1 TECHNICAL MEMORANDUM

TO: Tina Ndoh, U.S. EPA/OAQPS/SPPD - Minerals and Manufacturing Group

FROM: Eastern Research Group, Inc.

DATE: June 9, 2015

SUBJECT: Control Costs and Emissions Reductions for Phosphoric Acid and Phosphate Fertilizer Production Source Categories – Final Rule

The U.S. Environmental Protection Agency (E PA), under section 112 of the Clean Air Act (CAA), is required to establish maximum achie vable control technology (MACT) standards for phosphoric acid manufacturing plants (40 CFR pa rt 63, subpart AA) and phosphate fertilizer production plants (40 CFR part 63, subpart BB) source categories. This memorandum documents the
control costs and emissions reductions associat ed with the finalized subparts AA and BB. The following is an outline of the memorandum:
1.0 Introduction
2.0 Control Costs for Oxidation Reactors 3.0 Testing and Monitoring Costs
4.0 Total Cost
5.0 References Attachment A: Venturi Scrubber Analysis Attachment B: BLDS Cost Analysis

1.0 INTRODUCTION As part of the risk and te chnology review required under sect ion 112 of the Clean Air Act certain revisions were made to subparts AA and BB th at will impose additional costs. EPA determined that clarification of the applicability requirement s regarding oxidation reactor s at SPA process lines was necessary. As a result of the cl arification, it was assumed that one facility may need to install a
new venturi scrubber. This memorandum describe s the methodologies for estimating costs and the
associated emissions reductions as a result of facilities complyi ng with the proposed emission limits2 and clarifications. Cost estimates for the revised testing and monitoring requi rements included in the proposed rule are also provided. The following assumptions were applied throughout this analysis. For eq uipment installations, an equipment life of 15 or 20 years and a 7 percent di scount rate was used to cal culate capital recovery factors (CRF). All facilities were assumed to ha ve adequate space to install additional emissions control equipment, and installation would not caus e a production loss and coul d be completed during a routine maintenance outage. All costs are presented in 2013 dollars. For the cost analyses, only currently operating sources were considered as no new facilities are anticipated to be built in the near
future.

2.0 CONTROL COSTS FOR OXIDATION REACTORS The superphosphoric acid (SPA) process line de finition was revised to specify that emissions
from oxidation reactors must be included when determining compliance with the total fluoride
emission limit. Some facilities we re not previously including emissions from these emission sources, as was the intention of subpart AA. The cost im pact and emissions reduction associated with the subpart AA oxidation reactor applicability clarification was t hus evaluated. At proposal, an HF emission limit was evaluated for this analysis; ho wever, as discussed in the final preamble, HF emission limits were not finalized and the original total fluoride emission limit was maintained for SPA process lines. Oxidation reactors are used to remove organi cs by mixing SPA with nitric acid, ammonium nitrate, or potassium permanganate. Oxidation is us ed in the production of SPA at four facilities. The
inclusion of emissions from oxidation reactors was ev aluated to determine if facilities currently using
oxidation would meet the total fluoride limit for SPA process lines. Based on the available total fluoride data, three of the facilities were below the total fluoride limit when the emissions associated
with oxidation reactors were added to emissions of applicable equipment (e.g., evaporators) at SPA lines. In one instance, a facil ity already ducts oxidation reacto r emissions through a common SPA emission point and thus oxidation re actor emissions would have been included in past performance tests. However, the oxidation reactor at PCS Aurora is not controlled and when the oxidation reactor
emissions are combined with emissions from th e SPA emissions, the total fluoride limit may be
exceeded. PCS Aurora’s SPA process line was examined to determine their potentia l control options. The
oxidation reactor at PCS Aurora wa s not tested as part of the 2010 section 114 information collection request, so specific total fluoride da ta were not available. Therefore, the facility may not need to3 control emissions, may be able to route the emissions to existing absorbers at SPA process lines, or a new absorber may be necessary. PCS Aurora provide d initial comments on their oxidation reactor (see docket item EPA-HQ-OAR-2012-0522-0037) and then elaborated on these comments after the comment period ended for the proposed rule (see docket item EP A-HQ-OAR-2012-0522-0051). PCS Aurora stated it may be necessary to install a ne w venturi scrubber to cont rol the oxidation reactor emissions in order to comply with the SPA total fl uoride emission limit. They stated a new scrubber may be necessary due to logistical complications and concerns about inadequate capacity of other existing absorbers at their SPA units. PCS Aurora estimated the venturi scrubber would incur capital costs of approximately $270,500, based on prior absorb er purchases for their facility. In order to
estimate annual costs for the venturi sc rubber, we used algorithms from the EPA Air Pollution Control
Cost Manual 1 , see Attachment A for details. When appl ying the algorithms, we implemented certain
modifications in order to refl ect costs that we believe are more appropriate. The algorithm modifications focus on how many hours the fac ility would spend on operation and maintenance
activities. The EPA Air Pollution Control Cost Manual recommends that operator activities take 2 hours per shift and maintenance ac tivities take one hour per shift. PCS Aurora currently operates
numerous scrubbers at their facili ty and, therefore, we do not believe that these time commitments are appropriate. We reduced each of the hours by half; we assumed operation activities take one hour per shift and maintenance activities take 30 minutes per sh ift. Because we do not have emissions data for the oxidation reactor at PCS Aurora, we are not able to estimate the emissions reduction associated
with the installation of a venturi scrubber. Table 2-1 presents the capital a nd annual costs associated with installing a new venturi scrubber fo r the oxidation reactor at PCS Aurora.

Table 2-1. PCS Aurora oxidation reactor costs for installing a venturi scrubber.
Item Total Capital Investment (TCI) Total Annual Cost (TAC) Venturi Scrubber $270,500 $95,000

3.0 TESTING AND MONITORING COSTS The SPA process line definition was clarified to specify that emissions from oxidation reactors must be included when determining compliance. There are three known emission points for oxidation
reactors that would incur an addi tional cost. One facility alrea dy includes their ox idation reactor emissions in compliance tests, so additional costs are not necessary for this facility. The Method 13B cost of $5,600 was included for these three emission points.4 The final rule includes a tota l fluoride emission limit for phospha te rock calciners. A work practice standard was proposed for phosphate rock cal ciners, based on below detection level (BDL) HF data, but total fluoride emissions were above the detection level. Therefore, an emission limit was
calculated and finalized for total fluoride. Each of the six phospha te rock calciners must perform annual total fluoride compliance tests using Met hod 13B; a cost of $5,600 was included for each phosphate rock calciner. A mercury limit was finalized in subpart AA fo r phosphate rock calciners. Each of the six phosphate rock calciners must perform annual Hg compliance tests using Method 30B; a cost of $8,000 was included for each phosphate rock calciner. The method 30B cost was increased from proposal ($5,600) due to industry comments which suggested that $5,600 per Method 30B was too low (see the final preamble for addi tional Method 30B cost discussi on). The annual testing costs by
emission source for total fluoride an d Hg are shown in Table 3-1.

Table 3-1. Summary of testing costs to perform Methods 13B (for total fluoride) and 30B (for Hg).

Emission Source Total Annual Cost (TAC) ($/yr) Phosphate Rock Calciners – Method 30B $48,000 Phosphate Rock Calciners – Method 13B $33,600 Oxidation Reactors – Method 13B $16,800 TOTAL $98,400

Control device monitoring costs were also eval uated. The proposed rule included a requirement that a bag leak detection system (B LDS) must be installed on fabric filters, however we did not include costs for this requirement. We are including BLDS costs for the final ru le. When conducting the technology review, we identified thre e facilities that use fabric f ilters on their phosphate fertilizer process lines. These facilities are Simplot Don-Po catello (P-1, EP-103), Agrium Nu-West (Gran, EP6), and Mississippi Phosphates (P-2, EP-1). Attachment B provides th e detailed BLDS cost analysis. For a single fabric filter capital costs were estimated at $25,200 a nd annual costs were estimated at $9,900. Table 3-2 presents the capital and annual costs to install BLDS at the three fac ilities. Details on BLDS costs are provided in Attachment B.5 Table 3-2. Summary of capital and annual costs to install BLDS on

fabric filters located at three phosphate fertilizer process lines.

Item Total Capital Cost (TCI) Total Annual Cost (TAC) ($/yr) BLDS $75,600 $29,700

Performance evaluations of control device m onitoring equipment are a requirement for all facilities. An annual labor cost for completing the calibration requirements for scrubbers were estimated at seven hours per facil ity; this labor is included Tabl e 3-3. Recordkeeping and reporting costs were developed based on rule requirements. This includes re port preparation and recordkeeping of monitoring and test data. Changes are proposed for the monitoring section of subparts AA and BB that require development of a monitoring plan. Subpart AA also proposes the development of a gypsum dewatering stack and cooling pond manageme nt plan. Recordkeeping and reporting annual costs will be the highest in the fi rst year as initial costs will be incurred for reading the rule and developing the monitoring and management plans, and all subsequent years will have a lower annual cost. The annual costs for recordkeeping and repo rting are included in Ta ble 3-3. See the Supporting
Statement and burden tables for details on calcul ating testing, monitori ng, recordkeeping, and reporting costs. 2

Table 3-3. Summary of annual recor dkeeping and reporting costs. Annual costs are presented for the first year of compliance and subsequent years.

Cost for First Year of Compliance Annual Cost for Subsequent Years ($/yr) $162,800 $70,600

4.0 TOTAL COST The total cost to comply with subparts AA and BB for phosphoric acid manufacturing and phosphate fertilizer production plants is the sum of the costs presented in sections two and three. This includes venturi scrubber capital a nd annual costs, BLDS capital and a nnual costs, and annual testing and monitoring costs. The total cap ital and annual costs are presen ted in Table 4-1. Note that for testing and monitoring costs, the annual cost for subsequent years is included in this value, rather than the first year of compliance cost.6 Table 4-1. Total capital and annual cost s to comply with subparts AA and BB. Total Capital Cost Total Annual Cost $346,000 $294,000

5.0 REFERENCES

1. U.S. Environmental Protection Agency. “EPA C ontrol Cost Manual, Sixth Edition. Section 6: Particulate Matter Controls, Chapter 2: We t Scrubbers for Particulate Matter,” July 2002.
Publication Number EPA/452/B-02-001.
2. Eastern Research Group, Inc. “Supporting St atement for Phosphoric Acid and Phosphate
Fertilizers NESHAPs.” Docket ID: EPA-HQ-OAR-2012-0522. May 2015.Attachment A
Venturi Scrubber Annual Cost CalculationAttachment A: Venturi Scrubber Annual Cost Calculat ion Parameter Value Note INPUTS Facility Name PCS Aurora Emission Point ID Oxidation Reactor Gas Flowrate (acfm) 500 Estimate Operating Hrs 3552 From 2010 section 114 survey Operating Days 177 From 2010 section 114 survey Electricity Cost ($/kW) 0.063 EIA, Table 5.6.B. (a) HPfan (fan horsepower) 4 From Table 2.3. (b) Hppump (pump horsepower) 0.25 From Table 2.3. (b) TOTAL CAPITAL Venturi Scrubber TCI $270,500 Provided by PCS DIRECT ANNUAL COSTS Electricity $709 Eqn. 2.45 (b) Operating Labor - Operator $19,648 Table 2.9 (b, c) - Used 1 hr operating labor/shift Operating Labor - Supervisor $2,947 Table 2.9 (b) Maintenance - Labor $9,824 Table 2.9 (b, c) - Used .5 hr maint. labor/shift Maintenance - Materials $9,824 Table 2.9 (b) INDIRECT ANNUAL COSTS Administrative Charges $5,410 Table 2.9 (b) Property Tax $2,705 Table 2.9 (b) Insurance $2,705 Table 2.9 (b) Overhead $11,789 Table 2.9 (b) Capital Recovery $29,701 Table 2.9 (b) 15-year life, 7% interest TOTAL ANNUAL COST $95,262

Notes: a. EIA, Table 5.6.B. Average Retail Price of Electr icity to Ultimate Customers by End-Use Sector. Sele cted value for Industrial Sector in North Carolina. http://www.eia .gov/electricity/monthly/epm_table_grapher.cfm?t=ep mt_5_6_b

b. Available in the EPA Control Cost Manual, Sixth Edition - Section 5: SO2 and Acid Gas Controls, 5.2 : PostCombustion Controls, Chapter 2: Wet Scrubbers for P articulate Matter c. Wage rate = $55.20 per year, calculated as a loa ded wage rate. Loaded wage rate = 110% of $26.43. I ndustrial engineering technician (Occupation code 17-3026). h ttp://www.bls.gov/oes/2013/may/naics4_325300.htmAttachment B Bag Leak Detection Syst em Monitoring CostsAttachment B: Bag Leak Detection System Monitoring Costs Parameters/Costs Equation V alue

1. Cost index a. 2013 CEPCI 567.3 b. 2006 CEPCI 499.6 c. 1997 CEPCI 386.5 2. Capital recovery factor, 20-yr equipment life, 7% interest (CRF) = [i x (1 + i) a ] / [(1 + i) a - 1], where i = interest rate, a = equipment life 0.09439

1. Planning = 700 * (2013 CEPCI / 2006 CEPCI) $800 2. Select type of equipment = 3900 * (2013 CEPCI / 2006 CEPCI) $4,400 3. Provide support facilities = 400 * (2013 CEPCI / 2006 CEPCI) $500 4. Purchased equipment cost (PEC) = 12200 * (2013 CEPCI / 2006 CEPCI) $13,900 5. Install and check equipment = 4200 * (2013 CEPCI / 2006 CEPCI) $4,800 6. Perf. spec. tests (certif.) $0 7. Prepare QA/QC plan = 700 * (2013 CEPCI / 2006 CEPCI) $800 8. Total capital cost = Planning + selecting equipment + support facilities + PEC + installation + perf. spec. tests + QA/QC plan $25,200

1. Operation & maintenance = Day-to-day activities + annual RATA + CGA + annual QA + O&M review and update = 5000 * (2013 CEPCI / 2006 CEPCI) $6,000

2. Recordkeeping and reporting = $1,000 x (525.4/386.5) $1,500 3. Capital recovery = CRF x TCI $2,400 4. Total annual cost = Operating labor + maintenance materials + recordkeeping and reporting + overhead + property taxes, insurance, and administration + capital recovery $9,900

Sources: A. Parameters

B. Total Capital Investment, $ (TCI)

C. Annual Costs, $/yr

1. Hospital/Medical/Infectious Waste Incinerators (HMIWI) [EPA-HQ-OAR-2006-0534] Testing and Monitoring Options and Costs Memo (IV-B-66).