## Office of Air Quality Planning and Standards U.S. Environmental Protection Agency March 15, 2010

12 

# 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 345 

# 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)6 

# 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 mercury7 

# 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 proposed8 

# 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 limits9 

# 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 $ 101112 

# 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 units13 

# 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.14 

# 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 proposed15 

# 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 test16 

# 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 $11 billion (7% discount rate)  600 – 1,500 avoided premature mortalities plus morbidities  All estimates in 2008$ 1718

# Benefits Methodology  

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

### Only human health benefits monetized for PM 2.5 

### precursor pollutants  

### Direct PM 2.5 

### , SO 2 

### , 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 acros s c olumns. All fine particles are assumed to have equivalent health effects, but the benefit per ton estimates vary because each ton of precursor re duced has a different propensity to form PM 2.5 . These benefits incorporate the conversion from precursor emissions to ambient fine particles. PM 2.5 Major 24% PM 2.5 Area 23% SO 2 Major 53% SO 2 Area 0.3% VOC 0.01% **Breakdown of Monetized Benefits by PM**  **2.5 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)