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Environmental Protection Agency v. Pollution Control Board

November 19, 1999


Petition for review of order of Pollution Control Board No. AS97-5

The opinion of the court was delivered by: Presiding Justice Bowman

19 November 1999

The Louis Berkman Company, d/b/a the Swenson Spreader Company (Swenson), petitioned the Illinois Pollution Control Board (Board) for an adjusted standard pertaining to its emission of volatile organic material (VOM) pursuant to section 28.1 of the Environmental Protection Act (Act) (415 ILCS 5/28.1 (West 1996)). The Illinois Environmental Protection Agency (Agency) opposed the petition. The Board granted Swenson a 10-year adjusted standard with certain conditions. The Agency appeals the Board's decision and argues that (1) the manifest weight of the evidence showed that Swenson did not need an adjusted standard because it could substantially reduce its VOM emissions by installing a powder coating system; (2) the Board improperly interpreted the term "economic reasonableness"; (3) Swenson failed to establish that installing a powder coating system would be economically unreasonable; and (4) the record as a whole did not support the Board's decision. We affirm.

Swenson manufactures snow- and ice-control equipment at its plant in Ogle County. Part of the manufacturing process for many of Swenson's products includes applying one or more coatings of paint. Generally, Swenson applies a primer and at least one coat of paint to its products, with the exception of its stainless steel products and its "all purpose bodies," which receive only a primer coat.

Section 215.204 of the Illinois Administrative Code (Code) governs VOM emissions from manufacturing plants. 35 Ill. Adm. Code §215.204 (1996). VOM refers to a wide range of organic carbon compounds that participate in atmospheric photochemical reactions. 35 Ill. Adm. Code §211.7150 (1996). The parties agree that section 215.204(j)(2) of the Code (35 Ill. Adm. Code §215.204(j)(2) (1996)) applies to Swenson. According to that section, VOM emissions from air-dried miscellaneous metal parts and products coatings may not exceed 3.5 pounds per gallon. 35 Ill. Adm. Code §215.204(j)(2) (1996). Manufacturers that emit less than 25 tons of VOM per year are exempt from this limitation. 35 Ill. Adm. Code §215.206 (1996).

Swenson considers itself a "job shop" because most of the products it makes are customized to client specifications. When a customer does not specify a type or brand of paint, Swenson applies one of its standard coatings. Approximately 90% of Swenson's clients are governmental entities, which frequently require specialty coatings on the products they order. Many of the specialty coatings Swenson uses contain more than 3.5 pounds of VOM per gallon and therefore do not comply with section 215.204(j)(2).

On October 11, 1996, Swenson filed a petition for an adjusted standard pursuant to section 28.1 of the Act. 415 ILCS 5/28.1 (West 1996). In its petition, Swenson claimed that it could not meet the requirements of section 215.204(j)(2) because many of the coatings its customers specify contain more than 3.5 pounds of VOM per gallon. Swenson further claimed that coatings that satisfy customer requirements and comply with section 215.204(j)(2) are not available. On December 11, 1996, the Agency filed an enforcement action against Swenson, alleging violations of section 215.204(j)(2), the same provision from which Swenson sought an adjusted standard.

The Agency urged the Board to deny the petition for an adjusted standard, arguing that Swenson could reduce its VOM emissions to less than 25 tons per year by powder coating its products instead of using air-dried paints. If Swenson emitted less than 25 tons of VOM per year, it would qualify for an exemption from the emissions limitation. 35 Ill. Adm. Code §215.206 (1996). In an effort to settle the enforcement proceeding, Swenson offered to install a powder coating system. The Agency contended, in the adjusted standard proceeding, that this offer demonstrated that the installation of a powder coating system would be technically and economically reasonable for Swenson.

The Board held hearings in the adjusted standard proceeding on April 25, 1997, and June 3, 1997. The Board heard evidence about the feasibility of different abatement methods, including installing a powder coating system, installing an afterburner, and reformulating the paints Swenson uses. On appeal, the Agency challenges only the Board's findings regarding the installation of a powder coating system. The following facts, taken from the record, are relevant to this issue.

Mark Swisher, Swenson's general manager, testified that installing a powder coating system was one option Swenson considered in its efforts to comply with pollution control regulations. According to Swisher, powder coatings are strong and durable and do not emit VOM. He thought Swenson's customers would look favorably on powder coatings because of their durability, but it would take time to persuade them to accept powder coatings instead of the paints they normally specify.

Swisher estimated that Swenson could use powder coatings on approximately 70% of its products. Some products that require a specific primer could not be powder coated. Swenson would not have the capability to powder coat products larger than 10 feet, because building a system that could accommodate larger parts would cost too much. Also, certain parts, such as motors and plastic parts, could not be powder coated because they could not withstand the heat generated during the process.

Swisher testified that a powder coating system would cost approximately $750,000. He further testified that Swenson would have to construct a new building to house the powder coating system. The building would cost an additional $750,000, for a total cost of $1.5 million. Swisher testified that even if Swenson installed a powder coating system, that would not immediately solve its problem with excessive VOM emissions because it would take Swenson's employees some time to learn how to operate the system, and it would take "a long time" to convince customers to accept powder coating as an alternative to the coatings they normally specified.

The Board issued an interim opinion and order (Order) granting Swenson an adjusted standard on December 4, 1997. In its Order, the Board found that compliant specialty coatings were not available to Swenson. The Board further found that installing a powder coating system was not an economically reasonable compliance alternative.

The Board arrived at the latter Conclusion by comparing Swenson's projected cost per ton of reduced emissions to an average control cost per ton as set forth in the Reasonably Available Control Technology (RACT II) rules. RACT II Rules, Ch. 2: Air Pollution, Ill. Pollution Control Board R. 80--5 (October 5, 1982). These rules were based on a study performed by the Illinois Institute of Natural Resources, which determined that the average cost, in 1980 dollars, of complying with pollution regulations for companies located in attainment areas would be $1,032 per ton of VOM reduced. RACT II Rules, R. 80--5, slip op. at 19. The Board accepted Swenson's calculation that the equivalent cost in 1996 dollars was $1,734 per ton. The Board used this figure as its yardstick for determining the reasonableness of control costs Swenson would have to incur if it installed a powder coating system. Swenson claimed that if it were to install a $1.5 million dollar powder coating system, its cost would be $29,362 per ton of reduced VOM. The Agency did not challenge Swenson's calculation. In part, the Board based its decision to grant an adjusted standard on the substantial difference between the average control cost and the cost to Swenson of installing a powder coating system. The ...

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