44 Canal Center Plaza ▪ Suite 310 ▪ Alexandria, Virginia 22314 ▪ Tel: (703) 684

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May 8 , 2012

Ms. Susan Fairchild Sector Policies and Programs Division Metals and Minerals Group (D243

- 02) Office of Air Quality Planning and Standards U.S. Environmental Protection Agency

109 T

. W

. Alexander Drive Research Triangle Park, NC 27711

RE: Follow

- Up To April 30 , 2012 Meeting W ith NAIMA’s Mineral Wool Production

Members

Dear Ms. Fairchild :

The North American Insulation Manufacturers Association (“NAIMA”) and its mineral wool production members appreciated the opportunity to meet with the Environmental Protection Agency (“EPA”) on April 30 , 2012

. This letter provides additional information responsive to EPA’s questions at that meeting. This letter does not substitute for or replace the more extensive comments submitted by NA IMA on February 3, 2012.

ECONOMIC IMPACT OF EPA’S PROPOSED RULE

Proposed Limits Will Necessitate Additional Control Equipment

In two separate statements, EPA has indicate d that “Mineral Wool Production Facilities will be able to comply with the proposed amendments without having to install additional control technologies such as RTOs” 1 and that “[b]ased on the emissions data available to the EPA, we

believe that all facilit ies will be able to comply with the proposed emission limits for COS, HF, HCl, formaldehyde, phenol, and methanol without additional controls because they can reduce emissions using raw material substitution or oxygen injection.” 2

These statements are why the economic impact assessment concluded that the Proposed Rule would not have an adverse economic impact on the mineral wool industry. The problem with these statements is that they are erroneous.

1 76 Fed. Reg. at 72,805.

2 76 Fed. Reg. at 72,804.Ms . Susan Fairchild May 8, 2012 Page 2

The limits proposed by EPA will require installation of additional control equipment. Moreover, EPA’s proposed raw material substitution, contrary to EPA’s unfounded conclusions, is neither feasible nor is it desirable. As a result, a core assumption underlying the proposal is inaccurate, which fundamentally undermines the entire Proposed Rule.

During the April 30 meeting, NAIMA stated that various companies would cease to operate if changes to the Proposed Rule

– specifically the proposed emission limits

– were not made.

Mr. Steve Fruh asked why this was n ot reflected in the economic assessment. The answer to that question is as stated above. Set forth herein are other specifics about the economic impacts of the Proposed Rule.

Economic Downturn

The majority of the mineral wool companies ( five of the si x companies ) are small businesses

. All companies supply products to the building industry. The current economic downturn has been particularly severe for mineral wool companies since the building industry is experiencing the greatest downturn since build ing growth measurements were first taken in the 1950s. If

additional controls are required because the emission limits are so stringent, multiple companies will be forced to shut down operations.

Why? The answer is quite simple. Technological controls are costly. Given current economic conditions, additional technological controls will force multiple companies out of business. Moreover, installation of many of these additional pollution control s will have adverse environmental impacts.

Specifically, to meet the proposed COS limits, some companies will be required to install an incinerator to meet specific limits. Other companies may be required to install a wet or dry

scrubber for HF and HCl emissions . Installation of such equipment could have astro nomical economic repercussions for these companies and will force some out of business.

Price Waterhouse Economic Impact Analysis

In 1999, NAIMA commissioned Price Waterhouse to conduct an economic impact analysis on the proposed Mineral Wool Production MACT Standard. 3 NAIMA would like to have conducted another economic impact analysis, but the resources already expended on EPA’s successive MACT rulemakings makes such a project impossible. Nonetheless, the 1999 Price Waterhouse analysis is instructive.

The Price Waterhouse analysis indicated that it would take three years of income at 1995 income levels to pay the capital costs of installing an incinerator. According to Price Waterhouse, capital control costs for a cupola incinerator would be almost 2 5 percent of the rock and slag wool industry’s assets.

3 The Price Waterhouse report is available upon request.Ms . Susan Fairchild May 8, 2012 Page 3

One of the tests for adverse economic impact is the ratio of absorbed annual control costs to net income before tax. The Price Waterhouse report stated that ratio of absorbed control costs to

pre

- tax profits is estimated to range from 94.9 to 118.5 percent depending on the elasticity of

demand for miscellaneous non

- bonded products.

The report further states that the economic impact of the proposed MACT then under consideration “would be substantially reduced if the standard were modified to eliminate the requirement for a cupola incinerator because this requirement accounts for most of the estimated

annual control costs.”

The estimated costs of wet and dry scrubbers would pose similar threats. While the Price Waterhouse report dates back to 1999, the conditions for the mineral wool industry are certainly more dire than in 1999. If technological requirements threatened to destroy the mineral wool industry in 1999, it is not difficult to extend that s ame logic to 2012.

The unrealistic and unachievable emission limits discussed herein would be devastating to the majority of the mineral wool industry. Moreover, such an outcome is inconsistent with the legislative history of the Clean Air Act, which mak es clear that the MACT standards were not intended to force the shutdown of facilities. H.R. Rep. No. 101

- 490(I) at 335 (1990) (“MACT is not intended to . . . drive sources to the brink of shutdown.”) S. Rep. No. 101

- 228 at 152 (1989) (“Controls which ar e so expensive that they force closure of the source or would severely impair its continuation as an economic entity are not ‘available.’” 4 )

Third Party and Company Cost Estimates

Many of the Proposed Rule’s emissions limits require additional technolog ical controls. The installation of these controls would not only be economically devastating to the mineral wool industry, but it would not be cost

- effective for reducing hazardous air pollutants. Generally, EPA has found that requiring costs over a spec ified dollar amount per ton as unreasonable. 5
Thus, a decision to modify the emission limit to avoid requiring additional control equipment is

consistent with well

- established precedent in other MACT standards. This point is particularly potent when cons idering the fact that EPA is trying to control/reduce a pollutant

– COS

– that occurs largely in nature. EPA cannot control the largest emitter of COS, so it should not threaten the very existence of an industry over a pollutant that nature itself produce s in abundance.

As noted above, incineration and the use of wet scrubbers have environmental consequences of their own. Specifically, incineration of cupola emissions results in secondary emission of NOx

and SO 2

. 6

Based on mineral wool manufacturers’ ex perience and cost estimates, each incinerator could cost between $3 to $6 million. This cost is excessive in a number of ways, but its excessiveness

4 “Available” refers to available technological controls.

5 59 Fed. Reg. 25,387, 25,391 (May 16, 19 94)

. 6 Environplan, “Secondary NOx and SO 2 Emissions From Incineration of Cupola Exhaust In Slag Wool Manufacturing Plants,” June 25, 1996 ( see Appendix C to NAIMA’s February 3, 2012 comments)

.Ms . Susan Fairchild May 8, 2012 Page 4

appears most inappropriate when viewed in light of the pollutant that is being regulated

– carbonyl sulfid e; nature is the largest contributor of carbonyl sulfide to the atmosphere.

Specific cost estimates provided by a leading equipment manufacturer 7 are as follows:

• Sodium Bicarbonate Injection System: $1,886,188

• Regenerative Thermal Oxidizer, 240,000 CF M: 8 $7,832,471

• Regenerative Thermal Oxidizer, 20,000 CFM: $1,337,680

• Regenerative Thermal Oxidizer, 15,000 CFM: $1,012,500

Other cost estimates formulated by a specific company based on cost proposals from different

vendors is set forth below:

• Cupola Incine rator with Heat Recuperation: $5,000,000

- $2,200,000 capital plus annual operating costs

• Cupola Wet Scrubber: $900,000

- $700,000 capital plus annual operating costs

• Cupola Dry Sorbent Injection: $500,000

- $150,000 capital plus annual operating costs 9

Yet another company has estimated that to install a wet scrubber to control HF and HCl emissions would cost between $600,000 to $800,000 . The combined capital equipment and operating costs to control less than one (1) ton of HF and HCl per year is estimat ed to be $100,000 annually . While this company’s single data point for HF and HCl indicate that it would be able to meet EPA’s proposed limit, this company has no knowledge of what creates the

HF and HCl or how to control it or if the wet scrubber would e ffectively control the emissions (based on other mineral wool companies’ experience, wet or dry scrubbers are not a proven control method for HF and HCl). This company is specifically concerned about HF and HCl limits because it observes the wide range of HF and HCl emissions in the mineral wool industry;

it is not confident that a “10

- 20 fold range” would be the result if additional testing were conducted on its cupola. This company has effectively stated the concerns of all mineral wool producers: “We c an’t make the point more strongly about the Rule being reasonable and practical.”

These economic consequences are particularly unreasonable in light of the significant environmental benefits of mineral wool products and the equally important economic bene fits of mineral wool production.

SUBCATEGORY OPTIONS

Section 112(d)(1) of t he Clean Air Act authorizes EPA to “distinguish among classes, types, and sizes of sources within a category” in establishing MACT standards. 10 EPA will subcategorize if

7 The actual cost estimate contains CBI and other company

- specific data, but it could be provided to EPA as CBI.

8 Cubic feet per minute.

9 The most relevant fact on sorbent injection is that mineral wool companies that are currently using it find it does

n ot effectively remove HF and HCl from emissions.Ms . Susan Fairchild May 8, 2012 Page 5

sources a re “rationally distinguishable due to some common difference in class, type, or size.” 11
EPA has also said that “normally, any basis for subcategorizing must be related to an effect on emissions, rather than to some difference among sources which does not affect emission performance.” 12

EPA recognizes that it can subcategorize based upon different fuels and different unit designs. 13
EPA has also suggested that it could subcategorize based upon the raw materials used in the

process. 14 “[I]n his concurring op inion Judge Williams stated that EPA’s ability to create subcategories for sources of different classes, size, or type may provide a means out of the situation where the floor standards are achieved for some sources, but the same floors cannot be

achieved for other sources due to differences in local raw materials whose use is essential. 15

EPA retains discretion in important respects in setting floors for MACT standards within the statutory framework in order to promulgate MACT standards that best serve the public interest.

Specifically, “Congress authorized EPA to subcategorize source categories based on classes, types and sizes of sources which will result in different [f]loors for different subcategories.” 16
EPA’s criteria for subcategorization include “ air pollution control differences, process operation . . ., emissions characteristics, control device applicability and costs, safety, and opportunities for pollution prevention.” 17 In other words, EPA’s authority to subcategorize is broad and

discretionar y.

Open Top and Closed Top

NAIMA urges EPA to consider subcategorizing the industry based on “open top” cupolas and “closed top” cupolas. Open top cupolas essentially are open to the atmosphere or are not under negative pressure at the top of the cupol a where raw materials and coke are typically charged. Closed top cupolas essentially are completely enclosed at the top and are under negative pressure to pull combustion air emissions directly from the vessel to the appropriate pollution control

devices. In closed top situations, raw materials and coke also enter the cupola near the top, but a mechanical device ( i.e. , door, gate, or other separation mechanism) keeps the cupola virtually enclosed except for the brief moments when raw materials or coke are charged. “Open top” is a process distinction differing from the other mineral wool cupolas. In addition, the open top cupolas are exposed to the environmental elements; when it rains or snows, the moisture goes through the top. Based on these differenc es, NAIMA recommends the following subcategories:

10 42 U.S.C. § 7412(d)(1).

11 See Lignite Energy Counsel v. EPA , 198 F.3d 930, 933 (D.C. Cir. 1999); 75 Fed. Reg. 54,970, 54,977

- 78 (September 9, 2010).

12 75 Fed. Reg. at 54,978.

13 See, e.g., 76 Fed. Reg. 80,598, 80,607

- 09 (December 23, 2011) (Proposed NESHAP for Industrial, Commercial, and Institutional Boilers and Process Heaters).

14 See 75 Fed. Reg. 32,010 (June 4, 2010).

15 Citing Sierra Club v. EPA , 479 F.3d 875, 884

- 85 (D.C. Cir. 2007).

16 59 Fed. Reg. 29,196, 29,200 (June 6, 1994).

17 59 Fed. Reg. 26,429, 26,444 (May 20, 1994).Ms . Susan Fairchild May 8, 2012 Page 6

“Open Top” Cupolas

• Amerrock

– Nolanville, Texas

• Rock Wool Manufacturing

– Leeds, Alabama

“Closed Top” Cupolas

• IIG

– Phenix City, Alabama

• Isolatek International

– Huntington, Indiana

• Thermafiber

– Wabash, Indiana

• USG

– Red Wing, Minnesota

• USG

– Walworth, Wisconsin

Based on verbal reports from Tim Scott of Rock Wool Manufacturing, the open top system does result in greater emissions.

Unique Process, Fuels, and Raw Materials

NAIMA urges EPA to consider su bcategorization based on the unique process, fuels, raw materials, and product formulation. Each facility in the Mineral Wool Production Category can be subcategorized based on unique process, fuels, raw materials, and product formulation. Under this app roach, every facility should be able to meet its facility

- specific standard for COS, HF, and HCl.

The characteristics set forth below in each subcategory are differences that can lead to corresponding differences in the nature of the emissions and the tec hnical feasibility of applying emission control techniques. Specifically, raw material s and the combination of raw material

components are unique for each facility because each facility is producing unique products with singular performance traits that are achieved through an exclusive blend of raw materials

– a certain percentage of slag combined with any one or more of a wide variety of ro ck. Moreover, the raw materials are acquired from distinctive sources

– the plant in Minnesota is unlikely to obtain slag from the same location as a plant in Indiana or Alabama. Lastly, the type and amount of raw materials are directly relevant to the e missions.

Similarly, the size, quality, and quantity of coke will also vary because of the temperature needed to melt the raw materials used in the unique products described above. The coke and its

characteristics have a direct link to the amount of emis sions.

The design and height of the cupola also impact the level of emissions. For example, the cupola can be made almost any practical size. The size of a cupola is typically referenced in diameters and range from 1.5 to 13 feet. The overall shape is cylindrical and the equipment is arranged vertically. The bottom of the cylinder may be fitted with doors. The top where gases escape can be open or fitted with a cap to prevent rain from entering the cupola; it may, as noted above, operate without a cap . To control emissions, a cupola may be fitted with a cap designed to pull gases into a cooling device. Some cupolas are fitted with cooling jackets to keep the sides cool and others are fitted with oxygen injectors to make the coke burn hotter, all of w hich can

influence the level of emissions.Ms . Susan Fairchild May 8, 2012 Page 7

When the coke is very hot, solid pieces of rock or slag are charged into the furnace through an opening in the top. The rock and slag are alternated with additional layers of coke. Limestone is

sometimes added to act as a flux. During the melting process, a thermodynamic reaction takes place between the fuel and the blast air. The carbon in the coke combines with the oxygen in the

air to form carbon monoxide. The carbon monoxide further burns to form carbon d ioxide. The unique configuration of the ducts, which differ in each cupola, will impact the volume of these

emissions.

As noted in previous submissions, pollution control equipment varies by facility.

Amerrock Products LP

• Unique product formula for residential blowing wool

- Unique blend of rock and slag

- Unique slag and rock source

• Unique coke size

• Unique process characteristics

- Design of cupola

- Height of cupola

- Percentage of oxygen infiltration

- Duct configuration

- Pollution control equipment

Industria l Insulation Group, LLC

• Unique product formula for a unique line of commercial and industrial

insulation products

- Unique blend of rock and slag

- Unique slag and rock source

• Unique coke size

• Unique process characteristics

- Design of cupola

- Height of cupola

- Pe rcentage of oxygen infiltration

- Duct configuration

- Pollution control equipment

I

solatek International

• Unique product formula for spray fireproofing

- Unique blend of rock and slag

- Unique slag and rock source

• Unique coke size

• Unique process characteristics

- Design of cupola

- Height of cupola

- Percentage of oxygen infiltrationMs . Susan Fairchild May 8, 2012 Page 8

- Duct configuration

- Pollution control equipment

Rock Wool Manufacturing Co.

• Unique product formula for a unique line of commercial and industrial insulation products

- Unique blend of rock a nd slag

- Unique slag and rock source

• Unique coke size

• Unique process characteristics

- Design of cupola

- Height of cupola

- Percentage of oxygen infiltration

- Duct configuration

- Pollution control equipment

Thermafiber, Inc.

• Unique product formula for a unique line of commercial and industrial insulation and ceiling tile products

- Unique blend of rock and slag

- Unique slag and rock source

• Unique coke size

• Unique process characteristics

- Design of cupola

- Height of cupola

- Percentage of oxygen infiltration

- Du ct configuration

- Pollution control equipment

USG Interiors, LLC (Red Wing)

• Unique product formula for a unique line of ceiling tile products

- Unique blend of rock and slag

- Unique slag and rock source

• Unique coke size

• Unique process characteristics

- Design o f cupola

- Height of cupola

- Percentage of oxygen infiltration

- Duct configuration

- Pollution control equipmentMs . Susan Fairchild May 8, 2012 Page 9

USG Interiors, LLC (Walworth)

• Unique product formula for a unique line of ceiling tile products

- Unique blend of rock and slag

- Unique slag and rock source

• Unique coke size

• Unique process characteristics

- Design of cupola

- Height of cupola

- Percentage of oxygen infiltration

- Duct configuration

- Pollution control equipment

If you have any questions, please do not hesitate to contact me. The comments prese nted in this letter were largely set forth in NAIMA’s comments filed on February 3, 2012 with EPA.

Sincerely,

Angus E. Crane Executive Vice President, General Counsel

cc: Mr. Keith W. Barnett Group Leader, Office of Air Quality and Planning Standards Sector Policies and Programs Division, Mineral and Manufacturing Group U.S. Environmental Protection Agency

109 T

. W

. Alexander Drive (D243

- 04) Research Triangle Park, NC 27711

Mr. Steve Fruh Office of Air Quality Planning and Standards

U.S. Environmen tal Protection Agency 109 T.W. Alexander Drive (D205

- 01) Research Triangle Park, NC 27711

Mr. Peter Tsirigotis

Director , Sector Policies and Program Division Office of Air Quality Planning and Standards U.S. Environmental Protection Agency

109 T.W. Alexander Drive (C404

- 04) Research Triangle Park, NC 27711