Very Big News - Intel Busted

How Intel Escaped Rules for Major Air Polluters
Written by Jeff Radford
Corrales Comment
Tuesday, 09 November 2010
Second in a series

The air pollution permit that Intel fought so hard to get during the late 1990s has now been determined inadequate by the U.S. Environmental Protection Agency.

A lengthy report based on the EPA’s December 2009 surprise in-depth inspection at the Intel factories above Corrales not only found ongoing, systemic under-reporting of emissions of dangerous chemicals, but questioned the very legitimacy of the pollution permit which Intel insisted it be given ten years ago.

Many of the chemical emissions coming from Intel’s stacks are classified as hazardous air pollutants (HAPs) by the federal government while others are classified as toxic air pollutants (TAPs) regulated by state government.

The permit written for Intel by the Air Quality Bureau of the N.M. Environment Department (NMED) allows Intel’s operations here to release to the air more than 80 chemicals listed as hazardous air pollutants, up to a combined total of 24 tons a year.
As counter-intuitive as it might seem, the permit approval process includes no attempt to determine whether breathing that much HAP-contaminated air is safe. Not even if Intel accidentally releases all 24 tons in a few minutes.

That lack of short-term limits on what Intel can release to the air is a big part of the EPA’s concern over the microchip making operations here. It also leads to the central question: whether it was a mistake to agree to Intel’s insistence that it be regulated as a minor source of air pollution.

The National Enforcement Investigations Center (NEIC) team that participated in the December inspection studied Intel’s permit to determine whether conditions in Intel’s permit are “federally and practically enforceable” as required.

NEIC found that, “The potential to emit of HAPs is not practically limited by Intel’s permit.” That finding was cited as one of 15 areas of concern in the report.

Discussions between the Air Quality Bureau and Intel have been under way since the December inspection on how the Intel air permit should be changed.

Bureau Chief Mary Uhl said October 26, “We are only beginning to discuss changes to the Intel air quality permit. I believe it will take several months to resolve and address the areas of concern with Intel and EPA.”

In a mass-mailing addressed to “Dear Neighbors” at the end of October, Intel’s director of corporate affairs, Jami Grindatto, did not mention the underlying inadequacy of the NMED pollution permit, but focused on technical “miscalculations” of emissions, pollution abatement equipment efficiency and “parametric monitoring.”

Grindatto noted that, “The report lists one area of non-compliance related to a miscalculation of emissions for three chemicals: ethyl lactate, methanol and xylene. The actual emissions related to this error are minimal (less than 0.2 percent of our annual limit) and present no health risks to the community.”

He promised, “Intel is committed to working with the EPA and the NMED over the next six months to find cooperative solutions to address these areas of concern, including additional testing of our abatement systems.”

In fact, the EPA and NEIC teams repeatedly faulted Intel’s data which “may not be valid for use in calculating Hazardous Air Pollutant emissions.”

Intel’s critics, including nearby downwind neighbors who blame Intel’s pollution for recurring ailments, say the EPA-NEIC report vindicates their charges over the past 17 years.

The citizens group Corrales Residents for Clean Air and Water (CRCAW) has always distrusted Intel’s use of emissions factors to report its toxic emissions, insisting that releases to the air be continuously monitored and measured rather than calculated using what they regard as phony, unverifiable multipliers.

Steve Martinez, a CRCAW member and professional data analyst, made that point when he reviewed the EPA report last month. “During their brief investigation last December, the EPA readily found two emission factors that were in error.
“If two emission factors were easily found to be erroneous in such a short period of time, one has to wonder how many of the dozens of other emission factors are also in error?

“And what is the true impact of all of the potentially erroneous emission factors on the total pollution volume emitted by Intel?”
“This report by the EPA goes a long way toward exonerating affected residents and concerned citizens that have tried in vain for years to get Intel to care as much about the air we breathe as the profits they make from one of the largest chip manufacturing plants in the world,” said Martinez who several years ago relocated his family from their home near the Intel plant.

In an October 18 statement from CRCAW, the group noted that, “The report found multiple deficiencies in Intel’s operations relating to public health.

“The most shocking finding confirms what CRCAW has long claimed, that Intel’s minor source air permit is a sham and needs to be replaced. ‘Sham permit’ is an official EPA term for a permit that is essentially unenforceable.”

The now-retired Air Quality Bureau staffer who worked on Intel’s pollution permit more than five years, Jim Shively, recalled his frustration in trying to set regulations that would really restrict Intel’s release of chemicals that could violate ambient air standards and cause harm.

Reached by phone October 27, Shively said he had read the main sections of the EPA report and found its recommendations very similar to what he had tried unsuccessfully to write into Intel’s permit in the late 1990s.

“It would take pretty much what we were trying to do back in 2000 to meet what the EPA is asking for,” Shively concluded. “But I don’t see that happening.”

Based on his difficult experience, he thinks state regulators are unlikely to impose emissions controls Intel seriously dislikes.
“If the EPA really got behind it, maybe, but I don’t see NMED forcing Intel to operate as EPA is recommending,” the former Air Quality Bureau permit supervisor said.

Shively recalled that Intel was constantly critical of the bureau in the late 1990s for taking so long to grant the company’s “minor source” air pollution permit. “Actually we were pretty quick about getting the permit out. They said it took them four or five years to get the permit, but in reality that was their own doing. They kept coming back and coming back to us to get it the way they wanted it.

“Where I ran into trouble with the department was that I wasn’t conceding on things they wanted. In the end, I didn’t wind up writing the permit, and Intel finally got the permit they wanted.”

That permit is now the one that EPA has found inappropriate because it does not practically limit Intel’s potential to emit air pollutants.

Shively recalled he released a draft permit for public review in 1998 which contained much of what the EPA now says is required. It was the subject of a public meeting that fall, but when Intel officials objected, political pressure was brought to bear and the draft permit was yanked back.

“The problem was that Intel had a lot of objections to it, and insisted that it be withdrawn,” Shively remembered.

The permit Intel finally got after it was taken away from Shively and given to a more compliant regulator is really a “sham permit,” Shively contended.

“The term ‘sham permit; is actually a term used by the EPA to describe a permit that is impractical and unenforceable.” And Intel’s permit is unenforceable, Shively explained, “because it all comes down to these calculations to determine emission rates. These calculations are based on ‘emissions factors’ that Intel provides. We could never could figure out where these numbers came from.

“It is reliance on these emission factors that I think is just out of whack,” the veteran air quality specialist concluded. “It’d hard to have much confidence in the reported emissions numbers if you can’t verify it. My position was that those emissions factors were unreliable.

“First and foremost, the permit needs to be re-done,” Shively said shortly after he retired and could be interviewed by Corrales Comment. He said then that NMED officials lacked the courage to take on Intel given its political clout.

“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 involved [for NMED officials]. This is a large, influential corporation and there’s a risk involved if you mess with them.”

Two other former Air Quality Bureau staffers, including a former chief of the enforcement section, publicly supported Shively’s criticism of the Intel permit back in 2004. According to former permit enforcement manager Debby Brinkerhoff, 80 percent of the bureau’s staffers supported Shively’s position. She was involved in an aborted enforcement action against Intel in 1994 when stack tests revealed excessive acid gas emissions.

“We were never allowed to issue a notice of violations,” Brinkerhoff said. (See Corrales Comment Vol.XXII, No. 24, February 7, 2004 “Two More Pollution Regulators Blast Intel ‘Sham’ Air Permit”)

Finally, six years later, those political considerations shifted when the EPA notified Intel in February 2010 —just weeks after the Obama administration replaced the Bush team as head of the federal government’s executive branch— that it had been targeted for an air quality compliance investigation.

Shortly after she learned that EPA had targeted Intel’s operations here, the current bureau’s chief, Mary Uhl, told Corrales Comment the crackdown would likely lead to tighter regulations as a major source of air pollution, possibly with short-term limits on toxic emissions instead of calculated yearly averages.

“The over-arching thing that EPA was interested in —and I think Intel would agree with this— is whether it is a major source or a minor source,” Uhl concluded. “It was readily apparent that was the concern.”

Prospects that Intel might concede to regulation as a major source of air pollution were discussed at the October 20 meeting of Intel’s Community Environmental Working Group (CEWG).

Intel’s Frank Gallegos said the chipmaker did not fully agree with EPA that its operations warranted regulation as a major source. “Intel feels they have sufficient data to demonstrate that they are a minor source and we are under the 100-ton threshold. We feel comfortable that we do meet ‘minor source’ status.”

Gallegos said another “area of concern” cited by EPA regarded the need for short-term emissions limits. “Intel is not aware of any regulatory requirement for short-term limits on volatile organic compounds or HAPs.”

CRCAW co-founder Barbara Rockwell (who moved to Placitas to escape Intel’s fumes) attended the October 20 CEWG meeting and asked when Intel is going to agree to short-term limits on its emissions. “Back in 1993-94 when CRCAW signed a settlement agreement with Intel, it called for hourly limits on emissions. That lasted just a few years and was quickly abandoned in favor of this minor source permit,” she pointed out.

Rockwell’s 2005 book, Boiling Frogs: Intel versus the Village, documents downwind residents’ long struggles against Intel pollution.

“When Jim Shively left NMED, he said the minor source permit was a ‘sham permit’ and the process that produced it was a farce,” Rockwell continued. “Now we have the EPA, all these years later, confirming that statement by Jim Shively who was a highly respected permit writer for NMED.

“So now I want to know when Intel is going to move forward with a major source permit which they should have had all along?”
Gallegos replied he couldn’t say when it would happen due to “green house” gas regulations.
She sought assurance, asking, “But it is going to happen, right?”

“Yes, it’s going to happen,” Gallegos conceded.

A Rio Rancho member of CRCAW, Marcy Brandenburg, said she had no patience with Intel’s technical assurances that there’s no real problem. “We don’t need to be discussing how Intel is trying to do the right thing; is going to comply with EPA. We need to know what the heck have [regulators at all levels] been doing for the last 20 freaking years while these people slowly perish.”
She emphasized the unusually high incidence of pulmonary fibrosis disease reported among residents downwind from Intel. Later the same week, another of those stricken, Mary Daitz, died from the lung disease.

“We just got vindication and support for everything people have said for over 20 years. Guess what? It’s over. You need to have a major source permit. We need to take action to figure out how that’s going to happen.”

Last January, after Corrales Comment learned of the EPA inspection the previous month, Intel’s Sarah Chavez was asked what changes would be required in Intel’s operations if a “major source” permit is required.

She replied: “It would be a lot of work for us, but would it change the operation? I don’t know that I can fully answer that. The only major source permit that I’ve ever looked at that would be even somewhat close to what we might see was the Eastman Kodak permit.

“From what I recall, that permit actually had fewer conditions than our current permit.”

Chavez conceded it would probably mean more inspections, “but inspections don’t change how we operate.”

As to hourly or daily limits on toxic emissions, she said those might be imposed. She noted that Intel’s previous permit had some short-term limits, “but for very few things, though. It was only for five or six chemicals more than what we have today.”
Intel’s Thom Little suggested there may be drawbacks for the community to have Intel regulated as a major source of air pollution. “Obviously the public has a perception that having a major source permit would have a series of conditions that are beneficial. I wonder if there are things that the community wouldn’t like in a major source permit. There could be a potential down-side,” Little suggested.

Chavez added: “One of the things the community needs to look at is if Intel were a major source, we don’t have to keep our emissions under 96 tons, right?”

She referred to the condition in the current minor source permit that limits Intel’s release of volatile organic compounds to the air. “We could say, ‘We’re going to emit 200 tons,’ or whatever the number would be.”

Little added: “So it might be: ‘Be careful what you ask for.’”

Back in the late 1990s when Shively was still in charge of writing the air pollution permit for Intel, he wanted continuous emissions monitors on the factory’s stacks.

He was, after all, writing the permit for the world’s biggest microchip manufacturing plant —which was about to get much bigger.

It was also a time when semiconductor manufacturers were exposed nationally as not being the “clean” industry the public had been led to believe they were. USA Today carried a three-part series on that topic with an article entitled “Dirty Secrets of the Chip Making Industry“ in its January 13, 1998 edition.

And medical researchers were finding that the kinds of industrial chemicals emitted from plants like Intel were prime suspects in human endocrine system disorders, among other medical problems. Further cautions were being raised that air borne mixtures of several such chemicals could greatly magnify toxicity levels.

Shively, chief of the bureau’s air quality permitting section, was also aware that Corrales residents, especially those living near the Intel plant, had been complaining for more than five years about illnesses they experienced when industrial fumes invaded their homes.

In the mid-1990s, as it had done in the past, Intel essentially wrote up the permit conditions they wanted and sent them to the Air Quality Bureau to be dressed up in the agency’s format for approval.

But Shively balked.

From 1994 to 1999, through a series of negotiations, arm-twistings and permit application revisions, Shively’s team and Intel officials wrestled to come up with provisions that would allow Intel the operational flexibility it wanted yet establish meaningful controls over what the microchip facility was allowed to emit.

As the years dragged out, political pressure on Shively grew intense. “Intel is making my life hell,” Shively confided back then.
Inspection of the Air Quality Bureau’s administrative record on the Intel permit application revealed numerous Shively memos-to-the-file which explain several of his major concerns about giving Intel the “flexible” permit it sought.

• lack of enforceability, since compliance with permit conditions could not be determined easily or convincingly;
• reliance on unverifiable “emissions factors” supplied by Intel to calculate, rather than actually measure, what was coming out of Intel’s stacks;
• reliability of pollution control equipment manufacturer’s efficiency ratings, and their use to determine permit compliance;
• use of a hypothetical “bubble concept,” or imaginary containment dome over the entire Intel plant so that emissions from each stack are regulated as though they all combine into one imaginary point of release instead of coming from individual stacks; and
• inappropriate yearly averages for emissions limits, rather than hourly, daily or monthly restrictions as had been established in previous versions of Intel’s permit.

Virtually all of those misgivings that Shively detailed in his memos-to-the-file in the late 1990s have now been raised by the Dallas regional office of the EPA and the NEIC.

At the heart of many of these issues was whether Intel really qualified to be regulated as a “minor source” of air pollution as it wished to be to avoid tougher new federal regulations.

In the early to mid-1990s, Intel was emitting in excess of 140 tons per year of volatile organic compounds into the air untreated, as well as other more toxic chemicals federally classified as “hazardous air pollutants.” Shively and others in his bureau looked to federal policies and guidance on how to determine whether a pollution source like Intel qualified to be regulated as if it were a minor source of air pollution. A key determinant was the source’s “potential to emit,” and to what extent did Intel’s pollution controls mitigate that potential.

Shively’s concerns about the “bust-proof” permit Intel sought were never addressed to his satisfaction. Under intensifying political pressure, the Intel permit was effectively removed from his control; another bureau staffer, Richard Goodyear, was instructed to get the permit issued.

It was, on March 3, 2000.

Shively was prohibited by superiors in the N.M. Environment Department to speak to the media about his concerns with the air pollution permit Intel finally received.

When Shively retired in 2004, he wrote a letter to the Environment Department secretary, Ron Curry, detailing why the Intel permit is inappropriate.

Shively’s January 5, 2004 letter to Secretary Curry criticized the Environment Department for caving in to Intel’s pressures. “This permit, like many others, was granted due to pressure from the permittee, but worse than that, by an inappropriate desire internally to accommodate them to any extent possible. These actions reflect poorly on the entire bureau, and as a result, it has become severely compromised and lacks integrity and credibility.”

The former chief permit writer concluded 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 apparently triggered by requests by Corrales Comment to interview him for a series of articles on the Intel permit. In the opening paragraph, Shively wrote, “This letter is a follow-up to a meeting I had with [NMED Division Director] Jim Norton and [NMED public 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 reporter’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 interview, 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 interview Shively. NMED officials continued to thwart access to Shively until his retirement.

Shively referred to EPA guidance in his letter to Curry to explain what constitutes a “sham permit.” That document was issued by the EPA’s Office of Air Quality Planning and its Office of Enforcement and Compliance Monitoring, and is entitled “Guidance on Limiting Potential to Emit in New Source Permitting.”

That guidance memo is also reproduced in full in the EPA-NEIC report released last month.

The memo and a related EPA document explain that air pollution permit writers must guard against “sham permits” 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 (modification number 9) is, in fact, a permit to be regulated as a “synthetic minor source.”
A crucial consideration is the facility’s over-all “potential to emit;” how much toxic material could be released? Emissions potential from the Intel Rio Rancho plant is enormous.

The federal guidance also makes it clear that the permit can avoid becoming a “sham” only if it contains sufficient requirements to be federally enforceable.

The bureau’s Intel permit file in Santa Fe contained more references to concerns by Shively and others that the permit modification Intel sought amounted to a “sham permit.”

A November 9, 1994 memo written by Intel’s Sarah Chavez, stated the situation clearly. “NMED is concerned that this does not become a sham permit, and that emissions are verifiable, and that they be able to determine compliance in a timely manner.”
Those are precisely the concerns stated in Shively’s January 5, 2004 letter to NMED Secretary Curry.

Chavez’s memo continues: “Intel clarified that they will keep verifiable records and will determine emissions for each of the fuel firing units on a monthly basis. Intel will also keep a rolling annual average to ensure that they do not exceed the ton-per-year limits, and that they remain a minor source.”

The Chavez memo stated that NMED officials [Shively among them] were similarly concerned that conditions in the permit for limitations on federally classified “hazardous air pollutants” and State listed “toxic air pollutants” also would constitute a “sham.”
When Shively was in charge of writing the permit for Intel, he fought to require Intel to install continuous emissions monitoring equipment, so that NMED compliance officers would know at all times what level of emissions were coming from the facility. He also fought against Intel’s insistence on permit conditions that set yearly averages, rather than hourly or daily, emissions limits.
A draft version of Permit No. 325-M9 produced by Shively called for continuous emissions monitoring and other safeguards. When it was released for public review August 20, 1998, it was roundly supported by residents and citizens’ groups but strenuously opposed by Intel.

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

The permit which NMED approved was challenged by Southwest Organizing Project (SWOP), the N.M. Environmental Law Center and Corrales Residents for Clean Air and Water (CRCAW).

For their appeal to the N.M. Environmental Improvement Board, the citizens’ groups called in a California-based air pollution specialist, 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 Environmental 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 really 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 Regulators Worst I’ve Seen,’ Consultant Says.”)

But after refusing to consider technical testimony by CRCAW’s retired Los Alamos chemist Fred Marsh, and retired Sandia Labs physicist Alan Beattie, the Environmental Improvement Board, composed of political appointees, upheld the March 2000 permit for Intel.

At his January 19, 2004 news conference in Corrales after his retirement, Shively further explained his concerns about the permit finally issued.

One of the flaws in the kind of “minor source” permit Intel has, he said, is that it does not set lower emissions limits for chemicals that are more hazardous than others. Intel’s permit treats all hazardous chemicals equally, allowing release of up to 10 tons per year of even the most dangerous toxins —without any assessment of the health consequences of such releases.
CRCAW’s Fred Marsh, who attended Shively’s 2004 news conference, explained the problem this way. “They could release the annual allowable limit in one day or one hour and they would not violate the permit.

“For instance, Intel is allowed to release 5.9 tons of phosgene in 12 months time.” He noted that phosgene is an extremely deadly toxin used in chemical warfare. “They could release that 5.9 tons in a day or an hour and it would kill thousands and thousands of people. Intel could say, ‘We didn’t violate our permit,’ and that would be true.”

Without continuous emissions monitoring, depending on calculations using emissions factors rather than actual measurements, Shively said, it is difficult to know for sure how much of which kinds of toxins are coming out of Intel’s stacks at any given time.
Shively’s draft of the Intel permit which called for continuous emissions monitoring was withdrawn “because Intel didn’t want it.’
Cost of such a system may have been a deterrent, he admitted. “It wouldn’t have been cheap, but the accountability would have been there.”

Asked if he thought accountability was something Intel didn’t want, Shively replied, “Yeah.”




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