Preliminary Response to the Cold End Memorandum

Portland Cement Association (PCA) provides this preliminary response to the information contained in the attached memorandum from Keith Barnett dated March 21, 2011 (the “Cold End Memorandum”) and supporting documents (attached hereto). PCA greatly appreciates EPA’s continuing efforts to address PCA’s concern that cement kilns will inappropriately be regulated under the rules for Commercial/Industrial Solid Waste Incinerators (“CISWI”) facilities, rather than the Portland Cement National Emissions Standard for Hazardous Air Pollutants (“NESHAP”), based on the use of certain alternative ingredients and fuels by kilns that may be deemed solid wastes under the Identification of Non

- Hazardous Secondary Materials t hat are Solid Wastes rule (40 C.F.R. Part 241). While the interpretation of Section 129(g) of the Clean Air Act (“CAA”) articulated in the Cold End Memorandum represents a step in the right direction, the memorandum does not resolve our concerns. Nor do we agree that the overlap between the Portland Cement NESHAP and the CISWI rule is limited to just 18 kilns (the number is significantly higher) or that the revised MACT floor calculations are appropriate. In sum:

 Ingredients that may be determined to be solid wastes under Part 241 should not subject cement kilns to regulation under CAA Section 129(g) because they are not combusted. Therefore, the distinction between the “cold” end of the kiln and other locations is not legally relevant to whether ingredi ents should be regulated under Section 129(g). Furthermore, the supposition that ingredients are added only to the “cold” end does not accurately capture the full range of practices in the industry. Fundamentally, the location at which the ingredients are added to a kiln should not determine whether a kiln is classified as a CISWI source because ingredients are not combusted no matter where they
enter the kiln.

 Further, the incorrect assumption in the Cold End Memorandum that all ingredients are
added to the “cold” end of kilns leads EPA to the incorrect conclusion that only 18 kilns will be categorized as CISWI kilns based on their use of ingredients. PCA estimates that more than 90% of all kilns that are potentially subject to CISWI use ingredients t hat may be determined to be solid wastes under Part 241 and roughly 25% of those kilns introduce ingredients in locations other than the apparent “cold” end. In addition, the calculations in the memorandum fail to capture all kilns that would appear to be CISWI kilns because of EPA’s interpretation of their use of alternative fuels that may be classified as solid wastes under Part 241. PCA estimates that approximately 80% percent of all kilns that are potentially subject to CISWI use alternative fuels tha t may be classified as solid waste
under Part 241.

 Finally, while PCA appreciates that the Cold End Memorandum represents a helpful move toward more rational analysis of alternative ingredients in kilns, the memorandum alone is a procedurally deficient me ans of resolving the underlying issue. The memorandum is not an appropriate or reliable tool to amend the contradictory or ambiguous language included in the NESHAP, CISWI, and solid waste definition rules, preambles, and response to comment documents. F urthermore, memoranda are always subject to change without process.2

The Cold End Memorandum and the accompanying materials thus leave the “ingredients” and the NESHAP/CISWI overlap issues unresolved. Even with the memorandum,
EPA has still failed to deter mine correctly the number of facilities that would be CISWI rather than NESHAP sources based on their usage of either alternative ingredients or alternative fuels that may be determined to be solid wastes under Part 241. Thus, EPA cannot, at this point,

c alculate what the NESHAP limits should have been. And even if EPA could complete those calculations, the Agency would need to go through notice and comment rulemaking to issue those emission limits. The Cold End Memorandum therefore serves only to provid e further evidence that the Portland Cement NESHAP should be reconsidered, stayed, and synchronized
with reconsideration of the CISWI and solid waste definition rules.

1. The Cold End Memorandum does not resolve the ingredient issues raised by PCA

A. The inte rpretation of Section 129(g) is inconsistent with the language of the Clean Air Act, as ingredients utilized in cement kilns are not “combusted”

Fundamentally, ingredients utilized in cement kilns (whether virgin feedstock or obtained
from alternative sour ces) are not “combusted.” The location at which an ingredient enters the kiln does not change this key fact. As Section 129(g) provides that Section 129 standards apply only to units that “combust” certain types of materials, Section 129 standards cannot apply to units that use those materials as ingredients.

As discussed at length in PCA’s comments on the proposed CISWI and solid waste definition rules, under the plain meaning of the word “combust,” materials that are used as ingredients in an industria l process are not “combusted.” Common dictionary definitions make clear that a unit “combusts” fuels but not ingredients. The feedstock for clinker that is placed into the kiln is incorporated into the clinker product, not “combusted.” Thus, any seconda ry materials that may be used as substitutes for mined or virgin feedstock become incorporated into the clinker product and are not “combusted.” Much like cooking, it should not matter when and where the ingredients are added: whether they are mixed toge ther before being added to the pan, added directly to the pan, or added in after cooking, they are still ingredients and are not
combusted.

EPA accordingly has no authority under the plain terms of Section 129 to regulate portland cement kilns’ use of seco ndary materials as ingredients. This conclusion is supported by the fact that there is nothing in the legislative history of Section 129 that indicates any focus whatsoever on the use of ingredients. For this reason, the Cold End Memorandum’s distinction between materials added to the “cold” and “hot” ends of kilns as a rule of thumb is not legally
relevant. 1 Ingredients (whether virgin or alternative) should not trigger the applicability of the CISWI rules for cement kilns regardless of where they are i ntroduced into the process.

1 Furthermore, as discussed below, it is not clear what is meant by the “hot” and “cold” ends at kilns that have pre

heaters or precalciners, especially given that precalciner kilns have a second heat source.3

B. The assumption that ingredients are only introduced into kilns via the “cold”
end is incorrect

The Cold End Memorandum’s conclusion that there are only 18 remaining CISWI kilns is based on the fundamental assumption that no k ilns will be classified as CISWI sources based on the use of ingredients. While, as discussed above, a correct reading of Section 129(g) leads to that assumption, the Cold End Memorandum uses a different, and incorrect, rationale. The memorandum apparent ly assumes that all ingredients are added to kilns from the “cold” end, an assumption that is factually wrong.

While many ingredients are added to the “cold” end of the kiln, that is not true for all ingredients or all kilns. Ingredients are added to ki lns in a variety of ways and locations not envisioned by the Cold End Memorandum. For example, it does not appear that the Cold End Memorandum would exclude ingredients added in places other than the “cold” end from coverage under the CISWI rule, as illus trated in the following examples:

 Ingredients recycled during the process . Two types of materials are removed from the kiln exhaust gases, typically by the air pollution control devices, and returned to the process as ingredients. The first is incomplete ly calcined material that is recycled back into the kiln as a normal part of the clinker manufacturing process. The second is other
fine

- grained, solid material removed from the system to allow the clinker to meet specific quality standards or to maintain process stabilization. 2

Both of these materials may be reintroduced to the kilns in various places, depending on the kiln design and process. In wet process kilns, these ingredients are typically added near the kiln flame through insufflation or at mid

- kiln via dust scoops. 3 In long

- dry kilns, they are most often transferred to a feed bin and added to the raw meal feed just prior to the cold end of the kiln. In preheater and preheater/precalciner kilns, they are typically transferred to a feed bin an d added to the raw meal feed just prior to the preheater tower.

To be clear, neither material is discarded, much less combusted, and therefore it would be inappropriate to include them within the scope of Part 241 or use them to trigger the applicability of CAA Section 129.

 Kilns with preheaters/precalciners. It is unclear how the Cold End Memorandum would apply to preheater and precalciner kilns, as they heat ingredients in more than one location, including away from the kiln flame “hot” end. Preheater kilns have preheater towers that use the heat produced by the kiln to preheat the ingredients as they move through the various stages of the tower. In addition, ingredients can be added part way

2 EPA has previously referred to these types of materials as “cement kiln dust” or “CKD,” al though it has never promulgated a regulatory definition of that term. We do not use that term in this memorandum because it is most appropriately used to describe material that is removed entirely from the process and sold or disposed of.

3 It is unclear under the Cold End Memorandum whether ingredients added mid

- kiln would be considered to have been added to the “cold” or “hot” end.4

through the process, but still before the kiln. Moreover, p recalciner kilns have a second heat source to precalcine limestone and heat other ingredients prior to their introduction into the rotary kiln. Thus, from the brief discussion in the Cold End Memorandum, it is unclear what EPA would consider to be the “co ld” or “hot” end of such a kiln.

Thus, even if the position articulated in the Cold End Memorandum were deemed a legally effective rule (which it cannot be as explained below), a substantial number of kilns would still be CISWI kilns because they utilize alternative ingredients that are not fed to the “cold” end of the kiln.

Rather than suggesting a distinction that does not match actual practices in the industry, EPA should make clear that ingredients do not trigger the CISWI rules because they are not combusted, regardless of where they are introduced into the process and regardless of whether they would otherwise qualify as solid waste. The ingredients issue cannot be substantively resolved until this point is stated clearly and directly (for example , as explained below, in a final rule issued after notice and an opportunity for comment), rather than as a rule of thumb regarding the location at which the ingredients are added to the kiln. Furthermore, even if the interpretation in the Cold End Memora ndum did account for all potential ingredient uses, which it does not, EPA should still not adopt it here. The search for more efficient means of manufacturing portland cement is ongoing. Techniques may be developed in the future that
would increase effi ciency through alternative methods of adding ingredients. EPA should not stifle innovation by interpreting Section 129(g) to mean that such new techniques may trigger applicability of the CISWI rule.

C. The Memorandum raises significant procedural concern s, as it cannot amend
the rule documents

The Cold End Memorandum reflects a significant interpretation of Section 129(g) of the CAA. That statement of interpretation, standing alone in a staff memorandum, is insufficient to amend the relevant rules, inclu ding the CISWI and solid waste definition rules. Therefore, while the memorandum is a critical statement of agency interpretation, additional action must be taken by EPA to fully resolve the ingredients issue.

There are statements in the preambles, regul ations and response to comment documents associated with the CISWI and solid waste definition rules that appear to contradict the Cold End Memorandum. In the solid waste definition rule, for example, EPA says that cement kiln dust
would need to meet the l egitimacy criteria to avoid being classified as a solid waste, even if it is
reused in a closed

- loop process. 4 See, e.g. , 76 Fed. Reg. 15517, 15536. Additionally, the solid waste definition rule explains how a variety of ingredients used in kilns could b e solid waste

– many of which are commonly placed in the cold end of the kiln

– without ever making a distinction between the “hot” and “cold” ends of the kiln. See, e.g. , 76 Fed. Reg. 15536. It is
difficult to reconcile these and other statements in the rules with the interpretation in the Cold
End Memorandum.

4 As you know, we strongly disagree with this position and intend to seek its reversal through administrative and/or judici al processes. Nevertheless, that is the position EPA has currently articulated in its final rule and an agency
memorandum cannot amend it.5

Even if the rules, preambles, and responses to comments could be read harmoniously with the contents of the Cold End Memorandum, there is no trace of that memorandum’s interpretations included in a ny of those rule documents. There is no hint in the thousands of pages of those documents that EPA’s position is what is articulated in the Cold End Memorandum. Tellingly, the documentation for the solid waste rule and the CISWI rule both
refuse to addre ss the issue of whether ingredients can be considered combusted, while claiming that the issue will be addressed in the other rule. EPA’s response to comments regarding ingredients in the solid waste definition rule preamble states that “[w]hether EPA may cover ingredients used in combustors under section 129 of the CAA is a matter for regulations under that statute,” 76 Fed. Reg. 15536, and in the “Response to Comments” document for the CISWI rule, EPA states that the issue is “being dealt with within the Identification of Non

- Hazardous Secondary Materials That Are Solid Waste rulemaking... [and] will be addressed there.” Response to Comments at 74.

Given the failure to address this issue in the related rulemakings and the high potential
for conflicts in i nterpretation, these rules and their preambles will therefore need to be amended before anyone could reasonably rely on EPA’s interpretation of Section 129(g) described in the Cold End Memorandum. An explanation of EPA’s interpretation should be included in the text of the Agency’s decision on the Portland Cement NESHAP reconsideration (as EPA has already suggested it would do) and must also be made clear in further rulemaking on the Portland Cement NESHAP, the CISWI rule, and the solid waste definition ru les.

2. EPA’s recalculation of the MACT floors is incorrect, as many more than 18 kilns are potential CISWI sources

EPA cannot recalculate the Portland Cement Category MACT floors at this time because it does not yet know the correct universe of kilns that w ill be CISWI sources. Even if the Cold End Memorandum were procedurally sound and represented EPA’s final interpretation of the relevant provisions, the list of cement kilns that may be CISWI sources under the interpretation
in that memorandum would be se veral times greater than 18.

A. Ingredients

As discussed above, the ingredients issue has not yet been fully resolved substantively or procedurally. Without resolution of this issue in the relevant rules and preambles, 90% or more
of the cement kilns may be classified as CISWI sources. If EPA’s interpretation in the Cold End Memorandum were to stand unchanged and were properly issued through rulemaking, the effect of the ingredients issue would have been ameliorated but not eliminated. Given that rou ghly 25% of cement kilns that use alternative ingredients introduce those ingredients at points other than the cold end of the kiln, and confusion over how the interpretation applies to pre

- heater and precaliciner kilns, more than 18 would still be conside red CISWI sources based on ingredients
alone.

B. Alternative Fuels

Even if EPA were to fully resolve the ingredients issues by promulgating rules that make clear that ingredients are not combusted, the total number of cement kilns that will be CISWI6

sou rces would still be significantly greater than 18, and in fact could be approximately 80% of cement kilns. At least two major alternative fuel issues remain: first, kilns that burn tires that may not have been collected exclusively through an established tire collection program as EPA has used those terms; 5 second, kilns that burn a myriad of other alternative fuels that may not meet the criteria set forth in the definition of solid waste rule, including biosolids, engineered fuels, and others. Even if a ll tire

- derived fuel issues were resolved so that they did not trigger CISWI rules, far more than 18 kilns would still be CISWI kilns based on the use of other
alternative fuels.

In any event, if EPA were to reconsider the Portland Cement NESHAP, it would have to do so through notice and comment rulemaking and should, at that time, take into consideration (a) the correct list of facilities that will be subject to the NESHAP rule rather than the CISWI rule and (b) other emissions data that may become availab le. It would be wholly inappropriate for EPA to deny reconsideration on the basis of the factually flawed MACT floor recalculations
set forth in the Cold End Memorandum.

3. Conclusions

The Cold End Memorandum does not resolve the “ingredients” issue, leaving the scope of application of the CISWI rule to portland cement kilns as vexatious as it was when EPA promulgated the Portland Cement NESHAP last year. Even if it had resolved this issue, EPA has still not determined the full scope of the facilities that w ould be CISWI rather than NESHAP sources based on their usage of alternative fuels. PCA requests that EPA continue to examine this issue and to issue a final interpretation through notice

- and

- comment rulemaking that excludes ingredients entirely from cove rage of the CISWI rule, as a proper reading of the Clean Air Act mandates. Moreover, PCA urges EPA to grant reconsideration of and stay the Portland Cement NESHAP rule as well as the NSPS rule, which includes standards based on the NESHAP rule, to allow t he Agency time to:

 First, complete the changes to the CISWI and solid waste rules;

 Second, determine which kilns will be CISWI sources; and

 Third, engage in appropriate rulemaking to make any changes to the portland cement NESHAP and NSPS rules as previo usly requested by PCA.

Should EPA fail to take the steps necessary to properly promulgate a NESHAP rule that does not rely on data from CISWI facilities, the Agency will face the same quandary that the D.C. Circuit already addressed once, in the prior Boil er MACT case. When the Court determined that “the populations of units subject to EPA’s [NESHAP] and CISWI rules will change substantially,” the Court vacated the NESHAP rule, “requiring that EPA recalculate the stringency of the emissions standards” to a ccount for the new population of sources. Natural

5 There are several issues with tires. Some companies obtain tires from brokers and do not know the source of all

t ires; some companies do not know whether tire programs in their jurisdictions would qualify as established tire collection programs; and finally some companies burn tires that, under EPA’s formulation, have been discarded even if they have been managed und er an established program.7

Resources Defense Council v. EPA , 489 F.3d 1250, 1261 (D.C. Cir. 2007). EPA should take the
time to avoid a similar vacatur in this situation.

Attachment