OREGON GREEN PERMITS PILOT PROJECT:

LSI LOGIC CORPORATION QUALIFICATIONS
 AND PROPOSED INCENTIVES

Prepared by LSI Logic 
and the Oregon Department of Environmental Quality

November, 1999

TABLE OF CONTENTS

I	Facility Overview

II	Summary of Regulatory Requirements

III	Summary of EMS Implementation

IV	Summary of Performance Achievements

V	Future Targets for Environmental Impacts

VI	Requested Incentives

LIST OF ATTACHMENTS

ATTACHMENT A:  	LSI GRESHAM ENVIRONMENTAL REQUIREMENTS MATRIX

ATTACHMENT B:	LSI LOGIC ENVIRONMENTAL IMPROVEMENT PROCESS FLOW DIAGRAM

ATTACHMENT C:	LSI LOGIC ENVIRONMENTAL PROJECT EVALUATION FORM

ATTACHMENT D:	1999 LSI GRESHAM ENVIRONMENTAL IMPROVEMENT PROJECTS

ATTACHMENT E:	SEMICONDUCTOR INDUSTRY ASSOCIATION TECHNOLOGY ROADMAP 

ATTACHMENT F:	LSI LOGIC RCRA SUBPART BB/CC EQUIVALENCY DEMONSTRATION

I.	FACILITY OVERVIEW

LSI Logic is a leading designer, developer, and manufacturer of the most advanced application specific integrated circuits (ASIC’s) in the semiconductor industry.  The firm’s broad ASIC line includes high performance HCMOS gate arrays and cell based ASIC’s which integrate random logic, microprocessors, memory and analog functions.

LSI Logic serves the market by providing leading edge technology manufacturing services in producing electronic devices used in telecommunications, PC’s and engineering workstation environments.  In addition, it also supports the military and aerospace industries.  The company’s customer base is located throughout the world.

In 1996, LSI Logic established a manufacturing campus in Gresham, Oregon.  Construction of the office, semiconductor manufacturing, and energy center buildings in Gresham were completed by the end of 1997. Although manufacturing qualification commenced in 1997, semiconductor production did not begin until the fall of 1998.  LSI Logic plans to construct four more semiconductor fabrication facilities in the future at the Gresham campus.

In May, 1999, LSI agreed to participate in DEQ’s Environmental Management Systems Incentives Project, the predecessor of the Green Permits Program.  LSI has requested a Green Environmental Management Systems (GEMS) Achiever Permit.  

II.	SUMMARY OF REGULATORY REQUIREMENTS

The following environmental permits and registrations have been issued to LSI’s Gresham campus:

Agency	Permit Type	Number	Effective Date 	
DEQ	Storm Water Discharge 1200-Z	File No 109799	02/98	
DEQ	Air Contaminant Discharge	26-0027	7/17/96	
City of Gresham	Industrial Wastewater Discharge	332	09/1/97	
DEQ	Hazardous Waste Generator (Large Quantity Generator)	ORQ000004382	9/27/96	

Air Quality

The 1998 Annual Report was submitted to the DEQ on February 15, 1999.   On August 31, 1999, DEQ performed an inspection on LSI’s air emission sources, treatment systems and monitoring records. The inspection concluded that LSI Logic is in compliance with its Air Contaminant Discharge Permit.

Wastewater

LSI Logic’s on-site treatment systems include fluoride, ammonia and slurry treatment, and acid waste neutralization (AWN).  The installation and commissioning of the treatment systems was completed in December 1997.  Wastewater effluents are sampled weekly and self-monitoring reports are submitted monthly to the City of Gresham.

 In 1998, LSI Logic received two written notices of violation from the City of Gresham for industrial wastewater noncompliance.  The first notice was issued in February for a late monthly self-monitoring report submission caused by a laboratory error. The second notice was issued in August for a wastewater pH excursion.   Neither incident resulted in any negative environmental impact or damage to the City of Gresham wastewater treatment plant.  Corrective actions were implemented to the satisfaction of the City of Gresham.  

Hazardous Waste

In 1998, LSI Logic was a large quantity generator of hazardous waste.  LSI submitted its Annual Hazardous Waste Report to the DEQ on March 1, 1999.  The largest waste streams were isopropyl alcohol (IPA), which is used in the wafer cleaning process and ammonium sulfate, which is a byproduct of the ammonia treatment system.  A DEQ hazardous waste compliance inspection has yet to occur at the facility, however, DEQ on-site technical assistance was provided to LSI during 1998.

Stormwater

In 1998, five new stormwater detention ponds were constructed to enhance the surface water quality on the undeveloped portion of the site.    The new detention ponds are located adjacent to N.E. 223rd Street.    Similar to the stormwater detention pond collecting the developed area runoff, these ponds enhance the sedimentation from the undeveloped areas of the site.

Total suspended solids in samples collected from the outfall from this portion of the site were reduced from 940 milligrams per liter (mg/L) detected in 1997, to 25 mg/L detected in a sample after construction of the ponds.

A complete summary of the annual activities and reports completed by LSI for each of these aforementioned regulatory programs can be found in Attachment A.

III.	SUMMARY OF EMS IMPLEMENTATION

LSI Logic has established corporate quality and environmental improvement programs that the Gresham campus has incorporated into the development of a comprehensive environmental management system.  DEQ staff conducted an extensive review of the LSI EMS and determined it to be “ISO 14000 comparable.”  The facility is now preparing and planning for an ISO 14000 registration audit within the next six to twelve months.  Some of the exemplary features of the LSI Logic EMS include the following:
A.	PERFORMANCE DEVELOPMENT SYSTEM (PDS) 
LSI Logic has established a corporate-wide Performance Development System (PDS) which links individual performance directly to strategic, organization, and functional business goals. Key Responsibilities (KRs) are defined to describe the main mission and responsibilities of each work group.  KR goals are established by individuals for their specific job function to meet the overall KRs for the site.  Everyone’s performance evaluation is based on their achievement of the KR goals. 
In Gresham, all employees have a KR goal to Improve Environmental Performance.  Every employee is evaluated on his or her contribution toward achieving this goal.  Departments shall include this KRA into their goals in one of the following performance objective categories: 

•	 Chemical Reduction/Pollution Prevention
•	 Water Conservation
•	 Energy Conservation
•	 Solid Waste Reduction 
•	 Transportation and Trip Reduction

An Environmental Improvement Project Evaluation Form was developed to track projects and to evaluate environmental impacts, cost effectiveness, technical feasibility and effects on product quality, health & safety and regulatory compliance.  Employees are encouraged to use the Quality Improvement System to identify, monitor and to improve environmental performance.

A flow chart demonstrating the environmental improvement process is shown on Attachment B.  In 1998, ten environmental improvement projects were evaluated and six were completed. 

B. ENVIRONMENTAL IMPACT EVALUATION

LSI Logic’s Quality Improvement System (QIS) was established in 1992 and provides a formalized structure and systematic process for individuals and groups to identify and eliminate defects. All employees are required to complete QIS training and participate in a Cycle of Quality (COQ).  Environmental Improvement can either be a focus of a COQ, or an indirect benefit of an improvement in another area.

An Environmental Impact Evaluation Form, which is included as Attachment C, is used to capture the environmental benefit of a COQ.  It is completed after the Corrective Action Planning to determine the COQ contribution to achieving the site environmental objectives (chemical reduction, water conservation, energy conservation, solid waste reduction, and transportation and trip reduction) and environmental improvement.  If a COQ does improve environmental performance, this is also noted on the final summary.

C.	EMPLOYEE TRAINING

In 1998, Human Resources conducted a Cycle of Quality to improve the New Hire Orientation.  The Environmental, Health and Safety portion of the orientation was also revised to include the following information to all new employees on their first day at LSI Logic:

•	Environmental Policy
•	Environmental Objectives
•	Environmental Improvement KRA
•	Solid Waste and Recycling Guide
•	Ways to Get Involved

In addition, in-house training is provided for all personnel who may work with hazardous chemicals or in a hazardous environment.  The following training classes and programs were provided in 1998:   

•	Emergency Response Team Training
•	Chemical Safety
•	Hazard Communication
•	Construction Safety 
•	Confined Space Entry
•	Fire Extinguisher Usage
•	Electrical Lock Out/Tag Out
•	Respiratory Protection
•	Forklift Safety
•	Manager and Supervisor EHS Training

IV.	SUMMARY OF PERFORMANCE ACHIEVEMENTS

LSI Logic designed and constructed the Gresham facilities to optimize pollution prevention and resource conservation potential.  During 1997 several notable environmental gains were realized which exceed basic regulatory compliance standards, as well as surpassing the environmental performance of previously constructed LSI manufacturing facilities.  These achievements were attributable to either the original design of manufacturing equipment or modifications that took place soon after facility operation began.  During 1998, six new environmental improvement projects were implemented.  These new efforts produced the following annual environmental impact reductions:

•	Chemical Use Reduction:		12,000 gallons
•	Water Use Reduction:  		10,000,000 gallons
•	Energy Use Reduction:		4,462,000 kilowatt hours
•	Spent Chemical Recycling:	25,000 gallons
•	Solid Waste Reduction:		4,400 pounds
Below is a summary of some of the notable environmental design and improvement initiatives that LSI has completed over the previous two years.  These are all efforts that go beyond basic compliance standards.

CHEMICAL REDUCTION AND RECYCLING

Spent Chemical Recycling.  In many cases, the spent semiconductor grade chemicals from LSI’s processes are still considered industrial grade chemicals.  The Gresham fab was designed to facilitate chemical recycling and reuse.  Separate piping and tank collection systems were installed for selected spent chemicals.  In 1998, LSI located and audited multiple prospective purchasers of its spent chemicals.  The materials sold to other users included isopropyl alcohol, phosphoric acid, and sulfuric acid.  These spent materials would otherwise be managed and treated as hazardous waste.

Chemical Use Reduction.  Chemical baths in the wet bench wafer cleaning process were diluted with water to reduce the quantity and toxicity of chemicals (ammonium hydroxide, hydrogen peroxide, and hydrochloric acid) used for cleaning, thereby reducing the total annual usage of these chemicals by 7,000 gallons.  In addition, a change from a tungsten-based slurry process to a peroxide-based process reduced the quantity of chemical applied per wafer from 2.5 liters to 1.5 liters – a 4,000-gallon annual reduction in chemical usage.

WATER CONSERVATION AND QUALITY

Ultra Pure Water Conservation and Reclaim.  Historically, ultra-pure water (UPW) production system efficiency is as low as 50 %.  In other words, two gallons of city water generates one gallon of UPW.  To minimize water use, a LSI installed a UPW system with advanced reverse osmosis (RO) technology. This system uses 1.125 gallons of city feed water to make one gallon of UPW, resulting in an efficiency level of nearly 90%.  

In the fab, a UPW reclaim loop was installed on the wet benches and polishers to send 75 gallons per minute of water back to the front end of the UPW production system.  This conserves more than 100,000 gallons per day.  

In 1998, level controls were installed on the condenser tanks used in the ultra pure water purification process.  These new controls reduced the water flow rate in this system from 25 to 5 gallons per minute, an 80% reduction of water used in this process and a total annual reduction of 10,000,000 gallons in wastewater discharges from the facility.

Chemical and Mechanical Polishing Tool Set.  At the time of facility construction, an initial set of chemical and mechanical polishing tools were selected for installation.  The Chemical and Mechanical (CMP) group conducted are-evaluation of different process tools prior to purchase.  The evaluation was based on water and chemical use, production capacity, floor space, cost, and efficiency.   The new tools that were ultimately purchased reduced the DI water use by 650,000 gallons per week and chemical use by 1,300 gallons per week beyond the usage levels corresponding to tools initially selected for this process.  

Storm Water Management.  LSI constructed a 6-acre storm water detention pond to reduce the peak storm water runoff from the site to a level lower than that prior to the development. Adjacent to the storm water detention pond, a 31,500 cubic foot water quality pond was constructed to enhance sedimentation and facilitate biodegredation of contaminated storm water.  The combined treatment system will effectively remove 65% of total suspended solids from the site runoff.   The pond was designed for the 100-year flood event, which also reduces the need for public flood control facilities.

AIR QUALITY

PFC Abatement.  In 1996, LSI joined the Environmental Protection Agency’s  (EPA)  “PFC Emission Reduction Partnership for the Semiconductor Industry".  This partnership is designed to reduce emissions of global warming perfluorocarbon (PFC) gases to the earth's atmosphere.  The Gresham campus participates in LSI’s corporate effort to reduce PFC emissions.  Reduction methods for PFCs,  hydrides, and other specialty gases are controlled by the Point of Use (POU) abatement devices located upstream of the wet scrubbers.  The POU equipment LSI utilizes are thermal processing units (TPUs) and gas reactor columns (GRCs).  The use of all of LSI’s control measures decrease air pollution emissions at the Gresham by over 90% beyond what would be achieved without these measures.  It should be noted that there are currently no federal or state standards for the control of PFC emissions. Therefore, the reductions achieved for these emissions are all above and beyond compliance standards.

Employee Trip Reduction.  In 1998, LSI Logic participated in the Clean Air Action Day campaign.  On days when air pollution levels threatened to reach the unhealthy range, LSI sent e-mail notification to all employees encouraging them to find alternative transportation to minimize air pollution.  As an incentive, LSI provided lunch certificates to all employees who used alternative transportation on the Clean Air Action Days.  A certificate of recognition was received from DEQ.  This lunch certificate incentive initiative has now been established as an on-going program.  
ENERGY CONSERVATION

“Green Lights” Projects.  LSI Logic is a member of the EPA's "Green Lights" program, which aims to reduce air pollution through the use of more energy efficient lighting. At the Gresham campus energy conservation measures have been incorporated into the building design and operation.  By switching to more energy efficient lighting such as motion detectors and low-energy “T-8” fluorescent bulbs, LSI Logic has reduced its office lighting energy consumption costs by 30 percent per year.  

Efficient Building Design.  LSI Logic has installed a fully automated facility control system which regulates environmental conditions, including space temperatures, through a centralized computer system.  “Low E” window glass has been installed in the office building to reduce heat loss.  All computers, printers, faxes and copiers are equipped with automatic energy conservation devices that meet or exceed EPA Energy Star standards. 

Evaporator Efficiency.  The performance of an evaporator, used to reduce the volume of ammonium sulfate solution generated as a by-product of LSI’s ammonia treatment, was evaluated in 1998.  Based on the evaluation results, the evaporator was replaced with a more efficient model that reduced the energy consumption of this process by 75%.

SOLID WASTE REDUCTION AND RECYCLING

Purchasing Recycled Supplies.  In addition to recycling solid and chemical waste, LSI Logic is committed to purchasing and using recycled products.  LSI purchased recycled paper and envelopes, laser printer cartridges, cafeteria “to-go” containers, file folders, and bathroom supplies.  In 1997, LSI became a distinguished BRAG member (Business Recycling Awards Group).  In order to qualify for BRAG, LSI demonstrated to the City of Gresham’s waste prevention coordinator that it recycles at least 6 items, prevent waste, purchase and use recycled products, and provide recycling information.

Computerized Information Management.  LSI implemented a corporate-wide Systems, Applications, and Products in Data Processing (SAP) software to integrate business information management.  This system reduced the Gresham facility’s paper usage by an estimated 1,200 pounds per year by eliminating the need for paper copies of many administrative documents.  
Container Re-Use.  LSI also found an on-going alternative use for approximately 70 empty plastic slurry totes and metal drums (3,200 pounds) generated annually that would otherwise be disposed as a solid waste.  

V.	
FUTURE TARGETS FOR ENVIRONMENTAL IMPACTS 

The corporation’s World Wide Environmental Management System (WWEMS) Group defines the environmental aspects for LSI’s manufacturing operations.  The Gresham Environmental Health and Safety (EHS) Department then uses computer models, technical inventory, professional judgment, and/or assessments from industry association studies and road maps to determine which aspects are significant.  The Semiconductor Industry Association (SIA) Technology Road Map is particularly useful in assisting in this effort, and LSI has participated actively in the development of the environmental component of the SIA Road Map. The objectives for environmental improvement LSI Logic has established within their EMS directly correspond to the significant environmental aspects they have identified for their facility.  The significant aspects and objectives include the following:

•	 Chemical Reduction/Pollution Prevention
•	 Water Conservation
•	 Energy Conservation
•	 Solid Waste Reduction 
•	 Transportation and Trip Reduction

Employee and supplier transportation was determined to be the most significant aspect due to the massive cumulative air pollution and energy use levels, followed by facility usage of natural resources (energy and water).  In setting objectives and targets, LSI decided not to allocate company resources proportionally to the level of significance of each aspect.  For instance, despite its designation as the most significant aspect, LSI will not be dedicating more resources to transportation than any other objective.  The reason for this is that the degree of company control over transportation is somewhat limited relative to other aspects.  

The targets developed to meet these objectives are specific environmental improvement activities that are established annually.  Each year LSI also conducts evaluations of potential new environmental improvement projects that could be selected for implementation the following year(s). The environmental impact reductions resulting from the implementation of these activities are then measured.  For instance, in 1998, LSI developed ten environmental improvement project ideas and six were implemented.  The quantitative impact reductions attributable to those projects are summarized in Section III.  At the end of each year, the annual total environmental impact figures for each of the objective categories listed above will be compared to the baseline numbers established in 1998.  A current list of LSI’s 1999 targets (i.e., environmental improvement projects) are summarized in Attachment D.  Among the projects the company is now evaluating for possible implementation in 2000 and beyond include the following:  (a) full process wastewater reclaim, resulting in the recycling of 80-90% of process wastewater to the front of the water purification plant, (b) installation of a multiple (up to ten times prior to discharge) slurry reuse system, (c) elimination of a solvent cleaning process.

One of the overall corporate goals for the Gresham facility is to improve environmental performance over baseline levels.  Therefore, every functional area is responsible for considering new environmental improvement projects, as well as reporting on the department’s contribution to achieving the goal to improve environmental performance.  Guidance for some of the environmental improvement targets is derived from the Semiconductor Industry Association (SIA) Road Map, which sets timetables for the achievement of environmental (as well as others) activity goals for the semiconductor industry.  LSI Logic is currently meeting or exceeding those industry targets.  An excerpt from the SIA Road Map is found in Attachment E.

VI.	REQUESTED INCENTIVES

The incentives requested by LSI Logic were reviewed by DEQ’s Northwest Region managers, and were tentatively approved with certain conditions.  These conditions are outlined in the summary below.  These incentives will be drafted into permit language for proposed inclusion in the Green Permit.  

1. Tailored Enforcement Response

Description of Incentive
LSI will be provided time for correction of administrative errors and compliance deficiencies that do not result in any detrimental environmental impact without the applicable regulatory agency issuing a formal notice of violation (e.g., Notice of Noncompliance or Notice of Permit Violation).   DEQ assumes that the corrective action process outlined in LSI’s EMS will correct these deficiencies in a timely manner and in a way which will prevent deficiencies in the future 
Conditions/Exceptions
Deficiencies that indicate a major failure in the company’s compliance assurance procedures within its EMS, and/or result in detrimental environmental impacts, would be subject to formal compliance and enforcement actions 

2.	Single Point of Contact

Description of Incentive
This incentive would result in DEQ providing a single point of contact for interaction between LSI and DEQ on all DEQ regulatory and permit concerns, as well as any Green Permit Program issues.   This person will help to identify, track and resolve any issues relating to these regulatory and program matters.  The single point of contact will consult with compliance staff from all DEQ programs regarding the findings of any compliance inspection conducted, and will ensure that the appropriate response is provided to the company as per DEQ’s Green Environmental Management Systems (GEMS) Enforcement Response Directive.  

Conditions/Exceptions
The single point of contact will not have sufficient expertise to provide direct responses to LSI regarding regulatory and permit matters for all programs.  This contact would serve as project manager (or similar to a client manager), who would have general knowledge of all DEQ programs but would depend on DEQ program staff to provide expertise on specific issues. 

3.	Stakeholder Involvement Program Assistance

Description of Incentive
This incentive would result in DEQ assistance to LSI in conducting a stakeholder involvement program for the Gresham facility.

Conditions/Exceptions
DEQ will provide written guidance and technical assistance, but it will not offer the services of its stakeholder involvement consultant to provide in-kind assistance in developing and implementing stakeholder involvement activities. 

4.	Expedient Review of Permit Applications

Description of Incentive
Permit applications and modifications submitted to DEQ by LSI will be reviewed, processed and sent out for public notice within 120 days of receipt.  

Exceptions/Conditions
If LSI applies for an NPDES discharge to the Columbia River, the permit review and processing could extend beyond 120 days because such a discharge could trigger an Endangered Species Act (ESA) review.  DEQ may not have control over the time frame established for this ESA process.

5. Flexible Permitting

Description of Incentive
LSI is allowed to make facility process and operational changes without submitting permit modifications to the regulatory agency.  LSI will notify the agency(s) of these “pre-approved” changes in their Green Permits Annual Report.

Exceptions/Conditions
Permit modifications may be required if process changes result in the generation of new pollutants not addressed within existing permits, or if the changes generate quantities of pollutants that exceed allowable limits established in existing permits.

6. Authority to Construct

Description of Incentive
LSI can undertake facility construction and expansion activities prior to approval of a final permit or permit modification.  LSI would ensure that all regulatory requirements are met prior to submission of an application, and will notify the Department verbally, or in writing, to provide an opportunity to discuss the implications of these construction activities.

Exceptions/Conditions
If the change or expansion at the facility triggers a New Source Review (air quality) or a similar level of evaluation for other media, LSI would need to receive approval prior to initiating construction activities. 

7.	Consolidated Compliance Reporting

Description of Incentive
This incentive would consolidate all regulatory reports submitted to DEQ into one report that accompanies the Green Permits Annual Report.

Conditions/Exceptions
Any compliance report data required by DEQ programs that cannot be included in the Green Permits Annual Report would need to be submitted to individual DEQ programs as per existing reporting policies and procedures.  In addition, regulatory compliance violations that require immediate reporting under existing rules (e.g., spills) are to be reported to the relevant DEQ program at the time that they occur.

8.	Extended Interval for Air Quality Source Testing

Description of Incentive
The frequency of LSI’s source testing activity, required by its Air Quality permit, would change from once per year to once per permit cycle (i.e., at the time the Air Contaminant Discharge Permit period ends).

Conditions/Exceptions
If the nature and type of air pollutants emitted by LSI’s Gresham facility change, and thus, require a permit modification, the source testing would occur at the time of the modification.  In addition, LSI is expected to continue its current on-going monitoring activities (e.g., temperature and pressure), and maintain its annual operations and maintenance audits.

9.	Recognition

Description of Incentive
DEQ and LSI will implement a recognition program appropriate to GEMS Achiever facilities.  These activities will be defined through guidance developed by the Green Permits Advisory Committee and DEQ.  

Exceptions/Conditions
LSI’s use of the recognition program components (such as use of the Green Permits logo) is limited to recognition of facility achievements, and may not be used in a manner that implies corporate accomplishments.  

10.	Equivalency Determination for Meeting Intent of  Subpart  BB and CC of the RCRA Regulations (40 CFR 265.1030-1090)

Description of Incentive
The Subpart BB, and CC of the Resource Conservation and Recovery Act (RCRA) regulations are intended to ensure proper monitoring and control of air discharges of volatile organic compounds from hazardous waste tanks (and containers), and other equipment associated with hazardous waste management.   As a large quantity generator (LQG), LSI is subject to these rules.  The company has extensive air monitoring and controls in place to meet the conditions of its Air Contaminant Discharge Permit (ACDP).  The additional monitoring required by Subpart BB and CC would not provide any measurable environmental benefit, given the control systems already in place.  LSI has provided a detailed assessment of how its current air emissions controls meet, or exceed, the intent of Subpart BB and CC rules in a letter to DEQ.  This letter is found in Attachment F.

Conditions/Exceptions
All other requirements of RCRA will be met, or exceeded, by LSI.

ATTACHMENT A:  
LSI GRESHAM ENVRIONMENTAL REQUIREMENTS MATRIX

ATTACHMENT B:
LSI LOGIC ENVIRONMENTAL IMPROVEMENT PROCESS FLOW DIAGRAM

ATTACHMENT C:
LSI LOGIC ENVIRONMENTAL PROJECT EVALUATION FORM

ATTACHMENT D: 
1999 LSI GRESHAM ENVIRONMENTAL IMPROVEMENT PROJECTS

ATTACHMENT E: 
SEMICONDUCTOR INDUSTRY ASSOCIATION TECHNOLOGY ROADMAP

ATTACHMENT F:
LSI LOGIC RCRA SUBPART BB/CC EQUIVALENCY DEMONSTRATION