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Wheeling-Pittsburgh Steel Corp. v. Dep't of Environmental Protection

August 6, 2009

WHEELING-PITTSBURGH STEEL CORPORATION AND AMERICAN IRON OXIDE COMPANY, PETITIONERS
v.
DEPARTMENT OF ENVIRONMENTAL PROTECTION, RESPONDENT



The opinion of the court was delivered by: President Judge Leadbetter

Argued: May 5, 2009

BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, President Judge, HONORABLE RENÉE COHN JUBELIRER, Judge, HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge.

OPINION

Wheeling-Pittsburgh Steel Corporation (Wheeling Steel) and American Iron Oxide Company (AMROX) (collectively, Petitioners) petition for review of the orders of the Environmental Hearing Board (EHB) that affirmed, as modified, the decision of the Department of Environmental Protection (DEP) and denied Petitioners' petition to reopen the record to present additional evidence. DEP granted AMROX a variance from the classification of "spent pickle liquor" as a solid waste regulated by the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. §§ 6901-6992k, and the federal hazardous waste regulations adopted by DEP. In granting the variance, DEP imposed certain conditions, one of which was modified by EHB. Petitioners challenge DEP's authority to regulate spent pickle liquor as a solid/hazardous waste. They assert that the spent pickle liquor is exempt from the definition of a solid waste under the regulations. In the alternative, they argue that two conditions imposed by DEP are unreasonable. They also question EHB's refusal to reopen the record.

I.

EHB made the following relevant findings based on the evidence presented at hearings. Steel manufacturers treat steel utilizing a process known as "pickling," which involves running rolled sheets of steel through hydrochloric acid (HCl) solution. During this process, iron scale buildup (rust) on the surface of the steel is removed when it reacts with the hydrochloric acid to form iron chloride (FeCl2). After a continued use, the hydrochloric acid solution loses its effectiveness to treat the steel due to the weakened hydrochloric acid properties and the presence of iron chloride, water and heavy metals and must be replaced with fresh hydrochloric acid solution. This used hydrochloric acid solution is referred to as "spent pickling liquor" or "ferrous chloride solution."*fn1 The spent pickle liquor is a "spent material," which is defined as "any material that has been used and as a result of contamination can no longer serve the purpose for which it was produced without processing." 40 C.F.R. § 261.1(c)(1). The spent pickle liquor is contaminated with numerous toxic metals, such as lead, copper, zinc and chromium, and is corrosive. It is designated as a "KO62" hazardous waste and must be disposed of at a hazardous waste disposal facility or sent to a recycling facility. 40 C.F.R. § 261.32(a).

Under Section 104(1) and (6) of the Solid Waste Management Act, Act of July 7, 1980, P.L. 380, as amended, 35 P.S. §§ 6018.104(1) and (6), DEP has the authority and responsibility to "administer the solid waste management program, including resource recovery and utilization" and to "regulate the storage, collection, transportation, processing, treatment and disposal of solid waste." In 1995, AMROX obtained a "permit-by-rule"*fn2 from DEP and began processing spent pickle liquor at its facility located in Allenport, Pennsylvania. AMROX received spent pickle liquor for processing from steel rolling facilities including Wheeling Steel, which operates facilities in Ohio and in Allenport, Pennsylvania, adjacent to the AMROX's facility. In 1996, AMROX also obtained a conditional concurrence of a co-product determination for "waste pickle liquor" from DEP, which stated that the "spent pickle liquor . becomes a substitute for commercial ferrous chloride solution and therefore may be managed as a co-product."*fn3 Petitioners' Exhibit No. 13; Reproduced Record (R.R.) at 240a.

Currently, AMROX receives spent pickle liquor from Wheeling Steel's Allenport facility through pipes and from other generators' facilities by trucks. AMROX first places the spent pickle liquor in 35,000-gallon, above- ground storage tanks. The spent pickle liquor is then pumped into a Venturi scrubber/separator to remove excessive water, debris and other impurities. The next step is to spray a fine mist of spent pickle liquor into a gas-fired, high-heat spray roaster. During this process, known as pyrohydrolysis, molecules of the spent pickle liquor dissociate into individual atoms and react with oxygen to form hydrochloric acid (HCl) and iron oxide (Fe2O3). Appellants' expert witness, Dr. Richard McCullough, who is a chemistry professor and dean of Carnegie-Mellon University, described the process as follows: "4FeCl2 [iron chloride] 4H2O O2 → 2Fe2O3 8HCl." Dr. McCullough's Report at 4; R.R. at 313a.

AMROX removes the iron oxide that falls to the bottom of the spray roaster and sells it for use as coolants or for magnetic applications. AMROX transfers the hydrochloric acid in the spray roaster into an absorber and mixes it with water to produce hydrochloric acid with an 18% concentration.*fn4 The newly generated hydrochloric acid is sent back to Wheeling Steel and other steel rolling facilities that treat the steel. AMROX's operation also generates spent pickle liquor sludge, a hazardous waste, which is sent to an off-site facility for proper disposal. DEP's Exhibit No. 14 (Consent Assessment of Civil Penalty); R.R. at 714a. Under the contracts with AMROX, the spent pickle liquor generators pay AMROX monthly fees for "regeneration services" for converting "waste hydrochloric acid pickle liquor" into iron oxide and hydrochloric acid. R.R. at 542a and 558a.

RCRA provides that "[a]ny state which seeks to administer and enforce a hazardous waste program pursuant to this subchapter [Subchapter III - Hazardous Waste Management] may develop and . submit to the Administrator [of the Environmental Protection Agency (EPA)] an application . for authorization of such program." 42 U.S.C. § 6926(b). On April 30, 1999, DEP adopted 25 Pa. Code Chapter 261a (effective May 1, 1999), incorporating by reference most of 40 C.F.R. Part 261 ("Identification and Listing of Hazardous Waste") promulgated under RCRA. 25 Pa. Code § 261a.1. In 2000, EPA approved DEP's new hazardous waste regulations. The previous procedures for permitting the handling of the hazardous waste through a "permit-by-rule" and a "co-product determination" are no longer available under the new regulations.

In September 1999, Petitioners requested DEP's concurrence that the spent pickle liquor received by AMROX from Wheeling Steel and United States Steel Corporation (U.S. Steel) is not a solid waste subject to the hazardous waste regulations. DEP denied AMROX's request but indicated that it would prepare a document to grant a variance.*fn5 On April 6, 2005, DEP granted AMROX a variance "for covered sources of spent pickle liquor that is used as iron oxide manufacturing feedstock," subject to thirteen conditions. R.R. at 212a. Condition No. 5 limited the covered spent pickle liquor generators to Wheeling Steel, U.S. Steel and ISG Weirton Steel Corporation; other steel manufacturers were required to obtain DEP's prior written approval to supply spent pickle liquor to AMROX. Condition No. 6 required covered generators to analyze the spent pickle liquor for specified maximum and minimum ferrous chloride, maximum hydrochloric acid and maximum fluoride at least on a quarterly basis. They must also analyze the spent pickle liquor for parameters of nineteen specified metals, such as lead, aluminum, chromium, copper and zinc, at least on an annual basis.

In granting the variance, DEP rejected Petitioners' claim that the spent pickle liquor is not subject to DEP's solid waste regulations. A "solid waste" is "any discarded material," unless specifically excluded by the regulations from such classification. 40 C.F.R. § 261.2(a)(1). A "discarded material" is any material which is, inter alia, "abandoned," "recycled" or "considered inherently waste-like."

40 C.F.R. § 261.2(a)(2). A material is "recycled" "if it is used, reused, or reclaimed." 40 C.F.R. § 261.1(c)(7). A solid waste exhibiting ignitability, corrosivity, reactivity or toxicity is regulated as a hazardous waste. 40 C.F.R. §§ 261.3(a) and 261.20 - 24. Petitioners acknowledge that the spent pickle liquor would be subject to the hazardous waste regulations if it constitutes a solid waste.

AMROX and Wheeling Steel filed separate appeals from DEP's grant of a variance, which were consolidated by EHB. Petitioners claimed that the spent pickle liquor is exempt from the solid waste classification under 40 C.F.R. §261.2(e)(1)(i) and (ii). Section 261.2(e)(1) provides in relevant part:

(e) Materials that are not solid waste when recycled. (1) Materials are not solid wastes when they can be shown to be recycled by being:

(i) Used or reused asingredients in an industrial process to make a product, provided the materials are not being reclaimed; or

(ii) Used or reused as effective substitutes for commercial products; or

(iii) Returned to the original process from which they are generated, without first being reclaimed or land disposed.

Petitioners also argued that the conditions imposed by DEP were unreasonable.

EHB determined that the spent pickle liquor is not exempt from solid waste classification under 40 C.F.R. § 261.2(e)(1)(i). EHB concluded that AMROX's operation constitutes reclamation of the spent pickle liquor because it removes contaminants from the spent pickle liquor and restores the hydrochloric acid to a usable condition. EHB further determined that the spent pickle liquor is not eligible for an exemption under 40 C.F.R. § 261.2(e)(1)(ii). EHB found that AMROX reclaims a waste product for the steel industry by turning it into reusable materials and that the production of hydrochloric acid and iron oxide is only secondary to its primary function as a spent pickle liquor processor. EHB further found that DEP's 1996 co-product determination is not controlling in deciding eligibility for an exemption under 40 C.F.R. § 261.2(e)(1)(ii). EHB concluded that Condition Nos. 5 and 6 are reasonable and necessary to ensure that the spent pickle liquor is within the requisite chemical parameters, does not cause air pollution and is not harmful to AMROX's process. The Board modified Condition No. 3 and permitted AMROX to store up to 25% of iron oxide produced annually.

EHB accordingly affirmed DEP's grant of variance, as modified, and issued a separate order denying Petitioners' petition to reopen the record for the purpose of permitting them to present additional evidence, which allegedly supported their position that the spent pickle liquor is exempt from the solid waste regulations. Petitioners' appeal to this Court followed.

II.

Petitioners first argue that DEP and EHB misconstrued 40 C.F.R. § 261.2(e)(1)(i), which exempts materials "[u]sed or reused as ingredients in an industrial process to make a product" from the solid waste regulations, when such materials are not "reclaimed." Petitioners maintain that AMROX's operation does not involve "reclamation" or "restoration" of the spent pickle liquor. They assert that AMROX neither removes any "significant" amount of contaminants from the spent pickle liquor nor restores any "significant" amount of hydrochloric acid. Petitioners' Brief at 22. They claim that AMROX instead manufactures new products from the spent pickle liquor and does not restore it to its original usable condition.*fn6

Congress enacted RCRA to establish a "cradle-to-grave" regulatory scheme to provide safe treatment, storage and disposal of hazardous waste. Envtl. Defense Fund v. Envtl. Prot. Agency, 210 F.3d 396 (D.C. Cir. 2000). It is well-settled that any exception to the general provision promoting the legislative purpose or mandate should be narrowly construed. Borough of Youngwood v. Pa. Prevailing Wage Appeals Bd., 596 Pa. 603, 947 A.2d 724 (2008); Gen. Motors Corp. v. Unemployment Comp. Bd. of Review, 948 A.2d 256 (Pa. Cmwlth. 2008). Petitioners had the burden of proving that DEP's action was ...


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