20061011 secret epa doj document (this is the epa confidential for settlement purposes only document...

Protecting Texas by Reducing und Pwiienting Pollution

July 21,2006

VIA OVERNIGHT DELIVERY

Ms. Heather McMurray

Kathleen Hartnett White, Chilirman R. B. "Ralph" Marquez, Commissioner

Larry R. Soward, Commissioner (;lenn Shankle, Executive Director

Re: Public Information, Act Request Regarding EPA's h a l y s i s of ENCYCLE material leading to DOJ's Asarco multimedia consent decree PIA No. 06.07.05.01 .

Dear Ms. McMurray,

In response to your e-rnail request received by the Agency on July 5, 2006, enclosed please find a copy of the document referenced above, which may also be referred to as "EPA Response to Encycle/Asarco Settlement Statement."

If we can be of any further assistance, please do not hesitate to contact me at (5 12) 239- 41 13.

Sincerely,

{YiV%- Booker Harriso Senior Attorney Environmental Law Division

P.O. Box 13087 Austin, Texas 78711-3087 5121239- 1000 Internet address: www.tc~(l.state.tx.Lls

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! U.S. Department of Justice

Environment and Natural Resources Division

90-7-1-886 ,-a el D. Goodstain & l t r i r o n m ~ l E n f o ~ S e a i o n Tclcphonc 1703 514-111 I P. 0. Bar 7611 F - i t d e (302) 616-6583 Wuhmpton DC 20014- 761 1

Peter J. N i c k l e s Jchn T. Smith C ~ v i n g t o n & Burling 1201 Pennsylvania Avenue, N.W. P . O . Box 7566 ' Washington, D.C. 20044-7566

Dear Peter and J . T . :

Enclosed is the EPA's Response To the Encycle/AS?LXo Settlement Statement. We look fo rward t o meet ing aga in on these issues after Encycle and ASARCO have an opportunity iQ review it.

Sincerely,

.

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CONFIDENTIAL : For Settlement Purposes O n l y July 31, 1998

RESPONSE TO ENCYCLE/- S E T W T STATEMENT

I. Summary

The bas i c p o s i t i o n p u t f o r t h i n the Encycle/ASARCO s e t t l e m e n t s t a t emen t o f June 9, 1998 ("the se t t l ement statement") i s t h a t no p e n a l t i e s a r e appropr i a t e f o r any a c t i v i t i e s that Encyc l e and ASARCO perceive t o be covered by t h e Texas V?ater Commission ("TWC") l e t t e r of September 27 , 1989 {''TWC - e t t e s r ' ) . Encycle and ASARCO con tend that t h e letter fron the TWC referencing the exemption i n 40 C.F.R. § 261.2(e) ( 1 1 (li) for u s e / r e u s e a s an effective s u b s t i r u t e for a comiiercial p roduc t ("the use/reuse exemptionr') cove r s the unpermitted management of hazardous waste, i.~., Encycle a l l e g e d m e t a l s c o n c e n t r a t e p roduc t s (Encycle a l l e g e d 'productsr') a t t h e Corpus C h r i s t i f a c i l r t y , and f u r t h e r c o v e r s the unmanifested shipment o f Encycle alleged "productsN t o ASARCO's Eas t Helena and El Paso sme l t e r s , and t o o the r customers both domestic and i n t e r n a t i o n a l . A d d i t i o n a l l y , Encycle and ASARCO contend that t h e TwC letter also covers t h e f a i l u r e of ASARCO t o properly manage Encycle alleged "products r r a s hazardous waste a t i t s two r ece iv ing s m e l t e r s .

Even under Encycle and ASARCO' s s t a t e d , i n t e r p r e t a t i o n , . however, the TWC l e t t e r cannot be construed t o cover sham recycling. Therefore, the evidence of sham recycling Is an ap?ropriare starting paint in t h i s response, t o the setElement s r a t e m e n t , As p rev ious ly discussed and outlined below, Encycle ' s o w n b u s i n e s s records provide compell ing evidence of sham r e c y c l i n g . Numerous hazardous wastes with l i c t l e o r no r e c o v e r a b l e metals v a l u e , were mixed i n t o Encycle alleqed " ~ : r o d u c t s " . This activity c o n s t i t u t e d unpernitted e reacmen t and s r a r a g e of Kit9 hazardous waste at Encycle. T h i s p x a c t j c e l ed to f e r r h e r unpermicted s r o r a g e , and d i s p o s a l of 'RCFLP_ hazardous waste a t t h e smelters. The wholesale c o m i n g l i n g of t h e sham h a z a r a u u s w2szes i n t o Encycle a l l e g e d "products" rendered the a l l e g e d " p roduc t s" and Encycle's a l l e g e d exempt recycling p r o c e s s e s i r i e l i g i b l e f o r r ecyc l ing e x e m p t i o n . F o r t h i s reason alohe, th? analysis provided in the settlement s t a ~ e m e n t is fatally +: - - --zwed, and should be e x p e d i t i o u s l y reconsidere2 by t n c y c l e and AS ?I4 C 0 .

I n additlon co t h e sham recycling evicience, a r e v i e w o f ap7licable l a w and the d e t a i l s of Encyc le ' s operztions c o m p e l s tke concl~sion t h a t even if it had been accep t ing o n l y l e g ~ t l r n a c e r e z y c l a b l e s , t h e Encycle a l l e g e d "pxoducts" s t i l l c o u l d n e v e r h a v e qualified for t h e use / r euse exemption referenced In the TwC l e r t e r . The use/reuse exemption is n o t a v a i l a b l e foz j iastes t h a t

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a r e being reclaimed. Because the alleged "pfoducts" were being reclaimed at smelters and other metals recovery facilities, Encycle and P.SARCO should have concluded that none of the use/reuse exemptions were applicable to Encycle a l l e g e d " products" . Importantly, i n addition to the language of t h e regulation, pertizent explanations of the regulations by EPP. were not. only publicly available to Encycle and ASARCO during the relevant time period, but were provided to them b y t h e TWC as early as 1968. Encycle and ASARCO had acjxaJ. notice o f EPAf s relevant regulatory interpretations prior to r e c e i v i n g the TWC l e t te r upon which Encycle and ASARCO so heavily rely.

Additionally, based on the information now available to t 3 e governments, including the information I n the settlement sratement, it renains clear that the submittals made by Encycle to the TWC about its operations, upon which the 1989 TWC letter w a s based, did not accurately describe the p r o c e s s e s employed by Zncycle. A s previously articulated, and outlined below, the Encycle submittal upon 'which the 1989 TWC letter was based, completely omitted a description of the s u b s t a n t i a l direct mixing 05 unprocessed hazardous waste into ~ t s alleged "product". Nothing in the settlement statement effectively disputes these facts. As such, the TWC l e t t e r was inappropriately relied on by Encycle and ASARC.0, because the application of the exemption to Ezeycle alleaed ''products" was legally erroneous, and a 1 so because the 02erations documented to the TWC were different than Er.cyclel s actual operations.

if, Encycle and ASARCO Engaged In Extensive Sham Recycling

\{hen SPA promblgated the ,'new d e f i n i t i o n of solid waste ir 1985, the Agency discussed t.he imporrance of de t e rmin ing wkr the r a claimed recjrclit?g activity was legitimate or sham. Tc aid the regulated community and r e g u l a ~ o r s in making such a de=erminatsan, EPA arriculated the "sham recycling criseria" - a l ~ s t of f a c t o r s that could be evaluated to deter~ine wnerher an activity was recycling or surrogate disposal. 50 Fed. Reg. 614, 633-639, 646 9 - 3 6 (1985). The Agency has expounded on the cr~teria on other occasions as well. -2.a. 5 2 Fed. Reg: 1<382, 17013 (May 6, 1967) and 53 Fed. Rsg. 519, 522 ( J a n u a r y 9 , 1538). Encycle's historlc operatioz.~ fzir poorly under 9ast of t h e sham recycl ing criteria. The e v i d e ~ c e pertailring to one of tne factors is so compelling, however) it is not ne

c

essary to ziseuss the remainder of the factors. EPA has made clear that skan recycling, as opposed t o l e g i t i m a t e recycling, occurs when the hazardous waste purportedly recycled contributes in no s l ?ni fican: way to t h e production of r h e prodact a l l e g e d i y r e s 2 i t i n g from the recycling. The 5 : : C i r c u i t U.S. C ~ ' 3 r t of

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~ p p e a l s a f f ~ z r n e d chis p o s i t i o n in 9 Processors, 81 F.3d 1 3 7 1 (5'"Cir. 19961. T h e r e the Court h e l d t h a t SPA had properly r e f u s e d t o g r a n t a Boiler and I n d u s t r i a l Furnace p e r m i t t o Marine S h a l e a f t e r d e t e r m i n i n g that the company wzs engaged i n sham r e c y c l i n g . E P A ' s d e c i s i o n i n & d n e Shak wes L a s e d i n l a r g e p a r t on the f a c t t h a t t h e facility was burn ing "zerz value" w a s t e s , i.~., hazardous w a s t e s that c o n t a i n e d no m a t e r i a l o r e n e r g y v a l u e , and therefore, c o u l d n o t c o n t r i b u t e t o t 3 e p r o d u c t i ~ n of the aggregate "p roduc t f r Marine Shale claimed to produce. % u. a t 1381.

T h i s z r i n c i p l e applies e q u a l l y t o Encycle's c p e r a t i o n s . obviously, metals canno t be recovered f rom hazardous wastes t h a t cs---zain virtually no metals. "If t h e waste does not in f a c t s o r v e its alleged function in t h e process, t h e n sham recycling is

Ir o c c u ~ r i n g . -no S u , 81 F. 3 6 . 1361 at 1365 (5" Cir. 1996) . F;r Ese in its alleged "products" , E n c y c l e was p u r p o r t e d l y only a c c e p t i n g w a s t e s f o r metals recycling t h a t cou ld c o n t r i b u t e i n a

' significant way to t h e p r o d u c t i o n o f metal c o n c e n t r a t e s ; t h a t 'is, wastes t h a t c o n t a i n e d r e c o v e r a b l e q u a n t i t i e s of target m e t a l s . 1:- i t s submittal t o the TWC, Encyc le r e p r e s e n t e d t h a t i t was performing a p p r o p r i a t e s c r e e n i n g o n w a s t e s a c c e p t e d by Encycle f o r i n c o r p o r a t i o n i n t o m e t a l s concenrrates. Le t t e r from CerclerLas t o Reynolds of 7 /12/89 , at 2 a copy of which is attached a s Z x h i b i t E t o t h e s e t t l e m e n t : s t a t e m e n t (maintaining t h a t - r n t y c l e had a procedure to determine w h e t h e r a qualicy m a t e r i a l car: Se reclaiaed from t h e w a s t e ) .

A s shown i n Exhibits A - l and A-2, h e r e t o , h o w e v e r , . Er:z:~zle: r o u t i n e l y accepted wastes w i t h l i t t l e ' o r no metals

v e l e s , and \'blended" these wastes into i t s metals c ~ n c e n t r a t e s , The Sera i n Exhibit A-1 is a summary of m a t e r i a l movement t iz. . 'ezs, also known a s batch sheets ( Y w T s t 8 ) provided t o t h e gc7.-ernaents by E n c y c l a . As confirmed by Encycle employees , t h e m T s =.re management and process documents u s e d r o u t i n e l y b y E ~ c ; J z ~ ~ . According t o Encycle employees, as e a c h l o a d of inzzr.:.;;lg m a t e r i a l i s received i t i s a s s a y e d . The assay d z t a i s e n ~ e r e d i n f o a computer f o r Lse on the MMTs. At no time c u r i n g ar.1- .=:f the s i t e visits by EFA investigators d i d anyone a t E n c y c l e s c c = 5 :hat the d a t a on t h e mTs do not fully and a c c u r a t e l y - - r e z - e z t assays o f t h e m a t e r i a l i n question.

.a-fser p r o v i d i n g a ~urrber MMTs to t h e g o v e r n r n e n ~ s , m d a f ~ e r a nunher o f Encycle representatives pzov~ded sEaLernents t o gcq:?rxnent ~ ? . v e s t i g a r o r s establishing ' t h e r e l i a b i l i t y of t h e s e re=:r5s, Enzyzle and ASAilCO con tended I n t h e l r s e t t l e m e n t str:smenf,' t& --& = i t ti= c h a t these Encycle records a r e sorsnh . i . n a c c z r a r e . As a result, Texas invesiigators returned

chis week t o Encyc le t o review Enaycle assay d a t a . For the MMTs summarized on E x h i b i t A-1 w e have conf i rmed that t h e a s s a y d a t a supporcs t h e d a t a on t h e WTS, where such data w a s a v a i l a b l e . Moreover, even in this p r e l i m i n a r y review of Encyc le assay data c h i s w e e k a d d i t i o n a l evidence of sham r e c y c l i n g was discovered,

g e n e r a t o r s showing was te l o a d s which were accepted and pr'ocessed I '

A E x h i b i t A-2 i s a sunmary o f a s s a y data f o r a number 02 specif ic !;,:w d i Encycle. e his-data shows t h a t numerous l o a d s of t h e s e ! s 2 e c i f i c waste streams had v i r t u a l l y no recoverable m e t a l s . From ocr p r e l i m i n a r y rev iew o f Encyc le material movement t i c k e t s and assay data , i t can be d e t e r m i n e d t h a t a t least 2 4 7 shipments, t o t a l i n g spproxi rnate ly 5.079 t a of hazardous waste that had v i r t u a l l y no m e t a l s va lue , were received and incorporated i n t o 3 r A c y c l e a l l e g e d " products" . - T h i s a c r i v i t y ' p l a i n and s i m p l e , was i l l e g a l treatment and d i s p o s a l of haza rdous waste, s i n c e t h e w a s t e s cou ld not have contributed i n any significant way t o t h e p r o d u c t i o n o f t h e m e t a l s concentrates,

I .

I n a d d i t i o n t o a c c e p t i n g wastes with no significant v a l u e f o r mix ture into i t s a l l e g e d "products N, Encyc le also m i x e d haza rdous was te s l u d g e s generated f rom i t s wastewater t r e a t m e n t p l a n t i n t o i t s alleged " produc t s" . This i s a n o t h e r form o f sham r e c y c l i n g s i n c e these hazardous waste s l u d g e s had no r e c y c l i n g value. The sludges from t h e WWTP a re hazardous wastes because t h e y d e r i v e from hazardous wastes . 40 C. F.R. 5 261 .3 (c) ( 2 1 . Encycle has r e p r e s e n t e d t h a t i t s h y d r o m e t a l u r g i c a l p r o c e s s e s a r e designed t o remove tF.e m e t a l s from t h e was tes processed. T h e r e f o r e , t h e s e sludges c o n t a i n e d no s i g n i f i c a n t m e t a l s va lue and m u s t have Seen i n c l u d e d for d i s p o s a l purposes o n l y . S ~ n c e t h e y , had no l e g i t i m a t e r e c y c l i n g v d l u e t h e y c c u l d have added no value t 3 t h e e l l e g e d " p r o d u c t s" . Evidence o b t a i n e d r e g a r d i n g the h i s t o r i c Encyc le p r o c e s s e s establish that a l l wastewaters qenerated from t h e h y d r o m e t a l u r g i c a l p r o c e s s e s Slow t o t h e Fr?eretiCmerit unLts i n F a c i l i t y 1. Wastewater i s p r e t r e a t e d and residues wkich may a r g u a b l y c o n t a i n some m e t a l s v a l u e s r e c o v e r a d . These r e s i d u e s a r e also mixed w i t h t h e a l l e g e d " product" . P r e t r e a t e d waszewater i s t h e n discharged t o rhe was tewate r r r e s t m e a t p l a n t , a l s o kn.owrr a s t h e n e u t r a l i z a t i o n p laa t ("WWTP") f c r f ~ r r r h e r t reatsr tent . Solids g e n e r a t e d a t the WWTP were pu t back i n t h e processes w h i l e t h e effluent was d i s cha rged through N ? X S w t f a l l 001 . copies of E n c y c l e ' s own process flow di-grms a t t a c h e d h e r e t o a s E x h i b i t B . Cnce these clearly sham w a s t e s z e r r y i n g l i s t e d wesEe codes were mixed w i t h ocher poientially l e g i t i m a t e w a s t e s t r e m s and i n t o Encycle's a l l q e d pr,?.duc:s, there was z0 q u e s t i o n rrhat the r e s l s l t a z t m i x t u r e s were re~sl3:ed HCRA hazardous waste.

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t h e ilLeqal treatment and disposal activities r e s u l t l n y from shaa recyc1i:lg could no;; possibly have been sanctioned by r h e fwc lezter since che l e t t e r referer\CeS a exemption only ava i l . ab le f c r legitimate recvcling activities, The Texas regulsti~n cited by the TWC in the 1989 letter, 31 TAC 5 3 j ( i ) is based on federal. r e g u l a t i o n 40 C. F.P.. 5 6 . 1 ) i . In t h e publication of the definitio:: of s o l i d waste or! J a n u a r y 4 , 1995, EPA articulated the criteria for leqitimate recyclinq. 50 Fed. Reg. 614 ac 636-639 [ J a n u a r y 4 , 198'5) . ~ l s o =, 50 Fed. Reg. at 646 n. 36 (~oting that "the was te s mgst contribute t o the effectiveness of the waste-derived product" to be regarded as r e c y c l e d ) . These criteria were reiterabed on numerous ' o cca s ions p r i o r to Encycle's operations. at e-g.t 53 Fed. Reg. 1 7 , 5 7 8 , 17,606 (1988) (explaining that recycling means that the hazarcous waste legitimately contributes to the product) P.lsa m, Memorandum from Lowrance to Hazardous Waste Management Division Directors EPA Regions I-X at 1-2 and attachment (April 26, 19891, a copy of which is attached heret~ ,

as Exhibic C (a major consideration in assessing whether an activity is sham recycling is whether the material truly has value). Moreover, in its 1989 letter, the TWC reiterated to Encycle that any exempt r e c y c l i n g must be legitimate: " [ i l n order to exempt any waste from regulation as solid waste, TWC must be assured the method of managing and recycling the waste is . : ate, beneficial, allowable under current state and federal w n s , and assures the protection of 'the public-health and the environment." TWC Letter attached as Exhibit A to the .

settlement statement at 5. Therefore, Encycle and ASARCO have no argument that the TWC letter somehow sanctioned sham recycling or that they were not fairly notified of the requirement that any recycling must be legitimate. 6

111. Encycle Alleged ''ProductsW Do N o t Qualify For The Use /Reuse Exemption 'claimed.

' The settlement statement accuses EPA of not clearly articulating its basis for determining that Encycle alleged "products" are not exempt from the definition of solid waste and are regulated hazardous wastes. Therefore, once again the governments shall articulate this basis here. There -is no dispute that Encycle alleged "products" contain listed hazardous was te . There is further no dispute that Encycle alleged "productsf* are reclaimed at the smelters. As such, the Encycle alleged "products" are hazardous wastes until they are ultimately reclaimed. 40 C.F.R. 5 2 6 1 . 2 ( c ) (3) and Table 1 therein.

Encycle and ASARCO have claimed that Encycle alleged "products" are exempt from the' definition of solid waste because

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\\ t h e y a r e ylse.5 or r e u s e d a s e f f e c t i v e s u b s t i t u r e s f o r a c n m m e r , - i z l product." 40 C . F . X . 5 25: . 2 i e ) (1l ( i i ) and 31 T . A . Z . 335.1 ( F ) i ~ i j . When t h e d e f i n i t i o n ~f zolid waste was pro~u1ga:ed in 1985 , koxever , i t was made c l e a r in t h e Federa l Register p u b l - c a t i . z n r h a t reclamation and use/reuse a r e mutually exclusive terms arid :hat an exemption for u s e / r e u s e as an icgredienr 3r as a n e f f e c c . l v e subscituie f o r a c o m , e r z i a l product cannot a p p l y when rcclazction, sac5 as rnecals r e c o v e r y , is occurring.

IC i r s osed definition of reclamation in 1 9 5 3 , Z P A had eonsidered an g&tion that wolllc have -overed use or r e u s s o f ma te r i a l s "as effective s u b s t i t u t e s for r s d materials i:~ - p,ocesses -P u s i n g raw materials as p r i n c i p a l feedstocks (for example, s l ~ c i g e s used as s u b s t i t u t e s f a r ore concehtrates in primary smelting)" T h i s excep t ion , however, was -slv s l u d e d from the f i n a l definition of reclanation promulgated in 1955 . ornoare Proposed Rule at 4 8 Fed. R e g , 14472 a c 1 4 5 0 8 , , 5 6 . I ) ( 1 , i i with Fina l Rule a t

1 . 2 ) 1 ) ( i , i , ( 1 ) a t 5 0 Fed Reg. a t 6 6 4 . N o t e t h a t the definition of reclamation was proposed essentially as promulqated, but that three types of reclamation were to be considered use/reuse (and carved out o f t he r e c l a m a t i o n defin~tion), and that t h e r e was no independent d e f i n i t i o n o f t h e t e r m u s e / r e u s e in the proposed r u l e . I n t h e final rule, of course, the terms reclamation and use / r euse became independent, and as shown below, mutua l ly e x c l u s i v e .

The 1985 preamble t o t h e f i n a l rule unambiguously e x p l a i n e d t h e f a t e o f .the proposed exc lus ion (See 50 Fed. Reg. 6 1 4 at: 633-634, and 637-641, (.January 4, 1985) ) , and t h e resultant R c R a S u b t i t l e C r e g u l a t o r y status o f t h e wastestreams that might have otherwise q u a l i f i e d for the proposed e x c l u s i o n . EPA "decided not t o promulgate t h i s exc lus ion as proposed, b u t rather to limit its scope to the c losed- loop production situations.. ." . , at 640. The preamble also states, " [ t l h e final regulations thus provide that ~e f n l lnwinrr se-v m a w s a r e was- - r~clzimed bv .-D or marvsecondazv re- - to t h e urima,v I--

e w e v were a .nerat_ed w i u f i r s t b e i n g reclaimed: (11 [ s l l u d g e s and by-products t h a t a r e l i s t e d i n SS26l.31 and 261.321; I (2) [a] 11 hazardous spent materials.. .'I Id. at 641 (emphasis added).

The preamble discussion of the final definition of s o l i d w a s t e provides unequivocally that the u s e / r e u s e exemptions are n o t a p p l i c a b l e t o materials t h a t are reclaimed. In explaining the final definition of reclamation EPA states,

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50 Fed. Reg. 614 at, 6 3 3 ( J ~ n u a r y 4 , 1 9 8 5 ) (Emphasis added)

In the discussion of the use/reuse exemptions the Agency made c lea r again that the exemptions do not apply to materials t h a t are being reclaimed. The preamble provides a list of circumstances where "the nature of the mater ia l or t h e n q t u r e of t h e recycling activity i n d i c a t e s that -&c . ,

EPA concludes the list by stating " when tt& - a n -t. the b u -1 i s =covered

=claimed, not w" 5 0 Fed. R e g . 614, 638 ( January 4 , 1985) (emphasis added) .

The preamble also elaborates on the d i s t i n c t i o n between use as a s u b s t i t u t e for a commercial product and reclamation:

When secondary materials are di rec t ly used as s u b s t i t u t e s for commercial products, we also believe these materials are functioning as raw materials and therefore a re o u t s i d e of RCRA' s jurisdiction and, thus, are not wastes. Examgles. are c e r t a i n sludges t h a t a r e used'as water conditioners and by- products [sic] hydrochloric acid from chemical manufacture used in steel pickling. In these examples, the recycled materials are substituting for other commercial producth,

ed from t m .

U. at' 619-620 (underline added).

In light of the final promulgation of t h e rule , u s e / r e u s e can occur o n l y i f a component of the material ( m a t e r i a l va lues) is n o t recovered as an end product, o therwise the wastes are be ing reclaamsd.

Any analysis under t h e use / reuse e ~ c l u s i o n s must t h e r e f o r e focus on whether reclamation of the was te s i s occurring. Reclamation i s de f ined a s e i t h e r recovery of a useful p r o d u c t o r regeneration of a product f o r its o r i g i n a l use. 40 C . F . R . § 2 6 1 . l ( c ) ( 4 ) . Recovery is defined as the recovery of distinct components of a secondary material as separate end

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Encycle and ASARCO base their reliance on ;he gse / re ! l se exep.ptior. on the fact that Section 2 6 1 . 2 ( e ) (1) ( i i ) ( t h e c o m e r c i a l product use / r euse exemption) does not con ta l a an ex?ress p r ~ v i s o disallowing the exemption for waszes that a r $ reclaimeb. G i v e n the c l e a r intent of t h e comnercial product use/reuse exemption however , such a proviso was u n n e c e s s a r y . As b a c k c p u n d f o r The f i n a l rule, the April 4, 1983 preamble explained he excl,:sion to cover materials used "as substitutes

n for comertial prc -.lets 1 f u . . w s ar a p - 3 ,

An example is spent p i c k l e liquor used as a phosphorus p rec ip i t ac t and s l u d g e conditioner An wastewater treatment. C ~ C P - S n~t-v~r U P - k l e licf~o~;~.~ 43 Fed. Reg., at 14458 (emphasis added) . The explandtlon in t h e 1 9 8 5 prea'hle cited above also states unequivocally that a secondary material

"as an "effective substitute for a . must b e dlrectlv US& I I

commerciai product" and not undergo a n y type of preprocessing to be subject to the exemption. In light of t h i s context, Encycle a n d AsARCO's semantic argument is unavailing. .

Encycle does not produce a reclaimed "produc:" t h a t would be free from RCRA regulation. Spent materials, or-listed sludges or by-products (such as E006) were the malority of Encycler s f eedstacks. EPA' s summary of waste received and processed at Encyclo, a copy of which i s attached as Exhibit D - 1 hereto. There i s no ques t ion that Encycle alleged "products" must undergo reclamation a t the smelters if a>y actual metals recycling is going to occur. EPA's summary of Encycle shiphents to ASARCO smelters, a copy o f which is at tached as E x h i b i t D-2. T h e s e t y p e s of wastes are hazardous w a s t e s under RCRA because they are destined for metals reclamation and they remain hazardous wastes until reclamation is complete. There is no q u e s t ~ o n that Encycle's hydrometalurgical processes constitute, at best, only partial reclamation. No actual metals recovery takes place at Encycle, this occurs only at t h e smelters. EPA has clearly articulated that hazardous wastes that are only partially raclalrned or processed minimally, remain hazardous wastes until material recovery is complete. 40 C . F . R . § 261.2 ( c ) ( 3 ) . See a . 1 ~ ~ ~ 48 F e d . Reg. at 14489, which shows t h a t as early as 1903, EPA clearly articulated that preparation for reclamation was not complete reclamation: '[wl e also c a u t l o n that waste materials do not become products if they are merely processed minimally - ~ . e . , operations that leave materials unfit for use without further processing. For instance, a haza rdous sludge remains a waste when it is dewatered and sent to a metal reclaimer or used in a manner constituting disposal." and SO Fed.

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E?A i n t e r p r e t i v e zemoranda available t o ::-Le public d u r i n g the r e l e v a n t ~ e r i o d r e i t e r a t e d t h i s concep r . F o r exarngle, i n 1989 , the D i r e c r o r of the EP.4 Office of S o l i d Waste c i r c u l s ~ e d a memcrandum t o each o f h e r Reaional Hazardous Waste Manageiner.~ D i r e c t o r s r e g a r d i n g F006 r e c y c l i n g whicn a d d r e s s e d zhese i s s a e s . T h e memorandum states: "For F006 used as a f e e d s t o c k i n a rnezsls recoke:y s m e l t e r , t h e Agency v i e w s :his as a r e cove ry p rocess r a t h e r than use as an i n g r e d i e n t i n an f n d u s t r i a l ?recess and rherefore , c o n s i d e r s t h i s t o be a form of t r e a t m e n t t h a t i s r,cz c u r r e n t l y r e g u l a t e d [citations o m i t t e d ] . Furt-,,, v P , b,,al,9 em , - t=&,4 is a recnvarv n r o c . ~ . ~ s , - the FO 06 w a s t e w s a h a z a , d o u 5 +

C w a s t e ( a n d n b g . . m a n a c r e d as . , u c h m o r to ?he . n a d u c t i o n ' t

L h e ~ r o c e s s ) . . , " Memorandum f r o m Lowrance t o Hazardous Waste Management D i v i s i o n D i r e c t o r s EPA Regio,ns I - X a t 2-3 ( A p r i l 2 9 , 1989) ( e m p h a s i s added) . Exh ib i t C hereto. A i s o , ir. L989, the Deputy Director of t h e Characterization and Assessment 'Divisicn of EPA's O f f i c e of S o l i d Waste i n d i s c u s s i n g the e x c l u s i o n i n 4 0 C.F.R. § 261.2 (el (1) ( i i ) [ u se / r euse of a m a t e r i a l as a s u b s t i t u t e f o r a commercial product), s t a t e d , " T h i s e x c l u s i o n a p p l i e s t o m a t e r i a l s which a re used o r reused w i t h o u t r e c l ama t ion ( s e e the January 4 , 1985 F e d e r a l Register n o t i c e , 5 0 FR 637, 638) ." EPA Memorandum from Straus t o U l r i c h a t 2 ( S e p t . 12, 1989) a copy 3f

which i s a t t a c h e d as Exhibit E. Such memoranda have been p u b l i c a l l y a v a i l a b l e s i n c e the RCRA Po 1 i c y Compendium was started i n 1985.

~ p p r o p r i a t e l y , t h e TWC cited t o t h e p e r t i n e n t Federal R e g l s t e r language i n i t s f i r s t l e t t e r t o Encyc le of December 30, 1 9 8 8 : ''rf t h e m a t e r i a l i s to be p u t to use a f t e r i t h a s been rec la imed , it is s t i l l a s o l i d waste u n t i l r e c l a m a t i o n has been completed . Thus, t h e f a c t t h a t w a s t e s may be used after being reclaimed does not affect t h e ~ r s t a t u s as w a s t e s be fo r e and whi le be ing reclaimed. " The TWC l e t t e r f u r t h e r p r o v i d e d t h a t accord ing t o the f e d e r a l r e g i s t e r no t i ce , l i s t e d wastes t h a t have been p a r t i a l l y reclaimed, b u t must be r ec l a imed f u r t h e r , a r e n o t ' exempt from the d e f i n i t i o n of s o l i d waste. && l e t t e r t o S tephenson from H a t t e n a t 1-2 (December 30, 1988) . A copy of which i s a t t a c h e d as Exhib i t F, Again, these p r o v i s i o n s from the F e d e r a l Register are e q u a l l y a p p l i c a b l e t o both t h e ingredient and commercial p r o d u c t use/reuse exemption.

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.- erefor fore, L i n t h e 1983 t o 1989 timeframe, Encycle a:-.~:j A S ~ . . C O w e r e on not ice fzorn t h e r e g u l a t i o n s ( i n o 1 u d n . i ; rile definition of s o l i d w a s t e promulgated I n 1985), the Fec ie ra l Reg i s t e r preambles c i t e d h e r e i n , and EPA i n t e r p r e t i v e correspondence i n t h a t per iod , and f u r t h e r , were expressly noiified b y the TWC l e t t e r of December 30, 1988, of EPA's r egu la to ry interpretation. They were c l e a r l y on notice t h a t under E p A ' s view, Encycle a l l e g e d "products" were nor e l i g i b l e f o r any use / r euse exemption. The analogous Texas. regula t ions were based on the Federal regulatians, t h e r e f o r e , ZncycLe and ASARCO were a l s o on notice o f EPA's stated p o s i t i c n thag Encyc le alleged "products" could not q u a l i f y f o r t h e a n a l c g o u s !exas exemption.

Encyc le ' s l e g a l analysis prov ided t o the TWC i n its l e t t e r of J u l y 1 2 , 1989 was wrong because it omitted c o n s i d e r a t i o n of the ,,pronouncements of EPA on t h e s e issues and did n o t c o n s i d e r the i n t e n t and meaning o f the regulat i 'ms inco rpora t ed i n t o t h e Texas program, i n l l g h t o f these pronouncements. EncycLets a n a l y s ~ s f a i l e d to consider t h a t Encycle a l l eged "products", containing spent materials and llsred by-products and sludqes, were u l t i m a t e l y recla imed at t h e smelters. As such, Encyele a l l e g e d 'products" could n o t q u a l l f y f o r a use/reuse exemption. Even assuming t h a t Endycle o n l y accepted legitimate recyc lab le$ , the legal i n t e r p r e t a t i o n i n the TWC l e t t e r , upon which Encycle and ASARCO r e l y , is erroneous. A s provtded above, t h e RCRA regulations distinguish between reclamation and use/reuse and make these mutually exclusive c a t e g o r i e s . This was overlooked i n Encycle 's analysis.

Iv. E n c y c l e and ASARC0 cannot Rely ori the September 2 7 , 19B9 TWC Letter Because The Description of E n c y c l e ' s Processes Was Inaccurate.

Encycle and ASARCO cannot rely on t h e TWC l e t t e r for t h e a d d i t i o n a l reason that Encycle failed t o a c c u r a t e l y document i t s p rocesses t o t he TWC. In its s u b m i t t a l t o t h e TWC on July 1 2 , 1989, Encycle on ly documented hydrometaLurqical processes and a s s u r r e d the TWC t h a t a l l wastes would be processed through the hydrometa lurg ica l processes:

E/TI produces m e t a l l i c compounds from these w a s t e s th rough a series of reclamation steps as shown in the general flow diagram (Attachment B) . The w a s t e streams a r e f i r s t subjected t o pH adjustment and f i l t r a t i o n ( f o r co r ros ive wastes) ; a l k a l i n e c h l o r i n a t i o n f o r cyanide wastes; and a reduction s t e p f o r chromium bear ing wastes. Following these s teps , the t r e a t e d

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stream aoes thrcsugk f u r t h e r pH ac jus tmen: and/i;,r sulfide precipitation and f i l t r a t i o n s t e p s .

Let ter , from Cardenas to Beinke a t 1 (July 1 2 , 1989) . li copy 2:

which is a t t a c h e d as ~xhibit E t o t h e se t t lement stztemefir.

Encycle f ~ l r t h e r represenred that " t h e p r o c e s s 1s an extetlsive a n e in.~olv:-,g c a r e f u l pH c o n t r o l and sequential pfeciplrazicn . " a. at 2 . There is no dispute that subsiantial amounrs of h a z a r d a ~ s was tes received by E n c y c l e were put directly into "prouuc-," b i n s witklout any processing whatsoever a t Encycle. & EPA summary of was tes received and processed by Encycle, a copy of which i s atcached as Exhibit D, and EPA process flow diagram which shows r n i x r ~ g and blending ("PMP"] operations, a copy 05 which IS attached .= E x h i b i t G . Since the TWC letter was based on the representa~ions that an extensive hydrometalurgical process was t o be performed on .all the wastes received by Encycle, it canzct be r e l i ed on t o cover , .wastes t h a t were n o t processed i n t h i s nanner, or to otherwise "properly" processed wastes chat .were

' . # -. . mixed with unprocessed wastes (in combination, -a I e l v 31.1 . -.\ ~f rhe fa d - m c p s d w I f ec!r;to-,le u e ~ e r i _ o . d e s t l o ~ ) . % Exhibit D. In addition, the mixture o f sham wastes into the process styeams, or d i r e c t l y into * alleged vproduc t f f d i v e s t s the r e s u l t a n t mix tures of any exc lu s ion the non-sham portion might have enjoyed.

'

Encycle and ASARCO contend that the TWC letter addressed the mixing and blending activities by providing, "the

- fact t h a t a w o r w o f the described process is performed a t anorher loca t ion does not alter the status o f Encycle/Texas I n c f s . solids ..." Exhibit A 'to the settlement statement at 4 (emphasis added) , This language, however, cannot possibly be construed to cover the approximately one third of hazardous wastes received by Encycle that d i d not undergo m v ~ort_lon of the process documented to the TWC and which were mixed directly ~ n t o "productff bins. In addition, the mixing activity, which provides no significant concentrating of metals in the w a s t e being blended in, constitutes unpermitted treatment because it does not meet t h e definition of reclamation (rt is not "recovery of distinct components of a secondary material as separate end products"). 40 C.F.R. 261.1 (c) ( 5 ) (i) .

Encycle and ASARCO attempt to argue that Texas knew fully at the outset about the direct mixing of hazardous waste unprocessed at Encycle into its alleged 'product" because of annual inspections under the storage permit, and other interactions w i t h Encycle representatives. No evidence of this is provided in the settlement statement, however. Encycle and

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A-;$Jc-s. m s r e l y ? r e s e n t a copy .2f an 19forrnal. ~ n t e r n a i Encyicle <ocurr,enc azd t h e self-servir,.?, unsuks t . an t ld te . r f sgec~lazlon o f .a f u r m e = Encyc le P r e s ~ b e ~ C tP.3: chis document "nay" h a v e been provided t a Texas. O t h e r weak a t t e m p t s a t ? roof on t h i s p o i n t are r e f e r e n c e s to ~ n s p e c t i ~ x r e p o r c s s t a r t l n g in I994 that tire j.,,ll,, regarbing the d i r e c t rn ix lng o7eratiox. By t hen , oP course '-,he i nve r t i -ga t io r : that c u l m i n a t e d i n t h i s enforzenen t actlox was comencinc;. A s such, these r e f e r z n c e s do pa: show acquiescence on the p a r t of t ne stare i n t h e unlawfal b l e n d i r q activities. Texas ' posltlon regarding these matters was cnnfirmed in prior meetlngs with E n c y c l e and further confl=rned recently i n t h e June 9 , 1998 l e t t ? : t o t h e Preside~t of Er.:ycie from che E:zardous Waste Director of t h e Texas Natural R ~ s o u r e e s Conservati.;n Commmissir~n which s t a t e s , u&X u, t h a t \ \ t h e a v a i l a b l e information indicates t h a t the exenption p r o v i s i o n s cited in t h e ea r l i e r l e t t e r s a r e n o t a p p l i c a b l e to the m a t e r i a l s Encyc le produces and Encycle's r e l i a n c e on the litters has been misplaced." a l e t t e r from Hibbs t o Mosshoider (June 10, 1996r , a copy of which is atcached as Exhibit H h e r e t o .

Encycle did not process hazardous wastes received a s represented. I c i s therefore, n o t s u r p r i s i n g that inspections by TNRCC and site vissts by prospective customers did not initially disclose the RCi(A violations a s s o c i a t e d with Encycle's operations. Encycle failed to properly screen wastes e n t e r i z g its process as outlined in S e c t i o n I1 above [sham r ecyc l ing ) and did not process all wastes hydrometalurgically. This was inconsistent with its representations t o the TWC. Additionally, E n c y c l e did not specify to the T.WC in it submi t t a l s that it was p u t t i n g w a s t e sludges w i t h no recycling va,lue back into its '

process from its wastewater t reatm6nt plant. For these r e a s o n s , Encycle and ASARCO cannot rely on the TWC l e t t e r .

V . E n c y c l e and ASARCO Were On N o t i c e o f EPA' s Regulatory Interpretation.

Agency promulgation of a regulation provides f a i r and adequate n o t i c e of the Agency' s interpretation " [i] f , by reviewing the regulations and o t h e r p u b l i c s t a t emen t s i s s u e d by t h e agency , a r egu la t ed party acting i n good faith would be able to i d e n t i f y , w i t h 'ascertainable certainty, ' the standards wi th w h i c n the agency 'expects parties to conform." General E l petri-, Co. v . United St;gtes EPA, 53 F.3d 1324, 1329 (D.C. C i r . 1995). The definition of solid waste, as promulgated by EPA in 1985, is 'reasonably comprehensible to people of good f a i t h . ' u. at 1330 (citing McElrav E 1 e c t r o m . COD. v . FCC, 990 F. 2d 1351, 1358 ( D . C . C i r . 1 9 9 3 ) ) . The preamble t o the regulations in t h e

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F e d e r a l R e G l s i e r s t a t e s c?xqu i ' voca i l y t h a t uSe/reuse .and ~ c , , ; l a n a i - l ~ r . aa--e rnxt;:~ 1 l y e x c l - ~ s i v e : that t h e proposed e r , z l u s ~ - , n

sr,d l \sar . - :~ might have been able to enJoy .was e x p r e s s l y n o t p r s ~ ~ u l g a t e d , and chat .Encycle and Asarco' s a c t i v i t i e s , when taken t.c:qec'r.+r, c l ea r1 y e o n s t i t i l t e r e c l a m a t i o n a c t i v i t i e s . .- a d~sc:. lssion at Far; III. rho prea&le t o a r e g u l a t i n r . should be consi ,2ered in s 3 n s t r u i n g t h e r e g u l a t i o n and determrning t h e

' - meaning of t he r e g u l a t i o n . ; - ~ ~ I n c - 3 m e n t . v I ey.srt n f Ensrc;v, 66' F . Z d 7'7 ac 7 8 !Temp Ener. CC. App. 19s3!), _=_prt. m., 456 U.S. 9 0 5 (1982) . & k i Q S 2 2 , Kennecott u ~ & l COO

C = rorQ. v, P of T R W ~ O ~ , 8 8 F.3d 1191, 1223 (D.c.. Cir. 1396) (Cour t

-chat the agency i n t ended -he preamble r 3 be bind ing i f what i t requires is sufficiently c l e a r ) . The preamble is c l e a r i n s t a t i n g t h a t no use/reuse exemption is available if t h e material is reclaimed and i n defining sham recycling: Taking i n t o account t+ p r e a d 1 ~ language the o z l y x e a s o m i n t e r p r e t a t i o n i s t h a t khe use/reuse exemptioz c a n n o t apply when rec lamat ion t y p e activities are O C C U r . ? l n g .

As s t a t & above, Encycle and ASARCO had' f a i r no t ice from the r e g u l a t i o n s . Zowever, even if Encycle and ASAX0 successfully ,

argue t h a t t h e y d i d n o t receive f a i r n o t i c e from the promulgation of t h e regulations i n 1985, Encycle and ASARCO d id receive f a i r nctice of EPA's interpretation from t h e TWC i n 1988 . T h e TWC l e t t e r o f December 30, 1988, Exhibit F hereto, a f f i r m a t i v e l y s t a t e d t h a t according t o EPA's i n t e r p r e t a t i o n o f t h e regulations E n c y c l e alleged "products" were exempt. Therefore, even if the language of t h e r e g u l a t i o n s and federal register notices w e r e found t o be ambiguous, Encycle and ASARCO had a c t u a l n o t i c e of

. . E P A f s in terpre ta . t ion t h e day i t r e c e i v e d the bWC's l e t t e r .

S i m i l a r l y , Encycle and ASARCO have had f a i r n o t i c e f r o m the regulations and other p u b l i c s t a t e m e n t s b y EPA regarding t h e distinction between sham r e c y c l i n g and legitimate r e c y c l i n g , ' a

d i s c u s s i o n a t Part 11. Moreover, t h e TWC l e t t e r of September 2 7 , 1989, Exhibit A t o the s e t t l e m e n r s t a t emen t , af f i r n a t i v e l y stated that any cla~med "recycling" must be legitimate.

V I . Encycle and Asarco' s Proposal Does Not Appropriately R e f l e c t The ~ r a v i t y and Duration Of T h e Violat ions , And T h e Economic B e n e f i t R e s u l t i n g From The Violations

I n l i g h t of t h e fo rego ing , it is clear t h a t t h e central basis f o r ASARCO's proposa l i n t h e s e t t l e m e n t statement of June 9, 1998 is flawed and t h e proposal should be r econs ide red i n its e n t i r e t y . ont the less, we w i l l address a few points regarding t he

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I

A. Penalties For E n c y c l e

X i t h regard tc t h e Waste Analys is Plan violations ~r.cy:le ar.14 ASAiCi3 must ccns ider t h e f a i l u r e 0 5 Encycle's waste .;-cre~r.irlg ;rocedtires i n t h e evaluation of t 5 e s e claims. As a r e s u l i , Xr:.z:?;cle encjaqed i n s u b s t a n t i a l shar recyc l i f tg .

K i t h regard t o the o t h e r v i o l a t i o n s related t o S n c y c l e ' s . .-.eg& . xecyc1l.g activities, Encycle and ASARCO' s a n a l y s i s m u s t

t-; reevaluated In l i g h t of Sectians I through V above.

B. Penal ties For The ASARCO Smelters

with regard t o the E l Paso facility, Encycle and ASLrlCO c9n:end t b a c because ,Texas did not identify the E n c y c l e a l leged \. procuc:" a s hazardous waste during i n s p e c t i a n s a t El Paso, the governments should not seek a substantial penalty at El Paso. The Encycle wastes were handled a t E l Paso in the same way oze concentrates were handled, however. AS such, the Encycle wastes xere not easily identified at El Paso a s hazardous wastes by LnsDectors who did n o t have the information that ASARCO had regarding the composition of the wastes. Likewise , at East Helena, although it was difficult f o r inspectors to identify the E n c y c l e alleged "product" as hazardous wastes, once i d e n t i f i e d by EPA and State of Montana officials, the mismanagement of Encycle wastes a t East Helena was included in the investigation of Encycle. Further action on the part of Montana w a s unnecessary. Since the key to cmfi'rming t h e r e g u l a t o r y status of Encycle w a s t e s a t t h e smelters was the m v e s t i g a t i o n of Encyclers facility, i t w a s appropriate f o r inspectors at t h e smelters to reserve c~ting ASARCO f o r violations associated w i t h Encycle w a s t e s until t h e full investigation w a s completed. The delay in enforcement action was not acquiescence, it was the period of time r equ i red for the full investigation t o be completed.

With regard t o economic benefit for each of the smel te r s , t h e economic benef i t ("BEN") scenar ios used by EPA ( c o s t s saved by not upgrading the smelters t o lawfully manage t h e hazardous wastes received) is the scenario based on a c t u a l events, L.B . , ASARCO actually managed hazardous wastes at the s m e l t e r s . Encycle and ASARCO' s BEN scenario, that the wastes would not have been received by ASARCO' s smelters had t h e y been identified as hazardous wastes r e l i e s on s p e c u l a t i o n . While it is true that the precise BEN enjoyed by ASARCO a s a result of the subject

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C. World Resources Company

P.sP-?CO and Encycle have asked t h a t t h e p r i o r r e s o l u t i o n cf RC?A enforcement matters Fnvolvinc; World Resources Cowany ( " $ j p . ~ " ~ i n f l u e n c e t h e governments in their position i n this

rnat ,er . While W R C 1 s operati3ns have some s i m i l a r i t i e s to Encycle's operaticn, the WRC m a t t e r s referred t o l n :he settlenent starement were subs.tar.tislly d i f f e r e n t chan this one , Encyc le and ASFL?CO cite to an adminl->;rative penalty asses .:A a g a i n s t WRC in 1991 5s grounds fo r a s s e s s m e n t o f a minor p e n a i i y for the violarions of Encyc le and ASARCO here. T h a t WRC administrative order predated the currenr R C W pena1:ty policy, and is t h e r e f o r e , not cbmparable, however. With regard co the a d m i n i s t r a t i v e order w i t h WRc in Arizona, the facts of that situation were substantially di f feyen . t than "ce facts p r e s e n t e d h e r e . i n tha: . rnacter, WRC was handling its "product" as hazardoqs waste . Whle WRC: b r i e f l y suspended its manifesting, claiming they were informally authorized to due so by Arizona, once advised t h a t manifesting #as indeed required, WRC promptly returned to its prior hazardous was te handling procedures.

D . EPA A P ~ TNRCC Reactions To Supplemental Environmental Project ("SEP") Ptopo~als

1. Electrowinning: C e r t a i n aspects of t h i s proposed pro jec t potentially have meri t a s a SEP p r o j e c t under, the Texas N a t u r a l Resource Conservati~n commission ("TNRCC") and the EPA SEP p o l i c i e s . - The c r e d i t that Encycle can' receive for the project , however, i s l i m i t e d . First, a l t h o u g h both agencies wish to encourage efforFs to develop and use experimental technologies, n e i t h e r the TNRCC n o r t h e EPA can subsidize the expansion or development of new busi'ness. This concern reduces the value of the proposed SEP significantly.

Second, while EPA is w i l l i n g t o g ive SEP cced i t f o r bench t e s t i n g and pilot testing of new technology if there is some evidence that the technology will be s u c c e s s f u l , t h e TNRCC, believes that the environmental benefit of the assessment and testing of unproven technology is too intangible to qualify as a val id SEP pro jec t . Encycle's current proposal appears to be a purely experimental project which may or may not b e n e f l t the environment. It would be difficult to approve a SEP project without some measurable b e n e f i t t o the environment.

JUL- 18-2B06 15: 44 FROM:

-' ~ . a e TbiR;3:1 and EPA w o u l d boxh like to escocraqs a f7 , .- . , . , ,Eicsti.>n (4 i tc t'r.2 psopc;al :hat wcjuld qlve C5e a r o p o s s ~ ; ; ,~r i?

- 'JaLlle 35 a SEP. ri)5 exampLe, once t h e r e c h n s l 3 g y was i ,n+:al l sd and proven s u c c e s s f u l , t h e Aqencies would e n t e r t a i n the p o s s i b i l i t y of g l v i n q some SEE' credi : l f Encycle 3rocessed hazardous was te P D ~ smali businesses no t presently served by E n c y c l e , free cf charge. The Agencies m i q h t also c o n s i d e r SE? c r e d i r i f Zncycle promoted t h e t echno logy or provided training on the technoLogy t o 3 tner r e c y c l i n g f a c i l i t i e s .

2. DemoLition Projec t s : B e t h the INRCC and EPA b e l i e v e t h a t t h e v a l u e of chese proposed p r o j ~ : z s i s C.mprOmised by t l e f a c t t h a t Encyc le w i l l benefit s u b s t a n t i a l l y from i h e demol i t l .3n o f the s t r u c t u r e s , The Agencies believe that Encycle proSably w o u l d have performed t h e dernol~rLon f o r a number of reasons, i n c l u d i n g t h e e l i m i n a t i o n of f a c i l i t i e s t h a t a r e no lottger i n u s e , expans ion o f the , , f a c i l i t i e s , and r e d u c t i o n o f long term liability f o r t h e companies. To al low e v e n m i n i m a l SEP credit for rhe d e m o l i t i o n p r o j e c t s , ~ncycle' would need t o prove that t h e b u i l d i n g s a r e i n f a c t contaminated and that t h e r e is a real possibility that the contamination will be released i n t o the environment . I n e v a l u a t i n g SEP projects , t h e TNRCC and E?F. weigh heav i ly whether the project will improve t h e environment cf the community where t h e v i o l a t i o n o c c u r r e d . A s s u c h , i n addition t o

s establishing proof o f con tamina t ion , Encycle needs. to p r o v i d e I

e v i d e n c e that the con tamina t ion has, or w i l l , impact the corninunity sur rounding t h e f a c i l i t y . Many o f t h e proposed d e m o l i t i o n s i tes a p p e a r t o be located in the c e n t e r o f the f a c i l i t i e s , which

- reduces the l i k e l i h o o d of migra t ion o f con taminan t s off site. Thus, t h e projects provide l i t t l e p r o t e c t i o n for, o r environmental b e n e f i t t o , t h e community.

3. Mercuzy removal at East Helena: At first blush, t h i s proposal appears t o have potential m e r i t as a SEP . To make a final determination, however, EPA would need t o have more i n f o r m a t i o n a b o u t the e f f i c a c y of t h e technology t h a t would be installed. I n a d d i t i o n , the Agency would need to be assured t h a t the mercury removal was not r e q u i r e d a s par t of t h e on-going clean-up a c t i v i t i e s a t t h e site or under Clean A i r A c t requirements.

4 . N o t e For El Paso: In the recent p a s t , E l Paso has been t h e s u b j e c t of an enforcement a c t i o n by t h e TNRCC whlch r e s u l t e d in a SEP. When evaluating a respondents eligibility fo r a SEP, Texasr p o l i c y requires consideration of the f a c i l i t y ' s compliance h i s t o r y . D u r i n g the s e t t l e m e n t of the p r lo r a c t i o n , the TNRCC agreed t o an an-site demolition p r o j e c t a s a SEP . ASARCO i s s t i l l pe r fo rming t h i s SEP- The fact that E l Paso

JUL-18-2006 15:44 FROM:

I..; .cl;'rr-nrly Parr;i.c;ipatir.g I n t>,e S E 3 program i r . f l c e n c 2 5 i t s . . a:>l:i:y ;o p a r : l c i p a t e in r 5 t TPPCC S E ? p p r o q r a m a g a x p - W5lle

has no: decided 3: this t m e t,o exclude El Faso from . .zo?.s iderai ion for the SE? p r o g r a m i n t h i s case, TNRCC i s s a r t i c u l a r l y concerned a b o u t a n y a d d i c i m a l projects that. credit ASARC!',, £31 improving i t s own Eacility. C o n s i d e r i n 9 the f a c i l i t y ' s

. c v n g i l a n c e history, i t s i n v o l v e m e n t in t h e c u r r e n r RCRA nnforr:. '-ment a c r c ion , a n d :he T?JRCC1s concerns a b o u t ~ r o t 2 c t i n : j t h e ~ n t e g r . i t ; y of the S E P prograrr,, the TNRCC. w i l l subjecz ASAiZCOr s SEP proposals a t E l Paso t o c a r e f u l s c r u t i n y . T h e TNRCC1s p r i m . a r y Eoczs i n evalua~ing any SEP ~ r o p o s a l s by ASkRCO f o r E l Paso xi11 be o n securing a s t r o n g e r , more direct b e n j f i t to c h e community. i?X x o u l d be p a r t i c u l a r l y inrerested i n a n a i r q u a l i t y S E P z r El "so.

5 . Guidance on developing SEP' s fos this case: T h e focus of b o t h t h e EP.9 and che TNRCC SEP p o l i c i e s is on e n c o u r a g i n g r o j e c t s t h a t benefit. t h e community where t h e v i o l a t i o n s occurred. W h i l e t h e p r o p o s e d SE'PS nay kave some b e n e f i c i a ' l e n v i r o ~ m e n t a l i n p a t c s , they do not benefit t h e surrounding community, T h i s i s p a z t i c u l a r y i m p o r t a n t i n light o f the concerns r a i s e d about c o n t a m i n a t i o n i n n e i g h b o r h o o d s near the f a c i l i r i ' e s caused by f a c i l i c y a c t i v i t i e s . Both a g e n c i e s wou ld like 'to see, in Encyclers and ASARCO's SEP p r o p o s a l s , a s t r o n g e r focus on b e n e f i t t i n g t h e e n v i r o n m e n t a r o u n d t h e f a c i l i t i e s .

E. TNRCC Response To Encycle and ASARCO Comments on State Penalty Calculations

E n c y c l e and ASARCOrs response to t h e TNRCC p e n a l t y component o f t h e governments' Summary o f Violations i s self serving and misleading. Encycle and ASARCO i m p l y t h a t E n c y c l e was ready to settle with the TNRCC for the demanded amount o f $275,000. I n f a c t , when t h e TNRCC determined t o r e f e r E n c y c l e ' s violations t o t h e Texas Attorney General, Encycle ' s settlement o f f e r was c o n s i d e r a b l y Less t h a n TNRCC's a d m i n i s t r a t i v e p e n a l t y demand, I n a l e t t e r from K e i t h Hobson t o Ann Foster, d a t e d November 2 1 , 1995 , €TI made a " l o w b a l l " offer of $ 2 2 , 5 0 0 t o settle its p e n a l t y liability with the TNRCC. Encycle n e v e r moved o f f t h i s f i g u r e , and arguably dropped i t s offer, when, o n October 31, 1997 Mr. HopSon submitted a redlined v e r s i o n of TNRCC's a d m i n i s t r a t i v e order which c o n t a i n e d no p e n a l t y offer a t all. A s l a t e a s F e b r u a r y 4 , 1998 , i n a meeting w i t h TNRCC, Encycle continued to d i s p u t e the amount of TNRCC's p e n a l t y demand, b u t made n o new counter offer. C o n t r a r y to t h e i m p l i c a t i o n of the settlement statement, t h e parties had resolved only one t e c h n i c a l i t e m - E n c y c l e ' s proposed remediation approach t o t h e lagoons - at t h e t i m e TNRCC determined t o refer the matter to the A t t o r n e y G e n e r a l ' s Of f l ce . Many questions remained regarding the o t h e r

J U L - 1 8 - ~ 0 0 6 15:44 FROM:

' , ~ k e a n y litigant, TNRCC can t a k e i! non-suit i n a n y a c = i o n i t p r o s ~ c u E e s adxixfstratively or through the Atcorney General. Indeed, given t h e Great gag between the TNRCC a n c Z n c y c l e or. inenalr-tos and the r e l a r i v e l a c k of progress in resolving the :echnir,31 issues at the Encycle facility, TNRCC wes j u s r i f ied i n exercising its drscretlon and referring t h e m a t r c r to the A t t o r n e y G e n e r ~ l for prosecution in connection with the ,peridin9 federal action. The penalty dertlanded by the S t a t e of Texas r e f l ec t s t 5 e f ::t tF.3: che Attorney General is authorized : t seek a l a r g e r penalty t h a n the TNRCC ( : ~ p to $25,000 per day versus $10,000! . 'Compare Tex, Healih 6 S a f e t y Code A m . 7.102) w i t h 3 6 1 . 2 5 1 (now Water Code 7 . 0 5 2 ) . The penalty demanded by the State of Texas ro f i ec r s t h i s f a c t . TNRCCfs penaity demand also refl.ects a mdest additi~nal penalty for a violation not previously considered by the TNXCC. I .

VII. EPA and TNRCC Corrective Action Requirements

A. Encyc le Facility, Corpus C h r i s t i

Any settlement must include commitments by Encycle and ASARCO to complete ongoing c o r r e c t i v e action at t h e Encyc le f a c i l i t y and t o perform additional c o r r e c t i v e action as discussed. Here is a d d i t i o n a l information regarding the governments current position on corrective action requirements at the Encycle facility. .

1. Oversight: Oversight of the corrective action at the f a c i l i t y w i l l be conducted under TNRCC supervision with EPA concurrence.

2. Risk Assessment: Encycle and ASARCO may determine human health risk and a11 media cleanup levels at the F a c i l i t y based on t h e most c u r r e n t version of the Texas Risk Reduction Rules ucder the following conditions:

a. If clean-up levels are based on TNRCC' s Risk Reduction S t a n d a r d 1, EPA must c o n c u r on the background values used as the cleanup levels.

b. If clean-up levels are based on TNRCC1s Risk Reduction 2, Encycle and ASARCO shall insure t h a t l e v e l s a r e fully protective of human and ecological receptors. Where appropriate, TNRCC reference values s h a l l be adjusted In

JUL- l8-2EiEi6 IS: 44 FROM:

For assessment oE e c c l 3 g i c a l r i s k , Encyc le and A S A ~ C O s : ? a i l ~ ; g p TNF:3C13 2 r a f c qilidance for ecological r i s k asso-;smer,t, provided t h a z EPA csncurr i n the methodology and v a l u e s used. " o r surface LJater, Encycle anc! AS-XXO s h a l l Ese Texas *blent Water Q u 3 i i . i ~ S~andards.

i n recognition of t h e f a c t t h a t TNRCC is currently in the process of revising i:s Risk Reduction Rules, Z n c y c l e and ASARCO s h a l l use the approved version i- ?lace whec t h e Work Plan i s approved.

3. Corrective Action, Approach : ASARCO and Ezcyzle s h a l l use a sltewide approach to corrective action as opposed to a unit- by- uni t approach. A s i tewide approach would involve correct ive action on releases of hazardous c o n s t i t u e n t s to all media (soil, a l r , ' groundwater, surf ace water and s e d i m e n t ) i nc lud ing all units arid on-site/off-site areas which say have been impacted by those releases. T h e sitewide RFI s h a l l , a t a minimum, include invesrigatlon o f medla in, under , and nearby the u n i t s l i s t e d below.

w 01 Landfill

m East and West Lagoons

I Railroad Track Azea

m Feed Tanks 1 and 2

rn Road l e a d i n g t o and west of Bui lding C

rn Grain Elevator

m Former Sludge Drying Beds

I ' Reactor Clarifier

I Facilities 1 , 2, 3 and 4

I West Cell House

m NOR 4 3

JUL-18-2006 15:45 FROM:

w Bulldlng no r rh of Facliity 2

I o?d C l s t l n y Suilding

m O u t f a l l Nunber 0 0 2 o f f East Lagoon

m The Corpus Christ1 Ship channel in v l c i n i z y of t h e o u t f a i l s

m .Qy o z - s i t e o r of f-site waste disposal areas.

Encycle and ASARCO shall ' i n c l u d e investigative resu l t s of i t s current RFI b e i n g completed under i t s permit lssued b y TNRCC i.n

I. \ its sizewide RFI.

4 . Corrective Measures: Certain co r r ec t i ve measures at _onaratir.a units at the facility may be deferred -until final facility closure, if the RFI is ' completed immediately. However, the governrents must r e t a i n the authority t o d e t e r m i n e which measures may be deferred depending on the r e s u l t s of the RFI and the risk assessment.

B. ASARCO Smelter, El Paso

Any settlement must include commitments by ASARCO to complete ongoing corrective action at the ASARCO smelter in El Pasa and to perform some limited additional co r r ec t i ve action. ASARCO's coopera t ion regarding the J u l y 1, 1998 s i t e visit was g r e a t l y appreciAted. The governments' requirements for add i t iona l corrective action at El Paso will be provided shortly.

VII I. Encycle Future Operating Conditions

Recycling is an important goal of RCRA and one of the objectives of the governments in t h i s matter i s t o facilitate lawful recycling. As part of an appropriate overall set t lement , the governments are willing to sanction continued operations at Encycle under a consent decree with appropriate condit ions, u n t i l a p e r m i t application is acted upon. We believe Encycle has made substantial progress on redesigning its operations to conform to applicable law. Once the next version of the o p e r a t i n g plan and waste analysis plan are received, more detailed discussians can occur regarding required operating cond i t ions .

JUL- 18-2086 15: 45 FROM: TO: 5122390606

1%. F i n a n c i a l Consideratzons

E n c y c l e and ASAiiC3 5ave requested =ha t t h e r ; c ~ v e r n m e n t ~ consider t h e financial cczditions of Encycle and ASF-?.CZ as pzr: of o u r settlement analysis. We Gave submitted a detailed r e q c e s t on 3uLy 2 3 , 1998, to r e v i e w financial information. This ;nformzcion s h o u l d be provided as socn as ~ossible. I f Encycle can demonstrate a Sozafide ~nabiliry to pay, we can :;ns:ier recornmerding cl:?at. some ? o r = i m of t h e p e n a l t y be paid w i t h i n - k i n d services cti1i:inq Encycle's recycling c a p a 3 ~ l i t i e s .

DRAFT [O7/3 1/98] - CONTAINS CBUCONFIDENTLAL: FOR SETTLEMENT PURPOSES ONLY

TABLE 1 WASTES PROCESSED

PRINCIPAL METAL CONTENT. 0.00% PRECIOUS METAL CONTENT; LESS THAN 0.1 OZ/TON

JANUARY 1995 Encycle/Texas, Inc.

ASARCO, LIC. 03699

. Ihrpnl Suhine R i v a

13on Coqm~u~iail 0225 1-9 I

Process Imd ' (tons) Dertim~ion ' Nwnkr

l'h 0 0 I Na 1 43

DRAFT [07/31/981- CONTAINS CIIUCONFIDENTIAL: FOR SETTLEMENT PUKI'OSES ONLY

TABLE I WASTES PROCESSED

PRINCIPAL METAL CONTENT: 0.00% PREClOUS METAL CONTENT: LESS THAN 0.1 OZ/TON

JANUARY 1995 Encycle/Texas, lnc.

- - --

Number Process Gencr;ltor CCU of Lwds Callas (tons) Dca~ruiltion '

AShRCO, Inc. 0?699 I DQO2 9 5 t 1 I;Colorado)

DKAFT [07/31/98j - CONTAINS CBIfCONFIDENTLAL: FOR SETTLER.1 ENT PURPOSES ONLY

Table I WASTES PROCESSED

PIUNClPAL bETAL CONTENT 0 00 % PRECIOUS METAL CONTENT: LESS THAN 0.1 OZ/TON

MARCH 1994 Encycte/Texas, Inc.

Number of Loads

I

I

I

La m La I m .. cn ; Gawutor CCU ~)IILCI. COIISIIIUCII~S (fi)

Al 0 0 2 NB tr I31

~ l $ . i ~ u 3 ? i ) ~ . A c r l ) i l l X t k 1 ' 001

Ag 411133 01 :\II 4 ~ l J 1 7 t ) ~ 1' II r l l

Waste Codes

Do02 m 7 DO08

. Dun2

MHb2

t ~ 3 14-89

OW3.-I-90

I ti ~01-1-90

m

d In * .. e . -

N A S A ~ H I space ~ u w r

Senuteclb Lac:

R i i ~ c i p o l Merrrls Prucese l h t c (44 Avcrqc) '

Quantity (tons)

16.1

21.3

21 5 %W;I~LTII. IIK

3104/W

Jf0IPi.k

31 I Xf 9.1

Ni 0.W

, C'LI 11 01') .

C'u' 4 1 tnt

' 1 . d ' Nutnkr

1

t

I

7694

7083

7755

DRAFT [07/31/98) - CONTAlNS CBIfCONFlDENTIAL: FOR SETTLEAILN'I' PURPOSES ONLY

Table 1 WASTES PROCESSED

PRINCIPAL METAL CONTENT: 0.00 % PRECIOUS METAL CONTENT: LESS THAN 0. I OZ/TON

h4ARCH 1997 EncyclelTexas, t nc.

DRAFT 107/31/981- CONTAINS CBUCONFSDENTIAL: FOR SEITLEhlEN'I' I'URPOSES ONLY


PRMCiPAL METAL CONTENT: 0.00% PRECIOUS METAL CONTENT: LESS THAN 0. I 021TON

APRIL 1995 EncycldTexas, Inc.

DRAFT [U713LNB( CONTAINS CBI\CONFWENTtAL: FOR SETTLEMENT PURPOSES ONLY

Table 1 (continued)

WASTES PROCESSED PWCPAL METAL COMTM: 0.00%

PRECIOUS METAL CONTEW. LESS n w 0.1 ovro~ MAY 1993

Enc\clef$esas. Inc.

DWFT [07/31/98] - CONTAlNS CBIICONFIDENTIAL: FOR SETTLEMENT PURPOSES ONLY

Table-1 WASTES PROCESSED

PRINCIPAL METAL CONTENT: 0.00 % PRECIOUS METAL CONTENT: LESS THAN 0.1 OZITON

MAY 1996 Encycle/Texas. tnc.

DIWF1' 107/31/981 CONTAlNS CBUCONFCDENTWL: FOR SETTLEMENT PURPOSES ONLY


PRMCIPAL METAL CONTENT: 0.00 % PRECIOUS METAL CONTENT: LESS TI.IAN 0.1 OZ/TON

JUNE 1994 Encyclflexas, 1 nc.

DIWFT 10713[/981- CONTAlNS CBIICONFIUENTIAL: FOR SE'lTLElUEN'I' I'UKPOSES ONLY

Number Generator CC U of Loads

Corpus ChriEti Memorial I 05421 I I

Dupnt Sabine River 04 127 3

Dupnt Sabine River I 04117 I 1

-

Duponl Sabine River 01127 3

Dupont Sabine River Mi27 1

Duponl Sabine River 01127 1

Duponl Sabinc River

Dupont Sabine Rivw 04127

Dupon! Sabine R i w 04127 I 1 - ~

Dupon! Sabine R i m

Dupont 6 b i n c River

Duponl Sabine River

Table 1 .

WASTES PROCESSED P W C I PAL METAL CONTENT. 0.00 ?6

PRECtOUS METAL CONTENT: LESS THAN 0. I OZiTON JUNE 1997

Encyclflexas, lnc.

(el

Cr: 0.W Fc: 0 01 k' il I?

Cr: 0 00 I' 0 i lS

DRAFT 107/31/98] - CONTAINS CUUCONFIDENTkL: FOR SEITLEMENT PUIU'OSES ONLY

Tbble I - Continued WASTES PROCESSED

PFUNClPAL METAL CONTENT: 0.00 % PREClOUS METAL CONTENT: LESS THAN 0.1 OZnON

JUNE 1997

Number Wasre Q~uiitit? Gmeritor CC# ofLaads Corlrs (tons)

b I)l~wn~ Sabine Rivcr 01 127 I 22.5

Process Dcs~ination '

I

I

I

Lwd ' I f ~~icqxil hlclxls Nmnkr Process [ h e r % A vzrurc j .'

14209 61 12/97 Cr' O (10

I4209 6/12/97 Cr. (1 tH)

13202 .. 6li 1/97 Cr 11 011 15203 6!09/9? l&?O7

DRAFT 107131198] - CONTAlNS CBIICONF~DENTML: FOR SETTLEMENT PURPOSES ONLY


PRINCIPAL hSTAL CONTENT: 0.00 % PRECIOUS METAL CONTENT: LESS THAN 0. I OZtTON

JULY ! 995 EncycleJi'exas, lnc.

DRAFT [07/31/98] - CONTAINS CBUCONFIDENTWL: FOR SE'ITLEMENT PURPOSES ONLY


PRINCIPAL METAL CONTENT: 0.00 % PRECIOUS METAL, CONTENT: LESS THAN 0.1 OUTON

AUGUST 1996 Encycle/Texas, Inc

DRAFT 107/31/98] - CONTAINS CBYCONFIDENTIAL: FOR SETTLEMENT PURl P-s'ES ONLY


PRINCIPAL METAL CONTENT. 0 00 96 PRECIOUS METAL CONTENT. LESS THAN 0. I OZ/TON

' SEPTEMBER 1994 Encycle/Texas, 'lnc.

Sc~n:d~ccla. IIU I I# 11 I ;.I LU I I 1)lw .- Sc.n~:~~c.cli. Ilk I I I I ~ I ~ . W I \ I-) 11):

\~\ll~;lll-~ hll Jtllh 1 4>EglIP: u 11 1lK7 $'I I ( % P C l)lllJ?

I --

21 -I -I %'J& l i b ! / / I Ii94 I i! CHI $1 Z i I!\

DRAFT (07/31/98] - CONTAINS CBIICONFIDENTML: FOR SETI'LEMENT PURPOSES ONLY


PRINC[PAL METAL CONTENT: 0 00 % PRECIOUS hETAL CONTENT: LESS TI I AN 0 I OZ/TON

SEPTEMBER 1997 EncyclerTexas, Inc

Number Wasre Rocm O ~ W S ~ d c s Ikstina~ian '

DRAFT \07/31/98] - CONTAINS CBYCONFIDENTW~: FOR SETTLEMENT PURPOSES ONLY '

Tabie 1 WASTES PROCESSED

PRINCIP'a METAL CONTENT: 0.00 94 PREClOUS METAL CONTENT: LESS THAN 0. I OZlTON

OCTOBER 1995 EncycldTexas, I nc.

Smwtech. Inc. iItW)3J-LHl L 16 K I i w I WM

DRAFT (0713 11981 CONTAINS CBIICONFIDENTLAL: FOR SETTLEMENT PURPOSES ONLY


PRINCIPAL METAL CONTENT; 0.00% PREClOUS METAL CONTENT: LESS Tl fAN 0. I OZirON

Noveni ber I993 IJcrc~cle/Tcws, IIIC

1 3 r ~ ~ i c ~ p l McI~IIs {% Aurrapcj '

Zn. U.OI)

7.t1 o

/.N ~ I W

I. L, II r id]

.. .

. t I o I!II

CI i l ~ i

('14 i ~ i t l i

O111cr CO~ISIIILICHIS (96) '

Ag 0 UGn o r Au O 002 02.

Ca'O I4 Mp. 0 0 1 As (1 (CI Na: 4 4 0

AF u wn W . ' AU. o oo I 02.

CJ 0 I4 h.19. (1 o i AS (I I)j PA. 4 Iti

L;I 11 12 :TS !I I I I

N:I i 1)'

n;~~lls-r~,, : \ * I I I ? I I ? ~ ~ J L..l 11 (I? L!>L I IU'

:I] 1r75 ~ I I I t r 11:

N A t~ 0 4

1.t IJ 1 1 1 ~3 111-25

ng 0 031 tat.. nu 11 1,;s o/ I c 0 I)I ~a [J 3 I ' (1 LIZ

~ p . ( i !nl 07 - AU rl WI! ~ I J . ,

t1 i m t

Process Dcs~i~irtim '

1

I

I

I

Nmber oiLoads

1

I

I

I

~ & j J

Nua~bcr Process lhrr

7M3 11109193

7 1 5 :

7179

, f l 2-1

61hK

70% :

71!7il

I

I

1

Waste Codes

'W

lxnu

w n ~

1 w 2

1 1/30/93

. I 112q:~t;

I I / I WJ ;

I IHHIY!

1111~1/')1

I I NXIY I

(2ualuils (tmrs)

22.9

16.2

2.3 j

7 j

i r tie 1 W 7 D(LI$

lHKb7 I X ~ X

1X102

31 I

2tJ 1 -

21 1 I

I

1

DRAFT 107/31/98] - CONTAINS CBI/CONPIDENTL4L: FOR SETTLEMENT PURI'OSES ONLY

- - Table 1 WASTES PROCESSED

PRINCIPAL METAL CONTENT 0.00 ?/o PREC[OUS METAL CONTENT: LESS THAN 0.1 OZlTON

NOVEMBER 1996 Encycle/Texas, Inc.

DMFT (07131/98] - CONTAINS CUUCONFIDENTIAL: FOR SETTLEMENT PURPOSES ONLY

DRAFT 1071311981 - CONTAINS CBUCONFIDENTIAI,: FOR SElTLEM ENTPUW'OSES ONLY

Tabte 1 WASTES PROCESSED

PWCIPAL METAL CONTENT. 0.00 % PRECIOUS METAL CONTENT: LESS THAN 0 1 OZITON

DECEhmEU 1997 EncyclelTexas, loc.

u3 m u3 m cn N

W .A In . . 0 I-

N u m b oflatlds

1

Generator

6 1 o n Cory.

Ea~on Carp.

Wask Coda

Do02 DO07 lXlOX -

CCIl

02251-91

0225 1-9 1

Quanlrq (tons)

19

Pracss ncsti~la~iori '

2

Load ?

N~wiber

14715

I'roccs IMt

! 12R9197 I2131V97 ID? 1P}7

.. . 9. .<:

m - - ;Ix..;. Table 2 (continued)

DRAFT (07131bBj CONTAWS CBRCONFIDENTIAL FOR SETTLEhIENT YLIRY"aKS ONt b'

Table 2 (contitrucd)

WASTES PROCFSSED PRINCIPAL METAL CONTENT fl .O%

PREClOlJS METAL CONTENT: LESS'17 LAN 0.1 O m O N GENERATOR SUMMARY

' - Encyclen'exas, Inc.

. . . : .+? :;' ?<.:.. :. .. m

I 8 . . . _ %: "' : Wymm @,.don ,,, _.I. :. -... 87-89 I l&. - . . (Cameron Forge) . . $2;;' w,- Ed.<. ,...:y. : 87-89 1 t::;, (Cameron Farge) i

a, ::.' Wyman Gordon gi;.:;.' bra;: Fw)

$$uPont SabinC River ,..: ..,. $sa&pont S a b k Riva 4127

Quantity (ton*)

20 .o

Principal Metals Process Dale (% Averapt) '

Cc 0.00 Ni: 0.00

Cr: 0.00 Ni: 0.00

ULhcr Constituents (%I) '

Ag: 0.9 ppm Au: 1 7 pptn Ca: 0.36 Fc: U I Y Na: 0.31

CX 0.42 NP: 0.0.1

Ca: 0.83 Fc: 0.45 Na: 0.02

DO02 21.0 I 9446 0ll05mj Cr: 0.00 Ca: 0.94 . . - Na: O.U6

I W07 Ni: 0100

DO02 21.8 I 9495 01/05/95 Cr: 0.00 Ca: 1.64 Fe 006 W07 . Ni: 0.00 Na: 0. I I

4 20.8

' I 8294 061 17/94 Cr: 0.00 4 .

20.6 1 8326 06R0/!34 Cr. 0.00 Ag: 0.16 ppnl AU: 0.41 4

20.8 1 8391 0612719.1 Cr: 1).00 4

20.8 1 8392 06/27/91 Cr: 0.00 J

20.8 I 8396 06/27/94 Cr 0.00 I

N6l I 15237 03120#7 Cr: 0.00 Au: fJ 01 ppm R-

I 1

I Not i 15238 03R3J98 Cr: 0.00 Recarded

DRAFT p7/311981 CONTAINS CBI\CONFIDENTIAL: FOR SETTLEMENT PURPOSES ONLV

Number ~ f 1 . d ~ - = -

Table 2 . (conln~urd) .

WASTES PROCESSED PRINCIPAL METAL CONIFNT: 0.00%

P RECJOllS METAL CONTENT: LESS 1-1 IAN 0.1 O%l'li)N GENERATOR SUhlMAKY

EncylJLesas, Inc.

DRAm 107/3lPBi CONTAWS CBI\CONFIDEN.TIAG FOR SETTtEhlENT PURPOSES ONLY

Table 2 (continwrt)

DRAFT [07Ll1191$ CONTAINS CBnCONFLDENTIAL: FOR SETTLEMENT PURPOSES ONLY

Table 2 (colhuerlj

WASTES PROCESSED PRINCIPAL METAL CONTENI': 0.00%

PREC~OUS M n A L CONTJiNT: I.ESS TI U N O 1 U2.I-CIN CEWMI'OR S W U I R Y

Emc~c1t~es;rs. Inc.

I 4)tHtZ 22 I 5x6 t I W ~ ! I ~ J ~ CII 01 tnb

I I W M Z 22 I 5991 lJt~!l JXI'I? CN: (I OII

I . 1n~2 22 I 643x2 Wtl2 UILl Cu (1 tK)

I DOU2 22 I 62 I6 O7AWtc1t Cu: 0 Oil I I

x*: ..... ..,-.: .. DRAFT [ o m lnq CONTAINS CBIKONFIUENT~AL: FOR SETTLEMENT PURPUSES ONLY

Table 2 (conf nued)

WASTES PROCESSED PRINCIPAL METAL CONTENT; 0.00%

PKECIOUS MR'AL CONTENT. LESS n m O. I O ~ O N GENERATOR SUhlMARY

. E~vfldksas, hc.

O~IICI fm4nl.:ti1< P:,\ ' ...... . - - - - -.

.-.. . I ".,

. DRAFT [ O X I I881 CONTAWS CRI\CONFIDENTlAL: FOR SETTLEMENT PURPOSES

Table 2 (conlinued)

WASTES PROCESSED P W I P A L METAL CONTENT: 0 00%

PRECIOUS MI~TAL CONIENT: LESS n m 0. I OUTON GEWRA'SOR SUMhlARY

E ~ ~ c y c l e ~ e ~ i l s . l~lr

ONLY

J U L - 1 9 - 2 0 0 6 14:08 FROM:

071 18/98 11:52 P. 2

NO. 333 DBS

JUL-19-2006 14:08 FROM:

16/98 11 :51

TO : 5 122390606 P. 3

NO, 333 Dm

JUL-19-2006 14:08 FROM:

! 1 ;

SUBJECT: FOO6 Recycling . i i ! 1 1 .A

TO : Hazardous Waste Management Division Directors Regions I -%

It has come t o the attention o f EPA Headquarters that many of tne Regions and authorized States are being requested to make determinations on the regulatory s t a t = o f various recycling J

schemes for F006 electroplating sludges, In particular, companies have claimed that PO06 vaste is being recycled by being used as: ( I) an ingredient in the m ~ u f acture of aggregate,. ( 2 1 an ingredient in +he manufacture of cement, and ( 3 ) feedstock for a metals recovery smelter. The same company . may make such requests of more than one Region and/or State. Given the complexities of the regulations governing recycling vs. treatment and the definition Of solid waste, and the possible ramifications of determinations made in one Region ,

affecting another Retgion Is determination, it is extremely important that such-determinations are consistent and, )where possible, Coordinated. I

TvO issues are presented. The ffrst fssue is whether these activities are legitimate recycling., or ratnet just some f o m of treatment called arecyclingfl in an attempt to evade regulation, Second, as81tdling the activity is not sham recycling, the issue is wneMer the activity is a type o f recycling tMt is subject to regulation under sections 261.2 and 261.6 or is i t excluded from our authority.

With respect to the issue of whether the activity is sham recycling, this question involves assessing the intent of the o-er or operator by evaluating-circumstantial evidence, always

Exhibit C

JUL-19-2006 14:08 FROM:

a e i f f i c t ; ~ : :ask. 3.=s:z= l :y , tl;e dzterrnlnatic?. r e s t s on vrre;?.~,~ :32 seccnZzry materlal i s w c o ~ . C ~ 3 d l t y + l i k e . Tne maln envrironmec=al cons idera :rons a r e ( 1 ) vnether the secondary naserial t r 2 l y has value as a raw rnaterlal/product l i . e . , i s i: l i k e l y t o be abandoned or mismanaged pr io r to reclamation rather =>an being reclaimed? and t 2 ) whetaer the recycling process ( including ancillary storage) i s l i k e l y t o re lease hazardous constituents (or othervise pose risks to human health and the environmen=) that are different from or greater than the processing of an analogous raw material/procluct. The a t t a c m e n ; to this rne~orandum sets out relevant factors in more deta i l .

T f the a c t i v i t y is not a sham, then the question is whether it is regufated. X f Fb06 waste is used as an ingredient to produce aggregate, then such aggregate would remain a s o l i d waste i f used in a manner constituting disposal ( e . q - , road-base material) under sectlons 261.2(C)(1) and 261.2(e)(2)(i) or i f it is accumulated speculatively under section 261.2 ( e 1 ( 2 ) ( i i i . Likewise, the F006 "ingredientu is subject to regulation from the point of generation t o the poin t of recycling. The aggregate ~ r o d u c t is, however, entitled to the exemption under 40 C m 266.20tb1, as amended by the August 17, 1988, Land Disposal Restrictions for First mire Scheduled Wastes final rule t see 5 3 Ea 31197 for further discussion) . However, i f the aggregate is not used on the land, then the materials uses ta produce i t would not be solid w a s t e s a t a l l , and therefore neither those materials nor the aggregate would be regulated (see section 2 6 l . Z [ e ) (1) (i) 1 .

Likewise, cement manufacturing using PO06 waste 'as an ingreaient vould yield a product that remains a solid waste if it is used in a m q e r constituting disposal, also subject to section 266.2Otb). There is an additional quest ion of whether the cement k i a dusk remains subject to the ~ev i1 .1 exclusion. In or8er for the cement k i ln dust to remain excluded from regulatf on, the owner or operator must dambnstrate that the use of F006 waste has not significantly affectad the character of the cement k i l n dust (e.g. , dePKJnSErate that the use of PO06 waste has not significantly increased the levels of Appendix VTII constituents in the cement k i l n dust leachatel. [NOTE: !Chis isstre will be addressed mare fully in +he upcoming supplemeuxtal p r o p a 1 of the Boiler an8 Industrial hrrnaEe rule, which i s pending redetal RerJister publication. 1

For F006 w a s t e used as a ieeastoek in a metals 'recovery smelter, the Agency views tnis as a recovery process rather than use 8s ari ingredient in an i n d d t r i a l process and, therefore, considers this t o be a form of treatment that is not surrently regulated (see sections 261.2(c)"and 2 6 1 . 6 ( ~ ) ( 1 ) ) . Furthermore, because this is a recovery process rather than a production process, the F006 waste remains a hazardous waste (and must be

JUL-19-2006 14:08 FROM:

.-3naae1 a s S . J C ~ =::=I.= t.=: ir=rzdcc::or: 20 c.k.6 C ~ X C ~ S J , j z * :ye s l a q fram e5:s process wou!C normally be cons;tereS a ' ' d s r ? v e l 'rcin" P O 0 6 *--asre. Rgwever, for prinary smelters, t h e slaq pzlv be conslderee s-3 j eez to the Bet-*i 11 e x r l s i o n provlc+d tha t tp.e oyner cr c2era:ct can demonstrate tnat t3e use ~f F906 vasze "2s n o t signif :canzly a f fecced t h e hazardous c o n s t i t u e n c content of t h e slag ( i . e . , make a demonstration similar t? t h e m e discussed above f o r the cement k i l r , dust , [NOTE: T n the supplemental proposal of the B o i Ler and Industrial Furnace rule noted above, the Agency w i l l be proposing a definition of aindigenous wastew based on a comparison of the constituents found in the waste to the constituents found in an analogous rav material. Should tne F006 waste meet the Bef in i t -ion of an "indigenous vaste,m the vaste vould cease to be a waste when introduced to the process a d the s l a g vould not be derived from a hazardous waste. ]

A l s o , you should be aware that OSW is currently reevaluatfnq the regulations concerning recycling ac t iv i t i e s , in conjunctron w i t h finalizing the January 0 , 1988 proposal to amend tne Def inirion of So l id Waste. mile any major manges may depend on RCRA reauthorization, we are considering regulatory amendments or changes in regulatory interpretations that Li 11 encourage on-site recycling, Vhile ensuring the protection of human health and the environment.

Headquarters is able to serve as a clearinghouse to h e l p coordinate determinations on whether a specific case is recyclingm or "treatmentm and will provide additional guidance

and information, as requested. Ultimately, however, these determinations are made by the Regions and autnorized S t a t e s . Attached to this memorandum is a list of criteria that should be considered in evaluating the recyc ling scheme. Should you receive a request for such a determination, 'or should you have questions regarding the criteria used to evaluate, a specifif2 case, please contact Mltch Kidwell, of m y staff , at FTS 475-8553 .

Attachment

JUL-19-2006 14:08 FROM:

Y ! ! e d:',i f fersrr.co 3cl:'2pon ? a r j s = . l ;r.z JI~C :Te2',~ac: ;s e.=:ct:mas r l ~ f f:cl.;lc, :@ e:=i:ir1=.;;5::. I n 5cze c a s e s , ane is :r;;:rr? :c : z = e r 2 r e r :r .=ent f r 3 m c : r c m s t a n c i a i eV:ider,ce s1?~-.i:;;q r;~ixeC

- 3 t r v a t i o r 1 , always a diff:=~;t ~ r ~ ~ o s i t : c r , . T5e pote~tial fer A S U S C 1s SX=R t h a t q razz .==,re must 55 used =hen making a

. dorerrr.:r.atiorr that a particular recyclinq act lv i7 .y rs to go ~3regu:a ted (i.e., it i s one of those activities w , ? i c h is beyond :he sca?e of our juristiction). In certain cases, there may be fey c:ea:-cu: ansvers to :he question of :hether a specific a c t i v i ~ y is this type of excluded recycling (and, by exrension,

- :fiat a Secondary material is n3t .a waste, b u t ra the r a r a u narerial or effective substitu~el; however, the following list of criteria may be useful in focusing the cansideration of a specific a c t i v i t y . Here too, there may be no clear-cut answers b u t , :aken as a w h o l e , the answers to these ~ ! l e s t i ~ n s should he13 draw .. L :?.a distinction between recycling and sham recycling or r rearne:: t .

Is the secondary material similar to an analogous rav material or pt08uct?.

Daes it contain Appendix VIII constituents not tound' in t h e analogous raw material/product (or at higher levels ) 7

Does it exhibit hazardous characteristirs that the analogous r a w material/ptoduct would not?

Does it contain levels of recoverable material s i m ' i lar to the analogous raw material/produet?

Is much more of the secondary material used as compared with the analogous raw material/product it replaces? XS only a nominal amount of it used?

Is the seandary material as e f f ec t i ve as the r a w material or product it replaces? .

What deqiee of processing is required t o produce a finished product?

0 Can the secondary material be fed directly into t h e process ( i . e . , direct use) or is reclamation (or pretreatment regui red? .

o How much value do- final reclamation add?

JUL-19-2@06 14:08 FROM:

What is. t ? c .:a lue of L3e cccondary m a ~ e r i a l ?

Dges ths secondary r a t e r i a : 5ave e=ozEF,:= vaiue cospara2:e CQ t 5 e raw marer:al that nc rma lLy eri-zrs the process?

tnere a guaranteed market for the end product?

:s there a conrrac: In place GO pxchase rhe Mprcduc=M ostensiS!y produced from t3e h a z a s d x s secondary materials?

: f t.he ::+e of recyclinq i s ref!amtlor . , 1s -.!is arc=!::== used by :!I= rsclairnsr? T!!k ~ e ~ s r z t c r r ? . . c tne re ' a 3azch c,oll:ng agresrnenc? ' ( I I C t e t . l l . 3 ~ 5i"- ., G r e c l a i m e r s are normally TSDFs, assurr.ir.g :my stDre before reclaiming, reclamation f gcilities presefit fewer possibilities of systemic a b u s e ) .

1's the .reclaimed product a recognized comnodity? A r e there industry-recognized quality specifications for the product?

the secandaw material handled 5 n a manner consf stent with- the raw material/psoduct i t replaces?

o Is the secondary material stored an the land?

o Is the secondary material stored in a similar manner as the analogous raw material ( f .e . , to prevent loss) ?

1

o Are adequate records regarding the recycling transactions kept?

o Do the companies involved have a history of mismanagement 0.f hazardous wastes?

Other relevant factors.

a mat are the ecanomics of the recycling process? Does most of the revenue come from cnarging generators for managing their wastes or f rom the sale o f the product? -

0 Are the toxic constituents actually necessary (or of sufficient use) to the product or are t h c y just Ualong far the ride.

These criteria are drawn from 53 FR at 5 2 2 (January 8 , 1988); 5 2 FR a t 17013 (May 6 , 1987); and 50 FR at 6 3 8 (Zantrary 4 , 1 9 8 5 ) .

WASTE RECEIVED AND PROCESSED SUM&i:iEtY ENCYCLrnEXAS mc.

[I093 - 19971

YEAR 1 RECEIVED I R E C E m D ( %LISTED' 1 DIRECTLY ( PRECIPITATED TOTAL' LISTEDa BLENDED4 & BLENDED6 1

TOTAL 168,878 I 118,Q67 1 70% 1 1 32%? 49%7

1: TOTAL: Total of RCRA linted and charsckrbtk he2ardaus wsata ead m- regulated waste 2: USFED: RCRA Ibted hazardous w u b is: I LIBTED: Perccat of total wash received Q: BLEM)BD: Pmntege of total waste received which wan mixed (PblP) in bine R Estimated from M a t c h 1 Movement Ticket data 6: PREaPITATBD k BL&M)BD: Percenkga oftdot a r m received which waa precipitaLed in Fadity Nos. 1 and 2, than mired with other wastes in etoragc bins 7: D a a for January through July, 1997

SHIPMENTS OF REGULATED MATERIAL TO ASARCO SMELTERS FROM E/TI

SUMMARY

YEAR n PASO, TEXAS EAST HELENA, MT. I (Tons) I (Tons)

TOTAL 1 46,486 I . 37,918

'A'OTAL (Tons)

SJSJECY: Laclede Steel Campmy, A l t O a l , 1 Llinois ( I L P 006 280 6061 -

F R O M : + Matthew Scraus. Deputy ~ l ' r e c ~ o r Characterization and Assessment D i v i s i o n

TO : avid A. w l l r i c n , Associate Director Office' of RCRA' - Wasre Management, Division

I

mi s memorandum is ' in response to your memorandum. dated JULY 2 5 , 1989 in whlcn you request our review and determination of tnc regulatory status O f waste produced by Laclade Steel Company, which manuf actuses. specialty carbon and alloy steel from scrap iron.

Based on the ' information provided, the characterizations of the particulates generated in the furnacaa during tho melt down prac,ess, vtaicn are. Collected i q a baghouse, as electric arc furnace dust (Hazardous Uaote No. K061) and tne spent p i c k f e liquor as Haruaous Waste No. KO62 are correct. There appear$ t o be l i f t14 question in this regard. The issues in queatlon and 'on which this mwnorandrm focusma rafata to the exclusions claimed by Lacleaa Steel Company with respect t o their KO62 waste.

I

~aclsbs Steel hacl claimed three separate exezuaian8 from the definition of .solib wksta for i t s X662 vast*. The Agency -

a-, rr laast und.? radatal rmlrfimn. Each o t tha exclusions i s discussed b.lW.

ha f i r s t exclua,ian.clrimedl is tha *closM-lopp recyclinga exclusion found at 40 CFR 261.4(a) ( 8 ) . Thi l Qxcluion, promulgated in 'the Juiy 14, 1986 P.aeral notice (51 254221, statea that a material Fa not r dolid va8ta i f it is reeycled and raturnad t o the original process teem vhkn it w a s generated provtded t M t c 1) only tank storrgm is LnvolVW; 21,

3 tho entira proeesr is'clared by being entirely cennacto4 by pipas: 3 ) the rrclaatatfqn does not i n w l v o cembuationj 4 1 thare la no ~peculativa accumulation of the material; 5 ) the

saclede is not e l i g i b l e f o r tnis exemption. The reason IS :sat the KO62 IS trucked (not prped) to the recycling s i te . mile the Closed-loop exclusion does allow f o r the use o f " ~ t n e r cornpafable enclosed means of conveyance," t!-? Agency z o u ~ d not deem crucks to be comparable. The p s e w , e discussion found at 51 FR 25443 Clearly s t a t e s EPAps inrent that t h e closed na tu r e O f the process is a decisive f ac to r an2 f u r t h e r defines that "closed- re i ers to "hard connections f r o m point o f generarion to point of r e tu rn to the original process ." Trucks do not meet t h i s definition. In addit ion, i f the recycled materials are used ta produce a product {such as fsrri~izer) ~ h d t is applied to the.1and (&, used in a manner constituting disposal per Section 26la4(a)(8)(iv)), the s o l i d uaste exemption would nor apply. , There may also be some c p e s r i o ~ as to whether the storage unit Laelede uses meets tze definition o f -a tank or a surface impoundment. There uag not enough informat'ion provided to maKe that determination; the Region o r State must define the Storage writ.

The second excausion that Laclede .is claiming i s mound at section 7 2 3 , 1 0 4 6 a 3 ( 7 ) 8 f the State regulation (whica is.assumea to be equivalent to 40 CrR Zbl.Z(e) ( i i ) , involving use/reuse af .

-i. . .. ,. .. z .. .*( .I

a material a a substitute for a cammlorclrL product). while % . . d .. ..

-4

t h i s excrusian ,may apply to the iron sulfate by-product from. t h e reclamation act iv i ty , i t vould definitely not appJy to the K O 6 2 waste. This exclusion applies ta materfals which ate used or reused without reclamation (see the January 4 , 1983

not ice, 50 FR 637, 6 3 8 ) . The t o 6 2 is clearly being %%%a and. therefore, is not e l i g i b l e for thi8 ex~2usion.

-Again, the exemption vould not apply i t use constituting disposal is involv8U (so@ Section 261,2(e)(2)(i)),

m a third axclusion Laclade CltailrW i s under s e t i o n 721.102 ( e ) (1 1 (8). of th4 State regulation (which is assumed to be equivalent t o 40 CFR 261.4(a1(7Ir Fnvolving the exemption o f spent sulfuric acid web to produce virgin sulfuric acid from the Uefinftion o f solid ~ a a t d . Apparently, Laclede is confusing rsclraration o f a spent wterlal w i t h the production of virgin ntmrial. Tho KO62 is datinitaly being reclaimed ci.e., contaminants are being removed t o make i t reusable). The prerabla biscuseign found at 50 FR 642 (January 4 , 19851 clearly desctibrs tha process of using spent sulfuric acid as an ingredient in the production o f virgin sulfuric acid. Nothing in the ~ecl;rmatton process indieatma that virgin sulfuric acid is being pfaaucrd w i t h X082 u8Bd as M ingredient. Therefor., thls exclusion i# also not applicable to LacLede.

JUL-19-2006 14:09 FROM: 9158344940 TO : 5122390606 P. 13'la

~ i - ti/ I'IUL I II'IW ln r LUL-XJI-CU~~ Jul 16 '98 i, SO P. CJ/O4

regulatory aeterminaczon o f ' c o n q e r n assoc i d z e d ;;i ca :he ~acleda f a c i l i t y i s that K062 is a nazardous waste befng re~:laimed. The residues o f the reelamat i o n process r hi:?, i t s e l f is n o t regulated) are also hazardous vaste ~ 0 6 2 (artnougn the sulfuric a c i d that is recovered i s an effecziv~ sumtiruee for a commercial chemical pr0dUCt) and must meet =he :reatrnent standards ( and not i f iCati0n requirements 1 under rne land disposal resrricclons program ( 4 0 CFR Part 2 6 8 ) pr ic r c3 piacement on =he land (U, before a fertilizer proe-;cad from the iron s u l f a t e can be applied ro the land) . Also , the 4rtn sulrace ( a f t e r reclamation) may be demonstrared to be ar, ef f e c c i v e s ~ s r i w t e for a commercial chemical produe= f a r -;ses o t h e r thkn chose constituting disposal and, i f s o , would caase r o be a ~062-derived hazardous vaste.

I f you have any additional qaestions, pleas9 contac: hiscn Kidwell a t CTS 4 7 5- 8 5 5 1 .

1

Re: - Sclirl waste RcgFscration 30003

T h i s is in rcspansc to an October 7, 1988 l e t t e r from R. Keith Hopson of Brd.irn ~aroney Rose Barber and Dye to G l e n Davis of t h e Texas Water Conatission (TWC) i n which Mr. Hopson requested 1WC cotrcurrcnce that tho "precipitated solids reclaimed from the solid wastes received at the f a c i l i t y axe not s o l i d w a s t e s . " According to the letter, the precipitated solids bre to be sold to ' ' s m e l t e r s or other appropriate' metals processing fac i l i t i es .

A f t e r review of t h e mater ia l submitted, TWC cannot concur that khe precipitated so l ids are not so l id waste. In the preamble of 50 Federal Rcyister 6 3 3 I January 4 , l98S), which clarifies t h e status of recycling ac t iv i t i e s , EPA stated:

If t S a matszial is tc Se put ts use e f t z r it has been reclaimed, it is still a so l id waste until reclamation has been completed. Thus, tile fact that wastes may be used a f t e r being roc1ahcd does not affect their status as wastes before and while being reclaimed.

The EPA goes on to state on page 634 that ''commercial products reclaimed t tom ttazardous wastes are products, not wastes"; howsver , they c a u t i o n against misinterpretation of this statement and list several circumstances under w h i c l ~ a wrcclai~acd rnatcrialkl may remain a s o l i d waste. Included i n t h i s list are wastes which have been p a r t i a l l y reclaimed. but must be reclaimed Further, and reclaimed materials which are nut ordinarily considered t o be commercial products.

Exhibit ,F:-,.. . , ,

D. G . Steplrccson P a g e Two Deceokr 30, 1980

Smelt inq operations a r e cons idsrcd to be reclamation proccsscs : t h e r e f o r e , because it appears t h a t the prec ip i ta t ed s o l i d s a r e

. f u r t h e r rcclaincd before a f i n a l product is producej, t h e precipi tated solids, as described in Mr- Hapson's letter of October 7 , 1988, are not cxcludcd from the definition of a s o l i d w a s t e under 31 Texas ~dministrative Code (TAC) 335.1 (Solid waste) (I).

If you have any questions concerrlitig t h i s ~llattar, please cantac: Vanessa Scbiller of the Compliance Assistance U n i t at ( 5 1 Z ! -463-8175, f Sincerely, I.

- E. V . Hattcn, !lead Compliance Assistance Unit Hazardous and Solid Waste Division

cc: R. Keith Hopson, Brown Maroncy Rose Barber and Dye, Attornays end Counselors, 1400 One Congress PLaza, 111 Congress Avenue, Austin, Texas 78701

Texas Qater Commission District 12 Office - Corpus C h r i s t i

Whole kTS f_

--- -b Crushed CRTs lo East Helena, MT

Receiving

1 I

Rail 1 ! Truck dMp I

I

Drum I , .

Tole I

Supersack 1 I

Roll on I I I I I I I I I I I

t,,,

Legend

Wasta and inlermediale Material

Agmat Storage

I

Nickel Slcuage

'Products' lnclude PMP Malarial Bit: 1 ted wilh Processed Material

"Producl" Shipment

ENCYCLEmEXAS, INC. Waste and Product Flow

'PMP Material is Waste not Processed in Facility NOS. 1-4.

CONFIDENTIAL

JUL-19-2006 14:10 FROM:

Barry R McBre, Chatmarl

R 0. 'Ralph' blrrquar, Commlrrlorlrr <

lohn U. Baker. Cvmmlrrtonrr

TEXAS NATURAL RESOURCE CONSERVATNIN COMMISSION Probt t rw T u a b R d u d n g and P r r w r n t i ~ Pollutfo~

Mr. Nclson Mossholdcr Prcddcnt Enr,yclelTcxns, Ine. 5500 Upriver Road COQW Christi, 78407

Re: Solid Wmtc Regisvation No. 30003 EPA ID No. TX008 1 171 86

Dew Mr. Mossholder:

The purpose of this letter is to clurify the position of ibc Tcsus Natural Resoutoe Cansewation Comissian C-CC") concerning previous cdncspondencc *rn the TM2CC relating to &cycle. S m c d lmur hiwe been written to Encycle by v=riow mcrnbqs of the TNRCC over-a pe&d of years, datiag h m 1989 to the most fcccnt letter d a d M e h 6, 1997. As a rtsult of infomation gathered and developed by thc TNRCC and the United States Environmentat Protection Agmcy during the investigation rclattd to thc cumat enfomzncnt adon, it ia now apparent that much of the information supplied tir Encycle ns a bash fur the p r n i o ~ IXNRCC lcttcrs was incomplete 6 inaccurate, particularly as it dated to the processes which xxwre sctually in use. Because these p d o u s lcttcra were based on tht incomplete and inaccurate ipf9rmiation. Encycle should not rely on the previous oorrespondcnce from the TNRCC. includiig the most recent letter dated M a d 6, 1997. Thtrefbrc, as provi~usly discussed in various meetings between EPA. TNRCC-a~d.Encyck, the available inflormation indicatus that cxunption provisions cltcd in the earlier letters tm not applicable to the matarids Encycle produces lad bcyde's reliance on the lcttKs has been mimplaccd.

E x h i b i t B

JUL-19-2006 14:10 FROM:

Mr. Nclsan Massholder Pegc 2

If you need further clarification regarding thia letter, pluue do not hesitate to contact at 5 512039- 6592,

Sincerely.

Minor Hibbs. ~ . ~ . , k i n x t o r Indusaial and Hazardous Waste ~ iu i i i on

Cc: John T. Smith II Peter Nickles Cavington & Burling 1 201 Pennsyivania Avonuc, N. W. P.O. Bax 7566 Washington. D.C. 200467566

20061011 secret epa doj document (this is the epa confidential for settlement purposes only document...

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