r/EPA United States Environmental Protection Agency Office of the Administrator TMail Code 18021 EPA-10C-S-98-003 September 1998 (http://www.epa.gov) Project XL Preliminary Status Report An Evaluation of Projects in Implementation Executive Summary EPA 100- S- 98-003 iSSSss^ ^ lf:^ REINVENTION ------- ------- 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 Leadership-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 date available for indepth costfoenefit 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 FPA 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 stafflevels 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 cos^enefit 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. ni ------- ------- ------- ------- |