1. Environmental Quality Service Council IDEM Report August 18, 2006 Thomas W. Easterly, P.E., DEE, QEP Commissioner IN Department of Environmental Management

2. Thank You for Helping IDEM During the 2006 Legislative Session HB1110—Removal of Mercury Convenience Switches from End of Life Motor Vehicles. SB 234—Improving the rulemaking process and authorizing the Environmental Stewardship Program. HB1117—Simplifying the solid waste statutes and eliminating the groundwater task force. SB 146—Removing the Property Transfer Disclosure Form from Statute.

3. IDEM’s Environmental Goal Increase the personal Income of all Hoosiers from the current $0.88/$1.00 of the national average to at least $1.00/$1.00 of the national average while maintaining and improving Indiana’s Environmental Quality.

4. How is Personal Income Linked to Environmental Improvement? Maslow’s Pyramid reminds us that people meet their basic needs for food, shelter and security before addressing other needs In most of Indiana, personal autos for transportation are a basic need People with lower incomes can often only afford older more polluting automobiles which contribute more than their share to our transportation related air quality issues

5. Income and the Environment People with more income typically purchase newer cars that pollute less Similarly, newer industrial processes have less waste (more product per unit of input) Waste typically becomes pollution Financially successful industries typically are able to purchase these newer processes that pollute less

6. Pilot 2006 Environmental Performance Index Yale Center for Environmental Law & Policy Yale University Center for International Earth Science Information Network (CIESIN) Columbia University http://www.yale.edu/epi/

8. How Will IDEM Help Increase Personal Income? Clear, consistent and speedy decisions Clear regulations Assistance first, enforcement second Timely resolution of enforcement actions Every regulated entity will have current valid permits without unnecessary requirements

9. How Does IDEM Protect the Environment? Measure the air, water and land to determine the existing state of the environment. Compare the measured values to levels that protect human health and the environment. Ambient Air Quality Standards Water Quality Standards Use modeling to determine how much of a substance can be added to the environment.

10. How Does IDEM Protect the Environment? Develop regulations and Issue permits to restrict discharges to the environment to safe levels. Inspect and monitor permitted facilities to ensure compliance with the permits. Enforce against people who exceed their permit levels or violate regulations Educate people on their environmental responsibilities.

11. Performance Metrics Quality of Hoosiers' EnvironmentResultTargetComments % of Hoosiers that live in counties that meet air quality standards 77%100%80% 5 counties @ 1,419,455 of 6,271,973 failed % of CSO Communities with approved programs to prevent the release of untreated sewage 27%100%20%75% by 2007 is goal Permitting Efficiency Total calendar days accumulated in issuing environmental permits, as determined by state statute Land 122,46337,43086,864 238 permits 750 permits 125 permits Air 445,827207,731385,000 Water 188,72444,550200,000 * Places emphasis on back logged permits Compliance Total percentage of compliance observations from regulated customers within acceptable compliance standards Inspections 95.33%97%75% Self reporting 98.05%99%95% Continuous monitoring (COM) 99.38%99.90%98.95% * Tracks observations and not just inspections Organizational Transformation Budgetary agency dollars spent on key outside contracts for core agency functions. Dollars spent on outside services per year $5,079,367$0$3,447,017 Will require increase in head count to accomplish

12. Counties above AQ Standards January 10, 2005 Allen Boone Clark Dubois Elkhart Hamilton Hancock Madison Marion Shelby St. Joseph October 1, 2005 Clark Dubois Hamilton Marion

13. Counties above AQ Standards January 1, 2006 Clark Dubois Hamilton Marion Vanderburgh October 1, 2006 (Projected) Clark Dubois Marion Vanderburgh

14. Ozone Attainment Status

15. Major Voluntary Air Emission Control Announcements Alcoa will add Scrubbers for SO 2 Emission Control to all units at its Warrick Power Plant near Newburgh. Indiana Kentucky Electric Corporation will add Scrubbers for SO 2 Emission Control to all six of its units in Madison.

16. The following 32 CSO communities have either an approved LTCP or sewer separation Akron Albion Aurora Avilla Berne Bluffton Brazil Bremen Brownsburg Butler Chesterfield Columbia City Columbus Decatur Greenfield Kendallville Knox LaGrange LaPorte Markle Michigan City Milford New Haven Ossian Remington Seymour Sullivan Veedersburg Warren Warsaw Waterloo Winamac

17. Permitting IDEM is still meeting the statutory deadlines for permit issuance, as reported in past years IDEM now tracks the total calendar days a permit is in house and is applying a deadline to permits that traditionally do not have a statutory deadline; as a new interpretation to the intent of statutes

18. Total Permit Calendar Days

19. Air Permits for New Facilities New Toyota Production at Lafayette Suzuki Facility Louis Dreyfus Soy Biodiesel Plant— Largest in the US Ten new Ethanol Production Facilities

21. Office of Enforcement 2002-2006 20022003200420052006* Referrals 887607467547324 Violation Letters173347203125 Notice of Violations 561457318202281 Agreed Orders311349314258237 Commissioner's Orders 15 64128 Dismissals125121444829 * August 1, 2006

22. The 120 Cases over Two Years Old March 2005, notified regulated community that IDEM wanted old cases resolved by June: 90 cases resolved (approximately) 20 settlements pending 10 commissioner orders issued Purpose: clear the process and get on fresh footing with the regulated community

23. Poor Data Systems Caused Confusion 120 cases over 2 years old (119) 40 Resolved by 6/10 19 Additional resolved by 10/12 Industry asking why they were not included when they had old cases on the books 120 cases reported some of which were old Issued 8 old and 2 newer Commissioner’s Orders by 6/10/05 40 of these were older than 2 years

24. Status of the 119 Old Cases 110 have been moved through the process: 63 Agreed Orders 24 Commissioner’s Orders 12 Dismissals 1 Referred to EPA 5 Referred to the Attorney General 3 Deferred due to Criminal Prosecution 3 Violation Letters Issued

25. Status of the 119 Old Cases The Remaining 9 old cases involve 4 facilities 1 Air Case with Citizens Gas & Coke Utility 5 Air Cases with U.S. Steel 2 Air Cases with Grain Processing Corp 1 Water Case with the City of Warsaw Each of these Cases is in Active Negotiation and each of these parties is taking actions to improve the protection of the environment during the negotiations.

26. Possible Issues for 2007 Legislation

27. Possible 2007 Legislative Issues Budget Federal Funds continuing to decrease State General Funds fluctuate Except for Title V, Dedicated fund charges not well related to program costs—some programs like CAFOs, Methamphetamine clean-up and Mercury Switch management completely unfunded. Environmental Crimes Legislation from Senator Kenley’s Task Force

28. Environmental Crimes Task Force Environmental Crimes Task Force (SEA 195) has been meeting since October, 2006. Chaired by Senator Kenley Developing more specific environmental criminal statutes. Plan to bring draft legislation to the EQSC this year.

29. Possible 2007 Legislative Issues Streamlined Rulemaking when adopting Federal Requirements (including deadlines) without change. Ask EQSC to study Environmental Rulemaking Process. Request Legislative authority to bank unused Supplemental Environmental Project Value and perhaps recover with a tax credit. Consider Prohibiting the Commissioner from renewing a permit for a facility that was not constructed or has not operated for the past 5 years.

30. Possible 2007 Legislative Issues Streamline the OEA (Office of Environmental Adjudication) Process, especially for permit appeals. Issues include: Standing Timeliness of decisions The Standard of Review (i.e. Arbitrary and Capricious) Potential for the Collection of damages Current Roles of Environmental Districts Regional Water and Sewer Districts Solid Waste Management Districts

31. Major Regulatory Initiatives Rulemaking to establish presumptive 8-1-6 VOC BACT controls to streamline permitting: Acid Scrubbers for foundry core making amines Compliance with certain NESHAPs Rulemaking to require the removal of mercury convenience switches from automobiles prior to crushing or shredding Rulemaking to allow Performance Track (Indiana Environmental Stewardship Program)—Will be accepting applications in September.

32. Major Regulatory Initiatives Regulations to facilitate the proper management of e-scrap. Outdoor Wood Fueled Boilers. Utility NOx, SO2 and Mercury emission rules: CAIR, which regulates NOx and SO2, has been preliminarily adopted by the Air Pollution Control Board—general consensus. CAMR, regulating mercury, has not been second noticed because there has been no resolution of issues between Utilities which favor the federal program and the Hoosier Environmental Council which favors a 90% reduction.