Alcoa, Inc. Clean Air Act Settlement

(Washington, D.C. - On April 9, 2003) The Environmental Protection Agency and Department of Justice announced a major Clean Air Act settlement with Alcoa, Inc., under which the company will likely spend over $330 million to install state-of-the-art pollution controls to eliminate the vast majority of sulfur dioxide and nitrogen oxide emissions from the power plant at Alcoa's aluminum production facility in Rockdale, Texas.

Overview
Company
Environmental Benefits
Violations
Injunctive Relief
Environmental Projects
Civil
New Source Review Coal-Fired Power Plant
State Partnership
Citizen Group Partnership
Contact

Overview

On April 9, 2003, the Justice Department, and the Environmental Protection Agency announced a major Clean Air Act settlement with Alcoa Inc., that resolved violations of the Clean Air Act's New Source Review (NSR) and Prevention of Significant Deterioration (PSD) requirements. Under the settlement, Alcoa has committed to install pollution controls that will result in major reductions of harmful air pollutants annually and will fund several beneficial environmental projects.

With three citizen groups, and the involvement of the State of Texas, this consent decree is an excellent example of how effective federal, state, and citizen group partnerships can greatly benefit the environment and assure public health protection through enforcement actions.

Company

Alcoa is the world's leading producer of primary aluminum, fabricated aluminum, and alumina. Active in all major aspects of the industry - technology, mining, refining, smelting, fabricating and recycling. Alcoa is headquartered in Pittsburgh, Pa., and has 142,000 employees in 37 countries.

The company's Rockdale facility, located northeast of Austin, Texas, is the nation's largest emitter of sulfur dioxide (SO2) and nitrogen oxides (NOx) from the non-utility source category, according to EPA's 1999 National Emissions Inventory that was released in October 2001. These emissions were generated for the three coal-fired electric generating industrial boilers that support the smelter operations at Rockdale and are addressed in the agreement.

Environmental Benefits

The agreement will result in the annual reduction of approximately 15,480 tons of NOx
(90 percent) and 52,900 tons of SO2 (95 percent).

NO_x: Nitrogen Oxide (NO_x) causes a variety of health and environmental impacts, such as ground-level ozone, acid rain, PM, global warming, water quality deterioration, and visual impairment. NOx plays a major role, with VOCs, in the atmospheric reactions that produce ozone. NOx forms when fuel is burned at high temperatures. The two major emissions sources are transportation and stationary fuel combustion sources such as electric utility and industrial boilers.
SO2: High concentrations of sulfur dioxide (SO2) affect breathing and may aggravate existing respiratory and cardiovascular disease. Sensitive populations include asthmatics, individuals with bronchitis or emphysema, children and the elderly. SO2 is also a primary contributor to acid deposition, or acid rain.

Violations

In the 1980's, just as the Rockdale power plant was nearing the end of its useful life, Alcoa undertook a $63 million program known as the "Betterment Project" to extend the life of the Rockdale power plant, rather than retire the power plant and build a new facility with state-of-the-art pollution controls. The "Betterment Project" did little to better the environment, however. After the completion of the four-year program, pollution from the Rockdale facility increased over 13,000 tons each year as a result of Alcoa's changes.

Environmental Benefits

This agreement requires APC to install state-of-the-art air pollution controls on Plant Miller Units 3 and 4, and to run existing controls on a year-round basis, to reduce emissions of NO_x, SO₂, and PM. In 2005, Miller Units 3 and 4 emitted approximately 23,990 tons of SO₂ and 10,200 tons of NO_x. Under this CD, starting in 2009 APC will reduce the number of tons of NO_x emitted per year by approximately 4,940 tons, and starting in 2012 APC will reduce the number of tons of SO₂ emitted per year by 22,790. The settlement also requires APC to purchase and retire $4.9 million worth of SO₂ emission allowances.

NO_x : Nitrogen oxides cause a variety of health problems and adverse environmental impacts, such as ground-level ozone, acid rain, particulate matter (PM), global warming, water quality deterioration, and visual impairment. Nitrogen oxides play a major role, along with volatile organic chemicals, in the atmospheric reactions that produce ozone.

SO₂ : High concentrations of sulfur dioxide affect breathing and may aggravate existing respiratory and cardiovascular disease. Sensitive populations include asthmatics, individuals with bronchitis or emphysema, children, and the elderly. Sulfur dioxide is also a primary contributor to acid deposition, or acid rain.

PM: Health effects of PM include increased hospital admissions and emergency room visits, increased respiratory symptoms and disease, decreased lung function, and alterations in lung tissue and structure and in respiratory tract defense mechanisms and premature death. PM also is the major cause of reduced visibility in many parts of the nation.

Injunctive Relief

The agreement provides Alcoa three options that it may choose to achieve compliance:

Retrofit the existing Rockdale's Sandow Units 1, 2, and 3 with state-of-the-art
pollution control equipment to control NOx SO2 and PM by no later than March 1, 2007;
Replace the existing Rockdale's Sandow Units 1, 2, and 3 with new generating units that would meet best available control technology for NOx by the State of Texas by no later than December 31, 2007; or x, SO2 and PM as permitted
Permanently shutdown existing Rockdale's Sandow Units 1, 2, and 3 by no later than December 31, 2006.
Alcoa will also install continuous emission monitors for SO2, NOx, and PM in addition
to the existing opacity continuous emission monitors.

Environmental Projects

Under the consent decree, Alcoa will provide $2.5 million to fund the following environmental projects:

Spend $750,000 to retrofit school buses in the greater Rockdale/Austin area with PM pollution control devices.
Provide $1.75 million to the Trust for Public Lands, a national conservation organization, to purchase and maintain property designed to extend and protect the clean air, and the existing Houston toad habitat of the "Lost Pines

Civil Penalty

Pay $1.5 million dollars to the U.S. Treasury.

New Source Review Coal-Fired Power Plant Enforcement Initiative

This is one of a series of cases in the PSD/NSR enforcement effort to bring the power plant industry into full compliance with the Clean Air Act. The agreement resolves certain violations associated with PSD/NSR requirements applicable when "grandfathered" facilities are expanded in a way that increases emissions. The Alcoa consent decree represents the third judicial settlement under the power plants enforcement effort; the other settlement being PSEG Fossil in January 2002, and Tampa Electric Company (TECO) in January of 2000.

State Partnerships

EPA and the State of Texas issued notice of violations in January 2002, to address the PSD/NSR violations remedied by the agreement. While the State of Texas is not a co-plaintiff in the judicial action, Texas was involved in all settlement negotiations and was instrumental in achieving this favorable settlement. The State will be an important partner in the implementation of the consent decree, as the permitting process for the new pollution control devices will be conducted by the State.

Citizen Group Partnership

Neighbor for Neighbors, Inc., a local environmental organization, Environmental Defense, and Public Citizen, Inc., filed the initial action with the Federal District Court in December 2001 and are co-plaintiffs in this action. The citizens groups were key players to assure that the local issues surrounding this case were properly addressed and that the environmental projects required under the consent decree benefitted the local environment. The citizen groups were also involved in negotiations of the pollution controls and the operating parameters of the controls.

Contact

For additional information, contact:

Richard Alonso
U.S. Environmental Protection Agency (2242A)
1200 Pennsylvania Ave., N.W.
Washington, DC 20460-0001
(202) 564-2809
alonso.richard@epa.gov