&EPA
                  United States
                  Environmental Protection
                  Agency
                               Office of The Administrator
                               Washington, DC 20460
                               Mail Code 1802
Project XL  Progress  Report
Intel  Corporation
EPA 100-R-00-005
December 1999
www. e p a. g ov/re i n ve nt
                  On March 16,1995, the Clinton Administration announced a portfolio of reinvention initia-
                  tives 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 Leadership, EPA enters into
                  specific proj ect agreements with public or private sector sponsors to test regulatory, policy,
                  or procedural alternatives that will produce data and experiences to help the Agency make
                  improvements in the current system of environmental protection. The goal of Proj ect XL is to
                  implement 50 proj ects that will test ways of producing superior environmental performance
                  with improved economic efficiencies, while increasing public participation through active
                  stakeholder processes. As of September 1999,15 XL proj ects are in the implementation
                  phase and 3 5 XL proj ects are under development. EPAs Proj ect XL Progress Reports
                  provide overviews of the status of XL proj ects that are implementing Final Proj ect Agree-
                  ments (FPAs). The progress reports are available on the Internet via EPAs Proj ect XL web
                  site at http://www.epa.gov.Proj ectXL. Or, hard copies may be obtained by contacting the
                  Office of Reinvention's Proj ect XL general information number at (202) 260-7434. Addi-
                  tional information on Proj ect XL is available on the web site or by contacting the general
                  information number.

                  Background

                  Intel Corporation, the world's largest semiconductor manufacturer, has operated the Fab 12
                  facility in Chandler, Arizona since 1996. Fab 12 is Intel's newest chip fabrication facility
                  operating on the 720-acre Ocotillo site. Intel's Proj ect XL agreement applies to the entire
                  Ocotillo site, including any new semiconductor-related facilities that may be built at the site.
                  Intel is striving to reduce the environmental impact of its fabrication process by implementing
                  an environmental management master
                  plan that includes both voluntary and
                  mandatory commitments for environ-
                  mental performance, and is tailored to
                  meet both the operational needs of the
                  facility and the concerns of the local
                  community
                  In the highly competitive microproces-
                  sor industry, success is directly
                  related to a manufacturer's ability to
      Major Milestones
                                   Intel XL Project
                                   Chandler, Arizona
• 	 7 	
June 30, 1995
Intel XL Proposal
Submitted
s
November 19, 1996
Final Project Agreement
Signed
s
April, 1998
First Annual Stakeholder
Meeting
s
January 1999
Mid-Course
Review Meeting
	 7 	 •
December 3 1,2001
Termination/Renewal of
FPA

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Intel XL Project                                                                           12-31-99
  bring new technologies to the marketplace ahead of domestic and foreign competitors. The dynamic nature of
  this industry makes it crucial for a company to obtain maximum flexibility in its operations. Each new genera-
  tion of microprocessors requires continual process experimentation, involving frequent changes in equipment
  and process chemicals. A typical Intel plant can undertake 3 5 to 40 process chemical changes annually, and
  begin manufacturing a complete new generation of chips every 18 to 30 months. Given these operating
  characteristics, standard Federal air quality permit requirements increase the potential for delays in the devel-
  opment and production of new products and product lines. The Intel XL proj ect has the potential to minimize
  these delays and provide more flexibility in Intel's operations, by allowing the facility to make operational
  changes without a permit review for each change, as long as the overall permit limits are met.

  In the FPA and subsequent agreements, Intel has committed to limit emissions of criteria air pollutants and
  hazardous air pollutants (HAPs), and to meet other environmental goals that are designed to improve the
  area's air and water quality, conserve water, reduce the generation of hazardous and nonhazardous waste,
  and improve the general environmental performance of the facility. The anticipated environmental benefits from
  this proj ect are the following.
  • Maintaining a sitewide cap on air emissions for nitrogen oxides (NOx), sulfur dioxide (SO2), carbon mon-
    oxide (CO), particulate matter (PM-10), and volatile organic compounds (VOCs) at levels that ensure that
    the current site, including any future semiconductor manufacturing plants built there, is and remains a minor
    air emissions source, as defined by the Clean Air Act (CAA).
  • Using state guidelines to establish enforceable caps on emissions that may affect the community adj acent to
    the site. These standards also will be used to voluntarily set lower emissions levels to increase protection
    for those working at or vi siting the facility.
  • Conserving city water resources by increasing the amount of recycled manufacturing effluent to 65% of the
    volume of fresh water used, by 2001.
  • Reducing the amount of fresh water used by utilizing treated effluent for 95% of the water used in the
    semiconductor manufacturing cooling tower and for landscaping.
  • Recycling up to 60% of the solid waste and up to 70% of the nonhazardous chemical wastes the facility
    generates, by the year 2001.
  • Recycling an average of about half of the hazardous waste the facility generates over the five year period
    between 1997 and 2001.
  • Maintaining a minimum setback of 1,000 feet from the closest manufacturing-related building to residential
    property.
  • Reducing vehicle miles traveled by employees through a trip reduction program.
  • Participating in equipment donation and environmental education programs.

  The Experiment

  The Intel project's goal is to implement an Environmental Management Master Plan that includes a facilitywide
  cap on air emissions to replace individual permit limits for different air emission sources. The Intel proj ect
  provides a test case for two innovations for improving air permitting: (1) the elimination of case-by-case
  review of specific manufacturing process changes, if emissions remain under a capped amount; and (2)
  preapproval of a maj or plant expansion, if emissions remain below a capped amount for the entire site.

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 Intel XL Project                                                                           12-31-99
The Flexibility

The Intel XL Project establishes a long-term plan to minimize the Ocotillo facility's environmental impact on
local air, land, and water quality, to minimize both its use of fresh water and its generation of waste, and to
undertake a number of other actions to enhance the overall environmental quality of the community. As an
incentive to achieve environmental performance at the Ocotillo facility, EPA, the Arizona Department of Envi-
ronmental Quality (ADEQ), theMaricopa County Bureau of Air Pollution Control, and the City of Chandler
will provide a more flexible and cost-effective process for regulatory management. The FPA provides regula-
tory flexibility in the areas of air quality permitting, environmental performance reporting, and innovative tech-
nology.

The statutory programs, and the EPA offices administering the programs, that affect the Intel XL project are
the
•  Clean Air Act (CAA) programs administered by EPAs Office of Air Quality Planning and Standards;
•  Clean Water Act (CWA) programs administered by EPAs Office of Wastewater Management and EPAs
   Office of Wetlands, Oceans, and Watersheds;
•  Resource Conservation and Recovery Act (RCRA) programs administered by EPAs Office of Solid Waste;
   and
•  Pollution Prevention Act (PPA) programs administered by EPAs Office of Prevention, Pesticides, and Toxic
   Substances.
The parties to the FPA have designated the ADEQ as the coordinating agency for the FPA. This role includes
maintaining public records, coordinating implementation issues such as the conduct of inspections, and consid-
ering compliance issues or enforcement actions. The signatories anticipated that consolidating the coordination
into one agency would enhance the effective administration of the FPA, streamline regulatory oversight, and
help to coordinate approaches to environmental issues that arise at the Ocotillo site. The oversight of the air
quality permit conditions is delegated to the Maricopa County Environmental Services Department (MCESD).
The oversight of the industrial user wastewater discharge permit is designated to the City of Chandler.

Air Quality Permitting. The FPA and the revised air quality permit provide Intel with the flexibility to make
equipment and process changes and construct new facilities at the site without air quality permit reviews, as
long as the Plant Site Emission Limits (PSELs) are not exceeded and all other FPA and permit limits are met.
To provide an additional safety factor, Arizona Ambient Air Quality Guideline (AAAQG) limits for HAPs will
not be exceeded at the Intel facility property line or elsewhere on the site. This flexibility in air quality regulation
allows Intel to eliminate potentially 30-50 permit reviews a year and bring new products to market faster.

Environmental Performance Reporting. Compliance with PSELs will be verified through periodic emissions
reporting. EPA and Arizona are allowing Intel the flexibility to consolidate routine reports into four quarterly
reports and one annual report. The effluent discharge limitations, which are contained in a separate permit, are
incorporated into the FPA by reference. The reporting of these discharges is incorporated into the quarterly
and annual reports submitted under the FPA. This reporting system provides Intel with a more flexible reporting
format, and makes a consolidated environmental report available to the signatory agencies and the public. Also,
such periodic reporting will allow the public to verify that Intel has fully complied with the PSELs in the air
quality permit. These reports are available on the Internet via EPAs Proj ect XL web site at http://
www. epa. gov.Proj ectXL.

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Intel XL Project                                                                           12-31-99
 Promoting Innovation and System Change

 Proj ect 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 proj ects are
 helping to promote innovation and system change. The innovations and system changes emerging from the Intel
 XL proj ect are described below.

 Consolidated Reporting. The XL proj ect allows Intel to consolidate the reporting for Federal, state, and local
 permitting and regulatory programs into one annual and four quarterly reports and to make these reports avail-
 able on the Internet. Internet reports cover air emissions quality, water and wastewater use and quality, and solid
 and hazardous waste management, with the exception of the Toxic Release Inventory (TRI) reports which,
 under the Emergency Planning and Community Right-to-Know Act (EPCRA), are required to be prepared and
 submitted separately. EPA anticipates that this innovation in consolidated reporting will be incorporated into
 future XL proj ects, as EPA will work with sponsors, other regulatory authorities, and stakeholders to develop
 similar reporting formats and to make them available on the Internet. This proj ect will serve as a test for
 sectorwide collection of higher quality information from regulated industries, and directly influence the develop-
 ment of the comprehensive information management plan to be developed by EPAs Office of Environmental
 Information.

 Enhancing Public Access: Internet Reporting and Stakeholder Input. The Intel project has two innovations
 designed to improve public access to information: (1) using stakeholder input to help redesign the content and
 format of the reports on the environmental performance of the Ocotillo facility; and (2) making these reports
 available on the Internet. This reporting format was designed in conjunction with the EPA, the Arizona DEQ, the
 Maricopa County Bureau  of Air Pollution Control, the City of Chandler, and area residents who are part of the
 stakeholder team. Based on input from the team, Intel agreed to put routine environmental reports and account-
 ability measures into a single, integrated report that is publicly available on the Internet via Intel's Project XL
 website. The site also includes the proj ect's historical information, such as minutes of previous public meetings,
 and public comments and responses. Now citizens, as well as regulatory officials, can routinely monitor the
 facility's progress towards  its environmental commitments. This approach tests the value of getting comprehen-
 sive environmental information directly from the company. Although the long-term goal is to merge Intel's
 Internet form directly into the state and local agency information systems, for the time being, all data must be re-
 entered. The multi-stakeholder input approach and the Internet access to information have proven so innovative
 that EPA has incorporated Intel's approach into the "Guide to XL Project Teams - Project Tracking and Re-
 porting," which strongly encourages all future proj ects to develop similar Internet reporting formats with inter-
 ested stakeholders. The Agency has a number of efforts under way to improve public access to facility environ-
 mental information. The experience gained through this reporting approach will contribute to the development of
 a process for disseminating high quality information to regulatory authorities and the public.

 Air Permits. The Intel XL project is testing two of several alternatives for improving air permitting. These
 include preapproval and elimination of review of specific manufacturing process changes, if emissions remain
 under a capped amount; and preapproval of a major plant expansion, if emissions remain below a capped
 amount for the entire site. These emission caps are set at levels low enough for the entire site to remain a minor
 source of criteria and hazardous air pollutants under the CAA. These tests will directly influence EPAs sector-
 based action plan and the Agency's permit reform efforts.

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 Intel XL Project
                                       12-31-99
Project Commitment Summary
This table and the environmental performance section that follows summarize progress in meeting commitments
described in the FPA for Intel's facility in Ocotillo, Arizona.
  Commitment
  Status
                               Plant Site Emission Limits (PSELs)
 Limit the emissions of the following: volatile organic
 compounds (VOCs), inorganic hazardous air pollut-
 ants (HAPs), organic HAPs, nitrogen oxides (NOx),
 carbon monoxide (CO), particulate matter (PM-10),
 phosphine, sulfuric acid, and any new chemical that is
 brought onsite that produces air emissions.
All PSELs have been achieved through the third
quarter of 1999.
 Limit the level of emissions of total VOCs and
 aggregate HAPs so that air emissions per unit of
 production will not increase in the future. To enable
 Intel and the public to monitor progress in meeting this
 commitment, Intel has voluntarily agreed to establish a
 production-based performance standard.
In 1996, Intel voluntarily established a standard
based on the "production unit factor" (PUF). The
PUF is a measure of annual semiconductor output.
The standard is expressed annually as tons of emis-
sions (VOCs or HAPs) per PUF. A baseline value
was established for 1997 emissions and production
levels. Each year Intel reports the annual value for the
reporting year relative to the 1997 baseline value.
Performance measures for 1998 were compared to
the 1997 baseline and included in the 1998 Annual
Report.
                            Air Quality Evaluation and Management
 Screen modeling whenever Intel uses a new chemical
 for which Arizona Ambient Air Quality Guidelines
 (AAQG) have been established.
In the fourth quarter of 1997, screen modeled four
new chemicals associated with the 0.25 micron
manufacturing process.
 For new chemicals introduced to the site that generate
 air emissions, that have not been evaluated under the
 air permit or AAAQG screen modeling procedures,
 and that present potential concerns for human health
 or the environment, there must be a special analysis of
 the chemicals performed, and the Maricopa County
 Environmental Services Department and the Arizona
 Department of Health Services must be consulted.
No consultation has been required since the new
chemicals that have been introduced have been
evaluated.

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Intel XL Project
12-31-99
Commitment Status
Reporting of Air Emissions
Quarterly report of actual air emissions of all
pollutants subj ect to PSELs or limits otherwise
identified.
Annual summary of actual aggregate emissions of all
pollutants subj ect to PSELs or limits otherwise
identified.
Annual summary of known actual individual HAP
emissions above 1,000 pounds per year.
Annual list of known individual HAPs emitted in
quantities less than or equal to 1 ,000 pounds per
year.
Annual report of VOCs & HAPs per unit of
production (PUF), expressed as a ratio to the 1997
value.
Quarterly reports through the third quarter of 1 999
filed on schedule.
Annual summary for 1998 filed on schedule. Quar-
terly reports include summaries for previous 12
months.
The 1 998 annual report indicates there were no
individual HAP emission above 1,000 pounds.
The 1998 annual report includes aggregate amounts
of emissions of known HAPs, and lists four organic
and four inorganic HAPs that fall into this category.
The 1998 report indicates a 0.3 ratio for VOCs and
a 0.7 ratio for HAPs. This means that the VOC and
HAP emissions in 1998 were less than 1997 VOC
and HAP emissions per unit of production.
General Reporting
Prepare consolidated reports quarterly for signatory
agencies, and make the reports available to the
public.
Prepare annual summary report.
Completed all 10 quarterly reports through the third
quarter of 1999.
Completed 1998 annual report.
Water and Wastewater Use
Manufacturing effluent will be treated for reuse or
reinj ection into the groundwater supply, according to
the foil owing timetable: 45% of freshwater volume
intake in 1997, 55% in 1999, and 65% in 2001 .
The Mid-course Review of January 1999 established
a goal requiring using treated effluent water for 95%
of water used for cooling tower makeup and land-
scaping. This goal was revised from 100% in the
FPA.
Achieved 66% for 1997, 61% for 1998, and 60%
for the first three quarters of 1 999.
Achieved 80% for 1997, 97% for 1998, and 98%
for the first three quarters of 1 999.
Management of Stormwater
Use secondary containment areas, best management
practices, and retention basins.
Achieved prior to signing of FPA.
Management of Waste
Recycle substantial portions of solid, hazardous, and
nonhazardous chemical waste, according to a
schedule in the FPA.
Achieved through the third quarter of 1 999.

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 Intel XL Project
12-31-99
Commitment | Status
Intel Corporate Design for the Environment Program (DFE)
Implement the corporate DFE program, which seeks
to develop environmentally compatible processes and
products.
Being implemented as part of Intel's corporatewide
effort to design improvements for environmental
management and performance into manufacturing
processes during the development stage.
Chemical Spill Contingency Planning
Implement a single emergency plan for the facility that
integrates all applicable environmental requirements as
they relate to emergency planning.
Emergency plan was implemented in the first quarter
of 1997.
Trip Reduction Program for Intel Employees
Implement and maintain ongoing car pool and other
trip reduction activities.
Ride share registration grew from 23 1 by 9/30/97 to
951 by 9/3 0/98.
Property Setback for the Site
Maintain a minimum setback of 1 ,000 feet from the
closest manufacturing-related building to residential
property, and use contoured landscaping to add to the
aesthetic appeal of the setback.
The 1,000 foot setback has been maintained for all
plant expansions.
Environmental and Education in the Community
Ongoing participation in environmental mentoring and
educational activities targeted at various groups in the
community
First three quarters of 1 999 community volunteer
activities included assuming a leadership role in
coordinating ozone alert program; participating in the
Arizona Nature Conservancy; assisting in refurbishing
a community center; participating in the annual
EarthFest celebration; presenting a program to over
3 1,000 students emphasizing math, science, and
technology; and providing Arizona State University
with reusable/recyclable materials for campus
projects.
Donation of Computers and Manufacturing Equipment
Ongoing program to donate new and used computers
to schools and libraries, and used manufacturing
equipment to universities.
Donated 1,663 personal computers in 1998. Do-
nated 1 ,428 personal computers through the third
quarter of 1999.
Environmental Performance

This section summarizes progress in meeting the environmental performance commitments described in the
FPA for Intel. It compares the FPA goals to what would have been required under conventional environmental
regulations for minor sources in National Ambient Air Quality Standards (NAAQS) nonattainment areas.
Because the plant was new at the time the FPA was developed, there were no data upon which to establish a
baseline. Therefore, the "baseline" used in this section is based on what a conventional minor source permit

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Intel XL Project
                         12-31-99
  might have allowed. All the air quality permit and wastewater discharge permit commitments are enforceable
  undervarious environmental laws. There are no regulatory requirements for the other commitments.
  Ocotillo Plant Environmental Performance
   TPY=tons per year
   T-YTD=tons-year to date (9/30/99)
  Volatile Organic Compounds (VOCs): Intel has
  committed to capping the emissions of VOCs at 40 TPY
  for the entire facility. The FPA provides Intel the flexibility
  to make changes to the existing manufacturing operations
  and to expand the plant, as long as the entire Ocotillo site
  stays within this and other established limits. The baseline
  shown is based on an estimate of what would have been
  allowed under a conventional minor source air quality
  permit.
  Progress: The facility has remained well under the limit for
  1997,1998, and for the first three quarters of 1999.
  Nitrogen Oxides (NOx): Intel has committed to capping
  the emissions of NO at 49 TPY for the entire site. The
                    X
  FPA provides Intel the flexibility to make changes to
  existing manufacturing operations and to expand the plant,
  as long as the entire site stays within this and other estab-
  lished limits. The baseline shown is based on an estimate
  of what would have been allowed under a conventional
  minor source air quality permit.
  Progress: The facility has remained well under the limit for
  1997,1998, and for the first three quarters of 1999.
  Carbon Monoxide (CO): Intel has committed to capping
  the emissions of CO at 49 TPY for the entire site. The
  FPA provides Intel the flexibility to make changes to the
  existing manufacturing operations and to expand the plant,
  as long as the entire site stays within this and other estab-
  lished limits. The baseline shown is based on an estimate
  of what would have been allowed under a conventional
  minor source air quality permit.
  Progress: The facility has remained well under the limit for
  1997,1998, and for the first three quarters of 1999.
Volatile Organic Compounds Emissions
           20    30
           Tons per Year
   Nitrogen Oxide Emissions
 i     10    20    30    40
           Tons per Year


 Carbon Monoxide Emissions
     20
           40    60
           Tons per Year
                       80
                              less than
                               50
                             less than
                               50
                              less than
                               100
                            100

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 Intel XL Project
                                    12-31-99
Sulfur Dioxide (SOJ: Intel has committed to capping the
emissions of sulfur dioxide at five TPY for the entire site.
The FPA provides Intel the flexibility to make changes to
the existing manufacturing operations and to expand the
plant, as long as the entire site stays within this and other
established limits. The baseline shown is based on an
estimate of what would have been allowed under a conven-
tional minor source air quality permit.
Progress: The facility has remained well under the limit for
1997,1998, and for the first three quarters of 1999.
Particulates (PM10): Intel has committed to capping
the emissions of parti culate matter at five TPY for the
entire site. The FPA provides Intel the flexibility to make
changes to the existing manufacturing operations and to
expand the plant, as long as the entire site stays within
this and other established limits. The baseline shown is
based on an estimate of what would have been allowed
under a conventional minor source air quality permit.
Progress: The facility has remained well under the limit
for 1997, 1998, and for the first three quarters of 1999.
Aggregate Combined Organic Hazardous Air
Pollutants (HAPs): Intel has committed to capping the
emissions of organic HAPs at  10 TPY for the entire site.
Organic HAPs include methanol, xylene, and ethylene
glycol. The FPA provides Intel the flexibility to make
changes to the existing manufacturing operations and to
expand the plant, as long as the entire site stays within this
and other established limits.  The baseline of 25 TPY refers
to a total of organic and inorganic HAPs, which is what
would have been allowed under a conventional minor
source air quality permit. (The combined total commitment
for organic and inorganic HAPs under the XL permit is now
20 TPY.)

Progress: The facility has remained well under the limit for
1997,1998, and for the first three quarters of 1999.
                                                                   Sulfur Dioxide Emissions
1998 Actual
1997 Actual
        0     50     100    150    200    250
                    Tons per Year


              Particulate Emissions
                                      less than
                                        70
              15
                    30     45
                    Tons per Year
                                60
                                      75
             Aggregate Combined Organic
           Hazardous Air Pollutants Emissions
        0     5     10     15     20     25
                    Tons per Year

           *The baseline includes combined
           organic and inorganic HAPs

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      Intel XL Project
                                  12-31-99
        Aggregate Combined Inorganic Hazardous Air
        Pollutants (HAPs): Intel has committed to capping the
        emissions of inorganic HAPs at 10 TPY for the entire site.
        The FPA provides Intel the flexibility to make changes to
        the existing manufacturing operations and to expand the
        plant, as long as the entire site stays within this and other
        established limits. The baseline of 25 TPY refers to a total
        of organic and inorganic HAPs, which is what would have
        been allowed under a conventional minor source air quality
        permit. (The combined total commitment for organic and
        inorganic HAPs under the XL permit is now 20 TPY.)
        Progress: The facility has remained well under the limit for
        1997,1998, and for the first three quarters of 1999.
        Phosphine: Intel has committed to capping the emissions
        of phosphine at four TPY for the entire site. The FPA
        provides Intel the flexibility to make changes to the existing
        manufacturing operations and to expand the plant, as long
        as the entire site stays within this and other established
        limits. The baseline of 10 TPY is based on what the CAA
        would allow for a specific HAP under a conventional
        minor source air quality permit.
        Progress: The facility has remained well under the limit for
        1997,1998, and for the first three quarters of 1999.
        Sulfuric Acid: Intel has committed to capping the
        emissions of sulfuric acid at nine TPY for the entire site.
        The FPA provides Intel the flexibility to make changes
        to the existing manufacturing operations and to expand
        the plant, as long as the entire site stays within this and
        other established limits. The baseline of 10 TPY is
        based on what the CAA would allow under a conven-
        tional minor source air quality permit.
        Progress: The facility has remained well under the limit
        for 1997, 1998, and for the first three quarters of 1999.
        Arsine: Intel has committed to capping emissions of arsine
        at less than 14 pounds per year for the entire site. Arsine
        was added to the list of chemicals in late 1998, and Intel
        began reporting it in the first quarter of 1999. The FPA
        provides Intel the flexibility to make changes to existing
        manufacturing operations and to expand the plant, as long
        as the entire site stays within this and other established
        limits.
        Progress: The facility has remained well under the limit for
        the first three quarters of 1999.
             Aggregate Combined Inorganic
           Hazardous Air Pollutants Emissions
1998 Actual
              5     10     15     20     25
                    Tons per Year
          *The baseline includes combined
          organic and inorganic HAPs
                Phosphine Emissions
               2468
                     Tons per Year


               Sulfuric Acid Emissions
                     4     6
                     Tons per Year


                 Arsine Emissions
         - Not applicable
         - Not applicable
                                        10
                                        10
        0    2    4   6    8   10    12   14
                    Pounds per Year
10

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 Intel XL Project
                                                                                            12-31-99
                                                               Total VOC Emissions Per Unit of Production
                                                        Baseline (1997)
VOC Emissions Per Unit of Production: Intel has
committed to limit the level of emissions of total VOCs so
that air emissions per unit of production will not increase in
the future. The 1997 emissions and production levels were
used to establish a baseline ratio of emissions per unit of
semiconductor production. To enable Intel and other
stakeholders to monitor progress in meeting this commit-
ment, Intel has voluntarily established a production measure
called a "production unit factor" (PUF). A PUF is a
measure of annual semiconductor output (square inches of
silicon processed divided by feature size; the feature size is
the width of the smallest transistor, which was 0.35 microns
in 1997). The performance is measured annually as tons of emissions of VOCs divided by the PUF divided by
the 1997 value for this ratio. The 1997 value for VOCs, which was 1.28E"06, is set equal to 1.0 to express the
baseline in the form an index. Each year Intel reports the annual value relative to the 1997 baseline value.

Progress: The value for VOCs for 1998 relative to 1997was0.3. This means that the VOC emissions
released in 1998 per unit of production in 1998 was less than that for 1997.
                                                                      0.2    0.4    0.6    0.8
                                                                        Tons perYear/PUF/1997 value
                                                                   Aggregate Hazardous Air Pollutant
                                                                   Emissions Per Unit of Production
                                                        Baseline (1997)
Aggregate HAPs Emissions Per Unit of Production:
Intel has committed to limit the level of emissions of total
HAPs, so that HAP emissions per unit of production will
not increase in the future. The 1997 emissions and produc-
tion levels were used to establish a baseline ratio of emis-
sions per unit of semiconductor production. To enable Intel
and other stakeholders to monitor progress in meeting this
commitment, Intel has voluntarily established a production
measure called a "production unit factor" (PUF). A PUF is
a measure of annual semiconductor output (square inches
of silicon processed divided by feature size; the feature size
is the width of the smallest transistor, which was 0.35
microns in 1997). The performance is measured annually as tons of emissions of HAPs divided by the PUF
divided by the 1997 value for this ratio. The 1997 value for HAPs, which was 9.40E"08, is set equal to 1.0 to
express the baseline in the form of an index. Each year Intel reports the annual value relative to the 1997
baseline value.

Progress: The value for HAPs for 1998 relative to 1997 was 0.7. This means that the HAP emissions re-
leased in 1998 per unit of production in 1998 was less than that for 1997.
                                                                 0.0
                                                                      0.2    0.4    0.6    0.8
                                                                        Tons per Year/PUF/1997 value
                                                                                              1.0
City Water Reuse: Intel has committed to increase the
amount of water sent for recycling to the city's effluent
treatment and recharge facility, according to the following
timetable: 45% of freshwater volume in 1997, 55% in
1999, and 65% in 2001. There is no regulatory requirement
or previous standard that might be considered a baseline,
although water conservation is a priority environmental goal
in this arid region.
                                                          1999YTD
                                                         1998 Actual
                                                         1997 Actual
                                                        Performance
                                                            Goals
                                                                        City Water Reuse
                                                                                      60%
                                                                                       66%
                                                                                 45%
                                                                        1999 Goal
                                                                                    55%
                                                                        2001 Goal
                                                                                       65%
                                                                       20     40     60    80
                                                                          Percent of Freshwater Volume
                                                                                                 100
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      Intel XL Project
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        Progress: For 1998 and the first three quarters of 1999, the facility has exceeded the agreed-upon goal for
        1999. In 1998, Intel recycled 399 million gallons and, in the first three quarters of 1999,243 million gallons.
                                                                    Use of Treated Manufacturing Wastewater
Use of Treated Wastewater: Intel has committed to using
treated effluent water for semiconductor manufacturing
cooling tower makeup and landscaping. The treated effluent
will come from the city's wastewater reclamation facilities
and treated wastewater from its manufacturing operations.
There is no regulatory requirement or previous standard that
might be considered a baseline, although water conservation
is a priority environmental goal in this arid region.
Progress: The facility achieved 97% in 1998, and reports
that it achieved 98% for the first three quarters of 1999.
The original goal set in the FPA was 100%. However,
based on a review of the system design and after spending
$300,000 annually for phosphate treatment, the company informed the stakeholders that it would not likely be
able to achieve more than 95%, without spending significant resources on additional treatment systems. The
95% goal was approved at the Mid-Course Review in January 1999. In 1998 Intel reused 183 million gallons
and, in the first three quarters of 1999,155 million gallons.
                                                                              20
                                                                                    40    60
                                                                                      Percent
                                                                                                 80
                                                                                                       100
        Solid Waste Recycling: Intel has committed to recycle
        substantial portions of solid and hazardous waste accord-
        ing to the following schedule: 40% in 1997, 55% in 1999,
        and 60% in 2001. There is no regulatory requirement or
        previous standard that might be considered a baseline.
        Progress: In 1998 and the first three quarters of 1999,
        the facility has exceeded the agreed-upon rate for solid
        waste recycling for 2001. In 1998, Intel recycled 1,284
        tons of solid waste and, in the first three quarters of 1999,
        1,161 tons.
        Hazardous Waste Recycling: Intel has committed to
        recycle substantial portions of hazardous waste generated
        at the plant complex  according to the following schedule:
        60% in 1997, 50% in 1999, and 40% in 2001. Intel
        anticipates that the percentage of hazardous waste to be
        recycled will decrease because it expects to reduce the
        amount of hazardous waste generated at this site through
        pollution prevention measures. There is no regulatory
        requirement or previous standard that might be considered
        a baseline.
        Progress: In 1998 and the first three quarters of 1999, the
        facility has exceeded the 1999 goal of 50%. Actual tons
        recycled were 3 42 in 1998 and 276 in the first three
        quarters of 1999.
                                                                 Solid       Recycling
                                                        1999YTD
                                                       1998 Actual
                                                       1997 Actual
                                                      Performance
                                                          Goals
                                                                                      67%
                                                                              42%
                                                                   1997 Goal
                                                                            ] 40%
1999 Goal
                                                                   2001 Goal
               55%
               ~1 60%
                                                                     20
                                                                            40     60
                                                                              Percent
                                                                                        80
                                                                                              100
                                                                Hazardous Waste Recycling
                                                        1999YTD
                                                       1998 Actual
                                                       1997 Actual
                                                       Performance
                                                           Goals
                                                                                      69%
                                                                                      67%
                                                                     1997 Goal
                                                                                    60%
             50%
                                                                     2001 Goal  | 4Q%
                                                                     20
                                                                            40     60
                                                                              Percent
                                                                                         80
                                                                                               100
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Intel XL Project
                        12-31-99
                                                          Nonhazardous Chemical Waste Recycling

                                                                                 64%
                                                    1998 Actual
                                                    1997 Actual
                                                    Performance
                                                        Goals
                                                                            49%
                                                                                58%
1999 Goal
               50%
                                                              2000 Goal
                                                                  20
                                                                        40    60
                                                                          Percent
                                                                                    80
                                                                                          100
Nonhazardous Chemical Waste: Intel has committed to
recycle substantial portions of nonhazardous chemical
waste according to the following schedule: 25% in 1997,
50% in 1999, and 70% in 2001. There is no regulatory
requirement or previous standard that might be considered
a baseline.

Progress: The facility has almost achieved the 1999 goal
for all of 1998, and is exceeding that goal in the first three
quarters of 1999.  Intel recycled 415 tons of nonhazardous
chemical waste in 1998, and 484 tons during the first three
quarters of 1999.

Stakeholder Participation

Intel has worked to involve stakeholders in the design of its XL proj ect. Stakeholder involvement efforts during
negotiation of the  FPA included
•  use of a Community Advisory Panel (CAP) consisting of area residents to serve as a full partner in the
   project's development;
•  an outreach effort to local citizens (including 25,000 hand-delivered notices);
•  the involvement of national, regional, and local nongovernmental organizations that provided substantial
   comments on the project; and
•  the use of EPA  and Intel web sites to enhance accessibility to proj ect development and implementation
   information.
Intel has established a Stakeholder Team to ensure the involvement of national, regional, and local regulatory
authorities and citizens in the project's implementation. This team meets once a quarter to review the project's
progress reports. The most recent meeting was held in November 1999. A Mid-course Review meeting was
held in January 1999  and a second annual stakeholder and general public meeting was held in April 1999. All
quarterly and annual reports are published on Intel's web site to make its environmental data publicly available
as part of a standard reporting mechanism.

Six-Month Outlook

•  Complete quarterly progress report for the fourth quarter of 1999, within 60 days after the close of the
   quarter.
•  Plan and implement an annual stakeholders and general public meeting in April 2000.
•  Plan quarterly stakeholder meetings for February and May 2000.

Stakeholder Team

•  Jim Larsen, Intel Corporation, (480) 715-0206.
•  Colleen McKaughan, EPA Region 9, (520)498-0118.
•  Katherine Dawes, EPA Headquarters, (202) 260-8394.
•  Gregg Workman, ADEQ, (602) 207-4337.
•  Jo Crumbaker, Maricopa County Bureau of Air Pollution Control, (602) 506-6705.
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      Intel XL Project                                                                           12-31-99
        • Pat Sampson, City of Chandler, (480) 786-2396.
        • Pat Mariella, Gila River Indian Community Department of Environmental Quality, (520) 562-2234.
        • Steve Brittle, local citizen, (602) 268-6110.
        • Barbara Knox, local citizen, (480) 963-3802.
        • Jim Lemmon, local citizen, (480) 941-5517.
        • Dave Matusow, local citizen, (480) 899-9425.

        Information Sources

        The information sources used to develop this progress report include: (1) discussions during a teleconference
        among representatives of the U.S. EPA, Intel Corporation, Arizona DEQ, Maricopa County, City of Chandler,
        and local residents serving on the Intel CAP; (2) the FPA for the Intel XL project; and (3) annual, quarterly,
        and midcourse review reports prepared by Intel Corporation. The information sources are current through
        September 1999.
        Glossary
        Arsine (AsH3): Arsine is a colorless flammable, poisonous gas with an odor like garlic. It is used, among other
        things, in the processing of semiconductors.

        Baseline: The measure by which future environmental performance can be compared.

        Carbon Monoxide (CO): A colorless, odorless, poisonous gas produced by incomplete fossil fuel combustion.

        Clean Air Act (CAA): This act is the comprehensive Federal law that regulates air emissions from area,
        stationary, and mobile sources. This law authorizes EPA to establish the National Ambient Air Quality Stan-
        dards (NAAQS) to protect public health and the environment.

        Clean Water Act (CWA): The CWA sets the basic structure for regulating discharges of pollutants to waters of
        the United States. The law gives EPA the authority to set technology-based effluent standards on an industry
        basis and continues the requirements to set water quality standards for all contaminants in surface water. The
        CWA makes it unlawful for any person to discharge any pollutant from a point source into navigable waters
        unless a National Pollutant Discharge Elimination System (NPDES) permit is obtained under the Act.

        Community Advisory Panel (CAP): An advisory group consisting of area residents.

        Criteria Air Pollutants: The CAA requires EPA to set NAAQS for certain air pollutants known to be hazard-
        ous to human health. EPA has identified and set standards to protect human health and welfare for six criteria
        air pollutants -ozone, carbon monoxide, total suspended particulates, sulfur oxide, lead, and nitrogen oxide.

        Effluent: Treated or untreated wastewater that flows out of a treatment plant, sewer, or industrial outfall.
        Generally refers to wastes discharged into surface water.

        Emissions Cap: A measure designed to prevent projected growth in emissions from both existing and future
        stationary sources from exceeding any mandated levels. Generally, such provisions require that any emission
        increase from equipment at a facility be offset by emission reductions from other equipment under the same
        cap.

        Final Project Agreement (FPA): The FPA outlines the details of the XL project and each party's commitments.
        The project's sponsors, EPA, State agencies, Tribal governments, other regulators, and direct participant
        stakeholders negotiate the FPA.
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 Intel XL Project                                                                            12-31-99
Hazardous Air Pollutants (HAPs): Air pollutants that are not covered by NAAQS but that may have an
adverse effect on human health effects or the environment. Such pollutants include asbestos, beryllium, mer-
cury, benzene, coke-oven emissions, radionuclides, and vinyl chloride. Organic HAPs include methanol,
xylene, and ethylene glycol.

Hazardous Waste: By-products of society that can pose a substantial or potential hazard to human health or
the environment when improperly managed. Hazardous waste possesses at least one of four characteristics
(ignitability, corrosivity, reactivity, or toxicity), or appears on special EPA lists.

Hazardous Waste Recycle: Materials that are specifically designated as hazardous waste under EPA's Re-
source Conservation and Recovery Act (RCRA) regulations. The percentage recycled is calculated by dividing
the quantity of hazardous waste sent off for beneficial recycle and energy recovery by the total quantity of
hazardous waste generated and shipped offsite.

Media: Specific environments —air, water, soil—which are the subject of regulatory concern and activities.

Multi-media: Several environmental media, such as air, water, and land.

National Ambient Air Quality Standards (NAAQS): Standards established by EPA under the Clean Air Act
applicable to outdoor air throughout the country.

National Pollutant Discharge Elimination System (NPDES): A provision in the CWA that prohibits the dis-
charge of pollutants into  the waters of the United States unless a special permit is issued by EPA, a state, or
where delegated, by a Tribal government or Indian reservation.

Nitrous Oxides (NOx): 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 maj or contributor
to the formation of tropospheric ozone, photochemical smog, and acid deposition.

Nonattainment Area: A designated geographic area that does not meet one or more of the NAAQS for the
criteria pollutants designated in the CAA.

Nonhazardous Chemical Waste Recycle: Used chemical materials which are collected for the purpose of
returning them into beneficial reuse. They are classified as nonhazardous based upon EPA's definition set forth
under RCRA. The percentage recycled is calculated by dividing the amount of material in this category by the
total quantity of waste generated.

Paniculate Matter (PM-10): Fine liquid or solid particles, such as dust, smoke, mist, fumes, or smog, found in
air or emissions.

Phosphine: Phosphine occurs as a colorless, flammable gas that is slightly soluble in water. It is used as an
intermediate in the synthesis of flame retardants for cotton fabrics, as a doping agent for n-type semiconduc-
tors, a polymerization initiator, and a condensation catalyst.

Plant Site Emissions Limits (PSELs): Plant site emissions limits are facility-based emission caps that allow
production changes and facility expansion without recurring air quality permit reviews.

Pollution Prevention Act (PPA): This 1990 law was passed to reduce or eliminate industrial pollutants through
technology transfer, education, and public awareness.  The programs developed under the PPA are adminis-
tered by EPA's Office of Prevention, Pesticides, and Toxic Substances.

Production Unit Factor (PUF): A measure of annual semiconductor output. The PUF = square inches of
silicon processed/feature size. Feature size is the width of the smallest transistor.
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     Intel XL Project
12-31-99
       Resource Conservation and Recovery Act (RCRA): Passed in 1976, RCRA gives EPA the authority to
       control hazardous waste from the "cradle-to-grave." This includes the generation, transportation, treatment,
       storage, and disposal of hazardous waste. RCRA also sets forth a framework for the management of nonhaz-
       ardous waste. RCRA enables EPA to address environmental problems that could result from underground
       storage tanks storing petroleum and other hazardous substances. RCRA focuses only on active and future
       facilities and does not address abandoned  sites.

       Solid Waste: Nonliquid, nonsoluble materials ranging from municipal garbage to industrial wastes that contain
       complex and sometimes hazardous substances. Solid wastes also include sewage sludge, agricultural refuse,
       demolition wastes, and mining residues. Technically, solid waste also refers to liquids and gases in containers.

       Solid Waste Recycle: Includes materials designated under RCRA as nonhazardous waste such as paper,
       plastics, aluminum, glass, and wood. The percentage recycled is calculated by dividing the quantity of materials
       within this category that are sent to beneficial recycle by the total volume of solid waste shipped offsite.

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

       Toxic Release Inventory (TRI): Database of toxic releases in the United States compiled from Superfund
       Amendments and Reauthorization Act of  1986 (SARA) Title III Section 313 reports.

       Volatile Organic Compounds (VOCs): Any organic compound that easily evaporates and participates in
       atmospheric photochemical reactions, except those designated by EPA as having negligible photochemical
       reactivity.

       Wastewater: Spent or used water from a home, community,  family, or industry that contains dissolved or
       suspended matter.
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