Project XL PSD Permit and Variance for Merck and Co.
The Virginia Department of Environmental Quality has granted a variance to Merck and Company Inc., Stonewall Plant, from some portions of the Commonwealth of Virginia's regulations for the control and abatement of air pollution, and has issued Merck a Prevention of Significant Deterioration or PSD permit which will act in lieu of those regulations. The variance and PSD permit are part of an alternative permitting program known as Project XL.
What Is Project XL?
Project XL is a federal program designed to enable private industries to assume more responsibility for assuring compliance with applicable air pollution control requirements. The program is also designed to provide industries with more flexible permitting arrangements in return for superior environmental benefit. Projects accepted into the program are considered pilot projects which, if found to be successful, may be used as model permits to be applied to additional industries in the future.
Project XL participants must apply for acceptance into the program and, once accepted, negotiate a project agreement with a group of stakeholders representing regulatory authorities and concerned citizens. The stakeholder group for negotiating Merck's agreement consisted of neighboring citizens and representation from the following organizations: DEQ, US Environmental Protection Agency, US Department of Interior, and Rockingham County Board of Supervisors.
While participation of all stakeholders was encouraged, signature of all stakeholders is not required. Signatories to the Project XL agreement are DEQ, EPA, US Department of Interior, and the Rockingham County Board of Supervisors.
What is Merck's project?
Merck has proposed to replace many individual emission limits with one plant wide cap on emissions of criteria pollutants. The plant wide cap represents a 20 percent reduction below recent actual emission rates. This will be accomplished by converting the Stonewall Plant's steam-generating powerhouse from burning coal to natural gas as the primary fuel. The permit also will establish subcaps on some individual pollutants. In exchange for the reduction in emissions, Merck will be free to make changes in equipment and processes without obtaining further permits.
The plant wide cap and subcaps will provide an incentive for Merck to undertake ongoing emission reductions at the site, since any such emissions reductions will provide operating room under the cap for future modifications and expansions. In addition to this built-in incentive, the permit requires Merck to install "good environmental engineering practice" technology on significant new installations or significant modifications for pollutants covered by the site-wide emissions cap.
Upon issuance of the PSD permit, the initial limit for the plant wide emission cap is 1,503 tons per year (TPY). This limit is on total criteria pollutants, which includes emissions of the following:
- Ozone (using volatile organic compounds (VOC) as surrogate)
- Carbon monoxide (CO)
- Particulate matter with an aerodynamic diameter less than 10 micrometers (PM-10), with a subcap of 42 TPY
- Sulfur dioxide (SO2), with a subcap of 719 TPY
- Nitrogen oxides (NOx), with a subcap of 291 TPY
The permit requires Merck to replace its current coal-fired boilers with natural gas boilers with distillate oil or propane as back-up fuel, and then reduce the allowable emissions to:
- 1,202 TPY for combined criteria pollutants
- 42 TPY PM-10
- 539 TPY SO2
- 262 TPY NOx
Provisions of the permit address instances for which further reductions in the cap might be required, and provide detailed requirements for a three-tier system for monitoring and reporting emissions.
While there are no specific limits on fuel burned, recent usage levels of 44,320 tons per year of coal and 66,000 gallons per year of oil in the boilers will be replaced with an estimated consumption of 1.2 billion cubic feet of natural gas and 515,480 gallons of oil per year. Oil use for sludge and solid waste incineration is not expected to change from the current rate of 532,200 gallons per year.
What regulations do Merck's agreement replace?
The variance is necessary to allow DEQ to implement Merck's Project XL Agreement. The variance also allows DEQ to accept the PSD permit in lieu of otherwise applicable regulations. Specifically, the variance and PSD permit substitute for emission limitations and for testing, monitoring and notification requirements, including malfunction reporting requirements currently in the regulations, or in existing permits. The PSD permit replaces Merck's current permits and, the variance allows Merck to operate within its PSD permit without obtaining additional permits which would otherwise be required.
Specifically, the variance and PSD permit act in lieu of permits for new and modified sources, state operating permits and Prevention of Significant Deterioration permits. They also streamline requirements regarding both the content of the application for Merck's Title V operating permit and the initial compliance certification required by that application. Merck is required to obtain a Title V permit and will continue to be responsible for adhering to all other applicable state and federal air regulations.
For more information on the Merck permit and Project XL, contact Mr. Larry Simmons at:
DEQ Valley Regional Office
4411 Early Road
P.O. Box 1129
Harrisonburg, Va. 22801-1129
(540) 574-7800
Fax (540) 574-7878