Second in a series

The December 7-11 inspection of Intel’s air pollution records by Dallas Region Environmental Protection Agency (EPA) officials was the second step in a continuing enforcement action which could bring changes in the way Intel is regulated.

Documents obtained by Corrales Comment and interviews with N.M. Air Quality Bureau officials and Intel rep- resentatives indicate tighter regulations may be imposed.

That could include more testing, monitoring or even daily or hourly lim- its on emissions of airborne industrial chemicals.

EPA’s findings from its December 2009 in-depth inspection are not ex- pected until summer, but Intel officials have already held exploratory, pro-ac- tive discussions with Air Quality Bu- reau regulators in Santa Fe about how any new controls might unfold.

Corrales Residents for Clean Air and Water (CRCAW) has demanded for more than a decade that Intel’s air pol- lution permit from the N.M. Environ- ment Department’s Air Quality Bureau be re-written to require continuous emissions monitoring, hourly and/or daily emissions limits and other con- trols.

The citizens’ group that organized in 1993 has repeatedly called for Intel’s permit as a “minor source” of air pollu- tion be revoked and re-issued with tighter “major source” regulations.

The December EPA inspection at Intel by two Dallas officials and two consultants from Colorado was pre- ceded by a January 29, 2009 formal let- ter to Intel initiating the agency’s investigation for compliance with the federal Clean Air Act.

Such letters are referred to as “114 letters,” indicating Section 114 of the federal Clean Air Act regarding regula- tory action to assure compliance with pollution control requirements.

N.M. Air Quality Bureau Chief Mary Uhl said January 20 such letters “are typically tied to initiation of an EPA en- forcement action. The ‘114 letter’ is a

very detailed questionnaire about nor- mal operations and changes you’ve made in your operations.

“It’s the way that EPA, for lack of a better word, gets ammunition against their target for an enforcement action.”

Uhl said she understood that EPA- Dallas wanted more frequent inspec- tions and monitoring of Intel as well as short-term limits on allowable emis- sions.

On January 21, Corrales Comment asked Intel officials to provide a copy of EPA’s “114 letter” and the corpora- tion’s response. Intel had not complied at press time, but a similar request to the Dallas regional office of the EPA was partially successful.

Dave Bary, EPA’s regional external communications director, e-mailed copies of the January 29, 2009 letter and a subsequent August demand for addi- tional information. Bary said Intel’s re- sponses to those letters could not be released because they are “part of an en- forcement action.”

In the letters, EPA-Dallas’ Compli- ance Assurance and Enforcement Divi- sion demanded detailed answers to 27 comprehensive questions related to Intel-Rio Rancho’s air emissions.

The EPA “114 letters” to Intel con- tained the caveat that “We may use any information submitted in response to this request in an administrative, civil or criminal action.”

Intel Communications Manager Liz Shipley said February 1 that “Intel has provided responsive information to the EPA’s request. The EPA has not alleged any violations at this time.”

The questions are so comprehensive (covering any and all aspects of poten- tial emissions, seeking data from 1990 onward) that it is unclear exactly on what EPA may be focusing.

Uhl was asked whether the EPA-Dal- las enforcement action may have been triggered by the investigation into Intel’s pollution by the federal Agency for Toxic Substances and Disease Reg- istry (ATSDR), whose draft report was released about the same time EPA sent its January 2009 “114 letter.”

Uhl replied: “I have no idea what prompted it. We called EPA and said ‘hey, it would be nice if you told us that sources in our state were getting this let- ter.’”

Uhl is thoroughly aware of the Intel air pollution issues. She directed the bu- reau’s Corrales Air Toxics Study in 2002-04 which included extensive air sampling and monitoring, pollution dis- persion computer modeling, and an acute and chronic public health analy- sis.

“The EPA’s request was extremely detailed,” Uhl noted. “Whoever wrote this letter knew the semiconductor in- dustry. We were impressed with the de- tails.”

Uhl was asked, based on her knowl- edge of the issues and of the regulatory process, what she thought EPA-Dallas is focusing on.

“The over-arching issue —and I think Intel would agree with this— is whether this is a ‘major source’ or a ‘minor source.’ That was readily apparent.

“There are very detailed technical questions about toxics, but you can tell the flavor of it is: is this really a minor source of air pollutants... is this permit appropriate?”

Back in the mid-1990s, the Air Qual- ity Bureau staffer responsible for writ- ing the Intel air pollution permit, Jim Shively, was subject to heavy political pressure to grant Intel its requested “minor source” permit.

Shively, now retired, contended Intel’s operations and especially its po- tential to emit large quantities of several highly toxic chemicals should be regu- lated as a “major source” of air pollu- tion.

But political pressure inside the N.M. Environment Department wrested con- trol of Intel’s permit away from Shiv- ely. Responsibility for writing the kind of permit Intel wanted was given to an- other staffer who did so with little delay.

Shively blasted the outcome as a “sham permit,” using the EPA’s own terminology and criteria. (See Corrales Comment Vol.XXII, No. 23, January 24, 2004 “Intel’s Air Pollution Permit a

‘Sham,’ Says Former Regulator”)

Shively, program manager for the bu- reau’s new source permitting section from June 1994 to March 2001, backed up that assessment in a highly-charged letter to N.M. Environment Secretary Ron Curry dated January 5, 2004.

His indictment of the process that ap- proved the controversial pollution per- mit was based on his own experience as he struggled in vain to produce an en- forceable permit for Intel’s Rio Rancho operations.

After he retired from the bureau, Shively was no longer under a prohibi- tion against speaking out about the in- adequacy of Intel’s air pollution permit. He held a news conference January 19, 2004 to explain why he feels the mi- crochip manufacturer got a permit that does not protect the health of residents near the Intel plant.

Intel didn’t want to be held account- able for its emission of pollutants, Shiv- ely said, so they refused for more than five years to accept a regulatory permit that would have required close moni- toring and short-term emission limits.

“The term ‘sham permit’ is actually a term used by the Environmental Protec- tion Agency to describe a permit that is impractical and unenforceable,” he said.

Intel’s air pollution permit is unen- forceable, Shively explained, “because it all comes down to these calculations to determine emission rates. These cal- culations are based on ‘emissions fac- tors’ that Intel provides. But we never could figure out where these numbers came from.

“It is reliance on these emission fac- tors that I think is just out of whack,” the veteran air quality specialist con- cluded. “It’s hard to have much confi- dence in the reported emissions number if you can’t verify it.”

Back in 2004, Shively insisted Intel’s air pollution permit had to be with- drawn and developed anew.

“First and foremost, the permit needs to be re-done. There are provisions in the permit to rescind it and re-open it. All three of the criteria for re-opening the permit apply,” he said.

But from that day to now, the political hierarchy within State government has declined to take that corrective step.

Shively said the political courage within NMED to call for corrections was lacking. “In my gut, I think they know this permit is not right and needs to be re-opened. But I don’t think they want to go there.

“To re-open this permit is not a safe thing for them to do. There’s a risk in- volved [for NMED officials]. This is a large, influential corporation, and there’s a risk involved if you mess with them.”

Days after he retired, Shively wrote a letter to N.M. Environment Secretary Curry outlining his concerns about the Intel permit.

In his letter, Shively gave reasons why he considers the current air pollu- tion permit to be a sham, as defined by a federal policy memorandum.

“The Intel permit (No. 325M9) is a ‘sham’ based on an EPA memo dated June 13, 1989, and the process that pro- duced it was a farce,” Shively wrote.

“The permit is impractical and unen- forceable. This has been repeated and emphasized many times and by many people during the review process and since.”

Shively’s 2004 letter said he had sup- plied the names of 16 other former NMED employees who shared his con- cerns about the Intel permit and how it was approved.

Shively said the permit “is written with the emission factors provided by Intel that have never been independ- ently validated. The department cannot determine Intel’s air emissions, nor can the factors or emissions be determined with any real confidence or precision.”

The result, Shively pointed out, is that “Intel can’t be found in violation of the emission limits in the permit. Only Intel knows the origin or validity of the fac- tors.”

Intel’s Permit No. 325-M9, approved in March 2000 to cover the massive Fab 11-X expansion, is based almost en- tirely on calculating emissions of in- dustrial pollutants, rather than

measuring them. Those calculations are based on “emission factors,” or multi- pliers, generated at Intel’s research and development facility in Oregon.

Documents and notes in the bureau’s files on the Intel permit as far back at 1994 reveal that Shively repeatedly sought independent verification of those emissions factors.

Unless the bureau had some means of checking or validating the emissions factors, he said, state regulators were left only with Intel’s word that emis- sions do not exceed limits set in the per- mit.

Intel Communications Manager Shipley refuted that in a statement Feb- ruary 1. “Intel conducts quarterly emis- sions testing under the supervision of NMED which validates our calculated emissions,” she pointed out.

Shively’s January 2004 letter to Sec- retary Curry slammed the Environment Department for caving in to Intel’s pres- sures. “This permit, like many others, was granted due to pressure from the permittee, but worse than that, by an in- appropriate desire internally to accom- modate them to any extent possible. These actions reflect poorly on the en- tire bureau, and as a result, it has be- come severely compromised and lacks integrity and credibility.”

The former chief permit writer con- cluded his letter by urging Secretary Curry to re-open Intel’s air permit. “The department needs to rescind and re- issue the permit and conduct the review appropriately and in such a way that people know what is done, how it’s done and why it’s done.”

Shively’s letter to Curry was appar- ently triggered by requests by Corrales Comment to interview him on Intel’s air permit. In the opening paragraph, Shiv- ely wrote, “This letter is a follow-up to a meeting I had with [NMED Division Director] Jim Norton and [NMED pub- lic affairs director] Jon Goldstein on October 24, 2003 regarding the Intel air quality permit and Air Quality Bureau problems in general.

“This meeting was prompted by a re- porter’s request for an interview with

me prior to my retirement on December 31, 2003. The reporter made the request because I was a program manager of the New Source Review permitting unit of the Air Quality Bureau from June 1994 until March 2001.

“The reporter was denied the inter- view, and I requested the meeting with Jim Norton to at least inform him of how I expected the interview to go.”

Corrales Comment filed a Freedom of Information Act request with NMED in October 2003 to be allowed to inter- view Shively. NMED officials contin- ued to thwart access to Shively until his retirement at the end of 2003.

The U.S. Environmental Protection Agency (EPA) document to which Shively referred in his letter to Curry defining what constitutes a “sham per- mit” was issued by the EPA’s Office of Air Quality Planning and its Office of Enforcement and Compliance Monitor- ing. The memo is entitled “Guidance on Limiting Potential to Emit in New Source Permitting.”

The memo and a related EPA docu- ment explain that air pollution permit writers must guard against “sham per- mits” for big industrial operations (like the Intel facility above Corrales) which seek to be regulated as a “minor source” of pollution.

Intel’s Permit No. 325-M9 (modifica- tion number 9) is, in fact, a permit to be regulated as a “minor source.”

A crucial consideration was the facil- ity’s over-all “potential to emit;” how much toxic material could be released? Emissions potential from the Intel-Rio Rancho plant —the world’s largest mi- crochip facility— are enormous.

The federal guidance also makes it clear that the permit can avoid becom- ing a “sham” only if it contains suffi- cient requirements to be federally enforceable.

When Shively was in charge of writ- ing the permit for Intel, he fought to re- quire Intel to install continuous emissions monitoring equipment, so that NMED compliance officers would know at all times what level of emis- sions were coming from the facility. He

also fought against Intel’s insistence on permit conditions that set yearly aver- ages, rather than hourly or daily, emis- sions limits.

A draft version of Permit No. 325-M9 produced by Shively called for continu- ous emissions monitoring and other safeguards. When it was released for public review August 20, 1998, it was roundly supported by residents and cit- izens’ groups but strenuously opposed by Intel.

That 1998 draft was quickly with- drawn and the more “flexible” permit Intel sought, without short-term emis- sions limits, without verifiable emis- sions factors and without continuous emissions monitoring, was approved in March 2000.

The permit which NMED approved was challenged by Southwest Organiz- ing Project (SWOP), the N.M. Environ- mental Law Center and Corrales Residents for Clean Air and Water.

For their appeal to the N.M. Environ- mental Improvement Board, the citi- zens’ groups called in a California-based air pollution special- ist, Jim Tarr, for expert testimony.

“I have been in this business a long time, and I get around the United States from time to time on these issues,” said Tarr, president of Stone Lions Environ- mental Corporation. “I work with a lot of state and local agencies.

“From what I see here, the regulatory effort by the State of New Mexico re- ally stands out in my mind. It’s the worst I’ve ever come in contact with.

“By that I mean, in this particular case, the Environment Department has clearly abdicated its responsibility which is to protect the people who live around this facility.”

(See Corrales Comment Vol. XVII, No. 16, October 10, 1998, “‘Air Regu- lators Worst I’ve Seen,’ Consultant Says.”)

In May 1993, Dallas-Region EPA of- ficials instructed the N.M. Air Quality Bureau to regulate Intel-Rio Rancho as a major source of air pollution. That de- termination was meant to overturn the bureau’s decision that the rapidly ex-

panding operations here would not fall under federal regulations for “preven- tion of significant deterioration” of air quality.

(See Corrales Comment Vol.XIII, No. 8, June 11, 1994 “EPA Sees Intel as Major Pollution Source”)

The concern then was not about the quantities of federally identified Haz- ardous Air Pollutants and volatile or- ganic compounds that would be released, but rather combustion byprod- ucts from the new gas-fired boilers in the huge complex’s “energy center.”

How that got resolved, and how Intel got its “minor source” regulations, is il- lustrative.

When Intel first submitted data to the Air Quality Bureau on operation of the 12 big boilers, it used the manufac- turer’s specifications for expected emis- sions. But those numbers indicated Intel would qualify as a “major source” of air pollution, so Intel claimed the specifi- cations were erroneous.

Initially the new equipment was cal- culated to emit 433 tons a year of such combustion byproducts as nitrogen dioxide, carbon monoxide and sulphur dioxide. EPA’s “prevention of signifi- cant deterioration” of air quality rules had a threshold of 250 tons a year. Above that the “major source” regula- tions set in.

When the discrepancy was pointed out, Intel scurried to correct its submis- sion to show that its new emissions would be less than 215 tons, not 433, well less than the 250-ton threshold.

But then EPA oversight analysts in Dallas pointed out that the appropriate threshold level was really 100 tons a year, not 250. So Intel went back to its computer models to illustrate that its emissions would be under 100 tons, not just under 215 tons.

EPA-Dallas was not satisfied, but as- serted it was up to the N.M. Air Quality Bureau to accept or reject the revised calculations.

The Air Quality Bureau went along with Intel’s assertions.