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Caterpillar Tractor v. Pollution Control Bd.





PETITION for review of order of Pollution Control Board.


Caterpillar Tractor Company has petitioned this court for administrative review of an order of the Illinois Pollution Control Board denying a petition for variance from air pollution standards. The Environmental Protection Agency, which had recommended that the variance be granted, also argues for reversal of the Board's order but supports certain other rulings of the Board. The Board and the Agency have thus adopted conflicting positions in this case, and we earlier appointed special counsel for both the Agency and the Board in view of the Attorney General's conflict of interest.

Caterpillar operates a foundry employing 3,200 persons at Mapleton, Illinois, near Peoria, where ferrous metals are processed, melted, and cast for eventual use at other Caterpillar plants in the manufacture of earthmoving and construction equipment and diesel engines. The Mapleton plant has twelve 25-ton capacity melt furnaces which discharge particulates into the air at the plant site via roof ventilators located 52 feet above the furnaces.

Since 1972 Caterpillar has filed four applications for operating permits with the Agency, all of which have been denied. In 1974, Caterpillar undertook a testing procedure that involved temporary hooding of ventilators to measure particulate emissions from three furnaces. The test results demonstrated that the emission level for the foundry exceeded the Board's particulate emission standards at the rate of 80 pounds of particulates per hour. On February 25, 1975, Caterpillar initiated this variance proceeding, proposing to install a hooding and duct system with cloth bag filters which will have a dust collection efficiency of 99%, thereby achieving full compliance with the Board's emission standards. The cost of the compliance program is $2,482,700.

In its petition Caterpillar requested a variance from the particulate emission standards of Board Rule 203 *fn1 and also from the operating permit requirements of Rule 103 *fn2 until July 1, 1977, when the compliance plan will be completed. The petition asserted that continued operations posed no threat of injury to the public and that immediate compliance would impose an arbitrary and unreasonable hardship on Caterpillar.

The Agency filed its recommendation that the variance from Rule 203 be granted but that a variance from the permit requirements of Rule 103 be denied. The Agency had interviewed eight persons residing near the foundry, seven of whom had no objection to the variance. The Agency stated that the emission control plan would achieve compliance and that the July 1, 1977, compliance date was reasonable. The recommendation also concluded that Caterpillar had shown good faith in dealing with the Agency.

At the hearing on the petition a stipulation of facts was presented to the Hearing Officer, which included a detailed explanation of the proposed compliance program and of the current level of particulate emissions based on Caterpillar's 1974 tests.

Caterpillar's plant engineer testified to Caterpillar's emission tests in 1972 and 1973 which had indicated no violation and also to the results of air quality monitoring by the Agency at six sites in the Peoria metropolitan area. In a report sent to Caterpillar by the Agency in April of 1975, the 1973 annual report and the 1974 preliminary report showed no violation of national ambient air quality standards at any of the six Peoria area monitoring sites based on 24-hour particulate concentrations. The annual geometric mean of particulate concentration indicated that the national limitation of 75 micrograms per cubic meter was exceeded in 1973 at one site located 13 miles from the foundry, and in 1974, at one site located 11.5 miles from the foundry. At three sites the 1974 data on annual concentration were incomplete.

The plant engineer also testified that the only alternative to the proposed compliance plan would be to shut down the furnaces which would put the foundry's total operation "in jeopardy" and would "severely affect" Caterpillar's overall production. Another engineer described the hood and duct system he had invented to meet Caterpillar's requirements within the physical limitations of the existing foundry building, and he also explained why alternative systems were not feasible.

At the conclusion of the hearing, both Caterpillar and the Agency submitted briefs urging a grant of the variance from Rule 203. The Agency however advocated denial of the request for a variance from Rule 103. The Agency concluded that the ambient air quality data suggested nothing about the air quality close to the foundry or about Caterpillar's contribution to the particulate concentration at the monitoring sites ten or more miles distant from the plant, and that Caterpillar's evidence was not adequate to establish whether the foundry contributed to the air quality problem in the general area.

On February 19, 1976, the Board dismissed Caterpillar's petition for variance for failure to prove that its emissions do not contribute to a violation of the ambient air quality standards and for failure to show that compliance will impose an arbitrary and unreasonable hardship. The Board opinion stated that it took official notice of the Agency's final 1974 Annual Air Quality Report, published in September 1975, three months after the hearing. In the final 1974 report, the annual limitation was exceeded at two monitoring sites, one five miles and the other 11.5 miles from the foundry. The Board concluded that Caterpillar had the burden of proving that its particulate emissions do not cause or contribute to violations of the ambient air quality limitations in the Peoria area, and that it failed to sustain that burden. The Board also commented that, since denial of a variance is not a shutdown order, the denial need not result in cessation of production activities.

This administrative review action followed the Board's ruling. We believe the variance should have been granted.

• 1, 2 Under section 35 of the Environmental Protection Act (Ill. Rev. Stat. 1975, ch. 111 1/2, par. 1035), the Board is authorized to grant individual variances whenever "compliance with any rule or regulation, requirement or order of the Board would impose an arbitrary or unreasonable hardship." Section 37 of the Act places the burden of proof on the person seeking a variance, and requires the Agency to investigate the petitions filed, to consider the views ...

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