MEMORANDUM

DATE: August 19, 2010

SUBJECT: Cost Effectiveness and Impacts of Lean Oil Absorption for Control of Hazardous 

Air Pollutants from Gasoline Loading

Residual Risk and Technology Review for the Marine Tank Vessel Loading 

Operations Source Category 

EPA Contract No.: EPD06118

EPA Project No.: 4-15

RTI Project No.: 0210426.004.015

FROM: David Green and Karen Schaffner, RTI International

TO: Stephen Shedd and Brenda Shine, EPA

I. Background

The purpose of this memorandum is to document the methods used to estimate capital 

and annualized costs for reducing hazardous air pollutant (HAP) emissions and volatile organic 

compounds (VOC) from marine tank vessel loading operations (MTVLO) for gasoline. All cost 

estimates are based on the application of an add-on control device to reduce emissions. Potential 

control options and nationwide impacts for add-on controls for MTVLO facilities are presented.

II. Capital and Annual Costs

Based on information obtained from one vendor, lean oil absorption systems are available 

for control of hazardous air pollutants (HAP) and volatile organic compounds (VOC) emitted 

during loading of gasoline to marine vessels.1The assumptions for the cost estimates are shown 

in Table 1. The vendor equipment cost was estimated to be $650,000 for a lean oil absorption 

system would be adequate for the throughput associated with any major source that is presently 

uncontrolled. The total capital investment (TCI) required was estimated using EPA standard 

costing procedures. First the purchase equipment cost (PEC) was estimated by multiplying the 

vendor equipment costs by a factor of 1.18. The PEC includes costs for auxiliary equipment, 

instrumentation, sales, freight, etc. The TCI was then estimated by multiplying the PEC by a 

factor of 1.61 to cover the installation costs (i.e., foundation, piping, electrical, engineering, 

startup, and performance tests). Thus, the TCI was estimated to be 1.90 times the vendor 

equipment costs. Lean oil absorption systems would have a TCI of $807,000.

Capital costs for lean oil absorption systems were roughly comparable to costs estimated 

for refrigerated gasoline vapor recovery systems of similar capacity. Costs for refrigerated 

 

1

 Telecon with B. Shine, EPA/OAQPS/SPPD, with J. Rex Hewitt, Petrogas. July 8 and 15, 2010.
gasoline vapor recovery systems were based on the OAQPS Control Cost Manual2

, escalated to 

2010. The total installed capital cost of a refrigerated gasoline vapor recovery system with a 

capacity of 5000 gallons/min was estimated at $918,000 (2009$), which was within about 14% 

of the total installed capital cost of a similarly sized lean oil absorption system. 

Annualized costs for the lean oil absorption system were developed based on information 

provided by the vendor and EPA standard costing procedures. The annualized capital cost is 

$114,900 based on capital recovery factor (CFR) of 0.1424 (interest rate of 7 percent for an 

equipment life of 10 years). The lean oil absorption system from Petrogas is estimated to have a 

variable operating cost of $0.006 per gallon loaded; the vendor indicated that essentially all of 

which is attributable to electricity. The labor costs for running/maintaining the control device 

system were estimated based on an estimated labor requirement of 1.5 hr/day and an assumed 

labor rate of $25.76/hr and an estimated maintenance labor requirement of 1.5 hr/day and an 

assumed labor rate of $26.48/hr. The maintenance parts cost was estimated to be 1.0 times the 

maintenance labor costs. A variable operating cost was estimated to be $123,000/year.

Because the lean oil absorption system recovers gasoline product, a product recovery 

credit was included in the cost analysis. The value of the recovered product was assumed to be

$560/ton, which partially offsets the operating cost.

Table 1. Assumptions for Lean Oil Absorption Systems

Capital cost for lean oil absorber 650,000 $

Installed capital cost for lean oil absorber 807,300 $

Interest rate 7.0%

Useful life 10

Capital Recovery Factor 0.1424

Variable Operating Cost 0.006 $ per gallon loaded

Operating Labor @1.5 hr/day 29,618 $/yr

Maintenance Labor @1.5 hr/day 30,445 $/yr

Maintenance Parts 30,445 $/yr

Indirect Annual Cost: Admin, tax, insurance 32,292 $/yr

Recovery Credit 560 $ per ton gasoline

VOC emission Rate 3.4 lb/1000 gallons loaded

HAP emission rate 0.2482 lb/1000 gallons loaded

VOC recovery rate 99.0%

HAP content of VOC 7.3% by wt

III. Model MTVLO for Gasoline Loading

 

2

 OAQPS Control Cost Manual, Fourth Edition, EPA-450/3-90-006, January 1990.
Control options were developed based on annual gasoline throughput cutoffs, with a 

control efficiency requirement (or total organic carbon concentration limit) for MTVLO that 

exceed the threshold. Model MTVLO were considered for MTVLO with gasoline 

throughputs of 500,000 bbl/yr and 1,000,000 bbl/yr. 

The VOC emissions from gasoline loading are assumed to be 3.4 lb VOC/1,000 

gallons loaded (lb VOC/1,000 gal) and the HAP content of the VOC is assumed to be 7.3 

wt% . The overall recovery rate for the lean oil absorption system is assumed to be 99 

percent. The assumptions are shown in Table 1.

Table 2 provides the TCI, TAC, the HAP and VOC emission reductions, and the 

gasoline recovery credit for each gasoline throughput threshold.

Table 2. Costs for Model MTVLO for Sources with Gasoline Loading.

Gasoline Loading 

Threshold (million 

bbl/yr)

Total Capital 

Investment ($)

Total 

annualized 

cost ($)

Recovery 

Credit ($)

Net annualized 

cost ($)

HAP emission 

reduction (TPY)

VOC emission 

reduction

(TPY)

5,000,000 0 0 0 0 0 0

1,000,000 807,000 490,000 39,600 450,000 5.2 70.7

500,000 807,000 364,000 19,800 344,000 2.61 35.3

The number of nationwide MTVLO facilities that would be covered under each 

control option was based on information from the Waterborne Commerce Statistics Center 

(WCSC) database. As shown in Table 3, there are 34 facilities with annual gasoline 

throughput of 500,000 to 1,000,000 bbl; 44 facilities with 1,000,000 to 3,000,000 bbl 

throughput; and 10 facilities with 3,000,000 to 5,000,000 bbl throughput. Because State and 

local VOC emission limits are presently in place in some areas, it is estimated that

approximately 50 percent of MTVLO at these sources are already operating emission control 

equipment, would have no additional capital or operating costs, and would achieve no 

additional emission reductions if they were subject to the MACT standard.

Table 3. Facilities by Gasoline Loading Rate.

Gasoline Loading 

Rate (million bbl/yr)

Total Number of 

Facilities

Facilities Required 

to Install Controls

3 to 5 10 5

1 to 3 44 22

0.5 to 1 34 17

The nationwide cost and cost effectiveness estimates in Table 4 are based on 

applying controls to 5 facilities loading 3 million bbl/yr, 22 facilities loading 1 million bbl/yr and 

17 facilities loading 0.5 million bbl/yr.
Table 4. Cost Effectiveness and Nationwide Impacts for Vapor Collection and Recovery 

Controls for Sources with Gasoline Loading.

Gasoline 

Loading 

Threshold 

(bbl/yr)

Total 

Capital 

Investment

(million $)

Total 

annualized 

cost

(million $)

Recovery 

Credit 

(million $)

Net 

annualized 

cost (million 

$)

HAP 

emission 

reduction

(TPY)

HAP costeffectiveness 

($/ton)

VOC 

emission 

reduction

(TPY)

VOC cost -

effectiveness 

($/ton)

5,000,000 0 0 0 0 0 --- 0 ---

1,000,000 a22 16 1 14 190 74,000 2,600 5,500

500,000 36 22 2 20 240 85,000 3,200 6,300

a

 A total of 27 facilities are affected by the control option for gasoline loading throughput of 1,000,000 bbl/yr; the impacts 

for this option are based on 22 facilities with gasoline throughput of 1,000,000 bbl/yr and 5 facilities with gasoline 

throughput of 3,000,000 bbl/yr.

VI. Secondary Impacts Estimates for Controlling MTVLO for Gasoline Loading

The operation of lean oil absorption systems has an impact on electrical consumption. It 

is estimated, based on information from the vendor, that the lean oil absorption systems consume

approximately 0.1 kWhr/gallon of gasoline loaded. Thus, electrical consumption associated with 

a 1,000,000 bbl/yr applicability threshold would be approximately 155 million kWhr/yr. The 

incremental electrical consumption associated with a 500,000 bbl/yr applicability threshold 

would be 191 million kWhr/yr. These impacts and secondary emissions associated with this 

electrical consumption are given in Table 5.

Table 5. Secondary Impacts of Operating Light Oil Absorption Systems.

Gasoline Loading 

Threshold(million bbl/yr) 1 0.5

Electrical Consumption 

(kWhr/yr) 1.55E+08 1.91E+08

SO2 Emissions (ton/yr) 295 363

NOx Emission (ton/yr) 117 143

CO2 Emissions (ton/yr) 1.02E+05 1.25E+05