XL Project Progress Report
         OSi  Specialties
         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,
         and 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 October 1998,10 XL projects are in the implementation
         phase and 20 XL projects are under development. Project XL Progress Reports provide
         proj ect-specific overviews of the status of individual XL proj ects that are implementing Final
         Project Agreements (FPAs). The progress reports are available on the Internet via EPAs
         Project XL web site at http://www.epa.gov/Project XL. Or, hard copies may be obtained by
         contacting the Office of Reinvention's Project XL Docket at 202-260-7434. General
         information on Proj ect XL is available on the web site or by contacting the general informa-
         tion number at 202-260-5754.
         Background
         OSi Specialties, Inc. is a specialty
         chemical manufacturer. This XL project
         focuses on OSi's chemical manufactur-
         ing plant located 6 miles south of
         Sistersville, West Virginia, where OSi
         produces abroad range of silicone and
         silane products including surfactants,
         emulsions, antifoams, and oils. The
         facility is located along the east side of
         the Ohio River in a rural setting near the
OSi Specialties
XL Project
Sistersville,
West Virginia
Major Milestones
• 	 7 	
September 29, 1995
OSi XL Proposal
Submitted
s
October 17, 1997
Final Proj ect
Agreement Signed
s
December 11, 1998
Waste Minimization/
Pollution Prevention
Study Report Completed
s
July 31, 1999
First Annual
Report Due
	 7 	 •
2002 Project
Reevaluation

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 OSi Specialties XL Project
border of Tyler and Pleasants Counties. The operating units are situated centrally within the facility and encom-
pass approximately 50 acres.

The OSi XL project strives to reduce air emissions through a combination of flexible air pollution control and
waste minimization/pollution prevention (WMPP) activities. The poly ether methyl capper unit is the focus of
emission control efforts. The capper unit is the site of a two-step reaction that results in one of OSi's products,
methyl-capped poly ether. Also involved in this proj ect are the facility's generation of solid waste and the lined
one-million-gallon surface impoundments that contain process wastewater.

In return for a deferral of certain air emissions standards, OSi will achieve superior environmental performance
at this facility by:
* Installing a process vent incinerator that will destroy 98% by weight of certain air emissions (i.e., the organic
  compounds in the facility's process vent stream), or about 271,000 pounds per year;
• Recovering and reusing an estimated 500,000 pounds of methanol per year that would otherwise generate
  815,000 pounds of sludge per year;
• Reducing methanol emissions from the wastewater collection and treatment systems by 38,000 pounds per
  year; and
« Conducting a WMPP study to identify opportunities for additional reductions in waste generated by the
  facility




As an incentive to achieve superior environmental performance at OSi's facility, EPA and the West Virginia
Divi sion of Environmental Protection (W VDEP) are offering regulatory flexibility in the areas of pollution
control technology and air emissions.

The statutory programs, and the EPA offices administering those programs, that affect the OSi XL Project are:
* Clean Air Act (CAA) programs administered by EPA's Office of Air Quality Planning and Standards;
• Resource Conservation and Recovery Act (RCRA) programs administered by EPA's Office of Solid Waste; and
« Pollution Prevention Act programs administered by EPA's Office of Prevention, Pesticides, and Toxic
  Substances.
EPA's Region 3 office also is active in the development and implementation of the OSi XL proj ect as a member
of the WMPP study advisory committee, which participated in the design of the WMPP study and reviewed
and commented on progress reports from the study.
EPA and WVDEP agreed to a deferral of the RCRA Subpart CC organic air emission standards applicable to
OSi's two surface impoundments. These surface impoundments are one-million-gallon reservoirs that hold
wastewater from the facility's pollution control equipment and other sources. If not deferred, the Subpart CC
standards would have required OSi to install air emission controls on its surface impoundments. In response,
OSi could have replaced the existing reservoirs with open-top reservoirs that are not regulated under RCRA
Subpart CC regulation, and air emissions would not  have been reduced. However, with the deferral, OSi will
implement the emissions control measures on the capper unit and WMPP activities described at the end of the
previous section.
EPA and WVDEP consider the WMPP initiatives to be an important contribution to the superior environmental
performance offered by  the OSi XL project. The  WMPP initiatives could be undermined if the require-
ments proposed in CAA Subpart YYY are applied to the initiatives. As proposed, CAA Subpart YYY would apply

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 OSi Speeialties XL Project
13-31-89)
if OSi begins recovering substances listed in proposed CAA Subpart YYY. If OSi starts recovering these
substances, EPA and WVDEP will consider issuing a limited-scope "allowable exclusion/allowable increase"
deferral of the regulations on a case-by-case basi s, provided that EPA and WVDEP determine that this
deferral will not cause an increase in actual emissions of volatile organic compounds or cause a net adverse
environmental impact, and that OSi will remain in compliance with the provisions of the FPA. If such a deferral
is granted, EPA and WVDEP will propose regulations implementing the deferral.
EPA plans to promulgate National Emission Standards for Hazardous Air Pollutants (NESHAPs) that would
be applicable to miscellaneous organic processes. EPA plans to promulgate miscellaneous organic NESHAPs,
called "the MON," in 2000. Production activities at the Sistersville facility are classified as one type of these
"miscellaneous organic processes." The MON is anticipated to require process vent control s similar to the
vent incinerator installed by OSi under the XL proj ect. Therefore, the proj ect will provide superior environ-
mental performance only until the MON is in effect. The FPA provides for re-evaluation of the proj ect follow-
ing proposal of the new standards. OSi will prepare a proj ect re-evaluation report within 90 days following
the close of the comment period for the new standards. If EPA, WVDEP, and other stakeholders agree to
continue the proj ect, the FPA will be amended to achieve new approaches to superior environmental perfor-
mance.
                               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 OSi XL project are described below:
Innovative Technology, The OSi XL project provides a pilot for testing the benefits of allowing regulatory
flexibility in the technology used to control air emissions under RCRA regulations in order to provide superior
and less expensive environmental protection. Installing a process vent incinerator on OSi's capper unit in
return for deferral of air emission standards for its surface impoundments will lead to air emission reductions
four times greater than would be provided without undertaking the XL project, and will defer expenses for
several years of approximately $2 million for OSi.
Emission Standards. As EPA works to promulgate NESHAPs applicable to miscellaneous organic pro-
cesses by 2000, the Agency will gather data on, assess the performance of, the technology used at the
Sistersville plant. The new technology standard will require process vent controls similar to the controls
installed by OSi.

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 OSi Specialties XL Project
                                  13-31-89)

This section summarizes proj ect commitments described in the FPA for OSi Specialties' Sistersville facility in
West Virginia.
Commitment
       Status
                                 Regulatory Implementation
 EPA to propose a site-specific rule to defer surface
 impoundment requirements under RCRA Subpart
 CC by December 7, 1997.
Deferral final rule: Federal Register September
15, 1998
 W VDEP to execute a Consent Order to defer
 surface impoundment requirements under RCRA
 Subpart CC by December 7,1997.
Consent Order executed.
EPA to propose a site-specific rule to defer applica-
tion of CAA Subpart YYY to wastewater collection
and treatment system within 120 days of verifying
need for deferral.
Not yet necessary.
WVDEP to execute a Consent Order to defer
application of CAA Subpart YYY to wastewater
collection and treatment system within 45 days of
verifying need for deferral.
Not yet necessary.
                       Equipment Installation, Operation,    Monitoring
 Complete installation and initial startup of thermal
 incinerator by April 1,1998.
Due to the delays in completing thermal incinera-
tor performance tests, EPA revised site-specific
rule to extend startup completion date. Installation
and startup completed according to new schedule.
 Conduct performance test of thermal incinerator to
 determine minimum temperature at which compliance
 is achieved.
Test completed according to new schedule.
Monitor incinerator operating temperature and
closed vent stream flow.
Being done.
Monitor methanol recovery by condenser unit.
Being done-
 Develop incinerator startup, shutdown, and malfunc-
 tion plan.
Complete.

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OSi Speeialties XL Project
 Commitment
   Status
                                      Metfaanol Recovery
Begin collection of methanol from condenser unit
within 10 days of FPA signing.
Begun October 8, 1997.
Reuse, recycle, or incinerate 95% of methanol
(remaining 5% to go to wastewater biotreatment unit).
To be reported in semiannual report due January 31,
1999.
Monitor amount of methanol reused, recovered,
incinerated, and treated biologically in the waste-
water treatment unit.
To be reported in semiannual report due January 3'
1999.
                       Waste Minimization/Pollution Prevention (WMPP)
Create study team within 45 days of FPA signing
to perform WMPP study.
Study team made up of representatives of Witco
Corporation (OSi's parent company); a Witco contrac-
tor, STV; Concurrent Technologies Corporation; and
the Waste Reduction and Technology Transfer
(WRATT) Foundation.
Identify and prioritize waste streams to be evalu-
ated in WMPP study.
Presented in final WMPP project report delivered
December 11,1998.
Establish advisory committee within 30 days of
FPA signing to oversee WMPP study.
Advisory committee established to review and com-
ment on the study team's activities and periodically
review the effectiveness of WMPP opportunities
implemented. Advisory committee made up of repre-
sentatives from WVDEP, EPA Region 3, local resi-
dents, Witco Corporation, and West Virginia University
at Parkersburg.
Submit WMPP progress reports every 90 days
after signing of FPA.
Three progress reports submitted on schedule. A
WMPP assessment of the facility identified numerous
ways to reduce waste which are included in the WMPP
study report of December 11,1998. OSi also spon-
sored brainstorming sessions from a cross-section of
the plant's technical and operating staffs to screen,
prioritize, and analyze the feasibility of WMPP oppor-
tunities and prepare WMPP proj ect implementation
plans.

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    OSi Specialties XL Project
                                   13-31-89)
Commitment Status
Waste Minimization/Pollution Prevention, continued
Prepare draft WMPP study report one year after
FPA signing.
Implement WMPP opportunities.
Final report completed December 1 1 ,
1998.
A number of opportunities identified in the study
were determined to be technically and economically
feasible and are being implemented.
Reporting
Prepare semiannual progress reports
beginning January 31, 1 999.
Prepare annual reports on beginning July 31,
1999.
Prepare final proj ect report within 180 days after
termination of project.
Prepare project re-evaluation report within 90
days following the close of the comment period
for MON standards.
Not yet avail able.
Not yet available.
Not yet necessary.
Not yet necessary.
Reduce Air Emissions from Capper Unit: Methyl
chloride, dimethyl ether, andmethanol emissions generated
in the capper unit during production of the methyl-capped
poly ether will be collected and routed to a new process
vent incinerator installed on the capper unit. OSi estimates
the incinerator will destroy at least 98% of the organic
compounds (by weight) in the vent stream or about
271,000 pounds of these by-products per year.
Progress: The vent incinerator was installed and put into
operation on April 1,1998. Required incinerator
performance test results were delivered September 8,
1998. Data on the level of air emissions for 1998 are
expected in the annual report due July 31,1999.
                                                                     Air Emissions from Capper Unit
 1/98-12/98 Actual
  Estimated with XL
    1995Baseiine
Estimated without XL
                  data due 7/31/99
                  50   100   150   200   250
                     thousands of pounds per year
                                            300

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 OSi Speeialties XL Project
                                                                                         13-31-89)
                                                                Organic Capper Unit Discharges to
                                                                  Wastewater Treatment System
                                                     1/98- 12/98 Actual
                                                     7/98- 12/98 Actual
                                                     Estimated with XL
                                                        1995 Baseline
                                                    Estimated without XL
                                                                      data due 7/31/99
                                                                      data due 1/31/99
Reduce Organic Capper Unit Discharges to
Wastewater Treatment System: Excess methanol is
produced in the capper unit during the production of
methyl-capped polyether. Currently, a portion of this
methanol is condensed, collected, and either disposed
of in the facility's wastewater treatment unit or
incinerated. Under this XL project, OSi intends to
direct a minimum of 95% of the collected methanol
towards reuse and recycling, or subj ect it to thermal
recovery or treatment, thus minimizing biotreatment of
the methanol in wastewater treatment units. An
estimated 500,000 pounds of methanol that otherwise
would be treated in the wastewater system will be
transferred to tank trucks or rail cars for reuse or
recycling each year.
Progress: Data on the rate of methanol discharges for July through December I998 are expected in the
semiannual report due January 31,1999. Data for all of 1998 are expected in the annual report due July 31,
1999.
                                                                       200    400    600    800
                                                                         thousands of pounds per year
                                                                                               1000
Reduce Wastewater Treatment Sludge Generated
from Capper Unit Methanol: As a result of O Si's
methanol recovery and reuse efforts, the amount of
sludge generated by the wastewater treatment system
and disposed of in an onsite hazardous waste landfill will
be decreased by an estimated 815,000 pounds per year.

Progress: Data on the reduction of sludge generation for
1998 are expected in the annual report due July 31,
1999.
                                                                    Wastewater Treatment Sludge
                                                                 Generated from Capper Unit Methanol
                                                       1/98- 12/98 Actual
                                                       Estimated with XL
                                                          1995 Baseline
                                                      Estimated without XL
                                                                        data due 7/31/99
                                                                       200  400  600 800 1000 1200 1400 1600
                                                                           thousands of pounds per year
Reduce Air Emissions from Wastewater Treatment
Unit: By reducing the amount of methanol that is sent to
the wastewater treatment system, air emissions from the
wastewater treatment system that could occur during the
treatment of that methanol are reduced. OSi estimates
that as a result of their recovery and reuse of methanol,
air emissions from the wastewater treatment system will
be reduced by 38,000 pounds per year.
Progress: Data on reduced air emissions for 1998 are
expected in the annual report due July 31,1999.
                                                                         Air Emissions from
                                                                    Wastewater Treatment System
                                                       1/98-12/98 Actual
                                                       Estimated with XL
                                                         1995 Baseline
                                                      Estimated without XL
                                                                        data due 7/31/99
                                                                    0   20  40   60   80  100 120  140  160
                                                                           thousands of pounds per year

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 OSi Specialties XL Project
Implement a Comprehensive Waste Minimization/Pollution Prevention Project: The WMPP Project
included a study of plant operations that identified existing and future WMPP opportunities and the develop-
ment of a plan to implement those that are technically and economically feasible. Through the use of an advi-
sory committee, OSi has involved EPA, WVDEP, and other stakeholders in the study and implementation
phases of the WMPP Project.

Progress: OSi delivered the final WMPP Study Report on December 11,1998. Highlights of the study are
described below:

A WMPP study team (made up of OSi management and employees and an independent contractor, STV
Incorporated) was established to guide and conduct the daily activities of the WMPP study. An advisory
committee (made up of representatives of the community, regulatory agencies, and the plant) was established
to offer comments and suggestions throughout the process.
Four employee brainstorming sessions were a key component of the process. These sessions included repre-
sentatives from a cross-section of the plant's technical and operating staffs. The goals of the brainstorming
sessions were to develop criteria and methods to screen, prioritize, and analyze the feasibility of WMPP
opportunities; increase awareness of pollution prevention; evaluate and prioritize opportunities based on
technical and economic feasibility; prepare implementation plans; and determine how to measure progress. In
addition, a week-long survey was conducted by the Waste Reduction And Technology Transfer Founda-
tion (WRATT) to help the facility identify waste and emission sources, and to suggest ways to reduce
the quantity or toxicity of plant wastes.
A number of pollution prevention options identified in the study were determined to be technically and
economically feasible and implementation of those options is in progress. The WMPP Study Report is avail-
able from OSI

Stakeholder involvement during the proj ect development stage was cultivated in several ways. The methods
included communicating through the media (newspaper and radio announcements), directly contacting inter-
ested parties, and offering an educational program on the regulatory programs impacted by the XL project.
Stakeholders have been kept informed via mailing lists, newspaper articles, public meetings and the establish-
ment of public files at the Si stersville Public Library and the EPA Region 3 office.
A local environmental group, the Ohio Valley Environmental Coalition, was contacted but stated that they did
not have time to participate actively in the development of the XL project. However, a representative from
Natural Resources Defense Council, a national environmental interest group, participated in conference call
meetings with the XL proj ect team and provided comments during the development of the FPA. There are few
homes located near the facility, and, therefore, few local stakeholders other than employees of the facility
expressed interest in actively participating in the development of the proj ect. However, the  Sistersville Plant
provided stakeholders with regular project development updates by circulating meeting and conference call
minutes.

As this XL project continues to be implemented, the stakeholder involvement program will shift its focus to
ensure that stakeholders are apprised of the status of the project, and have access to information sufficient to
judge the success of this Project XL initiative. Stakeholder involvement during the term of the project will likely
include holding general public meetings to present periodic status reports and making available data and other
information as it is generated. OSi has appointed a Sistersville Plant Proj ect XL contact at the facility to serve
as a resource for the community. In addition, the plant is required to make copies of semiannual and annual
proj ect reports available to all interested parties.

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 OSi Speeialties XL Project                                                              (3-31-99)
Key focus areas for successful implementation of the FPA over the next six months include:
• Semiannual project report due January 31, 1999.
« First Annual proj ect report due July 31, 1999.
• Begin implementation of options identified in waste minimization/pollution prevention study.




Okey Tucker, OSi Specialties, 304-652-8131
Nancy Bimbaum, EPA Headquarters, 202-260-2601
Tad Radzinski, EPA Region 3, 215-814-2394
Lucy Pontiveros, West Virginia DEP, 304-558-1220
Jonathan McClung, West Virginia DEP, 304-558-1220




The information sources used to develop this progress report include: 1) discussions during a teleconference
among representatives of the U.S. Environmental Protection Agency, OSi Specialties, Inc., and West Virginia
Department of Environmental Protection; 2) the Final Project Agreement for the OSi XL project; and 3) the
final report from the waste minimization/pollution prevention (WMPP) study undertaken by OSi as part of this
XL project. The information sources are current through December, 1998.
Air Emission: Pollution discharged into the atmosphere from smokestacks, other vents, and surface areas of
commercial orindustrial facilities; from residential chimneys; and from motorvehicle, locomotive, or aircraft
exhausts.
Air Emission Standard: The maximum amount of air-polluting discharge legally allowed from a single source,
mobile or stationary.
Biotreatment: A process that uses bacteria to consume organic waste.
Capper Unit: The poly ether methyl capper unit (the "capper unit") is the point in OSi's production process
where a two-step reaction occurs that results in the intended endproduct, methyl-capped polyether.
Clean Air Act (C AA):  The Clean Air Act is the Federal law that regulates air emissions from area, stationary,
and mobile sources. This law authorizes the U.S. Environmental Protection Agency to establish National
Ambient Air Quality Standards (NAAQS) to protect public health and the environment.
C AA Subpart YYY (New Source Performance Standards): Proposed regulations to control volatile organic
compound emissions from wastewater generated by certain process units. As proposed, these standards
would generally apply to new or modified process units that generate a wastewater stream with concentrations
of volatile organic compounds above a specified amount and that produce any of a specific list of substances
("Subpart YYY Substances") as a product or by-product.

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          OSi Specialties XL Project
         Deferral: A legally sanctioned delay in compliance with regulations.
         Dimethyl Ether: A colorless flammable gas. Used in refrigeration, as a solvent, and in chemical production.
         Harmful if inhaled; irritating to eyes.
         Discharges: Flow of liquid or chemical emissions from a facility into water or air.
         Hazardous Waste: By-products of society that can pose a substantial or potential hazard to human health or
         the environment when improperly managed. These wastes possess at least one of four characteristics—
         ignitability, corrosivity, reactivity, or toxicity—or appear on special EPA lists.
         Impoundment: A body of water or sludge confined by a dam, dike, floodgate, or other barrier.
         Incineration: A treatment technology involving destruction of waste by controlled burning at high temperatures.
         Incinerator: A furnace for burning waste under controlled conditions.

         Methanol:  An alcohol that can be used as an alternative fuel or as a gasoline additive. Poisonous if ingested.
         Methyl Chloride: A colorless flammable gas. Used in the production of chemicals, as a solvent and refrigerant,
         and as a food additive. Mildly toxic if inhaled.
         "The MON": The National Emission Standard for Hazardous Air Pollutants (NESHAP) for the source
         category "Miscellaneous Organic Chemical Production and Processes." Some examples of these processes
         are: explosives production, photographic chemicals production, polyester resins production, and the produc-
         tion of paints, coatings and adhesives.
         National Ambient Air Quality Standards (NAAQS): Standards established by EPA applicable to outdoor air
         throughout the country.
         National Emissions Standards for Hazardous Air Pollutants (NESHAPs):  Emissions standards set by EPA for
         air pollutants not covered by National Ambient Air Quality Standards (NAAQS), that may cause an increase
         in fatalities or in serious, irreversible, or incapacitating illness. Primary standards are designed to protect human
         health, and secondary standards are designed to protect public welfare (e.g., building facades, visibility, crops,
         and domestic animals).
         Organic Compounds: Naturally occurring (animal or plant-produced) or synthetic substances containing
         mainly carbon, hydrogen, nitrogen, and oxygen.
         Pollution Prevention: Identifying, altering, or eliminating areas, processes, and activities that create excessive
         waste products or pollutants. Such activities, consistent with the Pollution Prevention Act of 1990, are con-
         ducted across all EPA programs.

         Resource Conservation and Recovery Act (RCRA): 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 nonhazardous wastes. RCRA
         enables EPA to address environmental problems that could result from underground tanks storing petroleum
         and other hazardous substances. RCRA focuses only on active and future facilities and does not address
         abandoned sites.
         RCRA Subpart CC: Requirements for the control of air emissions from hazardous waste tanks, surface
         impoundments, and containers. The name conies from the fact that they are found in the regulations in Subpart
         CC of 40 C.F.R. Parts 264 and 265.

         Sludge: A semi-solid residue from air or water treatment processes; it can be a hazardous waste.

10

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 OSi Speeialties XL Project
13-31-89)
Thermal Recovery or Treatment: In the OSi XL project, refers to the use of collected methanol in fuels
blending or as a feed to any combustion device.

Waste Minimization: Measures or techniques that reduce the amount of wastes generated during industrial
production processes; term is also applied to recycling and other efforts to reduce the amount of waste going
into the waste stream.

Wastewater:  The spent or used water from a home, community, farm, or industry that contains dissolved or
suspended matter.
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