OAR-2008-0708-DRAFT-0328[1] -----Forwarded by Melanie King/RTP/USEPA/US on 02/15/2010 09:27PM ----- To: Cortney_Higgins@omb.eop.gov From: Melanie King/RTP/USEPA/US

Date: 02/12/2010 11:22AM cc: RobertJ Wayland/RTP/USEPA/US@EPA, Michael Horowitz/DC/USEPA/US@EPA, Fred Talcott/DC/USEPA/US@EPA, Larry Sorrels/RTP/USEPA/US@EPA Subject: latest draft of RICE package

Cortney,

A ttached is the revised preamble and regulation text and revised RIA for the RICE NESHAP. Also attached is the revised RIA. You will notice a few changes to the package. 1) We were still referencing some recordkeeping and reporting requirements ior startup, shutdown, and malfunction (SSM) in the Part 63 General Provisions that didn't make sense anymore in light of the recent Court decision on the SSM exemption. Therefore what we have done is instead of referencing those sections, we have included the appropriate text from the General Provisions directly in subpart ZZZZ itself, and removed the text that wasn't applicable anymore. You will see those changes in 63.6650(c)(4), 63.6655(a)(2), and Table 7. In Table 7 we have removed the requirement for an immediate SSM report and limited line 1.c. to malfunction only. We are not adding new requirements, just eliminating ones that didn't make sense to include anymore. OGC also made a few edits to the SSM discussion in the preamble. 2) OGC preferred that we not the references to subpart E into subpart ZZZZ. They said that it was a freestanding subpart and there was no need to reference it here. We do still mention it in the preamble.

Larry is going to send you the RIA separately.

In response to the issues that are still outstanding with SBA, we reiterate that we have focused the requirements for emission controls on a the subset of the population of stationary CI engines that has the greatest impact on people. The total estimated population of existing stationary CI engines is 936,000. The estimated number of engines that have emission standards based on the use of oxidation catalyst control is 44,000, which is 5 percent of the total population. While these engines are only 5 percent of the population, they emit an estimated 44 percent of the total HAP emissions from existing stationary CI engines. We cover the remaining HAP emissions through work or management practice standards on the remaining population of stationary CI engines (except the 100-300 HP engines at major sources which have emission limits that are based on data from engines without oxidation catalyst control).

We have made several changes since the proposed rule that further reduce the burden of the rule on affected sources. These changes include: 1) The final rule has no numerical emission limits for emergency engines and for engines <100 HP at major sources 2) Residential/institutional/commercial emergency engines at area sources are not subject to

the final rule 3) We revised the management practice frequencies and added the option to use an oil analysis program

We performed economic impact analysis which showed that the rule would not result in significant economic impacts for a substantial number of small entities. There have been no facts provided by SBA to support the claim that there are tens of thousands of agricultural engines that will be heavily impacted by this rulemaking. The rule imposes management practice standards for engines at area sources that are less than 300 HP. The information that we received from comment letters indicated that engines used by the agricultural sector were predominately smaller than 300 HP. See for example the comment from the American Farm Bureau Federation (-0174) which states "In most instances, the engines are of the Page 1OAR-2008-0708-DRAFT-0328[1] compression ignition type rated at 300 hp or less." The comment letter from Southern Gardens Citrus Holding Corporation (-0189) stated that they operate 74 stationary RICE, of which one is greater than 300 HP. That means 1.4 percent of their engines are >300 HP. Other commenters provided similar information.

EPA does not believe that a limited use subcategory is warranted or justified. For engines smaller than 300 HP, if we created a limited use subcategory, the requirements would not be different than for other non-emergency engines, since we are already requiring the MACT floor emission limits for major sources and management practices for area sources of that size. For engines greater than 300 HP, we believe that the costs of control are acceptable given the reductions that would be achieved from these engines.

We believe a broad national rule that provides equal environmental protection to populations in both urban and rural areas is appropriate for stationary CI engines. The emission controls that are the basis of the rule are equally available in urban and rural areas, and the cost of control is not significantly higher in rural areas. EPA does not have precise information on the location of these engines such that we could do air quality modeling on the emissions and impact on specific populations. However, even if the engines are located in rural areas, many of them would be upwind of more highly populated areas. SBA has proposed that rural engines be excluded from retrofits if no person resides within 300 meters. We do not find that it is appropriate to incorporate this provision in the rule because we do not believe that the emissions from these engines only travel 300 meters or less. Attached is a

document that discusses this issue in much more detail. (See attached file: OMB Draft RICE NESHAP FRM Preamble and Reg Text 2-12-10.doc) (See attached file: OMB Draft RICE NESHAP FRM Preamble and Reg Text 2-12-10 redline from 2- 9 version.doc) (See attached file: Response on urban-rural issue.doc)

Thanks, Melanie King Energy Strategies Group Sector Policies and Programs Division Office of Air Quality Planning and Standards U.S. Environmental Protection Agency

Mail Code D243-01 RTP, NC 27711

Phone: (919) 541-2469 Fax: (919) 541-5450 king.melanie@epa.gov

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