STATE OF MINNESOTA MINNESOTA POLLUTION CONTROL AGENCY IN THE MATTER OF A REQUEST FOR A CONTESTED CASE HEARING

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2 ATTACHMENT 1 STATE OF MINNESOTA MINNESOTA POLLUTION CONTROL AGENCY IN THE MATTER OF A REQUEST FOR A CONTESTED CASE HEARING ON AND THE PROPOSED ISSUANCE OF AIR EMISSION PERMIT NO FOR UNITED STATES STEEL CORPORATION - KEETAC, KEEWATIN, MINNESOTA FINDINGS OF FACT CONCLUSIONS OF LAW AND ORDER FINDINGS OF FACT The above-entitled matter came before the Minnesota Pollution Control Agency (MPCA) at a Special Citizens Board Meeting held in St. Paul, Minnesota on September 13, After reviewing the record before it and allowing opportunity for public comment, the MPCA finds, concludes and orders as follows: DESCRIPTION OF THE PROJECT 1. United States Steel Corporation ( U. S. Steel Corp. ) owns and operates a taconite (iron ore) mine and processing plant in. The facility, U. S. Steel Corporation, Minnesota Ore Operations - Keetac ( Keetac ), produces taconite pellets for use as a primary raw ingredient at iron and steel mills. 2. Iron ore mining and taconite pellet production have been on-going at the Keetac facility since The original Phase I taconite processing plant began operation in At that time, the Keetac facility included one operating taconite production line. 3. In 1977, the Phase II expansion added a second operating line. The Phase I line was idled in December 1980 under the ownership of National Steel Pellet Corporation. U. S. Steel Corp. purchased the National Steel Corporation in 2003, including the Keetac facility. 4. Currently, there is one operational pellet producing line (Phase II) with annual production of approximately 6.0 million short tons of taconite pellets per year (MTPY). 5. The project for which Air Emission Permit No is sought is the Keetac expansion project (Phase III). It includes the modification and re-activation of the original Phase I operating line. The project will expand taconite pellet production from 6.0 MTPY of taconite pellets to 9.6 MTPY. The modification also includes expansions in mining and concentrating processes to supply the re-activated indurating furnace. Current crushing operations are sufficient to supply the new indurating furnace. 6. Major activity areas at the facility include: mines and crushers, concentrating, pelletizing, pellet storage and loadout, additive receiving and handling, concentrate storage, loadout and receiving, and support activities. 7. Pollutants of concern from this facility include volatile organic compounds (VOCs), carbon monoxide (CO), nitrogen oxides (NO X ), sulfur dioxide (SO 2 ), particulate matter (PM), particulate matter less than ten microns in diameter (PM 10 ), particulate matter less than 2.5 microns in

3 diameter (PM 2.5 ), greenhouse gases (GHG) or carbon dioxide equivalent (CO 2 -e), and various hazardous air pollutants (HAPs), including mercury, and lead. 8. The existing facility uses various emissions controls. Fugitive PM emissions from mining and hauling operations, the tailings basin, material transfer and storage activities are controlled by operation in accordance with the Fugitive Dust Emission Control Plan that will be updated with the new units and submitted prior to startup of the expansion line. PM emissions from ore crushing and transfer operations are controlled by centrifugal collectors or wet scrubbers. PM emissions from additive material storage processing are controlled by wet scrubbers and fabric filters. PM, SO 2, and mercury emissions from the Phase II, the existing pelletizing process, are controlled by wet scrubbers. 9. The Phase III Project will employ fabric filter baghouses, wet scrubbers and dry electrostatic precipitators to control particulate emissions; gas suspension/fluid bed absorbers to control sulfur dioxide emissions; natural gas and alternative renewable fuels (ARF) to reduce GHG emissions, activated carbon injection or an equivalent alternative to control mercury emissions; a low NO X burner to reduce NO X emissions; noise reduction measures and additional permit conditions to reduce air emissions. REGULATORY CONTEXT 10. The modified Keetac facility is an air emission source that is required by State rules to have an air emission permit. For air emission sources, these rules are found in Minn. R. ch New Source Review/Prevention of Significant Deterioration 11. Since 1980, federal regulations under the Clean Air Act require preconstruction permits for construction of certain new sources and modifications. These federal regulations are known as the New Source Review (NSR) regulations and are found at 40 CFR The United States Environmental Protection Agency (EPA) delegated 40 CFR to the MPCA to administer the Prevention of Significant Deterioration (PSD) portion of the NSR program for geographic areas that are in attainment with the National Ambient Air Quality Standards (NAAQS). 40 CFR All of Minnesota is in attainment for the NAAQS. Minnesota also incorporated the federal rules into state rule at Minn. R The MPCA has the authority to implement and enforce 40 CFR in Minnesota, which it does through Minn. R. ch A modification at a source located in an area that is in attainment with federal NAAQS is subject to the PSD requirements of the NSR permitting program if the modification meets the federal definition of a major modification in PSD. 14. A modification is a major modification if it results in a significant increase and a significant net increase in emissions of a PSD pollutant. The significance levels are specified in 40 CFR 52.21(b)(23)(i) and 40 CFR 52.21(b)(49). 2

4 Title V/Part 70 Operating Permits 15. In 1990, Congress amended the Clean Air Act (42 U.S.C.7401 et seq.). The amendments established, among other things, air emission operating permitting conditions. In 1992, the EPA promulgated regulations, referred to as Part 70 regulations, to implement the new federal permitting provisions, 40 CFR Part A source is subject to the Part 70 permitting requirements if it meets the federal definition of a major stationary source under Part 70 which, for a taconite plant, is a potential to emit 100 tons per year or more of any criteria pollutant, 10 tons per year of any hazardous air pollutant, or 25 tons per year of all hazardous air pollutants combined. The Keetac facility currently operates under a Part 70 operating permit as a major PSD source. 17. In 1993, the MPCA revised its permitting rules to incorporate the new Part 70 requirements (Minn. R. ch. 7007). A major modification under the federal PSD regulation also requires a major amendment under the federal Part 70 regulation. The MPCA issues major permit amendments under the provisions of Minn. R. ch It is the practice of this agency to include the requirements of PSD in the Part 70 major amendment. 18. For a modification to an existing major source which would be subject to the federal PSD regulation, the permit applicant has the option, when feasible, of proposing permit limits to avoid applicability of those regulations for the proposed construction. Such permits are described as synthetic minor source permits since the source avoids major modification status under PSD by accepting enforceable emission limits in its permit that are lower than the major modification thresholds and lower than would be allowed for an PSD or Part 70 source. This agency has the authority to issue synthetic minor permits under Minn. R. ch U. S. Steel Corp. has elected to propose permit terms and conditions to limit its potential-to-emit for NO X from the Keetac Phase III modification to less than the major modification threshold for the PSD regulation. Prevention of Significant Deterioration APPLICABLE STANDARDS 20. The Keetac modification has a potential to emit total PM, PM 10, PM 2.5, SO 2 and CO 2 -e in excess of the significance levels for those pollutants. 21. The MPCA finds that the Keetac modification is a major modification subject to PSD. 22. Because it is subject to PSD, U. S. Steel Corp. - Keetac was required to complete a Best Available Control Technology (BACT) analysis for new or modified units emitting the pollutants of concern; to model maximum allowable emissions to ensure protection of the Minnesota and National Ambient Air Quality Standards (MAAQS and NAAQS) for SO 2, PM 10, and PM 2.5 ; and to examine the planned facility s impacts on the PSD increments for PM 10 and SO 2. Increment analyses were required for both the local Class II areas and the nearby Class I areas. U.S. Steel Corp. - Keetac was also required to complete an Additional Impacts Analysis. 3

5 23. U. S. Steel Corp. Keetac also modeled the maximum allowable emissions to ensure protection of the MAAQS and NAAQS for Nitrogen Dioxide (NO 2 ) and CO. 24. The MPCA staff prepared a technical support document (TSD) that sets forth the legal and factual basis for the permit conditions. The TSD describes the BACT process for this permit, the modeling, the increment impacts and the Additional Impacts Analysis. 25. To determine the impact of the project on ambient air quality as required by the PSD regulation, the applicant conducted air dispersion modeling using EPA dispersion modeling computer programs. 26. The BACT analysis addressed each pollutant of concern, including GHG. The GHG BACT analysis generally considered process and fuel combustion GHG emissions, carbon sequestration, add-on controls and various fuel scenarios and alternatives to limestone as a pellet binder. 27. EPA requested that the MPCA include a CO 2 -e emission limit in addition to the proposed 114,000 ton per year (tpy) CO 2 limit. The MPCA staff modified the permit to include a 186,400 tpy CO 2 -e emission limit. Compliance with both limits is appropriately determined by calculating from measurements of fuel, ore and limestone. 28. The MPCA hereby adopts the explanation of the PSD permitting elements from the TSD and finds that, as modified in response to EPA, each element, including the BACT analysis, was properly completed and satisfies the requirements of the PSD program. New Source Performance Standards 29. The MPCA also has adopted standards of performance that establish emission limits and other performance requirements for specific sources of air pollutants (Minn. R. ch. 7011). If, however, modeling or monitoring shows that the standards of performance will not prevent a violation of an ambient air quality standard, an emission source will be required to meet more stringent performance standards that will protect ambient air quality. 30. The EPA has adopted standards for performance, which apply to specific types of equipment and industrial operations, generally referenced as the New Source Performance Standards (NSPS) (40 CFR Part 60). The Project as proposed is subject to the following NSPS: (1) 40 CFR pt. 60, subp. LL and (2) 40 CFR pt. 60, subp. Y. National Emission Standards for Hazardous Air Pollutants 31. The EPA has adopted emission standards for hazardous air pollutants, generally referenced as the NESHAPS or National Emission Standards for Hazardous Air Pollutants. 40 CFR pt. 63. subp. RRRRR applies to taconite iron ore processing plants. 4

6 Fish Tissue Mercury Concentration Standard MERCURY EMISSIONS 32. In 2008, the MPCA promulgated a 0.2mg/kg mercury fish tissue standard in its numeric water quality standards in Minn. R. ch In accordance with the federal Clean Water Act, the MPCA developed Minnesota s Statewide Mercury Total Maximum Daily Load (TMDL) which was approved by EPA in March, The TMDL sets a goal of 93 percent reduction in human-caused annual mercury air emissions from 1990 levels and a 24 pounds per year (lb/yr.) water discharge goal. The 93 percent reduction goal translates to a goal of 789 lb/yr. of mercury air emissions. 33. In October, 2009, the MPCA and a stakeholder group developed an Implementation Plan and a Strategy Framework to establish strategies to reach the goals articulated in the mercury TMDL. The Implementation Plan set a goal of a 75 percent reduction in mercury air emissions from the taconite industry by The Implementation Plan and Strategy Framework recognized that technology does not currently exist to control mercury emissions from taconite pellet furnaces and that time is needed to identify such controls. The focus for the taconite industry in the short term is on research to identify a viable control technology or technologies for the industry. 35. The MPCA rules require that air emission permits shall include requirements needed to ensure compliance with all applicable requirements. Minn. R , subp. 2. Applicable requirement is defined at Minn.R , subp. 7 and does not include the mercury TMDL, the Implementation Plan or the Strategy Framework. 36. The MPCA finds that the Mercury TMDL, Implementation Plan and Strategy Framework establish goals and strategies, not air quality mandates or applicable requirements. 37. The proposed Air Emission Permit establishes a 75.5 lb/yr. mercury limit. The limit reflects potential mercury emissions if the only mercury control were the existing electrostatic precipitator, which is intended to control particulate matter emissions, but has the additional benefit of also controlling mercury to some extent. 38. The permit also requires U. S. Steel to install and operate either activated carbon injection (ACI) or an equivalent alternative on the Phase III line within 365 days of startup, to control mercury emissions. The MPCA expects at least 80 percent reduction in mercury emissions from ACI or its alternative. An 80 percent reduction in mercury emissions from the Phase III line translates to approximately 21 lb/yr. 39. The alternative to ACI may be identified through research that U. S. Steel Corp. has committed to undertake pursuant to a June 2011 Schedule of Compliance (SOC) between this agency and U. S. Steel Corp. 40. The SOC includes subjects other than mercury control. The mercury control requirements are identical to the mercury control requirements in an August 2010 agreement between this agency 5

7 and U. S. Steel Corp. The parties incorporated the August 2010 agreement mercury requirements into the SOC and terminated the August 2010 agreement. 41. The SOC requires U. S. Steel Corp. to identify and trial mercury control technologies on one of its existing taconite production lines. In addition to the Keetac facility, U. S. Steel Corp. owns and operates the Minntac facility near Mountain Iron, Minnesota. The existing production lines at Minntac are available for control technology trials. 42. If the research and trials successfully identify a viable mercury technology, the SOC requires U. S. Steel Corp. to submit a permit application(s) and schedule for installation of the technology on its operating taconite indurating furnace lines at Minntac and Keetac. 43. The SOC obligates U. S. Steel Corp. to make mercury emission reductions earlier than is targeted in the mercury TMDL, Implementation Plan and Framework Strategy. 44. If the research and trials do not successfully identify a viable mercury control technology, U. S. Steel Corp. must present its work to the Mercury Emissions Reduction Research and Implementation Council, which will consider other strategies to reach the 789 lb/yr. Implementation Plan goal. 45. The MPCA staff issued guidance for new or increased sources of mercury emissions. The guidance indicates that sources of new or increased mercury emissions should secure equivalent mercury emission reductions from other Minnesota sources on a 1:1 ratio. 46. Operation of the Keetac Phase III modification will result in an increase in mercury emissions from the Keetac facility in the short term. The SOC obligates U. S. Steel Corp. to early mercury emission reductions so that overall cumulative mercury emissions will be the same or lower for the years 2008 to 2025 as they would have been without the Phase III expansion modification. 47. In addition to early emission reductions, the SOC obligates U. S. Steel Corp. to submit a contingency plan and schedule by January 1, 2016, for equivalent reductions if no mercury control technology has been identified for a long-term trial. The plan must include an evaluation of rerouting scrubber solids from the Minntac taconite process to Minntac s tailing basin. Rerouting scrubber solids is a known method of reducing mercury emissions from taconite indurating furnaces. 48. The MPCA finds that the mercury reduction requirements of the Keetac modification permit and the SOC are unique in the taconite industry at this time. To date, no other taconite producer in Minnesota has agreed to undertake measures to identify, install and operate mercury emission control technology. 49. The MPCA finds that U. S. Steel Corp. s commitments to early and equivalent reductions in the Keetac modification permit and the SOC further the goals and strategies of the mercury TMDL, Implementation Plan and Strategy Framework. The permit and SOC obligate U. S. Steel Corp. to take specific steps to achieve reductions in mercury emissions earlier than the Implementation Plan suggests and to ensure equivalent reductions for the increase in mercury emissions from 6

8 operation of the Phase III line. The MPCA finds that these obligations advance progress toward achievement of the goals of the mercury TMDL. 50. The MPCA further finds that the use of the SOC in tandem with the air emissions permit is appropriate. The SOC s requirements apply to both of U. S. Steel Corp. s Minnesota facilities, Keetac and Minntac. It is desirable from both a research and implementation perspective to involve both facilities in U. S. Steel Corp. s mercury emission reduction efforts, but it is not possible to regulate activities at the Minntac facility through the Keetac air emissions permit. The two facilities hold separate air emissions permits and there is no basis in law to join them. PUBLIC NOTICE OF THE PERMIT 51. Minn. R to apply to the issuance of air emission permits and describe the process the MPCA must follow in reviewing an application for a permit. Minn. R to contain procedural requirements for public notice and comment, review by other states, and review and objection by EPA, which apply to this proposed permit. Subpart 1 of Minn. R requires the MPCA Commissioner to prepare a TSD setting forth the legal and factual basis for the proposed draft permit conditions. Subpart 2 requires the MPCA to give public notice of the preliminary determination to issue a permit, including information on how copies of relevant documents can be obtained, the activities involved in the permit action, the emission changes, the comment procedures, any scheduled meetings or hearings, and hearing request procedures. Minn. R requires the MPCA to provide notice to affected states. Minn. R specifies the procedures for EPA review. 52. On June 2, 2011, pursuant to Minn. R , subp. 2, the MPCA Commissioner issued a public notice of the preliminary decision to issue the permit. The notice was published as required by MPCA s rules, and included the information required. The notice of the preliminary determination to issue the permit provided for a comment period ending July 1, In accordance with Minn. R , subp. 1 and 2 (2003), a draft permit and technical support document were made available to the public. 53. An interruption of government services in Minnesota started on July 1, 2011, and lasted until July 20, Because the last day of the public notice was July 1, there were some comments that were received after July 1, These comments have been treated as timely. 54. The MPCA staff held a public information meeting for this proposed facility modification in Hibbing, Minnesota on June 16, The public information meeting was publicized and held in accordance with Minn. R , subp. 2, which references Minn. R , subp. 3 and with Minn. R Minn. R specifies the procedures for EPA review of permits proposed for issuance by the MPCA. On June 1, 2011, the MPCA submitted the draft permit to EPA for its review. EPA submitted comments on the permit during the public comment period. 56. Copies of the draft permit were sent to North Dakota, South Dakota, Iowa, Wisconsin, Michigan and Ontario as affected states or provinces. 7

9 PUBLIC COMMENTS 57. During the comment period, the MPCA received a total of 12 written comments from citizens or other government entities. 58. Commenters expressed a variety of concerns including the mercury emissions that would be caused by the project, the determination of BACT for greenhouse gases, monitoring of greenhouse gas emissions, BACT limit for SO 2, BACT startup, shutdown, and malfunction considerations, notice to the public, air emissions modeling, water quality, and the relation of natural sources of pollution to manmade pollution. These comments are addressed in the Responses to Comments document, Appendix B to these Findings. 59. The MPCA staff reviewed each of the comments and provided a detailed response to each. The responses of MPCA staff are set out in the Responses to Comments document which is Appendix B to these Findings. 60. The MPCA concurs with the reasoning of MPCA staff and hereby adopts the explanations and rationale in the Responses to Comments document as its findings. REQUEST FOR CONTESTED CASE HEARING 61. WaterLegacy requested a contested case hearing on the following issues: A. Whether mercury emissions likely to result from the Keetac expansion, over time as well as at the onset of operation of the new indurating furnace, are likely to increase, adding up to 75.5 pounds per year of additional toxic mercury. B. Whether increased mercury emissions from the Keetac expansion are likely to be offset at all by mercury emissions reduction goals related to existing Keetac and Minntac mining operations and, if so, to what degree and within what time frame. 62. WaterLegacy identified the following issues as mixed issues of fact and policy: A. Whether the Keetac Draft/Proposed Permit is inconsistent with Minnesota s Statewide Mercury TMDL in that it provides for certain mercury increases and only speculative and untested mercury reductions. B. Whether the Keetac Draft/Proposed Permit is inconsistent with Minnesota s Statewide Mercury TMDL in that any offsets for increased mercury emissions are neither certain, specific, timely or enforceable. C. Whether the reliance of the Keetac Draft/Proposed Permit on various provisions in the U. S. Steel Corp./MPCA June 11, 2011, SOC undermines compliance with National Pollutant Discharge Elimination System (NPDES)/State Disposal System (SDS) permits and water quality standards, inconsistent with the MPCA s delegated duties under the Clean Water Act. 8

10 EVALUATION OF THE REQUEST FOR A CONTESTED CASE HEARING 63. The MPCA must determine if a request for a contested case hearing meets certain criteria specified in Minn. R. ch Minn. R , subp. 2.A. requires that a petition for a contested case hearing must state the issues proposed to be addressed, the specific relief sought or requested resolution of the matter, and the reasons (which may be in the form of proposed findings) that would support a MPCA decision to hold a contested case hearing. 64. Minn. R , subp. 2.B. provides that to the extent known, the petition for a contested case may also include a proposed list of prospective witnesses to be called with a brief description of proposed testimony or a summary of evidence that would be presented at a hearing, a proposed list of publications, references, or studies to be introduced and relied upon at a hearing; and an estimate of the times required for the petitioner to present the matter at a hearing. 65. The MPCA notes that while the information specified in Minn. R. 7000,1800, subp. 2.B. is not required in a contested case hearing petition, it is information that is helpful to the agency as it considers whether a hearing will aid the agency in making a final decision on a matter. 66. The criteria on which the MPCA evaluates a petition for a contested case hearing are specified in Minn. R The criteria are: Subpart 1. Board or commissioner decision to hold contested case hearing. The board or commissioner must grant the petition to hold a contested case hearing or order upon its own motion that a contested case hearing be held if it finds that: A. there is a material issue of fact in dispute concerning the matter pending before the board or commissioner; B. the board or commissioner has the jurisdiction to make a determination on the disputed material issue of fact; and C. there is a reasonable basis underlying the disputed material issue of fact or facts such that the holding of a contested case hearing would allow the introduction of information that would aid the board or commissioner in resolving the disputed facts in making a final decision on the matter. All three criteria must be satisfied for the MPCA to grant a petition for a contested case hearing. 67. The MPCA evaluated the request for a contested case hearing by examining each of the issues described in Finding 61 to determine if the three criteria in Minn. R are all met. 68. Regarding item A in Finding 61, there is no material issue of fact in dispute. The permit sets a limit for mercury from the expansion of 75.5 pounds per year as the comment notes. Attachment 7.b. to the TSD (available during the public notice period) provides a graphical depiction of how mercury emissions may increase for several years before decreasing as controls are implemented. 69. The MPCA finds that WaterLegacy has not met Criterion A. of Minn. R , subp. 1. The petition for a contested case hearing on item A in Finding 61 is denied. 9

11 70. Item B in Finding 61 questions the degree to which increased mercury emissions from the Keetac facility modification will be offset and in what timeframe. Attachment 7.b. to the TSD for the permit describes the timeframe as well as the amount of change in annual mercury emission. 71. WaterLegacy does not appear to challenge the accuracy or adequacy of that description. To the extent that the issue does not challenge either the time frame or the change in annual mercury emissions provided in the TSD, there is no material issue of fact in dispute and the petition fails to meet criterion A. of Minn. R , subp Item B in Finding 61 also disputes whether the increased mercury emissions from the Keetac Phase III modification are likely to be offset at all by mercury emissions reduction goals related to existing Keetac and Minntac mining operations. The MPCA will interpret mining operations to mean the taconite pellet production operations that are modified by this permit. There are a variety of goals related to mercury emission reductions. 73. The mercury TMDL, the Implementation Plan and the Strategy Framework include mercury reduction goals. All three relate to the existing Minntac and Keetac facilities. 74. Minn. R , subp. 1 establishes timeliness criteria for various types of contested case hearing. For matters other than a permit, a contested case hearing petition is timely if it is received within five days before a regular Board meeting and at any time before a special Board meeting at which the contested matter is heard. 75. The mercury TMDL, the Implementation Plan and the Strategy Framework that include mercury reduction goals have been finalized for several years. The Board took final action on the mercury TMDL on January 24, WaterLegacy s contested case hearing petition on the goals in the mercury TMDL is not timely under Minn. R , subp. 1.C. Further, in this proceeding, the MPCA is considering the proposed permit to authorize the Keetac Phase III expansion, not the mercury reduction goals in the mercury TMDL or accompany plans. 76. To the extent that WaterLegacy s petition for a contested case hearing challenges the goals established in the mercury TMDL, the Implementation Plan or the Strategy Framework, the petition is both untimely and beyond the scope of this permitting proceeding and is denied. 77. The Keetac modification permit includes a goal that the required ACI system or its equivalent achieve at least 80 percent mercury removal. The 80 percent mercury removal goal applies to the Phase III modification, however, not to existing Minntac or Keetac operations. The MPCA finds that WaterLegacy s issue concerning mercury emission reduction goals related to existing Keetac and Minntac mining operations does not relate to the 80 percent mercury removal goal in the Keetac permit. 78. As to the 80 percent mercury removal goal in the Keetac modification permit, WaterLegacy s petition for a contested case hearing is denied. 79. The U. S. Steel Corp. SOC establishes mercury requirements for U. S. Steel Corp. with regard to existing operations. The SOC establishes specific requirements that U. S. Steel Corp. must complete to research, trial and install mercury reduction technology. Failing the research and 10

12 trials to identify a viable mercury reduction technology, the SOC requires a contingency plan and schedule that is consistent with MPCA staff guidance for new and modified mercury sources to offset cumulative mercury emissions from the operation of Phase III from startup of Phase III through January 1, The MPCA finds that the requirements of the SOC are not goals. They are requirements. 80. Further, the mercury requirements of the SOC were originally established in an August 2010 agreement. The requirements were incorporated, without change, into the SOC that was finalized in June Any Board meeting at which the Board would have considered the August 2010 agreement or the SOC could have been considered is past. The MPCA finds that a petition for a contested case hearing on the mercury requirements of the SOC are untimely under Minn. R , subp To the extent that WaterLegacy intended to challenge provisions of the SOC, the MPCA finds that there are no goals established in the SOC and the petition is untimely. WaterLegacy s petition for a contested case hearing as it might apply to the SOC is denied. 82. WaterLegacy s petition also presented mixed issues of fact and policy. Criterion A. of Minn. R , subp. 1 requires that a petition present a material issue of fact in dispute. Policy disputes concerning one MPCA choice over another or strategies to further environmental goals do not present material issues of fact and fail to satisfy criterion A. of Minn. R , subp. 1. Also, the MPCA s procedural rules do not provide for contested case hearings on questions of policy. To the extent that WaterLegacy seeks a contested case hearing on policies of the MPCA, the petition is beyond the scope of this permitting proceeding, is not provided for by rule and is denied. 83. Item A in Finding 62 contends that the Keetac Draft/Proposed Permit is inconsistent with the mercury TMDL in that it provides for mercury increases and only speculative and untested mercury reductions. 84. There is no material issue of fact in dispute that the Keetac modification permit allows a mercury increase from operation of Phase III. WaterLegacy s petition for a contested case hearing on that fact is denied. 85. WaterLegacy appears to question whether the uncertain degree of mercury reductions to be realized through the requirements of the SOC renders the Keetac modification permit inconsistent with the mercury TMDL and therefore requires the MPCA modify or deny the permit. 86. As more fully described in the Findings 32 through 36, the mercury TMDL, the Implementation Plan and the Strategy Framework provide mechanisms to achieve the mercury fish tissue concentration standard in Minn. R. ch The TMDL does not establish applicable requirements, but goals. The TMDL is not a rule to which the MPCA must adhere when issuing permits. 87. As described in Finding 35 and 36, the Implementation Plan and Strategy Framework, not to mention the new and modified source guidelines, are not applicable regulatory requirements. 11

13 Nevertheless, the MPCA has chosen, as a matter of policy, to include certain mercury control requirements in the permit, which will further the goals of the mercury TMDL. 88. WaterLegacy s primary concern appears to be that the Keetac modification permit allows an increase in mercury emissions even though no mercury control technology for the taconite industry currently exists. These are undisputed facts. 89. WaterLegacy does not challenge the fact that the mercury TMDL, the Implementation Plan and the Strategy Framework articulate goals. It does not challenge the fact that the SOC requires U. S. Steel Corp. to undertake mercury control research and trials. It does not challenge the fact that the SOC requires U. S. Steel Corp. to provide a contingency plan for equivalent reductions, although it complains that the SOC does not specify the equivalent reductions. 90. Additionally, although Minn. R , subp. 1.B. allows a petitioner to identify witnesses it may call at a hearing and to summarize their testimony, to identify publications or references it might introduce at a hearing in order to clarify and sharpen an allegation of a factual dispute, WaterLegacy does not make any such offering. 91. The MPCA is unable to identify any material fact that WaterLegacy challenges in this issue. Rather, it appears that WaterLegacy would prefer that the MPCA should wait to issue the permit until a mercury control technology has been developed. This is an issue of policy and not a disputed issue of fact. 92. WaterLegacy s petition for a contested case hearing on whether the permit is consistent with the mercury TMDL does not present a material issue of fact and is denied. 93. Next, WaterLegacy questions whether the permit is inconsistent with the mercury TMDL in that offsets to the mercury emission increases from Phase III operation are not certain, specific, timely or enforceable. 94. The TMDL and Implementation Plan do not require offsets, but recognize that some increases in mercury will occur from new and modified sources. The MPCA staff provided guidance, which calls for 1:1 equivalent reductions in mercury emissions for such sources. 95. WaterLegacy appears to recognize that offsets to the Phase III increase are provided for. However, they are required by the SOC, which requires U. S. Steel Corp. to reduce mercury emissions earlier than the target date in the TMDL and to submit a contingency plan to completely offset the increases in mercury emissions from the operation of Phase III from startup to January 1, 2025, should early emission reductions not be possible. 96. Although not stated as such, it appears that WaterLegacy disputes whether the SOC is enforceable and whether the offset requirement is certain, specific and timely (by timely we will assume that WaterLegacy means contemporaneous ). 97. Similar to WaterLegacy s complaint that the Keetac modification permit is not consistent with the mercury TMDL, the MPCA is unable to identify any fact that is actually in dispute. There is no dispute that equivalent reductions are not provided for in the permit itself and that the SOC allows 12

14 equivalent reductions through early reductions from existing U. S. Steel Corp. facilities or through the contingency plan, which is uncertain in that it does not specify the source of the equivalent reductions. There is no dispute that the equivalent reductions are not contemporaneous with the mercury emission increases. 98. In addition, WaterLegacy has failed to identify any reasonable basis to dispute that the SOC or permit are enforceable. 99. Most importantly, however, as described in the Findings 87 through 92 concerning whether the Keetac modification permit is consistent with the mercury TMDL, the TMDL, Implementation Plan and Strategy Framework are not air permit applicable requirements. The air rules do not require the MPCA to include anything in the permit regarding equivalent mercury reductions. Further, the mercury TMDL, Implementation Plan and Strategy Framework do not suggest that all mercury emission reduction measures should be in permits, rather than in other tools, such as Schedules of Compliance In the absence of any disputed material issue or reasonable basis to dispute that the SOC and permit are enforceable and in the absence of an applicable requirement to include mercury emission offsets in this permit, WaterLegacy s petition for a contested case hearing on whether the permit is inconsistent with the mercury TMDL with regard to equivalent reductions for the permitted mercury emission increases is denied Finally, WaterLegacy asks for a contested case hearing on whether the SOC undermines compliance with NPDES/SDS permits and water quality standards that is inconsistent with the MPCA s delegated duties under the Clean Water Act This issue is not concerned with the Keetac air emissions permit. It raises issues concerning U. S. Steel Corp s NPDES/SDS water permit and the SOC, neither of which are presently before the MPCA. It does not raise any issue that is material to the proposed air emission permit. As such, it fails to meet criterion A. of Minn. R , subp WaterLegacy s petition for a contested case hearing with regard to the Keetac NPDES/SDS water permit is denied It should also be noted, that in support of its petition for a contested case hearing, WaterLegacy cites to a number of documents, including the proposed permit itself, the TSD, the SOC, the TMDL, and the TMDL Implementation Plan. All of these documents are currently in the administrative record for this proceeding. WaterLegacy has not identified any new evidence it would introduce at a hearing that would aid the MPCA in making a final decision on issuance of the Keetac air emissions permit. FINAL DETERMINATION ON ISSUANCE OF THE PERMIT 105. The MPCA s decision to issue the proposed permit is governed by its permit rule, Minn. R , which provides: Subp. 1. Preconditions for issuance. The agency shall issue a permit or permit 13

15 amendment, or reissue a permit only if it determines that all of the following conditions have bene met: A. The agency has received a complete application for a permit, permit amendment, or permit reissuance, except that a complete application need not be received before issuance of a general permit under part , subpart 4. B. The agency has complied with the public participation procedures for permit issuance if required by part C. The agency has complied with the procedures for notifying and responding to affected states, if required by part D. If the administrator s review is required by part , the administrator has received a copy of the permit and any notices required and has not objected to issuance of the permit within the time period specified, or the administrator has objected by the objection has been resolved to the administrator s satisfaction. E. The conditions of the permit provide for compliance with all applicable requirements and the requirements of parts to , or include a schedule to achieve such compliance. F. The permit does not reflect a variance from any federally enforceable applicable requirement or requirement of parts to G. The agency anticipates that the applicant will, with respect to the stationary source and activity to be permitted, comply with all conditions of the permit. H. All applicable provisions of Minnesota Statutes, chapter 116D, and the rules adopted under Minnesota Statutes, chapter 116D, have been fulfilled. Subp. 2. Grounds for denial. The following constitute grounds for the agency to refuse to issue a new or modified permit, or to refuse permit reissuance: A. The agency is unable to make any of the determinations required under subpart 1. B. There exists at the stationary source to be permitted unresolved noncompliance with applicable state or federal pollution control statutes or rules administered by the agency, or conditions of a previous or existing air emission permit, and the applicant will not undertake a schedule of compliance to resolve the noncompliance. C. An applicant has failed to disclose fully all facts relevant to the stationary source or activity to be permitted, or the applicant has knowingly submitted false or misleading information to the agency. D. The permitted facility or activity would endanger human health or the environment and the danger cannot be removed by an amendment to the permit. 14

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