[Federal Register Volume 66, Number 58 (Monday, March 26, 2001)]
[Rules and Regulations]
[Pages 16400-16409]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-7399]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 63

[FRL-6767-8]
RIN 2060-AJ39


Project XL Site-Specific Rulemaking for Georgia-Pacific 
Corporation's Facility in Big Island, VA

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

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SUMMARY: Under the Project XL program, the EPA is supporting a project 
for the Georgia-Pacific Corporation

[[Page 16401]]

facility located in Big Island, Virginia. The terms of the project are 
defined in the ``Georgia-Pacific Corporation Big Island, Virginia 
Project XL Final Project Agreement'' (FPA). The EPA is issuing this 
rule, applicable only to the Georgia-Pacific Big Island facility, to 
help implement the project.
    Under the terms of the FPA, Georgia-Pacific will install and 
operate the first commercial scale, black liquor gasification system in 
the United States. Use of this system will provide superior air 
emissions reductions and energy benefits compared to the use of 
conventional technology for recovering pulping chemicals from black 
liquor wastes in the pulp and paper industry. Once installed and 
successfully operating, the black liquor gasification system is 
expected to easily meet emission standards that apply (specifically the 
National Emission Standards for Hazardous Air Pollutants From Chemical 
Recovery Combustion Sources at Kraft, Soda, Sulfite, and Stand-Alone 
Semichemical Pulp Mills, promulgated in the Federal Register on January 
12, 2001 (66 FR 3179)). However, since the system will be the first 
demonstrated on a commercial scale in the United States, there is some 
risk that it ultimately will not operate successfully. If this event 
occurs, Georgia-Pacific may require temporary relief from the otherwise 
applicable emissions standards. Without this relief, Georgia-Pacific 
would not proceed to commercialize the gasification technology. This 
action provides a limited extension to the date of compliance with the 
standards for the Big Island facility if the system is not successful.

DATES: This direct final rule will be effective on June 25, 2001, 
without further notice, unless EPA receives adverse comments by April 
25, 2001. Written comments must be received by April 25, 2001. Anyone 
requesting a public hearing must contact the EPA no later than April 5, 
2001. If a public hearing is held, it will be on April 28, 2001, at 
10:00 a.m. Requests to present oral testimony must be made by April 16, 
2001. Persons interested in requesting a hearing, attending a hearing, 
or presenting oral testimony at a hearing should call Mr. David Beck at 
(919) 541-5421. If we receive any adverse comment, we will publish a 
timely withdrawal in the Federal Register informing the public that 
this direct final rule will not take effect.

ADDRESSES: By U.S. Postal Service, send comments (in duplicate if 
possible) to: Air and Radiation Docket and Information Center (6102), 
Attention Docket Number A-2000-42, U.S. EPA, 1200 Pennsylvania Avenue, 
NW., Washington, DC 20460. In person or by courier, deliver comments 
(in duplicate if possible) to: Air and Radiation Docket and Information 
Center (6102), Attention Docket Number A-2000-42, U.S. EPA, 401 M 
Street, SW., Washington, DC 20460. The EPA requests that a separate 
copy of each public comment be sent to the contact person listed below.
    Comments also may be submitted electronically by sending electronic 
mail (e-mail) to: [email protected]. Electronic comments must be 
submitted as an ASCII file avoiding the use of special characters and 
any form of encryption. Comments also will be accepted on diskette in 
WordPerfect or ASCII file format. All comments in electronic form must 
be identified by the docket number (No. A-2000-42). No confidential 
business information should be submitted through e-mail. Electronic 
comments may be filed online at many Federal Depository Libraries.
    If a public hearing is held, it will take place at the EPA Office 
of Administration Auditorium, Research Triangle Park, North Carolina.

FOR FURTHER INFORMATION CONTACT: Mr. David Beck, Office of 
Environmental Policy Innovation (MD-10), U.S. EPA, Research Triangle 
Park, NC 27711, telephone number (919) 541-5421, e-mail: 
[email protected].

SUPPLEMENTARY INFORMATION: The EPA is publishing this rule without 
prior proposal because we view this as a noncontroversial rule and do 
not anticipate adverse comment. However, in the ``Proposed Rules'' 
section of today's Federal Register, we are publishing a separate 
document that will serve as the proposal in the event adverse comments 
are filed. This rule will be effective on June 25, 2001, without 
further notice unless we receive any adverse comment by April 25, 2001. 
The amendment provision for extended compliance times for Georgia-
Pacific's Big Island facility, as described in the XL project FPA, is 
crucial to the company's plan to commercialize black liquor 
gasification. Given the economic and environmental benefits presented 
by this technology, its use could eventually become widespread in the 
pulp and paper industry. The draft FPA, including all details of the 
project, was made available for public comment through a Federal 
Register notice on May 8, 2000 (65 FR 26606). No adverse comments were 
received as a result of that notice, and the FPA subsequently was 
signed by the EPA, the U.S. Department of Agriculture (USDA) Forest 
Service, Georgia-Pacific, and Virginia's Department of Environmental 
Quality.

Outline

I. Overview
    A. Project XL
    B. Georgia-Pacific Project Description
II. Amendments to the MACT II Rule
    A. Georgia-Pacific's Flexibility Need
    B. Rule Changes
    1. Definitions
    2. Compliance Extensions
    3. Recordkeeping and Reporting Requirements
    C. Rationale for the Compliance Flexibility
III. Administrative Requirements
    A. Executive Order 12866: Regulatory Planning and Review
    B. Regulatory Flexibility Act (RFA), as Amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 
U.S.C. 601 et seq.
    C. Paperwork Reduction Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13045: Protection of Children from 
Environmental Health Risks and Safety Risks
    F. Executive Order 12875: Enhancing Intergovernmental 
Partnerships
    G. Executive Order 13084: Consultation and Coordination with 
Indian Tribal Governments
    H. National Technology Transfer and Advancement Act of 1995 
(NTTAA)
    I. Congressional Review Act

I. Overview

A. Project XL

    This site-specific regulation will help implement a project 
developed under Project XL, an EPA initiative to allow regulated 
entities to achieve better environmental results at less cost. Project 
XL--Excellence and Leadership--was announced on March 16, 1995, as a 
central part of the National Performance Review and the EPA's effort to 
reinvent environmental protection (60 CFR 27282, May 23, 1995). Project 
XL provides private and public regulated entities an opportunity to 
develop a limited number of their own pilot projects, which afford them 
regulatory flexibility but also produce environmental protection that 
is superior to what would be achieved through compliance with current 
and reasonably anticipated future regulations. These efforts are 
crucial to the Agency's ability to test new regulatory strategies that 
reduce regulatory burden and promote economic growth while achieving 
better environmental and public health protection. The Agency intends 
to evaluate the results of this and other Project XL projects to 
determine which specific elements of the project(s), if any, should be 
more broadly applied to

[[Page 16402]]

other regulated entities for the benefit of both the economy and the 
environment.
    Under 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 the full support of affected Federal, state 
and tribal agencies to be selected. For more information about the XL 
criteria, readers should refer to 60 FR 27282, May 23, 1995 and 62 FR 
19872, April 23, 1997, and the September 1999 document ``A Guide to 
Writing Final Project Agreements under Project XL.''
    The XL program is intended to allow the 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 the EPA to proceed more quickly than otherwise would be 
possible when undertaking changes on a nationwide basis. As part of 
this experimentation, the 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. The EPA may also modify 
rules, on a site-specific basis, 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 the 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 determining 
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.
    The 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 CAA.
    Each XL project relies on the input from a project stakeholder 
group, which usually includes representatives from the project sponsor, 
EPA, the involved State environmental agency, environmental groups, 
local community representatives, and other parties with an interest in 
the project. The stakeholder group works out the provisions of the FPA, 
which includes the details of the project, a timetable for completion, 
and the responsibilities of the signatories. The FPA is a statement of 
the plans and intentions of each signatory with respect to the project, 
but is not a legally binding document. The stakeholder group for the 
Georgia-Pacific project included representatives from the EPA, the 
Virginia Department of Environmental Quality, the USDA Forest Service, 
the U.S. Department of Energy (DOE), a local environmental group, the 
Big Island community, and, of course, Georgia-Pacific. A notice that 
the draft FPA for the Georgia-Pacific project was available for public 
comment appeared in the Federal Register on May 8, 2000. No comments 
were received on the draft FPA, and the final FPA was signed on May 31, 
2000 by Georgia-Pacific, the EPA, the Virginia Department of 
Environmental Quality, and the USDA Forest Service (the final FPA has 
been posted on EPA's website at: http://www.epa.gov/ProjectXL/georgia/index.htm). In the agreement, EPA committed to undertake this 
rulemaking.

B. Georgia-Pacific Project Description

    Georgia-Pacific owns and operates a non-sulfur, non-bleaching pulp 
and paper mill at Big Island, Virginia. The facility produces two 
products: corrugating medium, which is used by box manufacturing plants 
to make the fluted inner layer of corrugated boxes; and linerboard, 
which is used for the inside and outside layers of the boxes. 
Corrugating medium is made from semi-chemical (sodium carbonate/sodium 
hydroxide) hardwood pulp and secondary (recycled) fiber, and linerboard 
is made from fiber recycled from old corrugated containers, clippings 
and rejects from corrugated container manufacturing plants, and some 
mixed office waste paper. The secondary fiber operations supply 100 
percent of the fiber for the linerboard mill and about 20 percent of 
the fiber for the corrugating medium mill. Overall, the mill produces 
an average 870 tons per day of corrugating medium and 730 tons per day 
of linerboard.
    The mill is located in Bedford County, adjacent to the James River 
and approximately 20 miles northwest of Lynchburg, Virginia. A 
principal concern for this area is air quality due to the close 
proximity of the James River Face Wilderness. The James River Face 
Wilderness is about 3 miles to the northwest of the mill and under the 
CAA was classified a Federal Class I air quality area. The USDA Forest 
Service, a signatory to the FPA, is the designated Federal Land Manager 
for assuring that the air quality related values for this Class I area 
are maintained.
    The population of Big Island is approximately 400. The population 
within a 5-mile radius is about 2,100. Within a 25-mile radius of the 
mill (which includes the city of Lynchburg) is a population of 
approximately 111,500.
    The mill currently handles the spent (``black'') liquor from wood 
pulping operations by reducing liquor water content using a 
conventional multiple effect evaporation train and combusting the 
concentrated (about 60 percent solids) liquor in two smelters. Molten 
smelt is drawn from the smelters and dissolved in water to recover the 
sodium carbonate. This solution is used to make up the cooking liquor 
added to the hardwood chips going to the digesters (cooking vessels) to 
produce the pulp. Exhaust gases from the smelters pass through a 
venturi scrubber and are then discharged to the atmosphere.
    The mill currently is subject to two emission standards. The first 
is the so-called ``Cluster Rule,'' promulgated on

[[Page 16403]]

April 15, 1998 (40 CFR part 63 subpart S) under the CAA. That rule sets 
performance standards for regulated emission sources in pulp and paper 
production plants and is based on maximum achievable control technology 
(MACT). A second MACT based standard applicable to pulp and paper mills 
(National Emission Standards for Hazardous Air Pollutants From Chemical 
Recovery Combustion Sources at Kraft, Soda, Sulfite, and Stand-Alone 
Semichemical Pulp Mills or ``MACT II''), was promulgated in the Federal 
Register on January 12, 2001 (66 FR 3179) specifically to address 
hazardous air pollutant emissions from combustion sources associated 
with the recovery of pulping chemicals. Georgia-Pacific's two existing 
smelters (a type of semi-chemical combustion unit) are subject to the 
second rule.
    The MACT II rule contains a performance standard to be met, but 
does not specify a particular technology that must be used. The current 
emissions from Georgia-Pacific's two existing smelters at Big Island 
are above the HAP emission standard in the MACT II rule. For Georgia-
Pacific's Big Island facility to meet the standard in the MACT II rule, 
the smelters would have to be upgraded substantially. The age and 
physical condition of the smelters dictates that they either be rebuilt 
with additional emission control devices or replaced, such as with a 
conventional recovery boiler commonly used in the industry. Of these 
two options, Georgia-Pacific would choose to replace the smelters with 
conventional recovery technology. However, Georgia-Pacific also 
investigated a third alternative for chemical recovery, replacing the 
smelters with a PulseEnhancedTM, steam reforming black 
liquor gasification system, developed by Stone Chem, Inc. This 
technology uses steam reforming to convert the organics in black liquor 
to a hydrogen-rich gas fuel, leaving the residual pulping chemicals 
(primarily sodium carbonate) for reuse. The gas can then be used as a 
clean burning energy source for heat in the gasification unit and as an 
alternative boiler fuel, replacing fossil-fuel based (non-renewable) 
natural gas. Implementation of such a gasification system is expected 
to allow the Big Island facility to reduce emissions well below the 
MACT II HAP emission standards, and to significantly lower emissions of 
other criteria pollutants, compared to installation of conventional 
technology.
    The signatories to the FPA believe that gasification of black 
liquor represents a new and better approach for the chemical recovery 
process and eliminates many of the deficiencies of the conventional 
recovery furnace and fluid bed combustion technologies. The benefits of 
gasification to the paper industry generally are expected to include: 
increased efficiency in energy conversion and chemical recovery, 
elimination of the smelt-water explosion hazard, reduced operation and 
maintenance costs, and significantly lower environmental emissions. The 
emissions expected to be reduced include: particulates (PM, 
PM10), sulfur dioxide (SO2), total reduced sulfur 
(TRS), nitrogen oxides (NOX), volatile organic compounds 
(VOC), carbon monoxide (CO), hazardous air pollutants (HAP), and 
greenhouse gases, specifically carbon dioxide (CO2). These 
benefits are particularly attractive to pulp mills such as Georgia-
Pacific's at Big Island that use a semi-chemical non-sulfur process 
that requires auxiliary fossil fuel to sustain combustion of the black 
liquor. Projected benefits to the Big Island facility and surrounding 
areas include significant reductions in NOX, VOC, CO, and 
particulates. Table 1 below is taken from the FPA and compares actual 
emissions from the existing smelters to estimated emissions from use of 
conventional recovery boiler technology and a new gasification system.


    Note: The emissions are based on combustion of 400,000 lbs per 
day of black liquor solids).

Although HAP emissions are not listed separately in the table, the HAPs 
emitted at the facility are organic and, therefore, included in the 
value for VOC.

        Table 1.--Emissions Comparison of Chemical Recovery Units
                                [Tons/yr]
------------------------------------------------------------------------
                                   Existing   Conventional  Gasification
           Pollutant               smelters      boiler        system
------------------------------------------------------------------------
NOX............................          168          90.4          19.3
SO2............................           13          10.3           1.1
CO.............................        7,592         146.1          11.7
CO2............................      103,450       117,800        96,662
VOC............................        1,646           7.5          0.88
Particulates...................          440          14.8          1.88
------------------------------------------------------------------------

    Although Georgia-Pacific's feasibility analysis indicated the risks 
of attempting to construct and operate the new technology would be 
within acceptable limits from a technical standpoint, the company had 
two other concerns. The first concern was the cost of the project. 
Estimated costs to complete a gasification project, the first of its 
kind, were quite high and considerably more than costs for installing a 
new conventional recovery boiler. Therefore, Georgia-Pacific sought and 
has received some co-funding help from the U.S. Department of Energy 
(DOE). The second concern involved compliance with the MACT II rule. 
With this demonstration of a new technology come risks that the 
technology ultimately will not be successful. If this situation occurs, 
Georgia-Pacific may not have a functioning replacement for their 
smelters in time to meet the MACT II compliance date, which is March 
13, 2004. Therefore, the FPA for this XL project contains EPA's 
commitment to undertake a rulemaking to provide temporary relief from 
the MACT II compliance date for this situation (and also for a defined 
time period in which Georgia-Pacific will run the new gasification 
system on black liquor from a Kraft pulp mill, to fulfill an obligation 
under their funding agreement with DOE). The nature of this relief and 
the rationale for it are discussed more fully in section III.B of this 
preamble.
    As indicated by the schedule in the FPA, Georgia-Pacific has begun 
preliminary construction activities at Big Island for the black liquor 
gasification system. The construction schedule calls for completion of 
equipment installation by August 30, 2002 and completion of activities 
leading to startup by September 1, 2003. Of course this schedule is 
subject to some uncertainties, especially

[[Page 16404]]

considering the technology is being installed for the first time at 
this scale. Delays may occur not only in the procurement and 
installation of equipment, but also in the start-up of the system. The 
system is complex, and individual components must be operated and 
adjusted before the entire system can be started. Georgia-Pacific 
anticipates additional adjustments as operation of the entire system is 
attempted and as production is gradually increased toward capacity.
    If the gasification system cannot be operated successfully, 
Georgia-Pacific will construct a conventional recovery boiler. This 
will take approximately three years from the time the gasification 
system is declared a failure. After either successfully starting up the 
gasification system and conducting the Kraft liquor trials or declaring 
the gasification system a failure and constructing and starting up a 
conventional recovery boiler, Georgia-Pacific will shut down and 
decommission the existing smelters.

II. Amendments to the MACT II Rule

A. Georgia-Pacific's Flexibility Need

    There are no current full-scale commercial applications of the 
black liquor, steam-reforming gasification technology of the type 
proposed by Georgia-Pacific. Therefore, there is a risk that the 
gasification system will fail. Although Georgia-Pacific considers this 
an unlikely occurrence, it is possible that despite Georgia-Pacific's 
best efforts, the system may never perform as expected or to a level 
sufficient to warrant continued operation. If this happens, Georgia-
Pacific will construct a standard chemical recovery boiler in lieu of a 
gasification system to comply with MACT II, and will need to continue 
to operate the existing smelters while the standard recovery boiler is 
constructed. For this situation also, Georgia-Pacific requested the 
flexibility to operate the existing smelters past the MACT II 
compliance date for existing sources.
    In addition to the situation described above, Georgia-Pacific 
requested the flexibility to operate the existing smelters for a short 
time after the MACT II compliance date, as necessary, to allow Georgia-
Pacific to conduct limited trials of the new gasification system on 
black liquor from a Kraft pulp mill. Kraft mill black liquor has 
characteristics different from those of the liquor generated by 
Georgia-Pacific's semi-chemical pulp mill. The Department of Energy is 
interested, as is EPA, in the potential for widespread use of the 
gasification technology in the pulp and paper industry. However, the 
vast majority of pulp mills are of the Kraft type, and only a dozen or 
so mills in the U.S. are of the semi-chemical type. Therefore, the 
Department of Energy, in their contract with Georgia-Pacific to fund 
part of the cost of the gasification system, requested the trials to 
see how well the new technology could handle Kraft black liquor.
    Georgia-Pacific has not requested any other Federal regulatory 
flexibility. The company intends to comply with all other CAA 
requirements, including those for new source review of the gasification 
system construction.

B. Rule Changes

    The amendments to the MACT II rule to help implement the Georgia-
Pacific XL project are discussed below.


    Note: As is the case with other Federal emission standards, EPA 
intends to delegate authority to implement the provisions of the 
MACT II rule to the States, and these amendments specifically to 
Virginia.

1. Definitions
    The startup of a new emissions unit is an important event because 
it defines the point in time that the new unit must be in compliance 
with an applicable hazardous air pollutant standard. The General 
Provisions for part 63 (40 CFR part 63 subpart A) defines startup as 
follows: ``Startup means the setting in operation of an affected source 
for any purpose.'' This definition would apply to the startup of the 
gasification system at Big Island. Georgia-Pacific raised a concern 
with this general definition, particularly with the possible 
connotation of operation ``for any purpose.'' Under this definition, 
the company felt that the gasification system could be deemed by an 
enforcement agency to have achieved ``startup'' before the many 
components operated together as a system and within the specifications 
of the manufacturer. Startup of the new gasification system at Big 
Island likely will occur only after a protracted period of operating 
and adjusting the many parts of the system, first individually and then 
all together; a period Georgia-Pacific calls commissioning. The EPA 
agrees, in this instance, that the General Provisions definition of 
startup could lead to some confusion as to when startup occurs, 
especially considering that this new, complex gasification technology 
has never been started up before on a commercial scale. Therefore, a 
definition of ``startup'' applying only to the gasification system at 
Big Island, has been added to Sec. 63.861--Definitions. The definition 
makes clear that startup of the new gasification unit will occur at the 
end of the commissioning period.
2. Compliance Extensions
    Paragraph (c) is added to Sec. 63.863--Compliance Dates to allow 
compliance date extensions for the Georgia-Pacific Big Island plant in 
the event of failure of the gasification system and also during the 
time of the Kraft liquor trials. The compliance extensions are 
described more fully below.
    In the event the gasification system is a failure, the amendments 
provide Georgia-Pacific a compliance extension for the existing 
smelters of up to three years from the date the gasification system is 
declared a failure, but no later than March 1, 2007. The three years 
provides the company time to build and start up a new conventional 
recovery boiler to replace the existing smelters. March 1, 2007 is the 
longest possible duration of the extension, since it is three years 
after the latest date Georgia-Pacific agreed to declare that the system 
has failed. To obtain this extension, Georgia-Pacific must provide a 
notice to the Administrator stating that the system has failed and 
describing the events leading to that declaration.
    Finally, Georgia-Pacific, according to their contract with the 
Department of Energy, must operate the new gasification system for up 
to 500 hours using black liquor from a donor Kraft pulp mill. While the 
gasification system is processing Kraft liquor, the existing smelters 
must operate to process the black liquor generated by the Big Island 
plant. Although the Kraft trials will last up to 500 hours, the trials 
may not run continuously for that period of time. Separate trials may 
last only a few hours. Between trials various system components may be 
adjusted in an effort to improve system performance or find optimum 
performance. Therefore, the total elapsed time to accumulate up to 500 
hours of Kraft liquor trials may be as high as 1500 consecutive hours. 
The smelters must operate during this entire period. If the trials 
occur after the MACT II compliance date, the amendments allow the 
existing smelters to operate for up to 1500 hours during the Kraft 
trials, without the MACT II standard applying. Prior to conducting 
Kraft liquor trials, Georgia-Pacific must notify the Administrator of 
the 1500-hour time period in which it intends to conduct the trials 
(and operate the existing smelters).
3. Recordkeeping and Reporting Requirements
    Under Sec. 63.866--Recordkeeping requirements, a new paragraph 
((c)(7)) requires Georgia-Pacific to record the

[[Page 16405]]

hours the existing smelters operate during the Kraft liquor trials. 
This requirement will allow enforcement of the 1500 maximum duration of 
a compliance waiver for the existing smelters during Kraft liquor 
trials.
    Paragraph (a)(2) has been added to Sec. 63.867--Reporting 
requirements--to specify notices Georgia-Pacific must send to the EPA 
Administrator (or his/her authorized representative, such as a State 
that has been delegated authority to implement the provisions of the 
rule), prior to invoking one of the compliance extensions.
    To obtain the three year extension to build a conventional recovery 
unit in the event the gasification system fails, Georgia-Pacific must 
submit a notice providing the date the company declared the system a 
failure and the reasons why the technology was not successful. The 
decision to declare the new gasification system a failure rests with 
Georgia-Pacific alone, since only the company will know the technical 
information pertaining to failure of the system. Although the decision 
is theirs, Georgia-Pacific will declare the system a failure only after 
exhausting all possibilities for success and only as a last resort. 
Despite funding help from DOE, the company will be spending tens of 
millions of dollars on the gasification system, and failure of the 
system means Georgia-Pacific will have to spend additional tens of 
millions of dollars to scrap the failed system and construct a 
conventional recovery boiler. Thus, the company has considerable 
incentive to make the technology work.
    Also, prior to conducting any trials using Kraft black liquor, 
Georgia-Pacific must submit a notice that: (1) Identifies the period in 
which the trials will take place and (2) explains why the trials could 
not be run prior to the compliance date applicable to the existing 
smelters.

C. Rationale for the Compliance Flexibility

    For certain defined circumstances (see sections III.B.2 and III.B.3 
of this preamble), the rule amendments allow Georgia-Pacific to operate 
their existing smelters beyond the MACT II standard's compliance date, 
which is 3 years after the effective date of the standard. Of course, 
EPA is aware that section 112(i)(3)(A) of the CAA states that 
compliance with a MACT standard shall be no later than 3 years from the 
standard's effective date. However, EPA notes that the special 
circumstances in this instance warrant the flexibility.
    First, as described above, without this flexibility, Georgia-
Pacific would not proceed to construct the black liquor gasification 
system. The new gasification system, if successful at Georgia-Pacific's 
Big Island facility, is expected to produce significant environmental 
benefits, including reductions in emissions of all regulated air 
pollutants. These reductions extend beyond those expected from 
conventional recovery boilers, which are commonly used in the industry 
and can meet the MACT II standard. (See section II.B.2 of this preamble 
for a discussion of emission reduction benefits.)
    These emission reduction benefits include the effects of the 
gasification system's greater energy efficiency. The system will 
convert black liquor into a hydrogen rich gas. Some of this gas will be 
used to fuel the pulsed heaters providing energy to the gasification 
process and the remaining gas will be combusted in a boiler to produce 
steam. Steam generated by the gasification system will offset steam 
currently generated at Big Island by fossil fuel combustion. Although a 
conventional recovery boiler also will produce steam, the gasification 
system at Georgia-Pacific's Big Island facility is expected to do so 
with somewhat greater energy efficiency, lower air pollution levels, 
and significantly lower annual operating costs.
    Successful completion of this XL project will show this technology 
to be capable of providing full chemical recovery capacity for a semi-
chemical mill. This includes demonstration of the reliability and 
operational flexibility of the gasification system and all of the 
associated equipment. Once the technology is demonstrated, the industry 
can apply it at other pulp and paper facilities to obtain better energy 
conversion, improved safety, and environmental performance. The Big 
Island semi-chemical mill is similar in characteristics to 12 other 
mills in the U.S. producing virgin pulp for containers. Success of 
black liquor gasification at Big Island and success of the scheduled 
Kraft liquor trials will contribute significantly to its implementation 
in the much larger number of Kraft mills. Success also may pave the way 
for commercial scale application of gasification to the conversion of 
non-wood liquors, sludges, and agricultural wastes to energy.
    In addition to producing steam, gasification technology could be 
used to generate onsite electricity, thereby offsetting a pulp mill's 
demand for electricity purchased from the utility grid. By configuring 
the black liquor gasification system to burn the product gas in a 
combined cycle gas turbine system, the energy released would be 
harnessed to generate clean electricity. Although Georgia-Pacific's 
facility at Big Island is not large enough to make combined cycle 
energy production economically viable, Kraft process pulp mills in the 
U.S. are large enough. For a Kraft facility employing black liquor 
gasification and combined cycle energy production, the reduction in 
fossil fuel use and greenhouse gas generation would be dramatic.
    Compared to average utility grid emissions, generating electricity 
from a gasification unit would result in lower emissions of combustion 
related air pollutants. Displacing old, coal based utility boilers with 
a biomass based fuel, in this instance black liquor, would 
significantly lower emissions of CO2, a pervasive greenhouse 
gas that can contribute to global climate change. When this technology 
is successfully demonstrated with combined cycle energy generation and 
assuming utilization of currently available biomass, studies show that 
the energy savings could transform the domestic Pulp and Paper Industry 
from being a net importer of 6 gigawatts of electrical power to a net 
exporter. The studies also indicate that successful development and 
deployment of gasification technology would result in a decrease in 
greenhouse gas emissions of 18 million metric tons per year.

    (Source: The Forest Products Industry Gasification Combined 
Cycle Initiative, American Forest & Paper Association (AF&PA) Agenda 
2020, July 1998, www.agenda2020.org).

    Over the next 10 to 15 years, the industry expects that a large 
fraction of the existing conventional chemical recovery boilers will 
reach the end of their useful life and have to be replaced. If black 
liquor gasification has become a proven technology by the time 
replacement decisions are made, a large-scale conversion to the new 
technology could occur.
    Beyond the environmental and energy benefits described above, black 
liquor gasification has a safety benefit over conventional chemical 
recovery technology. In the gasification process, concentrated black 
liquor is pyrolyzed in a fluid bed gasifier through indirectly applied 
heat, liberating a hydrogen rich gas. Sodium carbonate pellets formed 
during the pyrolysis are drawn from the fluidized bed into a dissolving 
tank to reconstitute ``green'' liquor for recycle to the pulping 
process. Other gasification or conventional recovery technologies 
employ flame combustion within a reactor vessel or an intermediate 
smelt phase. The formation of smelt carries the potential for smelt-
water explosions,

[[Page 16406]]

which are a major safety concern in the operation of conventional 
recovery boilers. The steam reforming, black liquor gasification 
process to be constructed at Big Island does not produce a smelt phase 
and, thus, eliminates the potential for smelt-water explosions.
    In short, EPA sees that significant environmental, economic, and 
safety benefits would accrue from successful completion of this XL 
project, not only at the Big Island plant but potentially nationwide. 
Nonetheless, these potential benefits must be measured against any 
potential adverse effects from undertaking the project. Under this 
project, the potential exists for operation of the existing smelters at 
Big Island beyond the time they otherwise would have been shut down. 
Specifically, during the project and under certain situations, current 
HAP emissions from the existing smelters may continue beyond the MACT 
II compliance date (March 13, 2004). As stated before, current smelter 
HAP emissions are above those that would be allowed under the MACT II 
standard. Without this XL project, Georgia-Pacific would replace the 
smelters with conventional chemical recovery technology on or before 
the compliance date. The amounts of ``excess'' smelter emissions that 
actually will occur under this XL project depend on how well the 
construction and startup of the gasification system proceeds.
    It is quite possible that Georgia-Pacific will be able to construct 
and successfully start up the unit according to their current schedule, 
which allows for several months of commissioning activities leading to 
startup. Under such a scenario, Georgia-Pacific could shut down the 
smelters before the MACT II compliance date and not need any compliance 
flexibility.
    Even if Georgia-Pacific is able to start up the new system 
according to schedule, it is probable that the Kraft liquor trials will 
occur, at least in part, after the MACT II compliance date. These 
trials cannot be run until Georgia-Pacific has started up the 
gasification system and run it for some period under stable operation. 
Therefore, it is likely that the Kraft trials will require the smelters 
to operate for up to 1500 hours after the compliance date.
    The worst case scenario, which also is the least likely, occurs if 
Georgia-Pacific is unable to successfully operate the gasification 
system. If this occurs, Georgia-Pacific would have to construct a new 
conventional recovery boiler, and would be allowed up to three years to 
do so. Under such a scenario, the existing smelters would operate until 
the new conventional unit has achieved startup, which could be as long 
as March 1, 2007.
    Of all the possibilities, the most probable scenario is that the 
new gasification system will be started up prior to the MACT II 
compliance date, but the Kraft liquor trials will occur after that 
date. This means that the greatest likelihood is that the public 
surrounding the Big Island facility will experience smelter emissions 
up to 1500 hours longer than they would without this XL project, of 
course with the prospect of much lower emissions from success of the 
gasification system.
    In summary, the Agency has considered the expected environmental 
and energy benefits, safety improvement, reduced operation and 
maintenance costs, and high potential for transfer to the rest of the 
pulp and paper industry expected from a successful demonstration of the 
black liquor gasification technology at Georgia-Pacific's Big Island 
facility. The Agency also has weighed the possibility of allowing the 
existing emissions from the smelters, which are higher than allowed by 
the MACT II standard, to persist for a limited time beyond the MACT II 
compliance date. Finally, the Agency has noted the solid support for 
the project from all stakeholders involved in the project, including 
those representing the communities near the Big Island plant. Based on 
all available information, the Agency has concluded that it is in the 
best interest of the environment and public health and welfare to grant 
the regulatory flexibility requested by Georgia-Pacific to undertake 
this XL project. In the event that the gasification technology should 
fail, the Agency would regard the Georgia-Pacific mill as a different 
type of mill essentially part of its own subcategory--a mill that had 
attempted to operate using a method of pulping liquor recovery--
gasification--different from that used by any other source. In the 
event of failure of gasification, this unique source would then be 
accorded the statutory 3 year compliance period to use conventional 
recovery boiler technology to achieve the MACT II emission standard. In 
addition, as EPA indicated in the MACT I rule, there are rare 
circumstances where the three year compliance date can serve as such a 
disincentive to pollution control as to no longer properly be 
considered MACT. See 63 Federal Register at 18527-528 (acting to avoid 
discouraging mills from installing advanced water treatment 
technologies). EPA is similarly acting here to assure that the 
compliance date not serve as a disincentive to the potentially great 
benefits of gasification technology. (This same rationale serves to 
justify any potential compliance extension needed to test the new 
gasification unit at Big Island, Virginia on kraft mill black liquor.)
    The compliance flexibility afforded by these amendments to the MACT 
II rule is limited to the existing smelters at the Big Island facility, 
and only for this XL demonstration project.

III. Administrative Requirements

A. Executive Order 12866: Regulatory Planning and Review

    Because this rule affects only one facility, it is not a rule of 
general applicability and therefore not subject to OMB review and 
Executive Order 12866. In addition, OMB has agreed that review of site 
specific rules under Project XL is not necessary.

B. Regulatory Flexibility Act (RFA), as Amended by the Small Business 
Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 601 et 
seq.

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to conduct a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements unless the agency certifies 
that the rule will not have significant economic impact on a 
substantial number of small entities. Small entities include small 
businesses, small not-for-profit enterprises, and small governmental 
jurisdictions. This final rule would not have a significant impact on a 
substantial number of small entities because it only affects one 
source, the Georgia-Pacific plant at Big Island, VA, which is not a 
small entity. Therefore, I conclude that this action will not have a 
significant economic impact on a substantial number of small entities.

C. Paperwork Reduction Act

    This action applies only to one company, and therefore requires no 
information collection activities subject to the Paperwork Reduction 
Act, and therefore no information collection request (ICR) will be 
submitted to OMB for review in compliance with the Paperwork Reduction 
Act, 44 U.S.C. 3501 et seq.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local and tribal 
governments and the private sector. Under section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit

[[Page 16407]]

analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures to State, local, and tribal governments, in 
the aggregate, or to the private sector, of $100 million or more in any 
one year. Before promulgating an EPA rule for which a written statement 
is needed, section 205 of the UMRA generally requires EPA to identify 
and consider a reasonable number of regulatory alternatives and adopt 
the least costly, most cost-effective or least burdensome alternative 
that achieves the objectives of the rule. The provisions of section 205 
do not apply when they are inconsistent with applicable law. Moreover, 
section 205 allows EPA to adopt an alternative other than the least 
costly, most cost-effective or least burdensome alternative if the 
Administrator publishes with the final rule an explanation why the 
alternative was not adopted. Before EPA establishes any regulatory 
requirements that may significantly or uniquely affect small 
governments, including tribal governments, it must have developed under 
section 203 of the UMRA a small government agency plan. The plan must 
provide for notifying potentially affected small governments, enabling 
officials of affected small governments to have meaningful and timely 
input in the development of EPA regulatory proposals with significant 
Federal intergovernmental mandates, and informing, educating, and 
advising small governments on compliance with the regulatory 
requirements.
    As noted above, this rule is limited to Georgia-Pacific's plant in 
Big Island, Virginia. The EPA has determined that this rule does not 
contain a Federal mandate that may result in expenditures of $100 
million or more for State, local, and tribal governments, in the 
aggregate, or the private sector in any one year. Thus, today's rule is 
not subject to the requirements of sections 202 and 205 of the UMRA. 
Nevertheless, in developing this rule, EPA worked closely with the 
Virginia Department of Environmental Quality and received meaningful 
and timely input in the development of this rule. The EPA also has 
determined that this rule contains no regulatory requirements that 
might significantly or uniquely affect small governments.

E. Executive Order 13045: Protection of Children From Environmental 
Health Risks and Safety Risks

    Executive Order 13045, ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies 
to any rule that: (1) Is determined to be ``economically significant,'' 
as defined under Executive Order 12866; and (2) concerns an 
environmental health or safety risk that EPA has reason to believe may 
have a disproportionate effect on children. If the regulatory action 
meets both criteria, the Agency must evaluate the environmental health 
or safety effects of the planned rule on children, and explain why the 
planned regulation is preferable to other potentially effective and 
reasonably feasible alternatives considered by the Agency. The EPA 
interprets E.O. 13045 as applying only to those regulatory actions that 
are based on health or safety risks, such that the analysis required 
under section 5-501 of the Order has the potential to influence the 
regulation. This action is not subject to E.O. 13045 because it is not 
economically significant as defined in E.O. 12866, and in fact applies 
only to one source, Georgia-Pacific's facility in Big Island, Virginia. 
Additionally, this action promotes lower emissions compared to the 
emissions that would otherwise exist at that facility.

F. Executive Order 13132 (Federalism)

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires EPA to develop an accountable process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications.'' 
``Policies that have federalism implications'' is defined in the 
Executive Order to include regulations that have ``substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.''
    This direct final rule does not have federalism implications. It 
will not have substantial direct effects on the States, on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government, as specified in Executive Order 13132. Today's rule amends 
a previously established compliance date, under certain circumstances, 
for one entity, Georgia-Pacific Corporation's facility in Big Island, 
Virginia. Thus, this rule does not create any mandates nor impose any 
enforceable duties on the States in general or the Commonwealth of 
Virginia specifically. It also will not affect the national 
government's relationship with the States or the distribution of power 
among various levels of government. Thus, Executive Order 13132 does 
not apply to this rule. Nevertheless, in developing this rule, EPA 
worked closely with the Virginia Department of Environmental Quality 
and received meaningful and timely input in the development of this 
rule.

G. Executive Order 13175 (Consultation and Coordination with Indian 
Tribal Governments)

    Executive Order 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments'' (65 FR 67249, November 6, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by tribal officials in the development of regulatory 
policies that have tribal implications.'' ``Policies that have tribal 
implications'' is defined in the Executive Order to include regulations 
that have ``substantial direct effects on one or more Indian tribes, on 
the relationship between the Federal government and the Indian tribes, 
or on the distribution of power and responsibilities between the 
Federal government and Indian tribes.''
    This direct final rule does not have tribal implications. It will 
not have substantial direct effects on tribal governments, on the 
relationship between the Federal government and Indian tribes, or on 
the distribution of power and responsibilities between the Federal 
government and Indian tribes, as specified in Executive Order 13175. 
Today's rule does not significantly or uniquely affect the communities 
of Indian tribal governments. This direct final rule affects only the 
Georgia-Pacific Corporation's facility in Big Island, Virginia. It does 
not affect any communities of Indian tribal governments and there are 
no such communities located in the vicinity of the Georgia-Pacific 
facility. Thus, Executive Order 13175 does not apply to this rule.

H. National Technology Transfer and Advancement Act of 1995 (NTTAA)

    Section 12(d) of NTTAA, Public Law 104-113, section 12(d) (15 
U.S.C. 272 note) directs EPA to use voluntary consensus standards in 
its regulatory activities unless to do so would be inconsistent with 
applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (e.g., materials specifications, test methods, 
sampling procedures, and business practices) that are developed or 
adopted by voluntary consensus standards bodies. The NTTAA directs EPA 
to provide Congress, through OMB, explanations when the Agency decides 
not to use available and applicable voluntary standards.
    This rulemaking does not involve technical standards. Therefore, 
EPA is not considering the use of any voluntary consensus standards.

[[Page 16408]]

I. Congressional Review Act

    The Congressional Review Act, 5. U.S.C. 801 et seq., as added by 
the Small Business Regulatory Enforcement Fairness Act of 1996, 
generally provides that before a rule may take effect, the agency 
promulgating the rule must submit a rule report, which includes a copy 
of the rule, to each House of the Congress and to the Comptroller 
General of the United States. Section 804 exempts from section 801 the 
following types of rules (1) rules of particular applicability; (2) 
rules relating to agency management or personnel; and (3) rules of 
agency organization, procedure, or practice that do not substantially 
affect the rights or obligations of non-agency parties. 5 U.S.C. 
804(3). EPA is not required to submit a rule report regarding today's 
action under section 801 because this is a rule of particular 
applicability.

List of Subjects in 40 CFR Part 63

    Environmental protection, Air pollution control, Hazardous 
substances, Intergovernmental relations, Reporting and recordkeeping 
requirements.

    Dated: March 20, 2001.
Christine Todd Whitman,
Administrator.

    For the reasons set out in the preamble, title 40, chapter I of the 
Code of Federal Regulations is amended as follows.

PART 63--NATIONAL EMISSION STANDARDS FOR HAZARDOUS AIR POLLUTANT 
SOURCE CATEGORIES

    1. The authority citation for part 63 continues to read as follows:

    Authority: 42 U.S.C. 7401, et seq.

Subpart MM--National Emission Standards for Hazardous Air 
Pollutants; Standards for Hazardous Air Pollutants From Chemical 
Recovery Combustion Sources at Kraft, Soda, Sulfite, and Stand-
Alone Semichemical Pulp Mills

    2. Amend Sec. 63.861 by adding in alphabetical order a definition 
for ``Startup'' to read as follows:


Sec. 63.861  Definitions.

* * * * *
    Startup means, for the chemical recovery system employing black 
liquor gasification at Georgia-Pacific's facility in Big Island, 
Virginia only, the end of the gasification system commissioning phase. 
Commissioning is that period of time in which each part of the new 
gasification system will be checked and operated on its own to make 
sure it is installed and functions properly. Commissioning will 
conclude with the successful completion of the gasification technology 
supplier's performance warranty demonstration, which proves the 
technology and equipment are performing to warranted levels and the 
system is ready to be placed in active service. For all other affected 
sources under this subpart, startup has the meaning given in Sec. 63.2.
* * * * *

    3. Amend Sec. 63.863 by revising paragraph (a) and adding paragraph 
(c) to read as follows:


Sec. 63.863  Compliance dates.

    (a) The owner or operator of an existing affected source or process 
unit must comply with the requirements in this subpart no later than 
March 13, 2004, except as provided in paragraph (c) of this section.
* * * * *
    (c) The two existing semichemical combustion units at Georgia-
Pacific Corporation's Big Island, VA facility must comply with the 
requirements of this subpart no later than March 13, 2004, except as 
provided in paragraphs (c)(1) and (c)(2) of this section.
    (1) If Georgia-Pacific Corporation constructs a new black liquor 
gasification system at Big Island, VA, determines that its attempt to 
start up the new system has been a failure and, therefore, must 
construct another type of chemical recovery unit to replace the two 
existing semichemical combustion units at Big Island, then the two 
existing semichemical combustion units must comply with the 
requirements of this subpart by the earliest of the following dates: 
three years after Georgia-Pacific declares the gasification system a 
failure, upon startup of the new replacement unit(s), or March 1, 2007.
    (2) After March 13, 2004 and if Georgia-Pacific Corporation 
constructs and successfully starts up a new black liquor gasification 
system, the provisions of this subpart will not apply to the two 
existing semichemical combustion units at Georgia-Pacific's facility in 
Big Island, VA for up to 1500 hours, while Georgia-Pacific conducts 
trials of the new gasification system on black liquor from a Kraft pulp 
mill.
* * * * *

    4. Amend Sec. 63.866 by adding paragraph (d) to read as follows:


Sec. 63.866  Recordkeeping requirements.

* * * * *
    (d) For operation under Sec. 63.863(c)(2), Georgia-Pacific 
Corporation must keep a record of the hours of operation of the two 
existing semichemical combustion units at their Big Island, VA 
facility.
* * * * *
    5. Amend Sec. 63.867 by revising paragraph (a) to read as follows:


Sec. 63.867  Reporting requirements.

    (a) Notifications. (1) The owner or operator of any affected source 
or process unit must submit the applicable notifications from subpart A 
of this part, as specified in Table 1 of this subpart.
    (2) Notifications specific to Georgia-Pacific Corporation's 
affected sources in Big Island, Virginia.
    (i) For a compliance extension under Sec. 63.863(c)(1), submit a 
notice that provides the date of Georgia-Pacific's determination that 
the black liquor gasification system is not successful and the reasons 
why the technology was not successful. The notice must be submitted 
within 15 days of Georgia-Pacific's determination, but not later than 
March 16, 2004.
    (ii) For operation under Sec. 63.863(c)(2), submit a notice 
providing: a statement that Georgia-Pacific Corporation intends to run 
the Kraft black liquor trials, the anticipated period in which the 
trials will take place, and a statement explaining why the trials could 
not be conducted prior to March 13, 2004. The notice must be submitted 
at least 30 days prior to the start of the Kraft liquor trials.
* * * * *

    6. Amend Table 1 to Subpart MM by revising the entries for 
``63.6(c)'' and ``63.6(i)'' to read as follows:
* * * * *

[[Page 16409]]



                     Table 1 To Subpart MM.--General Provisions Applicability to Subpart MM
----------------------------------------------------------------------------------------------------------------
     General provisions reference      Summary of requirements   Applies to subpart MM         Explanation
----------------------------------------------------------------------------------------------------------------
 
*                  *                  *                  *                  *                  *
                                                        *
63.6(c)..............................  Compliance dates for     Yes, except for sources  Subpart MM specifically
                                        existing sources.        granted extensions       stipulates the
                                                                 under 63.863(c).         compliance schedule
                                                                                          for existing sources.
 
*                  *                  *                  *                  *                  *
                                                        *
63.6(i)..............................  Extension of compliance  Yes, except for sources  .......................
                                        with emission            granted extensions
                                        standards.               under 63.863(c).
 
*                  *                  *                  *                  *                  *
                                                        *
----------------------------------------------------------------------------------------------------------------

* * * * *
[FR Doc. 01-7399 Filed 3-23-01; 8:45 am]
BILLING CODE 6560-50-P