Early last September, the Department of Health’s Clean Air Branch fined Hawaiian Commercial & Sugar Company (HC&S) $1,977,700 for burning the wrong fuel in its Pu’unene mill for 30 years. HC&S has been reported as saying that the large fine is unfair since the error was self-reported and that it had been working cooperatively with the DOH to resolve the problem. But a review of Clean Air Branch records suggests that the self-reporting was more a matter of following the law than of altruism, and the company has been more dictatorial than cooperative in curing its violation.
In 1994, the DOH’s Clean Air Branch instituted a new program that required all fossil-fuel burning facilities to obtain from the department a covered-source permit (CSP) for emissions. In their applications, all facilities were required to report on their compliance with the Clean Air Act. That law requires facilities to submit a compliance plan to the DOH every five years.
Jill Stensrud of the Clean Air Branch says that while other facilities readily got their permits, HC&S, whose mill burns bagasse (the remains of sugar cane after processing), oil, and “a lot of different stuff,” took six years to get to the point where its application could undergo the process of public review and comment.
In reviewing its Pu’unene mill’s compliance with federal rules, HC&S determined that the mill needed to comply with a section of the Clean Air Act that deals with performance standards for fossil-fuel fired steam generators built after August 17, 1971.
Although none of the operating permits the DOH issued for the mill over the years had required compliance with this section (Subpart D), on August 9, 2001, HC&S notified the Clean Air Branch of the potential noncompliance and requested a postponement of the public hearing on its covered source permit application, which had been scheduled for August 20.
Would the Department of Health have known about the noncompliance if HC&S had not reported it? “That’s a good question,” Stensrud says, since the department relies heavily on self-reporting. But since the law requires it, HC&S would have risked criminal charges if it didn’t report the violation, she says. Whatever the motivation, HC&S immediately worked to come into compliance. In November 2001, it submitted a report on remedial actions, a schedule of compliance, and the results of a visual emissions evaluation. In the schedule, HC&S identified a number of actions needed for compliance, including the replacement of high-sulfur fuel oil, which it burned in one of its boilers, with a low-sulfur oil by October 31, 2001, and the installation of a continuous emissions monitoring system (CEMS) by February 1, 2002.
In March 2002, an HC&S compliance report states that the company had plans to have G.K. Associates, Inc. provide and install the CEMS, and “approval of funds and issuance of a purchase order are now expected by March 15, 2002.”
But as the months wore on, while most of the scheduled objectives were met, the deadline to install a CEMS was pushed back again and again, mainly because HC&S wanted to resume burning high-sulfur fuel oil (cheaper than the low-sulfur fuel). In February 2002, “due to an improper valve lineup, an estimated 169 barrels of high sulfur fuel oil #6 was inadvertently burned in Boiler 3” following an emergency repair, an HC&S compliance progress report states. Aside from that “mishap,” HC&S stopped burning high-sulfur fuel oil in October 2001.
Even so, the company wanted to know whether federal law allowed the burning of high-sulfur fuel oil in conjunction with bagasse. Initially, the DOH didn’t have an answer, so HC&S sought a determination from the U.S. Environmental Protection Agency.
The discussions between HC&S and the EPA dragged on for months. In May 2002, HC&S informed the Department of Health that the EPA was not inclined to allow the practice of burning high-sulfur fuel with bagasse. For it to do so, HC&S continued, a rule change would be required. The company was considering petitioning the EPA for just that, officials said – a process that could take 18 months or more.
After emission testing from coal and diesel fuel burning in October 2002, HC&S determined that it was exempt from installing a CEMS on its Boiler 3 stack, since nitrogen oxide emissions were less than 70 percent of limits set forth in the Clean Air Act.
HC&S also sought to amend its CSP application to allow for the possible rule change, but the DOH rejected that effort. Through the end of 2002 and into 2003, HC&S ‘s deadline to place an order for a CEMS was never specified. Its schedule only stated that a CEMS would be ordered, “within 30 days after determining that CEMS is required.”
The DOH, however, didn’t want to hold off compliance while a petition for a rule change crept along. In addition, it disagreed with HC&S ‘s position that a CEMS wasn’t needed. In a December 12, 2002, letter to Sean O’Keefe, the environmental officer for HC&S parent company Alexander & Baldwin, Clean Air Branch manager Wilfred Nagamine wrote that the federal condition exempting facilities that emit below the 70 percent level is “only good for the initial performance test for the equipment in question.”
In March 2003, Nagamine wrote to O’Keefe, that, “The Department and EPA continue to believe that continuous emission monitors (CEMs) are required for sulfur dioxides and nitrogen oxides (NOx) emissions under Subpart D… Finally, the past determinations made by other EPA regions that you referenced in a subsequent correspondence are believed to be inappropriate and not consistent with the intent of the 1990 Clean Air Act Amendments to enhance compliance monitoring. It should also be noted that sources subject to Subpart D typically have CEMS; and for coal-burning facilities, a CEM for SO2 is almost always required. The Department does not feel extenuating circumstances exist to exempt HC&S from these requirements.”
Despite the DOH’s determination that a CEMS would be required, HC&S continued to avoid pinning down a date to order and install the system. Instead, on April 4, 2003, the company submitted a request for approval of a fuel sampling and analysis (FSA) program in lieu of installing a CEMS for sulfur dioxide and for an exemption from the requirement to install CEMS for nitrogen oxides.
After more than a year of argument on the subject, the DOH decided to issue a Notice and Finding of Violation against the company last September. But two of O’Keefe’s letters to Nagamine, written after the NOFV was issued, suggest the fine hasn’t affected the company’s position. On September 30 and December 18, 2003, O’Keefe wrote, “HC&S appreciates the Department’s review and consideration of this request [to do a FSA instead of a CEMS] and has deferred any further action with respect to installation of CEMS pending receipt of the Department’s final response to this submittal.”
— Teresa Dawson
Volume 14, Number 8 February 2004