ARLANXEO Canada Inc. - Environmental Compliance Approval (air)

The following outlines the EBR comments and response:

Comments from Commenter No. 1:

Arlanxeo seeks a new Environmental Compliance Approval with Limited Operational Flexibility to replace existing ECAs for its West site in Sarnia. Arlanxeo West houses:

• a Bioindustrial Park, including a wastewater treatment facility and flare stacks;
  • olefin units, which currently fall under Arlanxeo ECAs but which Arlanxeo has sold to Diamond Petrochemicals Canada Corporation (DPCC)
  • a furfural/hydrothermal carbon manufacturing facility operated by Origin Materials under a separate ECA; Arlanxeo West and the Origin facility are adjacent properties under Regulation 419/05.

These comments focus on Arlanxeo’s request to exempt Arlanxeo’s Bioindustrial Park facility from requirements to model and report 1,3-butadiene emissions. The Director cannot reasonably grant this request. The relevant legal and policy framework requires the Bioindustrial Park facility to model and report all 1,3-butadiene emissions from joint adjacent properties. When all such emissions are considered, the commenter has serious concerns that the facility will exceed the Regulation 419/05 air quality standard for 1,3-butadiene.

A) Arlanxeo appears to seek joint property status in this application

In its application, Arlanxeo proposes to split the Bioindustrial Park and olefin units: if issued, this new ECA will apply only to the Bioindustrial Park and DPCC will require a separate ECA for the olefin units. However, Arlanxeo requests adjacent property status for the Bioindustrial Park, the Origin facility and the DPCC olefin units. As well as seeking adjacent property status, Arlanxeo has applied to transfer the Arlanxeo West site registration under the Petrochemical Industry Standard to DPCC.

The application indicates that adjacent property status will allow all three facilities to use the same dispersion modelling boundary (i.e., a shared modelling fenceline), while operating as separate entities. This appears to be a request for joint or single property status under section 4(2) of Regulation 419/05.

Joint property status and the use of a shared modelling fenceline are meant to help the Ministry better understand the total, cumulative effects of air emissions from adjacent facilities. However, the commenter is concerned that this application would, if granted, achieve the opposite outcome by unlawfully shielding the Bioindustrial Park’s 1,3-butadiene emissions from Ministry oversight.

Our concern arises from Arlanxeo’s suggestion that the technical standard registration transfer, coupled with joint property status, will allow all three facilities (Bioindustrial Park, Origin Materials, and DPCC) to exclude “any emissions associated with a Technical Standard…from all ESDM reports.”

That outcome would contravene the relevant legal and policy framework. To comply, not only must any ECA issued for the Bioindustrial Park require the facility to include its own 1,3- butadiene emissions in ESDM report; the ECA must also require the facility to include all 1,3- butadiene emissions from all joint properties in ESDM reports.

Response to above comments under A):

Both ARLANXEO and DPCC facilities emit 1,3-butadiene emissions. The first ESDM reports of both companies submitted with the air approval applications did not include all emissions from each other’s facility to determine the maximum point-of-impingement concentration for 1,3-butadiene. However, after reviewing the first ESDM reports, the Ministry made a request to both ARLANXEO and DPCC to re-calculate the maximum point-of-impingement concentration for 1,3-butadiene, including all emissions from both facilities. Both ARLANXEO and DPCC re-submitted their revised ESDM reports showing the overall maximum point-of-impingement concentration for 1,3-butadiene including all emissions from both facilities, based on dispersion modelling as a joint property. Emission of other air contaminants from all three facilities including the Origin facility are also included the revised ESDM reports.

Furthermore, ARLANXEO and DPCC are also required under the air approval to consider the most current information from the ARLANXEO, DPCC and Origin facilities and model as a joint property while preparing or proposing to update or updating the ESDM Report.

To continue addressing the issue on 1, 3-butadiene emissions from both ARLANXO and DPCC facilities, DPCC has registered to the Petrochemical Technical Standard for 1, 3-butadiene to ensure compliance with the Petrochemical Technical Standard requirements.

B) The Bioindustrial Park is ineligible to register to the Petrochemical Industry Standard

The Bioindustrial Park is ineligible to register to the technical standard, so there is no legal basis for the Ministry to exempt this facility from modelling and reporting its own 1,3-butadiene emissions.

In its application, Arlanxeo notes that the Bioindustrial Park is classified under NAICS code 221320 (sewage treatment facilities). That class of facility is not eligible for registration to the Petrochemical Industry Standard, which applies only to facilities classified under NAICS code 325110 (petrochemical manufacturing). Based on the meeting minutes attached to the application, Ministry staff appear to agree that the Bioindustrial Park is ineligible for registration to the industry standard.

It is not clear that the olefins units are eligible to register to the Petrochemical Industry Standard; Arlanxeo West has previously self-reported as a facility classified under NAICS code 325210 (resin and synthetic rubber manufacturing), which is not eligible for registration.

However, even if the olefins units are eligible to register to the industry standard, the Director has no authority to extend that registration to cover the separate, ineligible Bioindustrial Park facility. In fact, Regulation 419/05 specifically prohibits the Director from registering an ineligible facility. Attempting to achieve that outcome indirectly through conditions imposed in Arlanxeo’s Bioindustrial Park ECA would be unlawful.

Response to above comments under B):

While the ARLANXEO BioIndustrial park is not permitted to register for the Petrochemical Technical Standard, DPCC has the NAICS code 325110 (olefins units – a petrochemical manufacturing facility) and has registered under the Petrochemical Technical Standard for 1, 3-butadiene to ensure compliance.

C) Joint property status requires the Bioindustrial Park to report all 1,3-butadiene emissions, including those from DPCC

If DPCC and the Bioindustrial Park are considered joint properties, Arlanxeo must report all 1,3- butadiene emissions from the adjacent properties, even if the facilities on the adjacent properties are registered to the Petrochemical Industry Standard.

This is consistent with Ministry’s Guide to Applying for Registration to the Technical Standards Registry – Air Pollution. Section 2.1.3 gives examples of how the Ministry will treat adjacent properties where some properties register and others do not. Although the Guide contemplates scenarios where all the adjacent properties are eligible to register, which is not the case here, Fact Situation 2 is nevertheless analogous to the Arlanxeo application (where one facility wants to register and the other cannot). The Guide suggests that, where one facility registers to the standard and one does not, but they continue joint property status, the unregistered facilities “must prepare an ESDM that includes all contaminants discharged from [all the facilities].” There is no reason to depart from this policy for the Bioindustrial Park, which is not eligible to register to the standard.

This requirement makes sense. The Petrochemical Industry Standard was meant to set out requirements for the implementation of best available air pollution control for the petrochemical manufacturing sector. These requirements are meant to further the fundamental health and environmental protection objectives of the Environmental Protection Act and Regulation 419/05.

To develop these requirements, the Ministry reviewed ESDM reports for facilities in the sector; completed a dominant source analysis for those facilities; and conducted technology benchmarking to consider best available methods and requirements in other jurisdictions for the sector. It did not do this for the sewage treatment sector. Arlanxeo does not need to meet the requirements set out in the standard, and even if it did, the Ministry has not analyzed whether those requirements would constitute best available pollution control requirements for a sewage treatment facility. Most notably, Arlanxeo would no longer have to comply with the fenceline monitoring requirements of the technical standard. Allowing Arlanxeo not to comply with the air quality standard for 1,3-butadiene when it also does not have to comply with an applicable technical standard would, in effect, unlawfully authorize non-compliance with Regulation 419/05 and would seriously undermine the objectives of the EPA and the regulation.

Allowing Arlanxeo to artificially exclude its 1,3-butadiene emissions from future reporting would also run counter to the Ministry’s legal obligation to consider cumulative effects when making decisions related to air pollution. Without this information from Arlanxeo, the Ministry will lack the information about potential cumulative impacts that it needs to make legally defensible decisions. Hiding this information will also hamper the ability of surrounding communities, and their residents, to take whatever steps they deem appropriate to protect their health.

That is particularly problematic here, where 1,3-butadiene shares a similar cancer endpoint (leukemias) with benzene. Based on fenceline monitoring from Arlanxeo and nearby facilities, both contaminants are present at levels well above the Schedule 3 standards (and, for 1,3- butadiene in particular, well above the levels predicted in the Petrochemical Industry Standard Rationale document).

Response to above comments under C):

The first ESDM reports of both companies submitted with the air approval applications did not include all emissions from each other’s facility to determine the maximum point-of-impingement concentration for 1,3-butadiene. However, after reviewing the first ESDM reports, the Ministry made a request to both ARLANXEO and DPCC to re-calculate the maximum point-of-impingement concentration for 1,3-butadiene, including all emissions from both facilities. Both ARLANXEO and DPCC re-submitted their revised ESDM reports showing the overall maximum point-of-impingement concentration for 1,3-butadiene including all emissions from both facilities, based on dispersion modelling as a joint property.

Furthermore, ARLANXEO and DPCC are also required under the air approval to consider the most current information from the ARLANXEO, DPCC and Origin Material facilities and model as a joint property while preparing or proposing to update or updating the ESDM Report.

To continue addressing the issue on 1, 3-butadiene emissions from both ARLANXO and DPCC facilities, DPCC has registered to the Petrochemical Technical Standard for 1, 3-butadiene to ensure compliance.

As part of the approval requirements (as terms and conditions in the air ECA), ARLANXEO is required to continuously monitor benzene emissions from its facility to ensure compliance.

D) There is a reasonable basis to believe that 1,3-butadiene emissions from the joint properties exceed the Regulation 419/05 air quality standard

In this case, the commenter is concerned that exempting all three facilities from reporting 1,3- butadiene emissions in ESDM reports would artificially disguise potential exceedances of the Schedule 3 standard. This outcome would subvert the intent of joint property status under Regulation 419/05.

The ESDM summary table included in the application materials excludes 1,3-butadiene emissions from DPCC. It predicts annual 1,3-butadiene POI concentrations for the Bioindustrial Park for two operating scenarios; in both scenarios, the POI concentrations are less than the annual standard of 2 µg/m³ (0.5 and 0.045 µg/m³, respectively).

However, the March 2020 ESDM summary table for the entire Arlanxeo West site predicts an annual POI concentration of 9.3 µg/m³ – a concentration that significantly exceeds, by 465%, the annual air quality standard.

Since Arlanxeo implemented fenceline monitoring for 1,3-butadiene in 2018, it has consistently recorded the highest facility-wide 1,3-butadiene levels – averaging above 2 µg/m³ each year – at monitoring station 2.14 The two closest emission sources to this station are the BIOX plant and north brine pond, and the station is also one of the two closest to the flares.

Accordingly, if the Ministry approves this ECA, it should impose conditions to bring these high levels of 1,3-butadiene under control. It should not (and cannot lawfully) allow the Bioindustrial Park to exclude 1,3-butadiene emissions from all of the joint properties in its ESDM reports.

Response to above comments under D):

For ARLANXEO and DPCC, the first ESDM reports of both companies submitted with the air approval applications did not include all emissions from each other’s facility to determine the maximum point-of-impingement concentration for 1,3-butadiene. However, after reviewing the first ESDM reports, the Ministry made a request to both ARLANXEO and DPCC to re-calculate the maximum point-of-impingement concentration for 1,3-butadiene, including all emissions from both facilities. Both ARLANXEO and DPCC re-submitted their revised ESDM reports showing the overall maximum point-of-impingement concentration for 1,3-butadiene including all emissions from both facilities, based on dispersion modelling as a joint property. Emission of other air contaminants from the Origin facility are also included the revised ESDM reports.

ARLANXEO and DPCC are also required under the air approval to consider the most current information from the ARLANXEO, DPCC and Origin Material facilities and model as a joint property while preparing or proposing to update or updating the ESDM Report.

To continue addressing the issue on 1, 3-butadiene emissions from both ARLANXO and DPCC facilities, DPCC has registered to the Petrochemical Technical Standard for 1, 3-butadiene to ensure compliance.

Furthermore, ARLANXEO is required under the air approval to:

1. Ensure that 1,3 butadiene that is conveyed in closed system to a flare that has a pilot flame present.
2. Ensure that each open-ended valve that may contain or come into contact with a liquid or gas that contains at least 0.8% 1,3 butadiene by weight is equipped with a cap, blind flange, plug, or a second valve that seals the open end.
3. Maintain and implement a Leak Detection and Repair Program to detect and repair leaking components that may contain or come into contact with a liquid or gas that contains at least 0.8% 1,3 butadiene by weight.

These requirements are to address the emission sources of 1,3 butadiene that will be retained by the ARLANXEO after the transfer of the Olefin unit to Diamond Petrochemicals Canada Corporation is complete.

Comments from Commenter No. 2:

ARLANXEO Proposal Summary

This proposal is for an Environmental Compliance Approval with Limited Operational Flexibility (air) which replaces all the current Environmental Compliance Approvals for air at this facility for all emissions from ARLANXEO Canada Inc., a wastewater treatment facility for a bio-industrial park, located in the City of Sarnia, Ontario.

The application includes all sources at the facility, including flares, tanks, feed pit and labs, removal of all the Olefin sources and addition of a pilot plant.

Emissions to the air from this facility include:

• acetonitrile
• benzene
• ammonia
• 1.3-Butadiene
• chloroform
• bromoform
• methyl chloride
• methanol

The facility is also proposing that it no longer be registered to the Technical Standards Registry – Air Pollution (Technical Standards Registry) for the Petrochemical – Industry Standard under O. Regulation 419/05: Air Pollution – Local Air Quality (O. Reg. 419/05), with respect to 1,3-butadiene.

The Environmental Compliance Approval with Limited Operational Flexibility (Air), when issued, permits modifications to the facility subject to limits on operational flexibility that include a production limit for the facility to be specified on the Environmental Compliance Approval with Limited Operational Flexibility (air).

The limited operational flexibility conditions have an expiry date. The company will be required to make an application for amendment at that time to renew these conditions.

A) Ontario air quality standard for 1,3 butadiene: the Ontario air quality standard for 1,3 butadiene is insufficiently protective relative to the US EPA Integrated Risk Information System (IRIS) assessment for the carcinogenicity for this contaminant.

In summary, the IRS one-in-one million incremental cancer risk concentration threshold is 0.03 micrograms per cubic metre vs the Ontario air quality standard (supposedly protective against the incremental cancer risk) of 2 micrograms per cubic metre, annual average. This discrepancy results in a less stringent approach to dealing with 1,3 butadiene air emissions from ARLANXEO (and nearby NOVA-Corunna which has been reporting higher annual emissions of 1,3 butadiene to NPRI than ARLANXEO) and the need for consideration of a cumulative effect assessment and improved air pollution control for ARLANXEO. It is also worth noting that the cancer end-point for 1,3 butadiene is the same (i.e., blood cancers such as leukemia) as for benzene where there is also excessive exposure in the the commenter's community.

Response to above comments under A):

The air standard for 1, 3-butadiene in O. Reg. 419/05 has been established to be protective of human health. The proponent (ARLANXEO or Diamond) has demonstrated compliance with the ministry’s current regulatory requirements for 1,3-butadiene, either meeting the air standard in O. Reg. 419/05 or approved registration in Petrochemical Technical Standard.

The first ESDM reports of both companies submitted with the air approval applications did not include all emissions from each other’s facility to determine the maximum point-of-impingement concentration for 1,3-butadiene. However, after reviewing the first ESDM reports, the Ministry made a request to both ARLANXEO and DPCC to re-calculate the maximum point-of-impingement concentration for 1,3-butadiene, including all emissions from both facilities. Both ARLANXEO and DPCC re-submitted their revised ESDM reports showing the overall maximum point-of-impingement concentration for 1,3-butadiene including all emissions from both facilities, based on dispersion modelling as a joint property. Therefore, compliance is determined based on joint ESDM.

To address the issue on 1, 3-butadiene emissions from both ARLANXO and DPCC facilities, DPCC has registered to the Petrochemical Technical Standard for 1, 3-butadiene to ensure compliance. Assessment on best available air pollution control technology is part of the Petrochemical Technical Standard process to ensure compliance with the requirements under the technical standard.

The Cumulative Effects Assessment in Air Approvals Policy decision was posted to the Environmental Registry in April 2018 and came into effect on October 1, 2018. This policy strengthens and clarifies the consideration of cumulative effects when making decisions related to environmental compliance approvals and indicates when additional measures may be needed beyond current regulatory requirements. Under this policy, and other works the ministry is currently undertaking in the Sarnia area, it is considered that no further action is required for the facility at this time.

B) Suggestions for improved air pollution control to address fugitive emissions of benzene and 1,3 butadiene for petro-chemical plants and refineries nearby to the commenter:

• implementation of a fixed leak-detection-and-repair (LDAR) system as a significant improvement to the traditional LDAR systems.
• consideration of the use of a "closed vent and control system" (instead of a floating roof design) for storage tanks where fugitive emissions of 1,3 butadiene or benzene are significant.
• consideration of the installation of a vacuum system to minimize atmospheric emissions of leaks during rail or truck transfers of product and raw materials.

Response to above comments under B):

The proponent has demonstrated compliance with current regulatory requirements of the ministry in the proposal. Amendment to current regulatory requirements is outside the jurisdiction of this approval. To address the issue on 1, 3-butadiene emissions from both ARLANXO and DPCC facilities, DPCC has registered to the Petrochemical Technical Standard for 1, 3-butadiene to ensure compliance. Assessment on best available air pollution control technology, such as the air pollution controls for fugitive emissions as suggested above, is part of the Petrochemical Technical Standard process to ensure compliance with the requirements under the technical standard.

Furthermore, ARLANXEO is required under the air approval to:

1. ensure that 1,3 butadiene that is conveyed in closed system to a flare that has a pilot flame present.
2. ensure that each open-ended valve that may contain or come into contact with a liquid or gas that contains at least 0.8% 1,3 butadiene by weight is equipped with a cap, blind flange, plug, or a second valve that seals the open end.
3. maintain and implement a Leak Detection and Repair Program to detect and repair leaking components that may contain or come into contact with a liquid or gas that contains at least 0.8% 1,3 butadiene by weight.

These requirements are to address the emission sources of 1,3 butadiene that will be retained by the ARLANXEO after the transfer of the Olefin unit to Diamond Petrochemicals Canada Corporation is complete.

As part of the approval requirements of the air ECA, ARLANXEO is required to continuously monitor benzene emissions from its facility to ensure compliance.

C) Recommendation for a cumulative effects assessment: that is similar to the approach used in the United States Environmental Protection Agency National Air Toxics Assessment efforts.

Response to above comments under No. C):

The Cumulative Effects Assessment in Air Approvals Policy decision was posted to the Environmental Registry in April 2018 and came into effect on October 1, 2018. This policy strengthens and clarifies the consideration of cumulative effects when making decisions related to environmental compliance approvals and indicates when additional measures may be needed beyond current regulatory requirements. Under this policy, and other works the ministry is currently undertaking in the Sarnia area, it is considered that no further action is required for the facility at this time.