Final Report
                                
                             of the
                                
              Small Business Advocacy Review Panel
                                
                                
                 on EPA=s Planned Proposed Rule
                                
                 National Emission Standards for
                    Hazardous Air Pollutants
                  for Lime Manufacturing Plants
                                
                                
                         March 25, 2002

Table of Contents

1.   Introduction3
2.   Background4
     2.1  Regulatory History
     2.2  Description of Proposed Rule Under Development and Its
          Scope
     2.3  Related Federal Rules
3.   Overview of Proposal Under Consideration
3.1Potential Requirements and Guidelines of the Proposal
Considered by the Panel
     3.2  Options Presented to the Panel
4.   Applicable Small Entity Definitions
5.   Small Entities That May Be Subject to the Proposed
Regulation
6.   Summary of Small Entity Outreach
6.   List of Small Entity Representatives
8.   Summary of Comments from Small Entity Representatives
     8.1  Summary of Comments Presented at SER Outreach Meeting
          (February 19, 2002)
     8.2  Summary of March 5, 2002 Comments
9.   Panel Findings and Discussions
     9.1  Kiln HCl Standard
     9.2  Materials Handling Operations (MHOs)
     9.3  Kiln PM/Metals Standard
     9.4  Area Source Determinations
     9.5  Monitoring Requirements
     9.6  Economic Impacts Analyses
Appendix A:    List of Materials SBAR Panel Sent to SERs
Appendix B:    Summary of the Potential SER Outreach Meeting Held
          on December 20, 2001
Appendix C:    Pre-Panel Written Comments Submitted by Potential
          SERs on January 15, 2002
Appendix D:    Summary of the SBAR Panel's Outreach Meeting with
          SERs on February 19, 2002
Appendix E:    Written Comments Submitted by SERs on March 5,
2002

1. Introduction

     This report is presented by the Small Business Advocacy
Review Panel (SBAR Panel or Panel) convened for the proposed
rulemaking on the National Emission Standards for Hazardous Air
Pollutants (NESHAP) for Lime Manufacturing Plants that is
currently being developed by the U.S. Environmental Protection
Agency (EPA or the Agency).  Under section 609(b) of the
Regulatory Flexibility Act (RFA) as amended by the Small Business
Regulatory Enforcement Fairness Act of 1996 (SBREFA), a Panel is
required to be convened prior to publication of the initial
regulatory flexibility analysis (IRFA) that an agency may be
required to prepare under the RFA.  In addition to EPA=s Small
Business Advocacy Chairperson, the Panel consists of the Director
of EPA=s Emission Standards Division (Office of Air and
Radiation), the Administrator of the Office of Information and
Regulatory Affairs within the Office of Management and Budget,
and the Chief Counsel for Advocacy of the Small Business
Administration.

     This report includes the following:
    background information on the proposed rule under
  development;
    nformation on the types of small entities that would be
  subject to the proposed rule;
    a summary of the Panel=s outreach activities; and
    the comments and recommendations of the Small Entity
  Representatives (SERs).

     Section 609(b) of the RFA directs the Panel to report on the
comments of small entity representatives and make findings on
issues related to identified elements of an IRFA under section
603 of the RFA.  Those elements of an IRFA are:

    a description of and, where feasible, an estimate of the
  number of small entities to which the proposed rule will apply;
    projected reporting, record keeping, and other compliance
  requirements of the proposed rule, including an estimate of the
  classes of small entities which will be subject to the
  requirements and the type of professional skills necessary for
  preparation of the report or record;
    n identification, to the extent practicable, of all other
  relevant Federal rules which may duplicate, overlap, or conflict
  with the proposed rule;
    any significant alternatives to the proposed rule which
  accomplish the stated objectives of applicable statutes and which
  minimize any significant economic impact of the proposed rule on
  small entities; and
    any impacts, on small entities, of the proposed rule or
  significant alternatives to the proposed rule.

     Once completed, the Panel report is provided to the agency
issuing the proposed rule and included in the rulemaking record.
In consideration of the Panel report, and where appropriate, the
agency is to make changes to the draft proposed rule, the IRFA
for the proposed rule, or the decision on whether an IRFA is
required.

     It is important to note that the Panel=s findings and
discussion will be based on the information available at the time
the final Panel report is drafted.  EPA will continue to conduct
analyses relevant to the proposed rule, and additional
information may be developed or obtained during the remainder of
the rule development process.  The Panel makes its report at a
preliminary stage of rule development and its report should be
considered in that light.  At the same time, the report provides
the Panel and the Agency with an opportunity to identify and
explore potential ways of shaping the proposed rule to minimize
the burden of the rule on small entities while achieving the
rule=s purposes.

     Any options identified by the Panel for reducing the rule=s
regulatory impact on small entities may require further analysis
and/or data collection to ensure that the options are
practicable, enforceable, environmentally sound, and consistent
with the Clean Air Act.

2. Background

2.1 Regulatory History

     Under the Clean Air Act (CAA), as amended in 1990, EPA is
required to regulate major sources of hazardous air pollutants
(HAP).  These pollutants are listed in the statute.  Major
sources are those that emit or have the potential to emit 10 tons
per year (TPY) or more of a HAP or 25 TPY or more of a
combination of HAP.  On July 16, 1992, EPA, as required by
statute, published a list of industry groups (known as source
categories) that emit one or more of these air toxics.  Lime
manufacturing was on this list as a category of major sources.
For listed categories of "major" sources the Clean Air Act
(Section 112) directs EPA to develop emission standards that are
based on the application of air pollution reduction measures
known as maximum achievable control technology (MACT).  The CAA
requires EPA to complete all MACT standards for the listed source
categories by November 15, 2000.  Therefore, there is a mandatory
duty to promulgate the MACT standard for the Lime source
category, and a statutory deadline for doing so.  If EPA fails to
promulgate final standards by May 15, 2002, a so-called hammer
falls, requiring sources to apply for individual permits where
MACT for each lime manufacturing source would be developed on a
case-by-case basis.  However, this hammer process does not
relieve EPA of its obligation to issue national standards for the
Lime Manufacturing source category, and any case-by-case standard
issued as part of the hammer process must be superceded if the
eventual national MACT standard is more stringent.

     The law requires that MACT not be less stringent than:

    the emission control that is achieved in practice by the
  best controlled similar source, for new sources; and

    the average emission limitation achieved by the best
  performing 12 percent of the sources in the source category, for
  existing sources.
     
This mandated minimum level of control is referred to as "the
MACT floor."
     
2.2  Description of Proposed Rule Under Development and Its Scope
     
     The rule would apply only to lime plants that are major
sources of HAP.  In addition, lime manufacturing operations at
pulp and paper production facilities, and beet sugar plants would
not be subject to the rule.  (Beet sugar plants typically operate
only seasonally, and our analysis indicates that beet sugar
plants are not major sources of HAP.)  Further, lime hydration
units and facilities that do not produce lime in a kiln would not
be subject to the rule  (There are some lime plants that are
depot facilities only or produce lime hydrate only and thus would
not be subject to the rule.)  With respect to the emission points
which would be regulated, emission limits would apply to the lime
kilns/coolers, as well as to feed materials handling operations.
Materials handling operations for the lime product would not be
subject to the predecisional  draft proposed rule.  The emission
limitations selected are all based on the MACT floor, as opposed
to more costly beyond the MACT floor options.  The pollutants for
which emission limitations have been established include
particulate matter (PM; a surrogate for HAP metals in the
particulate phase) and hydrogen chloride (HCl).  See the summary
of the outreach meeting for the potential SERs (Appendix B) for
more details on the draft proposed rule requirements.
          
     There are about 110 lime manufacturing plants in the U.S.
Thirty of these are captive plants located at beet sugar
manufacturing plants, and would not be subject to the rule.  EPA
believes that about 70 percent of the sources in this source
category are major sources.  These facilities emit approximately
11,000 tons per year (TPY) of HAP.  The primary HAP are hydrogen
chloride and toxic metals.

2.3  Related Federal Rules

     Currently the Federal air emissions regulations that cover
this industry are the New Source Performance Standards for Lime
Manufacturing Plants (40 CFR Part 60, Subpart HH) and Non-
Metallic Minerals Processing Plants (40 CFR Part 60, Subpart
OOO).  Some facilities have been regulated by State air emission
regulations as part of a State Implementation Plan.

7.   Overview of Proposal Under Consideration

3.1  Potential Requirements and Guidelines of the Proposal
     Considered by the Panel

     Under the predecisional draft rule proposal EPA presented to
the Panel, the Agency would propose MACT floors for new and
existing lime kilns/coolers and limestone and lime kiln dust
materials processing operations.  For existing kilns/coolers, the
PM emission limit would be 0.12 pounds PM/ton feed material; for
new kilns/coolers, the PM emission limit would be 0.10 pounds
PM/ton feed.  The HCl emission limitation for both new and
existing kilns equipped with baghouses or electrostatic
precipitators would be a work practice standard:  EPA would
require that the PM control device inlet gas temperature be below
4001 F.   Opacity and PM emission limits would apply to the
various materials processing operations (e.g., crushers, mills,
storage bins, conveyor transfer points, etc.).

The proposal would require performance testing (i.e., testing to
determine compliance with the emission standards) for PM
initially and every 5 years thereafter, and continuous and/or
periodic monitoring of the PM control devices to ensure
compliance with the PM and HCl emission limitations.  Sources
wishing to claim area source status would need to measure HCl
emissions using either EPA Method 320 or 321.  Further details of
the predecisional draft of the rule can be found in Attachment 1
of the summary of the potential SER outreach meeting of December
20, 2001, attached hereto as Appendix B.

3.2  Options Presented to the Panel

     Prior to the convening of the SBAR Panel, one SER developed
and presented to EPA the following issues for the Panel=s
consideration:
     
    Possible exemption of a hydrogen chloride (HCl) standard,
  under authority of Clean Air Act Section 112(d)(4), pending the
  outcome of a risk assessment being conducted by the NLA.
    A different approach than the one EPA planned to propose for
  determining the MACT floor for PM, based upon the highest actual
  emission level from a well-designed and operated source, using
  the MACT control technology in use by the best 12 percent of
  sources for which EPA has data.
    Possible use of a bubble approach.
    Possible exemption of limestone materials processing
  operations (MPOs) in the quarry.
    Possible use of continuous opacity monitors, as an
  alternative to bag leak detectors and the monitoring of PM
  control device operating parameters - since some kilns already
  have COMs in place.
    Possible use of an alternative method, recently developed
  under the ASTM consensus process, for measuring HCl (for area
  source determinations).

     In addition, EPA developed a number of provisions in
developing the pre-decisional draft proposed rule for Panel
review that, if adopted in the final rule, will reduce the rule=s
burden on small entities:
     
    Lime manufacturing operations at beet sugar plants, of which
  three are small businesses, would not be subject to the rule.
    Lime hydration units and facilities would not be subject to
  the rule.
    Materials handling operations for the lime product would not
  be subject to the rule.
    The emission limitations selected are all based on the MACT
  floor, as opposed to more costly beyond the MACT floor options
  that EPA considered.
    Compliance demonstrations for materials processing
  operations would be conducted monthly, rather than on a daily
  basis.
    The minimum performance testing frequency (every 5 years),
  monitoring, recordkeeping, and reporting requirements specified
  in the general provisions (40 CFR part 63, subpart A) would be
  required.
    The rule would not apply to area source lime plants.
    The rule would not require PM continuous emission monitors
  (CEMS), but EPA will seek comment on their use.
     
4.  Applicable Small Entity Definitions
     
     There are approximately 39 lime manufacturing companies
operating about 80 lime plants in the U.S. that would potentially
be subject to the proposed rule.  (These numbers do not include
lime plants at beet sugar facilities which would not be subject
to the rule.)  Of these 39  companies, 12 are classified as small
businesses according to the SBA definition and would potentially
be subject to the rule.  These small businesses operate 14 of the
80 facilities.  Small businesses within the lime industry are
defined by SBA as any company with a total employment of 500 or
less.

5. Small Entities That May Be Subject to this Regulation

     Some of the 12 small businesses potentially subject to the
rule will likely be exempt from the rule because they are not
major sources of HAP.  EPA estimates that 70 percent of all lime
plants are major sources (i.e., 30 percent would be area sources
and not subject to the rule).  Note that there are a few lime
small businesses (not included in the 12 that are potentially
subject to the rule) that would not be subject to the rule,
because they do not produce lime in a kiln, e.g., they are depot
(storage) facilities and/or produce hydrated lime from lime
imported from another lime plant.

6. Summary of Small Entity Outreach

     EPA staff have communicated with a number of small firms.
Some of these communications were documented in the formal
notification for this Panel.  An outreach meeting with potential
small entity representatives was held on December 20, 2001, in
Washington, D.C.   A summary of this meeting, including meeting
materials, is found in the Convening Document and Appendix B.
During this meeting, the planned requirements of the proposed
rule were presented, and comments were solicited.
     
     In addition, EPA staff have communicated with, and provided
information to, the National Lime Association from time-to-time
since the lime NESHAP development project began in 1995.  The NLA
represents commercial lime production companies, both small and
large.  (7 out of the 12 small businesses are members of NLA.)
Communication with the NLA has occurred via formal meetings in
person, formal teleconferences, informal telephone calls,
electronic mail exchanges, and formal correspondence.
     

7.   List of Small Entity Representatives

     Table 1 presents the list of Small Entity Representatives
solicited to advise the Small Business Advocacy Review Panel
convened for this rule.  This list was developed in consultation
with SBA.  It should be noted that of the companies in Table 1,
Mercer Lime and Huron Lime are not members of the NLA.  (There
are 2 other non-NLA member small businesses potentially affected
by the rule, but these companies declined to participate on the
Panel.)

          TABLE 1. LIST OF SMALL ENTITY REPRESENTATIVES
                                   
                                 
                                                
      Edward Soloman III                (412) 220 - 0316
President, Mercer Lime Company          Slippery Rock, PA
                                 
                                                
       Anthony J. Paris                  (419) 433-2141
 President, Huron Lime Company              Huron, OH
                                 
                                                
         Arline Seeger                    703-243-5463
 Executive Director, National          Arlington, Virginia
       Lime Association
                                 
                                                
           Fred Nast                      262-334-3005
 CEO, Western Lime Corporation            West Bend, WI
                                 
                                                
     Mr. Timothy W. Byrne                (972) 991-8400
   CEO, United States Lime &               Dallas, TX
        Minerals, Inc.
                                 
                                                
        Frank McCarthy                   (563) 359-8251
 President, Linwood Mining and            Davenport, IA
     Minerals Corporation                       
                                 
Dana StoneVP - Operations, CLM                  
          Corporation               (218) 722-3981Duluth, MN
                                 
                                                
        Oscar Robinson                   (512) 255-3646
        General Partner                    Austin, TX
   Austin White Lime Company                    

8. Summary of Comments from Small Entity Representatives

     This section summarizes comments received during the Panel.
(EPA received an initial set of comments from potential SERs
during the pre-Panel phase, which are attached to this Report in
Appendix B.)   During the Panel, SERs provided comments (in the
form of a detailed presentation, around which there was extensive
discussion) during a face-to-face outreach meeting (held February
19, 2002).  Subsequently, the NLA, Huron Lime Company, and Mercer
Lime and Stone provided supplemental written comments on March 5,
2002.   The points offered at the SER outreach meeting are
summarized below; the entire meeting summary, with a copy of the
SER presentations, can be found in Appendix C.   The comments
filed March 5, 2002, are found in Appendix D.  It should be noted
that most of the March 5, 2002, comments repeat the main themes
discussed in the comments received previously, and so the
discussion at 8.2 below includes a summary only of new issues and
information provided.

8.1  Summary of Comments Presented at SER Outreach Meeting
(February 19, 2002)
     
Removal of the HCl Standard Via Section 112(d)(4) of Clean Air
Act
     The SERs presented an overview of the risk assessment the
NLA commissioned to determine whether there would be an ample
margin of safety with respect to HCl levels in the atmosphere
without an emission standard for HCl.  The study concluded that
an ample margin of safety exists without a standard for HCl.
Section 112(d)(4) of Clean Air Act would allow EPA to forego
setting an emission standard for HCl if this is the case.
     
Economic Impact of the Standard on Small Businesses
     The SERs presented their comments on EPA=s draft economic
impacts assessment (EIA).  The main point the SERs conveyed is
that, because the industry is subject to intense competition (due
to declining markets, pressure from non-lime product substitutes,
foreign producers, and potentially unregulated captive lime
producers that may start to sell commercially), and there is an
excess of capacity, the costs of the rule cannot be passed
through to customers.  EPA=s EIA model should reflect this.  Many
of the SERs presented additional comments, with emphasis on how
the pre-decisional draft rule would impact individual companies.
Their primary comment was that the pre-decisional draft rule
would disproportionately affect small businesses because: lime
prices for SERs are generally lower than the industry average,
economies of scale will make it easier for large companies to
absorb the costs of this rule than small companies, and it will
be difficult or impossible for small businesses to obtain capital
for new APCDs. The SERs also discussed the low cost and high
availability of Chinese magnesia as a substitute for lime in the
steel production process. A number of SERs stated they have not
been able to raise prices in the past few years, and that some of
their customers have instead requested that they lower their
price for  lime.  They all agreed that once a customer is lost
due to a price disadvantage (or any other reason), it is
difficult to get that customer back.

Technical Issues
     The SERs provided comments on the following technical issues
via a detailed slide presentation.  That presentation is included
in Appendix D to this report.  Highlights of comments provided
outside the formal presentation are as follows.

HCl Work-Practice Standard
     SERs believe EPA has overestimated the HCl emissions
reductions from lowering APCD inlet temperature. SERs indicated
that replacing wet scrubbers to meet the PM limit increases HCl
emissions. They also indicated that complying with a 400 degree
inlet temperature limit over a 3 hour averaging period would
require them to operate at a 350 degree APCD inlet temperature
(in order to account for temperature variability) which would
diminish ESP efficiency and may damage dry PM control devices.
They also indicated that a larger ID fan would be needed to
handle the increased air mass flow associated with water
injection or air tempering that may be used to reduce temperature
and that this would increase costs beyond EPA=s current estimate.

Materials-Handling Operations(MHO) in Quarries
     The SERs do not believe that the MHOs in limestone quarries
should be regulated.  They suggest regulation of limestone MHOs
begin with the raw material storage in the production sequence.
This is what is required under the Portland Cement NESHAP, and
they believe EPA should follow that example  They also state
that, if the mean of the top 12 percent, instead of the median of
the top 12 percent, is used to establish the MACT floor, then
NSPS subpart OOO could not be the basis for that floor because
not all of the MHO=s in the top 12 percent are currently subject
to subpart OOO.  One SER stated that its plant has MHOs (e.g., a
crusher) which process limestone for the kiln as well as other
non-lime plant uses such as limestone sales, which would not be
regulated under the Lime Manufacturing NESHAP.

PM Standard for Wet Air Pollution Control Devices
     One SER stated that his firm recently replaced a wet
scrubber with a fabric filter and triggered New Source Review
because of an increase in SO2 emissions.  SERs stated that this
may happen with other plants that replace their wet scrubbers
with a dry PM control device to meet the new PM standard.  The
SERs suggested that EPA create a subcategory that would set an
alternative standard for kilns employing a wet PM-control device,
because scrubbers allow sources to comply with any SO2
limitations while manufacturing low-sulfur lime (a necessary
characteristic for use in steel manufacture) from high-sulfur
fuels.  SERs also stated that replacing a wet control device with
a dry control device would reduce PM and metals emissions but
increase SO2 and HCl emissions.
     
     The SERs also suggested EPA allow bubbling of PM emissions
from the kiln (i.e., allowing compliance to be demonstrated by
summing PM emissions from various regulated sources) as the least
burdensome way to achieve the desired emissions reduction.  One
SER stated that his firm currently sells its de-watered scrubber
sludge, and if it were to remove its wet scrubbers (and replace
them with fabric filters), it would lose this market.  Another
SER stated that, based on a vendor quote, it would cost his firm
twice as much as EPA estimated to replace its wet scrubbers with
fabric filters.

Monitoring
     The SERs discussed the difficulties and drawbacks of
monitoring with bag-leak detectors (BLDs), and in particular the
absence of promulgated specifications and procedures to install,
calibrate, and conduct QA/QC for BLDs.  They recommended that, in
addition to BLDs, EPA should allow the use of continuous opacity
monitors (COMs) because the Agency has previously determined that
COMs constitute Aenhanced monitoring@ and provide reasonable
assurance of compliance with PM standards.  The SERs agreed that
continuous opacity monitors should be allowed because, for
several of them, COMs are required under other Federal and state
requirements, and cannot legally be removed.  A couple of SERs
described the substantial resources their companies have already
invested to install COMs and to train their personnel to operate
them.
     
     Another SER suggested that, because the PM limit is based on
PM limits for the 6 top-performing kilns, likewise, the opacity
limit should be permit-based, based on these same top-performers=
opacity limits.  All top-performing kilns have opacity limits of
15 percent, except for one (Cutler Magner=s kiln #3), which has a
20 percent opacity limit.  The SER said that another basis for
the suggested 15 percent opacity limit is that data from one of
the top performing kilns (Black River, kiln #4) shows that the
kiln=s opacity may range between 10 to 15 percent.  The SER
believes that promulgating an opacity limit lower than 15 percent
would be inappropriate because the standard could not be achieved
by one of the Abest-performing@ kilns used to establish the MACT
floor.

     Other SERs mentioned problems associated with monitoring PM
control-device parameters, such as ESP voltage and scrubber flow
rate and supply pressure.  They requested EPA to allow
flexibility in choosing scrubber operating parameters.  One SER
mentioned that his permit requires monitoring of scrubber water-
pump amperage, and that they also monitor gas temperature at the
outlet of the scrubber.

     A SER also described the SERs= concerns about how
Aviolations@ of the PM standard are defined in the draft rule.
In contrast to the Pulp and Paper MACT standard for lime kilns,
which allows operating parameters (e.g., opacity) to be exceeded
for up to 6 percent of the reporting period before a violation is
deemed to have occurred, the Lime MACT standard specifies that a
single exceedance of a 3-hour reading of certain operating
parameters (e.g., air pressure drop) would constitutes a
violation.  He suggested that, like the Pulp and Paper MACT
standard, as well as the Compliance Assurance Monitoring (CAM)
rule, the Lime MACT standard should prescribe maximum periods of
time during which, if operating parameters deviate from
prescribed levels, this would require that the kiln=s air
pollution control device be investigated to ensure it is
operating properly (i.e., so-called Acorrective action@
triggers).  He stated that the rule should specify separate,
longer time periods during which deviations from prescribed
parameter levels would have to occur before constituting a
violation.

     The SERs stated that the incorporation by reference of
chapters 3 and 5 of the American Conference of Governmental
Industrial Hygienists (ACGIH) Industrial Ventilation manual is
unduly prescriptive, and that these requirements are highly
complex.  The SERs suggested EPA refer to the requirements as
guidance only.

Area Source Determinations
     The SERs stated that EPA should not require the use of the
Fourier Transform Infrared (FTIR) spectroscopy method (EPA Method
320) for the measurement of HCl for area source determinations,
since the American Society of Testing and Materials (ASTM) HCl
method has been approved and EPA is required to use this
consensus-based standard under the National Technology Transfer
and Advancement Act.  They also suggested that EPA allow the use
of a HAP metals Aemission factor@ so firms could avoid testing
for individual HAP metals in making area-source determinations
(testing for PM instead and applying an agreed-upon factor for
the amount of HAP metal in the PM), and that sources should not
be required to test for organic HAPs, since they believe these
are inherently low.

Comparison with the Pulp and Paper MACT
     The SERs suggested that, in general, EPA should follow the
model of the requirements imposed on lime kilns under the Pulp
and Paper MACT standards, and they provided the Panel a summary
of these requirements.

8.2  Summary of March 5, 2002 Comments

Pre-decisional Draft Rule Requirements

Kiln HCl Standard and Risk Assessment of HCl:
     The SERs noted that they had revised their initial HCl risk
assessment in accordance with comments EPA provided after the
SERs= presentation on February 1, 2002.  The SERs also provided a
table comparing the its risk assessment with the HCl risk
assessment conducted by EPA for sources in the pulp and paper
industry.

     The SERs reiterated that, to comply with the 400E F work
practice standard, sources would need to operate below 350E F,
due to process variability.  The SERs stated that using water to
cool the gas stream will increase the gas flow rate.  The
additional flow of the gas stream from water injection will
require a new ID fan, which EPA agreed to include as a cost item.
The cost of a fan to provide a 150,000 ACFM air-flow rate would
be $150,000, with an annual increased energy cost of $93,000.

Materials Handling Operations PM and Opacity Standards:
     The SERs expanded on their earlier comments:  The SERs
reiterated that since certain materials handling operations are
not covered in the MACT standard for portland cement facilities,
neither should they be covered under the Lime MACT.  The SERs
reviewed EPA=s rationale for this difference, that MPOs at
portland cement plants may be covered under the NSPS Subpart F,
whereas the MPOs at lime plants are covered under the NSPS
Subpart OOO.  The SERs noted that portland cement plants= MPOs
may also be subject to Subpart OOO, but that  rule=s requirements
would end after the secondary crusher conveyor (the point at
which subpart F applicability begins).

     The SERs also clarified a point it made at the February 19,
2002, SER outreach meeting.  If EPA had used the mean of the top
12 percent of performing facilities (instead of the median), the
floor would be 3.25 times higher (i.e., less stringent) than the
level of control currently under consideration.  The SERs states
that, without data on the entire top 12 percent of the sources,
the appropriate measure of central tendency cannot be decided,
and EPA cannot accurately establish the floor.

     At least one SER is concerned that the use of water sprays
to control fugitive PM from MPOs would create problems in the
screening operations.  They referred to problems that arise when
heavy rains occur, such as blinding of the screens and the
subsequent reduction in production capacity.
     
Kiln PM standard:
      SERs offered process reasons for using a wet scrubber
instead of a baghouse for PM control, as summarized below.  The
SERs offered these comments in support of their request that EPA
create a subcategory for kilns equipped with wet scrubbers.
     
     The SERs commented that scrubbers allow a kiln to produce a
low-sulfur lime product through careful control of the kiln
environment.  They referenced a leading technical treatise on
lime manufacturing (Oates, Lime and Limestone (1998)), which
noted that a feature of rotary kilns is that sulfur from the
fuel, and, to a lesser extent from the limestone, can be expelled
from the kiln in the kiln gases, without over-burning the lime,
by a combination of controlling the temperature and the
percentage of CO in the calcining zone.  As a result, a lime kiln
burning high sulfur coal or coke can determine, by adjusting
operational parameters, whether the sulfur will go out in the
product or in the exhaust gases, and high reactivity, low sulfur
limes can be produced using relatively inexpensive high sulfur
fuels, subject to emission limits for SO2 in the exhaust gases.

     Hence, the SERs noted, scrubbers enable a kiln to produce a
low-sulfur lime product (needed for the steel industry) when the
only fuel reasonably available to a source is high sulfur coal.
Kilns using high-sulfur coal can operate such that the sulfur is
emitted through the stack, rather than incorporated into the
product.  A scrubber makes it possible for a kiln to burn high-
sulfur coal, produce a low-sulfur product, and avoid adverse
environmental impacts and non-compliance with SO2 emission
limits.  The need to use locally available fuel is a key
operational requirement for lime plants because of the freight
costs involved in shipping fuel long distances.  This is
particularly so for small companies, the SERs noted, because they
are less able to reduce freight costs through negotiations with
carriers.  Finally, the SERs observed that, in the Portland
Cement MACT rule, EPA recognized it would be impractical to
require facilities to switch from coal to natural gas, because
there was insufficient natural gas infrastructure readily
available to them.  Requiring lime plants to switch from
scrubbers to baghouses would effectively result in a similar fuel
switching requirement, because these facilities would have to
cease using locally available higher sulfur coal, and switch to
lower sulfur coal.  For many of these plants, however, lower
sulfur coal would not be practically available because of the
freight cost or other infrastructure limitations.

     In summary, the SERs believes a wet scrubber offers an
operational advantage by allowing the kiln to burn fuels across a
range of sulfur content and still produce a low-sulfur lime
product while minimizing SO2 emissions.

     Another SER provided the following comments about the sulfur
cycle in a kiln.  Sulfur from the fuel is vaporized in the kiln
flame at about 3,500E F.  Kiln operators try to maintain the
maximum feed material temperature in the burning zone of the kiln
below 2,100E F, to ensure the product is reactive.  This
temperature range does not promote rapid vaporization of sulfur
salts.  However, sulfur salts are emitted in the exhaust gas
(i.e., not incorporated into the lime product) when the exhaust
gas temperature is maintained above approximately 1,800 E F.  If
the kiln gas temperature is below 1,8001 F, kiln operational
problems could result (e.g., a Asticking@ problem resulting from
the liquid phase of sulfur salts in contact with a kiln=s
refractory lining and duct work, and the limestone material).

     Another SER stated that its wet scrubbers allow the plant to
achieve zero-discharge status under the Clean Water Act, by using
storm-water runoff as makeup water for the scrubber.
This SER reiterated previous comments that the gaseous emissions
of a scrubber would be less than those from a baghouse, and that
the capital and operating costs of a wet scrubber are lower than
for a baghouse.
     
     This SER also said that the handling of solids from a wet
scrubber is easier and renders less fugitive dust emission than
those from a baghouse.  Further, this SER stated that scrubber
solids from its plant are now used in agriculture.   But solids
from a baghouse would have different characteristics (possibly
characterizing them as hazardous waste) and prevent them from
being used on farms.  The SER remarked that the solids from a
baghouse would need to be landfilled, and their firm only has 2
years of land-disposal capacity available to it.

     The SERs said that scrubbers require less space than a
baghouse at a lime plant, and a lot of lime plants do not have
the space at their plant to replace the wet scrubber with a
baghouse.  One SER mentioned his plant uses a chamber from its
underground mine as a wet scrubber, and this frees surface space
for other operations.

     The SERs indicated that EPA has underestimated the cost to
replace wet scrubbers with baghouses by about a factor of two,
according to a quote recently solicited by one SER.  The SERs
state that EPA=s cost estimates do not properly consider space
constraints, dismantling of the scrubbers, and replacement of
equipment such as stone bins and preheaters.  One of the SERs
provided a cost analysis which was prepared by an APCD vendor.

Monitoring and Testing Requirements:
     The SERs referred to their previous comments to reiterate
that EPA Method 9 should be allowed to monitor positive-pressure
baghouses and that the rule should allow flexibility to monitor
scrubber operating parameters other than flow rate.

     The SERs provided reasons the draft pre-decisional rule
should not require testing for organic HAPs in support of an area-
source determination.  They said that, since only limestone is
processed in lime kilns, testing for a broad range of HAPs is
unnecessary.  By contrast, cement kilns emit organic HAP as a
result of processing many other types of feed materials, some of
which may contain petroleum or kerogens.  Several States have
confirmed that lime-kiln limestone does not contain kerogens.

Economic Impact Analysis
Overcapacity:  In earlier comments, the SERs observed that lime
manufacturers compete in markets where there is significant
overcapacity.  In their additional comments, they observed that,
even with the shutdown of several kilns in the year 2000,
significant overcapacity remains.  Furthermore, the capacity
levels reported by the USGS do not include deactivated plants,
which represent potential capacity that could be reactivated if
prices were to increase.  The SERs believe this suggests even
greater pressure to keep prices down.

Competition from Alternative Products:  The SERs emphasized that
lime is a basic industrial material, with limited value-added
from manufacturing.  It is easier to replace lime in some of
these processes than complex materials, so lime faces competition
from replacement materials in virtually all of its applications.

Lime Markets are Resistant to Price Increases:  The SERs observed
that lime prices have remained roughly static for the last five
years.  They point out further that the USGS Minerals Yearbook
for 2000 notes that a large increase in natural gas prices led to
the shutdown of several kilns throughout the U.S.

Lime industry profit margins:  The SERs accept EPA=s estimate of
industry profit margins, even though they are probably on the
high side, especially for small businesses.  The SERs believe
that profit margins do not indicate the ability of a firm to pass
on cost increases.  Small businesses need to generate cash and
guard their access to credit and capital so they can grow and
maintain/replace existing equipment.  It is extremely difficult
for a small business to obtain credit for a project, such as the
installation of a new APCD, that will not increase the revenues
and profits of the business.

Elasticity estimates for the lime industry:  The SERs did not
know of any documentation to support an estimate for the price
elasticity of demand for the lime industry that differed from
that contained in EPA's draft EIA.

9.  Panel Findings and Discussion
     
     The Panel considered a wide range of options that would
enable EPA to mitigate impacts on small businesses.  The Panel
arrived at these options through consideration of the comments of
the SERs and its findings based on the assembled record.  The
Panel believes that the following options would minimize the
burden on small entities without compromising the human health
and environmental benefits of the regulation or the requirements
of the Clean Air Act.

9.1 Kiln HCl Standard
     
     The NLA conducted a risk assessment of HCl emissions from
lime kilns, with the purpose of demonstrating there would be an
ample margin of safety with respect to HCl levels in the
atmosphere without the work practice standard under consideration
for HCl.  Section 112(d)(4) of Clean Air Act would allow EPA to
forego setting an emission standard, or to set a standard which
is less stringent than the MACT floor, for HCl if this is the
case.  The EPA has reviewed the risk assessment report, approves
of the methodology and model inputs used by the NLA=s consultant,
and believes, based on the risk assessment, there would be an
ample margin of safety.  Thus, the Panel recommends that the
proposed rule should not include the HCl work practice standard.
On the basis of the Agency=s findings, EPA will not include an
HCl work practice standard in the proposal.

9.2 Materials Handling Operations (MHOs)
     
     The Panel recommends that the MHOs in limestone quarries
should not be considered affected sources under the proposed
rule.  In other words, the first affected source in the sequence
of kiln feed MHOs would be the raw material storage.  This is
consistent with what is required under the Portland Cement MACT
standard.  In addition, MHOs pertaining to lime kiln dust would
not be an affected source, consistent with the NSPS subpart OOO.
The EPA intends to adopt these recommendations in its proposed
rule.

9.3  Kiln PM/Metals Standard
     
     (a)Bubbling Provision
     
     The Panel recommends including, in the proposed rule, a
bubbling provision for the kiln PM emission limit, such that the
sum of all kilns= and coolers= PM emissions at a lime plant would
be subject to the PM emission limit, rather than each individual
kiln and cooler.  In this approach, kilns that over-comply could
compensate for kilns not meeting the emission limit.  The
affected source would encompass all the lime kilns and coolers at
the lime plant.  A weighted average approach would be used for
determining compliance with the PM emission limit, i.e., the sum
of the PM emissions from all the kilns and coolers at the plant,
measured during the Method 5 performance test, would be divided
by the sum of the limestone feed rates to all the kilns at the
plant during the test, resulting in emission rate units of pounds
PM per ton of limestone feed. The EPA intends to adopt these
recommendations in the proposed rule.

     (b) Establishment of Subcategories

     About 20 percent of the lime produced in the US is from
kilns equipped with wet scrubbers.  Many of these wet scrubbers
would be replaced with electrostatic precipitators (ESPs) or
baghouses in order to meet the PM standard currently being
contemplated.  (The rule does not apply to plants that are area
sources, and does not dictate how the PM standard would be met,
and some plants may elect to upgrade their wet scrubbers to meet
the PM standard, but most likely major source lime plants would
replace them with baghouses, and incur additional cost.)  Because
scrubbers are more effective than dry PM controls at removing SO2
(and HCl), the Panel is concerned that such an approach would
result in increases in SO2 emissions from these sources.  The
Panel, therefore, recommends that EPA undertake an analysis of
the costs and emissions impacts of replacing scrubbers with dry
APCDs and present the results of that analysis in the preamble.
The Panel also recommends that EPA consider and request comment
on establishing a subcategory because of the potential increase
in SO2 and HCl emissions that may result in complying with the PM
standard.  The Panel further recommends that EPA specifically
request comment on any operational, process, product, or other
technical and/or spatial constraints that would preclude
installation of a dry APCD.

9.4  Area Source Determinations
     
     (a) Measuring HCl Emissions
     
     The current draft of the rule would require a source to
measure its HCl emissions using EPA Method 320 to claim it is an
area source (assuming its HCl emissions were below 10 tons per
year).  The Panel recommends that the recently-developed American
Society of Testing and Materials (ASTM) HCl manual method be
allowed as well for the measurement of HCl for area source
determinations.  The National Technology Transfer and Advancement
Act directs agencies to use voluntary consensus standards unless
to do so would be inconsistent with applicable law, or would be
impractical.  An agency=s decision not to use a voluntary
consensus standard must be explained in a letter by the agency to
both Congress and OMB.  Here, the EPA intends to adopt the Panel
recommendation and propose to use the recently-developed ASTM
method.

     (b) Other HAPs

     The Panel recommends that EPA clarify in the preamble to the
proposed rule that it is not specifically requiring sources to
test for all HAPs to make a determination of whether the lime
plant is a major or area source.  Since EPA believes that HCl is
most likely to be the only HAP that would cause a lime plant to
be a major source, it is only requiring that sources test for HCl
if they wish to claim area source status.  EPA will further
investigate the potential to emit other HAPs at lime plants, and
based on its analysis, EPA will (1) consider allowing the use of
a HAP metals emission factor, expressed as a ratio of metals:PM,
to allow sources to test for PM and then calculate HAP metals
emissions rather than to employ the costly and complex direct
test for each HAP metal; and (2) EPA will consider stating in the
preamble that sources would not be required to test for organic
HAPs in making a major source determination, as lime kilns are
not expected to emit significant quantities of organic HAPs.  The
Panel recommends that, in addition to further investigating these
issues, EPA solicit public comment on the issues.

9.5 Monitoring Requirements
      (a)  Bag Leak Detectors, COMS, and Other Monitoring
     
     EPA is currently contemplating proposing that kilns equipped
with baghouses monitor ongoing compliance through the use of bag
leak detectors (BLDs).  The Panel recommends that EPA consider
providing the option of using continuous opacity monitoring
systems (COMS) in place of BLDs.
     
     The proposal preamble and/or associated docket materials
will discuss the applicability, advantages, and disadvantages of
using COMS and BLDs (such as each method=s sensitivity or lack of
sensitivity, availability and quality of promulgated or approved
specifications and procedures to verify initial performance,
potential interferences or other quality assurance problems,
inapplicability to certain APCD designs or configurations, cost,
and precision and accuracy relative to the operating system to be
monitored and the standards to be proposed); request comment on
whether and how opacity could be used as a limit or an operating
parameter, and what would be an appropriate MACT floor opacity
limit for COMS; and request data on the foregoing issues.
     
     The Panel recommends that EPA consider and request comment
on using a COMS to monitor compliance with an opacity limit (a
surrogate for HAP metals emissions).  The Panel also recommends
that EPA discuss in the preamble that it is considering a range
of opacity levels between 10 and 15 percent as the MACT floor
opacity limit.  A 10 percent opacity level represents what EPA
currently believes is a minimum level of sensitivity for COMS.  A
15 percent opacity level is the opacity limit under the NSPS for
lime kilns (subpart HH), and based on a preliminary analysis may
also be the median opacity permit limit for the top 6 performing
lime kilns.  Opacity data from one of these top performing kilns
indicates that an opacity value lower than 15 percent may not be
continuously achievable.
     
     \Another approach to using a COMS would be to use it in a
way similar to how a BLD would be used to indicate the need for
inspection and maintenance of the PM control device.   Under this
approach, EPA could specify a time period over which a
significant increase in opacity level would trigger inspection of
the PM control device for leaks or other malfunctions, and
maintenance (if needed).  EPA believes that COMS have limited
sensitivity at opacities below 10 percent and that the relevant
range of opacities for the aforementioned application would be
below 10 percent.  If COMS were allowed under the rule, EPA would
prefer to set an opacity limit because of the COMS= ability to
directly measure opacity, instead of using the COMS in the
aforementioned way similar to how a BLD would be used. However,
the Panel recommends that EPA solicit comment on this option,
specifically including comments regarding the opacity levels
expected from a kiln in compliance with the PM limit and the
sensitivity of COMS at those levels.
     
     The Panel also recommends that EPA take comment on whether
the rule should specify separate, longer averaging time periods
(or greater frequencies of occurrence) for demonstrating
compliance with parameter limits, or other alternative approaches
for demonstrating compliance with operating parameter limits.
     
     The Panel recommends that EPA request comment on an approach
for demonstrating compliance involving two tiers of standards for
monitoring operating parameters whereby, if the conditions of the
first monitoring tier are exceeded, the facility operator would
be required to implement corrective actions specified in an
established plan to bring the operating parameter levels back to
established levels, and if the conditions of the second tier are
exceeded, the exceedance would constitute a violation of the
standard in question.
     
     The EPA will request comment in the proposal preamble about
the technical feasibility or appropriateness of using a bag leak
detector on a positive pressure, multi-stack baghouse, and
whether EPA Method 9 (manual observation of opacity) should be
allowed in lieu of bag leak detectors for this type of PM control
device.

     (b) ACGIH Industrial Ventilation manual
     
     The Panel recommends that the incorporation by reference of
Chapters 3 and 5 of the American Conference of Governmental
Industrial Hygienists (ACGIH) Industrial Ventilation manual be
removed from the rule.  The Panel believes these requirements are
highly complex and unnecessary, and that EPA should not dictate
how to design and operate a source=s industrial ventilation
system, as long as the source is in compliance.  The EPA intends
to adopt these recommendations.

     (c) Other PM Control Device Operating Parameters
     
     The Panel recommends that EPA take comment in the preamble
about the suitability of other PM control device operating
parameters that can be monitored to demonstrate compliance with
the PM emission limits, in lieu of or in addition to the
parameters currently required in the draft rule.  For example,
for scrubber-equipped kilns, EPA should consider modifying the
proposal preamble language to discuss allowing the use of
operating parameters other than scrubber liquid flow rate (e.g.,
wet scrubber water pump amperage and wet scrubber exhaust gas
outlet temperature).  This approach would potentially offer
sources some flexibility in choosing which parameters to monitor.
The EPA intends to adopt these recommendations.

9.6 Economic Impacts Analyses

     The Panel recommends that EPA reevaluate the assumptions
used in modeling the economic impacts of the standard, taking
into consideration the inputs provided by the NLA and other SERs.
Given that the NLA and other SERs have stated there is little
ability to pass on control costs to their customers and there is
considerable opportunity for product substitution in a number of
the lime industry=s markets, EPA will conduct a sensitivity
analysis using different price and supply elasticities reflective
of such conditions to provide a broader picture of the potential
impact of this regulation on the lime industry.

     Appendix A:  List of Materials SBAR Panel sent to SERs
                         
    Seven-page detailed summary of draft proposed rule - sent
  December 11, 2001.
    Technical memorandum detailing how cost and economic impacts
  were estimated - sent December 12, 2001.
    Draft Economic Impacts Assessment Report - sent December 13,
  2001.
    A detailed breakdown of EPA=s estimate of annual costs to
  comply with rule for each small business  - sent December 11,
  2001.
    A detailed breakdown of EPA=s estimate of cost/sales to
  potential SERs, with the sources of information used for the
  sales figures - sent January 8, 2002.
    One page summary of draft proposed rule - sent December,
  2000.
    Pre-decisional draft preamble language which included
  sections on the monitoring requirements, area source
  determination, and the rationale for selection of all of the
  rule=s requirements. - sent January 30, 2002.
    In conjunction with this draft preamble language, various
  technical memoranda that support the MACT standards
  determinations.
    A detailed breakdown of EPA=s estimate of capital costs to
  comply with rule for Austin White Lime Company  - sent December
  11, 2001.

     In addition to the above items sent to the SERs, the docket
for this rulemaking has been established for over a year, and all
items, reports, and memoranda that have been finalized have been
added to docket and have been available to all interested parties
through the Air Docket office in Washington, D.C..  A list of all
items in the docket was sent to the NLA and has been available to
anyone requesting one.  There are over 500 items in the docket
currently, and over 100 technical memoranda.  Docket items can be
requested of the Air Docket Office over the phone and sent to
interested parties for a small fee.

     In addition to all the materials in the docket, numerous
draft memoranda not yet in the docket have been sent to the NLA
for their review. These include all of our draft cost memoranda
and analyses, which were sent to the NLA in the 1st quarter of
2001.  The NLA has scrutinized these cost analyses, and EPA has
revised some of its memoranda in consideration of their comments.
These memoranda have since been put into the docket.  Other
pertinent memoranda that have been sent to the NLA (in addition
to the aforementioned cost-related memoranda) include, but are
not limited to, the following:

    Memorandum  related to baseline emissions estimates - sent
  December 28, 2001.
    Memorandum related to lime cooler exhaust - sent December
  28, 2001.
    Memorandum related to the MACT for HCl - sent December 28,
  2001.

   Appendix B:   Summary of the Potential SER Outreach Meeting
                    Held on December 20, 2001

       Appendix C:   Pre-Panel Written Comments Submitted
              by Potential SERs on January 15, 2002

   Appendix D:   Summary of the SBAR Panel's Outreach Meeting
                 with SERs on February 19, 2002

Appendix E:   Written Comments Submitted by SERs on March 5, 2002