1. Chapter 4 Joint Problem Solving Brown Paper Company

2. Competitive Bargaining Joint Problem Solving Mutually Beneficial Outcomes

3. Background

4. Brown Company Located in Berlin, NH Second largest employer in NH Four steam-generating boilers (numbers 6, 7, 9, 12) Boilers 6 and 7 dated from 1934 Boilers burn high sulfur fuel oil containing 2.2% sulfur Boilers emit 9,700 tons of sulfur per annum

5. State of New Hampshire New state implementation plan (SIP) requires burning 1% sulfur fuel oil This change would require Brown to acquire new equipment to handle the 1% sulfur oil

6. EPA Approves NHs SIP in 1972 Because of Arab oil embargo, state submits revision to SIP to allow use of 2.2% sulfur fuel oil EPA indicated that it would agree to the revision

7. EPA In 1976, EPA ordered Brown to address problems with its boilers that EPA claimed were causing a reduction in air quality due to particulates and sulfur dioxide (SO 2 ) Rescinded oral agreement with Brown regarding 2.2% sulfur fuel oil Labels Berlin a nonattainment area for particulates and SO 2 (stricter LAER v. cheaper BACT) In 1978, initiates formal action against Brown Brown files lawsuit against EPA

8. The First Formal Negotiation Session

9. Modeling Data EPA used the valley model, which assumed that plumes of smoke rose to a height at which their temperature matched the atmospheric temperature and then leveled off. Since stacks at Berlin were lower than surrounding peaks, the model predicted pollution on the peaks. Environmental Research Technology Group (ERT) Independent firm employed by Brown Focused on solutions other than 1% sulfur fuel oil Later introduced a new model

10. Boilers Possibility of raising smoke stacks Boilers 6 and 7 needed to be replaced soon Brown received a permit to allow it to convert boiler 9 to burn waste tree bark mixed with oil [+] Would reduce SO 2 to 50% current levels and reduce fuel costs [-] No guarantees; nonattainment designation still required 1% sulfer fuel oil Brown representative almost walks out of negotiations over modeling data

11. Negotiation of the Number 14 Boiler Control Strategy

12. New Boiler Proposal New number 14 boiler would burn without any oil infusion Cheaper than converting number 9 Reduce SO 2 emissions even more significantly Also allowed scrapping oldest boiler (number 6) and using number 7 only for emergency standby. Had to get new prevention of significant deterioration (PSD) permit from EPA EPA negotiator was more neutral about modeling data Brown used number 9 permit as leverage

13. New Boiler Proposal Issues Concerns over LAER requirements Could use BACT if could show that area would be an attainment area after project completion ERTs rough terrain dispersal model (RTD) Time required to get approval of new plan EPA would not let number 14 be covered by number 9 permit Decision that construction of number 9 had commenced

14. Modeling Discussion

15. NAAQS Study Used RTD model Assumptions: Stacks on 9 and 12 raised Boilers 6 and 7 shut down Filters installed Construction of boiler 14 24-hour primary NAAQS violation for particulates 3 options 1.Taller stack or vent emissions for lime kilns and slackers Depended on ERTs assumptions about background particulates Reached a compromise; split the difference 2. Taller stacks of recovery boilers 8 and 11 3. Decrease plant production

16. Options Implemented Taller stacks of recovery boilers 8 and 11 Needed to be replaced in 10 years New lime kilns and slackers Cost $1M, but saved money because of new boiler

17. Final Settlement