Office of Air Quality Planning and Standards

U.S. Environmental Protection Agency

March 15, 2010

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STATUS

 Rulemakings

 NESHAP for Industrial, Commercial, and Institutional 

Boilers and Process Heaters (Boiler MACT)

 NESHAP for Area Sources: Industrial, Commercial, and 

Institutional Boilers

 Schedule

 OMB review (30 days) – March 12 to April 10, 2010

 Proposals – April 15, 2010 (Court-ordered)

 Promulgation – December 16, 2010 (Court-ordered)
Background - What Sources Will The Boiler 

Rules Cover?

Boiler MACT

 Will cover about 13,434 boilers and process heaters at major sources at about 1,500 

facilities

 11,600 of the major source units are gas-fired

 Major source facilities are mostly industrial but include universities, municipalities, 

and military installations

 About 9% of major source facilities are small entities

Boiler Area Source Rule

 Will cover about 183,000 boilers at area sources at an estimated 92,000 facilities

 There are 1.3 million gas-fired boilers located at area sources that are not included in 

source category

 Area source facilities are mostly commercial (e.g., hotels, office buildings, 

restaurants) and institutional (e.g., schools, hospitals, prisons) but include industrial 

sources 

 About 85% of area sources are estimated to be small entities

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Boiler MACT - Proposed Subcategories

 Eleven subcategories based on design type:

 Pulverized coal units

 Coal-fired stokers

 Coal-fired fluidized bed combustion units

 Biomass-fired stokers

 Biomass-fired fluidized bed combustion units

 Biomass-fired Dutch Ovens/Suspension burners

 Biomass-fired fuel cells

 Liquid fuel-fired units

 Gas 1 (Natural gas/refinery gas)

 Gas 2 (other gases)

 Metal processing furnaces (natural gas-fired)
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Boiler MACT -Proposed Standards

 Existing units

 Proposing limits for nine of the eleven subcategories for:

 PM (as surrogate for non-mercury metals)

 Mercury

 HCl (as surrogate for acid gases)

 CO (as surrogate for non-dioxin organic HAP)

 Dioxin/Furan

 Technology basis - baghouse (metals/Hg)/carbon injection 

(Hg/dioxins)/ scrubber (HCl)/good combustion practices (organic 

HAP)

 Emissions limits only applicable to units with heat input capacities 

10 million Btu/hour or greater

 Work practice standard (annual tune-up) being proposed under 

section 112(h) for:

 Units with heat input capacities less than 10 million Btu/hour

 Units in Gas 1 and Metal Process Furnaces subcategories

 Beyond-the-floor standard being proposed for 

 All major source facilities – to conduct an energy assessment 

 Refinery gas-fired units – to install a carbon bed adsorber for mercury 
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Boiler MACT -Proposed Standards

 New units

 Proposing limits for each of the eleven subcategories for:

 PM (as surrogate for non-mercury metals)

 Mercury

 HCl (as surrogate for acid gases)

 CO (as surrogate for non-dioxin organic HAP)

 Dioxin/Furan

 Technology basis - baghouse (metals/Hg)/carbon injection (Hg/dioxins)/ 

scrubber (HCl)/good combustion practices (organic HAP)

 Emissions limits applicable to all units, regardless of size

 More stringent than limits for existing sources

 No work practice standards or beyond-the-floor standard being 

proposed
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Boiler MACT - Proposed Testing and Monitoring 

Requirements

 Testing:

 Initial compliance tests (PM, HCl, mercury, THC, and Dioxins)

 Annual performance tests

 Annual tune-up for units less than 10 million Btu/hour in size and units in Gas 1 

and Metal Process Furnaces subcategories

 Allows emission averaging among units in same subcategory

 Monitoring

 CO CEMS for units with heat input capacity of 100 million Btu/hour or greater

 PM CEMS for units combusting coal, biomass, or residual oil and having a heat 

input capacity of 250 million Btu/hour or greater

 Process parameters (opacity, pressure drop, sorbent injection rate, fuel, etc.) 

 Continuous Compliance

 Demonstrated by maintaining operating limits (process parameters)

 Demonstrated by maintaining CEMS values (30-day average) below emission 

limits
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Boiler MACT - Impacts

 Cost Impacts

 Total capital investment (TCI) = $13.5 billion

 Existing units = $13.5 billion

 New units (45 estimated) = $62 million

 Total annualized cost (TAC) = $5.1 billion

 Existing units = $5.1 billion

 New units = $26 million

 Testing/monitoring TAC = $320 million

 Energy Assessment (Audit) = $26 million

 Emission Reductions (tons/year)

Existing New

HCl = 47,000 53

Mercury = 19 0.007

Metals = 3,900 0.66

PM = 42,000 140

SO2 = 384,000 550

VOC = 1,400 5
Economic Analysis of Major Source Rule

 Engineering Costs = $5.1 billion

 Social Costs = $5.1 billion 

 Consumer Surplus loss of $1.8 billion

 Domestic Producer Surplus Loss of $3.8 billion

 Other Countries surplus Gain $0.2 billion

 Fuel savings and other costs not included in market model net gain of $0.3 billion

 Price and Quantity Changes

 Average National prices for industrial sectors increase 0.01%

 Domestic Production may fall by 0.01%

 Employment Changes

 Near Term job losses 6,000 to 8,000

 Long term net employment effects range from 16,000 job losses to 32,000 job gains

 Small Business

 SBAR Panel

 Monetized Health Benefits

 $16 to $40 billion (3% discount)

 $15 to $35 billion (7% discount rate)

 1,800 – 4,700 avoided premature mortalities plus morbidities

 All estimates in 2008$

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Boiler Area Source Rule - Proposed Subcategories

 Three subcategories based on design type:

 Coal-fired units

 3,700 units

 Biomass-fired units

 11,000 units

 Liquid fuel-fired units

 168,000 units
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Boiler Area Source Rule -Proposed Standards

 Existing units

 Proposing limits for the three subcategories for:

 PM (as surrogate for urban metals) – based on GACT

 Mercury – based on MACT

 CO (as surrogate for POM and other urban organic HAP) – based on MACT

 Technology basis - baghouse (metals/Hg)/good combustion 

practices (organic HAP)

 Emissions limits only applicable to units with heat input capacities 

10 million Btu/hour or greater

 Work practice standard (annual tune-up) being proposed under 

section 112(h) for units with heat input capacities less than 10 

million Btu/hour

 Work practice standard (energy assessment) being proposed for all

area source facilities as a beyond-the-floor standard.
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Boiler Area Source Rule -Proposed Standards

 New units

 Proposing limits for each of the three subcategories for:

 PM (as surrogate for urban metals)

 Mercury

 CO (as surrogate for POM and other urban organic HAP)

 Technology basis - baghouse (metals/Hg)/carbon injection (Hg)/good 

combustion practices (organic HAP)

 Emissions limits applicable to all units, regardless of size

 No work practice standards being proposed

 No beyond-the-floor standard being proposed
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Boiler Area Source Rule - Proposed Testing and 

Monitoring Requirements

 Testing:

 Initial compliance tests (PM, mercury, and CO)

 Annual performance tests

 Annual tune-up for boilers less than 10 million Btu/hour in size

 Monitoring

 Process parameters (opacity, pressure drop, sorbent injection rate, fuel, 

etc.) 

 CO CEMS for units with heat input capacity of 100 million Btu/hour or greater

 Continuous Compliance

 Demonstrated by maintaining operating limits (process parameters)

 Based on averages set during compliance test
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Boiler Area Source Rule - Impacts

 Cost Impacts

 Total capital investment (TCI) = $21.8 billion

 Existing units = $15.6 billion

 New units (6,779 estimated) = $6.2 billion

 Total annualized cost (TAC) = $7.7 billion

 Existing units = $5.5 billion

 New units = $2.2 billion

 Testing/monitoring TAC = $530 million

 Energy Assessment (Audit) = $145 million

 Emission Reductions (tons/year)

Existing New

Mercury = 1.7 1

Metals = 10,500 1,962

PM = 60,200 5,000

SO2 = 2,400 280

VOC = 65 4

HCl = 420 40
Economic Analysis of Area Source Rule

 Engineering Costs = $6.9 billion

 Social Costs = $6.9 billion 

 Consumer Surplus loss of $2.3 billion

 Domestic Producer Surplus Loss of $3.3 billion

 Other Countries surplus Gain $0.2 billion

 Fuel savings and other costs not included in market model net cost of $1.5 billion

 Price and Quantity Changes

 Average National prices for industrial sectors less than 0.01%

 Domestic Production may fall by less than 0.01%

 Employment Changes

 Near Term job losses 6,000 to 12,000

 Long term net employment effects range from 16,000 job losses to 32,000 job gains

 Small Business

 SBAR Panel

 Monetized Health Benefits

 $5.1 to $12 billion (3% discount)

 $4.6 to $11 billion (7% discount rate)

 600 – 1,500 avoided premature mortalities plus morbidities

 All estimates in 2008$

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Benefits Methodology

 Benefit-per-ton approach, as used in other recent NESHAP RIAs

 Only human health benefits monetized for PM2.5 precursor pollutants

 Direct PM2.5, SO2, NOx, and VOCs only

 Results presented as range of empirical studies with EPA’s PM Expert 

Elicitation results shown as characterization of uncertainty

 Unquantified benefits

 HAPs and CO benefits

 Ecosystem co-benefits

 Visibility co-benefits 

 Net benefits calculated as total monetized benefits minus social costs

 Major sources proposal: $5.1 billion in social costs

 Area sources proposal: $6.9 billion in social costs
Health Benefits of Proposed Boiler Rules

Total Monetized Benefits in 2013 (billions of 2008$)*

3% discount rate 7% discount rate

Major Sources $16 to $40 $15 to $35

Area Sources $5.1 to $12 $4.6 to $11

Total Proposed $22 to $53 $20 to $48

Reductions in Health Incidences in 2013*

Major Area

Avoided Premature Mortality

Pope et al. 1,800 600

Laden et al. 4,700 1,500

Avoided Morbidity

Chronic Bronchitis 1,300 410

Acute Myocardial Infarction 3,000 940

Hospital Admissions, Resp 450 130

Hospital Admissions, Cardio 950 290

Emergency Room Visits, Resp 1,700 430

Acute Bronchitis 3,000 960

Work Loss Days 240,000 81,000

Asthma Exacerbation 32,000 11,000

Acute Respiratory Symptoms 1,400,000 480,000

Lower Respiratory Symptoms 35,000 11,000

Upper Respiratory Symptoms 27,000 8,700

*

All estimates are for the implementation year (2013), and are rounded to two significant figures so numbers may not sum across columns. All fine 

particles are assumed to have equivalent health effects, but the benefit per ton estimates vary because each ton of precursor reduced has a different 

propensity to form PM2.5. These benefits incorporate the conversion from precursor emissions to ambient fine particles. 

PM2.5 Major

PM2.5 Area 24%

23%

SO2 Major

53%

SO2 Area

0.3%

VOC

0.01%

Breakdown of Monetized Benefits by 

PM2.5 Precursor and Source
Benefits of these Combined Rulemakings Exceed the Costs

-$10

$0

$10

$20

$30

$40

$50

$60

$70

Pope et al.

Laden et al.

Billions (2008$)

Benefits estimates derived from 2 epidemiology 

functions and 12 expert functions

Total Monetized Benefits for the 

Proposed Boiler Rules in 2013*

3% DR

7% DR

-$10

$0

$10

$20

$30

$40

$50

$60

Pope et al.

Laden et al.

Billions (2008$)

Cost estimates combined with total monetized benefits estimates 

derived from 2 epidemiology functions and 12 expert functions

Net Benefits for the Proposed Boiler Rules in 

2013 at 7% discount rate*

* Translucent bars represent benefits results using functions derived from EPA’s Expert Elicitation on PM Mortality (2006)