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MEMORANDUM

SUBJECT : Departmen t o f Energ y (DOE ) Comment s on th e Industria l Boile r NSP S (SO2 ) - Revie w o f th e Argonn e Nationa l La b(ANL ) Repor t

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Standard s Developmen t Branc h(MD-13 ) SUMMAR Y Publi c comment s submitte d b y DO E on th e propose d new sourc e performanc e standard s (NSPS ) limitin g sulfu r dioxid e (SO2 ) emission s fro m new industrial-commercial-institutiona l steam generatin g unit s (i.e. , boilers ) include d a repor t prepare d b y AN L assessin g th e cos t effectivenes s o f emissio ncontro l associate d wit hvariou s regulator y option s fo r NSPS . Th e analysi s i n th e AN L repor t i s simila r t o tha t i n th e EP A mode l boile r analysi s whic hexamine d th e cos t effectivenes s o f emissio ncontro l asso ciate d wit hvariou s regulator y alternative s fo r NSPS . Bot hanalyse s examin e th e cos t effectivenes s o f emissio ncontro l fo r specifi c coal-fire d boiler s unde r th e assumptio no f n o "fue l switching " (e.g. , boiler s firin g coa l switc ht o firin g natura l gas ) i n respons e t o variou s regulator y option s (i.e. , th e AN L report ) o r regulator y alternative s (i.e. , th e EP A analysis ) fo r NSP S limitin g SO 2 emissions . Th e ANL repor t use s th e same cos t algorithm s an d generall y

use s th e same coa l type s an d coa l price s a s thos e use d i n th e EPA mode l boile r analysis . Ther e are , however , severa l difference s i n assumption s betwee nth e tw o analyses . This , i n turn , result s i n somewha t differen t conclusion s regardin g th e cos t effectivenes s o f emissio ncontrol , particularl y

wit hregar d t o th e cos t effectivenes s o f regulator y options / alternative s fo r NSP S base d o n th e us e o f lo w sulfu r coal . Th e majo r differenc e betwee nth e AN L repor t and th e EP A analysi s concern s th e availabilit y o f ver y

lo w sulfu r coal s (i.e. , thos e wit h emissio nlevel s o f les s tha n1. 2 l bSO2/M M Btu) . Th e AN L repor t assume s ver y low sulfu r coal s wit hSO 2 emissio nlevel s a s lo w a s 0. 6 l bSO2/M

M Bt u ar e generall y

availabl e o r woul d becom e availabl e i n respons e t o deman d fo r suc hcoal s fro

m new industrial-commervial-institutiona l boilers . Th e EPA analysi s assume s very lo w sulfu r coal s ar e no t generall y availabl e an

d woul d no t becom e availabl e a s a resul t o f th e NSPS .P. 3

Thus , th e two analyse s ar e base do nver y differen t assumption s regardin g th e availabilit y o f >/ery

low sulfu r coals . Th e AN L repor t assume s suc hcoal s ar e available ; an dthus,assesse s th e cos t effectivenes s o f regulator y

option s base do

nth e us e o f suc hcoal s wit hemissio n limit s a s low

a s 0. 6 l bS02/M

M Btu . Incontrast , th e EP A analysi s assume s suc hcoal s ar e no t availabl e an da s a resul t i s limite dt o assessin g th e cos t effectivenes s o f regulator y alternative s base do n th e us e o f low

sulfu r coa l wit hemissio nlimit s onl y a s low a s 1. 2 l bSO2/M M Btu . Anothe r differenc e i nbasi c assumption s betwee nth e ANL repor t an d th e EPA analysi s concern s th e annua l cost s o f emissio nmonitorin g unde r th e regulator y

baseline . Bot hth e ANL repor t an dth e EP A

analysi s assum e tha t coa l samplin g an danalysi s woul dgenerall y b e use dt o monito r SO 2 emission s unde r th e regulator y baseline . Th e ANL report , however , assume s th e cost s associate dwit hcoa l samplin g an danalysi s ar e negligible . Th e EPA analysis , onth e othe r hand , assume s the y ar e significan t an

do f th e sam e orde r o f magnitud e a s thos e associate dwit h us e o f a continuou s emissio nmonitor . Bot hth e ANL repor t andth e EP A analysis , therefore , includ e cost s fo r emissio nmonitorin g i nregulator y options/alternative s base donth e us e o f lo

w sulfu r coal . However , wher e th e ANL repor t include s n o cost s fo r emissio nmonitorin g unde r th e regulator y baseline , th e EP A

analysi s include s suc hcosts . A s a resul t o f thi s differenc e i nassumption s regardin g th e cost s o f emissio nmonitorin g unde r th e regulator y baseline , th e incrementa l cost s betwee nregulator y option s base donth e us e o f lo w sulfu r coa l an dth e regulator y

baselin e ar e som e $110,00 0 pe r yea r highe r i nth e ANL repor t tha nth e correspondin g incrementa l cost s i nth e EP A analysis . A s on e migh t expect , thi s ha s a majo r impac t o nth e cos t effectivenes s o f emissio ncontrol . Fo r a 10 0 M M Btu/h r boile r locate di nRegio nV , fo r example , thi s effectivel y increase s th e cos t effectivenes s o f regulator y

option s base do

nth e us e o f low

sulfu r coa l i nth e ANL repor t b y some $l,100/ton . Thus , wher e th e EP A

analysi s conclude s tha t th e cos t effectivenes s o f regulator y

alternative s base do nth e us e o f low

sulfu r coa l fo r a 10 0 M M Btu/h r boile r locate di nRegio nV i s i nth e rang e o f $600/ton , th e AN L repor t conclude s th e cos t effectivenes s i s i nth e rang e o f $l,900/ton . Adjustin g th e ANL cost s t o reflec t th e EP A assumptio nregardin g th e cost s o f emissio nmonitorin g unde r th e regulator y baselin e reduce s th e cos t effectivenes s i nth e ANL repor t t o abou t $800/ton , whic hi s comparabl e t o tha t cite di nth e EP A analysis . Althoug hth e ANL repor t an dth e EP A

analysi s arriv e a t differen t conclusion s regardin g th e cos t effectivenes s o f regulator y options / alternative s base do

nth e us e o f lo

w sulfu r coal , thi s i s no t th e cas e fo r regulator y

options/alternative s requirin g a percen t reductio ni n emissions . I

nthi s are a th e tw o analyse s reac hsimila r conclusions . Th e ANL report , fo r example , estimate s th e cos t effectivenes s o f option s requirin g a percen t reductio ni nemission s ove r option s base do nth eP. 4

us e o f lo

w sulfu r coa l fo r a 10 0 M M Btu/h r boile r locate d i nRegio nV a s i nth e rang e o f $l,900/ton . Th e EP A analysi s estimate s thi s cos t effectivenes s a s i nth e rang e o f $l,700/ton .

I nadditio nt o examinin g th e cos t effectivenes s o f emissio ncontro l associate d wit hvariou s regulator y options/alternative s fo r NSPS , bot h th e AN L repor t an

d th e EPA

analysi s examine d th e cos t effectivenes s o f th e additiona l emissio nreductio nachieve d b y no t providin g emissio n credit s fo r mixe d fuel-fire d boiler s an d boiler s withi ncogeneratio n systems . I

nthi s are a bot hanalyse s reache d essentiall y th e same conclusion , tha t is , th e cos t effectivenes s i s generall y i nth e rang e o f $30 0 - 400/ton .

Insummary , th e ANL repor t an d th e EP A

analysi s reache d quit e differen t conclusion s regardin g th e cos t effectivenes s o f emissio n contro l associate d wit hregulator y options/alternative s base d o nth e us e o f lo

w sulfu r coal . Bot hanalyses , however , reache d essentiall y th e sam e conclusion s regardin g th e cos t effectivenes s of emissio ncontro l associate d wit hregulator y options/alternative s requirin g a percen t reductio ni nemissions , a s wel l a s th e cos t effectivenes s associate d wit hth e additiona l emissio nreduction s achieve d b y no t providin g emissio ncredit s fo r mixe d fuel-fire d boiler s o r boiler s incogeneratio n systems . Whil e no t specificall y highlighte d a s a conclusion , th e ANL repor t als o lead s t o th e conclusio ntha t ther e i s littl e differenc e i nth e cos t effectivenes s betwee nregulator y option s base d o

nth e us e o f lo

w sulfu r coa l and regulator y option s requirin g a percen t reductio ni n emissions . Th e cos t effectivenes s o f eithe r optio ni s i nth e rang e o f $l,900/ton . Thi s i s quit e differen t fro m th e conclusio nreache d i nth e EP A analysi s tha t a significan t differenc e exist s i nth e cos t effectivenes s betwee nthes e tw o regulator y alternatives . Considerin g onl y

cos t effectiveness , therefore , th e ANL repor t lead s t o th e conclusio ntha t standard s fo r industrial-commercial

institutiona l boiler s shoul d requir e a percen t reductio ni nemissions . Th e cos t effectivenes s o f emissio ncontro l i s essentiall y th e same whethe r thes e standard s ar e base d o nth e us e o f low sulfu r coa l o r requir e a percen t reduction . Emissions , however , ar e substantiall y lowe r i f th e standard s requir e a percen t reduction . Th e EP A analysis , onth e othe r hand , doe s no t necessaril y lead t o thi s conclusion . Th e cos t effectivenes s o f emissio ncontro l associate d wit hstandard s requirin g a percen t reductio ni nemission s i s significantl y highe r tha nth e cos t effectivenes s o f emissio ncontro l associate d wit h standard s base d onth e us e o f lo w sulfu r coal . Thus , th e EPA analysi s require s a judgmen t whethe r th e highe r cos t effectivenes s o f emissio n contro l associate d wit hstandard s requirin g a percen t reductio ni s reasonable .P. 5

COMPARISO N

O F TH E AN L REPOR T AN D TH E EP A ANALYSI S

Th e approac hemploye di nth e ANL repor t i s essentiall y th e same a s tha t employe di nth e EPA mode l boile r analysis . Bot hanalyse s examin e th e impact s associate dwit hvariou s regulator y option s (i.e. , th e AN L report ) o r regulator y alternative s (i.e. , th e EP A analysis ) i n term s o f mode l boiler s locate di nvariou s EP A Regions . Bot hanalyse s als o us e th e same cos t algorithm s an dgenerall y

us e th e sam e coa l type s an dcoa l price s t o estimat e th e cost s associate dwit hthes e regulator y

option s o r alternatives . On e migh t expect , therefore , tha t th e two analyse s woul dyiel dth e same o r ver y simila r conclusions . A quic k revie w

o f th e tw o analyses , however , indicate s tha t thi s i s no t th e case , particularl y wit hregar dt o th e cos t effectivenes s associate d wit hregulator y

option s o r alternative s base donth e us e o f lo w sulfu r coal . Althoug hth e approach , includin g th e cos t algorithm s an dmos t o f th e coa l type s an

dcoa l price s ar e th e same , ther e ar e a numbe r o f assumption s i nth e ANL repor t an dth e EP A

analysi s tha t differ , a s show n i nTabl e 1 . Perhap s th e mos t significan t i s tha t o f th e availabilit y o f lo w sulfu r coals . Th e ANL repor t assume s tiery lo w sulfu r coals , wit h SO 2 emissio nrate s a s lo w a s 0. 6 l bSO2/M

M Btu , ar e generall y

available ; whereas , th e EP A

analysi s assume s coal s wit hsuc hlo w emissio nrate s ar e no t generall y

available . Th e ANL repor t implicitl y assume s tha t coa l deman db y new industria l boiler s i s sufficien t t o resul t i nth e applicatio no f coa l washin g t o low sulfu r bituminou s an dsubbituminou s coal s t o produc e ver y lo w sulfu r coals . Thus , althoug hth e AN L repor t initiall y adopt s th e sam e coa l type s an

dcoa l price s a s th e EP A analysis , i t expand s th e numbe r o f coa l type s andcoa l price s b y assumin g tha t coa l washin g coul db e applie dt o thes e coals . Thi s lead s t o a categor y o f yery low sulfu r coal s i nth e ANL repor t whic har e capabl e o f achievin g emission s level s o f 0. 6 l bSO2/M

M Btu . Th e EP A analysis , onth e othe r hand , explicitl y assume s tha t coa l deman db y new industria l boiler s i s no t sufficien t t o resul t i nsignifican t change s i ncurren t coa l productio npractices . Currently , coa l washin g i s generall y

limite dt o easter nbituminou s coal s andi s generall y employe donl y

t o improv e coa l qualit y (i.e. , lowe r as hleve l an dincreas e heatin g value ) or , i nsom e cases , t o produc e lo w sulfu r coal s (i.e. , coal s capabl e o f meetin g emissio nlimit s o f 1. 2 l bSO2/M M Btu) . Thus , coa l washin g i s considere dunlikel y t o b e applie dt o lo w sulfu r bituminou s o r subbituminou s coal s t o produc e ^/ery lo w sulfu r coal s (i.e. , coal s capabl e o f meetin g emissio nlimit s a s lo w a s 0. 6 l bSO2/M

M Btu ) i n respons e t o coa l demand s b y new industria l boilers . Consequently , th e EP A analysi s assume s tha t th e lowes t sulfu r coa l generall y availabl e t o industria l boiler s i s capabl e o f reducin g emission s onl y t o 1. 2 l bSO2 / M M Btu . A s a resul t o f thi s differenc e i nassumption s regardin g th e availabilit y o f ver y lo w sulfu r coals , th e AN L repor t i s abl e t o examin e regulator y option s base donth e us e o f suc hcoal s wit hemissio nlimit s a s low a sTABL E 1

Difference s i nAssumption s Betwee nth e ANL Repor t an d th e EPA

Analysi s

ANL Repor t Assumption s

1 . Assume s coa l deman d fro m new industria l boiler s sufficien t t o resul t i napplicatio no f coa l washin g t o lo

w sulfu r coa l t o produc e very

lo w sulfu r coals .

2 . N o cost s fo r emissio nmonitorin g include d unde r th e regulator y baseline .

3 . Sulfu r retentio ni nth e botto m as hi s 5 % an

d 15% , respectively , fo r bituminou s an

d subbituminou s coals . EP A Analysi s Assumption s

1 . Assume s coa l deman d fro m new industria l boiler s insufficien t t o chang e curren t coa l washin g practices ; thus , applicatio no f coa l washin g limite d t o medium an d intermediat e sulfu r coal s t o produc e lo

w sulfu r coals . 2 . Cost s fo r emissio nmonitorin g equivalen t t o th e cost s fo r a CEM include d unde r th e regulator y baseline . 3 . N o sulfu r retentio ni nbottom as hassumed . Impac t o f Difference s

1 . Permit s ANL Repor t t o examin e option s base d onth e us e o f very lo w sulfu r coa l (i.e. , emissio nlimit s a s lo w a s 0. 6 l bSO2/M

M Btu) .

2 . Decrease s cost s unde r th e regu lator y baselin e i nth e AN L Report , thu s increasin g th e cos t effective

nes s o f regulator y

options . 3 . N o impac t o noption s base d o n th e us e o f low

o r very

lo w sulfu r coal ; but , result s i n lowe r emissio nreductio ni n ANL Repor t fo r option s requirin g a percen t reduction , thu s increasin g th e cos t effectivenes s o f thes e options . c n

4 . T o accoun t fo r variabilty , RSD' s o f 10 % an

d 20% , assume d fo r fo r washe d an

d ra w coals ; no variabilit y

assume d i nFG D performance .

5 . "Mixed " regulator y baselin e o f 1. 2 o r 1. 6 l bSO2/M M Btu . 4 . T o accoun t fo r variability , RS D o f 20 % assume d fo r coa l and FG D performance .

5 . Singl e regulator y baselin e o f 2. 5 l bSO2/M

M Btu . 4 . Littl e o r n o impac t onoption s base d onlo

w o r ver y

low sulfu r coal ; result s i nlowe r emissio n reductio ni nAN L Repor t fo r option s requirin g a percen t reduction , thu s increasin g cos t effectivenes s o f thes e options . 5 . Decrease s emission s and increase s cost s i nth e ANL Repor t unde r th e regulator y

baseline ; increase s "average " cos t effectivenes s i n ANL Report .

T lP. 7

0. 6 l bSO2/M

M Btu . I

ncontrast , th e EP A analysi s i s limite d t o examinin g regulator y

alternative s base d o nth e us e o f lo

w sulfu r coa l wit hemissio n limit s onl y

a s lo w a s 1. 2 l bSO2/M

M Btu . I t i s no t possible , therefore , t o compar e conclusion s i nth e ANL repor t concernin g regulator y option s base d onth e us e o f ver y lo w sulfu r coa l wit hsimila r conclusion s i n th e EP A analysis . Th e EP A analysi s di d no t examin e suc halternatives . Beyond thi s differenc e i nassumption s regardin g th e availabilit y o f very lo w sulfu r coals , on e reaso nfo r th e apparen t differenc e i n conclusion s betwee nth e ANL repor t an d th e EP A

analysi s i s tha t th e AN L repor t examine d th e averag e cos t effectivenes s o f regulator y option s compare d t o th e regulator y baseline , bu t di d no t examin e th e incrementa l cost s effectivenes s amon g regulator y options . Th e EP A

analysi s examine d th e averag e cos t effectivenes s o f variou s regulator y alternatives , bu t focuse d o

nexaminatio no f th e incrementa l cos t effectivenes s amon g regulator y

alternatives . Anothe r reaso ni s tha t th e ANL repor t use d a differen t regulator y baselin e tha nth e EP A analysis . Th e AN L repor t assume d th e regulator y baselin e require s th e us e o f lo w sulfu r coa l (i.e. , eithe r 1. 6 o r 1. 2 l b SO2/M M Btu ) wherea s th e EP A analysi s assume d th e regulator y baselin e permit s th e us e o f mediu m sulfu r coa l (i.e. , 2. 5 l bSO2/M M Btu) . Th e impac t o f thes e late r two factor s ca nb e overcome , however , b y comparin g th e cos t effectivenes s betwee nsimila r regulator y option s an

d alternative s i nth e two analyses . Considerin g th e cas e o f a 10 0 M M Btu/h r boile r locate d i nRegio nV , fo r example , th e ANL repor t conclude s tha t th e cos t effectivenes s associate d wit ha regulator y optio nrequirin g a 9 0 percen t reductio ni nemission s ove r anoptio no f 1. 2 l bSO2/M M Btu , base d onth e us e o f lo w sulfu r coal , i s i nth e rang e o f $l,900/to n o f SO2 . Similarly , th e EP A analysi s conclude s tha t th e cos t effectivenes s associate d wit ha regulator y alternativ e requirin g a 9 0 percen t reductio n i nemission s ove r analternativ e o f 1. 2 l bSO2/M M Btu , base d o

nth e us e o f lo w sulfu r coal , i s i nth e rang e o f $l,700/to no f SO2 . Thus , focusin g onth e cos t effectivenes s betwee nsimila r regulator y option s o r alternative s essentiall y serve s t o reconcil e th e tw o analyse s wit hrespec t t o th e cos t effectivenes s associate d wit hoption s o r alternative s requirin g a percen t reductio ni nemissions . Thi s doe s not , onth e othe r hand , serv e t o reconcil e th e apparen t differenc e i nconclusion s betwee nth e two analyse s regardin g th e cos t effectivenes s associate d wit hregulator y option s o r alternative s base d onth e us e o f lo

w sulfu r coal . Fo r th e cas e cite d abov e o f th e 10 0 M M Btu/h r boile r locate d i nRegio nV , th e ANL repor t conclude s tha t th e cos t effectivenes s associate d wit ha regulator y optio no f 1. 2 l bSO2/M M Bt u ove r th e regulator y baselin e o f 1. 6 l bSO2/M M Bt u i s i nth e rang e o f $l,900/ton . I

ncontrast , th e EP A analysi s conclude s tha t th e cos t effectivenes s associate d wit ha regulator y alternativ e o f 1. 2 l bSO2/M M Bt u ove r analternativ e o f 1. 7 l bSO2/M M Bt u i s abou t $600/ton . Thi s discrepanc y

result s i nlarg e par t fro m th e differenc e i n assumption s betwee nth e AN L repor t an

d th e EP A

analysi s regardin g th eP. 8

cost s o f emissio nmonitorin g unde r th e regulator y baseline . Th e AN L repor t assume s tha t th e cost s associate d wit hSO 2 monitorin g technique s currentl y

use d b y many boiler s unde r th e regulator y baseline , suc ha s coa l samplin g an

d analysis , ar e negligible . I naddition , th e AN

L repor t als o assume s tha t suc htechnique s coul d no t b e use d t o monito r SO 2 emission s unde r regulator y option s base d o

nth e us e o f low

sulfu r coal .

A s a result , th e AN L repor t assume s ther e ar e no cost s associate d wit hemissio nmonitorin g unde r th e regulator y baseline . Th e cos t o f a continuou s emissio nmonito r i s assigne d t o regulator y option s base d on th e us e o f lo

w sulfu r coa l an

d additional , althoug hconsiderabl y lower , cost s fo r a secon d continuou s emissio nmonito r ar e assigne d t o regulator y option s requirin g a percen t reductio ni nemissions . (Th e second monito r i s neede d t o determin e th e percen t reductioni nSO 2 emission s achieved. )

Th e EPA analysis , o

nth e othe r hand , assume s tha t eithe r coa l samplin g an

d analysi s o r continuou s emissio nmonitorin g woul d b e use d t o monito r emission s unde r al l th e regulator y alternative s examined . I nth e cas e o f regulator y alternative s requirin g a percen t reductioni n emissions , coa l samplin g and analysi s coul d onl y b e use d t o monito r SO 2 emission s prio r t o th e flu e ga s desulfurizatio nsystem , however . Th e EP A analysi s als o assume s tha t existin g requirement s t o monito r SO 2 emission s unde r th e regulator y baseline , throug hth e us e o f suc h technique s a s coa l samplin g an d analysis , ar e effectiv e i ngeneratin g usefu l an

d reliabl e dat a fo r accuratel y assessin g emissio nlevel s fro m existin g sources . (Note : I f thi s wer e no t th e case , i t woul d impl y tha t enforcemen t personne l woul d b e unabl e t o effectivel y monito r th e complianc e statu s o f existin g source s an d enforc e existin g regulations. )

Studie s hav e show

ntha t th e cost s o f coa l sampling an d analysi s ar e generall y

o f th e same orde r o f magnitud e a s th e cost s o f a continuou s emissio nmonitorin g system , i f coa l samplin g an d analysi s i s use d t o generat e usefu l and reliabl e SO 2 emissio ndata . Thus , th e EP A analysi s assume s tha t th e cost s o f SO 2 monitorin g technique s use d b y boiler s unde r th e regulator y baseline , suc ha s coa l samplin g an d analysis , ar e significan t an

d tha t thes e cost s ar e comparabl e t o thos e o f a continuou s emissio nmonitor . Th e EP A analysis , therefore , view s th e cost s fo r a continuou s emissio nmonito r a s representativ e o f th e cost s o f coa l samplin g and analysis . Consequently , thes e cost s ar e assigne d t o th e regulator y baselin e a s wel l a s t o regulator y alternative s base d onth e us e o f lo w sulfu r coal . Cost s fo r a secon d continuou s emissio nmonitor , wit hno "discount " a s assume d i nth e AN L report , ar e assigne d t o regulator y alternative s requirin g a percen t reductioni nemissions .

I t shoul d als o b e note d i npassin g tha t th e EPA analysi s estimate s th e annua l cost s associate d wit ha continuou s emissio nmonito r fo r SO 2 emission s a s $50,000 . Adding continuou s emissio nmonitor s fo r opacit y an d nitroge noxide s (N0 X ) emission s increase s thi s t o abou t $110,000 .P. 9

8

Th e ANL report , o

nth e othe r hand , estimate s th e annua l cost s o f a continuou s emissio nmonito r fo r SO 2 emission s a s $110,000 . Consequently , i t appear s th e cost s o f emissio nmonitorin g i nth e ANL repor t associate d wit hregulator y

option s base d o

nth e us e o f lo

w sulfu r coa l actuall y represen t th e annua l cost s o f monitorin g particulat e matte r an d N0 X emissions , a s wel l a s th e annua l cost s o f monitorin g SO 2 emissions ; inappropriat e whe nattemptin g to asses s th e cos t effectivenes s associate d wit hregulator y

option s fo r contro l o f SO 2 emissions .

I nan y event , thi s differenc e i nassumption s regardin g th e annua l cost s o f emissio nmonitorin g unde r th e regulator y baselin e ha s a relativel y smal l impac t o

nth e cos t effectivenes s associate d wit hregulator y option s o r alternative s requirin g a percen t reductio ni nemissions . Du e t o th e differenc e i nth e assume d cost s o f addin g th e second monitor , th e tota l differenc e betwee nth e ANL repor t an d th e EP A

analysi s i n annua l monitorin g cost s i s onl y abou t $17,00 0 betwee noption s o r alternative s requirin g a percen t reductio ni nemission s and option s o r alternative s base d o nth e us e o f lo

w sulfu r coal . Thi s differenc e i nassumption s ha s a majo r impact , however , onth e cos t effectivenes s associate d wit hregulator y option s o r alternative s base d o nth e us e o f lo

w sulfu r coal . Du e to th e differenc e i nassumption s regardin g i nth e annua l cost s o f emissio nmonitorin g unde r th e regulator y baseline , th e tota l differenc e betwee nth e ANL repor t an d th e EP A

analysis, i nth e monitorin g cost s betwee nregulator y option s o r alternative s base d o nth e us e o f lo

w sulfu r coa l an

d option s o r alternative s reflectin g th e regulator y

baselin e i s $110,000 . Thi s significantl y increase s th e annua l cost s associate d wit hregulator y option s base d onth e us e o f lo w sulfu r coa l i nth e ANL repor t an d effectivel y

increase s th e cos t effectivenes s i nth e ANL repor t b y abou t $l,100/ton . Thus , i t i s responsibl e fo r mos t o f th e differenc e i nconclusion s betwee nth e ANL repor t an d th e EP

A analysi s regardin g th e cos t effectivenes s associate d wit hregulator y option s o r alternative s base d onth e us e o f lo w sulfu r coal . Th e ANL repor t an

d th e EP A

analysis , therefore , ar e generall y i n agreemen t wit hregar d t o th e cos t effectivenes s associate d wit hregulator y option s o r alternative s requirin g a percen t reductio ni nemissions . A s illustrate d b

y th e abov e exampl e fo r a 10 0 M M Btu/h r boile r locate d in Regio nV , bot hanalyse s conclud e tha t th e incrementa l cos t effectivenes s associate d wit hsuc hoption s o r alternative s ove r option s o r alternative s base d onth e us e o f lo w sulfu r coa l i s i nth e same genera l rang e (i.e. , $1,70 0 - $l,900/to nfo r th e exampl e cited) . Discountin g th e differenc e i nassumption s regardin g th e annua l cost s o f emissio nmonitorin g unde r th e regulator y baseline , bot hanalyse s ar e als o generall y

i nagreemen t wit hregar d t o th e cos t effectivenes s associate d wit hregulator y option s o r alternative s base d o nth e us e o f low sulfu r coa l (i.e. , 1. 2 l bSO2/M M Btu) . I

nth e exampl e cite d abov e fo r a 10 0 M

M Btu/h r boile r locate d i nRegio nV , fo r example , bot hth e ANL repor t an

d th e EPA

analysi s conclud e tha t th e incrementa l cos t effectivenes s associate d wit hsuc hoption s o r alternative s ove r option s o r alternative s base d o nth e us e o f lo

w sulfu r coa l to mee t a nemissio n limi t o f 1. 6 l bSO2/M M Bt u i s i nth e rang e o f $60 0 - 800/ton . (Note :P.1 0

Th e ANL valu e i s calculate db y subtractin g th e impac t o ncos t effectivenes s o f th e assumptio nregardin g emissio nmonitorin g cost s unde r th e regulator y baselin e [i.e. , $l,100/ton ] fro m th e cos t effectivenes s valu e o f $l,900/to n cite di nth e ANL report. )

Inadditio nt o examinin g th e cos t effectivenes s associate dwit h variou s regulator y

option s o r alternatives , bot hth e ANL repor t an dth e EPA analysi s examine dth e cos t effectivenes s associate dwit hth e additiona l emissio nreduction s achieve db y no t providin g emissio ncredit s fo r mixe d fue l fire dboiler s o r boiler s operatin g withi na cogeneratio nsystem . Th e ANL report , however , examine dth e cos t effectivenes s unde r regulator y option s base do

nth e us e o f very

lo w sulfu r coa l an

dregulator y

option s requirin g a percen t reductio ni nemissions , bu t di dno t examin e th e cos t effectivenes s unde r option s base do nth e us e o f lo

w sulfu r coal . Th e EPA analysi s examine dth e cos t effectivenes s unde r regulator y alternative s base do

nth e us e o f lo

w sulfu r coa l an

dregulator y

alternative s requirin g a percen t reductio ni nemissions . Th e two analyse s ca nno t be compared , therefore , wit hrespec t t o conclusion s regardin g emissio n credit s unde r regulator y option s o r alternative s base do nth e us e o f lo w sulfu r o r very

lo w sulfu r coals . Simlia r option s o r alternative s wer e no t examine di nth e two analyses . Th e two analyse s ca nb e compare ddirectly , o nth e othe r hand , wit h respec t t o conclusion s regardin g emissio ncredit s unde r regulator y option s o r alternative s requirin g a percen t reductio ni nemissions . Conclusion s regardin g emissio ncredit s ar e no t influence db y difference s i nassumption s regardin g th e regulator y baseline . A s a result , bot h analyse s reac hsimila r conclusion s wit hrespec t t o emissio ncredit s an dconclud e tha t th e cos t effectivenes s o f th e additiona l emissio n reduction s achieve db y no t providin g emissio ncredit s i s generall y i n th e rang e o f $30 0 - 400/ton .

REVIE W OF ANL "FINDINGS "

° ANL Findin g No . 1 : Th e baselin e emissio nrat e use db y EPA i s considerabl y

les s stringen t tha ntypica l emissio nrate s containe di nEPA-approve dpermits . Th e EP A analysi s o f th e propose dstandar dproduce dlowe r cost-effective

nes s value s tha nwoul doccu r i f typica l emissio nrate s wer e used . Th e followin g definitio no f th e regulator y baselin e wa s considere dt o be appropriate , base do

nEPA an dStat e permi t data : (1 ) 1. 2 l bSO2/I O Bt ufo r boiler s >25 0 xIO 6 Btu/h r nationwid e an dfo r boiler s >10 0 xIO 6 Btu/h r i nRegion s V I an dVIII-X , (2 ) 1. 6 l bSOo/10 6 Bt ufo r boiler s greate r tha n10 0 an

dles s tha n25 0 x10 6 Btu/h r i nRegion s I- V an dVII .

° Discussio n Thi s i s no t correct . I nfac t th e two analyse s diffe r very littl e wit hrespec t t o th e cos t effectivenes s associate dwit hregulator y option s o r alternative s requirin g a percen t reductio ni nemissions ,P.1 1

! 0

a s illustrate d b

y th e exampl e discusse d abov e comparin g th e result s o f th e two analyse s fo r boiler s locate d i nRegio nV . I nthi s case , bot h analyse s conclud e tha t th e cos t effectivenes s o f emissio ncontro l i s i nth e rang e o f $1,70 0 - $l,900/ton . Onth e othe r hand , ther e doe s appea r t o b e a significan t differenc e betwee nth e two analyse s wit hregar d t o th e cos t effectivenes s o f emissio ncontro l associate d wit hregulator y option s o r alternative s base d o nth e us e o f lo

w sulfu r coal . A s illustrate d b y th e exampl e discusse d abov e fo r Regio nV , th e AN L repor t conclude s thi s cos t effectivenes s i s i nth e rang e o f $l,900/ton ; th e EP A analysi s conclude s tha t i t i s i nth e rang e o f $600/ton . A s discusse d above , thi s discrepanc y betwee nth e two analyse s i s no t th e resul t o f a differenc e i nregulator y baselines , bu t th e resul t primaril y o f a differenc e i nassumption s regardin g th e annua l cost s o f emissio nmonitorin g unde r th e baseline . Th e ANL repor t assume s th e annua l cost s o f emissio nmonitorin g unde r th e regulator y baselin e ar e negligible , wherea s th e EP A analysi s assume s thes e cost s ar e significant . Thus , th e AN L repor t effectivel y add s th e cost s o f emissio nmonitorin g t o th e incrementa l cost s o f contro l i nestimatin g th e cos t effectivenes s associate d wit hregulator y option s base d onth e us e o f lo w sulfu r coa l ove r th e regulator y baseline . Th e EP A analysis , o

nth e othe r hand , effectivel y add s n o additiona l cost s fo r emissio nmonitorin g t o th e incrementa l cost s o f contro l i n estimatin g th e cos t effectivenes s o f regulator y alternative s base d o n th e us e o f lo

w sulfu r coa l ove r th e regulator y baseline . A s a result , th e cos t effectivenes s o f emissio ncontro l associate d wit hregulator y option s o r alternative s base d o nth e us e o f low

sulfu r coa l ar e muc h highe r i nth e ANL repor t tha ni nth e EP A analysis .

I naddition , a s mentione d above , i t als o appear s tha t th e ANL repor t substantiall y overestimate s th e cost s o f emissio nmonitorin g b y usin g th e cost s fo r monitorin g opacity , N0 X , an d SO 2 emission s rathe r tha njus t thos e fo r monitorin g SO 2 emissions .

I nan y event , i t i s no t th e differenc e i nregulator y baseline s tha t i s primaril y

responsibl e fo r th e lowe r cos t effectiveness , bu t th e differenc e i nassumption s regardin g th e annua l cost s o f emissio nmonitorin g unde r th e regulator y baseline . Assumin g suc hcost s ar e significan t appear s mor e appropriat e tha nassumin g the y ar e negligibl e a s i nth e AN L report . Assumin g thes e cost s ar e negligibl e beg s th e questio no f how worthwhil e curren t effort s ma y b e t o monito r th e complianc e statu s o f boiler s subjec t t o existin g Stat e and Federa l regulation s limitin g SO 2 emissions .

° AN L Findin g No . 2 :

Fo r 10 0 xIO 6 Btu/h r boiler s i nRegion s III , V , an d VIII , cost effectivenes s estimate s ar e $l,700-$2,500/ton . Fo r 25 0 and 40 0 xIO 6 Btu/h r boilers , cost-effectivenes s estimate s ar e abou t $1,50 0 an d $l,000/ton , respectively .P.1 2



### 1 1

0 Discussio n

A s illustrate dabove , th e EP A analysi s als o conclude s tha t th e cos t effectivenes s o f emissio nreductio nassociate dwit hregulator y alternative s requirin g a percen t reductio ni nemission s i s inthi s rang e cite di nth e AN L report . Unlik e th e ANL report , however , th e EP A analysi s conclude s th e cos t effectivenes s o f emissio ncontro l associate dwit hregulator y alternative s base donth e us e o f lo w sulfu r coa l i s significantl y lowe r tha nth e cos t effectivenes s o f emissio ncontro l associate dwit hregulator y alternative s requirin g a percen t reductio ni nemissions . A s als o discusse dabove , thi s i s du e primaril y t o th e differenc e i nassumption s betwee nth e tw o analyse s regardin g th e annua l cost s associate dwit h emissio nmonitorin g unde r th e regulator y baseline .

° AN L Findin g No . 3 : Unde r emissio nlimitatio noptions , th e minimum cost-effectivenes s fo r al l boile r size s andregion s correspond s wit hemissio nceiling s i n th e 0.7-1. 0 l bS0 2 /10 b /Bt u range . T o mee t thi s limit , thes e boiler s us e cleane dcoal . Lowe r emissio nceiling s necessitat e us e o f FG D system s andresul t i nsubstantia l incrementa l cos t increases . Th e mos t cost-effectiv e emissio nceilin g fo r 10 0 x10* > Btu/h r boiler s i nal l thre e region s i s 0. 8 l bS0o/1 0 , whic hi s achieve db y burnin g cleane dcoal . Fo r 40 0 x10 & Btu/h r boiler s i nRegion s V an d VIII , cleane dcoa l combustio ni s th e least-cos t metho dfo r meetin g 0. 9 an d0. 7 l bSO2/I O Bt uemissio nceilings , respectively . Fo r lowe r ceilings , FG D system s ar e selected .

0 Discussio n Thi s i s no t correct . I f th e objectiv e i s t o identif y thos e option s wit hth e lowes t cos t effectivenes s levels , th e AN L repor t appear s t o indicat e tha t anemissio nlimitatio no f 0. 2 l bSO2/M M Bt uha s th e lowes t cos t effectivenes s level . Thi s i s show

nb y figure s i nth e ANL repor t plottin g cos t effectivenes s verse s emissio nreduction . Th e minimum cos t effectivenes s i nthes e figure s fo r 10 0 M

M Btu/h r boiler s i nRegion s II I an dV i s anemissio nlimitatio n of 0. 2 l bSO2/M

M Btu . I

nRegio nVIII , a 0. 2 l bSO2/M M Bt uemissio n limitation , ha s th e sam e cos t effectivenes s a s tha t associate dwit hemissio n limitation s of 0. 7 - 1. 0 l bSO2/M M Btu . Simila r figure s wer e no t include di nth e ANL repor t fo r boiler s o f 40 0 M M Btu/hr . I t shoul dals o b e note dtha t thes e sam e figure s show tha t th e cos t effectivenes s level s associate dwit hregulator y option s requirin g a 9 0 percen t reductio ni nemission s ar e lowe r tha no r th e same a s thos e associate dwit hemissio nlimitation s i nth e rang e o f 0. 7 - 1. 0 l bSO2 / M M Btu .1 2

0 ANL Findin g No . 4 :

A CE M requiremen t distort s th e cos t an dcost-effectivenes s o f compliance-coa l option s versu s technology-dependen t approache s suc ha s FGD . Fo r some smal l boilers , th e annua l cost s o f monitorin g woul d excee dth e annua l cost s o f emission s compliance . Cost-effectivenes s estimate s ar e sensitiv e t o CE M requirement s fo r al l emissio nceilings . Eliminatin g th e CEM requiremen t fo r coal-fire d boiler s meetin g emissio nceiling s withou t th e us e o f FG D system s change s cost-effectivenes s estimate s fro m $800/to nt o ove r $2,000/to nfo r 10 0 xIO 6 Btu/h r boilers . Difference s fo r 25 0 x10 6 Btu/h r boiler s ar e abou t $500/to nan

d$l,000/to ni neaster nandwester nregions , respectively .

° Discussio n

A s discusse dabove , th e majo r differenc e betwee nth e ANL repor t an dth e EPA

analysi s concern s th e cos t effectivenes s associate dwit h regulator y

option s o r alternative s base do nth e us e o f low

sulfu r coa l A s als o discusse dabove , thi s differenc e i s du e primaril y t o th e differenc e i nassumption s regardin g th e annua l cost s o f emissio nmonitorin g unde r th e regulator y

baseline . Th e ANL repor t assume s tha t th e annual - cost s o f emissio nmonitorin g unde r th e regulator y

baselin e ar e negligible . I naddition , th e ANL repor t appear s t o substantiall y ove r estimat e th e cost s o f monitorin g SO 2 emission s unde r regulator y option s base do

nth e us e o f lo

w sulfu r coa l b y includin g cost s fo r monitorin g opacit y an dN0 Xemission s a s wel l a s SO 2 emissions . Wit hthes e assumptions , a s th e ANL repor t concludes , monitorin g cost s substantiall y impac t th e cos t effectivenes s o f regulator y option s base do

nth e us e o f lo

w sulfu r coal . Th e question , therefore , i s whic hassumptio nregardin g monitorin g cost s unde r th e regulator y baselin e i s mor e appropriate ; tha t use di n th e ANL repor t tha t an y cost s ar e negligible , o r tha t use di nth e EPA analysi s tha t suc hcost s ar e significant . Boiler s subjec t t o existin g Stat e o r Federa l requirement s unde r th e regulator y

baselin e generall y

us e a continuou s emissio nmonito r o r coa l samplin g an

danalysi s t o monito r SO 2 emissions . Onc e generated , thes e dat a ar e use dt o monito r th e complianc e statu s o f thes e boilers . Studie s hav e show

ntha t th e cost s o f coa l samplin g an danalysi s ar e comparabl e t o thos e fo r a continuou s emissio nmonito r whe ncoa l samplin g an danalysi s i s use dt o generat e reliabl e an daccurat e dat a concernin g SO 2 emissions . Thus , i t seem s mor e appropriat e t o assum e tha t th e annua l cost s o f emissio nmonitorin g unde r th e regulator y baselin e ar e significan t rathe r tha nnegligible . I f they ar e assume dt o b e negligible , i t call s int o questio nth e valu e o f curren t effort s t o monito r th e complianc e statu s o f existin g boilers .P.1 4

1 3

° ANL Findin g No . 5 : Th e incrementa l cost s fo r no t allowin g credi t fo r a coal-fire dboile r i na combined-cycl e cogeneratio nsystem (receivin g 2 5 percen t o f it s hea t inpu t fro

m oil-fire dturbin e exhaust ) rang e fro m a fe w hundre dt o a fe w thousanddollar s pe r to no f SO2 . Fo r boiler s receivin g 2 5 percen t o f thei r hea t inpu t fro

m wood , th e incrementa l cost s o f no t allowin g credi t fo r th e nonfossi l fue l us e ar e simila r t o th e cogeneratio nvalues . Nonfossi l fue l credit s ca nb e significan t fo r coal-fired , combined-cycl e cogeneratio no r multifue l boiler s i nsituation s wher e ther e i s a margina l choic e betwee ncomplianc e coa l andFGD . Fo r certai nemissio nceilings , th e credi t ma y

allow us e o f lowe r cos t complianc e coa l options .

0 Discussio n

A s discusse dabove , wher e th e two analyse s ca nb e compared , th e ANL repor t an

dth e EP A

analysi s examinin g th e cos t effectivenes s associate dwit hth e additiona l emissio nreduction s achieve db y no t providin g emissio ncredit s fo r mixe dfue l fire d boiler s an dboiler s withi ncogeneratio nsystem s reac hessentiall y th e sam e conclusions . Unde r regulator y

option s o r alternative s requirin g a percen t reductio n i nemissions , thi s cos t effectivenes s i s generall y i nth e rang e o f $30 0 - 400/ton . Th e two analyse s ca nno t b e compare dwit hrespec t t o conclusion s regardin g th e cos t effectivenes s unde r regulator y option s o r alternative s base do nth e us e o f lo

w sulfu r coal . Th e ANL repor t onl y examined th e cos t effectivenes s unde r regulator y option s base do

nth e us e o f ver y low sulfu r coal . Th e EP A analysi s onl y

examine dth e cos t effectivenes s unde r regulator y

alternative s base donth e us e o f lo w sulfu r coal . Th e two analyses , therefore , di dno t examin e simila r option s o r alternatives . A s mentione di nth e abov e finding , however , cos t effectivenes s level s highe r tha n$30 0 - 400/to noccu r i nsome case s unde r regulator y option s base donth e us e o f ver y lo w sulfu r coa l i nth e ANL report . As discusse di nth e repor t an dinferredi nthi s finding , thes e highcos t effectivenes s level s generall y resul t whe nanemissio nlimi t i s base d o nth e us e o f very

lo w sulfu r coa l an

dthi s emissio nlimi t i s s o lo w tha t i t effectivel y

require s th e us e o f a flu e ga s desulfurizatio n (FGD ) system . I

nthes e cases , anemissio ncredi t ca nb e significan t enoug htha t i t "relaxes " th e emissio nlimi t sufficientl y t o permi t th e us e o f low

sulfu r coa l rathe r tha nanFG D system . Thus , th e emissio n credi t effectivel y

change s th e basi c approac hemploye dt o reduc e SO 2 emissions . Generally , emissio ncredit s ar e no t thi s significant . I nmos t cases , th e effec t o f anemissio ncredi t i s merel y t o reduc e th e degre e o f emissio ncontro l necessary , bu t no t chang e th e basi c approac huse d t o reduc e emissions . Fo r example , unde r option s o r alternative s base do nth e us e o f low sulfu r coal , anemissio ncredi t generall y onl y permit s a highe r sulfu r coa l t o b e fire di nth e boiler ; unde r option s o r alternative s requirin gP.1 5

1 4

a percen t reductio ni nemissions , anemissio ncredi t generall y onl y permit s a lowe r percen t reductio nt o b e achieve db y a nFG D system . I

n bot hthes e cases , th e cos t effectivenes s o f th e additiona l emissio n reduction s achieve db y no t providin g emissio ncredit s i s i nth e rang e o f $30 0 - 400/ton . A s mentioned , however , i nsom e o f th e case s examine di nth e ANL report , th e emissio nlimi t associate dwit hanoptio nbase donth e us e o f ver y lo w sulfu r coa l ca nb e s o lo w tha t i t result s i nth e us e o f an FGD , rathe r tha nth e firin g o f a ver y low sulfu r coal . I

nthes e cases , a nemissio ncredi t ma y b e significan t enough , i nterm s o f effectivel y raisin g th e emissio nlimit , tha t wit hanemissio ncredi t th e boile r n o longe r use s anFG D syste m t o reduc e emissions , bu t fire s a very lo w sulfu r coal . Inthes e cases , th e cos t effectivenes s o f th e additiona l emissio n reduction s achieve db y no t providin g anemissio ncredi t ca nb e i n th e rang e o f severa l thousan ddollars , a s cite di nth e abov e finding . Thi s hig hcos t effectiveness , however , i s no t s o muc ha reflectio n o f th e cos t effectivenes s generall y associate dwit hno t providin g emissio ncredits , bu t a reflectio no f th e highe r cos t effectivenes s associate dwit hth e us e o f FG D system s t o reduc e SO 2 emission s compare d t o th e us e o f lo

w sulfu r coa l t o reduc e emissions .

o ANL Findin g No . 6 : Th e EP A coa l cos t dat a appeare dto o hig hwit honl y mino r variation s i ncos t a s a functio no f sulfu r conten t an dwit hn o ver y

low sulfu r coal s available . Cos t effectivenes s estimate s base do nth e AUS M coa l dat a ten dt o b e slightl y lowe r tha nthos e base donth e EP A dat a fo r 10 0 xIO 6 Btu/h r boiler s andslightl y large r fo r 25 0 an

d40 0 xIO 6 Btu/h r boiler s i nRegion s II I an dV . InRegio nVIII , th e AUS M dat a resul t i nsubstantiall y

highe r cos t effectivens s estimate s (e.g. , $5,740/to n compare dt o $2,160/to nfo r meetin g a 0. 6 l bSO2/I O Bt uceilin g fo r a 25 0 x10 6 Btu/h r boiler) .

0 Discussio n

- --• ' —- i A s discusse dabove , a significan t differenc e betwee nth e ANL repor t andth e EP A

analysi s concern s th e availabilit y o f ver y

lo w sulfu r coal . Th e ANL repor t implicitl y assume s tha t coa l deman dfrom ne w industria l boiler s wil l b e sufficien t t o resul t i nproductio no f suc hcoals , primaril y throug hincrease dcoa l washing . Sinc e utilit y

boiler s consum e abou t 9 0 percen t andindustria l boiler s onl y

consum e abou t 1 0 percen t o f th e steam coa l consume di nth e Unite dStates , th e EPA analysi s assume s tha t coa l market s andcoa l washin g practice s ar e determine dprimaril y b y th e need s an

ddemand s o f utilit y boilers , no t industria l boilers . Consequently , th e EP A analysi s assume s tha t coa l deman dfro m ne w industria l boiler s i s no t sufficien t t o significantl y

chang e existin g coa l market s o r curren t coa l washin g practice s and , a s a result , ver y lo w sulfu r coal s ar e no t considere d generall y

available .P.1 6



### 1 5

Althoug hth e coa l price s use di nth e EP A analysi s ar e consistentl y abov e th e adjuste dAUS M coa l price s cited , coa l price s b y themselve s ar e relativel y

unimportan t interm s o f assessin g th e cos t effectivenes s associate dwit hreducin g SO 2 emissions . Wha t i s importan t i s th e sulfu r premiu

m o r th e differenc e i npric e betwee nlow andhig hsulfu r coals . A s show nb y figure s i nth e ANL report , th e sulfu r premiu m i nth e EP A coa l price s an

dth e adjuste dAUS M

coa l price s ar e quit e simila r i n Region s II I an

dV . InRegio nVIII , however , th e AUS M coa l price s d o show a highe r sulfu r premiu m tha nth e EP A

coa l prices . Thi s highe r sulfu r premiu

m explain s th e highe r cos t effectivenes s valu e cite d abov e fo r boiler s locate di nRegio nVIII . Unfortunately , th e ANL repor t provide s n o explanatio no f why th e sulfu r premiu

m i nRegio n VII I i s s o hig hand , a s a result , provide s n o basi s fo r attemptin g t o reconcil e thi s differenc e i nsulfu r premiums .

0 ANL Findin g No . 7 : Projection s o f th e amoun t o f coa l burne di nnew industria l boiler s ar e contingen t onassumption s abou t futur e fue l prices . Base do na simplifie dcompariso no f tota l levelize dcost s fo r coal - an doil-fire d boilers , oi l price s woul dhav e t o ris e t o $35-$45/bb l i norde r fo r coa l t o compet e effectivel y a s anindustria l boile r fuel . Wit hnatura l ga s an dresidua l oi l price s projecte dt o b e $26/bb l an d$24/bb l (i n198 3 dollars ) i nth e yea r 2000 , respectively , ther e i s littl e incentiv e t o construc t th e ne w

coal-fire dindustria l boilers . Thus , EP A ma y b e over statin g th e environmenta l benefit s (i.e. , reduce demissions ) o f th e propose drevision .

0 Discussio n Projection s o f th e amoun t o f coa l likel y t o b e fire di nnew

industria l boiler s ar e sensitiv e t o projection s o f futur e fue l price s (i.e. , natura l gas , oil , an

dcoal) . Th e EP A

nationa l impact s analysi s supportin g th e propose dNSP S considere dtw o energ y pric e projection s (i.e. , energ y scenarios) . Th e energ y scenari o considere dmos t likel y wa s tha t referre d t o a s th e "highoi l penetration " scenario . Unde r thi s energ y scenario , coa l wa s projecte dt o accoun t fo r onl y 5 percen t o f th e energ y consume d i nne w industria l boilers . Natura l ga s wa s projecte dt o accoun t fo r abou t 3 0 percen t an

doi l fo r abou t 6 5 percent . Anothe r energ y

scenari o wa s als o considered . Unde r thi s energ y scenario , terme dth e "hig hcoa l penetration " scenario , coa l wa s projecte d t o accoun t fo r abou t 5 7 percen t o f th e energ y consume di nnew

industria l boilers . Natura l ga s wa s projecte dt o accoun t fo r abou t 4 2 percen t an d oi l wa s projecte dt o accoun t fo r abou t 1 percent . Bot henerg y

scenarios , therefore , wer e quit e differen t i nthei r projecte dfue l mi xi nnew industria l boilers . Sulfu r dioxid e emissions , however , wer e significan t unde r eithe r scenario . Unde r th e hig hoi lP.1 7

1 6 penetratio nscenario , annua l SO 2 emission s o f som e 28 0 thousan dton s wer e projecte dandunde r th e highcoa l penetratio nscenario , annua l SO 2 emission s o f som e 32 5 thousan dton s wer e projected . Thus , whethe r man y

coa l fire dindustria l boiler s ar e constructe d o r not , ne w

sourc e performanc e standard s limitin g SO 2 emission s from ne w industria l boiler s ca nhav e significan t environmenta l benefits . I f energ y

price s ar e suc htha t few coa l fire dboiler s ar e constructed , thes e benefit s resul t primaril y from reducin g SO 2 emission s fro m oi l fire dboilers . Eve ni f onl y

a few coa l fire dindustria l boiler s ar e constructed , however , th e environmenta l benefit s o f standard s limitin g SO 2 emission s from suc hboiler s ar e significant . A typica l 15 0 M

M Btu/h r coal-fire d boile r firin g a medium sulfu r coal , fo r example , result s i nSO 2 emission s i nth e rang e o f 80 0 tons/yr , i f uncontrolled . Eve nfirin g a lo w sulfu r coal , thi s boile r coul demi t som e 40 0 tons/y r o f SO 2 emissions . Thus , eve nth e benefit s o f reducin g SO 2 emission s fro m a singl e coal-fire d boile r ar e considere dsignificant .