Legal Analysis Supporting Listing Railr oad Tie Fuel as a Nonwaste under 241.4(a) (January 15, 2014)

As noted in the February 2013 final NHSM Rule, in December 2012 EPA received a draft petition from American Forest & P aper Association (AF&PA) and American Wood Council (AWC) seeking listing of creosote and borate treated railroad ties as a nonwaste fuel. In the preamble to the F ebruary 2013 final NHSM rule, EPA identified
additional information needed to co mplete its review of creos ote treated railroad ties and stated the following:

Assuming that the additional information supports and supplements the representations made in the petitioner’s December 6, 2012 draft petition, the EPA also expects to propose a categorical lis ting for this materi al. To the extent that petitioners would like to provi de additional information, the Agency will
consider such information as well.

78 Fed. Reg. at 9173.

Since developing the February 2013 final NHSM Rule, EPA has received additional
information from several entities. In January 2013, EPA received data on the polynuclear aromatic hydrocar bon (PAH) content of creosote treated railroad ties from
the Association of American Railroads. On February 27, 2013, American Forest & Paper Association and America Wood Counc il submitted a paper that responded to the questions raised in the February 2013 preambl e on behalf of members of the forest products industry. Also in February 2013, EPA received a petition to list cross-tie derived fuel from M.A. Energy Resources, LLC (MAER), a company that specializes in collecting, handling, processing, and distribu ting specification railroad tie fuel. The MAER petition also responded to the questi ons raised in the February 2013 preamble, providing information relating to a variety of industries that utilize railroad tie fuel. On December 4, 2013, EPA received a petiti on from the Treated W ood Council seeking a
nonwaste determination for several treated w oods, including creosote treated wood. Finally, on December 19, 2013, EPA received additional information from American Forest & Paper Association and the Americ an Wood Council regarding the regulation of emissions from the forest products industr y boilers that combust railroad tie fuel.

This record supports an EPA determination that creosote and borat e treated railroad ties, when collected, processed to meet sp ecifications, and then combusted in stoker, bubbling fluidized bed, circulating fluidized be d or hybrid suspension grate boilers, or
boilers that co-combust railroad ties with other fuels to maintain appropriate Btu levels,
are not waste when combusted. Based on this record, EPA could propose to list such
creosote and borate treated railroad ties as a non-waste fuel under section 241.4(a), as
follows:

Railroad ties treated with creosote or creosote and borate that have been processed to meet specifications and combusted in stoker, bubbling fluidized2 bed, circulating fluidized bed, or hybr id suspension grate boilers or are combusted as part of a fuel mix to maintain a Btu level that is appropriate for the
boiler.

Listing under section 241.4(a) will allow the continued combustion of railroad ties because (1) a 241.4(a) listing eliminates the need to make individual non-waste determinations for combustors of process ed railroad ties and, (2) for a subset of combustors, a 241.4(a) listing balances the legitimacy criter ion for comparable
contaminant levels with record evidence sho wing that the contaminants in railroad ties
are not combusted for the purpose of discard.

To determine that railroad ties are a non-waste fuel notwithstanding the fact that they are combusted by third parties, EPA can rely on the extensive information in the record regarding the companies that recover and process railroad ties for use as fuel; the management of railroad ties by processors and by combustors; and the fact that processed railroad ties are commodities that meet a product specific ation and are sold in the marketplace. This information is suffi cient to demonstrate that railroad ties are processed into a fuel product. 1

According to EPA, a determination that railroad ties are processed into a fuel product is not, by itself, sufficient to support a categorical non-waste determination for railroad ties. The legitimacy criteria also are relevant. There is ample evidence in the record that railroad ties are managed as a valuable co mmodity, have meaningful heating value, and are used as a fuel to generat e energy and therefore always wi ll meet two of the three legitimacy criteria. With respect to the c ontaminant legitimacy criterion, the record
shows that railroad ties have contaminants at levels that are lower than or comparable
to the traditional fuels that multi-fuel combustion units (s toker, bubbling fluidized bed, circulating fluidized bed, or hybrid sus pension grate boilers) are capable of burning 2 and can be designed to burn, 3 i.e., coal, biomass, and oil. Specifically, the contaminant levels in railroad ties are comparable to coal and biomass for all contaminants except
PAHs and the PAH levels are lower than ar e found in fuel oil. Thus, for some combustors, whose boilers are currently designed to burn fuel oil, railroad tie fuel meets the contaminant legitimacy criterion. Howe ver, for boilers that no longer possess the equipment needed to deliver oil or may elimi nate that equipment in the future, the
railroad tie fuel will not meet the contaminant legitimacy criterion. 4

1 See AF&PA petition; MAER petition. These petitions address the fact pattern where the processor and the combustor are separate entities and the combusto rs are purchasing the fuel. These facts provide very strong support for a conclusion that combustors do not combust railroad tie fuel to dispose of it. However, the same conclusion holds if the processor is also the combustor. In that case, the processor obtains railroad ties from railroads and expends resour ces to create a fuel product. The only difference is that the processor would then keep the fuel and comb ust the fuel itself rather than selling it.

2 Each of these boiler types can accommodate fuel oil burners and delivery systems.

3 With the appropriate burners and fuel delivery equipment.

4 This statement applies only to creosote treated railr oad ties. EPA has already determined that borate treated railroad ties meet the legitimacy criteria. 76 Fed. Reg. 15456, 15484 (Mar. 21, 2011).3 In such a case, EPA requires additional evidence to support a non-waste determination.
See 40 C.F.R. 241.4(b)(5)(ii) (requiring evidence showin g, “[w]here any one of the legitimacy criteria in § 241.3(d)(1) is not met, that the use of the non-hazardous secondary material is integrally tied to t he industrial production process, that the nonhazardous secondary material is functionally the same as the comparable traditional fuel, or other relevant fa ctors as appropr iate.”).

As described below, EPA can rely on evidence of the motivation of the combustor and
evidence that railroad tie fuel is functionally the same as co mparable traditional fuels to further support a proposal to lis t railroad ties as nonwaste fuel.

1. Motivation of the combustor.

While higher contaminant levels can be an indication that a NHSM is combusted to discard the contaminant, the record demonstrat es that discard is not a motivation for
combustion of railroad ties. The motivation of the combustor is a relevant factor that can be balanced with the legitimacy criteria. See American Petroleum Institute v. EPA, 216 F.3d 50, 58 (DC Cir. 2000) (recognizing the motivation is relevant to a nonwaste determination).

The record amply supports a determination that the PAH levels in railroad tie fuel are
not evidence of an intent to discard PAHs when the railroad ties are combusted in stoker, bubbling fluidized bed, circulating fluidized bed, or hybrid suspension grate boilers. These boilers are categorically ca pable of combusting oil, and in many cases were designed to and did combust oil in the past. As a result, railroad tie fuel combusted in many of these boilers has met or currently meets the contaminant legitimacy criterion. However, in re sponse to new Clean Air Act regulations promulgated for boilers, many combustors have discontinued or are discontinuing the use of fuel oil in their boilers and, to ma ximize boiler efficiency, are removing fuel oil delivery equipment. The change in the fuel mi x for these boilers is a strategy for Clean Air Act compliance and therefore is not evidence of intent to discard PAHs. Further, the removal of a fuel oil delivery system does not result in a change in the applicability of Clean Air Act regulations to the boilers or in the pollution control equipment employed. 5

There also is substantial record evidence s howing that railroad tie fuel is a commodity that is produced to specification and is bought and sold in commerce under a wide variety of commercial arrangements. As noted above, a common arrangement involves a third party that obtains ra ilroad ties, processes them in to a fuel product that meets customer specifications, and sells the finished fuel product to combustors. 6 These facts clearly demonstrate that us e as a fuel, and not dispos al of PAHs or any other contaminants, is the motivation for the combus tion of railroad tie fuel by the purchaser. It also is possible for a person to obtain ra ilroad ties, do their own processing to meet

5 See AF&PA-AWC power point presentation fr om December 19, 2013 meeting.

6 As described in the AF&PA petition, these facts are reflective of the practices in the forest products industry.4 their own specifications, and combust the finished fuel product themselves. 7 Under this scenario too, resources are ex pended to obtain railroad tie fuel, strongly supporting a
conclusion that the motivation for combus tion is the production of energy, not the
discard of railroad ties.

Finally, the record shows that creosote us ed to treat railroad ties is governed by standards established by the American W ood Protection Association (AWPA). AWPA has established two blends of creosote, P1 /P13 or P2. These standards identify the
source material for creosote as well as t he physical-chemical c haracteristics of the pesticide product. Railroad ties are typically manufactured using the P2 blend. Thus,
the constituents found in cr eosote treated railroad ties ar e not added for the purpose of discarding those constituents; there is no “sham recycling” when railroad tie fuel is
combusted. 8

2. Functionally the same.

Under the NHSM regulations, where the wei ght of evidence shows that a fuel is functionally the same as a co mparable traditional fuel it is not a waste when combusted,
even if it does not meet one of the legitimacy criteria. See 40 C.F.R. 241.4( b)(5)(ii).

The record supports a determination that the weight of evidence s hows that railroad tie fuel is functionally the same as comparable traditional fuels. For example, there are industry sectors that are dependent on the combus tion of biomass material to maintain economic viability. 9 Biomass contains useful heat valu e but can contain a large amount of moisture, which, when combusted, can affect the thermal efficiency of the boiler. To help maintain good combusti on efficiency, combustors o ften co-combust biomass with fuels that have a higher Btu value. Fossil fuels can serve this function, but railroad tie fuel can serve it equally well. Thus, the use of railroad tie f uel is functionally the same as comparable traditional fuel when it is used in a fuel mix to maintain a Btu level that is appropriate for the boiler.

A finding of functional equivalency is further supported by the fact that stack emissions
of the contaminant at issue for railroad tie fuel, namely PAHs (since PAHs are higher in railroad ties than in coal or biomass), are controlled in the same way as all organic constituents present in the ot her fuels used by the boilers that combust railroad tie fuel, i.e., through good combustion efficiency. Good co mbustion efficiency is demonstrated by compliance with CO limits for major Boiler MACT sources and work practice
standards for area Boiler MACT sources. PAH stack emissions are not directly a
function of the PAH levels in railroad ties. 10 The attached NCASI compilation provides

7 These facts are reflective of the practices of some combustors outside the forest products industry.

8 MAER petition, at 2-9.

9 See comment submitted by Paul Noe, Vice Presi dent for Public Policy, American Forest & Paper Association, et al., EPA document no. EPA-HQ-RCRA-200 8-0329-1946.

10 See NCASI analysis on “The Air Emissions Impact of Bu rning Railroad Tie-Derived Fuel,” January 15, 2014 (attached).5 examples where emissions of PAHs when burn ing railroad ties were closer to the lower end of the emissions range associated with burn ing biomass or coal. This observation is not surprising given that PAH emissions ar e not directly a function of PAH content in
fuel and reduced when the robustness of com bustion increases. The use of dry fuels with high heat value, like railroad ties, genera lly improves combustion, thereby reducing products of incomplete combustion like PAHs . Without good combus tion efficiency, far higher PAH levels could be created during com bustion. Supplementin g a lower Btu fuel with a higher Btu value fuel, like railroad ti es, increases combustion efficiency and reduces PAH levels (as well as emissions of CO and VOCs and other contaminants) in
emissions.

Conclusion

EPA can balance the contaminant legitimacy crit erion with the facts th at railroad tie fuel is processed into a fuel that meets spec ifications, is a valuable commodity, is combusted in boiler types that are categoric ally capable of combusting fuel oil, is functionally the same as comparable traditi onal fuel that is o ften co-combusted with lower Btu fuel, is subject to the same emis sions controls as the comparable traditional fuels it replaces in such boilers, and cont ributes to good combustion efficiency thereby reducing pollutant emissions. Based on th at balance, EPA can determine that railroad
ties treated with creosote or creosote an d borate that have been processed into specification fuel for the combustor are not a waste when combust ed in stoker, bubbling fluidized bed, circulating fluidi zed bed, or hybrid suspension gr ate boilers or boilers that
co-combust railroad ties with lower Btu fuels to maintain a Btu leve l that is appropriate
for the boiler.

EPA can request comment on any other relevant factors to be balanced and other ways that railroad tie fuel may be functionally the same as comparable traditional fuel.