### DRAFT

MEMORANDUM

TO: Misha Adamantiades, CAMD

FROM: Bansari Saha, Bibhakar Shakya, Kelsey Read, ICF International

DATE: February 25, 2011

RE: Employment Estimates of Direct Labor in Response to the Proposed Toxics Rule in 2015 – DRAFT

Introduction

This technical support document (TSD) presents estimates for the direct job impacts of the proposed Utility Air Toxics Rule (Toxics Rule). The focus of the employment analysis in this study is only on the short-term direct jobs related to the compliance actions of the affected entities within the power sector. It does not include the ripple effects of the estimated direct jobimpacts on the broader economy (the “multiplier” effect), nor does it include the wider economywide effects of the changes to the energy markets (such as higher electricity prices). Moreover, this study provides only a static snapshot of the impacts for 2015 and does not account for the dynamic adjustments of the affected entities as they adapt to the Toxics Rule, such as those arising from technological innovation and learning-by-doing.

The estimates of the job impacts are divided into several categories: job gains due to the increased demand for pollution control equipment; job losses due to retirements of fossil generation; and job shifts due to changes in demand for fuels. Results indicate that the Toxics Rule has the potential to provide significant sh ort-term employment opportunities, primarily driven by the high demand for new pollution control equipment. The job gains due to new pollution control requirements are likely to be tempered by some job losses due to plant retirements, although, as discussed below, many of these workers who lose their jobs due to plant retirements could find replacement jobs operating the new pollution controls at nearby units. Finally, job losses due to reduced coal demand are likely to be neutralized by job gains due to increased natural gas demand, resulting in small positive net change in jobs due to fuel demand changes. Overall, the preliminary results indicate that the Toxics Rule could support a net of about 40,000 to 50,000 job-years in 2015. These results are summarized in Table 1
below.

Table 1: Net Employment Changes (Job-years in 2015)

New Pollution Control Equipment 45,058 ‐ 55,501

Retirements of Generating Units (5,720)
Changes in Fuel Use 427

Net Effect 39,765 ‐ 50,208

The job-years estimated here is a snapshot of the di rect employment effect of the Toxics Rule in



### 1

### DRAFT

2015. While there is no temporal dimension to this study, most of these jobs are likely to last over an extended time period, some more than the others. Most of the construction related jobs, for example, are expected to provide a s hort-term, temporary boost to employment that could last a few years, along with any multiplier effects that are not included in these job-year estimates. Most of the operational jobs are likely to be more long term. Thus, in terms of the impacts of the Toxics Rule on economy-wide empl oyment over time, this study shows there could be a significant temporary spurt to employment levels starting before 2015, which would likely recede thereafter as the construction phases for the needed pollution controls wind down. Over time, the operational jobs will continue to provide a small boost to employment over “business as usual” baseline employment levels. Note that this synopsis does not account for other employment impacts of the Toxics Rule, like those resulting from higher energy prices.

Overall Approach

The estimates for direct employment effects of the proposed rule utilize basic methodologies to estimate these job impacts relying on approache s used in prior EPA studies on similar issues. The basic approach involved using power sector projections and various energy market implications under the Toxics Rule from the Integrated Planning Model (IPM), along with data from secondary sources, to estimate the first order job impacts for 2015. Throughout this analysis, incremental employment is measured in job-years, since there is no temporal dimension to the analysis currently. 1 Also, this TSD does not include estimates of total direct employment impacts over time, though there is a distinction between short-term construction jobs and more long-term operational jobs for new pollution controls (though these operational jobs are also measured in 2015 job-years only).

Jobs gains due to new pollution control equipment

IPM projections for the proposed Toxics Rule policy case were used to estimate the incremental pollution control demand. These are shown in Table 2 below: 2

Table 2: Increased Retrofit Demand due to the Toxics Rule, 2015 (GW)

Retrofit Type IPM Projected Additional
Pollution Control
Scrubbers (FGD) 22
Selective Catalytic

Reduction (SCR) 3

Activated Carbon 92

1 A job-year is defined as the amount of work that can be performed by the equivalent of one full-time individual for one year (or FTE).

2 According to IPM, there is a fair amount of ov erlap between the different types of pollution control equipment demand at individual facilities. To the extent that there could be some efficiency gains at plants installing multiple controls due to economie s of scale, the job estimates presented here could overstate the impacts.



### 2

### DRAFT

Injection (ACI) Dry Sorbent Injection (DSI) 55

Fabric Filter (FF) 108.5 ‐ 158.5

Incremental fabric filter (FF) capacity is defined by a range because in the IPM policy case modeling, EPA assumes FFs are necessary for all coal and solid-oil derived fuel-fired electric generating units (EGU) to meet the standard for particulates (PM). EPA believes this could be a conservative assumption, and the data collected under the Information Collection Request (ICR) suggests that some EGUs may be able to meet the total PM standard without installing FFs. Based on this data and the PM factors used in IPM, EPA estimates potentially 50 GW of existing capacity may not actually require this pollution control for compliance with the proposed Toxics Rule. Therefore, the IPM-based estimate which requires FF at all affected units (158.5 GW) may overstate the employment estimates. Hence, this study also included a lower bound FF estimate (50 GW less to 108.5 GW) and a corresponding lower bound of the pollution control job impacts using this lower FF estimate. 3 The range of job-year estimates discussed below are thus all defined as a function of which FF requirement is assumed.

The job impacts due to increased pollution control demand are divided into four categories: short-term labor needed for constructing and installing the pollution controls, which were further subdivided into types of installation labor (such as boilermakers, engineers and other installation labor) and steel manufacturing labor. Additional estimates are also provided for longer-term operational requirements for the pollution controls, including jobs in sectors that supply resources needed to run these pollution control equipment (e.g., reagents) and utility sector jobs to operate the pollution controls. The following sections discuss the approach for each:

• For the installation related construction labor, per-unit labor needs were taken from an extensive 2002 EPA resource analysis for multi-pollutant strategies that analyzed the resource requirements for installing various pollution control equipment (FGD, SCR, and ACI). 4 For those equipment that were not in cluded in the 2002 EPA study (DSI and FF), additional information was supplied by Andover Technology Partners (ATP), which was also one of the contributors of the 2002 EPA study. Using the same resource requirement approach as done in the 2002 EPA study, ATP provided estimates of unit labor needs based on scaling the labor requirements for ACIs (to derive estimates for DSI) and SCRs (to derive estimates for FFs). 5 Thus, all of the unit labor needed for different pollution control installations can be traced back to the 2002 EPA study, with appropriate engineering adjustments. The installation labor was sub-classified into

3 As these costs may be overstated, the IPM results ma y also overstate natural gas and retail electricity impacts, as well as plant closure decisions. Those changes are not studied in the lower bound job estimate, only changes in pollution control equipment were adjusted.

4 “ Engineering and Economic Factors Affecting the Installation of Control Technologies for Multi-pollutant Strategies ”. EPA/ORD, 2002.

5 DSI and Fabric Filter System Installation Labor Estimate. Memorandum by Andover Technology Partners to ICF International. January 26, 2011.



### 3

### DRAFT

different labor categories, such as boilermakers, engineers and a catch-all “other installation labor”, using information from the 2002 EPA study, adjusted for the new pollution controls (FFs and DSIs).

• In addition to construction labor, it was assumed that installing the pollution controls requires labor for steel as the primary raw material, leading to jobs in the steel manufacturing industry. Again this approach is consistent with the 2002 EPA study. The increased steel demand is estimated using the per-MW steel demand from the EPA study along with the estimated increase in pollution controls. For DSI and FF, the same proportionality assumption is taken from ATP for installation labor to estimate the steel
needed for installation.

• For the longer term direct jobs associated with operating the pollution controls, per-unit estimates of the main resources needed for these equipment (see Table 3 below for a list of the resources) are taken from the 2002 EPA study, augmented by DSI resource
use estimates from ATP. Resources needed for FF were estimated from the incremental Variable Operation and Maintenance (VOM) costs from IPM. 6 7 These were then multiplied by the incremental GW for each pollution control to obtain the total (physical) quantity of resources needed. 8 Total tonnage for each resource was then converted to dollars of increased economic output for these resources using price estimates obtained from publicly available sources (see Table 3). Finally, the labor productivity for each particular sector was used to estimate the number of job-years these would likely create in 2015. Labor productivities for each sector were adjusted to account for increased worker productivity in 2015. Data for baseline worker productivity and corresponding growth rates to account for future productivities came from the Economic Census and the Bureau of Labor Statistics (BLS) estimates. 9

• The final jobs vector estimated was related to the utility sector jobs required to operate these pollution control equipment. This estimate was based on the incremental Fixed Operation and Maintenance (FOM) costs from IPM outputs, excluding costs due to
retirements. 10 The assumption in this TSD was that the FOM costs – which, in IPM, are defined as the maintenance costs incurred by the utility irrespective of whether the equipment is operated (such as those for payroll) – are a good proxy for estimating the incremental demand for jobs that would be needed to operate these pollution controls. The FOM costs were then translated into employment based on estimates of payroll per

6 Because FF requirements are not endogenously determi ned in IPM, it required a different approach than the other controls.

7 For the lower bound job-year estimates, the FF VOM cost was scaled down proportionately from the VOM cost estimate for 158.5 GW.

8 Except for Ammonia, where the usage was calc ulated based on the total predicted NOx reduced, consistent with the 2002 EPA study approach.

9 Total value of shipments in 2007 and total employees were taken from 2007 Economic Census, Statistics by Industry for Mining an d Manufacturing sectors. The average annual growth rate of labor productivity was taken from the Bureau of Labor Stat istics. Average growth rate calculated for years 1992-2007, applied to 2007 productivity to determine 2015 estimates of productivity. For steel, limestone, ammonia and SCR catalyst, the value of shipments and employment estimates were taken from the 2000 Survey of Manufacturers.

10 For the lower bound job-year estimates, the FOM co st used for the operating labor calculations was scaled down proportionately to reflect the lower level of FF pollution controls (50GW out of 330 GW).



### 4

### DRAFT

worker for the power sector taken from the 2007 Economic Census and BLS.
estimates. 11

Table 3: Estimated Pollution Control Resource Needs (Quantity and Prices Used)

Amount of Resource Used Price Used ($/unit)

Steel (tons) 364,287

– 435,365 $ 550
Limestone, FGD (tons) 7,157,631 $ 75 12

Ammonia, SCR (tons) 57,860 $ 150 Catalyst, SCR (m3) 3,874 $ 8,475

Activated Carbon, ACI (tons) 50,701 $ 1,120

Sodium Bicarbonate, DSI (tons) 12,254,403 $ 120 Price Sources: Steel: Platts, Steel Markets Daily, Vo l 3 Issue 209, October 29, 2009. Limestone: FGD Tech Evaluation, March 2007. Ammonia: Development of Supply Curves for Abat ement of GHG from Coal-fired Utility Boilers, Air Pollution Prevention and C ontrol Division, US-EPA, RTP and NC State University, 2009. Catalyst: EPA Air Pollution Control Cost Manual, Sixth Edition, January 2002. ; Activated Carbon: Preliminary Cost Estimate of ACI fo r Controlling Hg Emission, US DOE, NETL, November 2003. Sodium Bicarbonate: Communication with Andover Technology Partners, Feb 7, 2011.

Results

Table 4 presents the estimated job impacts in 2015 resulting from the additional pollution controls needed to meet the Toxics Rule requirements. The Toxics Rule is estimated to lead to a total capital investment of about $55 to $60 billion in order for the regulated entities to meet the limits under the proposed rule (This capital cost will be amortized over many years). According to this analysis, these investments co uld provide the opportunity to create or support about 45,000 to over 55,000 job-years to design, construct, and operate the needed pollution control equipment in 2015. Note, some of these jobs are expected to start before, and continue beyond 2015 (such as the resource related job-years), but this analysis only provides a snapshot for 2015.

Table 4: Jobs Due to Pollution Control Retrofits under the Toxics Rule (Job-years in 2015)

Jobs for Construction Incremental Employment

1. Boilermakers 13,804 - 18,110

2. Engineers 3,412 - 4,082

3. General Construction 14,189 - 18,782

11 Same sources as other productivity estimates (2007 Economic Census and BLS), however, uses employees and total payroll rather than revenue or value of shipments.

12 The limestone price used is for a dry FGD. This pr ice is significantly greater than the wet FGD price. This price was used because IPM predicts only 1 GW of incremental wet FGD compared to 26 GW of dry FGD.



### 5

### DRAFT

4. Steel Manufacturing 430 - 514

Sub-Total: 31,835 - 41,592 Jobs for Operation
Jobs from Increased Operating
Resource Use

1. Limestone (FGD) 2,130

2. Ammonia (SCR) 18

3. Catalyst (SCR) 104

4. Activated Carbon (ACI) 90

5. Sodium Bicarbonate (DSI) 6,138

6. Baghouse material (FF) 62 - 90

Sub-Total: 8,542 - 8,571
Jobs for Retrofit Operation 4,681 - 5,443

Total Labor: 45,058 - 55,501

The number of job-years estimated for pollution control installation is driven in large part by the very high demand for new FFs used in IPM. As shown in Table 1, up to 158.5 GW of new FF capacity is projected to come online in 2015 due to the Toxics Rule, which is about 66 GW more than ACI, the next highest. This high demand for new FFs is estimated to contribute between about 65 and 75 percent of the new jobs resulting from the installation of pollution controls, depending on the range for incremental FFs shown in Table 1. Moreover, of the jobs due to increased resource use, the sodium bicarbonate required for DSI is estimated to support significantly higher number of jobs than the other resources. This is because the DSI technology requires significantly higher quantities of reagents than the other pollution controls, according to the ATP report. The second highest resource-related job gains would likely come from the limestone requirements for the scrubbers in response to the Toxics Rule.

Of the 45,000-56,000 job gains estimated in Table 4, roughly 10 percent are estimated to occur within the utility sector for labor needed to operate the pollution controls. The rest of the labor demand will benefit the pollution control industry and other economic sectors. The increased demand for resources and chemicals needed to operate the pollution controls will provide a boost to employment in sectors such as mining, chemicals, and other manufacturing sectors. The majority of the direct jobs, however, are likely to benefit construction-related sectors, such as construction boilermaker, heavy engineering and other heavy construction sectors, due to the needs for constructing and installing the new pollution controls.

Job losses due to coal retirements

Job losses due to plant retirements were estimated by first identifying the retiring units 13 from

13 Oil and gas steam unit emissions requirements, and pot ential retirements, were not directly included in IPM modeling under the Toxics Rule policy scenario. An analysis of these units was conducted



### 6

### DRAFT

IPM results (for the base and the Toxics Rule policy cases). EPA projects that there will be roughly 10.2 GW of additional coal retirements by 2015 with the Toxics Rule in place. 14

In order to convert the retired capacity into pot ential job losses, it was assumed that changes in the operating costs for electricity generation can be used as a proxy for the lost economic output due to fossil retirements. Thus, the changes in the O&M costs (both FOM and VOM) for these particular retiring units were derived using IPM outputs, and converted to lost jobs using data from the Economic Census and BLS output/worker estimates for the utility sector. 15 Table 5
shows those results.

Table 5: Job Losses due to Coal Capacity Retirements

O&M Decrease from Retirements ($MM) 658

Workers Per Million$ in payroll 8.7

Workers lost due to retirements (man-year): 5,720

Results indicate there could potentially be about 5,700 job losses (measured in job-years for 2015, but any net job losses under this category are likely to be permanent), due to coal retirements. However, two mitigating factors could reduce the negative job impacts due to retirements. First, many of the retiring units are at plants that are likely to have other units operating under the policy scenario. In such cases, some of the excess labor pool at the retiring
units could well be absorbed at other units within the same firm. 16

Second, as Table 4 indicates, utilities are ex pected to have the need to fill over five thousand additional job slots to operate the pollution controls needed to meet the requirements of the Toxics Rule. If workers with experience at existing coal facilities become available through plant retirements, it would seem logical for many of these workers to be absorbed in operating these new pollution controls. While it is not possible to determine how many of these workers from particular coal retirements could be employed to oper ate the new pollution controls, it is likely that a significant portion of them could find gainful employment at nearby units.

Job losses due to changes in fuel use

Two types of job impacts due to projected fuel use changes are estimated from IPM. First, job
losses due to reductions in coal demand were estimated using an approach similar to EPA’s

separately, and to the extent that there may be some retirements of oil and gas units, then the estimates of potential job losses due to retirements provided here will understate job losses.

14 Retirement estimates are based on IPM System Summary Reports. Where applicable, data from IPM parsed outputs were adjusted to account for partial retirements reported in the parsed outputs.

15 As before, the same sources but using workers and total payroll.

16 According to the IPM results, about 70 percent of t he coal retirements (in terms of capacity) occur at plants with other operating units under the Toxics Rule policy case.



### 7

### DRAFT

coal employment analyses under Title IV of the Clean Air Act and the Clear Skies Act. 17 18 Using this approach, IPM projected coal demand changes (in short tons) for various coal supplying regions were converted to job-years using EIA data on regional coal mining productivity (in short tons per employee hou r), using 2008 labor productivity estimates. 19 20 Results of the coal employment impacts of t he Toxics Rule are presented in Table 6 below.

Table 6: Employment Due To Changes in Coal Use

Coal by Region Change in Coal Demand (MM Tons) Labor Productivity Job-year Change

Appalachia (17.0) 2.91 (2,812)

Interior 10.7 4.81 1,071

West (13.3) 19.91 (321)

Waste Coal (0.7) 5.96 (58)

Net Total (20.3) -- (2,120)
Note: Used US national coal productivity for waste coal.

For natural gas demand, the incremental expenditure on natural gas from IPM projections was used as the basis for employment estimates, combined with productivity data for the oil and gas industry taken from the 2007 Economic Census. Those estimates were used as a proxy to estimate changes in production amounts in physical quantities into jobs estimates for the oil and gas mining sector. In addition, the projected capital cost estimates for new pipeline capacity needed to meet the 2015 demand levels from IPM were also used, and translated into employment using worker productivity esti mates for the pipeline construction sector. 21 These
results are summarized in Table 7 below.

Table 7: Total Employment Impact due to Changes in Fuel Use (2015)
Fuel Type Employment

Coal Job Years Lost (2,120)

Natural Gas

17 CSA Technical Package, Section D. Projec ted Impacts on Generation and Fuel Use.
18 Impacts of the Acid Rain Program on Co al Industry Employm ent. EPA 430-R-01-002 March 2001.

19 From US Energy Information Administration (EIA) Annual Energy Review, Coal Mining Productivity Data. Used 2008.

20 Unlike the labor productivity estimates for various equipment resources which were forecasted to 2015 using BLS average growth rates, we used the most recent historical productivity estimates for fuel sectors. In general, labor productivity for the fuel sectors (both coal and natural gas) showed a significantly higher degree of variability in recent years than the manufacturing sectors, which would have introduced a high degree of uncertainty in forecastin g productivity growth rate s for future years.

21 Same Economic Census 2007 source as used prev iously. Because BLS does not have growth rate data for the construction sector, and to maintain cons istency with coal and natural gas data, we did not forecast this productivity but used the most recent available 2007 value.



### 8

### DRAFT

Change in Fuel Expenditure ($MM) 3,427

Worker Per Million in Revenue 0.65

Job-years gained 2,242

Gas Pipeline Capital Cost for New Pipeline Capacity (US total: MM $/year) 59.2

Workers/million $ in Pipeline Construction 5.1

Job-years gained 305

Net Employment Effects of Fuel use changes 427

About 2,100 job losses in the coal mining sector are likely to be more than outweighed by the gains in the production and transportation-related jobs in the natural gas related sectors. Thus, net employment impacts of fuel use changes in 2015 are likely to be minimal, because of shifts in demand for particular fuels.

Conclusion

Overall, the Toxics Rule is expected to provide a significant boost to short-term employment resulting from substantial investments in new pollution control equipment. The Toxics Rule is estimated to lead to a total pollution control-related capital investment of about $55 to $60billion, and results for 2015 indicate this could support or create around 40 to 50 thousand jobyears, driven primarily by the need to design and construct the needed equipment. While there are expected to be some job losses due to coal re tirements that will likely have a negative effect on some utilities and the coal mining sector, job gains in pollution control operation activities and the natural gas sector are likely to offset some of those losses. As previously discussed, this assessment does not account for the long run economy-wide effects of the proposed Toxics
Rule.

The employment impacts estimated in this st udy are mostly based on approaches in prior EPA studies on similar topics. The main source fo r resource estimates used here is the 2002 EPA multi-pollutant resource analysis, which was also the basis for subsequent EPA labor analyses, such as the 2005 Clean Air Interstate Rule (CAIR) TSD on boilermaker labor. 22 Thus, results presented here are consistent with EPA’s assessment from the 2002 and the 2005 studies.

22 CAIR Technical Support Document. Boilermaker Labor Analysis and Installation Timing. March 2005.



### 9

### DRAFT

Appendix

This Appendix provides further details on the inputs and methodology used in the labor calculations presented above. The Appendix begins with the pollution control labor section, presenting the inputs for the four primary sections of equipment labor and describing the process by which the labor estimates were obtai ned from the available data, followed by similar discussions for coal retirements and fuel use change employment analysis.

Pollution Control Equipment Labor

• Installation Labor

Table A-1: Installation Labor Requirement

Retrofit

Type Incremental GW Installed Manhours/MW Boilermakers (%) Engineers (%) Others (%)

FGD 22 760 40 20 40

SCR 3 700 45 7 48

ACI 92 10 50 17 33

DSI 55 44 50 17 33

FF 158.5 398 45 7 48
Source: EPA Multi-pollutant Strategies 2002 report; DSI and FF adjustm ents based on Andover Technology Partners.

Installation labor is estimated by using the incremental GW installed for each pollution control type from IPM. This was then converted into total man-hours needed for installation using estimates of man-hours/MW from the 2002 EPA study , supplemented by information from ATP. Total man-hours for each pollution control type were then converted into man-years assuming 2080 working hours per year.

Total man-years for each pollution control type were then broken down into various sectors using the percentages, shown in Table A-1. These percentages were estimated from the 2002 study and supplemented by ATP information for DSI and FF.

• Installation Resource Labor

Table A-2: Installation Resource Needs

Retrofit Type Steel (Tons/MW)

FGD 2.25

SCR 2.5



### 10

### DRAFT

ACI 0.35

DSI 2.2

FF 1.42
*Direct workers per $Million in Output forecast to 2015. (Sources: Steel and Catalyst Us age: EPA Multi-pollutant Strategi es 2002 report; Steel Price: Platts, Steel Markets Daily, Vol 3 Issue 209, October 29 2009; Productivity: 2000 Economic Census, BLS for Productivity Growth Rate

For installation resource labor, steel is the primary resource input used for new pollution control installations, consistent with the 2002 EPA multi-pollutant study. The first step used the incremental installed pollution control capacity and estimates of steel usage (tons/MW), as shown in Table A-2 above, to calculate the total steel needed in tons, by pollution control type. Steel usage estimates were used from the 2002 EPA study, supplemented by ATP information for DSI and FF. The total amount of steel was then converted into a dollar value for steel expenditure using an average steel price ($550/ton), using data from Platts Steel Markets Daily (see notes to Table A-2 above). Resulting total steel expenditure was then converted to labor using the productivity estimates calculated from the Economic Census data using direct workers per $ Million in total output for the iron and steel manufacturing industry (= 2.1 workers/$Million). 23

• Operating Resource Labor

Table A-3: Resources Needed for Operation

Retrofit

Type Incremental Total GW (Includes Existing Units) Resource (Units in parenthesis) Usage Estimates Price ($/unit) Productivity*

FGD 27 Limestone (Tons/MWh) 0.036 75 4.0

SCR 4.5 (NOx reduction:

296,731,400 lbs) Ammonia (lbs/lb NOx Reduced) 0.39 150 2.1

Initial Catalyst (m3/MW) 1.2

8,475 3.2 Operational Catalyst (m3/MWh) 0.00002

ACI 92 Activated Carbon (Tons/MWh) 0.000074 1,120 1.6

DSI 55 Sodium Bicarbonate (Tons/MWh) 0.03 120 4.2

23 In general, the productivity estimates for various se ctors were derived using data from the 2000 or 2007 Economic Census. These were then forecasted to 2015 using corresponding average growth rates estimated using data from the Bureau of Labor Statisti c (BLS) information on productivity growth rates.



### 11

### DRAFT

FF 158.5 Bag-house Resources *Resource Labor determined Using VOM cost for FFs 0.6

*Direct Workers/$Million in Output, Forecasted to 2015 Sources: Usage: EPA Multi-pollutant Strategies 2002 report, DSI from Andover Technology Partners; Prices: Limestone: FGD Tech Evaluation, March 2007 Ammonia: Development of Supply Curves for A batement of GHG from Coal-fired Utility Boilers, Air Pollution Prevention and Control Division, US-EPA, RTP and NC State University, 2009 Catalyst: EPA Air Pollution Control Cost Manual, Sixth Edition, January 2002. Activated, Carbon: Prelim. Cost Estimate of ACI for Controlling Hg Emission..., NETL. November 2003 Sodium Bicarbonate: Communication with Andover Technology Partners, Feb 7 2011; Productivity: 2000 and 2007 Economic Census , Productivity Growth rates from BLS.

Labor related to resources used in operating pollution control equipment was estimated using the total incremental GW of pollution control capacity which was first converted to total MWh of incremental capacity assuming 85 percent capacity factor. For each pollution control type, the next step involved choosing the primary operating resource, except for SCRs for which two resources – ammonia and catalyst – were chosen. 24 This approach is consistent with the 2002 EPA study. The next step involved estimating th e resource needs by each control type, generally in tons of material (m3 for catalyst), using the resource usage estimates as shown in Table A-3. 25 Using the total usage for each pollution control input (in tons or m3) and associated average prices, total expenditure by each resource type was then calculated. This total expenditure was then converted to labor using direct workers per $Million in total output for the industry associated with producing each respective input material. 26

• Operating Labor

Table A-4: Operating Labor Assumptions
Incremental FOM from IPM Parsed ($ Billion) 4.35

FF Capital Cost Included in FOM ($ Billion) 2.99

FGD Improvement included in FOM ($ Billion) 0.73

Remaining FOM used to find O&M Labor ($ Million) 626.2

Productivity* 8.7 *Direct Workers per $Million in Payroll for Elec tricity Generating Sector, Forecast to 2015 Sources: Productivity from 2007 Economic Census and Growth Rate from BLS.

Labor requirement to operate the controls is estimated for all equipment types combined, using the incremental FOM costs from IPM. The IPM in cremental FOM cost estimate included capital

24 SCRs have an operational input of catalyst as well as an initial input needed when the unit is first installed. While the initial value is calculated using only the installed new control capacity, that number and the associated labor needs are included to estimate the total volume of catalyst required.

25 Ammonia has a usage rate based on lbs of NOx reduced, so we estimated our ammonia usage using the total NOx reduced between the base and policy cases.

26 Fabric filters follow a different pattern. Instead of a resource usage estimate, we used the VOM cost for FFs and converted this to jobs using the direct workers per milli on dollars output for the relevant manufacturing industry sector.



### 12

### DRAFT

costs for fabric filter and scrubber improvement costs, which were first subtracted to obtain the true FOM costs ($626.2 million). Resulting FOM cost estimate was then converted to labor needs using the direct workers/$ Million in total payroll for the Electric Generating Sector.

Retirement Labor

Table A-5: Inputs to Labor from Retirements O&M Decrease from Base to Policy Case From Parsed (BC_3e and BC_24) ($MM) 725.2

Capacity of Incremental Retirements in Parsed (MW) 11,211

Capacity of Incremental Retirements in SSR (MW) 10,173

O&M Decrease scaled to SSR Retirements ($MM) (To account for Partial Retirements) 658.06

Workers Per $Million in payroll, forecast to 2015 8.692
Sources: Productivity from 2007 Economic Census and Growth Rate from BLS.

Retirement labor was estimated by first identifying the retiring units from IPM parsed outputs (using incremental retirements in the policy case). The next step involved estimating the capacity of incremental retirements as well as the change in the O&M costs due to these retirements. Because of the discrepancies between partial retirements in IPM parsed outputs and System Summary Reports (SSR), O&M costs were scaled proportionately to reflect the lower SSR-based estimates, as shown in Table A-5 above. O&M cost decreases were then converted to job-years lost due to retirement s using workers per $Million in payroll.

Fuel Use Labor

Table A-6: Inputs to Labor for Fuel Use
Coal by Region 2015 Incremental Fuel USE (Tons) 2008 Short Tons/Employee hour
Appalachia (17,020,000) 2.9

Interior 10,720,000 4.8

West (13,310,000) 19.9

Waste Coal (720,000) 5.9

Natural Gas Change In Fuel Expenditure ($MM) Productivity *

3,426.50 0.65

Pipeline Capital Cost of New Pipeline ($MM) Productivity *

59.2 5.1
*Direct Workers per $Million in Output for Crude Petroleum and Natural Ga s Extraction, and for



### 13

### DRAFT

14 Pipeline Construction. Sources: Productivity from 2007 Economic Cens us, Short Tons per hour from US EIA, Coal Industry Annual.

Fuel use related job impacts were estimated by using IPM results for incremental changes in coal and natural gas use (policy case over the base case). For coal, estimates of coal use in tons by region from IPM were used in conjunction with labor productivity estimates from the EIA for each region (in short tons/ employee hour), to calculate the change in job-hours needed. These were then converted to job-years, assuming 2080 working hours per year. As discussed in the main report above, because of the high variability in coal mining labor productivity in recent years, no attempt was made to forecast coal (and natural gas, for consistency) productivities, instead the most recent historical estimates were used in this TSD (which was the 2008 labor productivity for coal).

For natural gas, incremental change in fuel costs from IPM (policy case over the base case) was used, along with 2007 Economic Census data on productivity in workers per $million in output for the natural gas industry. These were then used to estimate the increased labor demand for natural extraction services. For pipeline capacity, a similar approach was applied, using the capital cost of new pipeline (from IPM) and labor productivity for the pipeline construction sector to estimate the labor needs. For both cases, to be consistent with coal and again because of the variability, most current confirmed productivity estimates from 2007 were used in the job-year calculations.