United States
       Environmental Protection
       Agency
Office of the
Administrator
(1802)
EPA-100-R-98-008
September 1998
www.epa.gov
        Project XL Preliminary
        Status Report
        An Evaluation of Projects in Implementation
                                           swf ..
                                                 #"/> S'
                                       '           u*:
^Environmental Excellence and Leadership
                                             j

-------
[This page intentionally left blank]

-------
Project XL Preliminary Status Report	September 1998

                                        Contents


Executive Summary	  i

1.0 Introduction	1

2.0 Data Collection Process	1
    2.1 Focus Groups	1
    2.2 Stakeholder Process Surveys  	1
    2.3 Follow-Up Discussions With EPA Staff and Managers  	2

3.0 Results (As of January 1998-Based on 1 Year of Project Implementation)	2
    3.1 Environmental and Economic Performance	2
    3.2 Promotion of Innovation and System Change	3
    3.3 XL Project  Development-Lessons Learned	4

4.0 Weyerhaeuser Preliminary Status Report (As of January 1998)  	7
    4.1 Weyerhaeuser FPA  	7
    4.2 Weyerhaeuser Focus Group   	7
    4.3 Weyerhaeuser Focus Group-Lessons Learned  	8
    Exhibit 1: Weyerhaeuser Project Commitments as of January 1998  	  11
    Exhibit 2: Weyerhaeuser Environmental Performance as of January 1998	  16
    Exhibit 3: Weyerhaeuser Costs and Benefits	  18

5.0 Intel Preliminary Status Report	  21
    5.1 Intel FPA	  21
    5.2 Intel Focus  Group 	  21
    5.3 Intel Focus  Group-Lessons Learned  	  22
    Exhibit 1: Intel  Project Commitments as of January 1998  	  24
    Exhibit 2: Intel  Environmental Performance as of January 1998  	  28
    Exhibit 3: Intel  Costs and Benefits  	  32

6.0 Berry Preliminary Status Report (As of January 1998)	  33
    6.1 Berry FPA  	  33
    6.2 Berry Focus Group	  33
    6.3 Berry Focus Group-Lessons Learned  	  34
    Exhibit 1: Berry Project  Commitments as of January 1998	  38
    Exhibit 2: Berry Environmental Performance as of January 1998   	  40
    Exhibit 3: Berry Costs and Benefits   	  41

-------
[This page intentionally left blank]

-------
Project XL Preliminary Status Report	September 1998

                                   Executive Summary

    On March 16, 1995, the Clinton Administration announced a portfolio of reinvention initiatives to
be implemented by the U.S. Environmental Protection Agency (EPA) as a part of its efforts to achieve
greater public health and environmental protection at a more reasonable cost.  For one of these
initiatives, Project XL-which stands for excellence and Leader ship-EPA entered into a series of
specific project agreements to produce  data and experiences to help the Agency make improvements in
the current system of environmental protection. The goal of Project XL is to test ways of producing
superior environmental performance with improved economic efficiencies, while increasing public
participation through active stakeholder processes.  As of August 1998, there are 10 XL projects in the
implementation phase and 20 XL projects under development. As  the Agency works to streamline and
improve current procedures for designing and implementing XL projects, a number of important
lessons can be learned from XL projects in the implementation phase.  A review of the projects in the
implementation phase can offer EPA, industry,  and stakeholders valuable insights into the
development, implementation, and, ultimately, the transferability of XL projects.

    This Preliminary Status Report examines three XL projects that implemented Final Project
Agreements (FPAs) in January  1998: Weyerhaeuser-Flint River Operations, Oglethorpe, Georgia; Intel
Corporation-Ocotillo Site, Chandler, Arizona; and Berry Corporation Facility, Labelle, Florida. This
report covers the projects' progress in meeting FPA commitments, stakeholder participation outcomes,
environmental performance, and lessons learned. This report also presents the data available on
economic and environmental costs and benefits to the public and private sectors  involved in the three
XL projects.  With this information, Agency senior management-as well as other XL project
stakeholders-will gain a better understanding of the projects underway and  how the Project XL process
can be improved.
Environmental and Economic Performance

    Gaining superior environmental performance and economic efficiency are major objectives for each
XL project. The data for the projects indicate that, overall, the projects result in key benefits for the
environment, the project sponsors, and stakeholders,  such as:

For the Environment:
    •   Decreased waste, water, and air emissions.
    •   Eliminated hazardous waste streams and sources of odor problems.
    •   Increased recycling.

For Project Sponsors:
    •   Substantial cost savings on capital and process expenditures.
    •   Better stakeholder relationships.
    •   Improved ability to adapt processes and products due to changes in consumer demand.
    •   Improved environmental control programs with reduced costs in employees' environmental
       management training.

For Stakeholders:
    •   Improved availability of information from the companies.
    •   Environmental mentoring and educational activities for local students and community groups.

-------
Project XL Preliminary Status Report	September 1998

    Although this report shows that all three project sponsors gained economic benefits as a result of
participating in Project XL, at this time the projects do not have enough quantitative data available for
indepth cost/benefit analysis, including:

    •   Assessing what the potential cost outlays and savings could be at a national level for an
       industry sector or sectors to  implement specific regulatory innovations.
    •   Comparing the costs of operating under the XL projects' innovations with the costs of
       operating under the conventional programs for coregulators (e.g., federal, state, and local
       government).
    •   Understanding the economic costs and benefits of the XL innovations for local community
       representatives and national environmental nongovernmental organizations.
Innovation and System Change

    The Weyerhaeuser, Intel, and Berry experiments provided EPA with demonstrations of site-
specific stakeholder participation models and opportunities for close collaboration with state and local
programs.  These projects also have provided arenas for testing innovations such as:

    •   Allowing  alternative ways to meet maximum achievable control technology standards required
       by the Clean Water Act.
    •   Using the Internet to give greater public access to environmental information and to end
       fragmented reporting to coregulating agencies.
    •   Employing methods that incorporate broad environmental management system approaches,
       Comprehensive Operating Permits (COPs), and flexible permitting requirements that allow
       facilities to reduce sources of air, water, or waste regardless of expansion or production
       changes.

    As a result, these projects have lead agency to improve the federal Pulp and Paper Cluster Rules;
cite the XL program in a Federal Register notice announcing EPA's intent to support and help promote
the development and use of Environmental Management Systems; explore the use of the Internet
reporting for facilities; and  consider designing a "how  to" process guide for completing a COP.
XL Project Development-Lessons Learned

    An analysis of each project in this report reveals challenges experienced by those involved in the
projects' development.  As EPA makes progress toward its goal of 50 XL Projects in implementation
or development by September 1999, the Agency will continue to work on improving the project
development process and can draw on these lessons learned to do so. The individual projects'
experiences, for example, demonstrate that clearly outlined goals are needed at the beginning of each
XL project. Early identification and understanding of goals by the project sponsor, EPA, and  other
project participants allows for a smoother process of proposal and EPA development and helps to
ensure project stakeholders move in the direction of a sound partnership.

-------
Project XL Preliminary Status Report	September 1998

    Also, the individual projects' experiences clearly demonstrated that having Agency "champions"
for specific projects at  senior management and staff levels enhanced the quality of a project's
development process and outcome. More specifically:

    •   Strong support from Agency management is critical. This  support includes ensuring clear
       direction, empowering Agency staff that participate in negotiations, and providing travel
       resources for onsite visits.
    •   EPA must recognize and develop the organizational structure necessary for project
       decision-making.

    Meaningful and organized  participation on the part of community and national nongovernmental
organization representatives has been recognized as a cornerstone of a successful XL project and is a
criterion of the project  selection process.  This report documents valuable lessons in facilitating and
attaining a meaningful  stakeholder participation process, for example:

    •   Building trust is critical. Facilitated stakeholder processes, face-to-face meetings, and site visits
       are demonstrated mechanisms for building trust.
    •   Input needs to be obtained from local stakeholders early in the process. Resources should be
       made available to ensure local stakeholders have the resources to assess the  technical and
       environmental  issues.
    •   National nongovernmental organizations should be involved earlier in the negotiation process.
       When these organizations are not fully engaged in the stakeholder process in an early and
       direct way,  their participation in the negotiation process is hampered.
    •   Clarity of the XL process and objectives is an essential criterion for stakeholder involvement
       and progress in developing the FPAs.
Next Steps for Evaluating the XL Program

    Using this report as a starting-point, EPA plans to continue tracking and evaluating the progress of
the XL program.  The goals of evaluating XL include three areas: developing assessments of
individual XL projects from the perspectives of the stakeholders, project sponsors, and regulatory
entities; cataloging program contributions to testing innovations  and developing "cleaner, cheaper, and
smarter" alternatives to  the current environmental regulatory system;  and identifying areas  where the
XL program can be strengthened. Specifically, future evaluation efforts will include:

    •   Case studies of all projects implementing FPAs (on-going).
    •   Evaluations of XL stakeholder processes (in 1999 and 2000).
    •   A cost/benefit analysis framework that will allow EPA to quantify the economic and
       environmental impact of XL projects-from the perspective of project sponsors, regulators, and
       environmental and community stakeholders (1999).
    •   Annual reports of program progress (January 1999 and January 2000).
    •   Communicate evaluation results to the public via the Project XL home page (on-going) and
       other mechanisms.
                                                 in

-------
[This page intentionally left blank]

-------
Project XL Preliminary Status Report	September 1998
                       Project XL Preliminary Status Report
1.0 Introduction
    The purpose of this report is to present information about the status and results of three
XL-eXcellence and Leader ship-projects as of January 1998: Weyerhaeuser-Flint River Operations,
Olgethorpe, Georgia;  Intel Corporation-Ocotillo Site, Chandler, Arizona; and Berry Corporation
Facility, Labelle, Florida.  For each XL project, this report describes the preliminary lessons learned
as based on 1 year of the projects' implementation; the environmental performance of the projects; and
the status of each project's commitments.

2.0 Data Collection Process

2.1 Focus Groups

    The U.S. Environmental Protection Agency's (EPA's) Office of Reinvention Programs (OREP)
conducted focus group conference calls with organizations responsible for reporting and carrying out
activities in the Final Project Agreements (FPAs) for Weyerhaeuser, Intel, and Berry. These focus
groups included company employees, state and local government representatives, and EPA
Headquarters and regional staff.

    Project-specific Focus  Group Protocols were distributed to participants prior to each focus group
conference call. The protocols included a brief overview of the focus group process;  a conference call
agenda; a list of general questions related to information on lessons learned; and exhibits summarizing
FPA project commitments, outlining costs and benefits, and summarizing progress in achieving
superior environmental performance. During the focus group conference calls participants reviewed
the exhibits, described lessons they learned from negotiation and implementation of the XL project,
and gave any available information on costs and benefits.  Discussions about lessons  learned focused
on the negotiation and implementation of the  projects' FPAs. Followup calls were made to individual
contacts to obtain additional information.
2.2 Stakeholder Process Surveys

    In developing overall lessons learned for this preliminary report, OREP also relied on some
summary data from survey questionnaires returned by 36 participants in four XL stakeholder
processes.  The four XL projects surveyed included Weyerhaeuser, Intel, Merck, and Hadco.  The
respondents represented the companies, EPA, state and local governments, national environmental
nongovernmental organizations (NGOs), and local community participants.  Survey information for
only the Weyerhaeuser and Intel projects is used in this report.

    A detailed analysis of the XL stakeholder processes, including the results of respondents
questionnaires, is available in the report, completed by Resolve, Inc., Evaluation of Project XL
Stakeholder Processes.

-------
Project XL Preliminary Status Report	September 1998

2.3 Follow-Up Discussions With Key EPA Staff and Managers

    In order to identify the impacts the Weyerhaeuser, Intel, and Berry XL projects had on EPA policy
and program implementation, OREP staff spoke with key EPA staff and managers in Agency
Headquarters and regional offices.  These discussions took place in January 1998 as follow-up to the
focus group  conference calls.  The results of these discussions are summarized below in Section  3.2
Promotion of Innovation and System Change.


3.0 Results  (As of January 1998-Based on 1 Year of Projects Implementation)

3.1 Environmental and Economic Performance

    Gaining  superior environmental performance and economic efficiency are major objectives for each
XL project.  The data indicate that  each project resulted in key benefits for the environment, the
project sponsors, and stakeholders. These benefits are outlined below:

Weyerhaeuser Flint River Project Benefits

For the Environment:
     • Voluntary effluent guidelines became enforceable permit requirements
     • Three  effluent discharges into Flint River decreased by 10 percent, biological oxygen demand
       (BOD); 30 percent,  total  suspended solids (TSS); and 32 percent,  absorbable organic halides
       (AOX).
     • Solid waste decreased by 40 percent and air emissions decreased by 13 percent.

For Stakeholders:
     • High stakeholder satisfaction in the outcome.
     • Improved availability of information from the  company.

For Project Sponsors:
     • Estimated savings of $176,000 in the first year.
     • $10  million in future capital spending avoided.
     • A reduced reporting burden.
     • Flexibility in meeting air pollution technology requirements.

Intel Ocotillo Site Project Benefits

For the Environment:
     • Large  facility will stay a minor source of air pollution in a  "serious nonattainment" district,
       regardless of expansion or production changes.
     • Voluntary air pollution controls now enforceable under a permit.
     • Better management of Arizona water resources.
     • Increased recycling; decreased solid and hazardous waste.

For Stakeholders:
     • Environmental reporting to the public via Internet, based on a community designed format.
     • Environmental mentoring and educational activities for local students and community groups.
For Project Sponsor:
•rojeci sponsor:
•  Gained competitive advantages in a quick-to-market industry.

-------
Project XL Preliminary Status Report	September 1998

     • Avoided millions of dollors worth of production delays by eliminating 30 to 50 permit reviews
       a year.

Berry Project Benefits

For the Environment:
     • Elimination of an 88-acre spray field that caused odor problems.
     • Elimination of some hazardous waste streams.
     • Standardization of work procedures that lead to reduced releases.

For Project Sponsor:
     • 50 percent savings in environmental control programs expected.
     • Standardized work procedures have reduced chance of violations.
     • Expected improvements in worker safety.
     • Employee environmental management training costs will be reduced.

For Stakeholders:
     • This was not evaluated for this project.
    While all three companies reported significant benefits as a result of participation in Project XL,
there is not enough data conduct an indepth cost/benefit analysis of specific innovations. There are not
enough data, for example, to compare the costs of operating under an XL project with the costs or
operating under conventional program approaches and to assess the potential  cost outlays and savings
required for an industry sector to implement specific regulatory changes at a  national level.

    Also, very little information is available on costs and benefits for federal, state, and local
regulatory agencies. The information obtained currently indicates that for federal, state, and local
agencies the costs of negotiating and monitoring the XL projects are not offset by the savings accrued
under operating XL permitting programs. Future savings, however, might offset the up-front
transaction costs.

    In addition, little or no information is available on the economic costs and benefits to local
community representatives and national NGOs. The available information clearly demonstrates that
while these stakeholders need early access to technical assistance in order to participate in the process,
they generally do not have adequate monetary resources to gain this access.
3.2 Promotion of Innovation and System Change

    The Weyerhaeuser, Intel, and Berry projects provided EPA with demonstrations of site-specific
stakeholder participation models and opportunities for close collaboration with state and local
programs.  These projects also gave EPA an opportunity to explore and implement regulatory
flexibility in a protective way, for example:

     • Weyerhaeuser effectively decreased effluent discharges by testing innovative ways to meet the
       Maximum Achievable Control Technology (MACT) requirements under the  Clean Water Act.
     • Intel became one of the first facilities with environmental reporting on the Internet:
           - "State of the art" format giving greater public access.
           - Ended fragmented reporting with information available quarterly.

-------
Project XL Preliminary Status Report	September 1998

     • Intel developed a method to insure its facility stays a minor source of air pollution in a
       "serious nonattainment" district, regardless of expansion or production changes.
     • Berry effectively implemented and demonstrated that an Environmental Management System
       approach with the use of a Comprehensive Operating Permit (COP) can produce superior
       environmental performance, reduce environmental control costs, and improve employee
       training.

As a result, these projects lead the Agency to initiate system changes, such as:

     • Improvements to the MACT standard portions of the federal  Pulp and Paper Cluster Rules,
       such as:
           - Alternative compliance schedules for companies participating in effluent  guidelines
             voluntary  incentive programs.
           - Increased flexibility of implementation of the Clean Condensate Alternative.
     • An EPA Federal Register notice citation announcing EPA's intent to support and help promote
       the development and use of Environmental Management Systems.
     • EPA exploring the use of Internet reporting as a template for improved public  access to
       facilities' environmental results.
     • EPA considering designing a "how to" process guide for completing a COP.

    In addition to the innovations described above, the flexible permitting concept has  been pioneered
through XL and  other special permitting projects. These projects used agreement to limit emissions of
specific air pollutants in exchange for greater flexibility  in plant operations and tested the use of
advance approval for classes of plant or process changes.  As a result of these projects, EPA's air
program is:

     • Developing a flexible permit approach to implement the pharmaceutical air toxics  standard
       (due to promulgate shortly).
     • Drafting a flexible permit policy that provides specific guidance and encouragement to states
       coregulators.
     • Revising permit regulations under the Clean Air Act to better accommodate advance approvals.
3.3 XL Project Development-Lessons Learned

    The analysis of each project in this report reveals challenges experienced by those involved in the
projects'  development. As EPA makes progress toward its goal of 50 XL projects in implementation,
the Agency will continue to work on improving the project development process and can draw on the
lessons learned below to do so:
Have Clear Project Objectives and Goals:

    •  Project sponsors must identify and clearly lay out the objective of the project and its goals so
       that subsequent discussions and meetings are focused.
    •  Project sponsors need clarity on what the Agency project guidelines are, and EPA must do a
       better job of providing this information.
    •  Project sponsors must clearly articulate the regulatory flexibility the project will test.

-------
Project XL Preliminary Status Report	September 1998

Build Trust and Open the Lines of Communication:

    •  Project sponsors and the Agency must work together to establish good communications-this
       includes using the same acronyms and avoiding excessive use of different types of technical
       jargon.
    •  Project participants should use the project site visits as a means to aiding trust-building and
       opening communications. Efforts should be made to allow for travel to the facilities.


Organize Effective Teams:

    •  Project sponsor should identify appropriate participants from the community, different levels
       of government, and national environmental organizations as early as possible in the
       process-potentially during the proposal development stage and definitely at the beginning of
       the FPA negotiation process.
    •  Issue teams should be organized to address specific items and report to the full team.
    •  Project teams should identify the key issues and prioritize them according to which should be
       addressed first.
    •  Project teams should build critique sessions into the negotiation process.
    •  Project team members must recognize the time commitment required of them. In particular,
       EPA management must be willing to allow the necessary time investment of its staff.


Minimize Team and Schedule Changes:

    •  Avoid making changes to team representatives.
    •  If team members change, make sure new members get up to speed before participating directly
       in project negotiations.
    •  Changing timelines impedes the negotiation process;  keeping the project on schedule and
       meeting all deadlines helps to maintain trust.

Meaningful Stakeholder Participation Starts Early:

    •  Project sponsors should develop a stakeholder participation plan as early in the proposal
       development stage as possible.
    •  Facilities with good community relationships have a starting point for convening a sound
       stakeholder group that is well informed and comfortable with the project sponsor.
    •  Input from local stakeholders must be obtained and explored early in the process.
    •  National NGOs must be involved early on in the negotiations process to ensure all parties work
       with the same information and the FPA negotiation process is not hampered by late entrants in
       the process.


Process Clarity and Access to Information are Essential:

    •  Clarity of the XL process and objectives  is essential for trust-building and empowerment of
       participants-and better facilitates progress in  FPA negotiations.
    •  Clear and concise information must be shared with the stakeholders.  Information sharing
       includes identifying resources to local representatives so they can assess the technical,
       financial, and environmental issues specific to the facility.

-------
Project XL Preliminary Status Report	September 1998

    •  Third party facilitators, face-to-face meetings, and site visits are demonstrated mechanisms for
       building trust.
Stakeholder Participation Continues After the FPA Is Signed:

    •  The stakeholder participation plan should incorporate goals for FPA implementation including
       stakeholders' role in data review and project decision-making.
    •  Future evaluation efforts must assess the economic and noneconomic costs and benefits to the
       local community and national NGOs.

-------
Project XL Preliminary Status Report	September 1998

4.0 Weyerhaeuser Preliminary Status Report (As of January 1998)

4.1 The Weyerhaeuser FPA

    The Weyerhaeuser Flint River facility is a state-of-the-art mill producing 320,000 tons of fluff pulp
per year. The mill, located in Oglethorpe, Georgia, opened in 1981. Minimum impact manufacturing
has been part of Flint River's management philosophy for many years.  For example, the facility
voluntarily installed oxygen delignification technology in 1980 and 100 percent chlorine dioxide
substitution bleaching in 1989.

    The FPA for the XL pilot at the Weyerhaeuser facility was signed on January 17, 1997.  Through a
combination of enforceable requirements and voluntary goals, Weyerhaeuser Company committed to
improving the health of the  nearby Flint River and surrounding watersheds by:

    •   Cutting its bleach plant effluent by 50 percent over  a 10-year period.
    •   Reducing water usage by 1  million gallons a day.
    •   Cutting solid waste  generation in half over a 10-year period.
    •   Committing to reduce energy use.
    •   Reducing constituents of hazardous waste.
    •   Improving forest management practices in over 300,000 acres of timber land.
    •   Adopting ISO 14001, an international standard that defines the elements of an effective
       environmental management system.

    As part of the agreement, EPA  offered Weyerhaeuser the flexibility to consolidate routine reports
into two reports per year and to use alternative means to meet the requirements of new air regulations
that prescribe MACT. EPA also is waiving government review prior to certain physical modifications,
provided that emissions do not exceed stipulated levels.


4.2 Weyerhaeuser Focus Group

    Participants in the Weyerhaeuser focus group reviewed  drafts of the three exhibits shown below: a
summary FPA project commitments,  an outline of costs and benefits, and a  summary of progress in
achieving superior environmental performance.  The drafts  of exhibits were based on information
contained in:

    •  Weyerhaeuser Flint River Operations Final Project  Agreement (January 1997).
    •  Weyerhaeuser Flint River Operations 1997 Midyear Progress Report (June 1997).
    •  Weyerhaeuser Flint River Operations Annual Report (January 1998).

    During the focus group  conference calls,  participants  also described lessons learned that  focused on
the negotiation and implementation of the projects FPAs.  Questions about lessons learned included:

    •  What is the most important lesson learned from this project in your  opinion?
    •  Did  you encounter anything unexpectedly helpful during  the process? If so, what was the major
       one?
    •  Did  you encounter any unexpected barriers during the project? If so, what was the major one?
    •  Are  there any unresolved issues or problems related to the project that have yet to be
       addressed? If so, what are they?
    •  Do you have any suggestions for improving the process of implementing similar projects in the
       future? If so, what are they?

-------
Project XL Preliminary Status Report	September 1998

     • Are there lessons learned in your project that have not been mentioned yet? If so, what are
       they?

Focus group participants included:

Name                Organization
Gary Risner          Weyerhaeuser-DC
Russell Stevenson     Weyerhaeuser-Flint River
Mark Johnson        Weyerhaeuser-Atlanta
Allen Leake          GA-Environmental Protection Division (EPD)
Paul Grumpier        GA-Pollution Prevention Assistance Division (PPAD)
Michelle Glenn       EPA Region 4
Penny Lassiter        EPA (Office of Air and Radiation (OAR)
Nancy Birnbaum      EPA OREP
Katherine Dawes      EPA OREP
4.3 Weyerhaeuser Focus Group-Lessons Learned

Start the Process with Clear Goals:

     • There needs to be an agreement up front on the goal of the project.
     • The company needs to be clear on what it wants from the Agency and must do its homework
       on the project.
     • The lack of focus at the beginning of the process was frustrating. The same discussions
       occurred over and over. When an agreement on clarity  was made by EPA, this hurdle was
       overcome.
     • There was a problem with participants using jargon and acronyms others were not familiar
       with. This hindered communications.
Provide Agency Management Support:

     • EPA management support is crucial. The right EPA staff need to be involved, allowed to
       spend the time necessary to make the process work, and be empowered to speak for the
       Agency.
     • Some EPA staff were not orginially empowered by their offices to make decisions and speak
       for their offices. For example, the region initially did not have an effective management
       structure in place. This contributed to having the wrong people placed on the team at the
       beginning  of the process. When a new Deputy Regional Administrator (DRA) started to
       participate in the project, the necessary staff got involved and the process moved ahead.
     • Management support was crucial. An EPA OAR senior manager, for example, always had an
       open door policy and empowered staff to make decisions.
     • The Agency did not  seem committed to assigning the right people. Up to a certain point, no
       one seemed to take the program seriously. The Office of Water,  for example, did not seem
       very interested in participating because they thought they would get improvements in
       performance without having to grant regulatory flexibility (they perceived that OAR would).
     • EPA's travel restrictions were a constraint, resulting in negotiations occurring in Washington,
       DC,  rather than onsite in Oglethorpe, Georgia.

-------
Project XL Preliminary Status Report	September 1998

Organize Effective Teams:

     • Effective teams should be organized at the start of the process.  Smaller teams should be
       formed to address specific issues and report back to the full team.
     • Identifying appropriate team members at the beginning of the negotiation process is critical.
       Understanding the commitment of time necessary is important at the beginning of the process
       and management must be willing to allow their representatives  to devote adequate time to the
       project.
     • There were a lot of unfocused meetings at the beginning.  When people started to break out
       into smaller groups (i.e., 4 to 5 people) to address core issues,  they were able to begin
       resolving  issues. If the process is not compartmentalized,  it will bog down.
     • Building critique sessions into the negotiation process would have been helpful. Identifying and
       organizing the issues is important.


Minimize Changes:

     • Making changes in timelines and team memberships should be  minimized.
     • Changing timelines impeded the negotiation process.
     • Changing EPA team members late in the process held things up. If new members are brought
       into the process, an explicit effort should be  made to  bring them up to speed.


Build Trust:

     • Building trust is crucial. Important mechanisms for building trust are to conduct extensive site
       visits for federal and state regulators and to keep on schedule.
     • The negotiation process moved  ahead  much faster after a 3-day site visit to the mill. Federal
       and state employees looked through the mill  in detail. This turned out to be very important for
       building trust. The company was a good host, which  lead to a better understanding of specific
       site issues.
     • Honesty and openness are important.
     • Keeping the project on schedule and meeting all deadlines helps to establish trust.
Identify a Champion:

     •  A champion for the project was important. In this case, DRA Stan Meiburg became the
        champion and things went much more smoothly.
Work With Local Stakeholders:

     • Local stakeholders gave input on what was important to them. Weyerhaeuser spent a lot of
       effort to keep local stakeholders informed. At the beginning of the project, Weyerhaeuser
       thought meetings twice per year would suffice, but more frequent meetings and activities were
       necessary.  The company has a good neighbor policy and is comfortable working with local
       residents.
     • Local stakeholders provide critical input on issues important to them. They should have
       adequate resources to help them understand the details of the project.

-------
Project XL Preliminary Status Report	September 1998

     • An ombudsman for stakeholders would be helpful so they can understand the details of the
       project. The stakeholders wanted to be involved, but did not know what to expect.
     • A dialog between EPA and the residents and stakeholders near the facility was important.
Directly Involve National NGOs:

     • National NGO stakeholders should be directly involved in the project. The national NGOs
       critiqued the project from afar, without ongoing detailed involvement. They are influential
       with EPA; therefore, these NGOs should have more ongoing involvement.
                                              10

-------
Project XL Preliminary Status Report
September 1998
            Exhibit 1: Weyerhaeuser Project Commitments as of January 1998

Summary of Findings:

     • Implementation of the Minimum Impact Manufacturing (MIM) Phase IV projects are on
       schedule.
     • Certain feasibility studies for MIM Phase V projects have been initiated.
     • Weyerhaeuser is working jointly with stakeholders and FPA signatories to incorporate FPA
       terms into the facility's environmental permits.


Table of Project Commitments:

    The attached table summarizes progress in meeting commitments described in the XL FPA for
Weyerhaeuser's Flint River Operations in Georgia. The table lists the commitments included in the
FPA; provides dates for meeting the commitments; indicates whether the commitments have been
achieved, are being achieved, or are being exceeded; and includes explanatory comments where
needed.
Commitment
Date
Achieved, Being Achieved, or Exceeded
MIM Plans
MIM Phase IV Implementation Schedule
Isothermal Cooking (Brownside Optimization):
Construction Complete
Process Optimization Complete
Odor Control System Upgrade:
Construction Complete
Process Optimization Complete
Energy Steam Reductions:
Construction Complete
Process Optimization Complete
Incorporate ISO 14001 Enforcement
Management System (EMS) (nonenforceable):
Begin IS0 14001 Documentation
Complete ISO 14001 EMS
Implement IS0 14001 EMS
MIM Phase V Feasibility Studies (Nonenforceable)
Solid Waste Reductions' Feasibility Studies:
Lime Mud Recovery (vertical/rotary kiln)
By Product Use (composting/land
application)
Process Solid Waste Elimination Biannual
Study

1996.4
1997.3
1996.2
1996.4
1997.2
1997.4
1997.1
1997.4
1/1/1998

2002.1
2004.1

Achieved.
Achieved.
Achieved.
Being Achieved (target completion
6/1998).

On schedule. Conducting pilot-plant scale
composting trial. Began land application
feasibility studies.
                                           11

-------
Project XL Preliminary Status Report
September 1998
Commitment
Energy Conservation Feasibility Study to lidentify
Potential Conservation Practices:
Develop Study
Water Use Reductions Feasibility Studies:
Reuse Excess Machine White Water
Substitute Woodyard Flume Water
Install Pump Seals
Reuse Bearing Cooling Waters
Bleach Pant Effluent Feasibility Studies:
Mill Water Balance
Water Reuse/Reduction
Corrosion/Scaling
Product Quality Characteristic
Economic/Market Analysis
Construct Project Elements
Project Line
Hazardous Air Pollutant (HAP) emission
reduction feasibility studies:
Reduce Process Condensate Wash Water
Reduce Bleach Plant HAP Emissions
Reduce Oxygen Delignification HAP
Emissions
Reduce Cylinder Mould Decker and Cylinder
Mould Filtrate Tank HAP Emissions
Weak Gas Collection System for End-of-Pipe
Control
Date
10/1/1998

1998.1
1999.1
2000.1
2002.1
2003.1
2004.1
2006.1
TBD
Achieved, Being Achieved, or Exceeded
On schedule. Facility task team will be
formed in next 6 months to develop an
energy conservation plan.
On schedule. Initiated feasibility study to
reuse excess machine water (expected to
recover 1 million gallons per day [MGD]).
On schedule.
On schedule. A preliminary investigation
was conducted on the effects of the new
isothermal cooking digester and impact on
HAP emissions from brownstock washing,
oxygen delignification, and bleaching
processes.
Water
Enforceable Implementation Mechanisms
Reissue National Pollutant Discharge Elimination
System (NPDES) Permit to Provide More
Stringent Effluent Limits for BOD, TSS, and AOX
Revise NPDES Permit to Describe Streamlined
NPDES Permit Renewal Process
Reissue NPDES Permit Without Fish Tissue
Sampling Requirement
Revise NPDES Permit to Remove a Requirement
for Additional Assimilative Capacity Study
Revise NPDES Permit to Allow Annual
Compliance Certification in Lieu of a NPDES
Discharge Monitoring Report (DMR)
Modify a Surface-Water Withdrawal Permit to
Reduce Daily Maximum Withdrawal Limits by
1.0 MGD

9/1/1997
1/1/1997
9/1/1997
9/1/1997
1/1/1997
1/1/1998

Achieved 7/1 997.
Achieved 7/1997.
Achieved 7/1997.
Achieved 719/97.
Achieved 7/1 997.
Upon completion of 1998 water
conservation projects, will modify permit
for reduction.
                                          12

-------
Project XL Preliminary Status Report
September 1998
Commitment
Enforceable Environmental Goals (Phase IV)
Raw Water Usage Goal 11 .50 MGD
Effluent Discharges:
BOD goal 3.80 Ibs/Ar Dried Metric Ton (ADMT)
TSS goal 4.01 Ibs/ADMT
AOXgoal0.15kg/ADMT
Bleach Plant Effluent Reductions (Phase V)
Reduce Beach Plant Effluent Flow to 10 cubic
Meters Per ADMT (nonenforceable)
Environmental goals:
Reduce Water Use by 2 MGD
50% Reduction BOD
50% Reduction COD
50% Reduction Color
50% Reduction TSS
50% Reduction AOX
50% Reduction HAP emissions
Date



2006
2006
Achieved, Being Achieved, or Exceeded

11. 74 MGD (1/1 998 report).
3.01 Ibs/ADMT (1/1 998 report).
3.13 Ibs/ADMT (1/1 998 report).
0.10 kg/ADMT (1/1998 report).

20 nWADMT (1/1998 report).
On schedule.
Solid Waste
Enforceable Implementation Mechanisms
Modify Solid Waste Permit to Allow
Nonhazardous Industrial Wastes Containing
Free Liquids Disposal Into Permitted Onsite
Landfill
Nonenforceable Implementation Mechanisms
Reduce Solid Waste Generation From Baseline
to 621 Ibs/ADMT (Phase IV goal)
Reduce Solid Waste Generation From Baseline
to 310 Ibs/ADMT (Phase V goal)

1/1/1997

1/1/1998
1/1/2006

Will submit for minor solid waste permit
modification 1998.1.

409 ADMT (1/1 998 report).
On schedule. Feasibility studies in
progress for composting and land
application.
Hazardous Waste
Nonenforceable Implementation Mechanisms (Phase
IV)
Reduce hazardous waste generation to
conditionally exempt small quantity generator
(SQG) status

1/1/1998

Achieved conditionally exempt SQG
status (1/1998 report).
Air
                                          13

-------
Project XL Preliminary Status Report
September 1998
Commitment
Enforceable Implementation Mechanisms
Modify Air Quality Permit to Include Dual
Emissions Caps That Will Reduce Allowable
Emissions by 60%
Modify Air Quality Permit to Include Streamlined
Construction and Operation Permit Renewal
Process
Modify Air Quality Permit to Include Alternate
Excess Emission Reporting Protocols
Modify Air Quality Permit to Include Alternate
Compliance Testing Protocol
Modify Air Quality Permit to Include Experimental
Trials' Protocol (Without Triggering Permitting)
Draft Flint River's Title V Permit to Defer Permit
Modifications for Activities Undertaken Pursuant
to XL Project Until the Permit Comes up for
Renewal
Promulgate Site-Specific Rule (or Equivalent) to
Provide Regulatory Flexibility to Meet or Surpass
MACT Emissions Reductions Required
HAP Emission Reductions (Phase V)
Conduct site MACT Applicability Assessment
Date

1/1/1997
1/1/1997
1/1/97
1/1/97
1/1/97
11/1/98
1/1/1998

TBD
Achieved, Being Achieved, or Exceeded

Achieved 12/1 997.
Achieved 12/1997.
Achieved 12/1 997.
Achieved 12/1 997.
Achieved 12/1 997.
Achieved 12/1 997.
Cluster rule signed 11/1997. Held
preliminary meeting with EPA 12/1997 to
establish a timeline for MACT site
applicability review.

Cluster rule signed 11/97. Held preliminary
meeting with EPA 1 2/97 to establish a
timeline for MACT site applicability review.
Timberland Resources
Timberlands Resource Strategies (Phase V)
Implement Resource Strategies on Timberlands
Supplying Flint River Operations:
Designate Forest Buffers
Minimize Erosion Caused by Roads
Improve Streamside Management
Develop Water Bars to Stabilize Soils
Safeguard Unique Habitats
Implement Landscape Planning
Establish Wildlife Corridors
Protect Threatened and Endangered Species

TBD

Completed documentation of resource
strategies into operating management
practices. Rollout of EMS guidelines,
employee training, and field deployment completed
in fall 1997. Deployment
ongoing.
Energy
                                          14

-------
Project XL Preliminary Status Report
September 1998
Commitment
Nonenforceable Implementation Mechanisms (Phase
V)
Establish Energy Reduction Goals
Date

1/1/2006
Achieved, Being
Achieved, or Exceeded

On schedule.
                                          15

-------
                                   Exhibit 2: Weyerhaeuser Environmental Performance as of January 1998


                       Flint River Baseline Performance and MIM Phase IV Goals to Be Included in Enforceable Permits
                                                               (Table Two in FPA)
Environmental Parameter

Raw water usage in MGD
Effluent discharged to Flint River in ADMT):
BOD (Ibs/ADMT
TSS (Ibs/ADMT)
AOX (kg/ADMT)

Target Value and
Date Under FPA
11.50(1/1998)2


3.80 (1/1998)
4.09(1/1998)
0.15 (1/1 998)5
Pre-FPA
Allowable
14.34


5.30/4.833
5.80/8.58"
N/A
Baseline1

11.18


4.32
4.65
0.11
1995 Actual

11.43


4.15
5.14
0.10
1996 Actual

11.91


3.52
3.58
0.10
1997 Actual

11.74(1/1998)


3.01 (1/1998)
3.13(1/1998)
0.10(1/1998)
1 Baseline conditions are derived from average monthly values for calendar years 1993,1994, and 1995.
2 The Surface Water Withdrawal Permit (09401191-01) monthly withdrawal limit will be reduced by 1.0 MGD: new limit is 11.5 MGD.
3 The BOD limit proposed in EPA's draft Cluster Rule, 4.83 Ibs/ADMT is provided for purposes of comparison.
4 The TSS limit proposed in the draft Cluster Rule, 8.58 Ibs/ADMT is provided for purposes of comparison.
5 The AOX limit proposed as an entry requirement for EPA's Tier 1 Incentives Program, 0.30 kg/kkg is provided purposes of comparison.
                                                                        16

-------
Project XL Preliminary Status Report
September 1998
                   Flint River Baseline Performance and MIM Goals That Will Not Be Included in Enforceable Permits
                                                     (Table Three in FPA)
Environmental Parameter
Solid waste generation (Ibs/ADMT)
Hazardous waste generation
Bleach Plant Flow (cubic meters/ADMT)
Environmental Management System
Energy Conservation
FPA Agreement
MIM Phase IV
621 (1/1998)
Conditionally
exempt SQG
(1/1998)
NA
ISO 14001

FPA Agreement
MIM Phase V
310(1/2006)
Conditionally exempt
SQG
10(1/2006)
ISO 14001
TBD after feasibility
study
Baseline1
690
SQG
20
Flint River EMS

1995 Actual
653
SQG
20
Flint River EMS

1996 Actual
505
SQG
20
Flint River EMS

1997 Actual
409(1/1998)
Conditionally
exempt SQG
20
Flint River EMS

                                                              17

-------
Project XL Preliminary Status Report	September 1998

                           Exhibit 3: Weyerhaeuser Costs and Benefits

    The purpose of this exhibit is to present information on the costs and benefits of the Weyerhaeuser XL
project. The table is divided into three parts: company, federal, and state cost.


Weyerhaeuser Costs and Benefits

    The following information was provided during the Focus Group teleconference and in
Weyerhaeuser's annual report:

     •  Weyerhaeuser spent 2.5 full-time equivalents (FTE) for 1 year and $100,000 for legal and
        other outside costs in negotiating the FPA.
     •  Weyerhaeuser estimates a cost savings of $176,000 during the first year of operation under the
        XL project as a result of the successful revision and reissue of the facility's air quality and
        NPDES waste-water discharge permits that incorporate the terms in the FPA.
     •  Weyerhaeuser noted they will receive addition intangible benefits such as improved perception of
        the company as a good neighbor, better environmental performance, and lowered risk of
        environmental violations.


Federal Government Costs and Benefits

    The following information was provided by EPA's project manager in Region 4 (Michelle Glenn)
following the focus group teleconference and represents time spent by EPA  regional and  Headquarters
staff from the start of negotiations in January 1995, through the signing of the FPA in January 1996.
These estimates have not been verified by EPA program offices, and no  other EPA regional or
Headquarters office provided estimates of their costs.

    EPA Region  4 spent an estimated 413 days (1.6 FTEs) in development of the Weyerhaeuser FPA:

     •  Air division averaged 7 days a month for the year (84 days).
     •  Water division averaged 1 day a month for the year (12 days).
     •  Legal staff averaged 1-1/2 days a month for the year (18 days).
     •  Environmental assistance staff averaged 1 day a month for the year (12 days).
     •  DP A averaged 4 days a month starting in July 1996 (24 days).
     •  Miscellaneous additional participants spent approximately 1 month (22 days).
     •  Weyerhaeuser project manager spent approximately 24 pay periods (241 days).

    EPA Headquarters spent an estimated 177 days (0.7 FTEs) in development of the Weyerhaeuser FPA:

     •  Office of Air Quality Planning and Standards: 2 months total (44 days).
     •  Office of General Counsel: 2 months total (44 days).
     •  Office of Water: 2 !/2 weeks total (12 days).
     •  Office of Air and Radiation:  2 weeks total (10 days).
     •  Office of Solid Waste: 1 week total (5 days).
     •  Office of Policy, Planning and Evaluation: 3 months total (62 days).
    Estimates on savings for EPA under the Weyerhaeuser XL project are not available.
                                               18

-------
Project XL Preliminary Status Report	September 1998

State Government Costs and Benefits

     Costs and benefits for the Georgia Environmental Protection Division (EPD) are not available. The
following information on costs and benefits was provided by the Georgia Pollution Prevention Assistance
Division (P2AD).

     (P2AD) has the goal of reducing environmental degradation associated with manufacturing, business,
and institutional operations  within Georgia.  P2AD uses existing expertise within industry, business, and
universities to develop useful and informative programs and technical information.  Where possible, the
most sound and cost-effective manufacturing technologies are described in case studies and technical
bulletins in addition to being presentation topics during seminars.

     The Weyerhaeuser XL project provides a source of sound and cost-effective techniques that are
provided to other industries by P2AD and other organizations.  The project will have the potential benefit of
improving the environmental performance of companies that use the information in their operations.


Project Costs

     The cost to P2AD in participating in the Project XL process was limited.  A working relationship
existed between Weyerhaeuser and P2AD prior to the formal beginning of this project. Weyerhaeuser had
previously allowed P2AD staff to tour the Flint River facility, provided extremely detailed information
about their processes and general pulp and paper processes, and participated in a research project
conducted by P2AD to identify pollution prevention opportunities and impediments within the Georgia pulp
and paper industry. Because of this prior relationship, P2AD was able to incur minimal costs during
Project XL negotiations.
Estimation of Person-Hours Incurred During Project XL Negotiations

Management Time:     60 Hours
Engineering Time: 100 Hours
Benefits of Participation in Project XL

     The benefits cannot be easily estimated on a dollar basis.  Instead, a list of other direct and indirect
benefits are listed below.  It is anticipated that future Project XL milestones, such as completion of
pollution prevention audits and feasibility studies on Weyerhaeuser's solid waste, waste water, energy, and
air emissions, will provide a large amount of information that will be useful to P2AD in meeting
environmental goals.

     •  Weyerhaeuser participated in a pulp and paper seminar in September  1997. Weyerhaeuser
        presented information on solid waste minimization at the Flint River operation to an audience of
        other pulp mills both within and outside Georgia, consultants to the pulp industry, utility
        providers, and university personnel. The seminar was organized by the Georgia Environmental
        Partnership (i.e.,  P2AD, Georgia Tech, and the University of Georgia) and supported by several
        pulp and paper business and research and government organizations.  This seminar likely will be
        repeated with new information on a periodic basis.  Georgia pulp and paper mills have requested
                                                  19

-------
Project XL Preliminary Status Report	September 1998

        more Georgia-based seminars in the future. This will provide a mechanism for distributing
        Project XL data as it becomes available.

     •  Weyerhaeuser provided a written article on solid waste minimization published by P2AD.

     •  Weyerhaeuser provided detailed technical information on a variety of topics useful in increasing
        the level of expertise within P2AD on the pulp and paper industry.

     •  Other pulp and paper mills are aware of this XL project. As a result, more interaction between
        Georgia pulp and paper mills and P2AD is taking place.

     •  Weyerhaeuser helped open lines of communication with other pulp and paper mills and other
        organizations by describing the  services of P2AD when presenting information on Project XL.  In
        addition, information published by EPA on Project XL contains information on P2AD. As a
        result, writers for technical publications, researchers in other parts of the United States, and others
        have contacted P2AD for technical information.

     •  The P2AD Internet Web site, which  contains information on pulp and paper manufacturing and
        forest products, has been consulted more than P2AD Web sites with information on other
        technologies. Project XL participation probably contributed to the higher level of interest.
                                                20

-------
Project XL Preliminary Status Report	September 1998

5.0      Intel Preliminary Status Report (As of January 1998)

5.1      The Intel FPA

    Intel, the world's largest semiconductor manufacturer, has operated the 720-acre Ocotillo site in
Chandler, Arizona, a suburb of Phoenix in Maricopa County, for over 16 years. The largest facility on
the site, FAB 12, is the company's newest Pentium chip fabrication facility and one of the largest such
facilities  in the world. Intel completed this plant in summer 1996.  Intel's Project XL agreement applies
to FAB 12 and would apply to a second fabrication plant at the site should the company decide to build
it.

    Intel's XL FPA has three major components:

     •   An air pollution permit allowing the company to operate FAB 12 and the potential second
        fabrication facility without seeking the permit modifications normally required whenever the
        company changes its manufacturing process.
     •   An industrial user permit governing some water treatment issues.
     •   A package of nonregulatory commitments, such as to conserve ground water, reduce waste,
        recycle materials, and maintain minimum building setbacks  from the property line.


5.2      Intel Focus Group

    Participants in the Intel focus group reviewed drafts of the two exhibits shown below: asummary
FPA project commitments and a summary of progress in achieving superior environmental
performance. During the focus group conference calls participants also described lessons learned that
focused on the negotiation and implementation of the projects FPAs.  Questions about lessons learned
included:

     •   In your opinion, what has been the most important lesson learned from this project?
     •   Did you encounter anything unexpectedly helpful during the process? If so, what was the major
        one?
     •   Did you encounter any unexpected barriers during the project? If so, what was the major one?
     •   Are there any unresolved issues or problems related to the project that have yet to be addressed? If
        so, what are they?
     •   Do you have any suggestions for improving the process of implementing similar projects in the
        future? If so, what are they?
     •   Are there lessons learned in your project that have not yet been mentioned? If so, what are they?

    Focus group participants included:

Name                     Organization
Tim Mohin                Intel
Jim Larsen                Intel
Karen Heidel           Arizona Department of Environmental Quality (DEQ)
Jo Crumbaker          Maricopa County Bureau of Air Pollution Control
Colleen McKaughan        EPA Region 9
Katherine Dawes           EPA OREP
Christopher Knopes        EPA OREP
Gerardo Pascual,  formerly of EPA, participated in a one-on-one interview with EPA staff.


                                              21

-------
Project XL Preliminary Status Report	September 1998



5.3      Intel Focus Group-Lessons Learned

Creative Regulatory Approaches Can Help Industry to Stay Competitive and Efficient:

     •   Conventional regulatory practices slow down a dynamic (quick-to-market) industry.
     •   The capability to rapidly implement product changes is a basic requirement to keeping a
        company competitive and profitable. This is especially true for Intel, because it faces strong
        domestic and foreign competition in a rapidly changing market.
     •   Because Intel has a need for flexibility in responding to market changes, Intel felt the
        substantial time and effort they put into the project was worthwhile.
     •   The accomplishments of this project might have been achieved within existing regulatory
        programs; however,  the XL program provided the impetus to pull all the pieces together.


The XL Process Provided New Insights for General Environmental Programs:

     •   Because the XL process requires intensive communications between companies and federal,
        state, and local regulatory agencies, the regulatory agencies developed a better understanding
        of industry operations. This understanding is useful in fashioning better regulatory programs,
        both conventional and innovative, in the future.
     •   Although the XL process is complex,  it might be applicable to other sites in the same
        industry. It might, however, be difficult to apply to a large number of facilities, because many
        firms are not prepared to work through all of the complexities of a site-specific agreement.
     •   In the process of developing the agreement, Intel and the regulatory agencies developed a better
        understanding of stakeholder concerns.  It would have been more helpful to have information about
        public concerns earlier in the process.


Start the Process  With Clear Goals:

     •   There needs to be an agreement up front on the goal of the project. Stakeholders commented it
        was difficult to contribute to open ended discussions at the beginning of the process. If they
        had a set of options to discuss, the process would have been more productive.
     •   Participants should determine stakeholder goals early on and incorporate them into the
        planning process. Some important stakeholder concerns did not emerge until later in the
        negotiation process. Had they been understood earlier, the project could have been completed
        sooner.
     •   Education on environmental terminology and issues is needed to assist stakeholders in
        developing realistic goals.
     •   All stakeholders and  regulators should be educated on the technical and business realities of
        the industry.


Work With Local Stakeholders:

     •   Local stakeholders gave input on what was important to them. Intel made an effort to keep
        local stakeholders informed, which including establishing a Web site devoted to the project.
                                                 22

-------
Project XL Preliminary Status Report	September 1998

     •  Some stakeholders had difficulty getting up to speed on the environmental terminology and
        issues. An education and training program for stakeholders would be helpful so they can
        understand the details of the project.
     •  A dialog between EPA, residents, and other stakeholders near the facility was important.
     •  Since the signing of the FPA, Intel has found it more expeditious to deal with the stakeholders
        through a community advisory panel that is empowered to represent the community.
     •  The national NGOs should be involved early so they thoroughly understand local concerns. Some
        NGOs did not take part in the detailed negotiations; however, they were critical of the final
        agreement.
Develop Ways to Measure the Outcome of the Program:

     •  It is difficult to estimate the benefits and costs of this program, primarily because the
        signatories do not know what the baseline regulatory requirements would have been.
     •  Company benefits, which primarily are  improved efficiency and competitiveness and
        accelerated innovation, have not been quantified.
Develop Ways to Achieve Greater Consolidation of Permits:

     •  Although the XL process achieved significant consolidation of permitting, Intel's original
        ambition was to complete a greater degree of consolidation.
     •  It is difficult to coordinate the regulatory responsibilities of various local, state, and federal
        agencies to achieve complete consolidation of all permitting.
                                               23

-------
Project XL Preliminary Status Report	September 1998

                    Exhibit 1: Intel Project Commitments as of January 1998

Summary of Findings

     The Table below contains a list of the FPA provisions and indicates the status of implementation.
The  status data, which is cumulative data for the first nine months of operations under the agreement,
are from Intel's third quarter 1997 XL  report.  Intel's annual report came out in April 1998.

     According to these data, Intel has met or is meeting all of the commitments, except two of the
nonregulatory provisions of the agreements: the use of treated city waste water for cooling tower
makeup and landscaping, and the recycling of solid waste. Intel  had technical difficulties in meeting
these two goals.  The company committed to recycle 100 percent of water for cooling tower makeup
and landscaping from the city's waste-water reclamation facilities. Although the total for the first 9
months was 67 percent, the company reports it reached 95 percent in the fourth quarter. Based on a
review of the system design, Intel determined that even with significant increases in  operational costs
(about $300,000 annually for phosphate treatment), it is not possible to achieve more than 95 percent
annual reuse consistently. Intel also reported stakeholders believe achieving 95  percent waste-water
reuse would be an outstanding achievement. The second provision with which Intel had difficulty is the
commitment to recycle 40 percent of solid waste in 1997, which is  supposed to increase to 60 percent
in 2001. For the first 9 months of 1997 Intel recycled 33 percent of its solid waste, but has stated it
expects to reach 40 percent in the fourth quarter.

     During the first 9  months of operations under the agreement, Intel's releases of air and water
pollutants are a fraction of the values included in the agreement. Intel had technical difficulties in
meeting only two of these goals, as described above. The third quarter progress report indicates Intel is
making substantial progress toward achieving these two goals.


Table of Project Commitments

     This table details Intel's progress in meeting the commitments specified in the FPA for this
facility. The table lists  the commitments included in the FPA and provides dates for  meeting the
commitments. It also indicates whether the commitments have been achieved, are being achieved, or
have been more than achieved. This draft status information is from the Intel's third quarter 1997
progress report.
                                   Intel Project Commitments
                                               24

-------
Project XL Preliminary Status Report
September 1998
FPA Commitment

Plant Site Emission Limits (PSEL):
Volatile Organic Compounds (VOCs): 40 tons per year (TPY)
Nitrogen Oxide (NOX): 49 TPY
Carbon Monoxide (CO): 49 TPY
Paniculate Matter [nominally 10m and less] (PM10): 5 TPY
Sulphur Dioxide (S02): 5 TPY
Aggregate combined organic HAP: 25 TPY
Aggregate combined inorganic HAP: 10 TPY
Phosphine: 5 TPY
Sulfuric acid: 9 TPY
New chemical: 10 TPY
Maximum onsite concentration below 1 -hour Arizona Ambient Air
Quality Guidelines (AAAQG) at point of maximum concentration
within property line.
Air Quality Evaluation and Management
Screen modeling analysis in conjunction with a new chemical for
which an AAAQG has been established.
Consult with MCESD and the Arizona Department of Health
Services in conjunction with new chemicals that are introduced
and have not been evaluated.
Evaluate maximum onsite modeled concentrations for chemicals
modeled under the air permit.
Develop production and performance standards.
Reporting of Air Emissions:
Quarterly report of actual air emissions of all pollutants subject to
PSEL or limits otherwise identified.
Annual summary of actual aggregate emissions of all pollutants
subject to PSEL or limits otherwise identified.
Annual summary of known actual emissions of individual HAPs
emitted above 1,000 pounds per year.
Annual list of known individual HAPs emitted in quantities < 1,000 pounds per
year.
Annual report of VOCs and HAPs per unit of production
Date

1997

1997




1/1/1997

2-months
after quarter
April
April
April

April
Status As of
9/30/1997
(9-month total)
12.6 TPY
6.1 TPY
3.7 TPY
0.4 TPY
0.3 TPY
0.4 TPY
0.5 TPY
ND*
ND
NA*
NA

NA


NA

Achieved
through third
quarter
NA
NA
NA

NA
                                           25

-------
Project XL Preliminary Status Report
September 1998
FPA Commitment

Water and Waste-Water Use:
Pretreatment and discharge provisions of industrial waste water
from a separate industrial user permit are attached to the FPA.
100% of water for cooling tower makeup and landscaping will be
treated water from city (Chandler-Ocotillo) waste-water
reclamation facilities.
Manufacturing effluent will be treated for reuse or reinjection into
the ground-water supply, according to the following timetable:
45% of total fresh-water volume
55% of total fresh-water volume
65% of total fresh-water volume
Management of Waste:
Recycle solid waste generated at the site according to the
following timetable:
40% of solid waste generated
55% of solid waste generated
60% of solid waste generated

Recycle hazardous waste generated at the site according to the
following timetable:
60% of hazardous waste generated
50% of hazardous waste generated
40% of hazardous waste generated
(Intel plans to transfer some hazardous waste into the
nonhazardous waste category.)
Recycle nonhazardous chemical waste generated at the site
according to the following timetable:
25% of nonhazardous chemical waste
50% of nonhazardous chemical waste
70% of nonhazardous chemical waste
Management of Storm-Water:
Use of secondary containment areas, best management
practices and retention basins .
Intel Corporate Design for the Environment (DfE) Program:
Implement the corporate DfE program, which seeks to develop
envronmentally compatible processes and products, at the facility.
Contingency Planning:
Implement a single emergency plan for the facility that integrates
all applicable environmental requirements as they relate to
emergency planning
Reporting:
Submit consolidated reports quarterly to signatory agencies and
make available to the public.
Annual summary report.
Date


NA

1/1/1997




1997
1999
2001



1997
1999
2001



1997
1999
2001




1997
1999
2001
NA


NA




1/1/1997


2 months
after quarter
April 1
Status As of
9/30/1997

Achieving

67%1




74%


9-month
cumulative


33% 2
(Approaching
achievement)




95% (Achieved)






57% (Achieved)
Achieved


Being Achieved




Achieved


3 quarters
achieved
NA
                                           26

-------
Project XL Preliminary Status Report
September 1998
FPA Commitment

Implementation of Trip Reduction Program for Intel Employees


Property Setback for the Site:
Maintain a minimum setback of 1,000 feet from the closest
manufacturing-related building structure to residential property,
and use a contoured landscaping to add to the aesthetic appeal
of the setback.
Education Programs on the Environment:
Participate in environmental mentoring and educational activities
targeted at various groups in the community.


Donation of Computers and Manufacturing Equipment:
Donate new and used computers to schools and libraries, and
used manufacturing equipment to universities.
Date

Ongoing


NA

Ongoing


Ongoing
Status As of
9/30/1997
Rideshare
program
includes 231
registered
carpool
participants
(9/1997)
Achieved

Hosted Arizona
State University
(ASU) students
on Project XL
and environmental
management;
supported
pollution preven-
tion week, and
recycling
projects
Donated 125
computers
during third
quarter 1997
Notes:
      Status information is from the 1997 third quarter report. Data for the entire year would be needed to directly compare performance to
      commitments.

            NA = not applicable and ND = no data available.
      1.     Intel reports that fourth quarter results were 95 percent; and that based on a review of the system design, it has determined that
            even with significant increases in operational costs (approximately $300,000 annually for phosphate treatment), it is not possible to
            achieve more than 95percent an nual reuse consistently. Intel also reports that stakeholders believe achieving 95percent waste-
            water reuse would be an outstanding achievement.
      2.     Although the average for the year did not reach the 40 percent goal, Intel expects the fourth quarter to reach this goal.
                                                             27

-------
                                   Exhibit 2: Intel Environmental Performance as of January 1998

This table compares environmental performance (e.g., releases of pollutants to the environment and volume of resources used and recycled)
for the Intel site under a Project XL permit with performance under a conventional permitting scenario. The table lists the environmental
performance measures included in the FPA and then compares them to values that would likely be specified in a conventional permitting
scenario and to those that have actually been observed through September 1997.
Environmental Performance Measure


Plant Site Emission Limits (PSEL):
VOCs (TPY)
NOX (TPY)
CO (TPY)
PM10 (TPY)
S02 (TPY)
Aggregated combined single HAP (TPY)
Phosphine (TPY)
Sulfuric acid (TPY)
Air Quality Evaluation and Management:
Screen modeling analysis in conjunction with a new chemical for
which an AAAQG has been established.

Consult with MCESD and the Arizona Department of Health
Services in conjunction with new chemicals that are introduced
and have not been evaluated.
Evaluate maximum onsite modeled concentrations for chemicals
modeled under the air permit.

Maximum on-site concentration below 1 -hour AAAQG at point of
concentration within property line.

Develop production and performance standards by 1/1/1997.


Baseline (Under
Conventional
Permit)

<50 TPY
<50 TPY
<100TPY
<70TPY
<250 TPY
<25 TPY



No previous regulatory
requirement


No previous regulatory
requirement

No previous regulatory
requirement

No previous regulatory
requirement

No previous regulatory
requirement
FPA
Target Value


40 TPY
49 TPY
49 TPY
5 TPY
5 TPY
10 TPY
5 TPY
9 TPY

Voluntary
requirements as
described in column
1









Achieved

Actual Value
(9 Months)1


12.6 TPY
6.1 TPY
3.7 TPY
0.4 TPY
0.3 TPY
0.9 TPY



No new chemicals that
require screen modeling














Comments


























                                                               28

-------
Environmental Performance Measure
Reporting of Air Emissions:
Quarterly report of actual air emissions of all pollutants subject to
PSEL or limits otherwise identified.
Annual summary of actual aggregate emissions of all pollutants subject to
PSEL or limits otherwise identified.
Annual summary of known actual emissions of individual HAPs
emitted above 1,000 Ibs per year.
Annual list of known individual HAPs emitted in quantities < 1,000
Ibs per year.
Annual report of VOCs and HAPs per unit of production.
Water Use:
Requirements for pretreatment and discharge of industrial waste
water are in an attachment to the EPA.
100% of water for cooling tower makeup and landscaping will be
treated water from city (Chandler-Ocotillo) waste-water reclama-
tion facilities (% treated water).
Manufacturing effluent will be treated for reuse or reinjection into
the groundwater supply, according to the following timetable:
45% of total fresh-water volume in 1997
55% of total fresh-water volume in 1999
65% of total fresh-water volume in 2001
Baseline (Under
Conventional
Permit)
No previous regulatory
requirement




Conventional water permit
No previous regulatory
requirement
No previous regulatory
requirement


FPA
Target Value
2 months after quar-
ter (voluntary)
April
April
April
April

Conventional water
permit
100% (voluntary)
45% (voluntary)


Actual Value
(9 Months)1
3 quarters to date
NA
NA
NA
NA

Achieved
67%2
74%


Comments










29

-------
Environmental Performance Measure
Management of Waste:
Recycle solid waste generated at the site according to the follow-
ing timetable:
40% of solid waste generated in 1997
55% of solid waste generated in 1999
60% of solid waste generated in 2001
Recycle hazardous waste generated at the site according to the
following timetable:
60% of hazardous waste generated in 1997
50% of hazardous waste generated in 1999
40% of hazardous waste generated in 2001
(Intel plans to transfer some hazardous waste into the nonhazard-
ous waste category.)
Recycle nonhazardous chemical waste generated at the site
according to the following timetable:
25% of nonhazardous chemical waste in 1977
50% of nonhazardous chemical waste in 1999
70% nonhazardous. chemical waste in 2001
Management of Storm Water:
Use of secondary containment areas, best management practices
and retention basins.
Intel Corporate DfE Program:
Implement the corporate DfE program, which seeks to develop
environmentally compatible processes and products, at the facil-
ity.
Contingency Planning:
Implement a single emergency plan for the facility that integrates
all applicable environmental requirements as they relate to emer-
gency planning by 1/1/1997.
Baseline (Under
Conventional
Permit)
No previous regulatory
requirement
No previous regulatory
requirement
No previous regulatory
requirement


No previous regulatory
Requirement
No previous regulatory.
requirement
No previous regulatory
requirement
FPA
Target Value
(voluntary)
40%
60%
25%


As in described in
column 1
(voluntary)
As in described in
column 1
(voluntary)
As in described in
column 1
(voluntary)
Actual Value
(9 Months)1
33% 3
95%
57%


Implemented
Implemented
Completed
Comments








30

-------
Environmental Performance Measure
Reporting:
Submit consolidated reports quarterly to signatory agencies and
make available to the public 2 months after quarter.
Annual summary report by April 1 .
Trip Reduction Program for Intel Employees
Property Setback for the Site:
Maintain a minimum setback of 1 ,000 feet from the closest
manufacturing-related building structure to residential property,
and use a contoured landscaping to add to the aesthetic appeal of
the setback.
Education Programs on the Environment:
Participate in environmental mentoring and educational activities
targeted at various groups in the community.
Donation of Computers and Manufacturing Equipment:
Donate new and used computers to schools and libraries and used manu-
facturing equipment to universities
Baseline (Under
Conventional
Permit)

County trip reduction pro-
gram
No previous regulatory
requirement
No previous regulatory
requirement
No previous regulatory
requirement
FPA
Target Value
As described in
Column 1
(voluntary)
April
No specific value
1,000 feet
(voluntary)
No specific target
specified
(voluntary)
No specific
target
(voluntary)
Actual Value
(9 Months)1
Three quarters completed
NA
Rideshare program hdudes
231 registered parfcpants
9/1997
1,000 feet
Hosted ASU students on
Project XL and environ-
mental management; sup-
ported pollution preven-
tion week, and recycling
projects
Donated 1 25 computers
during third quarter 1997
Comments





Notes:
      NA = not applicable.
1     Status information is from the third quarter 1997 quarterly report.
2     Intel reports that fourth quarter results were 95 percent; and that based on a review of the system design, it has determined that even with significant increases in operational
      costs (approximately $300,000 annually for phosphate treatment),  it is not possible to achieve more than 95 percent annual reuse consistently. Intel also reports stakeholders
      believe achieving 95 percent waste-water reuse would be an outstanding achievement.
3     Although the average for the year did not reach the 40 percent goal, Intel expects the fourth quarter to reach this goal.
                                                                                 31

-------
Project XL Preliminary Status Report	September 1998

                                Exhibit 3: Intel Costs and Benefits

     The costs for establishing this agreement were borne by Intel; federal, state, and local govern-
ments; local public interest groups; and national environmental interest groups. These costs took the
form of transaction costs to  support and conduct the negotiations.  Although comprehensive data on
these costs are not available, some information was obtained from reports by Resources for the Future,
and the National Academy of Public Administration, and through statements of representatives attending
the focus groups.

Background

     Intel's interest in participating in the XL program stems from the nature of its business. The
profitability, competitiveness, and growth of a microprocessor company are directly related to its ability to
rapidly commercialize new technologies ahead of its domestic and foreign competitors. Intel has grown in
the industry by affecting technical breakthroughs in microprocessor design and manufacturing technologies,
which has led to  an approximate doubling of the number of transistors on a single silicon wafer every 18
months. As the complexity of chips has increased, so has the complexity of the manufacturing facility. The
cost of building a new microprocessor fabrication facility today is high. The need to earn a return on this
investment, as well as the dynamic and competitive nature of the industry, makes it crucial for the company
to obtain maximum efficiency in its operations.

     There is no  preset formula for manufacturing a new generation of chips. Each new generation requires
continual experimentation and refinement of the process, which involves frequent changes in equipment and
process chemicals. A modern chip plant involves over 300 manufacturing steps, millions of gallons of
water daily, more than 90 different chemicals, and the maintenance of "clean rooms" for the most sensitive
manufacturing processes. A typical Intel plant can involve 35 to 40 process chemical changes annually, and
a complete new generation of chips every 18 to 30 months.

     Given these operating characteristics, federal air permit requirements increase the potential for delays
in producing existing products and developing new product lines. The potential to minimize these delays
and provide more flexibility in its operations were the major incentives for Intel's decision to seek an XL
permit.

Summary Points:

     •   Intel invested at least several hundred days  of staff time plus other expenses, although they
        were unable to provide a total dollar cost.
     •   Data are not available to determine if Intel's abatement costs associated with the XL permit
        are more or less than they would have been under a conventional permitting scenario.
     •   If Intel  builds another major semiconductor fabrication facility on this site, its costs to design
        and equip the new plant likely will be much higher than for FAB12.
     •   Intel representatives believe the site avoided millions of dollars worth of product delays by
        eliminating 30 to 50 permit reviews a year.
     •   State and federal costs are not available, although there is evidence that the federal govern-
        ment probably committed at least one staff-year.
                                                32

-------
Project XL Preliminary Status Report	September 1998

6.0      Berry Preliminary Status Report (As of January 1998)

6.1      Berry FPA

    Berry is a mid-sized juice-processing company. The company's facility in LaBelle, Florida, the
site of the Project XL pilot, is located on Berry's largest grove, consisting of about 14,000 acres of
orange and grapefruit trees. The FPA for the Project XL pilot at the Berry facility was signed on July
8, 1996.  The project focuses on development of a facilitywide COP. The COP not only consolidates
more than 20 federal, state, and local environmental permits and maintains all environmental standards
contained in these permits, it also integrates all plant operating procedures into a single  manual for use
by employees day-to-day.

    As part of the project agreement, Berry made a voluntary commitment to several additional
environmental  performance goals. These commitments included reducing air emissions of VOCs, SO2,
and Nox;  reducing the number and types of solvents and lubricants used onsite and replacing them with
environmentally friendly material; reducing water use through reuse and more efficient management
practices  and technologies; and reducing solid waste generation through increased recycling.


6.2      Berry Focus Group

    Participants in the Berry focus  group reviewed drafts of the  three exhibits shown below: a
summary of FPA project commitments, an outline of costs and benefits,  and a summary of progress in
achieving superior environmental performance. During the focus group,  conference calls participants
also described  lessons learned that focused on the negotiation and implementation of the project's FPA.
Questions about lessons learned included:
    •    How and why did your organization decide to get involved in an XL project?
    •    How were you involved in developing the Final Project Agreement and preparing the COP?
    •    What was the best thing about the project?
            A.   Did you encounter anything unexpectedly helpful during development of the FPA? If
                 so, what?
            B.   Did you encounter anything unexpectedly helpful during preparation of the COP? If
                 so, what?
    •    What was the most difficult thing about the project?
            A.   Did you encounter any unexpected problems in developing the FPA or preparing the
                 COP? If so, what?
            B.   What steps did you take to address problems you encountered?
    •    Even though the COP has not yet been completed, do you believe the project has resulted in
        improvements in environmental performance? If so, can you explain?
    •    Did you have an idea at the beginning about what it would cost to accomplish the various
        parts of the project?
            A.   Looking back over the project to date, have actual costs been:
                     -Higher?
                     -Lower?
                     -About what you expected?
                     -Can you give any examples to illustrate your answer?

    •    What has been the most significant lesson learned from this project in your opinion?
    •    Would you do it again, knowing what you know now? Why or why not?
                                                33

-------
Project XL Preliminary Status Report	September 1998
    •    Would you recommend to someone else that they get involved in a future XL project? Why or
        why not?
    •    Do you have any suggestions for improving the process of implementing similar projects in
        the future? If so, what are they?
    •    Are there any other comments you would like to make?

    Focus group participants included:

Name                             Organization
Ernest Caldwell                    Jack M. Berry, Inc.
Peggy Highsmith                   Florida Department of Environmental Protection (DEP)
Pat Comer                        Florida DEP
Marc Harris                       Florida DEP
Michelle Glenn                    EPA Region 4
Zylpha Pryor                  EPA Region 4
Katherine  Dawes                   EPA Headquarters
Chad Carbone                      EPA Headquarters
Chris Knopes                  EPA Headquarters

Terrie Bates ot the South Florida Water Management District (SFWMD) and Jacki McGorty of Florida
DEP, participated in one-on-one interviews with EPA staff.
6.3 Berry Focus Group-Lessons Learned

The Interconnectedness of Processes at the Plant Reinforces the Value of the COP Approach:

     •  A process change that affects one media will affect other media in some way. Berry found, for
        example, a way to change some cleaning supplies, and it resulted in reducing and eliminating
        waste streams.  In each step of the process, the project team found cross-media, cross-program
        opportunities.
     •  The COP goes  beyond simply consolidating permits and is more than an operating permit. It
        includes many other regulatory requirements and addresses every aspect of environmental law
        in the state.
     •  This project makes permit compliance rules part of a living document and  part of the
        operating environment in the facility. Using the COP reduces fragmentation and increases the
        chances that compliance will be achieved. Creating the COP, however, was a challenge. To
        make it comprehensive, the project team had to look at everything. It was  like remodeling an
        old house; each time the team opened one door they found new issues to address.
     •  It was a challenge  to find a way of reconciling various requirements and authorities in a
        multiagency document, so that every organization got what it needed.
     •  The project offered an opportunity to explore a holistic approach, something different from
        the "blinders-on" approach regulators usually use.
The COP Makes Employees Major Players in Achieving Compliance:
                                             34

-------
Project XL Preliminary Status Report	September 1998

     •  The COP makes compliance part of the daily operating routine at the plant. It gets employees
        involved and makes them major players in compliance.
     •  Employee training is a cost of compliance under a conventional permitting system. Often
        Berry employees have to attend seminars focusing on a specific regulatory program in which
        only 10 to 20 percent of the seminar content relates to their particular job. The standard
        operating procedures (SOPs) and work instructions being created in the COP will help Berry
        reduce the cost of training,  because they will focus on how employees should perform their
        specific job responsibilities  day-to-day in a way that will result in compliance.

     •  Writing the work instructions to be included in the COP was very difficult. It required
        determining the right balance of information to ensure compliance without sacrificing
        understandability.
The Trust-Building Process Can Be Successful:

     •  The state had to explore every facet of the facility in creating the COP, while maintaining its
        enforcement rights. This required building trust, which was not easy, but it worked.
     •  Berry was impressed that the project participants could work well together and that everyone
        remained committed to making the  project work. The industry routinely looks at government
        as a threat. Berry employees often felt intimidated by government personnel, fearing they
        might give the wrong answer or cause a violation and lose their job. The project succeeded in
        eliminating this intimidation; employees are now comfortable talking with government
        personnel.
     •  No other company in the industry thought the Berry project could be done. As a result, Berry
        had a lot at stake in going forward with the project. The project, however, succeeded in
        proving teamwork is  possible and makes sense.
     •  It is important to be open and flexible with people in order to build trust. The dynamics of
        people working together is very important in this kind of project.
Start With Clear Direction:

     •  The project needs to be more focused from the beginning. Each party needs to know from the
        outset what flexibility it wants, or will give, and what environmental performance it is
        offering or expecting.
     •  Berry feels EPA Headquarters should have provided clearer early direction on the EPA. The
        company does not feel EPA provided a good road map.
     •  The Berry representative pointed out, while he was  in a position to make decisions and
        commitments for the company independently,  the EPA personnel with whom he was meeting
        to discuss the EPA were not at the same level  and were not able to  make decisions and
        commitments for the Agency.
     •  Before the project begins, there must be clearly stated expectations, clearly defined roles and
        responsibilities, and a methodology for resolving issues and problems. Project participants
        encountered unanticipated issues and problems and had no clear method for addressing them.
        The EPA, for example, did not lay out the format for the COP; the team had to create it as
        they went.
     •  Language in the EPA was not specific enough in several areas. Since the EPA was signed,
        there have been turnovers in personnel at federal and state levels. Without specific guidance in
        the EPA, each new person had to develop his or her own interpretation of the EPA language
        in terms of his or her role and how to deal with specific issues encountered.


                                                35

-------
Project XL Preliminary Status Report	September 1998

     •  It is very important to agree at the beginning of the project on a timeframe for accomplishing
        results and to invest dedicated resources to the effort. The participants in the Berry project
        could not do that, and the state feels the project dragged on as a result. If the team had been
        able to accomplish the process of preparing the COP in 6 months or a year, the state feels the
        level of effort would have been different and results would have been evident sooner.
     •  It is very important to clearly define baselines for performance measurement. SFWMD feels it
        would be better to use facility-specific rather than permit baselines in the future.
     •  The team encountered areas where there was a lack of coordination among EPA programs.
     •  Berry feels EPA needs to identify incentives for companies to participate in projects like XL.
        There must be more reason to participate than  "it's a Presidential initiative." The company
        suggests changing the current system to set environmental goals based on units of production
        and measuring environmental efficiency per unit of production would provide more incentive
        for industry. Berry  also  encouraged EPA to find ways to reward good players as well as
        punish the bad ones.
The Project Provided New Insights:

     •  Having the project team working day-to-day at the plant gave the state a more indepth
        perspective on plant operations. Florida DEP staff saw more than they would normally in the
        course of inspections, even though their inspections are very thorough.  Being at the plant
        helped the Florida DEP and the company recognize and deal with some compliance issues
        encountered. Florida DEP staff were able to make suggestions to help the company address
        compliance.
     •  Onsite tours of the Berry facility early in the process provided EPA regional personnel, who
        are not normally involved at the facility level, an appreciation for plant operations and the
        interconnectedness of plant processes.
     •  The project was an educational experience.  One state participant indicated she learned a lot
        about permitting, in which she routinely has only  limited involvement, from the day-to-day
        interaction with the district staff and other members of the project team. She said what she
        learned will be useful in other areas of her job.
The State Can Conduct Additional Project Without EPA's XL Program:

     •  Some Florida state staff feel strongly that they learned the state can do projects like Berry
        under state authorities-without federal participation-since most regulation is delegated to
        states. EPA's participation through Project XL was helpful, however, in bringing visibility to
        the project, which helped motivate others to participate.
Changes in Agency Programs:

     •  While Florida DEP representatives indicated they would like to make changes in their
        regulatory system based on the ideas from this project, some state staff indicated these
        changes might be too resource-intensive.
     •   EPA Region 4 indicated that more information with which to make decisions about potential
        changes should be available later in the year when Berry applies its resources to the project.
                                               36

-------
Project XL Preliminary Status Report
September 1998
                  Exhibit 1: Berry Project Commitments as of January 1998




Progress in Meeting Commitments




    Berry met 60 percent of its project commitments, even though work on the COP was put on hold.






Table of Project  Commitments
Commitment
Develop COP
Reuse treated industrial waste water
Water conservation
Replace an existing peel dryer
Prepare implementation strategy for
reduction of S02, NOX, and VOC
emissions
Abandon the spray site as an industrial
waste-water disposal area and reuse
treated water as irrigation water
Maintain present wetland treatment area
Maintain wetland treatment ponds at or
near present location
Close or modify surge pond
Reduce number and types of solvents
and lubricants used on site
Recycle scrap metal
Recycle paper, metal, glass, plastic to
the best extent possible
Meet drinking water standards equal to
half of Maximum Containment Limits
(MCLs)
Date
8/31/1997



COP effective
date + 1 yr.
COP effective
date + 1 yr.
COP effective
date + 1 yr.
COP effective
date + 1 yr.
COP effective
date + 1 yr.
COP effective
date + 1 yr.
COP effective
date + 1 yr.


Achieved,
Being
Achieved, or
Exceeded
Being
Achieved
Achieved
10/1997
Not achieved
Achieved
9/1996
Not
Achieved
Achieved
10/1997
Achieved
Achieved
Being
Achieved
Achieved
1997
Achieved
2/1997
Achieved
2/1997
Not
Achieved
Comments
Substantial progress has been
made, but work on the COP was
put on hold in late 1997 pending
negotiation and startup of a
lease agreement with Berry for
operation of the plant .







Larger pumps, operating at lower
levels, have been installed.



Meet current MCLs, except for
radionuclides, but not at half of
MCLs.
                                           37

-------
Project XL Preliminary Status Report
September 1998
Commitment


Institute IS0 14000 Environmental
Management Program

Date




Achieved,
Being
Achieved, or
Exceeded
Not
Achieved

Comments


Work on this item has not begun;
however, the SOPs and work
instructions in the COP have
been formatted to be compatible
with ISO to expedite
implementation.
                                           38

-------
Project XL Preliminary Status Report	September 1998

               Exhibit 2: Berry Environmental Performance as of January 1998

    Since monitoring and formal reporting for most environmental performance commitments under
the FPA for the XL project at the Berry plant are connected to the effective date of the COP, no
measurement data is reported in this section. The project team reported, however,  Berry succeeded in
making environmental performance improvements in these and other areas, even though work on the
COP was put on hold in 1997. Following are comments concerning these improvements:

     •  Florida DEP: The fact Berry has been able to meet a majority of the project commitments, even
        before the COP was finished, has resulted in environmental benefits.
     •  Florida DEP: Having the project team working day-to-day at the plant gave them a more in-depth
        perspective; they saw more than they would normally on inspections, even though their inspections
        are very thorough. Being there helped them and the company recognize and deal with some
        compliance issues that were encountered; Florida DEP staff were able to make suggestions to help
        the company address compliance.
     •  Florida DEP: As result of a detailed review, Berry was able to reduce and eliminate some
        hazardous waste streams; the character of waste changed and waste toxicity was changed.
     •  Florida DEP: Berry implemented self-audit process. The list of items needing attention got
        progressively shorter.
     •  Florida DEP: Berry was able to eliminate a spray field (88-acre field in operation since 1974) that
        had been set aside for waste-water disposal (not irrigation), because they no longer needed it as a
        backup. This dealt with the odor problem the field had caused.
     •  Berry: The  state was able to help Berry clean up its air permits (old construction permits). Some
        no longer applied, some were contradictory, and some were duplicative.
     •  Berry: All three shifts at the plant now are performing their jobs in a standard way. Work
        instructions developed for the COP have helped standardize testing. Industrial waste-water tests,
        for example, are consistent with last tests or previous year's tests, instead of showing spikes, even
        though there is higher production at the plant. Now the  quality of data is consistent.
     •  Berry: The  level of compliance with regulations is much improved, and the chances of violations
        have been reduced significantly. This is very important for transferability of the program. This has
        happened as a result of the project, because people understand their jobs better and do not fear
        inspections.
     •  SFWMD: Qualitatively, working together has improved everyone's understanding and awareness
        of each other's needs.
                                               39

-------
Project XL Preliminary Status Report	September 1998


                               Exhibit 3: Berry Costs and Benefits

    The purpose of this exhibit is to record data that will allow a comparison of the costs of developing
and implementing an XL permit agreement to those of a conventional permit program (reasonable
anticipated future permits). The difference between the two costs is the savings (or extra costs) of operating
under an XL permitting scenario as compared to a conventional permitting scenario. The table is divided
into four parts, with similar questions for company, federal, state, and local costs.

1.  Berry Costs:

    A.  Start-up costs for developing the FPA and preparing the COP up to the point at which work on the
        permit was put on hold were approximately $55,000, 45 percent lower than comparable for
        continuing a conventional permit program.
    B.  Operating costs for maintaining the COP were expected to be at least 50 percent less per year over
        5 years than those for maintaining environmental control programs under a conventional permit-
        ting scenario for the same period of time.
Comments:
        Berry expects the COP to reduce production costs at the plant by increasing the efficiency of plant
        operations. These reductions, however, are not expected to be substantial enough to affect prices.
        The company anticipates the COP might change the value of the facility because increased plant
        efficiency would raise the comfort level of lenders.
        Berry does not expect the XL project to result in changes in the  process by which the facility
        produces its products; however, the introduction under the COP of detailed work instructions,
        driven by regulatory compliance, is  expected to reduce significantly the chances of process
        deviations that result in noncompliance.
        While these changes are not expected to affect the company's market position, they  will assist in
        maintaining the company's competitiveness on the world market.
2.  EPA Costs:

    A.  Start-up costs for developing the FPA for the XL project and the background preparation for the
        COP were approximately 420 labor hours and $4,000 in travel. Comparable costs for continuing
        a conventional permit program would have been 24 labor hours and $600 in travel per year over 5
        years.
    B.  Operating costs for maintaining the COP were expected to be 24 labor hours and $600 in travel
        per year over 5 years-the same as for maintaining environmental control programs under a
        conventional permitting scenario for the same period of time.
3.  Florida DEP Costs:

    A.  Start-up costs for developing the FPA for the XL project and for preparing the COP up to the
        point at which work on the permit was put on hold were approximately $60,000. Comparable
                                                 40

-------
Project XL Preliminary Status Report	September 1998

        costs for continuing a conventional permit program would have been about $20,000 per year over
        5 years.
    B.   Operating costs for maintaining the COP were expected to be $30,000 per year over 5 years.
        Comparable costs for maintaining environmental control programs under a conventional permit-
        ting scenario for the same period of time were expected to be $10,000 per year.
4.   South Florida Water Management District Costs:

    A.   Start-up costs for developing the FPA for the XL project and for preparing the COP up to the
        point at which work on the permit was put on hold were approximately $5,800. Information
        on comparable costs for continuing a conventional permit program was not available.
    B.   Information on operating costs per year for maintaining the COP and comparable annual costs
        for maintaining environmental control programs under a conventional permitting scenario
        were not available.
                                              41

-------
[This page intentionally left blank]

-------
vvEPA
   United States
   Environmental Protection Agency
   (1802)
   Washington, DC 20460

   Official Business
   Penalty for Private Use
   $300

-------