Steel Dynamics, Inc. (Board decision, August 2, 2000)

Plain-English summary

Steel Dynamics, Inc. was developing a steel mill under a PSD permit. The United Association of Plumbers and Steamfitters, Local 166, and its members asked the Environmental Appeals Board to reconsider three issues involving nine natural gas-fired preheaters and dryers, continuous emissions monitoring for nitrogen oxides and sulfur dioxide, and averaging times and sampling durations for electric arc furnace stack tests. The Board denied the motion because the Union did not show a demonstrable legal or factual error. It held that concerns about low-nitrogen-oxide burner performance should have been raised during public comment, IDEM had addressed the monitoring issue, and the permit's stack-test protocol could be specified later while related compliance issues were handled on remand.

Decision snapshot

• Cited authorities: 40 C.F.R. § 124.19, including § 124.19(g)
• Outcome: The Union's motion for reconsideration was denied.
• Key point: Reconsideration requires a demonstrable error, and arguments that could have been raised during public comment may not be used to reopen the Board's decision.

Full text (EPA EAB public release)

BEFORE THE ENVIRONMENTAL APPEALS BOARD
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON, D.C.

)
In re: )
)
Steel Dynamics, Inc. ) PSD Appeal Nos. 99-4
) and 99-5
PSD Permit No. CP-183-10097-00030
)
)

ORDER DENYING THE UNION’S
MOTION FOR RECONSIDERATION

By motion dated July 5, 2000, the United Association of Plumbers and Steamfitters, Local 166,

and its members (“Union”) seek reconsideration of three issues decided by the Environmental Appeals

Board (“Board”) in the above-captioned matter. The disputed issues involve: (1) the absence of

continuous compliance requirements for nine natural gas-fired preheaters and dryers that will emit

nitrogen oxides (“NOx”) into the atmosphere; (2) the lack of continuous emissions monitoring

requirements for the proposed steel mill’s emissions of NOx and sulfur dioxide (“SO2”); and (3) the

failure to include stack test averaging times and sampling durations in the proposed mill’s permit. For

the reasons explained below, we deny the Union’s motion.

A. Venting Multiple Emission Units Through a Single Stack

First, the Union claims the Board erred in its treatment of the petitioners’ arguments with

respect to the enforceability of NOx emissions limits placed on nine natural gas-fired preheaters and

dryers. As the Union points out, Steel Dynamics, Inc.’s (“SDI’s”) permit contains no compliance requirements for the nine units, which are vented through a single stack. Union Motion at 2. The Union

charges that the Board “reframed” the issue it had raised from an absolute failure to require any

compliance demonstration to an “unrebuttable general understanding that low-NOx burners should

easily achieve [best available control technology (“BACT”)] limits, obviating the need for compliance

demonstration.” Id.; see In re Steel Dynamics, Inc., PSD Appeal Nos. 99-4 & 99-5, slip op. at 79-

80 (EAB, June 22, 2000), 9 E.A.D. ___. According to the Union, in reaching its decision on this issue,

the Board erroneously relied on extra-record facts introduced by Amici and failed to address the

arguments the Union raised. The Union therefore asks the Board to “reconsider its decision and either

decide the issue the Union initially raised -- the validity of a categorical exemption from practical

enforceability -- or alternatively, * * * consider [the Union’s] argument that low-NOx burners

inherently are unreliable and, thus, must be monitored to assure compliance.” Union Motion at 4-5.

Some procedural background is necessary to understand this issue. In response to comments

on the issue, the Indiana Department of Environmental Management (“IDEM”) had contended that:

(1) emissions from the nine units would constitute only a small fraction of total NOx emissions from the

mill, and thus stack testing to demonstrate the units’ compliance was not necessary; (2) no operational

parameters could be measured to demonstrate continuous compliance with the NOx emissions limits;

(3) it is in SDI’s “best interest to assure that [the nine units] are operating properly such as to prevent

unnecessary natural gas consumption”; and (4) IDEM could always require stack testing if needed.

ATSD at 70. In its petition for review, the Union countered IDEM’s contentions by arguing: (1) there

are no small source exemptions from the requirement to achieve BACT limits; (2) the combined

-2- emissions venting through the common stacks are, in fact, not small; and (3) several operating

parameters, such as fuel flow, firing rate, and furnace temperature, could be monitored to demonstrate

compliance. Union Pet’n at 43.

IDEM responded to the Union’s petition by reiterating that stack testing could be required if

necessary and that “there are no measurable operational parameters to demonstrate continuous

compliance other than operating the low-NOx burners properly[,] which is in SDI’s best economic

interest.” IDEM Resp. at 36. IDEM also stated:

[T]he NOx limit for each [of the nine] unit[s] is an expression of the emission factor used in the calculation of each unit’s potential to emit when the low-NOx burners are in use. Because the permit does not seek to restrict the potential to emit NOx, operational limitations are unnecessary.

Id. (citations omitted).

Amici contended that IDEM’s latter argument (quoted above) was “slightly misleading.” Amici

stated:

Practical enforceability is required because these limits constitute BACT for these emission units; the potential to emit for the required control technology is not determinative. The rationale underlying [IDEM’s] argument, however, is more persuasive. IDEM has argued that stack testing for the collected emissions of these small burners is not justified, and no operational parameters correlated to emissions are available. ATSD at 70. Amici believe Petitioners have not adequately addressed IDEM’s claim that the use of low-NOx burners alone adequately demonstrates compliance, given the relatively small contribution of NOx from these sources and the general understanding that low-NOx burners should easily achieve the BACT limit for these sources.

-3-
Amici Brief at 36. Amici added further that “Petitioners have not rebutted IDEM’s claim that, as a

technical matter, the enforceability of these limits may not be critical because as long as low-NOx

burners are in use, the 0.10 lb/MMBtu limit will be achieved on a continuous basis.” Id. at 35.

The Union replied to IDEM’s and Amici’s assertions by arguing in its reply brief that use of

low-NOx burners alone does not guarantee that compliance with BACT limits is assured. Moreover,

as detailed in the Board’s June 22, 2000 decision, the Union offered a number of factual scenarios

challenging the concept that use of low-NOx burners alone is enough. See Steel Dynamics, slip op. at

79-80 n.62 (quoting Union Reply at 35). In ruling on this issue, the Board did not consider the Union’s

fact examples on the grounds that they were raised too late in the proceedings to warrant our review.

See id. The Union now claims that we erred in doing so, because the idea that low-NOx burner use

alone ensures compliance was not reasonably ascertainable from the materials in the record, and thus

the Union had no opportunity to respond to that idea until after it was raised in IDEM’s and Amici’s

briefs. Union Motion at 3.

We find it difficult to accept the Union’s argument that the rationale advanced during briefing --

that operation of low-NOx burners should achieve the BACT limit for these sources -- was

unascertainable during the public comment period. Even absent some prior explicit statement by IDEM

to this effect, the rationale flows naturally from the permit itself, which relies on low-NOx burners as the

primary control strategy for NOx at these emissions units. See Permit § D.3. Thus, in our view, the

Union was duty bound to raise concerns about the capacity of low-NOx burners to achieve compliance

-4- with the relevant BACT limit during the public comment process and, having failed to do so, cannot

raise them here.

Moreover, IDEM stated in the response-to-comments document that it is in SDI’s best interest

to ensure the proper operation of the nine emissions units. See ATSD at 70; Steel Dynamics, slip op.

at 78, 79-80 n.62. Despite the presence of this assertion in IDEM’s response to comments, neither the

Union nor Citizens Organized Watch (“COW”) challenged it in their petitions for review of SDI’s

permit. Petitioners could have, but did not, maintain that “proper operation” of such units must include

the elements identified in the Union’s reply brief -- i.e., initial tuning of the burners on installation to

ensure the appropriate blend of fuel and air is achieved; performance verification after tuning; periodic

maintenance and retuning to forestall performance degradation due to plugging, corrosion, and deposit

formation; and so on -- or any other elements, for that matter.

In light of the foregoing, we do not agree that the assertion regarding the capacity of the low-

NOx burners to achieve compliance with the BACT limit is unsupported by facts in the record, and we

do not find demonstrable error in our decision that the Union could have raised these issues earlier. See

In re Knauf Fiber Glass, GmbH, PSD Appeal Nos. 99-8 to -72, Order on Motions for

Reconsideration at 3 (EAB, Feb. 4, 2000) (“Reconsideration is generally reserved for cases in which

the Board is shown to have made a demonstrable error, such as a mistake of law or fact.”).

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 Even if we were to consider the maintenance/performance examples the Union raised in its

reply brief, our holding on this issue would not change. The Union provided no data or other evidence

to support its factual scenarios regarding potential low-NOx burner plugging, corrosion, tuning needs,

and the like. See Union Reply at 33-36. Mere assertions of potential problems, without more, are not

enough to overcome IDEM’s clearly expressed statements that operating the low-NOx burners

properly will be in SDI’s best interests (i.e., to minimize consumption of natural gas). See ATSD at 70;

IDEM Resp. at 36. The Union failed to carry its burden of proving that IDEM committed clear error

or abused its discretion in handling this issue, and thus the Board did not err in upholding IDEM on this

ground. See, e.g., In re Maui Elec. Co., PSD Appeal No. 98-2, slip op. at 19 (EAB, Sept. 10,

1998), 8 E.A.D. ___ (review denied where petitioner did not challenge or explain the clear error in

permit issuer’s reliance on data in report); In re Envotech, L.P., 6 E.A.D. 260, 295-96 (EAB 1996)

(review denied where permit issuer denies possessing waste documentation and petitioner provides no

evidence that such documentation exists).

B. Continuous Emission Monitoring for SO2 and NOx

Second, the Union claims the Board’s decision is erroneous because it does not address an

issue raised in the Union’s petition, namely that IDEM failed to respond to a comment that continuous

emission monitors (“CEMs”) should be used “where feasible.” Union Motion at 5-6. We do not agree

that IDEM failed to respond to a comment on this issue, nor do we think our decision erroneous as

charged. In its response to comments, IDEM devoted quite a bit of attention to the CEMs issue,

explaining in detail its position that certain factors must be in play to justify the use of CEMs. In

-6- particular, IDEM argued that CEMs are required only where: (1) a control device is used;

(2) information on emissions is limited; and (3) emissions could adversely affect air quality. See ATSD

at 50-51. By setting forth these conditions for CEMs’ use, IDEM implicitly rejected the broad view of

the comment that CEMs should be required wherever feasible.1 See id. Because the Union has not

pointed to a demonstrable error in our treatment of the CEMs issue, reconsideration of the issue is

denied.

C. Permit Limits for EAF Emissions of NOx, SO2, and PM

Finally, the Union claims the Board erred in declining to grant review of IDEM’s failure to

include in SDI’s PSD permit specific averaging times and sampling durations for the EAF stack tests.

IDEM had explained in the response-to-comments document that SDI would be required to prepare a

stack testing protocol that ensures tests are run during normal operating periods and are at least one

hour in duration. ATSD at 29. IDEM had also noted that steel mills historically have used tap-to-tap

stack test runs, which can last as long as ninety minutes. Id. The Board found no clear error or abuse

of discretion in IDEM’s treatment of this issue. In so doing, we stated:

Petitioners offer no evidence that stack test durations of at least one hour or tap-to-tap runs of ninety minutes are inadequate to obtain reasonable assessments of facility performance. Instead, they argue only that the “conditions” of source tests should be

1
Moreover, we are not convinced that this issue -- i.e., that IDEM failed to respond to a comment that CEMs should be used where feasible -- was even raised in the Union’s petition. Indeed, our review of the petition reveals a number of arguments focused on rebutting IDEM’s three conditions for CEMs’ use, but the petition does not contain a clear charge that IDEM erred because it failed to respond to a comment that CEMs should be used where feasible. See Union Pet’n at 48-52.

-7- specified in the permit because “high variability of emissions has been alleged” due to the diversity of products to be manufactured by this mill.

Steel Dynamics, slip op. at 104.

The Union now claims the Board erred in stating that the Union offered no evidence that stack

tests of an hour or ninety minutes are inadequate to obtain a reasonable assessment of facility

performance. In its comments on the draft permit, the Union had stated:

The electric arc furnace is a noncontinuous batch process with high heat-to-heat variability in the emission rates of all criteria pollutants. In this situation, averaging times are essential to assure that the full range of variability in emissions is captured during the source test. Because permit limits are expressed in terms of pounds per hour, rather than pounds per ton, the more usual metric, a 1-hr source test could be conducted during a low-emitting heat. Alternatively, the source test could be conducted over a long time period, averaging out routine spikes and excursions. Both situations would bias the results, making it appear that the EAF is in compliance when it is not.

Union/Fox Cmts at 31. In this way, the Union claims it demonstrated that SDI could circumvent the

permit limits. Union Motion at 7. The Union further notes that the Board used these examples in its

remand of one “very similar issue in this case, the lb/ton versus lb/hr issue.” Id.

The Union is correct in noting that we relied on its examples, among others, in our evaluation of

the dual limits issue. However, in parsing through the myriad of complex, competing, and/or

overlapping arguments on the issues in this case, we construed the Union’s examples, quoted above, as

bearing most directly on the dual limits issue rather than supporting an independent need to specify

stack test averaging times and sampling durations in SDI’s permit. Indeed, it appeared to us that the

fundamental issue identified -- the absence of dual limits or other permit conditions that would ensure

-8- compliance at all levels of operation -- would be addressed by adding production limits or other

conditions to the permit.

Even if we were to have construed the Union’s two examples in the way the Union now urges,

we still would not have been persuaded that IDEM clearly erred or abused its discretion in its treatment

of the stack test protocol issue. As we indicated in our original decision and reiterated in our response

to IDEM’s motion for reconsideration of that decision, the Union’s (and Amici’s, for that matter)

concerns about ensuring continuous compliance at all levels of operation must be readdressed by

IDEM on remand. See Steel Dynamics, slip op. at 81-88. Specifically, the revised permit must

contain either dual limits or other conditions that will protect against the types of permit abuses

described by the Union in its comments and petition (and by Amici in their briefs). We fully expect that

IDEM will comply with these requirements on remand. Thus, we do not believe that a failure to

reconsider the averaging time and sampling duration issues will lead, as the Union fears, to “otherwise

undiscovered permit violations,” Union Motion at 7, nor do we believe it was clear error here for

IDEM to defer specifying the stack testing protocol until a later date.

In sum, we do not find a demonstrable error in our treatment of these issues, and thus

reconsideration is denied.2

2
Citizens Organized Watch (“COW”) filed a response to IDEM’s and SDI’s motions for reconsideration that supports the Union’s response to those motions. In addition, the COW filing raises new arguments about the State Implementation Plan for Indiana and about potential NOx nonattainment (continued...)

-9-
 So ordered.

ENVIRONMENTAL APPEALS BOARD

Dated: 8/02/00 By: /s/
Kathie A. Stein
Environmental Appeals Judge

2
(...continued) status for Whitley County and Allen County, Indiana. These arguments will not be considered in this setting. See 40 C.F.R. § 124.19(g) (motions for reconsideration of Board orders “must set forth the matters claimed to have been erroneously decided and the nature of the alleged errors”).

-10-
 CERTIFICATE OF SERVICE

I hereby certify that copies of the foregoing Order Denying the Union’s Motion for Reconsideration in the matter of Steel Dynamics, Inc., PSD Appeal Nos. 99-4 and 99-5, were sent to the following persons in the manner indicated:

By Facsimilie and First Class U.S. Mail:

Rosemary G. Spalding, Esq.
Solomon L. Lowenstein, Jr.
330 South Downey Avenue
503 West Wayne Street
Indianapolis, Indiana 46219
Fort Wayne, Indiana 46802
telephone: (317) 375-0448
facsimile: (219) 422-4815
facsimile: (317) 352-9340

Anne Slaughter Andrew, Esq.
Loraine L. Seyfried, Esq.
David L. Hatchett, Esq.
Elizabeth Zlatos, Esq.
Baker & Daniels
Office of Legal Counsel
300 Meridian Street, Suite 2700
Indiana Department of Environmental
Indianapolis, Indiana 46204
Management
telephone: (317) 237-0300
100 North Senate Avenue
facsimile: (317) 237-1000
Indianapolis, Indiana 46202-6105
telephone: (317) 232-8603
Charles L. Berger, Esq.
facsimile: (317) 233-5517
Berger & Berger
313 Main Street
Evansville, Indiana 47708-1485 telephone: (812) 425-8101 facsimile: (812) 421-5909

By Facsimile and EPA Pouch Mail:

Paul R. Cort, Esq.
Diane L. Embil, Esq.
Air & Radiation Law Office
Office of Regional Counsel
Office of General Counsel (2344A)
U.S. EPA, Region V
U.S. Environmental Protection Agency Chicago, Illinois 60604-3590
401 M Street, S.W.
telephone: (312) 886-7889
Washington, D.C. 20460
facsimile: (312) 886-0747
telephone: (202) 564-5573 facsimile: (202) 564-5603

Dated: 8/02/00
/s/
Annette Duncan
Secretary