United States
               Environmental Protection
               Agency
Office of Reinvention
Washington, DC 20460
Mail Code 1802
EPA/1 OO/F-99/007
March 1999
www.epa.gov
ERA        XL
               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. Through Project XL, which stands for excellence and Leader-
               ship, EPA enters into specific project agreements with public or private sector spon-
               sors to test regulatory, policy, and procedural alternatives that will produce data and
               experiences to help the Agency make improvements in the current system of environ-
               mental protection. The goal of Project XL is to implement 50 projects that will test
               ways of producing superior environmental performance with improved economic
               efficiencies, while increasing public participation through active stakeholder pro-
               cesses. As of October 1998, 10 XL projects are in the implementation phase and 20
               XL projects are under development. Project XL Progress Reports provide project-
               specific overviews of the status of individual XL projects that are implementing Final
               Project Agreements (FPAs). The progress reports are available on the Internet via
               EPA's Project XL web site at http://www.epa.gov/ProjectXL. Or, hard copies may be
               obtained by contacting the Office of Reinvention's Project XL Docket at 202-260-
               7434. General information on Project XL is available on the web  site or by contacting
               the general information number at 202-260-5754.



               Merck & Co., Inc., is a worldwide research-intensive health products company that
               discovers, develops, manufactures, and markets human and animal health products.
               Merck's Stonewall Plant near Elkton, Virginia, was established in 1941. The plant
               employs over 900 people in a
               range of pharmaceutical manu-
               facturing (batch processing)       : '
               activities such as fermentation,         (                    '"; .
               solvent extraction, organic           •          ,            '           '^"J
               chemical synthesis, and finish-              -  - .       ,      ';        A'
                                                                   . ••       •    ,-.- i  Merck XL Project
               ing Operations.                  '           ,                  ,     ^"_ Elkton, Virginia
               The Stonewall Plant is located          '                      •
               within two kilometers of the            "-               ,
               Shenandoah National Park,  a                    .•       ,      ""'"'  •   •

* /•
August 24, 1995
Merck XL Proposal
Submitted

/"
December 15, 1997
Final Project Agreement
Signed

/
February 10, 1998
PSD Permit
Effective

/
June 30, 1999
Anticipated Completion
of the Gas-Fired Boiler
Conversion

/• m
October 2004
Anticipated Date of First
Stakeholder Review

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Merck XL Project                                                                       13-31-991
  Federal Class I air quality area under the Clean Air Act (CAA). The facility is subject to CAA require-
  ments to comply with the National Ambient Air Quality Standards (NAAQS). Shenandoah National
  Park has experienced substantial air quality degradation and related resource impacts over the past
  several decades. In 1990, the Department of Interior published a Preliminary Notice of Adverse Impact
  on Shenandoah's visibility, streams, and vegetation.
  The Merck XL project creates a facility-wide emissions cap for criteria air pollutants that will both: 1)
  provide flexibility for production changes without requiring prior permitting approval; and 2) mini-
  mize actual emissions. A new Prevention of Significant Deterioration (PSD) permit, developed
  through the Merck XL project, provides alternative methods for complying with applicable state
  implementation plan (SIP) rules, New Source Review (NSR) regulations, and certain provisions of the
  Resource Conservation and Recovery Act (RCRA) relating to air emission controls on hazardous
  waste  equipment. The new PSD permit includes a facility-wide cap for total criteria air pollutants and
  subcaps for sulfur dioxide (SO2), nitrogen oxide (NOx), and particulate matter with a diameter of less
  than 10 microns (PM-10).
  Through the Merck XL project, environmental benefits will be gained by the following:
  •  Capping the facility's total emissions of criteria air pollutants at levels 20% below the baseline
    levels occurring prior to the XL project; capping SO2 emissions at levels 25% below baseline levels;
    capping NOx emissions at levels 10% below baseline levels; and capping particulate matter at levels
    approximately equal to baseline levels.
  *  Modifying the facility's existing coal-burning power plant to burn natural gas. This replacement of
    coal-fired boilers with natural-gas boilers is expected to result in an upfront reduction of 900 tons
    per  year of total criteria air pollutant emissions, to virtually eliminate lead emissions, and to reduce
    the  combined emissions of the hazardous air pollutants hydrogen chloride and hydrogen fluoride by
    65% (47 tons per year). The conversion to natural gas is anticipated to cost Merck approximately
    $10 million, but it is not required by regulations or as a result of operational problems.
  •  Either complying with specific control-technology requirements in future regulations affecting
    criteria air pollutants, or reducing the facility-wide cap or subcaps for certain pollutants and regula-
    tions.
  •  Implementing a comprehensive monitoring, record keeping, and reporting program that increases in
    stringency as actual emissions approach the cap.
  •  Assessing the air quality impact in Shenandoah National Park if volatile organic compound (VOC)
    emissions reach specified levels.
  *  Ensuring compliance with Significant Ambient Air Concentrations (SAAC) of nonhazardous VOC
    emissions for increases above specified thresholds.



  Merck is working with EPA, the Virginia Department of Environmental  Quality (VADEQ), the Na-
  tional  Park Service, and the community to achieve superior environmental performance and to operate
  the Stonewall Plant in a more flexible, cost-effective manner. As an incentive to achieving superior
  environmental performance, regulatory flexibility is being offered in the area of air quality permitting.
  The statutory programs, and the EPA offices administering the programs, that are affecting the Merck
  XL project are:
  *  Clean Air Act (CAA) programs, administered by EPA's Office of Air Quality Planning and Standards;

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 Merck XL Project                                                                       (3-31-991
* Resource Conservation and Recovery Act (RCRA) programs, administered by EPA's Office of Solid
  Waste; and
* Pollution Prevention Act (PPA) programs, administered by EPA's Office of Prevention, Pesticides,
  and Toxic Substances.
EPA has delegated to the Commonwealth of Virginia full authority to implement and enforce the
newPSD permitting program.

Air Quality Permitting. Pursuant to an agreement between EPA and VADEQ, the latter issued a new
PSD permit of unlimited duration for a facility-wide air emissions cap at the Merck Stonewall Plant.
The permit defines compliance with PSD and minor NSR requirements, as well as with other regulatory
requirements. A variance issued by VADEQ for the Stonewall Plant allowed VADEQ to issue the
flexible PSD permit. Merck will be required to comply with the facility-wide emission caps, at the
latest, 12 months after the facility converts its coal-fired boilers to natural-gas boilers. Until that time,
existing air quality permits and regulations, specifically Federal and state PSD and minor NSR permits
and regulations, govern operations at the facility.

The facility's existing air quality permits require that most changes to manufacturing processes be
reviewed and approved by VADEQ prior to being implemented. The complexity of the regulations
requires a considerable effort by the facility and regulators to prepare and review permit applications for
many process modifications. Under the Stonewall Plant's new PSD  permit, changes or additions to
facility operations that result in emission increases would no longer  require prior approval under either
Federal or state NSR regulations.

Merck's new PSD permit provides the facility with the flexibility to implement a change in operations
that increases emissions, within the constraints of the total criteria pollutant cap and the individual
pollutant subcaps for SO2, NOx, and PM-10. In addition, Merck will have the option of reducing the
facility-wide caps instead of implementing specific control technologies prescribed by  future regula-
tions. Merck also is provided flexibility in complying with RCRA air emission requirements that apply
to certain existing hazardous waste management units. This  operational flexibility  is provided in return
for the superior environmental performance resulting from the permanent reduction of emissions; the
conversion of the powerplant to natural gas; the requirements to increase monitoring, record keeping,
and reporting as actual emissions approach the caps; and the five-year periodic stakeholder reviews.

The variance and permit streamline requirements regarding both the content of application for Merck's
Title V operating permit and the compliance certification. Merck is required to obtain a Title V permit
and will continue to be responsible for adhering to all other applicable state and Federal air regulations.
Merck will comply fully with  all applicable requirements for the control of hazardous air pollutants
(HAPs) under CAA section 112, including:
• Maximum achievable control technology (MACT) standards for the pharmaceutical  industry under
  CAA section 112(d);
• Risk management plan requirements under CAA section 112(r); and
• Future residual risk regulations under CAA section 112(f);
Environmental Performance Reporting. The new PSD permit provides an innovative three-tiered ap-
proach to monitoring,  record keeping, and reporting. The requirements for monitoring, record keeping,
and reporting become more stringent as the facility's actual emissions approach the facility-wide cap.
This provides a built-in incentive for Merck to minimize emissions from the Stonewall Plant.

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Merck XL Project
                                   13-31-991
                                ail

  Project XL provides EPA opportunities to test and implement approaches that protect the environment
  and advance collaboration with stakeholders. EPA is continually identifying specific ways in which XL
  projects are helping to promote innovation and system change. The innovations and system changes
  that have emerged from the Merck XL project are described below:
  Tiered Monitoring, Record Keeping, and Reporting. A key innovative feature of Merck's XL project is
  that the monitoring, record keeping, and reporting requirements for the PSD permit increase in strin-
  gency as the site's actual total criteria pollutant emissions come closer to the total emissions cap.
  Annual reporting is required when facility-wide emissions are less than 75% of the cap. Semi-annual
  reporting is required when facility-wide emissions are between 75% and 90% of the cap. Monthly
  reporting is required when emissions are equal to or greater than 90% of the total emissions cap. This
  provides an additional incentive for the facility to minimize its emissions. This project will serve as a
  test-bed for sector-wide collection of higher quality information from regulated industries, and will
  directly influence the Comprehensive Information Management Plan being developed by EPA's new
  consolidated Environmental Information Office.
  Air Permits. Certain industries change their product lines frequently. Usually, such changes require a
  time-consuming preconstruction permit exercise. As part of EPA's attempt to improve this aspect of air
  permitting, Project XL has tested various alternatives, such as preapproval of specific changes or no
  review if changes fall under a capped amount, as in the Merck XL project. The recent Pharmaceutical
  MACT regulations have incorporated such an approach, allowing the limited preapproval of certain
  types of production changes without a permit revision. EPA is working to identify additional and more
  comprehensive preapprovals for the pharmaceutical industry.



  This section summarizes Federal, state, and corporate commitments described in the FPA for Merck's
  Stonewall Plant.
  Commitment
 Status
                                       EPA Commitments
   Issue a site-specific rule to provide an alternative
   means of compliance with applicable state imple-
   mentation plan (SIP) rules and NSR standards
   and to address certain provisions of RCRA air
   standards for air emission controls on hazardous
   waste equipment.
EPA proposed a site-specific PSD and NSP rule
on March 31, 1997, that applies only to Merck's
Stonewall Plant. EPA promulgated the final rule
on October 8, 1997.
   Issue a site-specific revision to Virginia's SIP
   that delegates authority to the Commonwealth of
   Virginia for implementing and enforcing the site-
   specific PSD rule, and that allows for an alternate
   means of compliance with newly applicable rules.
EPA proposed delegation of authority in the site-
specific rule issued March 31, 1997. EPA del-
egated full authority to Virginia for implement-
ing and enforcing the site-specific PSD rule on
November 24, 1997.

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Merck XL Project
                                     (3-31-991
Commitment
Status
                          Commonwealth of Virginia Commitments
Request full delegation of authority for implemen-
tation and enforcement of the site-specific PSD
rule for the Merck Stonewall Plant.
VADEQ requested full delegation from EPA on
October 27, 1997.
Grant a PSD permit and variance to the Merck
Stonewall Plant for implementing the XL project.
On September 11, 1997, the State Air Pollution
Control Board of Virginia issued a variance
containing site-specific PSD provisions consistent
with those of EPA's final rule. VADEQ issued the
PSD permit on January 7, 1998, with an effective
date of February 10, 1998.
Issue a regulation to address EPA's final
site-specific PSD rule.
The State Air Pollution Control Board of
Virginia approved a regulation that incorporated
by reference the provisions of EPA's final site-
specific PSD rule.
                              Merck & Co., Inc. Commitments
Replace coal-fired boilers with natural gas boilers
that can use distillate oil as backup fuel.
Boiler conversion is required to be completed 30
months after permit issuance (by August, 2000).
An optimistic schedule referenced in the permit
predicts completion within 18 months. Conver-
sion now is anticipated for completion by June
30, 1999.
Implement a three-tiered system for monitoring,
record keeping, and reporting.
The three-tiered monitoring, record keeping, and
reporting requirements will become effective 12
months after boiler conversion is completed.
Submit emission reports to all FPA signatories.
Semi-annual reports required under the permit
are scheduled for submission by March 1 and
September 1 of each year, beginning in March 1,
2000.
Provide XL progress reports to stakeholders
annually upon initiation of operation of the natural
gas boilers.
Annual reports outlined in the FPA are scheduled
for distribution each year, beginning in March
2000.
Conduct stakeholder meetings to evaluate project
effectiveness.
Meetings are to be conducted every five
years beginning within three months of the
5-year anniversary of completion of the boiler
conversion.

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Merck XL Project
                                                                                        13-31-991
 This section summarizes Merck's progress in meeting environmental performance commitments described
 in the FPA. Detailed technical specifications are set forth in the new PSD permit issued by VADEQ.
 The total criteria pollutant and individual criteria pollutant caps will be adjusted downward after boiler
 conversion is complete. Compliance with emission caps will be determined monthly, on a 12-month rolling
 total basis. Boiler conversion will significantly reduce criteria pollutant emissions and, therefore, will
 immediately reduce the 12-month rolling total. However, the 12-month rolling total will not be decreased
 below the emissions cap for some months following boiler conversion. Therefore, the new PSD permit's
 emission caps will not be enforceable until 12 months after boiler conversion is complete. Merck has the
 option of accepting the provisions of the new PSD permit and operating under the caps before this date.
 Once the caps are in effect, the Stonewall Plant will be required to operate under the caps and increase
 monitoring, record keeping, and reporting if the 12-month rolling total of criteria pollutant emissions
 triggers a higher tier.
                                                                      Total Criteria Pollutants
                                                          Emissions
                                                            Cap
                                                          Baseline
                                                         (1992-1993)
                                                       Standard Permit
                                                          (estimate)
Air Emissions of Total Criteria Pollutants: The Merck
facility's total emissions of criteria pollutants (including
all criteria pollutants except lead, which will be virtu-
ally eliminated by conversion to the natural gas boiler)
will be capped below the level found to be representa-
tive of recent plant operations. The facility's actual
emissions averaged over 1992 and 1993 provide a
baseline level of 1,503 tons per year for total criteria
pollutants. Under the new facility-wide cap, total criteria
pollutant emissions will  be maintained at levels below
1,202 tons per year (a 20% reduction). Merck estimates
that up to 2,700 tons per year would be allowable at its
facility under current regulatory standards.
Progress: Facility-wide  air emissions will be determined monthly following completion of the boiler
conversion. Progress in maintaining total criteria pollutant air emissions at levels below the new cap will be
reported in permitting documentation and semi-annual  reports to FPA signatories.
                                                                                1500
                                                                              Tons/Year
                                                                         Sulfur Dioxide
                                                        Emissions
                                                           Cap
                                                         Baseline
                                                       (1992-1993)
Air Emissions of Sulfur Dioxide (SO,): The facility's
actual SO2 emissions averaged over 1992 and 1993
provide a baseline level of 719 tons per year. The
facility's PSD permit includes a facility-wide cap that
limits SO2 emissions following boiler conversion to 539
tons per year. The cap guarantees a minimum 25%
reduction in SO2 emissions as a result of the boiler
conversion.

Progress: Air emissions will be determined monthly
following completion of the boiler conversion. Progress
in maintaining SO2 air emissions at levels below the
new cap will be reported in permitting documentation and semi-annual reports to FPA signatories.
                                                                               400  500
                                                                              Tons/Year

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 Merck XL Project
                                                                                        (3-31-991
Air Emissions of Nitrogen Oxides (NOJ: The
facility's actual NOx emissions averaged over 1992
and 1993 provide a baseline level of 291 tons per year.
The facility's PSD permit includes a facility-wide cap
that limits NOx emissions following boiler conversion
to 262 tons per year. The cap guarantees a minimum
10% reduction in NO  emissions as a result of the
                   X
boiler conversion.

Progress: Air emissions will be determined monthly
following completion of the boiler conversion.
Progress in maintaining NOx air emissions at levels
below the new cap will be reported in permitting
documentation and semi-annual reports to FPA signa-
tories.
                                                                      Nitrogen Oxides
                                                      Emissions
                                                         Cap
                                                       Baseline
                                                     (1992-1993)
                                                                  50     100    150    200    250    300
                                                                            Tons/Year
                                                                   Particulate Matter -10
                                                      Emissions
                                                        Cap
                                                      Baseline
                                                    (1992-1993)
                                                                         20      30
                                                                           Tons/Year
Air Emissions of Particulate Matter (PM-10): The
facility's actual emissions of PM-10 provide a
baseline level (1992 and 1993 average) of 42 tons per
year. Significant decreases in PM-10 emissions are
not anticipated as a result of the boiler conversion
because stringent PM-10 emission controls have
already been placed on the coal-fired power plant.
The PM-10 cap initially will be placed at the baseline
level of 42 tons per year. Following conversion of the
power plant to natural gas, the new boiler will be
tested to determine emission levels at full capacity. So
that the new gas-fired boilers can generate at their full capacity, there will be an automatic increase in
the PM-10 cap of one to 10 tons per year to account for condensable PM-10 emissions. The cap on total
criteria emissions will not be affected by this automatic increase in the PM-10 cap.
Progress: Air emissions will be determined monthly following completion of the boiler conversion.
Progress in maintaining PM-10 air emissions at levels below the new cap will be reported in permitting
documentation and semi-annual reports to FPA signatories.
Hazardous Waste Management Unit Emissions: The Merck PSD permit contains requirements for
compliance with RCRA provisions pertaining to the control of air emissions from certain hazardous
waste management units.
Progress: Compliance with hazardous waste management unit emission regulations is being main-
tained during conversion of the boiler. The requirements of these regulations will be replaced by alter-
native provisions contained in Merck's PSD permit after conversion of the boilers.

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 Merck XL Project
13-31-991

The organizations directly involved in negotiating the FPA included Merck & Co., Inc., EPA, U.S. Depart-
ment of the Interior National Park Service, VADEQ, Rockingham County Board of Supervisors, and
private citizens. In addition to the efforts of the EPA and VADEQ to solicit and respond to public com-
ments on the site-specific rule and variance issued as part of the project, Merck worked to ensure that
stakeholders were involved in the planning of for the XL project and were provided opportunity to partici-
pate in project development. Public meetings were held on:
* May 23,  1996, to discuss development of Merck's proposed XL project and anticipated activities. The
  meeting was attended by approximately 30 people representing government, environmental, and com-
  munity groups;
* February 27,  1997, to solicit comment on VADEQ's proposed PSD permit and variance. The meeting
  was attended by 30 to 50 people representing government, environmental, and community groups; and
• April 14, 1997, in Harrisonburg, Virginia, to solicit comment on EPA's proposed site-specific rule. The
  meeting was attended by 30 to 50 people representing government, environmental, and community
  groups.
A working committee of government and nongovernment stakeholders was established after the initial
public meeting. The group met weekly for seven months and frequently thereafter during FPA negotia-
tions. Environmental organizations offering input during the stakeholder process included the Southern
Environmental Law Center, the Virginia Consortium for Clean Air, and the Natural Resources Defense
Council. Issues  of concern expressed by stakeholders during negotiation of the final project agreement
included minimal opportunities for nonsignatory parties to participate in the project, shifting of risks
associated with exchanging one type of pollutant for another, and clarification of VOC emission issues.

The PSD permit provides that nonsignatory stakeholders, including up to three community representatives
and up to one representative from a regional public interest group, may be designated to participate in
implementation and review of the project. These stakeholders would receive information and have the
opportunity to participate in the periodic reviews of performance as described in the permit.  The permit
provides for a review of certain issues every five years  and other reviews when specified emission levels
are reached. The Merck XL project stakeholder group will convene every five years to evaluate the
project's implementation and to mutually  agree on whether changes to the project are needed.

On an ongoing basis, information will be provided to enable stakeholders to evaluate Merck's performance
under the facility-wide emission caps.  This will ensure  that local stakeholders are well informed about
facility operations and the impact of incentives to minimize facility emissions. Merck has communicated
the project's progress with interested parties, including employees; Merck retirees; surrounding communi-
ties; local, state, and federal government officials; and others that expressed interest in the project.



The key focus areas for continued successful implementation of the FPA over the next six months will be
the following:
• Completion of the conversion of the coal-burning power plant to a natural-gas-burning plant.

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 Merck XL Project                                                                       (3-31-991
• Tedd Jett, Merck & Co., Inc., 540-298-4869
• Kathleen Henry, EPA Region 3, 215-814-2175
• Christ! Gordon, U.S. Department of the Interior, National Park Service, 540-999-3499
• Larry Simmons, VADEQ, 540-574-7810
* William O'Brien, Rockingham County Board of Supervisors, 540-564-3000



The information sources used to develop this progress report include: 1) discussions during a teleconfer-
ence among representatives of the federal and state regulatory agencies, Merck Stonewall Plant, and local
stakeholders involved in the project; 2) the Final Project Agreement for the Merck XL project; 3) a Preven-
tion of Significant Deterioration (PSD) permit issued by the Commonwealth of Virginia, Department of
Environmental Quality; and 4) a report prepared by Merck & Co., Inc., Merck Project XL PSD Permit
Support Document. The information sources are current through December, 1998.



Class I air quality area: Under the CAA, a Class I area is one in which visibility is protected more strin-
gently than under the NAAQS.  These areas include national parks, wilderness areas, monuments, and other
areas of special national and cultural significance.

Clean Air Act (CAA): The CAA is the comprehensive  federal law that regulates air emissions from area,
stationary, and mobile sources.  This law authorizes the U.S. EPA to establish National Ambient Air Qual-
ity Standards (NAAQS) and other regulations to protect public health and the environment.

Control technology: Equipment, processes, or actions used to reduce air pollution. The extent of pollution
reduction varies among technologies. In general, control technologies that do the best job of reducing
pollution are required in areas with the worst pollution.  For example, the best available control technology
will be required in  serious nonattainment areas for particulate matter, a criteria air pollutant. A similar high
level of pollution reduction will be required by MACT regulations for sources releasing HAPs.

Criteria air pollutants: The CAA requires EPA to set NAAQS for certain pollutants known to be hazardous
to human health. EPA has identified and set standards to protect human health and welfare for six criteria
air pollutants—ozone, CO, particulate matter, SO2, lead, and NOx. EPA must describe the characteristics
and potential health and welfare effects of these pollutants. It is on this basis that NAAQS are set or re-
vised.

Emissions cap: A limit designed to prevent growth in emissions from a facility's existing and future
operations above a specified limit. Generally, such provisions require that emission increases from one
operation be offset by reductions at other operations at the facility.

Hazardous Air Pollutants (HAP):  Air pollutants that are not covered by NAAQS, but that may present a
threat of adverse human health effects or adverse environmental effects. Examples of such pollutants
include asbestos, beryllium, mercury, benzene, coke-oven emissions, radionuclides, and vinyl chloride.

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       Merck XL Project                                                                       13-31-991
     Hazardous waste management unit: A contiguous area of land on which hazardous waste is placed, or the
     largest area in which there is significant likelihood of mixing hazardous waste constituents in the same
     area.

     Hydrogen Chloride: A colorless, pungent, poisonous gas that yields hydrochloric acid when dissolved in
     water.

     Hydrogen Fluoride: A colorless, corrosive gas that yields a hydrofluoric acid when dissolved in water.

     Maximum Available Control Technology (MACT): The emission standards for sources of HAPs requiring
     the maximum reduction of hazardous emissions, taking cost and feasibility into account. Under the CAA
     Amendments of 1990, the MACT standards must not be less than the average emission level achieved by
     controls on the best-performing 12% of existing sources, by category.

     National Ambient Air Quality Standards (NAAQS): Regulations promulgated by EPA under the CAA for
     six criteria pollutants—SO2, particulate matter, NOx, CO, ozone, and lead—in order to protect the public
     from the impacts of emissions to the atmosphere.

     New Source Review (NSR): The new source review (NSR) and prevention of significant deterioration
     (PSD) provisions of the CAA strive to ensure that potential new sources of air pollution (new plants or
     facilities, or additions to existing ones) take proper steps to minimize pollution levels. The goals of the
     NSR program are:  1) to ensure that an increase in emissions due to a new source or modification to an
     existing source does not significantly deteriorate air quality; 2) to ensure that source emissions are consis-
     tent with applicable state attainment plans;  and 3) to establish control technology requirements that maxi-
     mize production capacity while minimizing air-quality impacts.

     Nitrogen Oxides (NOJ: An air pollutant that is the result of photochemical reactions of nitric oxide in
     ambient air. Typically, it is a product of combustion from transportation and stationary sources. It is a
     major contributor to the formation of ozone in the troposphere, photochemical smog, and acid deposition.

     Ozone (O3): Ozone is found in two layers of the atmosphere, the stratosphere and the troposphere. In the
     stratosphere (the atmospheric layer 10 miles or more above the earth's surface), ozone is a natural form of
     oxygen that provides a protective layer, shielding the earth from ultraviolet radiation. In the troposphere
     (the layer extending up to 10 miles from the earth's surface), ozone is a major component of photochemi-
     cal smog. It can seriously impair respiratory systems, and is one of the most widespread of all the criteria
     pollutants. Ozone in the troposphere is produced through complex chemical reactions involving NOx,
     VOCs, and sunlight.

     Particulate Matter: Fine liquid or solid particles, such as dust, smoke, mist, fumes, or smog, found in air or
     emissions.

     Pollution Prevention Act (PPA): The Act that focuses on enhancing industry, government, and public
     attention on reducing the amount of pollution through cost-effective changes in  production, operation, and
     raw materials use. Pollution prevention includes practices that increase efficiency in the use of energy,
     water, or other natural resources, and that protect resources through conservation. These practices include
     recycling, source reduction, and sustainable agriculture.

     Precursor:  In photochemistry, a compound antecedent to a pollutant. For example, VOCs and NOx often
     react in sunlight to form ozone.  As such, VOCs and NO are precursors to ozone.
10

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 Merck XL Project
(3-31-991
Prevention of Significant Deterioration (PSD): The part of the NSR program in which state or Federal
permits are required to restrict emissions for new or modified sources in locations where air quality
already attains ambient air quality standards.

Resource Conservation and Recovery Act (RCRA): RCRA gives EPA the authority to control hazard-
ous waste from the "cradle-to-grave." This includes the generation, transportation, treatment,  storage,
and disposal of hazardous waste. RCRA also set forth a framework for the management of nonhazard-
ous wastes and underground storage tanks. RCRA focuses only on active and future facilities and does
not address abandoned sites.

Significant Ambient Air Concentrations (SAAC): Regulations promulgated by the Commonwealth of
Virginia under the CAA to protect the public from emissions of the six criteria pollutants to the atmo-
sphere.

State Implementation Plans (SIP): EPA-approved state plans for the establishment, regulation, and
enforcement of air pollution standards.

Sulfur dioxide (SO2): Sulfur dioxide gases are formed when fuel containing sulfur (mainly coal and
oil) is burned, during metal smelting, and during other industrial processes.  Sulfur dioxide is associated
with acidification of lakes and streams, accelerated corrosion of buildings and monuments, reduced
visibility, and adverse health effects, including effects on breathing, respiratory illness, and aggravation
of existing cardiovascular disease.

Title V of the Clean Air Act: Title V establishes a Federal operating permit  program that applies to any
major stationary facility or source of air pollution. The purpose of the operating permits program is to
ensure compliance with all applicable requirements of the CAA. Under the program, permits are issued
by states or, when a state fails to carry out the CAA satisfactorily, by EPA. The permit includes infor-
mation on which pollutants are being released, how much may be released,  and what steps the source's
owner or operator is taking to reduce pollution, including plans to monitor the pollution.

Variance: Government permission for a delay or exception in the application of a given law, ordinance,
or regulation.

Volatile Organic Compound (VOC): Any organic compound that evaporates easily into the atmosphere
and that participates in atmospheric photochemical reactions except for those designated by the EPA
Administrator as having negligible photochemical reactivity. VOCs are a precursor to the formation of
ozone, and as such, are subject to regulation under the NAAQS. VOCs also may be HAPs that are
subject to regulation under the MACT standards.
                                                                                                    11

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