[Federal Register Volume 64, Number 133 (Tuesday, July 13, 1999)]
[Notices]
[Pages 37785-37803]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-17633]


-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

[FRL-6375-6]

Notice of Availability of the Project XL Proposed


Final Project Agreement: Imation Corp., Camarillo, CA Plant

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of availability.

-----------------------------------------------------------------------

SUMMARY: The EPA is proposing to implement a project under the Project 
XL program for the Imation Corp. facility in Camarillo, CA (hereafter 
``Imation''). 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. EPA is requesting comment on the proposed 
FPA and the Imation XL Project generally.

DATES: Public comments on this document are requested and must be 
received on or before August 12, 1999.

ADDRESSES: Comments. Written comments should be submitted in duplicate 
to: David Albright, Permits Office (AIR-3), Air Division, US 
Environmental Protection Agency, Region IX, 75 Hawthorne Street, San 
Francisco, CA 94105-3901. Comments may also be faxed to Mr. Albright at 
(415) 744-1076. Comments may also be sent via electronic mail to: 
[email protected].

FOR FURTHER INFORMATION CONTACT: To obtain a copy of the proposed Final 
Project Agreement contact: David Albright, Permits Office (AIR-3), Air 
Division, US Environmental Protection Agency, Region IX, 75 Hawthorne 
Street, San Francisco, CA 94105-3901, (415) 744-1627 or Daniel Reich, 
Office of Regional Counsel (RC-2-2), US Environmental Protection 
Agency, Region IX, 75 Hawthorne Street, San Francisco, CA 94105-3901, 
(415) 744-1343. The proposed FPA and related documents are also 
available on the world wide web at the following location: http://
www.epa.gov/ProjectXL. Copies of the proposed Final Project Agreement 
are also available for inspection at the following location: Ventura 
County Air Pollution Control District, 669 County Square Drive, 
Ventura, CA. To be included on the Imation Project XL mailing list 
about future public meetings, XL progress reports, and other mailings 
from Imation on the XL project, contact Mr. Thomas Ferguson, Plant 
Manager, at (805) 482-1911, 350 S. Lewis Road, Camarillo, CA 93012. For 
information on all other aspects of the XL Program contact Christopher 
Knopes at the following address: Office of Reinvention, United States 
Environmental Protection Agency, 401 M Street, SW Room M3802 (Mail Code 
1802), Washington, DC 20460. Additional information on Project XL, 
including documents referenced in this notice, other EPA policy 
documents related to Project XL, regional XL contacts, application 
information, and descriptions of existing XL projects and proposals, is 
available via the world wide web at http://www.epa.gov/ProjectXL.

SUPPLEMENTARY INFORMATION:
Outline of this Document
I. Background
    A. Overview of Project XL
    B. Overview of the Imation XL Project
    1. Introduction
    2. Imation XL Project Description
    3. Environmental Benefits
    4. Stakeholder Involvement
    5. Evaluation of the Project
II. Clean Air Act Requirements
    A. Summary of Regulatory Requirements
    B. New Source Review Requirements
    C. Compliance with New Source Performance Standards (NSPS) and 
Maximum Achievable Control Technology Standards (MACT) Standards for 
Existing and Future Activities at Imation Camarillo
    D. State Implementation Plan Requirements
    E. Title V Operating Permit
III. Other Requirements

I. Background

A. Overview of Project XL

    EPA is proposing 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). In addition, 
on April 22, 1997, EPA modified its guidance on Project XL, solicited 
new XL proposals, clarified EPA definitions, and described changes 
intended to bring greater efficiency to the process of developing XL 
projects. See 62 FR 19872 (April 22, 1997). 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

[[Page 37786]]

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 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. 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 Imation XL Project

1. Introduction
    In today's action, the Agency is soliciting comment on the Project 
XL proposed Final Project Agreement (FPA) that has been developed by 
the Imation XL stakeholder group, namely Imation, EPA, California Air 
Resources Board (CARB), Ventura County Air Pollution Control District 
(VCAPCD), and community representatives. Several Ventura County 
organizations offered valuable input and support during the development 
of this project, including the Environmental Coalition, the American 
Lung Association, and the Ventura County Economic Development 
Association. The proposed FPA and related public documents are 
available from EPA Region IX, Ventura County Air Pollution Control 
District and on the world wide web as described above in this preamble. 
In addition, EPA is today making available, for informational purposes 
only, a pre-draft title V permit for the Imation Camarillo facility and 
a draft site-specific revision to the California State Implementation 
Plan (SIP) for the Imation XL Project.
    The Ventura County Air Pollution Control District is conducting the 
official comment period for the draft title V permit, and will initiate 
its 30-day public comment period at a later date. The draft site-
specific SIP revision will be the subject of a Ventura County APCD 
Board Advisory Committee meeting on June 22, 1999 and a Board hearing 
on September 14, 1999. EPA will evaluate the proposed SIP revision 
after the District submits it for SIP approval, and after a period of 
public comment, will take final action on the proposed SIP. See 
additional discussion of the site-specific SIP revision and title V 
permit in sections II.D and II.E, respectively. Copies of these 
documents are also available with the proposed FPA as noted in the 
above section For Further Information Contact.
    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. EPA seeks comment on the proposed FPA, in light of the 
criteria outlined in the Agency's May 23, 1995, Federal Register 
document (60 FR 27282) regarding Regulatory Reinvention (XL) Pilot 
Projects.1 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).
---------------------------------------------------------------------------

    \1\ The Imation XL project was proposed, evaluated, and accepted 
based on the original criteria for XL projects outlined in the 
Agency's May 1995 document (60 FR 27282), including the requirements 
for demonstration of superior environmental performance. The Agency 
refined the Project XL criteria with its April 1997 document (62 FR 
19872), and while the Agency believes that this project also meets 
the slightly modified criteria put forth in the April 1997 FR 
document, EPA is today seeking comment on the proposed FPA only with 
respect to the original criteria under which this project was 
initially accepted. This approach is consistent with the April 1997 
FR document which states that for projects where FPAs are already 
being developed, the guidance contained in the document does not 
impose new requirements or procedures.
---------------------------------------------------------------------------

2. Imation XL Project Description
    Imation Enterprises Corporation, a global technology company

[[Page 37787]]

headquartered in Oakdale, Minnesota, was formed on July 1, 1996. 
Imation owns and operates the plant at 350 South Lewis Road in 
Camarillo, California, as part of its Data Storage and Information 
Management Division. The facility, which was operated by Minnesota 
Mining and Manufacturing Company (3M) between 1963 and 1996, currently 
employs approximately 550 people and is the world's largest 
manufacturer of magnetic data storage tape. The Camarillo facility has 
manufactured magnetic recording products since 1963. The plant's 
earliest magnetic recording products included audio and video tape, 
video tape recorders, and high-performance instrumentation recorders. 
By the early 1970's the plant's focus was converted from audible range 
tape to data storage tape. The success of personal computers, with a 
subsequent increase in the use of hard disk drives, increased the need 
for data storage tape--especially backup systems.
    In pushing data storage tape technology to higher capacities and 
speeds, Imation Camarillo continues to develop and improve both tape 
media and cartridges. In addition, Imation works with data cartridge 
drive and tape head manufacturers to advance recording technologies. 
Imation Camarillo currently manufactures four standard product lines, 
with a number of new products currently in development. Their four 
product lines are mini cartridges storing up to 2 Gbytes of 
information, TravanTM cartridges which have up to 20 Gbytes 
capacity, data cartridges storing up to 50 Gbytes of information, and 
single reel cartridges for Digital Information Library systems in 
excess of 100 Gbytes.
    Magnetic tape manufacturing is a high-technology operation that 
requires frequent changes to plant operations. Streamlining these plant 
changes will provide Imation Camarillo with the advantage of being able 
to make modifications without delay, respond to the fast-paced market 
conditions in the computer data tape industry, and bring their products 
to market faster. This is especially important to a company such as 
Imation that is dedicated to producing innovative products.
    One of the principal goals of this XL project is to ensure that 
these frequent changes in operation can occur without lengthy project-
by-project reviews, but in a manner that guarantees superior 
environmental performance. The existing preconstruction air permitting 
regulations that govern modifications at the facility, specifically the 
minor New Source Review (NSR) and major non-attainment NSR regulations, 
require that most changes to Imation's manufacturing processes must be 
reviewed and approved in advance by the VCAPCD. 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.
    Imation's XL project seeks to simplify the process of frequent 
facility modification by imposing an overall emissions cap of 150 tons 
per year (tpy) for volatile organic compounds (VOCs) and authorizing 
the facility, through a site-specific SIP revision and federally 
enforceable permit conditions, to carry out numerous types of 
modifications and new constructions without undergoing VCAPCD's major 
or minor NSR. In addition to the 150 tpy VOC emissions cap, Imation 
will ensure that these changes are carried out in a publicly 
transparent and environmentally protective manner by: (1) Conducting 
control technology assessments for proposed modifications and new 
constructions and applying additional control when necessary to achieve 
``best available control technology'' (BACT) or ``toxics best available 
control technology'' (TBACT) limits; (2) using a state-of-the-art 
continuous emissions monitoring device for all VOC and HAP stack 
emissions; and (3) providing detailed monthly reports on facility 
emissions and operations that will be made readily available to the 
public.
    The mechanism for authorizing Imation Camarillo to modify existing 
coating operations and construct new coating operations is through pre-
approvals in their title V permit. Specifically, Imation's permit will 
pre-approve specific changes that would subject the facility to New 
Source Performance Standards (NSPS) at 40 CFR part 60, subparts SSS 
(Standards of Performance for Magnetic Tape Coating Facilities), VVV 
(Standards of Performance for Polymeric Coating of Supporting 
Substrates Facilities), RR (Standards of Performance for Pressure 
Sensitive Tape and Label Surface Coating Operations), TT (Standards of 
Performance for Metal Coil Surface Coating), and Kb (Standards of 
Performance for Volatile Organic Liquid Storage Vessels), a Maximum 
Achievable Control Technology (MACT) standard at 40 CFR part 63, 
subpart EE (National Emission Standards for Magnetic Tape Manufacturing 
Operations), and VCAPCD's SIP-approved Rules 71.2 (Storage of Reactive 
Organic Compound Liquids) and 74.3 (Paper, Fabric, and Film Coating 
Operations).
    Specific facility changes that would subject Imation to these 
standards and regulations are being written into the title V permit as 
alternative operating scenarios (AOSs). Imation's pre-draft title V 
permit contains AOSs for both equipment modifications and new equipment 
construction, but only as such modification or construction is subject 
to one or more of the standards and regulations noted above. Title V 
permit alternative operating scenarios typically provide permitted 
facilities some flexibility by allowing the facility to switch from one 
set of operating conditions (scenario) to another. A simple example is 
a facility switching from one type of fuel to another. AOSs may be 
written into title V permits provided the permit clearly identifies the 
different possible scenarios under which the facility can operate, and 
contains appropriate conditions to assure compliance with all 
requirements that apply to each scenario. Permitted facilities with 
AOSs are further required to maintain an on-site log and to record in 
the log, contemporaneously with any change in scenario, the permitted 
scenario under which they are operating.
    EPA will ensure that the AOSs in Imation's title V permit meet 
these requirements. In Imation's pre-draft title V permit, the AOSs 
range in complexity from switching raw materials to constructing and 
operating new equipment. Use of AOSs in a title V permit as a means of 
pre-approving new equipment construction is one of the unique 
experimental aspects of this project. EPA believes that such advance 
approval is warranted on an experimental basis in this case because of 
the general similarity of the various potentially applicable standards, 
the unique operating conditions at the Imation Camarillo facility, and 
the ability to reasonably anticipate these pre-approved changes. See 
section II.E of this preamble for additional discussion of the use of 
AOSs in Imation's title V permit.
    All of the federal and state standards addressed by Imation's pre-
approvals regulate coating (and related) operations which emit VOCs and 
HAPs, and the pre-approved operations will be identical or very similar 
to the existing coating operations at the facility. As for the 
operation of the facility, Imation maintains the areas where VOC and 
HAP-emitting coating operations are conducted under a condition of 
total enclosure (100 percent capture of all organic compounds). These 
total

[[Page 37788]]

enclosures, which are vented to a highly-efficient solvent recovery 
unit (SRU), will allow Imation to conduct various types of coating and 
related activities in compliance with the VOC/HAP control standards of 
all relevant NSPS, MACT, and District standards. In addition, several 
continuous emissions monitoring systems (CEMS) are in place at the 
facility that will provide further assurance that existing and new 
operations at the facility are complying with all applicable standards. 
Any construction outside the existing total enclosures is required by 
the proposed permit to meet the same rigorous conditions now in place 
at the facility, including 100% capture of organic compounds within a 
permanent total enclosure, use of a minimum 95% efficient control 
device (either the existing SRU or another control device which 
provides this level of emissions control, such as a thermal or 
catalytic oxidizer), and continuous emissions monitoring.
3. Environmental Benefits
    As noted above, EPA's initial FR document (May 23, 1995) describing 
the criteria for evaluating XL projects set forth a standard that 
projects chosen as XL pilots should be able to achieve environmental 
performance that is superior relative to what would have been achieved 
through compliance with otherwise applicable requirements. In April 
1997, EPA refined its definition of superior environmental performance, 
adding a two-tiered test that project sponsors and the Agency need to 
consider when developing and evaluating potential XL pilot projects. 
Although the Imation XL project was proposed, evaluated, and accepted 
based on the original criteria for demonstration of superior 
environmental performance, the Agency believes that this project also 
meets the more refined definition put forth in the April 1997 FR 
document (62 FR 19873, April 23, 1997). This XL Project creates some 
significant environmental benefits that exceed the baseline of 
performance that would have reasonably occurred in the absence of the 
project.
    Under this project, Imation must meet capture and control 
efficiencies for VOCs and HAPs that go beyond the requirements of the 
regulations to which they are subject. For all HAP and VOC emissions, 
Imation must meet the requirements of the magnetic tape manufacturing 
maximum achievable control technology (MACT) standard (See 40 CFR part 
63, subpart EE), even though some facility operations are subject to 
less stringent standards. In addition, Imation must conduct BACT/TBACT 
analyses for most emission-related changes at the facility and apply 
additional control if BACT/TBACT is determined to be more stringent 
than their existing control. This requirement could, for example, 
result in the installation of a thermal or catalytic oxidizer in order 
to provide even more stringent control technology for VOCs and HAPs 
than is required by the MACT standard.
    Another requirement of the project is that Imation must use an 
advanced Extractive Fourier Transform Infrared (FTIR) Spectrometry 
Continuous Emission Monitoring System (CEMS) to monitor all coating-
related stack emissions. An FTIR-CEMS allows the facility to speciate 
and quantify all organic emissions from the stack on a continuous 
basis. The capabilities of the FTIR-CEMS are well beyond those required 
by all applicable requirements, and the speciation provided by this 
equipment allows Imation to optimize the operation of the existing SRU. 
Moreover, the FTIR-CEMS requirement also applies to the monitoring of 
emissions from any new control device installed under this project, and 
its use in such cases would likewise optimize performance. The 
optimization of VOC and HAP control and destruction that results from 
use of an FTIR-CEMS translates directly into reduced emissions of these 
pollutants.
    An additional, potential environmental benefit associated with this 
project involves some of the VOC emission reduction credits (ERCs) 
donated by Imation to the District. The District will either retire the 
ERCs or sell them to companies who have been screened according to 
their environmental track record. The environmental benefit would 
result from the reduction of VOC emissions represented by retiring the 
ERCs from the air, or from emission reductions associated with 
pollution control projects that the District plans to fund with any 
proceeds from the sale of these ERCs. The types of projects that would 
be funded with the ERC proceeds are likely to be ozone precursor 
reduction projects. As noted below, there will be a stakeholder group 
formed to assist the District in determining appropriate projects to 
fund with any ERC sale proceeds. The potential emissions reductions 
associated with retiring the ERCs or through funding of high priority 
pollution control projects with the ERC sale proceeds would provide an 
additional environmental benefit that would not be realized had Imation 
merely sold the credits themselves or otherwise used them for their own 
economic benefit.
    Finally, EPA believes it is important to address the issue of 
superior environmental performance under this project given Imation's 
current VOC emission level (30 tpy) as compared to the maximum VOC 
emission level allowed under the terms of the FPA (150 tpy). First, 
current utilization of the Imation facility is well below historical 
utilization patterns, which suggests that VOC emissions of 30 tpy are 
not representative of normal facility operation. Imation is actually 
operating the facility at about 25-30 percent of its existing capacity, 
due to business and market considerations. Second, EPA has suggested in 
its most recent guidance on determining superior performance for XL 
Projects (62 FR 19872, April 22, 1997) that for projects which include 
new facilities that have not yet been built or expansion of existing 
facilities for additional production (as does this project), such 
determination needs to consider how the project compares to the level 
of performance representative of industry practice, instead of focusing 
on a benchmark of current environmental loadings. This acknowledges 
that economic growth and expansion can occur in an environmentally 
superior manner, when emissions from such expansion are stringently 
controlled, even if overall emissions do not decrease. Such is the case 
with this project, which although not resulting in a decrease in 
overall VOC emissions, will result in superior environmental 
performance for the reasons described above in this section, especially 
including the application of the most stringent VOC control technology 
to any expansion of the facility.
4. Stakeholder Involvement
    The Imation XL project enhances the involvement of the community 
and other stakeholders in understanding and evaluating environmental 
impacts of the Imation Camarillo facility. As outlined in the FPA, an 
Imation XL Project Stakeholders Group will be formed to evaluate 
implementation of the XL project during the initial five-year term. 
Stakeholders will have a unique opportunity to participate in the 
ongoing evaluation of the XL project and to recommend necessary changes 
to the project. Evaluation by the Stakeholders Group is not limited to 
commenting on already implemented aspects of the XL project; it will 
also include commenting on the ongoing activities under the project. 
However, the Stakeholders Group is not established under the project 
for purposes of evaluating or determining the facility's compliance 
with legal

[[Page 37789]]

requirements, such as the enforceable terms and conditions of the 
facility's title V operating permit. Rather, assuring compliance with 
all legally enforceable requirements is the responsibility of the 
appropriate regulatory agencies, VCAPCD and EPA.
    In addition to evaluating the implementation of the XL project, the 
Stakeholders Group serves as a critical link between the community, the 
regulatory agencies, and the facility. The Group will advise Imation on 
any local community concerns, provide feedback to the community on 
implementation of the project, and maintain an ongoing dialogue with 
Imation to ensure transparency of facility operations related to 
Project XL and continued superior environmental performance.
    The Project Stakeholders Group will consist of five (5) to ten (10) 
members in total, including one representative each from EPA, VCAPCD, 
and Imation as well as other interested participants that represent a 
balance of interests among neighbors, nearby business owners, local 
environmental organizations or other nonprofit groups, academic 
institutions, members of the public health community, etc. All members 
will serve a 5-year term commencing at the time of FPA signing.
    The entire Group will meet on at least an annual basis and may meet 
more frequently as warranted by project developments. During the annual 
meetings, presentations will be made by Imation on progress and results 
of the XL project to date. The meetings will be interactive with 
discussion of results and suggestions made by the Project Stakeholders 
Group.
    The Project Stakeholders Group will prepare an annual report 
evaluating the implementation of the XL project. It is anticipated that 
the Stakeholders Group will, as part of its annual evaluation of the XL 
project, examine the monthly reports which have been submitted by the 
facility under the title V operating permit and review jointly with the 
facility any significant concerns. Other aspects of the annual review 
may include facility or regulatory agency reports and general 
Stakeholder Group discussion of some or all of the following topics: 
the applicability of any newly promulgated regulations; the results of 
the internal audit of the facility's Environmental Management System 
(EMS), including how the EMS has impacted environmental performance; 
implementation of the facility's title V permitted AOSs, including a 
review of the on-site AOS logs and the overall experience with the 
permitted mechanisms for implementing AOSs; and the Group's 
satisfaction with the overall stakeholder process, including the 
availability of information pertinent to the XL Project. The 
Stakeholder Group's annual report will be made available to the public.
    In addition to the Stakeholders Group, the general public may also 
have an interest in monitoring Imation's XL progress. This will be 
accomplished in several ways. First, the date and time of all 
Stakeholder Group meetings will be published in the newspaper at least 
two weeks in advance and these meetings will be open to all interested 
parties. Second, as a condition of the FPA and their proposed title V 
permit, Imation will provide EPA and the VCAPCD with a monthly report 
of facility operations that will also be made readily available to the 
public. The monthly report, whose specific content requirements are 
described in Imation's proposed title V permit, will include: (1) 
Actual/calculated air emissions of all regulated air pollutants for 
each month, with a 12-month rolling average of air emissions for each 
of the pollutants, and a comparison to the annual facility caps; (2) a 
description of any emission-related modifications to the facility that 
occurred over the past month, as well as any planned modifications for 
the upcoming two months; and (3) the results of any control technology 
analyses or tiered health risk assessments conducted as a result of 
proposed facility modifications. These monthly reports (as well as the 
annual reports) will be available for public review at the Ventura 
County Air Pollution Control District, in the Camarillo Public Library, 
and on the Internet. A contact name and number at Imation, EPA Region 
IX, and VCAPCD will be provided for answering any questions related to 
this XL project.
    A second stakeholders group (the ERC Advisory Committee) has 
already been formed to advise on the distribution of some of the ERCs 
donated to the District by Imation. VCAPCD formed the ERC Advisory 
Committee to develop criteria to be used for determining the use of 
these ERCs. The criteria address the type of business/industry that 
will be allowed to purchase the ERCs (e.g., companies with good 
environmental track records). The Advisory Committee consists of local 
community members along with public officials and industry 
representatives in order to provide a balanced perspective. Another 
stakeholder group, likewise comprised of a balance of perspectives and 
interests (and including EPA as a participant), will participate in 
recommending to the VCAPCD Board measurable clean air projects to be 
funded by the income generated as a result of the sale of the ERCs.
    The stakeholder processes described above for project 
implementation represent a continuation of the opportunities for 
stakeholder involvement during development of the project. EPA expects 
that the signatories to the FPA will fully consider concerns and issues 
raised by all the stakeholders before reaching decisions on project 
changes.
    Of course, elements of the stakeholder and general public 
participation process described here do not supersede any other public 
participation right, including but not limited to, District Hearing 
Board procedures for appealing permit decisions.
5. Evaluation of the Project
    As noted above in section I.B.4 (Stakeholder Involvement), this XL 
project will be reviewed annually to evaluate whether the project is 
meeting its objectives. At the conclusion of the initial five-year term 
of this project, a more comprehensive Project XL evaluation will 
examine the extent to which both short-term and long-term goals have 
been achieved. This evaluation will also examine the appropriateness 
and success of specific components of the project, such as the 
pollutant-specific plant-wide applicability limit (PAL) and emission 
cap levels, pre-approving new equipment under an alternative operating 
scenario, the capture and control efficiencies, the overall 
environmental benefit/pollution reduction, the reduction of compliance 
costs and burdens, the empowerment of local stakeholders and the level 
of community participation, any regulatory or policy flexibilities 
granted, and other elements of the XL project. The results of this 
review will help assess whether innovations piloted by this project are 
viable alternatives for other sources. It will also provide a basis for 
suggestions to improve the FPA and title V permit upon renewal, and the 
Agency's overall XL Program.
    At the end of the FPA's five-year term, the Project Stakeholders 
Group will meet to evaluate the renewal of the Project, and the 
potential for transferability of the regulatory approaches it tests. At 
that time, the stakeholders will also review any necessary changes to 
the project.

II. Clean Air Act Requirements

A. Summary of Regulatory Requirements

    Under this XL project, Imation will comply with all current and 
future

[[Page 37790]]

environmental standards to which its activities are subject. The one 
regulatory change that will be proposed for this project is a revision 
to the California State Implementation Plan (SIP). EPA will soon be 
proposing approval of a site-specific SIP revision for the Imation 
Camarillo facility. As noted above, a draft of the site-specific SIP 
revision is being made available by EPA today for informational 
purposes. The draft SIP revision proposes to establish an alternative 
approach that would ensure that new and modified emission sources at 
Imation would not be subject to the VCAPCD New Source Review (NSR) 
program, so long as Imation keeps its emissions within a source-wide 
cap. A key element of the draft SIP revision, and this XL project, is 
the authorization of a plant-wide applicability limit (PAL) for 
volatile organic compounds (VOCs). The VOC PAL, a voluntary VOC 
emissions cap accepted by Imation, is based on actual emissions and 
provides Imation with the flexibility to add and modify emissions units 
below the PAL level without triggering traditional new source review 
requirements. Additional details and requirements imposed under the 
draft site-specific SIP are described in section II.D of this preamble.
    This project also involves an innovative part 70 permitting 
approach. Imation's pre-draft title V permit contains several pre-
approved alternative operating scenarios (AOSs) for the construction of 
new process equipment and the modification of existing units. Specific 
AOSs pre-approve construction and modification that would subject the 
facility to a number of different New Source Performance Standards 
(NSPS), VCAPCD rules, and a Maximum Achievable Control Technology 
(MACT) standard. Imation's compliance with these multiple potentially 
applicable standards will be assured by their meeting the most 
stringent requirements of all of these standards for any equipment 
newly installed or modified under a pre-approved AOS. EPA and VCAPCD 
identified the most stringent requirements using a streamlining 
exercise, conducted in accordance with the guidelines of EPA's White 
Paper Number 2 for Improved Implementation of the part 70 Operating 
Permits Program (March 5, 1996). Imation's pre-draft title V permit 
both describes the reasonably anticipated alternative scenarios under 
which the facility is authorized to operate, and identifies the 
applicable requirements for each such scenario. As described in more 
detail in section II.C of this preamble, Imation's compliance with the 
most stringent requirements identified in the streamlining assures 
compliance with all applicable requirements. EPA is today making the 
pre-draft title V permit available for informational purposes only.

B. New Source Review Requirements

    The New Source Review (NSR) program is a preconstruction review and 
permitting program applicable to new or modified major stationary 
sources of air pollutants regulated under the Act. In areas not meeting 
health-based National Ambient Air Quality Standards (NAAQS) the program 
is implemented under the requirements of part D of title I of the Act 
for ``nonattainment'' NSR. The nonattainment NSR provisions of the Act 
are a combination of air quality planning and air pollution control 
technology program requirements for new and modified stationary 
sources. See section 173(a) of the Act. In addition, the Act contains 
certain other nonattainment NSR permitting requirements that supplement 
those in section 173. These supplemental nonattainment NSR 
requirements, which apply only in ozone nonattainment areas, vary in 
stringency according to the severity of the ozone nonattainment 
classification (e.g., marginal, moderate, serious, etc.). See section 
182 of the Act.
    The Imation Camarillo facility is a major stationary source located 
in an area that does not meet the ozone NAAQS and, thus, the facility 
is subject to the nonattainment NSR program under part D of title I of 
the Act. The area in which Imation is located is classified as severe 
nonattainment for ozone. Below, EPA describes how the proposed project 
at Imation Camarillo satisfies the statutory nonattainment NSR 
permitting requirements and the special rules for ozone nonattainment 
areas in sections 173(a) and 182, respectively, of the Act.
    For existing major sources, the current regulations that implement 
the nonattainment NSR provisions of the Act restrict major NSR 
applicability to only ``major modifications'' at the source (i.e., 
physical or operational changes at the source that would result in a 
significant net emissions increase of any pollutant regulated by the 
Act). See 40 CFR 51.165(a)(1)(v). Typically, determinations of major 
NSR applicability are made using a case-by-case assessment of facility 
modifications. Modifications trigger major NSR if they result in a net 
emissions increase exceeding specified significance levels, determined 
on a pollutant-by-pollutant basis. In severe ozone nonattainment areas, 
major NSR is triggered if the net emissions of volatile organic 
compounds (VOCs) increases by 25 tons, when aggregated with all other 
net increases in VOC emissions from the source over a period of 5 
consecutive years. Increases in net emissions of VOC from a source, 
resulting from a physical or operational change, that total less than 
25 tons, when aggregated over 5 years, are considered ``de minimis.'' 
See section 182(c) of the Act.
    As part of EPA's effort to streamline the often complicated 
assessment of major NSR permitting applicability, EPA proposed that 
plant-wide applicability limits (PALs) be allowed under certain 
conditions. See 61 FR 38249 (July 23, 1996) (Prevention of Significant 
Deterioration and Nonattainment New Source Review; Proposed Rule). A 
PAL is a ``federally enforceable plant-wide emissions limitation 
established for a stationary source to limit the allowable emissions of 
a source to a level such that major NSR is not required for changes 
under the emissions limitation.'' Id. at 38264. EPA believes PALs, 
which must be established based on a facility's actual emissions, can 
offer facilities some flexibility by excluding changes at a facility 
from major NSR so long as the facility stays within its emissions cap.
    The Imation XL Project involves an emissions cap for VOCs of 150 
tpy (based on actual emissions from the Imation Camarillo facility) 
which is being treated like a PAL. Although Imation's current emissions 
are below 150 tpy, the definition of ``actual emissions'' at 40 CFR 
51.165(a)(1)(xii) allows the reviewing authority (in this case, VCAPCD) 
to use a different time period for establishing a source's actual 
emissions than the most recent two-year period, upon determination that 
such period is more representative of normal source operation. VCAPCD 
determined, based on several years of underutilization of the Imation 
facility, that the 1991-1992 period is more representative of normal 
source operation. The Imation VOC PAL is thus being set at 150 tpy, a 
level that is lower than actual VOC emissions from the facility in the 
1991-1992 period, when the facility emitted an average of 165 tpy of 
VOCs.
    As EPA has proposed, generally, in its NSR Reform Proposal (see 61 
FR 38258, July 23, 1996), major NSR will not be required for changes at 
Imation Camarillo that result in emissions less than the 150 tpy PAL. 
However, this XL Project has several other provisions that make the 
Imation PAL more protective of the environment than what would be 
required under EPA's proposed PAL

[[Page 37791]]

regulations. Most importantly, in addition to the emissions cap, all 
new and modified emissions units must apply California BACT. 
Accordingly, there is not only assurance that the plant is emitting 
less than the PAL requirement of 150 tpy overall, but also each 
emissions unit is subject to the same level of control technology that 
would be required under major NSR.2 In addition, Imation has 
agreed to install TBACT on all new and modified emissions units where 
HAPs are emitted. Finally, regardless of the stringency of emissions 
control or the fact that VOC emissions will not exceed the PAL, Imation 
will not construct new emissions units or modify existing ones if such 
construction or modification would exceed a Ventura County APCD defined 
health risk level.
---------------------------------------------------------------------------

    \2\ California BACT, as defined in VCAPCD rules, is equivalent 
to federally defined lowest achievable emissions rate (LAER).
---------------------------------------------------------------------------

    For this aspect of the XL project, EPA is interpreting the Clean 
Air Act to consider all changes made under the 150 tpy VOC PAL as de 
minimis. As noted above, CAA section 182(c)(6) provides that for severe 
nonattainment areas, any physical change in, or change in the method of 
operation of, a stationary source shall not be considered de minimis 
for purposes of determining the applicability of the permit 
requirements (major NSR permitting) unless the increase in net 
emissions of the air pollutant does not exceed 25 tons. For purposes of 
this XL project, EPA believes that changes at the Imation Camarillo 
facility (located in a severe ozone nonattainment area) that result in 
VOC emission increases below the PAL are not considered net emission 
increases; rather, a net emission increase will only occur at the 
facility if the VOC PAL of 150 tpy is exceeded. Because the 150 tpy VOC 
PAL is a condition of the permit, and assuming that Imation does not 
violate its permit by exceeding 150 tpy of VOC emissions, there will be 
no emissions changes that result in a net emissions increase. 
Therefore, pursuant to section 182(c)(6), all emissions changes below 
the PAL will be considered de minimis because they will never trigger 
the 25 ton limit for net emissions increases. In accordance with CAA 
section 182(c)(8), changes that result in de minimis increases from 
sources such as Imation, that have the potential to emit in excess of 
100 tpy, are not subject to the nonattainment (major) new source review 
permitting requirements at section 173(a) of the Act.
    Section 110(a)(2)(C) of the Act requires state programs to 
institute their own preconstruction review program, generally referred 
to as ``minor NSR.'' VCAPCD's NSR program (see VCAPCD Rule 26) requires 
new source review permitting for ``any new, replacement, modified, or 
relocated emissions unit which would have a potential to emit any * * * 
Reactive Organic Compounds.'' 3 Such permitting under Rule 
26 would typically require BACT for any ROC emissions (no threshold) 
and offsets for ROC emissions from facilities with emissions over 5 
tpy. In order to provide Imation flexibility with regard to Rule 26, 
VCAPCD will propose a source-specific SIP revision that will apply only 
to the operations at the Imation Camarillo facility. The source-
specific SIP revision would exempt Imation from the requirements of 
Rule 26, but require the source to remain below the PAL of 150 tpy of 
ROC emissions, apply California BACT for facility modifications, and 
follow specified procedures for adding new equipment or modifying 
existing equipment. The requirements contained in the source-specific 
SIP revision, in conjunction with Imation's transfer of ROC emission 
reduction credits (ERCs) to the District, would assure that any new 
construction or equipment modification allowed under the source's title 
V permit would be carried out in a manner that is at least as 
environmentally protective as what would have been required under Rule 
26. See additional discussion of the SIP revision in section II.D of 
this preamble.
---------------------------------------------------------------------------

    \3\ The VCAPCD term reactive organic compound (ROC) is 
functionally equivalent to EPA's term volatile organic compound 
(VOC).
---------------------------------------------------------------------------

C. Compliance with New Source Performance Standards (NSPS) and Maximum 
Achievable Control Technology (MACT) Standards for Existing and Future 
Activities at Imation Camarillo

1. Current Situation at Imation Camarillo
    40 CFR part 60 contains New Source Performance Standards (NSPS) for 
new and modified equipment in specific source categories. 40 CFR part 
63 contains Maximum Achievable Control Technology (MACT) Standards for 
certain sources of hazardous air pollutants (HAPs). Magnetic tape 
manufacturing operations are regulated by both an NSPS (40 CFR part 60, 
subpart SSS) and a MACT standard (40 CFR part 63, subpart EE). 
Presently, only one of the four magnetic tape coating lines at Imation 
Camarillo is subject to the NSPS at SSS. The other three coating lines 
at Imation are not subject to any NSPS. In addition, because Imation is 
subject to a standard of performance under 40 CFR part 60, the 
associated General Provisions (subpart A) from part 60 also apply. The 
EE MACT is not an applicable standard for any coating operations at the 
facility because Imation is not a major source of HAPs. Imation's 
status as a non-major source of HAPs is based on their existing actual 
HAP emissions being less than 50 percent of the major source thresholds 
of 25 tons per year of total HAP and 10 tons per year of any single 
HAP. Imation's title V operating permit will include federally 
enforceable emission caps of less than 25 tons per year of total HAP 
and less than 10 tons per year of any single HAP.
2. Future Activities at Imation Camarillo
    At some future date, Imation plans to relinquish non-major HAP 
source status. Upon that date, the HAP caps established in Imation's 
title V operating permit will no longer apply and Imation Camarillo 
will be subject to the MACT at 40 CFR part 63, subpart EE and 
associated requirements in the part 63 General Provisions (40 CFR part 
63, subpart A). Imation also expects to trigger additional NSPS 
applicability by modifying existing coating operations and/or 
constructing new coating operations (subject to the NSPS at SSS or one 
of several other coating-related NSPS). For example, Imation 
anticipates modifying one or more of the existing coating operations 
not now subject to an NSPS to make them subject to subpart SSS or 
constructing a new coating operation that would be subject to subpart 
SSS (such operations would also be subject to part 63, subpart EE, once 
Imation is a major source of HAP). In addition, as a unique aspect of 
this XL project, Imation's title V permit will contain pre-approvals 
for construction and subsequent modification of equipment subject to 
the following other NSPS at 40 CFR part 60 and VCAPCD rules: subpart 
VVV (Standards of Performance for Polymeric Coating of Supporting 
Substrates Facilities); subpart RR (Standards of Performance for 
Pressure Sensitive Tape and Label Surface Coating Operations); subpart 
TT (Standards of Performance for Metal Coil Surface Coating); subpart 
Kb (Standards of Performance for Volatile Organic Liquid Storage 
Vessels); VCAPCD Rule 71.2 (Storage of Reactive Organic Compound 
Liquids) and VCAPCD Rule 74.3 (Paper, Fabric, and Film Coating 
Operations). These pre-approvals, as described further in section II.E 
of this preamble, are being written into Imation's title V permit as 
alternative operating scenarios (AOSs) and are contingent on there 
being terms

[[Page 37792]]

and conditions in the permit assuring compliance with all applicable 
requirements of each relevant standard, including all monitoring, 
recordkeeping, and reporting requirements. Imation will assure 
compliance with newly triggered NSPS and MACT standards as described 
below.
3. Streamlining Analysis of Multiple Applicable Requirements
    The federal new source performance standards and hazardous air 
pollutant standard that currently apply to existing operations, or will 
apply to new or modified coating facilities emitting VOC or HAP at the 
Camarillo site, have been streamlined into a single set of requirements 
that assures compliance with all.4 The streamlining 
exercise, conducted pursuant to the guidelines in EPA's White Paper 
Number 2, showed that current applicable requirements (40 CFR part 60, 
subpart SSS) and future or potential applicable requirements (40 CFR 
part 63, subpart EE, 40 CFR part 60, subparts Kb, RR, TT, and VVV) can 
be met by a single, distilled set of requirements. The requirements 
essentially reduce to the pertinent sections of 40 CFR part 63, subpart 
EE with some slight modification (for example, to account for the fact 
that subpart EE does not address VOC emissions), and a few selected 
additions from subsumed standards. The streamlining also demonstrated 
that the requirements of the General Provisions of part 60, subpart A 
can be met by complying with the part 63 General Provisions. Therefore, 
the requirements in part 60, subpart A sections 60.7, 60.8, 60.11, 
60.12, 60.13, 60.18, and 60.19 are subsumed under the part 63 General 
Provisions.
---------------------------------------------------------------------------

    \4\ The streamlining analysis conducted during the development 
of Imation's pre-draft title V permit included several applicable 
VCAPCD SIP rules. Imation's compliance with these District rules, as 
demonstrated by the streamlining analysis, is discussed in section 
II.D of this preamble.
---------------------------------------------------------------------------

    In order to both address the future applicability of the EE MACT 
and to simplify compliance with the multiple current and potential 
future applicable requirements, Imation's title V permit will contain 
conditions to assure compliance with the most stringent emission 
standards from the streamlining analysis, as well as the necessary 
monitoring, recordkeeping, and reporting requirements identified by the 
streamlining analysis. Imation's title V permit will also contain 
conditions necessary to meet the requirements identified by the 
streamlining of the parts 60 and 63, General Provisions. All of the 
conditions necessary to meet the requirements identified by the 
streamlining will be contained in the title V permit as specific, 
federally enforceable requirements, and are briefly described in the 
sections that follow.
    In a few instances, the compliance monitoring and performance 
testing approaches of the standards to which Imation would become 
subject upon implementation of an AOS do not fit well with the 
operational scenarios at the Imation facility. In those instances, as 
described below, this project relies on alternative monitoring schemes 
and performance test waivers where technically warranted. Such 
alternatives and waivers are authorized according to the General 
Provisions of 40 CFR part 63, subpart A and 40 CFR part 60, subpart A. 
Specifically, the provisions at 40 CFR 60.13(i), 63.7(e), and 60.8(b) 
allow alternative monitoring schemes for purposes of compliance 
demonstration, and performance testing waivers where a source has 
demonstrated by other means to the Administrator's satisfaction that an 
affected facility is in compliance with a standard. Formal approval of 
the alternative monitoring and performance test waivers described below 
for this project are delegated to the permitting authority, the VCAPCD.
4. Compliance with Specific NSPS and MACT Standards
    Imation's method of compliance with the NSPS and MACT standards to 
which it is currently subject (SSS NSPS) and to which it may become 
subject in the future (EE MACT, and VVV, RR, TT, and Kb NSPS) lies 
totally within the current regulatory framework. As described below for 
Imation's facility, and as contained in the standard itself, one method 
of compliance with the emissions control requirements of subpart SSS 
relies upon the total enclosure of all affected coating operations and 
the venting of the resulting mixture of coating operation emissions to 
a single control device. Continuous monitoring of the single control 
device assures compliance with the standard by all affected operations. 
In addition to subpart SSS, this method of compliance is also written 
in to the EE MACT and the VVV NSPS. Thus, Imation can demonstrate 
compliance with these two standards (if/when they become applicable) 
using the same compliance method as they currently rely upon to meet 
the requirements of SSS.
    Two other potential future applicable standards (RR and TT NSPS) do 
not contain this method of compliance demonstration. However, as noted 
previously, the General Provisions of 40 CFR part 60 provide the 
authority to approve alternative monitoring and performance test 
waivers, which in this case allows Imation to demonstrate compliance 
with RR and TT (if/when they become applicable) using the same method 
as they currently rely upon to meet the requirements of SSS. The 
sections below detail the technical rationale that supports the use of 
such alternative monitoring and performance test waivers.
    Assuring compliance with Kb (if/when it becomes applicable to 
solvent storage tanks at Imation Camarillo) will not rely on a 
demonstration like that described above (i.e., total enclosure of all 
affected operations, etc.). Instead, all storage tanks will have a 
closed vent system with emissions ducted directly to a 95% efficient 
control device, as is required under the EE MACT. See discussion below 
of the streamlining analysis conducted to demonstrate that, for solvent 
storage tanks, compliance with the EE MACT assures compliance with Kb.
    a. Assuring Compliance with the Currently Applicable Requirements 
of the NSPS at Subpart SSS. Imation's Superior Environmental 
Performance stems in part from their commitment to totally enclose/
capture 100% of VOC and HAP emissions from all coating operations and 
control captured emissions using a highly efficient solvent recovery 
unit--SRU--(or other similarly efficient device) demonstrated to 
achieve at least 95% emission reduction. Their existing total 
enclosures capture 100% of the emissions from multiple coating 
operations within the production building and route all the emissions 
to the SRU. As a result, individual coating operations are not 
controlled separately but rather contribute to an emissions mixture 
containing the emissions from all coating operations within the total 
enclosures. The existing SRU receives the combined emissions from all 
active coating operations. As noted above, the following detailed 
explanation of how Imation currently meets the requirements of the NSPS 
at SSS using their unique capture and control set-up is particularly 
important because the same technical approach is relied upon to ensure 
compliance with other NSPS. (See section II.C.4.c of this preamble.)
    As a result of Imation's control setup as described above, it is 
not possible to measure inlet and exit emissions from the control 
device (and thus control device efficiency) for any one coating 
operation on an ongoing basis. The VOC (and HAP) emissions from the 
single existing coating operation subject to

[[Page 37793]]

subpart SSS are part of the mixture of emissions including the other 
VOC/HAP sources. In such situations, section 60.713(b)(2) applies 
requirements for determining the capture efficiency for VOC emissions 
from an affected facility under subpart SSS (i.e., what fraction of 
emissions makes it to the control device). Section 60.713(b)(2) 
indicates that where the emissions from an affected coating operation 
and other VOC sources are ducted to a common control device, the owner 
or operator must determine the emissions capture efficiency for each 
individual affected coating operation. These requirements apply where 
there is no total enclosure of emission sources. However, Imation uses 
a permanent total enclosure to capture emissions. Where a total 
enclosure exists around the affected coating operation, such a 
determination is made alternatively according to section 60.713(b)(5), 
which requires demonstration of a total enclosure around each coating 
operation, and does not require the determination of individual capture 
efficiency for each coating operation. Imation has already demonstrated 
compliance with the total enclosure requirement of subpart SSS for the 
one subject coating operation by showing that a total enclosure exists 
around the operation (the enclosure meets the criteria in EPA Method 
204--Criteria for and Verification of a Permanent or Temporary Total 
Enclosure (section 5)); the total enclosure will be maintained 
continually.
    Although subpart SSS generally requires determining emissions 
capture efficiency on an individual affected facility basis (except 
when a total enclosure is employed), control device efficiency is to be 
determined for mixed emission streams when ``all emission sources'' are 
connected to the device. See section 60.713(b)(3). The owner or 
operator is not forced to shut down the other VOC emission sources to 
test the control device efficiency on individual affected facility 
emissions. Thus, compliance with the required 93% VOC control standard 
at each SSS affected facility is demonstrated by showing that the 
common emission control device provides a 95% control efficiency when 
receiving the mixture of VOC emissions from all SSS affected facilities 
(housed in a total enclosure) and all other sources of VOC routed to 
the device.5 The implicit assumptions in this method of 
demonstrating compliance with the VOC emission standard for an 
individual affected facility in subpart SSS are as follows: (1) An 
emission control device will control the same (and similar) chemicals 
equally, regardless of their point of emission (i.e., control device X 
controls chemical Y at Z efficiency whether chemical Y is emitted by 
affected facility 1, 2, 3, etc.); (2) the ``other sources of VOC'' 
ducted to the common emission control device likely have chemical 
constituents that are the same as or similar to those in the emissions 
from the affected facility (since they are related operations) and, 
therefore, the control device performance does not vary on individual 
emission streams; and (3) performance testing the control efficiency of 
the newly affected facility emissions only (assuming such emissions 
contain the same or similar chemical constituents as other operations 
controlled by the common emission control device) is not necessary to 
assure compliance with the standard at the newly affected facility 
(instead compliance can be demonstrated with all VOC sources connected 
to the common control device).
---------------------------------------------------------------------------

    \5\ Subpart SSS contains a standard of 93% control of VOC 
applied at each affected facility. At the time that subpart SSS was 
promulgated, the Agency assumed that use of a total enclosure with a 
95% efficient control device could yield as low as a 93% level of 
actual VOC control at the affected facility (because of the 
possibility that a total enclosure would not actually capture 100% 
of emissions). The Agency now believes that a total enclosure, 
meeting the requirements of Method 204, will capture 100% of 
emissions. Thus, Imation's use of a Method 204 compliant total 
enclosure around their coating operations in conjunction with a 95% 
efficient control device will achieve an actual control level of 95% 
at each affected facility, thereby exceeding the standard as written 
at subpart SSS.
---------------------------------------------------------------------------

    Imation has performance tested the existing SRU and has 
demonstrated a >95% emission reduction with all VOC and HAP emission 
sources connected. Monitoring of continuous compliance at the one 
coating operation currently subject to Subpart SSS is being 
demonstrated through Imation's maintenance of the total enclosure and 
use of an FID-CEMS (flame ionization detector-continuous emission 
monitoring system) to measure VOC concentrations in both inlet and 
outlet of the SRU, per section 60.714(c)(1).
    b. Assuring Compliance with Future Requirements under the MACT at 
Subpart EE and the NSPS at Subparts SSS and VVV. In the future, Imation 
will become a major source of HAP, thereby triggering applicability of 
the MACT standard at subpart EE. Once this occurs, all magnetic tape 
coating operations at the facility will be subject to the standards at 
subpart EE. Much like the NSPS at subpart SSS, EE allows for the total 
enclosure of all emission points and the ventilation of the total 
enclosure(s) to a common control device operating at 95% or higher 
efficiency. Imation will demonstrate initial compliance with the MACT 
standard by demonstrating that all HAP-emitting coating operations are 
totally enclosed, and that the enclosure is vented to the SRU which is 
operating at a minimum control efficiency of 95% as monitored at the 
inlet and outlet of the SRU using the FID-CEMS. See section 
63.705(c)(4).
    In addition, Imation anticipates modifying one or more of the 
existing coating operations not now subject to an NSPS to make them 
subject to subpart SSS or constructing a new coating operation that 
would be subject to subpart SSS (such operations would also be subject 
to part 63, subpart EE, once Imation is a major source of HAP). Imation 
will ensure compliance with subpart SSS and part 63, subpart EE for 
such operations by maintaining a total enclosure around the 
operation(s) and controlling emissions by at least 95% as monitored at 
the inlet and outlet of the SRU using the FID-CEMS.6
---------------------------------------------------------------------------

    \6\ For future activities, Imation may utilize a device other 
than the existing SRU to control VOC and HAP emissions (e.g., the 
BACT analysis may dictate that Imation install a thermal or 
catalytic oxidizer to control emissions at a level beyond 95%). 
Although this section refers to assuring compliance by reducing 
emissions using the SRU and monitoring emission reduction at the 
inlet and outlet of the SRU, Imation may also comply with these 
standards through the use of a different control device, as 
specified in the AOSs in their pre-draft title V permit. Any such 
device must meet a minimum 95% efficiency, and must be appropriately 
performance tested and continuously monitored in accordance with 40 
CFR part 63, subpart EE.
---------------------------------------------------------------------------

    Imation also anticipates modifying one or more of the existing 
coating operations or constructing a new coating operation to produce 
polymeric coatings on supporting substrates. Such modified or new 
operation(s) would be subject to part 60, subpart VVV (Polymeric 
Coating of Supporting Substrates). Subpart VVV contains standards and 
compliance provisions that are nearly identical to those in subpart SSS 
and part 63, subpart EE (See section 60.743(a)(1)), including 
provisions for mixed VOC streams, use of a total enclosure, and a 95% 
efficient control device. Imation would assure compliance with subpart 
VVV through maintaining the total enclosure around the subject coating 
operation(s) and reducing emissions by at least 95% as monitored at the 
inlet and outlet of the SRU using the FID-CEMS (or using a different 
95% efficient control device and appropriate monitoring). Imation's 
pre-draft title V permit contains the requirements of part 63, subpart 
EE and includes the streamlining analysis demonstrating that compliance 
with

[[Page 37794]]

these requirements will assure compliance with part 60, subparts SSS 
and VVV.
    c. Assuring Compliance with Future Requirements under the NSPS at 
Subparts RR and TT. In addition to the changes described above, Imation 
is anticipating modifications or new construction of facilities that 
potentially would trigger applicability of NSPS in subparts RR 
(Pressure Sensitive Tape and Label Coating) and/or TT (Metal Coil 
Surface Coating). Such changes could create an emission stream from the 
total enclosure containing a mixture of VOC and HAP from affected 
facilities subject to the MACT standard and two or more different NSPS, 
or from affected facilities subject to the MACT standard, different 
NSPS, and other VOC/HAP sources not subject to any NSPS or MACT. Unlike 
the MACT standard at EE and the NSPS at SSS and VVV, 40 CFR part 60, 
subparts RR and TT do not specifically address such mixed emission 
stream situations and how compliance is to be demonstrated for any one 
affected facility. However, it is reasonable to assume that compliance 
with the VOC standards by affected facilities subject to these NSPSs 
can be demonstrated in a manner similar to that for operations subject 
to part 63, subpart EE and part 60, subparts SSS and VVV, by extending 
the assumptions and rationale described above to these other two NSPS.
    Imation can demonstrate compliance for an individual affected 
facility subject to subparts RR- or TT by maintaining a total enclosure 
around the facility and reducing the captured emissions from this 
facility and all other sources of VOC and HAP by at least 95% as 
monitored at the control device. EPA believes such a demonstration will 
be adequate for each RR- and TT-affected facility based on the 
following. First, the total enclosure captures 100% of VOC/HAP 
emissions from manufacturing operations. As part of Imation's initial 
compliance demonstration for the MACT standard, the facility will 
demonstrate that there is a total enclosure around all coating-related 
operations that captures all VOC and HAP emissions, and Imation will be 
required to monitor to assure that such operations remain within a 
total enclosure. Second, the 95% efficient control device delivers a 
high enough control efficiency to meet any one of the standards (when 
combined with the 100% capture of VOC/HAP) and the control device 
response on an individual or mix of solvents will not vary according to 
the type of affected facility emitting the solvent. This is a 
reasonable assumption considering that: (1) The control device already 
has demonstrated >95% control efficiency and will be required to 
continue to achieve at least 95% overall reduction continuously (as 
measured by the FID-CEMS) on the mixed stream, whereas the two 
potentially applicable NSPS require only 90% VOC reduction, and (2) 
where the emission streams from the modified or constructed facilities 
are similar to (i.e., use the same types of solvents as) those already 
demonstrated to be controlled by at least 95%, the control device can 
be expected to deliver the same level of control (See this discussion 
above for compliance with subpart SSS). Finally, emissions of new 
solvents (not previously tested in the control device) from new or 
modified operations will be subject to a performance test. Imation will 
be required to test the control device's performance on operations 
utilizing new solvents (those that have not been previously tested in 
the control device) by conducting a performance test whereby the 
efficiency of the control device is measured when only the equipment 
utilizing a representative coating containing the new solvent is 
connected to the device. This test must show that at least 95% control 
of emissions containing the new solvent is achieved.
    In summary, the concept of exhausting emission streams from two or 
more process lines within a total enclosure through a single control 
device that controls the mixed streams from the lines, and 
demonstrating compliance with individual process line VOC/HAP control 
standards by the efficiency of the common control device when receiving 
such mixed streams appears in 40 CFR part 63, subpart EE and part 60, 
subparts SSS and VVV. For this XL project, the Agency is extending this 
approach to two other NSPSs (subparts RR and TT), where there will also 
be a requirement for 100% capture of VOC (and HAP) from the different 
process lines. Such extension is technically warranted due to the 
points described above, including the total capture and >95% control 
requirements, and the expected consistency of control by the control 
device on process solvents regardless of the emitting source. Imation's 
pre-draft title V permit contains the requirements of part 63, subpart 
EE and includes the streamlining analysis demonstrating that compliance 
with these requirements will assure compliance with part 60, subparts 
RR and TT.
    d. Assuring Compliance with Future Requirements under the NSPS at 
Subpart Kb. 40 CFR part 60, subpart Kb contains standards of 
performance for volatile organic liquid storage vessels. Imation 
currently has numerous volatile organic liquid storage vessels, 
however, none are subject to the NSPS at Kb because of their relatively 
small size (all are less than 5,000 gallons). In the future, Imation 
may, in accordance with the conditions of their title V permit, install 
additional storage tanks with a capacity of greater than 5,000 gallons. 
Any such tanks would be subject to the requirements of part 60, subpart 
Kb. In addition, once Imation relinquishes their HAP limits and becomes 
subject to the EE MACT, all HAP-containing volatile organic liquid 
storage tanks will be subject to that standard, regardless of size.
    As part of the streamlining analysis conducted in the development 
of Imation's pre-draft title V permit, the requirements of the NSPS at 
Kb were streamlined against the tank-specific requirements of the EE 
MACT standard. The analysis demonstrated that compliance with the 
requirements of the MACT for all storage tanks at Imation (regardless 
of size or VOC/HAP content) would assure compliance with the 
requirements of the NSPS at Kb. Therefore, in order to assure 
compliance with potential future applicability of the NSPS at Kb, the 
requirements that pertain to control of emissions from storage tanks 
under the EE MACT standard (use of a closed vent system with 95% 
overall control of emissions) have been written in to Imation's pre-
draft title V permit as specific, federally enforceable requirements
    e. Assuring Compliance with New NSPS and MACT Standards. Imation 
Camarillo will be subject to the requirements of regulations 
promulgated after the date the Final Project Agreement (FPA) is 
executed. If Imation demonstrates to EPA's and VCAPCD's satisfaction 
that it can achieve greater environmental benefit either through the 
existing terms of the FPA, or through an alternative strategy, and that 
doing so will satisfy statutory and regulatory requirements and the 
criteria for the XL program, the Agencies intend to initiate steps to 
allow such alternative compliance, including where necessary proposing 
a site-specific rule. Opportunities for public/stakeholder 
participation will be provided in connection with such changes 
consistent with the principles of Project XL and the public 
participation guidelines in the FPA. Imation's proposals will have the 
twin goals of achieving superior environmental performance, while 
ensuring that the installation of new or modified coating equipment or 
the

[[Page 37795]]

development of new products will not be delayed.
    One potentially applicable regulation on the horizon is the MACT 
standard for the source category ``Paper and Other Web Coatings.'' The 
Paper and Other Web Coatings MACT is expected to be promulgated by EPA 
in November 2000. This standard is likely to apply to some of the 
activities for which Imation will receive pre-approval in their initial 
title V permit. Upon promulgation, EPA and VCAPCD will make a 
determination as to the applicability of the new standard to pre-
approved activities contained in Imation's title V permit. If the 
standard is applicable, it will be necessary to re-open the permit in 
order to add appropriate requirements from the new Paper and Other Web 
Coatings MACT (assuming Imation's permit term has more than three years 
remaining on it upon MACT promulgation). However, in such case, it is 
the intention of all parties to attempt to maintain in the revised 
permit the same degree of flexibility afforded Imation in their initial 
permit if all Project XL elements continue to be met by this facility.
5. Applicability of the Preconstruction Review Requirements Under 40 
CFR 63.5
    Section 112(i)(1) of the CAA prohibits construction of a new major 
source, or reconstruction of an existing major source, that is subject 
to a standard under 112, unless EPA (or its designee) has determined, 
prior to construction, that the source will comply with the standard. 
40 CFR 63.5 contains regulations promulgated to implement section 
112(i)(1) of the Act. The preconstruction requirements contained at 40 
CFR 63.5 apply to construction of a new major affected source, or to 
reconstruction either of a major affected source or of a major source 
such that it becomes a major affected source.
    For Imation Camarillo, the requirements of 40 CFR 63.5 do not apply 
to any activity implemented under a pre-approved alternative operating 
scenario in Imation's title V permit. None of the pre-approved 
activities specified in the pre-draft permit involve construction of a 
new major affected source, reconstruction of a major affected source, 
or reconstruction of a major source such that it becomes a major 
affected source. The pre-draft permit does authorize construction of 
new magnetic tape coating equipment, however, this facility (once the 
HAP limits are relinquished) will already be a major affected source 
(subject to 40 CFR part 63, subpart EE) and the construction of 
additional magnetic tape coating equipment will be considered a part of 
this existing major affected source; it will not be considered a new 
major affected source.7 In addition, pre-approved scenarios 
in the pre-draft permit do not allow any activity that would constitute 
``reconstruction'' of magnetic tape coating sources (the existing 
affected source), based on the definition of reconstruction contained 
at 40 CFR 63.2.
---------------------------------------------------------------------------

    \7\ 40 CFR 63.2 defines affected source as ``. . . the 
stationary source, the group of stationary sources, or the portion 
of a stationary source that is regulated by a relevant standard . . 
. established pursuant to section 112 of the Act.'' In addition, 40 
CFR part 63, subpart EE states that the requirements apply to, 
``each new and existing magnetic tape manufacturing operation 
located at a major source of hazardous air pollutant (HAP) 
emissions.'' Subpart EE further defines ``magnetic tape 
manufacturing operation'' as ``all of the emission points within a 
magnetic tape manufacturing facility that are specifically 
associated with the manufacture of magnetic tape.''
---------------------------------------------------------------------------

    40 CFR 63.5 preconstruction review requirements would apply only if 
there is construction or reconstruction of a source at Imation 
Camarillo that is subject to a standard promulgated under 40 CFR part 
63, but that is not identified as an alternative operating scenario in 
the permit. Such construction or reconstruction is not pre-approved in 
Imation's pre-draft title V permit.

D. State Implementation Plan Requirements

    A key element of the Imation XL project is the site-specific 
California State Implementation Plan (SIP) revision. EPA plans to 
evaluate and take action on the site-specific SIP revision under a 
procedure called parallel processing, whereby EPA proposes rulemaking 
action concurrently with the State's procedures for amending its 
regulations. See 40 CFR part 51, appendix V, 2.3. The SIP revision, 
which will only apply to the operations at Imation Camarillo, is a 
critical element of the XL Project at Imation as it will ensure that 
operations at the Imation facility that are implemented in accordance 
with the XL project are not in conflict with federally enforceable SIP 
requirements.
    The draft SIP revision is comprised of several of the most critical 
terms and conditions from the Imation XL Project FPA, a document that 
represents the intentions of all parties to the agreement but that is 
not legally enforceable. By incorporating these terms and conditions 
into a VCAPCD rule that the VCAPCD Board adopts and which is approved 
into the SIP, the main tenets of the FPA will be made enforceable by 
EPA and the State. Generally, the draft SIP revision authorizes the 
establishment of a plant-wide applicability limit (PAL) at the Imation 
facility, institutes several unique requirements and procedures for 
operations at the facility, and exempts specified Imation activities 
from two VCAPCD rules, most notably VCAPCD Rule 26 (New Source Review). 
EPA and VCAPCD agree that such revision of the SIP on a source-specific 
basis for this XL Project is an appropriate exercise of regulatory 
flexibility, and will result in environmental performance that is at 
least equivalent to what would be achieved under the existing SIP. A 
more detailed description of the contents of the draft site-specific 
SIP revision is provided below.
    The draft SIP revision would exempt Imation Camarillo from two 
VCAPCD rules, however, a number of important requirements from these 
rules remain intact through their inclusion in the draft SIP revision. 
For example, Imation Camarillo would be exempt from the VCAPCD's NSR 
program, yet the requirement to apply appropriate control technology to 
equipment installed or modified at the facility has been carried over 
as a key element of the draft SIP revision. Under the draft revision, 
Imation would be required to conduct a Best Available Control 
Technology (BACT) analysis for new construction or modifications under 
this project and to apply new or additional controls (e.g., a thermal 
or catalytic oxidizer) if the existing controls at the facility did not 
qualify as BACT. Also, for HAP-emitting new or modified equipment, the 
SIP revision requires Imation to conduct a Toxics Best Available 
Control Technology (TBACT) analysis and apply identified controls if 
such controls are not already in place. The proposed SIP's BACT/TBACT 
requirement provides an assurance that any equipment that is modified 
or newly installed as part of this project at Imation Camarillo will 
have no less degree of emissions control than what it would have had 
under the VCAPCD's current NSR program.
    Another important element of the draft SIP revision is a 
requirement that Imation Camarillo conduct a tiered health risk 
assessment prior to implementing any project that would increase 
emissions of an existing HAP or result in the emission of a HAP not 
previously emitted by the facility. Moreover, the assessment must 
demonstrate that the aggregate risk from the facility, factoring in 
both the proposed new HAP emissions and the existing HAP emissions, 
will not exceed specific human health risk trigger levels established 
by the VCAPCD. Although this requirement is not found in any of

[[Page 37796]]

the SIP rules from which Imation Camarillo would be exempted (SIP rules 
address emissions of criteria pollutants and generally do not contain 
requirements targeted specifically at HAPs), the tiered health risk 
assessment is a requirement agreed to by all parties and is written 
into the FPA for this project. Inclusion of the tiered health risk 
assessment requirement in the proposed SIP makes it a condition that is 
enforceable by both EPA and VCAPCD. In addition, it assures that 
emissions from any Project XL-related new construction or equipment 
modifications at Imation Camarillo will result in risk levels that are 
acceptable under VCAPCD guidelines.
    The draft SIP revision also contains a fairly detailed set of 
procedures that Imation Camarillo must follow in order to implement the 
pre-approved activities that are at the core of this XL project. These 
procedures are important because Imation would not be subject to the 
VCAPCD new source review permitting program for most new construction 
and equipment modifications at the facility. Under typical NSR 
permitting, Imation would be required to apply to the District for an 
Authority to Construct (ATC) and would negotiate with the District over 
the details of their proposed project, prior to moving forward with 
construction. Once constructed, Imation would then need to apply to the 
District for a Permit to Operate (PTO) the new equipment, once again 
negotiating with the District to reach agreement on the parameters of 
operation in order to assure that the equipment is operated in 
accordance with all applicable standards and regulations. The ATC and 
PTO approval processes would require a period of public and EPA notice 
and review.
    The procedures in the draft SIP revision maintain some similar 
steps, but allow for a much more streamlined process leading to new 
construction, equipment modification, and operation by Imation 
Camarillo. The key elements of the procedures in the draft SIP revision 
are: a requirement for Imation to provide, through their Project XL-
mandated monthly report, at least 30 days advance notification of any 
new construction or equipment modifications; requirements for VCAPCD 
approval of any tiered health risk assessment or BACT/TBACT analysis 
conducted pursuant to a proposed new construction or equipment 
modification (unless the facility's existing control device(s) 
represent BACT/TBACT and the estimated risk is over an order of 
magnitude lower than the District's level of concern, approval of these 
analyses must be gained prior to commencement of any new construction 
or equipment modifications); a requirement to provide operating and 
engineering details to VCAPCD prior to commencing construction of 
certain new control devices; and a requirement for Imation to apply for 
minor modifications to their title V permit in specific instances where 
they have installed a new control device. These procedures will allow 
Imation to take advantage of the flexibilities inherent in this 
project, while ensuring that a sufficient amount of public notification 
and an adequate level of oversight by VCAPCD and EPA are still in 
place.
    The draft SIP revision would impose numerous requirements on the 
Imation Camarillo facility that would be in force in lieu of VCAPCD's 
NSR program. However, for most of the VCAPCD SIP requirements, Imation 
would merely comply with the requirements as they exist in the SIP. 
Some of these SIP requirements that Imation would continue to meet 
under the project are the requirements for non-VOC criteria pollutants, 
standards for their industrial boilers, regulations governing solvent 
cleaning operations, and a number of generally applicable SIP 
requirements such as those for opacity, transfer of ROC liquids, and 
several short-term activities such as abrasive blasting and asphalt 
roofing operations. In a few instances, Imation would meet applicable 
SIP requirements by complying with the EE MACT. The streamlining 
analysis discussed in section II.C.3 of this preamble provides a 
demonstration of how compliance with specific requirements of the EE 
MACT assures compliance with the VCAPCD SIP rules identified in the 
analysis.

E. Title V Operating Permit

1. Introduction
    As part of this XL project, Imation Camarillo is obtaining a title 
V operating permit, pursuant to the applicable VCAPCD title V program 
(see VCAPCD Rule 33--part 70 Permits). Although the VCAPCD will provide 
a separate opportunity for public notice of the draft title V permit 
for Imation, as is required under their approved program, a pre-draft 
version of the title V operating permit is available for preliminary 
review in the docket for today's proposal (and is available on the 
world wide web as described in the preamble above).
    This XL Project is experimenting with pre-approving, in the title V 
permit, new construction and equipment modifications at Imation 
Camarillo. Specific new construction and modification activities will 
be described in Imation's title V permit as alternative operating 
scenarios (AOSs). The significance to Imation of this innovative 
permitting approach is that it will create flexibility for the facility 
to make a limited set of preapproved changes under their title V 
permit. These changes, implemented as AOSs, will not require a permit 
revision in most instances, nor the time delays often associated with 
the permit revision process. This ability to undertake preapproved 
changes without delay will enable Imation to be more responsive to 
changing market conditions. From a regulatory perspective, Imation has 
provided the details necessary for the permitting authority to define 
reasonably anticipated AOSs and to create permit terms and conditions 
that assure compliance with all applicable requirements. From an 
environmental perspective, Imation has agreed to have the most 
stringent requirements from all potentially applicable standards 
incorporated into the terms of its title V permit. In many cases, the 
requirements that Imation would be subject to for a specific AOS are 
more stringent than the current regulatory structure would require.
    40 CFR part 70 and VCAPCD Rule 33.4(B) provide for the 
establishment in title V operating permits of terms and conditions for 
reasonably anticipated operating scenarios at a source.8 A 
source may then preapprove alternative operating scenarios in its 
permit and switch among these scenarios in response to operational 
demands, without obtaining a permit revision to account for the 
previously approved new operating scenarios and their different 
applicable requirements. All title V permits, including those 
implementing alternative scenarios, must contain terms and conditions 
sufficient to assure that each operating scenario will comply with all 
applicable requirements and will meet the requirements of part 70. 
Pursuant to section 70.6(a)(9), the source must identify such scenarios 
in its permit

[[Page 37797]]

application and the permitting authority must approve the scenarios for 
inclusion in the permit. The permit terms and conditions necessary to 
implement the alternative operating scenarios must also require the 
source to record contemporaneously in an on-site log the scenario under 
which it is operating, upon changing from one permitted scenario to 
another. The contemporaneous record of the present operating scenario 
that the source maintains on-site serves to document for important 
inspection and enforcement purposes that the source is in compliance 
with the source's permit terms and conditions.
---------------------------------------------------------------------------

    \8\ The VCAPCD title V program describes alternative operating 
scenarios in their title V program rules at VCAPCD Rule 33.4(B), 
which provides, in part:
    The owner or operator of any stationary source required to 
obtain a part 70 permit may submit a description of all reasonably 
anticipated operating scenarios for the stationary source as part of 
the part 70 permit application. The operating scenario descriptions 
shall contain emission information for each scenario and sufficient 
information for the District to develop reasonable permit conditions 
defining each scenario.
---------------------------------------------------------------------------

    The determination of when alternative scenarios are ``reasonably 
anticipated'' and would meet the requirements of section 70.6(a)(9) (or 
VCAPCD Rule 33.4(B)) is not amenable to a rigid legal formula that can 
dictate through general guidance what types of permit terms and 
conditions will ensure that a source's future operations comply with 
these requirements. Instead, there must be legal and practical 
considerations that inform this determination within EPA's reasonably 
broad discretion to do so. The Agency has identified certain 
preliminary legal boundary considerations and conditions for 
implementing reasonably anticipated operating scenarios as part of this 
XL project, pending further experience with pilot projects and permits 
and further guidance or rulemaking on the subject.
    The structure and nature of title V permitting determine how permit 
terms and conditions may be developed to reasonably anticipate 
alternative operating scenarios. The part 70 regulations govern the 
content requirements for permit applications and permits in sections 
70.5 and 70.6, respectively, and these sections govern how reasonably 
anticipated AOSs must be addressed in permit applications and permits 
as well. For example, all part 70 permit applications must contain 
information ``for each emissions unit at a part 70 source,'' which 
includes a description of the source's processes and products for each 
alternate scenario identified by the source (see 40 CFR 70.5(c) and 
(c)(2)). Section 70.6(a)(9) in turn makes clear that a source must 
identify in its application each reasonably anticipated operating 
scenario for which it intends to include permit terms and conditions. 
For this specific project, Imation was required to identify the new or 
modified emissions units that are part of their reasonably anticipated 
AOSs.
2. Compliance with the Permit Application Requirements
    As noted above, part 70 permit applications must contain specific 
information ``for each emissions unit at a part 70 source.'' 40 CFR 
70.5(c) contains the minimum permit application requirements. As stated 
in EPA's White Paper for Streamlined Development of part 70 Permit 
Applications, July 10, 1995 (White Paper I), ``Applications should 
contain information to the extent needed to determine major source 
status, to verify the applicability of part 70 or applicable 
requirements, to verify compliance with applicable requirements, and to 
compute a permit fee (as necessary).'' (Id. at 6) The White Paper 
further articulates how part 70 allows permitting authorities (in this 
case, VCAPCD) considerable flexibility to make decisions regarding the 
completeness of permit applications and their adequacy to support 
initial title V permit issuance. (Id. at 2) EPA and VCAPCD have 
determined that the information provided by Imation as part of their 
initial title V application, and through subsequent submittal of 
supplemental information, completely satisfies the permit application 
content requirements under 70.5(c) for existing emissions units and for 
reasonably anticipated AOSs. The following is a brief discussion of 
Imation's compliance with the requirements of section 70.5(c), focused 
specifically on the information they provided to address reasonably 
anticipated AOSs.
    40 CFR 70.5(c)(2) requires a description of the source's processes 
and products, including any associated with AOSs at the source. Imation 
has provided the SIC codes for all existing equipment and all new and 
modified equipment contained in their AOSs, as is specifically required 
by section 70.5(c)(2).
    40 CFR 70.5(c)(3) requires emission-related information for the 
source as well as for specific emissions units. In particular, section 
70.5(c)(3)(i) requires identification of ``all emissions of pollutants 
for which the source is major, and all emissions of regulated air 
pollutants.'' Imation has identified, for existing emissions units and 
for any new or modified emissions units under the reasonably 
anticipated AOSs, that they are a major source of VOCs and that they 
emit NOX, SOX, PM, CO, and HAPs in non-major 
quantities. Section 70.5(c)(3)(i) also requires that a permit 
application ``describe all emissions of regulated air pollutants 
emitted from any emissions unit.'' EPA's White Paper I states that this 
can be a qualitative description of all significant emissions units 
i.e., that numeric estimates are not required. (Id. at 6) Based on 
this, and the previously noted guidance on the extent and purpose of 
information to be provided in an application, EPA and VCAPCD have 
determined that Imation has met this requirement for existing emissions 
units and for new or modified emissions units under the reasonably 
anticipated AOSs. Imation has provided lists of all existing emissions 
units, as well as the specific emissions units that comprise the 
coating operations contained in their reasonably anticipated AOSs, and 
they have qualitatively described the emissions from all of these 
units, namely VOCs and HAPs for emissions units that are part of the 
existing, new, and modified coating operations (including the ancillary 
equipment) and NOX, SOX, PM, CO, and VOC 
emissions from the gas-fired boilers. Finally, section 70.5(c)(3)(i) 
provides that the permitting authority may request additional emissions 
information to verify which requirements are applicable to the source. 
VCAPCD and EPA have determined that no additional emissions information 
is required because the applicability of the requirements of all 
relevant standards (both currently applicable requirements and 
requirements applicable to the reasonably anticipated AOSs) is not 
dependent on emissions information beyond the qualitative information 
provided by Imation in their permit application.
    40 CFR 70.5(c)(3)(ii) requires the source to identify and describe 
all points of emissions described in section 70.5(c)(3)(i) ``in 
sufficient detail to establish the basis for fees and applicability of 
requirements of the Act.'' As already noted, Imation provided lists of 
existing units and units that are contained in their reasonably 
anticipated AOSs. Imation has further provided a description of each 
type of emissions unit, in many cases describing the purpose of 
different pieces of equipment. For emissions units under the reasonably 
anticipated AOSs that are subject to standards that regulate down to 
one or more individual pieces of constituent equipment (e.g., magnetic 
tape coating and polymeric coating) as opposed to wholly regulating an 
entire coating line as a single entity, Imation clearly identified the 
constituent pieces and provided upper-bound estimates of the number of 
constituent pieces that may be added to the facility under a reasonably 
anticipated AOS. These details for the specific units subject to such 
standards

[[Page 37798]]

were provided by Imation as additional information to clearly establish 
the requirements applicable to the reasonably anticipated AOSs at their 
facility. VCAPCD-levied permit fees are based on overall facility 
emissions, which in this case are measured by the FTIR-CEMS. Thus, no 
additional detail on specific emissions points, whether for existing 
emissions units or for units under the reasonably anticipated AOSs, is 
necessary to establish the fee basis.
    40 CFR 70.5(c)(3)(iii) requires information on ``emissions rate in 
tpy and in such terms as are necessary to establish compliance 
consistent with the applicable standard reference test method.'' White 
Paper I states that EPA interprets the tpy estimates to not be required 
at all where they would serve no useful purpose, where a quantifiable 
emissions rate is not applicable, or where emission units are subject 
to a generic requirement. White Paper I at 7. EPA and VCAPCD have 
determined that the tpy estimates are not required because a 
quantifiable emissions rate is not applicable to any individual 
emissions unit. Rather, all the relevant standards (both currently 
applicable standards and standards applicable to the reasonably 
anticipated AOSs) are written in terms of control efficiency (based on 
inlet/outlet concentrations) rather than overall emissions rate.
    The only applicable requirement described in terms of emissions 
rate is the overall site emissions cap (PAL) of 150 tpy. This 
applicable requirement is not emissions unit-specific, but applies to 
the facility as a whole. White Paper I states that where a PAL or other 
plantwide emissions limit would be established or defined in a part 70 
permit, ``more emissions information would presumptively be required to 
verify emissions levels and monitoring approaches.'' (Id. at 7) Imation 
has met this added requirement through the provision of continuous 
emissions monitoring data collected by the source. These data have been 
deemed sufficient to verify VOC emission levels and to meet the intent 
of the regulatory requirement at 40 CFR 70.5(c)(3)(iii) and the White 
Paper I interpretation of this requirement. For future compliance with 
the plantwide VOC emissions rate, Imation is using the FTIR-CEMS, which 
provides continuous and highly accurate data on VOC emissions.
    40 CFR 70.5(c)(3)(iv) requires the submission of information about 
fuels, fuel use, raw materials, production rates, and operating 
schedules, to the extent such information is needed to determine or 
regulate emissions. VCAPCD and EPA have determined that such 
information is not needed to determine or regulate emissions associated 
with the reasonably anticipated AOSs, however, Imation has still 
provided some of this information for new and modified equipment 
contained in the alternative scenarios.
    Pursuant to the requirements of section 70.5(c)(3)(v), Imation has 
identified and described its existing air pollution control equipment 
and the control equipment contained in the reasonably anticipated AOSs, 
as well as the compliance monitoring devices for the equipment. 
Imation's existing solvent recovery unit (SRU) is monitored by two FID-
CEMS and the FTIR-CEMS. Other VOC/HAP air pollution control devices 
described in Imation's reasonably anticipated AOSs include a thermal 
oxidizer, a catalytic oxidizer, and a new SRU. These control devices 
would be continuously monitored by an FTIR-CEMS, and either continuous 
combustion temperature monitors (for the oxidizers) or FID-CEMS (for 
the SRU).
    Imation has met the requirements of the remainder of section 
70.5(c)(3) in their permit application by addressing the limitations on 
source operation affecting emissions and the work practice standards 
for all regulated pollutants at the source (see section 
70.5(c)(3)(vi)), by providing all necessary information required by any 
applicable requirement (section 70.5(c)(3)(vii)), and by providing all 
necessary calculations for the information in their application 
(section 70.5(c)(3)(viii)).
    Imation has also met the requirements of sections 70.5(c)(4), (5), 
(6), (8), (9), and (10), as applicable to the existing operations and 
operations described in their AOSs. Unlike the requirements in section 
70.5(c)(3), where a determination of sufficient permit application 
content may be subject to various interpretations and has been the 
subject of specific EPA policy guidance, the requirements in these 
parts of the regulation are very straightforward. For example, section 
70.5(c)(6) requires the source to explain any proposed exemptions from 
otherwise applicable requirements. Imation has fulfilled this 
requirement (they have no proposed exemptions from otherwise applicable 
requirements), as well as the remaining requirements of sections 
70.5(c)(4), (5), (8), (9), and (10).
    40 CFR 70.5(c)(7) requires the source to submit additional 
information as determined to be necessary by the permitting authority 
to define alternative operating scenarios identified by the source 
pursuant to section 70.6(a)(9). EPA and VCAPCD have determined that the 
information provided by Imation is sufficient and that no additional 
information is necessary to define alternative operating scenarios 
identified by the source.
    Imation's compliance with the regulatory requirements of section 
70.5(c) for permit application content, for both existing equipment and 
for new and modified equipment contained in their reasonably 
anticipated AOSs, provided the necessary information for EPA and VCAPCD 
to develop a title V permit for the source which identifies all 
applicable requirements and which contains terms and conditions 
sufficient to assure that each operating scenario will comply with all 
applicable requirements and will meet the requirements of part 70. As 
previously noted, a pre-draft copy of the Imation title V permit is 
available today as part of this document for informational purposes.
3. Overview of the Permit Content Requirements
    Along the same lines as the requirements under section 70.5(c), 
section 70.6 requires that all part 70 permits include emissions 
limitations and standards, monitoring, recordkeeping, reporting, 
compliance and other requirements to assure compliance with all 
applicable requirements. Section 70.6(a)(9) again makes clear that the 
permit terms and conditions governing alternative scenarios must meet 
these requirements. Applicable requirements generally fix a source's 
compliance obligations on an emissions unit or activity, control 
equipment, process, or combination thereof. Permitting alternative 
operating scenarios requires the ability to reasonably anticipate 
future emissions units, future operational details, and the compliance 
obligations under each applicable requirement associated with each 
operational state, as necessary to assure compliance with each 
applicable requirement.
    The requirement to ensure that the terms and conditions of each 
alternative scenario meet all applicable requirements has been 
simplified somewhat in this project by conducting a comprehensive 
streamlining analysis, in accordance with White Paper II. See section 
II.C of this document. This simplifies matters by identifying the most 
stringent requirements of the five NSPS standards, one MACT standard 
and District Rule that Imation might trigger, and imposing these most 
stringent requirements as a single, uniform set of requirements that 
apply to each alternative scenario (as well as to the current 
operational scenario). This single, uniform set of requirements

[[Page 37799]]

includes emissions limitations and standards, monitoring, 
recordkeeping, reporting, compliance and other requirements to assure 
compliance with all applicable requirements for each reasonably 
anticipated AOS. By requiring that Imation meet the most stringent of 
these requirements the title V permit for Imation is able to assure 
compliance with all applicable requirements and the requirements of 
part 70 and the District's title V program in accordance with CAA 
section 504(a).
    Moreover, the permit terms and conditions governing each 
alternative operating scenario must assure compliance with all part 70 
and applicable requirements at all times. This means that the permit 
terms and conditions must assure compliance with all relevant 
requirements at the time of initial permit issuance and at the time 
that changes to alternative operating scenarios are undertaken in the 
future. Upon a source's change from one operating scenario to another, 
the terms and conditions of the permit must continue to fully and 
accurately reflect the source's compliance obligations under all 
requirements applicable to the change. Imation's title V operating 
permit clearly states that if Imation changes to an operating scenario 
that was not provided for in its permit, or if a change undertaken by 
Imation triggers compliance obligations that are not fully and 
accurately reflected in the permit, then they will be subject to the 
permit revision, permit reopening, or section 70.4(b) notification 
provisions, as applicable, under the part 70 regulations and VCAPCD 
rules prior to making the change.
4. Permitting Reasonably Anticipated Alternative Operating Scenarios
    The permitting of established operating scenarios at a part 70 
source that are fully known, identified and expected is 
straightforward. Such situations are accounted for in part 70 permits 
through terms and conditions that specify the emissions units and 
activities, provide required citations to applicable requirements, and 
supply the additional range of permit provisions required in a complete 
title V permit. Reflecting current equipment and activities, existing 
operating configurations, and presently applicable regulatory 
requirements, these operating scenarios present no difficulty to 
incorporating into an operating permit sufficient terms to meet the 
permit content requirements of part 70.
    The preapproval and permitting of reasonably anticipated AOSs is 
somewhat different in that their associated emissions units and 
activities, operational configurations, and applicable requirements may 
not be known with the same specificity as previously established 
operating scenarios. Nonetheless, in order to be included in the permit 
as alternative operating scenarios, the source must provide sufficient 
specificity for those scenarios to allow the permitting authority to 
determine the applicable requirement(s) and establish permit terms and 
conditions assuring compliance with those applicable requirements and 
the requirements of part 70. The EPA believes that it is a reasonable 
interpretation of section 70.6(a)(9) to require only that permit terms 
and conditions reasonably anticipate the emissions units and 
activities, operational configurations, compliance obligations, and 
other relevant information associated with each alternative operating 
scenario, so long as the permit terms and conditions assure compliance 
with relevant applicable requirements at all times. Conversely, there 
may be new or different requirements that attach to an operating 
scenario at the time that the source changes to that scenario, or other 
material differences from the permitted operating scenario may have 
arisen, such that the change and its regulatory requirements are not 
covered by the permit. If the permit does not reflect those 
requirements because they were not previously established, then the 
source, as provided for under the part 70 regulation, must account for 
all requirements applicable to that operating scenario, whether through 
a permit revision or advance notification or in response to a permit 
reopening.
    It is helpful to distinguish further among categories of AOSs, on 
the basis of whether new versus existing process equipment or control 
devices are involved, and on the basis of the specificity of the 
equipment identification, operational configurations, and linkages to 
applicable requirements in the permit. Of the two categories of 
alternative operating scenarios described below, EPA is experimenting 
with the pre-approval of equipment modifications and new equipment 
construction that would trigger one or more specified NSPSs, the MACT 
standard for Magnetic Tape Manufacturing Operations, and a VCAPCD SIP 
rule.
    First, there are alternative operating scenarios for existing 
emissions units and activities at a part 70 source, covering 
specifically identified operational states or configurations for 
specified emissions units. In its simplest form, this first category is 
exemplified by an emissions unit such as a fossil fuel-fired boiler 
that has two fuel burning options, which are each subject to a 
different applicable requirement with different monitoring obligations. 
The task of reasonably anticipating the terms and conditions of an 
alternative operating scenario such as this is furthered by the 
relative ease of specifying the emissions unit and its activities, 
operational configurations and conditions, and associated applicable 
requirements. A source's past operating experience as well as future 
operational certainty, founded upon existing emissions units and 
activities, will make permitting of such alternative scenarios more 
like the task of permitting a source's current operating scenario.
    A second category of alternative operating scenario, which is the 
subject of experimentation in this XL project, covers specific new and 
modified emissions units and control devices that have not been 
constructed or modified at the time the operating scenario is 
established in the permit, but that may be preapproved in the title V 
permit. The following is a description of the specific new and modified 
emissions units and control devices that are being pre-approved as part 
of this category of AOS under the Imation XL Project.
5. Description of the Alternative Operating Scenarios for Imation 
Camarillo
    The new and modified process equipment pre-approved in this project 
includes four types of surface coating operations and liquid storage 
tanks used to support these operations. Magnetic tape coating is the 
only one of the four surface coating types currently conducted by 
Imation. The other three types, polymeric coating, pressure sensitive 
tape and label surface coating, and metal coil surface coating are 
similar to magnetic tape coating in that they all involve a VOC-based 
coating applied to a supporting web substrate.9 These 
operations differ in terms of the substrate material to which the 
coating is applied, the coating material itself, and the final product 
being manufactured.
---------------------------------------------------------------------------

    \9\ Paper, Fabric, and Film Coating operations, which are 
defined and regulated by a VCAPCD SIP rule, are also pre-approved 
under this project. However, these operations are not typically 
distinct from the surface coating types listed above (i.e., magnetic 
tape, polymeric, and pressure sensitive tape and label coating 
operations are all also considered ``Paper, Fabric, and Film Coating 
Operations'').
---------------------------------------------------------------------------

    Generally, all of the pre-approved coating types are continuous 
coating operations where the web substrate is unwound from a roll or 
coil, coated at

[[Page 37800]]

one or more coating stations, dried/cured in an oven, and then rewound 
onto the same roll or coil. All operations require ancillary process 
equipment such as the liquid storage tanks noted above, other tanks, 
kettles, and mills for handling, mixing, and otherwise preparing the 
coating solutions for use from raw materials. It is anticipated that 
some of the ancillary equipment will support operations of more than 
one coating type. For example, if tetrahydrofuran--THF--is used as a 
carrier solvent for both magnetic tape and polymeric coating 
operations, then a single THF storage/holding tank could be used to 
feed both types of coating line.
    All such pre-approved new or modified coating operations, as well 
as all new or modified ancillary equipment that is not directly hard-
piped to the 95% efficient control device, must be installed within a 
permanent total enclosure (providing 100% capture of emissions) and the 
captured emissions delivered to the 95% efficient control device. These 
are the capture/control requirements that are also in place under this 
project for existing process equipment (four magnetic tape coating 
lines and all mix preparation equipment).
    An additional aspect of the reasonably anticipated AOSs under this 
project for which Imation is also receiving pre-approval, is the 
construction and operation of specific devices to control emissions 
from the new or modified process equipment described above. Specific 
control devices include a new thermal or catalytic oxidizer, a new SRU 
(and associated steam stripper, if necessary), and a baghouse or fabric 
filter for particulate control within the permanent total enclosure. 
Although these devices are part of the reasonably anticipated AOSs for 
this facility, and can be constructed and initially operated without 
first revising the title V operating permit, the project contains 
several safeguards described below to ensure that these devices will be 
operated in accordance with all applicable requirements. The reasonably 
anticipated AOSs in Imation's permit will allow VOC and HAP emissions 
from new or modified process equipment to be controlled by the existing 
control set-up at the facility (the existing total enclosure and SRU), 
or by one of the three VOC/HAP air pollution control devices listed 
above that has been determined, through a VCAPCD-approved analysis, to 
meet CA BACT (same as federally defined LAER) and/or Toxics-BACT, 
whichever is most stringent.
6. Analysis of Factors Considered in Defining Appropriate Permit Terms 
for Imation's Alternative Operating Scenarios
    The permit terms needed to approve alternative operating scenarios 
to assure compliance with all applicable requirements and to be 
reasonably anticipated may, in general, be expected to vary by source 
category, the different types of emissions units and operating 
scenarios present at sources, and the inherent uncertainty of 
predicting future operating conditions and market demands. In 
particular, the authorizing permit limits might vary based on several 
factors which primarily include, but are not necessarily limited to: 
the types and specific terms of the applicable requirement(s); the 
complexity of the facility; whether the type or quantity of emissions 
will change widely; whether different pollution control devices will be 
needed; the ability of the permitting authority to develop practicably 
enforceable permit terms for alternative scenarios and to define the 
limitations of the control and monitoring approaches; the potential for 
future technology advances (where such advances are linked to the 
nature of the applicable requirements); and the presence of discretion 
in determining the applicability and/or the compliance status of the 
change. These factors are not always present, are often interdependent, 
and can range widely in their ability to affect whether compliance with 
the applicable requirements can be assured and whether operating 
scenarios can be reasonably anticipated.
    In determining the permit terms and conditions needed to approve 
the AOSs under the Imation XL Project, EPA and VCAPCD considered all of 
the factors listed above. Below is a brief discussion of several of 
these factors as they pertain to the Agencies' determination that 
Imation's AOSs are reasonably anticipated and that compliance with all 
applicable requirements can be assured by the terms and conditions in 
their title V operating permit.
    One major factor is the type of applicable requirements that attach 
to the AOSs and the specific terms associated with these applicable 
requirements. For this project, reasonably anticipated AOSs involve 
activities subject to several types of applicable requirement. However, 
as previously noted, all of the requirements associated with every 
applicable standard that applies or will apply to the reasonably 
anticipated AOSs and the current operating scenarios have been 
streamlined into a single set of applicable requirements, using EPA's 
guidance on streamlining multiple applicable requirements from White 
Paper II. The requirements essentially reduce to the emissions 
standards, limitations, monitoring, recordkeeping, reporting, and 
compliance requirements of the MACT for Magnetic Tape Manufacturing 
Operations. Thus, regardless of which reasonably anticipated AOS is 
implemented, there will be no difference in applicable requirements.
    In addition, the application of the streamlined set of requirements 
to activities under reasonably anticipated AOSs should be very 
straightforward for the facility given their past operating experience. 
The specific requirements are very similar to those that Imation 
Camarillo has been operating under for a number of years (e.g., total 
enclosure of coating operations with emissions routed to a single 
control device), and the emissions units to which the requirements will 
need to be applied for any of the alternative scenarios will be very 
similar to those already operating at the facility. In fact, this 
general similarity amongst emissions units in the current operating 
scenario and in the alternative scenarios (and, therefore, the 
similarity of the multiple standards which apply to the different 
scenarios) is what allows the streamlining of six federal standards 
into a single set of applicable requirements.
    For example, the requirements for control of emissions from coating 
lines, whether the lines are for magnetic tape, polymeric, pressure 
sensitive tape and label, or metal coil coating, are identical--95% VOC 
and volatile HAP control, accomplished by housing the entire line 
(unwind/rewind station, coater(s), drying oven(s)) in a permanent total 
enclosure which is routed to a 95% efficient control device. The 
application of these requirements to new or modified equipment under 
any of the reasonably anticipated AOSs will be the same, and will be 
the same as the application of these requirements to Imation's four 
existing coating lines.
    Another significant factor in evaluating the terms necessary to 
implement Imation's AOSs is the complexity of the facility. Imation 
Camarillo is not an extremely complex facility. As described above, it 
is a manufacturing facility utilizing surface coating operations. The 
operations defined in Imation's AOSs are all types of surface coating. 
Surface coating of continuous web substrates involves unwinding the 
web, passing it through coating stations, then through an oven, and 
then rewinding it back on to the roll

[[Page 37801]]

from which it was unwound. This manufacturing operation relies upon 
support equipment such as tanks, mixers, and kettles for preparing the 
coatings, and all coatings are directly plumbed to the coating 
stations. All the emissions units associated with a particular coating 
operation (except for some closed-vent tanks whose emissions are piped 
directly to the control device) are within a permanent total enclosure 
whose room air is routed through a single point of control. Some have 
likened the operational set-up at Imation Camarillo to a black box, 
with a single emission point. The reasonably anticipated AOSs allow for 
the addition of the same or similar types of surface coating lines 
within the existing black box, as well as the creation of one new black 
box (permanent total enclosure), also with a single point of emissions, 
and subject to the identical rigorous parameters of the existing black 
box.
    A third factor for consideration is whether the type or quantity of 
emissions will change widely under the AOSs. This is particularly 
important where emission of a new compound or exceedance of a specified 
emissions threshold might trigger new requirements or modify compliance 
obligations under an alternative scenario. In this case, the type of 
emissions from the facility is not expected to change widely from the 
existing emissions profile. The emissions from units defined in the 
AOSs will be very similar to the emissions associated with the current 
operating scenario, namely, VOCs (some of which are HAPs) used as 
carrier solvents in the surface coating process. As described 
previously, the aggregate quantity of emissions could increase somewhat 
as a result of the implementation of an AOS, however, the applicable 
requirements and their application to existing, new, and modified 
equipment, are not dependent on the overall quantity (or type) of 
emissions, as long as the 150 tpy VOC cap is not exceeded.
    An additional factor is whether different pollution control devices 
will be needed to control emissions associated with alternative 
scenarios. The existing solvent recovery unit (SRU) is highly efficient 
and should provide the necessary level of VOC and HAP emissions control 
(at least 95%) for any emissions units associated with Imation's 
reasonably anticipated AOSs. However, under some circumstances a 
different pollution control device may be needed. One circumstance is 
if the BACT/TBACT analysis, which Imation must conduct for any proposed 
emissions unit construction or modification, demonstrates that a 
different control device must be utilized to control emissions from the 
proposed new or modified units. Another circumstance is if the existing 
SRU has reached its maximum capacity for handling facility emissions. 
In the event that Imation proposes to install a different control 
device, in accordance with a specified AOS, several additional 
safeguards are in place. These safeguards, such as requiring specific 
pre-construction VCAPCD reviews and minor permit modifications 
subsequent to control device performance testing, are established as 
key terms in the operating permit for assuring compliance, and are 
described more fully below.
    A final factor in establishing permit terms for reasonably 
anticipated AOSs for the Imation XL Project is the ability of the 
permitting authority, VCAPCD, to develop practically enforceable permit 
terms for AOSs. The nature of the requirements that apply to Imation's 
AOSs and the means by which the facility has elected to meet these 
requirements enhances VCAPCD's ability to develop permit terms for the 
AOSs that are enforceable as a practical matter. For example, the 
emissions limitation for each coating line is the same (95% control) so 
there is no question as to which limitation applies to which line. 
Furthermore, all coating lines must be located within a permanent total 
enclosure. The enclosure is vented through a single point to the 95% 
efficient control device, that is continuously monitored (using 
appropriate CEMS/CMS) to ensure that an overall control efficiency of 
95% is maintained. The control and monitoring approaches are 
straightforward and apply in the same manner to each alternative 
scenario.
    The consideration of all these factors by EPA and VCAPCD informed 
the agencies' development of the permit terms and conditions needed to 
approve Imation's alternative scenarios. In addition, 40 CFR 70.6(a)(9) 
affords permitting authorities the latitude to impose any necessary 
permit terms and conditions to assure that alternative operating 
scenarios meet all applicable requirements and the requirements of part 
70. Such terms and conditions may go beyond compliance obligations 
strictly incorporated from applicable requirements being implemented 
pursuant to the alternative scenario.
7. Safeguards for Alternative Operating Scenario Implementation to 
Assure Compliance with all Applicable Requirements
    The VCAPCD has determined that in order to assure that Imation's 
alternative operating scenarios meet all applicable requirements, the 
following safeguards, which are contained in the title V operating 
permit as specific, enforceable requirements, are necessary to assure 
compliance. First, there is a safeguard to assure that any proposed new 
VOC/HAP control device represents BACT/TBACT for controlling the 
proposed new or modified emissions units. For any modifications or new 
construction implemented as an AOS, Imation must conduct a BACT/TBACT 
analysis for the proposed change, and VCAPCD must approve the analysis. 
The analysis must be approved prior to commencement of construction if 
the analysis indicates that a new control device (either a thermal 
oxidizer, catalytic oxidizer, or new SRU) must be installed, or prior 
to commencement of operation if the existing SRU meets BACT/TBACT. This 
will assure that the most stringent controls are applied at the 
facility, and will prevent the possibility of the facility installing a 
control device that the permitting authority subsequently deems 
inadequate for meeting the necessary level of VOC/HAP emissions 
control.
    Second, there are safeguards in the implementation of scenarios 
which include new VOC/HAP control devices to ensure that permit terms 
are updated based on documented performance testing. For AOSs involving 
construction of a new catalytic oxidizer or new SRU (including 
restarting the warehoused SRU on-site), Imation is required to apply 
for a minor permit modification once performance testing of the new 
device is complete. One purpose of the minor permit modification is to 
establish the specific operating conditions for the device that were 
demonstrated through performance testing to provide the necessary level 
of VOC/HAP control efficiency (minimum 95% or higher if required by 
BACT/TBACT results). This will assure that Imation's specific, 
enforceable operating parameter commitments for these devices are 
completely and accurately defined in the permit.
    For AOSs involving construction of a new thermal oxidizer, Imation 
is required to apply for a minor permit modification once performance 
testing of the new device is complete, if the operating parameters 
contained in the initial title V permit (minimum 1500

[[Page 37802]]

degrees F and 0.5 second residence time) do not result in the necessary 
level of VOC/HAP control efficiency (minimum 95% or higher if required 
by the BACT/TBACT results). Also, if performance testing of the new 
thermal oxidizer demonstrates the need for more stringent operating 
conditions (i.e., higher temperature and/or longer residence time), 
then Imation is required to operate the device at those conditions 
while their permit modification is pending.
    Third, VCAPCD has built into the AOS implementation process several 
opportunities to intervene prior to the execution of the preapproved 
alternative operating scenarios, if such intervention is necessary to 
assure compliance with applicable requirements. The terms of the permit 
contain a requirement for Imation to provide advance notification of 
any proposed AOS implementation at least 30 days prior to commencement 
of the pre-approved change (i.e., prior to commencement of any 
construction). This notification is provided through the permit-
mandated monthly report to the Agencies and the public. In addition, 
for AOSs involving construction of a new catalytic oxidizer or new SRU 
(including restarting the warehoused SRU on-site), Imation must provide 
to VCAPCD the proposed operational details for the device, and 
appropriate engineering calculations that support the proposed 
operating conditions at least 30 days prior to commencement of 
operation of the new device. This is in addition to the previously 
referenced requirement for VCAPCD approval (prior to construction) of 
the analysis demonstrating that the proposed new VOC/HAP control device 
represents BACT/TBACT for controlling new or modified emissions units.
8. Opportunity for EPA and Public Review of Proposed Alternative 
Operating Scenario Terms and Conditions
    In addition to permitting authority review, in this case the 
VCAPCD, part 70 permits are subject to public and EPA review to ensure 
that the permit terms and conditions assure compliance with all 
applicable requirements and the requirements of part 70. An essential 
consideration in determining whether permit terms and conditions 
reasonably anticipate operating scenarios is whether the permit 
provides sufficient information and opportunity for the public and EPA 
to determine and comment in a meaningful fashion whether the terms and 
conditions of reasonably anticipated operating scenarios meet, and will 
continue to meet, all applicable requirements and part 70 requirements. 
While EPA has participated closely in the development of the permit 
terms and conditions to date, and will have additional opportunities to 
review and comment on all aspects of the permit as it is finalized by 
the VCAPCD, the public will also have an opportunity to review and 
comment on the permit prior to its finalization. This opportunity will 
occur when VCAPCD provides its 30-day public notice of the draft 
permit. In addition, a pre-draft version of the title V operating 
permit is being made available as part of today's document. The pre-
draft permit, made available for informational purposes, contains 
descriptions of the reasonably anticipated AOSs, including limits on 
the extent of future construction and on the emissions from new and 
modified units. It includes a comprehensive streamlining analysis which 
identifies the most stringent requirements of all current and potential 
future applicable standards, and contains permit terms and conditions 
to assure compliance with these most stringent applicable requirements.
    Permit terms and conditions reflecting alternative operating 
scenarios, like all part 70 permit terms and conditions, are subject to 
the possibility of EPA objection and public petition under section 
505(b) of the Act. In addition, operating permits are subject to the 
possibility of reopening by permitting authorities or EPA under 
sections 502(b)(5) and 505(e) of the Act. Permit terms and conditions 
of alternative operating scenarios that fail to reasonably anticipate 
future operating scenarios, emissions units and activities, and their 
associated compliance obligations may be subject to EPA objection, 
public petition, or reopening for cause. Failure by permitting 
authorities to submit information necessary for the public and EPA to 
review proposed permits adequately constitutes grounds for an EPA 
objection under section 70.8(c)(3)(ii). However, as noted previously, 
EPA believes the information necessary for the review of alternative 
operating scenarios should be guided by the principle that permit terms 
and conditions must reasonably, but not perfectly, anticipate 
alternative operating scenarios.
9. EPA's Regulatory Interpretation of Advance Approvals for the Imation 
XL Project
    The EPA, in August 1994, proposed to allow use of the concept of 
alternative operating scenarios under section 70.6(a)(9) to provide 
advance approval to construct and operate new or modified units subject 
to NSR and section 112(g) (referred to as ``advance NSR''). (59 FR 
44460, 44472, Aug. 29, 1994). Under the proposal, advance NSR would 
have allowed permitting authorities to establish the applicable NSR or 
section 112(g) requirements before a reasonably anticipated project or 
class of projects was constructed or modified, and then include that 
project's requirements in the part 70 permit for the facility. As a 
result, the project would be ``preapproved'' by the permitting 
authority, without the need for a later part 70 permit revision since 
the part 70 permit would already contain the relevant construction and 
operation requirements for the project.
    In August 1995, EPA further clarified its advance NSR proposal by 
proposing to add a definition of advance NSR to section 70.2, and by 
explaining that, in EPA's view, a change subject to an advance approval 
scenario would not be a change under section 502(b)(10) of the Act (60 
FR 45530, 45544-45545, Aug. 31, 1995). Rather, it would constitute a 
switch to an alternative operating scenario under section 70.6(a)(9). 
As the 1995 preamble noted, this interpretation would have two 
advantages. First, it would allow the use of advance NSR for title I 
modifications, and avoid the limitation that changes made under section 
502(b)(10) cannot be title I modifications. Second, and more important, 
the 7-day advance notification under section 502(b)(10) which attaches 
to each change made under that section would not apply to changes under 
the advance NSR approval. Consequently, where the State operating 
permit program allows for advance approval, and the permitting 
authority approves an alternative scenario containing advance approval, 
the part 70 permit could allow a source to make the approved change 
without an advance notice or a part 70 permit revision.
    Although the Agency has not finalized revisions to the part 70 
regulations to adopt the proposed amendments to sections 70.2 and 
70.6(a)(9) discussed above, the Agency is prepared to interpret the 
existing part 70 regulations for purposes of this XL project to enable 
alternative operating scenarios to encompass advance approvals in the 
limited manner described in this document. In other words, for purposes 
of the approach described in this section, EPA believes that it is a 
reasonable interpretation of existing section 70.6(a)(9) to cover the 
advance approval of the new and modified emissions units and control 
devices described in this document,

[[Page 37803]]

within the scope of alternative operating scenarios that may be 
included in part 70 permits. The concept of ``reasonably anticipated 
operating scenarios'' is expansive enough to encompass not only 
existing equipment that may operate under a different operating 
scenario reasonably anticipated to occur, but also to encompass new and 
modified equipment housed in a permanent total enclosure, subject to 
100% capture and at least 95% control device efficiencies, and subject 
to the most stringent applicable requirement streamlining provided for 
in this project. In addition, there must be a reasonable anticipation 
as to the limits of the advance approval. The limits in this project 
include future construction of a maximum of six new coating lines 
during the permit's term, limitation of the types of new construction 
and modification that may be implemented under an AOS, and the permit's 
restriction of the source to one new total enclosure housing pre-
approved coating activities. As an additional element of the reasonable 
anticipation of operating scenarios, the permit provides upper-bound 
estimates of the number of constituent pieces of equipment (e.g., 
mills, mixing vessels, storage tanks) that may be constructed under 
specified AOSs.
    The Agency is prepared to advance these interpretations under the 
current regulations prior to any final action on the part 70 revisions 
that might adopt the proposed amendments, for purposes of this 
experimental XL project. As previously noted, adoption of alternative 
approaches or interpretations in the context of a specific XL project 
does not signal EPA's willingness to adopt that interpretation as a 
general matter. Depending on the results of this project, as well as 
the results of other experimental and pilot projects implemented by 
EPA, the Agency may or may not be willing to adopt an alternative 
approach or interpretation again, either generally or for other 
specific facilities. The EPA solicits comment on these interpretations 
and their application in this project. In addition, members of the 
public will have the opportunity to comment on the approach discussed 
above, as well as the title V permit application and permit for the 
Imation Camarillo Plant, when the draft permit is made available by 
VCAPCD for a 30-day public comment period.

III. Other Requirements

Environmental Management System (EMS) and Multi-Media Pollution 
Prevention Reporting

    As an additional element of this XL project, Imation Camarillo is 
developing an EMS modeled after International Standard ISO 14001. The 
EMS identifies all aspects of the plant's environmental management 
program and is a tool for ensuring continuous improvement with respect 
to controlling the environmental impacts associated with the Camarillo 
plant's activities. In terms of innovation, this project can be used to 
learn how an EMS can improve the pollution prevention opportunities 
that are identified within a plant, how the systems management approach 
is useful in helping a company meet and go beyond compliance, and how 
the training of employees to implement an effective EMS results in a 
reduction of environmental risks.
    Imation Camarillo will also report a waste ratio number annually 
that represents the results of pollution prevention measures taken at 
the facility on an annual basis since 1990. The waste ratio shall be 
calculated based on the mass of the facility's actual waste output in 
all media and the mass of products and byproducts produced at the 
facility. Reporting of the waste ratio as a measure of pollution 
prevention activities at Imation Camarillo is one of the voluntary 
elements of this XL project.

    Dated: June 23, 1999.
Laura Yoshii,
Acting Regional Administrator, Region IX.
[FR Doc. 99-17633 Filed 7-12-99; 8:45 am]
BILLING CODE 6560-50-P