1 MEMORANDUM

TO: Phil Mulrine , U.S. Environmental Protection Agency, OAQPS /SPPD/MICG

FROM: Brad Nelson, EC/R

DATE : May 21 , 201 5

SUBJECT: Final Cost Impacts of Control Options Considered for the Ferroalloys Production NESHAP to Address Fugitive HAP Emissions

T he purpose of this memorandum is to provide a summary of the costs and emissions reductions for the fugitive emissions option selected for the National Emissions Standards for Hazardous Air Pollutants (NESHAP) for the Ferroalloys Production source category. These impacts were calculated for existing units only, as no new facilities are expected to become operational within the next 5 years

. The methodolog y used to estimate the costs are provided in the costs memorandum 1 for the 2014 supplemental proposal. The emissions estimates (baseline and enhanced capture ) for this source category are discussed in the modeling emissions memorandum

. 2

For the 2014 supplemental proposal, the EPA considered two options for reducing fugitive emissions from the ferroalloys process; Option 1 include s enhanced local capt ure and roofline ventilation for both facilities

. Option 2 reflect s full building enclosur e with negative pressure for both facilities. The cost estimates for Option 1 contained in Table 1 of this memo randum represent controls likely to be installed as a result of facility

- specific ventilation analyses, the controls likely to be needed to addre ss risk , and existing capture and control systems at the facilities. These estimates were based on cost estimates supplied by the facilities after discussions with EPA regarding the standards being considered , and incorporating their best estimates of the improvements to fugitive emission capture and control they would implement to achieve “enhanced” capture”

. All costs are estimated in 2012 dollars. The cost estimates for Option 2 a re based on revised analyses that we re conducted after considering comments , information and data submitted by the facilities in response to EPA’s November 2011 proposal

. 3
, 4 The emissions reductions associated with the control option s presented in this memorandum are calculated as the difference between baseline or existing emiss ions and the estimated emissions with enhanced

1 Memorandum from Jeff Harris and Bradley Nelson, EC/R to Phil Mulrine, U.S. Environmental Protection Agency, OAQPS/SPPD/MICG, Cost Impacts of Control Options Considered for the Ferroalloys Production NESHAP to Address Fugitive HAP Emissions, August 13, 201 4.
2 Memorandum from Bradley Nelson, EC/R Inc. to Phil Mulrine, EPA OAQPS/SPPD/MMG, Revised Development of the Risk and Technology Review (RTR) Emissions Dataset for the Ferroalloys Production Source Category for the 2015 Final Rule, April 21, 2015.
3 Era met: "Engineering Review of Proposed Ferroalloy NESHAP Requirements for Eramet Marietta Inc.", EPA

- HQ

- OAR

2010

- 0895

- 0106.
4 Felman : "Building Ventilation Costs January 30, 2012", EPA

- HQ

- OAR

- 2010

- 0895

- 0073.2 fugitive capture and control. These estimated reductions reflect full implementation of the options, which will likely need to occur 2 years after promulgation of the final standard. A summary of the costs and emission reductions for the 2 options is provided in Table 1. The capital costs range from $14.6 million to $25.2 million for the enhanced capture option and $28.2 million to $33.2 million for the building ventilation option. Annual costs range from $1.85 million to $5.34 million for the enhanced capture option, and $5.04 million to $ 13.7 million for the building ventilation option. The average cost effectiveness were estimated to be $31,420 per ton of PM removed and $46 per pound of HAP removed for the enhanced capture option, and $73,780 per ton of PM removed and $112 per pound of HAP removed for the building ventilation option.
PM emissions in this memo refer to total PM. Of the total PM, approximately 21 percent of the emissions are estimated to be fi ne particulate (PM 2.5 ), based on analysis performed by EPA's National Environmental Investigation Center of TSP data collected in the Marietta area by Ohio EPA and the federal Agency for Toxic Substances and Disease Registry (ATSDR) during 2007

- 8. Costs an d emissions reductions for Option 2 for Eramet reflect the assumption that building ventilation will not be required for Eramet Building #18, which does not contain an operational furnace.

For the 2014 su pplemental proposal, the EPA selected the first option (Option 1) based on enhanced local capture and control, including primary and secondary hooding. The option was based on the assumption that facilities will achieve about 95% capture of the total fugit ive emissions with a combination of primary and secondary capture of emissions and ventilation of those emissions to a PM control device (either a FF or wet scrubber). This assumption is based on information from ventilation experts whom reviewed the plans submitted by the facilities and believe that these enhancements would achieve 95 percent reduction. The form of the standard under this option includes an opacity limit of 8 percent with the use of a digital camera opacity system (DOCS) to comply with the enhanced fugitive capture and control systems . The costs for the DOCS were updated based on new cost information from the vendor. The one

- time cost for setting up the DOCS was estimated to be $4,900 per source , and includes the cost of 2 cameras to be set up to read from the single roof vent to cover sun angle during different times of the day, mounts, cables, computer and accessories, and training. The a nnual cost of operating the system per source was estimat ed to be $ 32,300 for weekly monitoring and $16,300 for monthly monitoring. The annual cost includes the cost for the software license, analyzing 90 minutes of opacity per monitoring event , and quarterly reporting of results. For comparison, the cost of me asuring opacity using EPA Method 9 was estimated to be $33,900 per source for weekly monitoring and $8,400 for monthly monitoring. These costs include labor for measuring and analyzing opacity data and EPA Method 9 certification costs.3 Table 1

. Summary of the Estimated Costs and Emissions Reductions for Control Option s

Eramet $25,150,000 $5,340,000 147 31 61 $36,660 $174,600 $43 Felman $14,630,000 $1,850,000 83 17 16 $22,250 $106,000 $58 Total $39,780,000 $7,190,000 230 48 77 $31,420 $149,600 $46
Eramet 4 $33,150,000 $13,670,000 157 33 65 $87,070 $414,600 $105 $833,000 $3,967,000 $1,172
Felman 5 $28,230,000 $5,040,000 97 20 19 $52,190 $248,500 $134 $240,200 $1,144,000 $562 Total $61,380,000 $18,710,000 254 53 84 $73,780 $351,400 $112 $494,800 $2,356,000 $901

1 Annual cost calculated using 7% interest and a 20-year equipment life.

3 HAP reduction estimates assume Eramet Furnaces #1 and #12 both producing silicomanganese 50% of the time, FeMn 50% of the time.

5 Felman building ventilation cost estimate provided by Felman Production Inc, in their comments on the proposed rule: "Building Ventilation Costs January 30, 2012", EPA-HQ-OAR-2010-0895-0073 4 Eramet Building Ventilation costs provided by Eramet Marietta Inc, in their comments on the proposed rule: "Engineering Review of Proposed Ferroalloy NESHAP Requirements for Eramet Marietta Inc.", EPA-HQ-OAR-2010-0895-0106. Emissions and costs reflect the assumption that building ventilation will not be required for Eramet building #18. 2 PM2.5 estimated to be approximately 21% of total PM, based on analysis performed by EPA's National Environmental Investigation Center of TSP data collected in the Marietta area by Ohio EPA and ATSDR Incremental Cost Effectiveness Incremental Cost Effectiveness ($/Ton PM) Incremental Cost Effectiveness ($/Ton PM 2.5 ) Incremental Cost Effectiveness

($/lb HAP) Costs

Facility Cost Effectiveness ($/Ton PM 2.5 ) Cost Effectiveness ($/Ton PM) PM 2.5 Reduction 2

(Tons) PM Reduction

(Tons) Total Capital

Cost ($) Cost Effectiveness

($/lb HAP) HAP Reduction

(Tons) 3 Total Annual
Cost 1 ($/yr) Emission Reductions Cost Effectiveness

Option 1: Enhanced

Fugitive Capture

Option 2: Building Ventilation Compliance Option4 In addition, the baghouse systems used to control emissions from the furnaces are required to be outfitted with a bag leak detection system (BLS) to ensure proper operation of the baghouse. The capital cost for BLS was estimated to be $269,148 per facility with an annual cost of $219,078. The total costs for implementat ion of the enhanced capture system, DOCS and BLS are provided in Table 2. As shown in Table 2, the total capital cost of the enhanced capture option for the facilities was estimated to be $40.3 million with an annual cost of $7.7 million.

Table 2. Total Costs for Implementation of the Final Ferroalloys Production NESHAP
Facility Control System Capital Cost ($) Annual Cost ($)

Eramet Enhanced Capture System $25,1 50 ,000 $5,34 0 ,0 00 DOCS 1 $14,700 $ 72 ,900 BLS $269,1 00 $ 219,100 Total Facility Cost $ 25,43 3,800 $ 5,6 3 2 ,0 00

Felman Enhanced Capture System $14,6 30
, 000 $1,85 0
, 000 DOCS 1 $4,900 $ 2 4 ,300 BLS $269,100 $219,100 Total Facility Cost $ 14,90 4
, 000 $ 2,0 9 3
, 400 Total Industry Cost $ 40,33 7 ,8 00 $ 7,7 25
, 400
1 The annual DOCS costs assume weekly monitoring for 26 weeks and monthly monitoring thereafter. Eramet is assumed to need 3 DOCS and Felman is assumed to need 1 DOCS.