RE: Red Rock Air Permits Heads up! ,
 From: John Shafer/ENRON@enronXgate on 09/16/2001 09:07 PM CDT
To: Phil Lowry/ENRON@enronXgate, Jerry D Martin/ENRON@enronXgate
cc: Louis Soldano/ENRON@enronXgate, William Kendrick/ENRON@enronXgate, Larr=
y=20
Campbell/ET&S/Enron@ENRON, Ruth Jensen/ENRON@enronXgate, Richard=20
Melton/ENRON@enronXgate=20

Subject: RE: Red Rock Air Permits Heads up!

Phil,
I agree with your assessment, but would offer some additional information.=
=01;=20
After returning from Austin on Wednesday and learning that Larry Campbell=
=20
had=01;received a negative reaction from EPA Region IX concerning a possibl=
e=20
meeting with them, I worked on this issue most of Thursday and Friday.=01; =
The=20
strategy I discussed with Lou was to locate a local Arizona or California=
=20
"political/lawyer" type=01;who would have the necessary contacts to get us =
in=20
there and get the permits moving.=01; Lou agreed and we have been working o=
n=20
that strategy while gathering more information related to the "right" conta=
ct=20
that could get this job done.=01; I personally have had lengthy discussions=
=20
(Thursday and Friday) with Lou, Larry Campbell, Bill Kendrick and several k=
ey=20
consultants that have extensive contacts within both Arizona and=20
California.=01;We are closing in on a=01;local law firm and also a "high le=
vel=01;air=20
consultant"=01;who will be able to get us in at the Director or Air Permit =
Chief=20
level=01;to present (1) our=01;situation, (2) clean air needs for Arizona a=
nd CA,=20
and (3) how long these permits have already been on file.=01; We should hav=
e=20
someone identified early this next week.=01;=20
=01;
Let me present the following information to=01;complement yours:
* =01;The permitting timeline=01;being used=01;was based on historical=20
timelines=01;encountered=01;while processing prior Arizona projects.=01; No=
 indication=20
of backlogs or slower processing in the beginning.=01; A familiar consultan=
t=20
(Argent)=01;was used for the air permit applications and no indication was=
=20
offered by the AZ DEQ or EPA Region IX that normal processing was not=20
occurring.=01; Applications filed in March, 2001 and by letter from the age=
ncies=20
were deemed complete by mid-April.
* Within the last two weeks, the Arizona DEQ Permit Engineer assigned to th=
e=20
applications for Station 1 and 2 has stated that he is overloaded and worki=
ng=20
on the applications as they are in the "que".=01; He told Larry Campbell (a=
nd I=20
have verified=01;it also by talking to outside consultants that permit in=
=20
Arizona) that this is true and the AZ DEQ have been very slow lately in=20
getting permits out. (Caveat: One of the suggestions we want to carry in to=
=20
AZ DEQ is that we would be willing to pay for a third-party contractor to=
=20
take the permits and work them up=01;for release to the publishing firm so =
they=20
can be sent out for public comment.=01; AZ DEQ is willing to meet with us a=
nd=20
discuss our applications.)=01;=01; Even if we get this part going, this is =
only=20
part of the problem.=01; Bottom line is=01;we must play our cards=01;correc=
tly at this=20
juncture to be able to get our applications moved up in the que, typed, and=
=20
out for public comment; but EPA Region IX will still have thirty days after=
=20
that for their review of those two state issued permits.
* EPA Region IX is a different story.=01; It is most difficult to put press=
ure=20
on them, more so than AZ DEQ.=01; The applications for Stations 3 and 4 are=
 on=20
tribal land and these=01;applications are not delegated to any state air qu=
ality=20
department.=01;=01;After the technical meetings in the office last week, La=
rry made=20
a couple of calls=01;to the Permit Engineer=01;in Region IX and received a =
negative=20
response.=01; Larry was told that the=01;permits would issue in one to four=
 months=20
and that=01;there was no need for a meeting with them.=01; Again,=01;my adv=
ice at this=20
point is to find the right person with the right contacts at a very high=20
level and get the meeting set.=01; It's one thing to pressure the State of=
=20
Arizona and get a permit applications moving; but if we are not very carefu=
l=20
with Region IX we could damage our ability to not only get Sun Devil's=20
permits, but create audits and compliance situations that are far reaching.=
=01;=20
Again, we must first get a personal meeting with them=01;to enable us to=20
present=01;the need, circumstances, and how long these permits have already=
 been=20
on file.=01; Locating the=01;correct person to help us do that is of upmost=
=20
importance!
* Clarifying the complicated point, EPA Region IX has responsibility=20
to=01;review and publish not only the permits for Stations 3 and 4, but to =
also=20
review the AZ DEQ permits for stations 1 and=01;2 for 30 days.=01; Therefor=
e, if we=20
anger EPA Region IX over permits for Stations=01;3 and 4, they could delay =
the=20
issuance of the permits for Stations 1 and 2 that=01;have been expedited wi=
th=20
the AZ DEQ.=01; It's a two-edged sword.
Our Strategy:
* Continue to work on the technical staff permit engineers, but very=20
carefully.=01; Indications are that our phone calls are beginning to annoy =
them.
* Locate a political/lawyer type that has connections at the top of AZ DEQ=
=20
and EPA Region IX to help us get the=01;desired meeting with key=01;people =
in order=20
to=01;move=01;the permits.=01; This should be done within the next week.
* Offer to assist in any manner (e.g., funding a third party) to get the=20
permit applications moving out of AZ DEQ and EPA Region IX for public comme=
nt.
I have some strategic ideas that will increase the=01;probability that this=
 type=20
of circumstance will not occur in the future.=01; I will be glad to discuss=
 any=20
of this with you on Monday morning.=01; John Shafer
=01;
-----Original Message-----=20
From: Lowry, Phil=20
Sent: Sun 9/16/2001 8:56 AM=20
To: Martin, Jerry D.=20
Cc: Shafer, John=20
Subject: Red Rock Air Permits Heads up!


At Stan=01,s staff meeting last week, the discovery of a delay in the issua=
nce=20
of Air Permits was discussed.=01; Stan indicated that this was unacceptable=
.=01; I=20
requested that you conduct a meeting that afternoon with key people to=20
outline a plan of attack to get the permit schedule back on track.=01; I am=
=20
aware that you did such and you provided a voice mail update that indicated=
 a=20
plan.
=01;
Here is the problem.=01; Apparently the matter was further discussed at the=
=20
weekly Red Rock status meeting on Friday and the following feedback was=20
provided by a =01&little birdie=018.=01; We can expect another unpleasant d=
iscussion=20
at Monday=01,s 8am meeting with Stan.
=01;
* Joe Hartsoe has been unable to pursue any discussion with Washington=20
officials to put pressure on Arizona.=01; WTC attacks!=20
* Operations is unwilling to put much pressure on Arizona/EPA out of concer=
n=20
for future responsiveness from the agency Re: Sun Devil=20
* Sun Devil is a bird in the bush and Red Rock is a bird in the hand.=20
* There is no way that we can get the Red Rock project completed as promise=
d=20
because we waited until it was too late to find out what was going on with=
=20
the Air Permits.=20
* The agency will not allow a bifurcation of the project and let us proceed=
=20
with on site construction prior to a permit and delay delivery of the=20
compressor to the site.=20
* We haven=01,t yet had any contact with the agency after the discussion la=
st=20
Monday.=20
=01;
=01;
=01;
=01;
=20
=01;
=01;
john.shafer@enron.com