p.1 

OAR Box 1837 

Prepped by Keeia Richards 

Document Number: 

184) IV-H-1 

Docket Number: 

A-84-33 

Printed 11/14/2008 3:48:12 PM Sheet 184 of 238 
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Department of Energy 

Washington, DC 20585 

November 6, 1985 

Mr. Charles Elkins 

Acting Assistant Administrator 

for Air and Radiation 

U. S. Environmental Protection Agency 

401 M Street, S. W. 

Washington, D. C. 20460 

Dear Mr. Elkins: 

^ •<V 

DOE staff appreciates the opportunity to informally review the 

September 1985 draft Regulatory impact Analysis (RIA) prepared 

for the rulemaking decision on the Listing of Surface coal 

Mines foi' New Source Review. On January 30, 1985, the 

Department of Energy provided initial comments on the October 

1984 initial listing proposal (Enclosure 1), and may provide 

additional, formal comments on the RIA and the listing proposal 

during the upcoming public comment period. 

Given the statutory interpretation of section 302(j) of the 

Clean Air Act which the Agency adopted, the draft RIA is a 

useful attempt to quantify the potential" costs and benefits of 

several regulatory alternatives. Based on our experience with 

other documents of this type, this RIA is more forthright in 

acknowledging the uncertainties of its. quantitative estimates. 

We continue to be concerned, however, that the inherent 

difficulties and lack of accepted, standard methodological 

approaches to estimating the costs and benefits of any of the 

regulatory options may systematically misrepresent the 

socio-economic impacts of these options to the Administrator. 

More specific comment on these difficulties and on the 

methodologies used is provided in Enclosure 2. 

It is apparent from the estimates provided for general 

application of "listing," with or without grandfathering (i.e., 

Alternative's II and III), that national environmental, economic 

and energy interests would not be served by either 

alternative. Our analysis would suggest that the assumptions 

used to estimate the benefits for these two alternatives would 

systematically provide a value that is higher than the likely 

actual value. Therefore, it appears that it is safe to 
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Again, we appreciate this opportunity to comment and look 

forward to continuing to work with you and your staff in this, 

as well as other, regulatory actions. 

Sincerely, 

Ted Williams 

Director 

Environmental Analysis 

Enclosure 

cc: Barry Albright, DOI 

Gerald Emison, EPA 
P.5 

. ' i 

Enclosure 1 

Department of Energy 

Washington, D.C. 20585 

January 30, 1985 

Honorable Joseph A. Cannon 

Assistant Administrator for Air and Radiation 

U. S. Environmental Protection Agency 

401 M Street, S. W. 

Washington, D. C. 20460 

Dear Mr. Cannon: 

The Department of Energy (DOE) is pleased to provide initial 

comments on the proposed addition of surface coal mines to the 

list of stationary sources for which fugitive emissions must be 

included for threshold applicability determinations under 

pre-construction review and permit programs (49 FR 43210; 

October 26, 1984). We applaud the Agency's 30-day extension of 

the initial comment period and its commitment to reopen the 

public comment period for 60 days after completion of the 

Regulatory Impact Analysis (RIA). DOE expects to provide 

further comment on the proposal when the RIA is available. 

As I expressed in my letter of December 17, 1984, to 

Mr. Ruckelshaus, the unavailability of a draft Regulatory 

Impact Analysis within this initial comment period compounds 

the difficulty in adequately assessing the proposal's impacts 

upon our national energy plan and national security. Our 

initial analysis, however, supports our belief that these 

impacts may be so severe as to jeopardize these interests. 

Our initial comments are detailed in Enclosure 1. In summary, 

these comments and our initial analyses suggest that: 

1. Lack of siting flexibility and other unique operational 

characteristics of surface coal mines provide the potential 

for more severe socio-economic impacts from compliance with 

PSD increments for surface coal mines than for traditional 

stationary sources. 
PJL. 

- 2 -

2. Limitation on the production size of these mines provides 

the only compliance method, potentially resulting in higher 

costs of coal and reduced national coal production. 

3. The quantitative tools necessary, and now widely used by 

permitting agencies, for predicting ambient particulate 

matter concentrations from a surface coal mine are 

unverified, and sufficiently different as to make their use 

in a federally-required permit program inadvisable. 

4. Federal requirements under other legislative programs 

provide both adequate environmental review of new/modified 

mines, and the potential for irreconcilable conflict with 

Clean Air Act requirements if the proposal is finalized. 

We believe that the enclosed comments and analysis support a 

decision not to list surface coal mines, and that a completed 

Regulatory Impact Analysis will likely provide further support 

for such a decision. Should further analysis indicate 

otherwise, it seems preferable to limit the application of PSD 

requirements to mines with the potential to affect air quality 

in nationally important pristine areas, e.g., Class I areas. 

Such limited application of these requirements would minimize 

their adverse socio-economic effects and address the special 

character of these pristine areas. 

We look forward to reviewing the Regulatory Impact Analysis 

upon its completion, and will provide additional comments on 

the proposal when the public comment period is reopened. In 

addition, the current program with the Department of the 

interior and EPA to share information in this- area should 

continue to both provide useful exchanges between our agencies, 

and to receive my full support. 

Sincerely, 

•7(Lt. OXJJJU. 

Robert C. Odle , Jr . 

Acting Assistant Secretary for 

"Policy, Safety, and Environment 

Enclosures 

cc: Docket Number A-84-33 

Central Docket Section (LE-131) 
P.7 

Enclosure 1 

Unique Qualities of Surface Coal Mines 

1. The location of surface coal mines is determined by the 

distribution of the resource, not by the operator. Unlike 

most traditional new stationary sources, there is no 

flexibility to relocate a surface coal mine source. 

2. Multiple mines may recover coal from the same deposit with 

the possibility that the mines' areas of ambient air 

quality impact will overlap.' 

3. Surface mining is not a static stationary source. As it 

progresses, the sources within an operation move across the 

coal deposits, as does the location of maximum particulate 

concentration. 

4. Surface coal mining is heavily regulated — through Federal, 

legislation, for example, under the Surface Mining Control 

and Reclamation Act, 30 USC 1201, and, where Federal coal 

is involved, under the Federal coal Leasing Amendments of 

1976 (P.L. 94-377). Environmental goals are features of 

permitted mine design under SMCRA. Conflict may exist* 

between the proposed listing and current requirements for 

Federal coal leases. 

5. Mining operations require long pre-operation planning, 

generally have a 30-to-40 year life, and must be flexible 

to accommodate shifting demand during that period. 

Restricting Production Size as the Sole Compliance 

Alternative 

The application of Prevention of Significant Deterioration of 

Air Quality (PSD) regulations to surface coal mines would, 

through the restriction on the allowable incremental addition 

of particulate matter ambient concentrations, offer these 

sources only one viable method of compliance — severe 

restrictions on maximum annual production. 

New mines, and the expansion of existing mines, employ best 

available control methods on the wide variety of component 

sources of "fugitive particulate emissions, thus offering 

little, if any, possibility that increments can be met, without 
P.8 

- 2 -

production limitation, through a greater reduction in 

emissions. In addition, the location of surface coal mines is 

determined by the distribution of the available resource. 

These mines,' unlike traditional stationary sources which have 

more siting flexibility, cannot determine to site elsewhere in 

order to minimize restrictions imposed by various site-specific 

air quality parameters, such as the PSD increment 

classification. 

The discernible trend in surface coal mining is that the 

proportion of larger mines is increasing, with over 70 percent 

of 1983 national production coming from mines producing 

one-half million tons per year (TPY) or more. 

The enclosed report by Pedco Environmental (now PEI 

Associates), "Assessment of Impacts on the Surface Coal Mine 

Industry Resulting from Possible Changes to PSD and Ambient, Air 

Quality Standards," June 1984, details the size restrictions on 

hypothetical surface coal mines for compliance with PSD 

increments (See Enclosure 2). This report ("Pedco report") 

analyzed hypothetical mines in four coal basins, using the best 

available and accepted emission factors and dispersion models. 

These mines were evaluated as "single" sources, without 

consideration of the impact that would occur from either 

multiple-mine or multiple-source siting in close proximity and 

the resulting combined ambient air quality impacts. The 

occurrence of such a "stand-alone" mine would be rare, given 

the nature of coal resources (seams with commerically surface 

retrievable coal), and the transportation costs for delivery of 

coal to the user/combustor. 

Table 5-7 of the PedCo report indicates the maximum mine size 

which would be allowed under various scenarios. While 

obviously not allowing mines of a size comparable to the 

largest existing mine in the basin/state, PSD Class II 

increments would not allow mines of average existing capacity 

in either the Powder River or San Juan River basins. Class I 

increments'would preclude average size mines in all basins. 

Oar Office of Fossil Energy (FE) has performed a simplified 

analysis for four planned, new/expanded coal mine projects (See 

Enclosure 3). All four would be limited by the annual Class II 

increments to one-half to two-thirds the size of the planned 

maximum production. The PedCo report illustrates that the 

24-hour increments are generally substantially more 

restrictive; 24-hour increment restrictions were analyzed by FE 

only for the LaPlata mine, due to the unavailability of 

necessary data for the other mine projects. 
P.9 

- 3 -

During the public hearings on the proposal, several examples of 

the adverse impact of PSD application to planned surface coal 

mines were presented by industry witnesses. Perhaps the most 

detailed of these statements is from Robert T. Wallace, Peabody 

Holding Company, Inc., at the December 11, 1984, hearing. 

Mr. Wallace's quantitative statements are based on application 

of the results of the PedCo study (Enclosure 2) to actual 

Peabody corporate plans and facilities. Mr. Wallace testified 

that of the nine new/expanded surface mines Peabody plans for 

the next decade, most needed to fulfill existing coal supply 

contracts, only one (0.3 million TPY) would be permitted at the 

planned level. Total production of all nine is planned at over 

20 million TPY, but that compliance with PSD increment 

limitations would allow only nine million TPY production, less 

than half the total contemplated by corporate plans. 

* 

Mr. Wallace also presented a quantified analysis of the 

sensitivity of unit costs to volume reductions. Using an 

existing Indiana mine with current production of 3 million TPY, 

Peabody estimates that limiting production to one-half million 

TPY (maximum allowed, based on the PedCo report), cost to the 

utility now purchasing this coal would increase 48 percent, 

from approximately $27/ton to over $40/ton. Jobs at this 

particular mine would decrease by over 75 percent. 

(Mr. Wallace's prepared testimony and supplement are .-attached 

as Enclosure 4.) 

Given that surface coal mining essentially involves materials 

handling, the economies of scale are essential elements in 

projecting not only costs, but whether a particular operation 

is economically viable at all. We urge that the Regulatory 

Impact Analysis, now being prepared, fully address this issue. 

Lack of Accuracy of the Process to Predict Particulate 

Concentrations Around Surface Coal Mines 

In order to predict the ambient concentrations resulting from a 

new/expanded mine project, as from all sources, both emissions 

and concentration estimates must be made. There is for surface 

coal mines a wide variety of emissions factors and dispersion 

models used, accepted, and sometimes required by permitting 

agencies. The PedCo report (Enclosure 2) discusses in detail 

the differences between these predictive tools in Section 7, 

concluding that the alternate methods now widely employed can 

produce emissions estimates varying by a factor of 2.6, and 

concentration estimates varying by a factor of 11. No 

predictive concentrations around coal mines have ever been 

verified against measured concentrations. 
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P.11 

United States Government Department of Energy 

memorandum ENCLOSURE 3 

DATE December 5, 1984 •— 

REPLY TO ,-a 

ATTN OF: FE-1 3 

SUBJECT: Comments on EPA's Proposed Fugitive Dust from Surface Mining Regulation 

TO-. Ted Williams, PE-16 

Attached per your request are FE's preliminary comments on the subject 

regulation. General comments are listed below. A somewhat detailed analysis 

in support of this section is provided in the attachment to this memorandum. 

These comments are preliminary ln nature because we believe that a 

significant amount of salient infonnation on this regulation will be 

presented at a public hearing to be held by EPA on December 3. My staff will 

attend this hearing and will synthesize the information which is presented. 

This information will ln turn be forwarded to you as soon as possible. 

Since it is not possible to assess the energy and economic impacts of this 

regulation without the associated regulatory impact assessment, we have 

limited our comments to those of a technical nature. 

If you have any questions, on these comments, please call Dave Beecy 

(353-2782) or Bob Kane (252-4753)»" 

David J. Beecy 

Director 

Office of Planning and Enviroment 

Attachments 
P.12 

General Comments 

1. We believe that this rulemaking could have major impacts on the coal 

industry. For example, average size new mines in both the Eastern and 

Western U.S. won't be able to obtain construction permits without 

significant downsizing or without obtaining "buffer zones". 

2. If development of large surface coal mines is restricted by application 

of the PSD requirements, the short term and long term effects on 

domestic energy supplies must be considered. The development of coal 

based industries ualng liquification or gasification processes may also 

be impacted. 

3. If surface coal mines are to be listed, the number of mines that would 

actually be affected is probably limited. The major impact will most 

likely fall on very large mines, primarily but not exclusively ln the 

west, where most of tha Class I areas are located. However, these mines 

may make major contributions to the development of the nation's 

low-sulfur coal resources and to future liquid-fuels-from-coal 

industries. Therefore, ^if surface mines must be listed, it seems 

preferable to limit the application of PSD requirements to those mines 

that have the potential to affect Class I areas, rather than to ^list all 

surface coal mines. 

4. If surface mines 'do become subject to tbe PSD requirements, they will 

have to apply the best available control technology (BACT) to control 

emissions. BACT ls generally more stringent than new source performance 

standards, which has not been established for surface mines. BACT 

determinations must consider cost, economics, and energy Impacts, so we 

urge EPA to allow maximum flexibility in adjusting the stringency of 

associated emission limits. 

5. FE also has a number of questions about the scope and eventual 

Implementation of the proposal. These questions involve related 

visibility concerns, monitoring methods, the focus of the PSD review 

process, and consideration of the contribution of other sources to 

ambient particulate concentrations. These will be addressed in depth in 

the detailed analysis section. 
P.13 

Detailed Analysis 

Surface Coal Mining Profile 

Surface coal mining is a significant segment of the coal industry. In 1983, 

surface mine coal accounted for 481.7 million short tons, amounting to 61.6 

percent of the total coal produced (coal production, 1983, DOE/EIA - 0118 

(83) Oct. 1984). One of the discernible trends ln surface coal mining is 

that the proportion of smaller mines is decreasing and the tonnage from 

larger mines is increasing. Table 1 presents the number of active Bituminous 

and Lignite surface coal mines, for the last five years (Anthracite coal 

production ln 1983 accounted for less than IZ of total surface coal 

production). The mines are classified by tons produced. Table 2 contains 

the coal tonnage produced from different size classes of mines for the last 7 

years. 

Table 1 Number of Active Bituminous and Lignite Coal 

Surface Mines.by Production Size Class, 

1977-1983, 10"3 Tons 

Coal Production, 1977-1983 

Derived From: EIA, 1984 

EIA 0118, October '84 

Size 

Tear 

-1983 

1982 

1981 

1980 

1979 

1978 

1977 

In 1983, w. 

10-50 

793 

1009 

923 

910 

1214 

1439 

1406 

e stern coal 

NUMBER OF MINES 

50-99 

340 

395 

409 

416 

467 

628 

614 

accounted for 3 

100-199 

248 

277 

311 

297 

318 

309 

331 

6 percent of 

-

200-499 

185 

209 

255 

222 

197 

202 

196 

total coal m: 

>500 

140 

153 

143 

152 

140 

125 • 

130 

Lning 

— 

production (Annual Energy Outlook, EIA, May 1984). In 1995, western coal 

production is projected to account for 39 percent of"coal production. 
P.14 

Table 2 Surface Mine Production of Bituminous & Lignite, 

coal by mine size class in 1000 tons annual production, 

1977-83 (Mine size in 1000 tons annual production) 

Prod'n 

by Mine 

Year Size 

1983 

Z 

1982 

Z 

1981 

Z 

1980 

Z 

1979 

Z 

1978 

Z 

1977 

Z 

10-49 

19588 

4.12 

25129 

5.11 

24106 

4.83 

23658 

4.82 

30611 

6.69 

36453 

8.70 

35220 

8.37 

50-99 

24272 

5.11 

28489 

5.79 

29019 

5.81 

29794 

6.08 

33083 

7.23 

43061 

10.28 

43548 

10.35 

100-199 

• 35096 

7.39 

38659 

7.82S 

44259 

8.87 

42240 

8.67 

44504 

9.73 

43652 

10.42 

46196 

10.98 

200-499 

54987 

U.59 

62097 

12.63 

75983 

15.22 

67285 

13.71 

59470 

13.00 

59713 

14.26 

61158 

14.34 

>500 

340,924 

71.79 

337,291 

68.60 

325,858 

65.27 

327,663 

66.78 

289,725 

63.34 

236,004 

56.34 

234,573 

55.70 

Surface 

Mine Total 

Production 

474866 

100.00 

491663 

100.00 

499225 

100.00 

490643 

100.00 

457394 

100.00 

418883 

100*. 00 

420695 

100.00 

REF: SAME AS TABLE 1. 

Specifically, during the period from 1985 to 1995, surface mining is 

projected to decrease ln the East and increase in the West by 11 million 

short tons and 116 million short, tons, respectively. The decrease in the 

East ls due primarily to the depletion of economically minable surface coal 

reserves ln that region. (Annual Energy Outlook, EIA, May 1984) 

The next 2 tables summarize projected growth increases of new surface mines. 

This information has been summarized from a November 1984 Coal Age article, 

and other sources. While only 10 of the top fifty coal producing companies 

(representing 7 new mines and 4 expanded facilities) expect future growth, 

the new capacity totals approximately 20 million tons per year. The largest 

of these facilities (Rochelle) is expected to produce 11,000,000 tons of coal 

per year by 1986, when it is expected to be operating at full capacity. 
P.15 

Table 3 Coal Age Survey of New Surface Mines and Mine Expansions - 1984 

"~ -Year Mine Capacity Mine Capacity 

New Mine Year Project at Full Added 

Mine Name or Project to be Production (if Expansion) 

County/State Expansion Begins Completed (Tons Per Yr) (Tons Per Yr) 

Colowyo Coal ' • 

Colowyo Mine Mine Expansion 1990 1992 4,300,000 1,175,000 

Moffat Co. Colo. 

Diamond Shamrock 

Coal 

Calvin Branch 

Mine New Mine 1985 2005 2,000,000 

Logan/Wyoming Co.'s 

W. Va. 

Texas Utilities - --

Mining 

Forest Grove New Mine 1988 2023 4,000,000 

Mine 

Henderson Co. Tex. * 

Twin Oaks Mine New Mine 1988 - 2023 8,000,000 

Robertson Co., 

N. Mex. 

Utah International 

(San Juan 

Coal) New Mine .1986 2017 1,500,000* 

La Plata Mine 

San Juan Co. 

N. Mex. 

Peabody Holding 

North Antelope New Mine 1983 1984 5,700,000 3,000,000 

Campbell, Co., 

Wyo. 

Rochelle Mine New Mine 1985/86 1986 11,000,000, 

Campbell Co.. 

Wyo. 

Peabody Coal 

Martwick Mine New Mine, 1986 1987 1,100,000 

Muhlenberg Co., 

Ky. 

* Publication OSM EIS-17 indicates 4 million ton capacity at full production. 
fable 3A Additional New Surface Hines and Mine Expansions 

(From Various Additional Sources) 

Mine Name 

County State 

Westmoreland 

Resources 

Abaaloka Big Horn Co, 

Mont 

Western Energy 

Rosebud Mine 

Rosebud Co,,* 

Mont. 

East Gillette, Mine 

Campbell Co, Wy 

New Mine 

or 

Expansion 

Expansion 

Mine Expansion 

New Mine 

Year 

Project 

Begins 

1984 

1983 

i 

i 

1987 

Year 

Of 

Completion 

2014 

2006 

2012 

Mine Capacity 

at Full 

Product* (TPY) 

5,000,000 

3,800,000 

11,000,000 

Hlne Capacity 

Added 

(lf expansion - TPY) 

4,000,000 

-

* From 1/14/85 Federal Register; document not yet received 
P.17 

1 

PSD Analysis 

The analysis which is summarized in Table 4 presents a simplified approach to 

determining the potential impact of the proposed regulation on four of the 

facilities listed in the previous table. (Montco, Abaloska, East Gillette, 

and La Plata.) 

First, we determined from very recent (July 1, 1984) EPA ambient air quality 

data that each of these mines is located in an attainment area for TSP. 

Thus, each of these mines would be subject to PSD review. Only the Montco 

mine, however, is located near a Class I area. 

Next, from various environmental impact statements prepared for each of these 

mines, we have extracted values for the maximum air quality concentration due 

to the mining operation determined by air quality modeling. (Column 2) 

In the next column, PM.Q concentrations were calculated based on Information 

contained In the PEDCO report. The next column lists the allowable PSD 

increment for each mine. As previously stated only the Montco mine is 

located near a Class I area. 

Prediction of Production Levels 

Using a production algorithm based on a'simple rollback technique, an 

expression of the kind shown below was'utilized to estimate the maximum 

allowable production, in 10 tons for both TSP and PM.Q 

Pe/Ce • Pm/Cm 

Where Pm * planned production, million tpy 

Cm • modeled maximum, predicted .concentration due to mining 

operation, ug/m 

Pe » allowable production, million tpy 

3 

Ce » desired maximum predicted concentration, ug/m (5 for a 

class I area; 19 for a Class II area) 

For example, the "proposed expanded production of the Montco mine will result 

in an additional 6 million tpy and the maximum modeled off site concentration 

resulting from this activity is estimated to be 45 Ug/m . Therefore, solving 

for PE the maximum increase ln production for a class I Increment area of 5 

Ug/m 

would be 

PE • ' PMxCe 

CM 
P.18 

or 

PE - .6x5 - 3£ - 0.67x10 million tons. 

45 45 • 

Similarly, if this mining operation were to impact a Class II area, where the 

allowable Increment is 19 ug/m , solving again for PE, 

(6x19) - Pe . 

45 - Pe - 2.5x10° tons 

This analysis concludes that the PSD increments,could be exceeded at 0.67x10 

tons production near a Class I area, and 2.5x10 near a Class II area. This 

indicates that the proposed expansion to 6 million tons would probably be 

precluded by this regulation. Similarly, the table indicates that the other 

3 mines would all have to curtail production, based on this simplified 

analysis. This analysis was not conducted for the 24 hour, short term 

primary standard because the Impacts of the mining operations on this 

standard were not generally available in the environmental impact statements» 

The PM.Q analysis is Included for illustration only, since EPA has proposed 

in its revisions to the NAAQS for particulate matter that TSP should be 

retained for PSD calculations. Even if PM.fl increments are adopted, the 

Montco mine would be limited to approximately 1/3 of its projected increase 

in capacity near a Class I area. 

This represents a worst case analysis in that maximum values of production in 

conjunction with maximum offsite ambient concentrations were used. This 

analysis indicates that for TSP, maximum production at the Montco mine would 

be limited to about 10Z of its proposed peak production (.67x10 tons). 
Table 4 Potential Impact on Coal Production or Expansion Frora 4 Selected Proposed Mines on 

PSD Increments- A SIMPLIFIED ANALYSIS 

\BI Co/States 

co/Roeebud/MT 

Maximum 

Prpposed 

10 TPY 

Max. Offsite Max. Offsite 

TSP Cone. (PM101 Cone* 

(ug/mJ) (ug/m3) 

Annual 24 hr Annual 24 hr 

Allowable 

Increment 

(ug/m ) 

Max. Production 

Assuming TSP 

(IO5 TPY) 

Max. Production 

Assuming PMIO 

(10° TPY) 

Annual 24 hr Annual 24 hr Annual 24 hr 

45 13 0.67 

19 2.53 8 

.31 (Cl 

•77 (Cl 

Class I Area) 

ass II Area) 

iloka/Bighorn/MT 

: Gillette/Campbell/WY 

'lata/San Juan/MN 

5 

11 

4 

37 

45 

30 40 

11 

13 

9 

< 

i 

13 

19 

19 

19 37 

2*6 

4.6 

2*53 

, 

\ 

3*7 

8.63 

11*08 

9,18 11.4 

t 

y 

CO 
Other Issues 

Monitoring Requirements 

1. It is not clear where a facility must measure fugitive emissions — at 

the boundary line of the property, or off the property. If the latter 

criterion is chosen, how far from the property is appropriate? 

2. How are the impacts of other particulate sources factored into 

background concentrations? For example, farming, especially in the West 

can contribute substantial particulate loadings (probably MOO 

tons/year). Some of these particulates could be in the respirable range 

and could contain Insecticides, herbicides, and fertitlzers, potentially 

compounding the deleterious nature of these particulates. Yet farming 

is not one of the 30 major source categories proposed for coverage by 

this rulemaking. 

Focus of PSD Review Process 

Assuming surface mines are listed as a major source category, at what point 

in the mine's development will the PSD review focus? If it is during.the 

period of maximum production, we have shown that production could be 

significantly limited. Also, it is unknown how large an expansion of a 

facility would have to be to be considered a major modification. 

Visibility 

Another potential concern related to this proposal deals with visibility 

protection for Class I areas. Visibility protection is Intimately connected 

with the PSD program. First, the definition of "major stationary source" 

under the visibility provisions is identical to the definition applicable to 

PSD, with the exception that the- emission trigger level is 250 tons per year, 

rather than 100; listing surface mines under the PSD program might also 

trigger a listing under the visibility rules, requiring the application of 

emission limits more stringent than BACT if visibility ln Class I areas would 

be impaired. Second, some existing mines could be required to apply retrofit 

controls, unless rulemaking exempts them from this requirement. 
P.21 

Testimony of 

Robert T. Wallace 

Senior Vice President - Corporate Planning 

Peabody Holding Company, Inc. 

at 

Public Hearings 

before 

The Environmental Protection Agency 

Docket No. A-84-33 

Listing of Surface Coal Mines 

as Major Stationary Sources 

December 11, 1984 

Washington, D. C. 
P.22 

Members of the panel, 

My name 1s Robert T. Wallace. I am Senior Vice President for 

Corporate Planning of Peabody Holding Company, the parent of Peabody Coal 

Company, the nation's largest coal producer. Peabody and its affiliates 

operate 45 coal mines 1n 11 states, of which 23 are surface mines. In 

addition to our existing facilities, Peabody has plans to develop a number 

of new surface coal mines which would be adversely Impacted or perhaps 

precluded altogether by the requirement that such mines be listed as a 

designated source category for purposes of undertaking PSD (Prevention of 

Significant Deterioration) review for new sources under the Clean A1r 

Act. Our testimony today will not only show that such action 1s not 

necessary, but also that it 1s especially and unreasonably harmful to the 

orderly development of coal reserves. 

At the outset, let me say that my comments today are, of necessity, 

rather general. EPA has not yet published its Regulatory Impact Analysis 

required by Executive Order 12991. This makes 1t very difficult to make 

any detailed response to EPA's position on one of the key questions 1n this 

rulemaking — the economic and social Impact of EPA's proposal. For this 

reason, Peabody has requested an extension of the public comment period 

until after the RIA 1s released. In any event, Peabody Intends to submit 

more detailed written comments. 

Fugitive Dust from Coal Mining Activity 

In addressing EPA's proposal, I think 1t 1s appropriate to begin by 

discussing the nature of surface coal mining as It relates to the issue of 

fugitive dust. 
P.23 

t First, as a general rule, coal mines are located in rural areas, 

not 1n the midst of communities and other highly populated areas. 

• Fugitive dust from mining is considered harmless, non-toxic, and 

non-respirable. 

t Fugitive dust emissions from mining activities, such as topsoil 

handling, overburden removal, blasting, and haul road travel, are 

difficult and costly to control. 

• Individual surface mines often generate substantial amounts of 

fugitive dust, even after the application of best available control 

technology (BACT), but the collective contribution of surface coal 

mines to total fugitive dust emissions 1s negligible. Studies 

indicate that all surface nines, including hardrock minerals as 

well as coal mines, produce less than 2 percent of the total 

fugitive dust, of which surface coal mining contributes only 0.05 

percent. Unregulated sources such as roads and farms 1n rural 

areas produce an estimated 95 percent of total fugitive dust 

(attachment A) . 

r Techn-ical steps to further Umit the generation of fugitive dust, 

at surface coal mines are impractical, prohibitively expensive, or 

non-existent, leaving a reduction in production levels as the only 

practicable compliance strategy. 
P.24 

functij)^ is for mining operations. This uncertainty further demonstrates 

the unjustiflability of listing surface mines, because we cannot quantify 

the air quality impact with sufficient precision to support regulation. 

Effect on Coal Development 

The action on October 20, 1984 to list surface coal mines as a source 

category for purposes of PSD review would require that fugitive particulate 

emissions from new -or expanded mines be counted against consumption of the 

PSD Increment. This will ^ery significantly impede new coal mine 

development and the expansion of existing surface coal mines. Many mines 

are already required to utilize BACT 1n controlling particulate emissions, 

yet they could not meet PSD increment limitations. Hence, the only 

reasonable option for compliance at new mines would be to reduce the size 

of the mine. In some cases, the restricted mine size precludes the 

economically-viable development of the coal reserve. For those mines which 

Involve development of Federal coal — a majority of mines 1n the West — • 

the resulting limitation on annual coal production from a proposed mine may 

render the mine incapable of meeting the minimum production requirements of 

the Mineral Leasing Act. Peabody has testified more fully on this point at 

the Denver hearing, and will also cover It in Its written comments. 

A recent assessment of the impacts of the designation of surface coal 

mines as a source category was conducted by PEDCo Environmental, Inc. for 

the Department of Energy. The study Indicates that surface coal mines in 

or near Class I areas would be limited to annual production levels of from 

*Assessment of Impacts on the Surface Coal Mine Industry Resulting from 

Possible Chanqes In PSD and Ambient Air Quality Standards, PEDCo 

Environmental, Inc., June 1984 " 
P.25 

0.1 to 1.0 million tons, while mines 1n Class II areas would effectively be 

restricted to annual tonnage levels of from 0.5 to 3.3 million tons, 

depending upon the section of the country. For example, maximum mine 

production in Class II areas in Wyoming (24 hour standard) would be limited 

to 3.3 million tons per year (TPY); 1n North Dakota, production would be 

limited to 2.0 million TPY; while 1n Kentucky or Illinois the limit for a 

new mine would be .6 million TPY. As will be discussed 1n its written 

comments, Peabody has some concerns that even these estimates may be too 

high. But even accepting them, these production levels are far below the 

levels of the larger existing mines 1n those states (see attachment B) . 

The net effect of Imposing PSD Increment requirements on surface coal 

mines is to substantially alter economics of coal mining in most regions of 

the country, especially where reserve configurations, coal seam 

thicknesses, and investment considerations such as railroad spur lines, 

extraction equipment, and coal handling and preparation facilities dictate 

high volume mining operations. 

9 

Effect on Competition 

Limitations on new mine sizes bear some important implications for 

competition in the coal market. Because of economies of scale, lower 

volume new mines simply cannot compete with larger existing mines whose 

production 1s unimpeded by PSD Increment considerations. Moreover, 1t 

would be inappropriate 1n our view to suggest that overall production from 

new mines can be limited for PSD reasons because there 1s ample unused 

capacity in the various coal producing regions from existing mines. Among 

other problems, the concept that new entry Into the marketplace can be 

limited 1n favor of existing elements is contrary to accepted principles of 
P.26 

promoting competition, yet this concept may be Inherent 1n the requirement 

that new surface mines be limited to meet PSD increment considerations not 

imposed upon existing facilities. 

Effect on Peabody's Future Plans 

To satisfy new markets and to fulfill Its obligations to existing 

customers currently served from mines whose reserves will be exhausted, 

Peabody itself continually seeks to acquire new reserves and develop new 

mines. Our normal planning horizon of ten years projects several new 

surface coal mines which would be adversely affected by the application of 

the PSD requirements. 

Our current corporate plan requires installation of nine (9) new or 

expanded surface mines within the next decade. Most of these facilities 

are required to meet existing coal supply agreements. For the most part, 

these are not simply ventures connected with prospective business, but 

installations necessary to fulfill present contractural obligations. 

In the aggregate, these nine mines Involve an investment of over $300 

million, will produce more than 20 million tons of coal annually, will • 

generate cumulative revenues of over $2.7 billion dollars by 1993 and will 

employ over 1,400 people. Yet only one of these new or expanded mines — a 

small midwestern mine scheduled to produce 300,000 TPY — would be 

permittable at the contracted level, according to the PEDCo report. In 

theory, the Imposition of the PSD Increment limitations on these new or 

expanded mines would reduce their collective production levels by more than 

11 million tons per year. In reality, we would not develop these mines at 

limited levels because they would simply not be economic. 
P.27 

To say that the EPA action may have serious economic consequences 1s, 

from our perspective, a gross understatement, rt not only severely hampers 

our ability to meet new market demand, it precludes our ability to meet our 

current market obligations. 

Summary 

The requirement that fugitive particulate emissions from new or 

expanded surface coal mines be counted against consumption of PSD 

increments does not reflect the reality of coal mining or the very minor 

contribution it makes to overall fugitive dust emissions. Moreover, the 

effective limitation on the size of new surface coal mine facilities will 

severely alter Investment strategies and disrupt the orderly and economic 

development of the United States' vast coal reserves. Such limitations 

bear very serious Implications with respect to market competition. 

Finally, the process by which this issue has been addressed by EPA is 

troublesome. The action to 11st surface coal mines as a source category 

was taken before the pending revisions to the National Ambient Air Quality 

Standards for particulates have been promulgated and before a decision has 

been made on the proper definition of particulate matter to be used in the 

PSD Increments. In effect, the coal industry has been presented with the 

official presumption that new mines should be listed. We are told there 

would be a period of time to try to rebut the presumption with good 

evidence. Yet it appears that the pending revisions of the particulate 

standards and the definition of particulate matter for PSD purposes, which 

are so critical to the analysis of the Impacts of the listing, will not be 

completed within the time frame provided. Moreover, the failure of EPA to 

complete the Regulatory Impact Analysis required by Executive Order 12991 
P.28 

compounds the difficulty 1n making an effective rebuttal. More 

importantly, 1t calls into serious question the availability of the factual 

basis on which the action to 11st was taken. We believe it would have been 

far more prudent and fair to have determined not to list coal mines at this 

o 

time, at least until these missing elements were available for 

consideration. 

For reasons stated above, we firmly believe the action to list surface 

coal mines as a source category for PSD purposes is both inappropriate and 

impractical. Further, when all the pertinent elements and impact analyses 

are completed, we believe our contention will be conclusively 

substantiated. 

This completes my testimony. I would be happy to respond to 

questions. 
P.29 

Attachment A 

CONSTRUCTION" 3.7% fa VOtEST FIRES 0.3 * 

MINING 16% 

(

tailings 1.26* 

surfeee coo! O.OiX 

other surface 0.32%, 

1976 

Cliiribvtiont 

fe tetoi emu* 

kvrdmn ifi 

a*re»nt 

ficmrt 1. Cateoories of Particulate Emissions From 

Open Sources in the U.S. 

Source: Evans, T.S. and Cooper, D.W., "An Inventory of 

Particulate Emissions from Open Sources," Journat 

of the Air PoUution Control Association, Vol. 30, 

No. 12, 1298-1303 C1980). 
P.30 

Attachment B 

State 

Montana 

Wyoming 

Limitation on new 

Mines resulting from 

PSD Increment . 

Consumption (MMTPY)1 

3.3 

3.3 

North Dakota 2.0 

New Mexico 1.2 . 

Illinois 

Indiana 

Kentucky 

0.6 

0.5 

0.6 

SURFACE COAL MINES 

1982 

No. of Mines 9 

Above Limitation2 

4 

11 

5 

3 

13 

14 

18 

Average 

Production 

Per Mine Above 

Limitation 

(MMTPY)

 z 

5.5 

8.2 

3.2 

5.8 

1.8 

1.6 

1.4 

Largest 

Existing 

Mine (MMTPY)2 

9.9 

16.8 

5.2 

7.2 

4.0 

3.4 

2.8 

assumes Class II area, 24 hour standard (Assessment of Impacts on the 

Surface Coal Mine Industry Resulting from Possible Changes in PSD and 

Ambient Air Quality Standards, PEDCo Environmental, Inc., June 1984) 

z (Mine Safety and Health Administration) Employment, Production and 

Injuries Data Base for 1982 
P.31 

December 14, 1984 

EPA'S PROPOSED LISTING OF SURFACE MINES AS MAJOR STATIONARY SOURCES 

SUPPLEMENTARY COMMENTS TO THE TESTIMONY OF 

PEABODY HOLDING COMPANY, INC. ON DECEMBER 11, 1984 

EPA's proposal to list surface coal sines as designated sources 

for purposes of undertaking; PSD reviews is generally perceived to be a 

significant problem west of the Mississippi. This is due to the fact 

that most large-capacity (e.g., 5 million tons or more) new surface 

nines are scheduled to open in the west. What 1s not understood is 

the fact that the proposed regulatory action could be even aore serious east of the Mississippi. This occurs because unit costs are ouch 

•ore sensitive to voluae fluctuations due to the fact that the overburden 1s generally greater than it is in the west and the coal seaas 

are not as thick. 

In testimony given on December 11, 1984 in Washington D.C. (EPA 

Docket No. A-84-33), Peabody indicated that Its plans over the next 

ten years include the development or major expansion of nine surface 

mines which could be significantly impacted by the proposed listing. 

Specifically, these nine sines would produce more than 20 mi 11 ion tons 

of coal annually, generate cumulative revenues of over $2.7 billion, 

and employ over 1400 people. Although a breakdown was not provided as 

part of the formal testimony, six of these sines involve coal reserves 

located in the states of Ohio, Indiana and Kentucky. Together, they 

account for almost $1.9 billion in total revenue, or 68 percent of the 

total noted in the testimony, and approximately 75 percent of the 

total jobs. 
P.32 

In order to illustrate the sensitivity of unit costs to voli 

reductions, particularly in the Midwest, Peabody conducted a bri«f 

analysis of a large existing coal sine currently operating 1n the 

state of Indiana. Under present circumstances, this Bine produces 3 

Billion tons of coal a year for a major utility. This 1s accomplished 

through the use of three large excavators which together move approximately 48 nil Ho n cubic yards of virgin overburden a year. The average f.o.b. Bine price paid by the utility for this coal approximates 

527.00 per ton. Based upon the PEDCO study for DOE, which indicates 

that surface mining operations in the state of Indiana would be 

limited to only 500,000 tons of production a year if the proposed 

listing were to be Bade final, the average f.o.b. sine price was 

recalculated. In summary, only 8 million cubic yards of virgin 

material would be required in order to achieve the 500,000 ton 

production level. However, because of the depths involved, at least 

one of tha large excavating shovels was still required, even though it 

would only operate 30 percent of the time because of the production 

constraint. Under these assumptions, it was estlaated that the f.o.b. 

nine price paid by the utility would rise to approximately $40.00 per 

ton, or a 48 percent increase in the cost of the fuel. The employment 

impacts would also be substantial. Total mining jobs would decline 

froa 511 to 118. 
P.33 

Enclosure 2 

Comments on Benefits Methodology 

Inapplicability of PMIO Health Studies to this RIA 

Inasmuch as a significant portion of the benefits estimates used 

in the surface coal mining listing RIA are based on the RIA for 

the proposed revision of the National Ambient Air Quality 

Standards (NAAQS) for Particulate Matter, many of the flaws noted 

by the Department of Energy in its June 7, 1985, comments on the 

NAAQS proposal are applicable to the surface mining RIA. 

Attached are those portions of our NAAQS comment letter most 

relevant to the surface coal mining RIA; our complete letter is 

entered in Docket Nos. A-82-37, A-82-38, and A-83-48, and 

referred to hereafter as "NAAQS comments." (See Enclosure 3.) 

The problems we addressed in our NAAQS comments are further 

compounded by their application of the NAAQS data and findings to 

the surface coal mine listing proposal. For example, the 

analysis of health effects benefits derived by regulating flew 

surface coal mines under Alternatives II and III is extrapolated 

from the epidemiological studies EPA used to support a proposed 

size indicator of 10 microns for the proposed health-related 

primary standard. 

The majority of the evidence for health effects from particulate 

exposure are based on British Smoke studies carried out between 

10 and 30 years ago. Particulates included in the British Smoke 

measure are substantially different in particle composition from 

fugitive emissions from surface mines, since most mine particles 

will be dust, and sulfate composition in mine particles is 

expected to be especially low. This is particularly important 

since several of the health effects studies identify sulfates, 

rather than unspecified particles, as having the potential for 

health risk. 

The size composition of fugitive emissions from surface mines can 

be expected to contain a much higher portion of large particles 

in comparison to typical urban ambient concentrations. EPA has 

already determined in the PMIO review that the health risk from 

particulate exposure comes from smaller particles (the so-called 

thoracic particles), not coarse ones. The use of health damage 

estimates from the PMIO review is, therefore, questionable, since 

neither the particle size exposure profile nor the chemical 

composition is expected to be at all similar between urban PMIO 

studies and the surface mining case. 
Appropriate Scope of Alternative IV 

Alternative IV considers the benefits and costs of re-siting 

mines that would have an impact on Class I and mandatory Class II 

areas. The analysis in.the RIA indicates no perceptible impact 

on the one mandatory Class II area studied in the analysis, the 

Chaco Culture National Historic Park. If new surface coal mines 

are projected to have little or no impact on mandatory Class II 

areas, the justification for considering them in the alternative 

rule appears weak, and sizable economic dislocations may occur 

for no perceptible benefit. If a rule similar to Alternative IV 

is to be considered at all, it should be restricted to mandatory 

Class I areas. 

Overestimates in Benefits Estimations 

The surface mining RIA contends that benefits are probably 

underestimated because existence value is not quantitatively 

estimated except in Alternative IV. In fact, existence value is 

described as "potentially large" in the RIA text (e.g., see RIA 

page xv). Analytic attempts to measure existence value have, 

however, used various definitions of that concept. In some 

cases, it is associated with a payment for the right to 

participate in the future (see for example Horvath, 1974), as 

indicative of the desire to preserve an asset (see for example, 

Meyer, 1974; Schultz et. al., 1980; or Brookshire, Eubanks, and 

Randall, 1983), or as a payment for knowing the resource exists 

(see for example, Walsh, Gillman, and Loomis, 1982; or 

Desvousges, Smith-and McGivney, 1983). 

Not all of the above definitions are potentially applicable to 

the case of surface mines where, after a mine's fixed productive 

life, the land resource is to be returned to its pre-mine state 

because of Federal legislation, in some cases supported by 

equally stringent State laws. Thus, the mine -ceases to cause 

visibility impacts after it is fully exploited. For large mines, 

as are anticipated to be regulated by this proposal, the time 

that particles will fall beyond visual property boundaries is 

generally shorter than the mine lifetime since the actual area of 

disturbance is moving and will often be located well away from 

the property boundary. 

Additionally, visibility is subject to wind conditions. This 

implies that days will differ in terms of visibility damage 

effects. Existence value estimates related to the desire to 

participate in the future and the other benefits measures must, 

under such conditions, reflect the probabilistic nature of the 

alleged visibility damage. Individuals might wish to pay to 

reduce the" probability that, on the day they visit the site, the 

visibility conditions would be of a certain level or they may 
P.35 

alternatively choose a low cost or no cost mitigation strategy. 

Examples would be to choose alternative visit days within the 

allotted vacation time or choose a visit time of year when the 

prevailing wind boosts the likelihood of no visual interference. 

The amount of willingness to pay for these circumstances would 

not be nearly as large as that which might be experienced with 

irreversible damage, or as that that would be anticipated if the 

visibility damage were continuous and constant over a several 

year period, as is assumed in most willingness to pay benefits 

surveys used for this RIA. 

Lastly, visibility is a highly site specific benefit. Panoramas 

of the Grand Canyon are in no way comparable to those over, say, 

portions of sparsely inhabited Northern Plains or agricultural 

mideast coal regions. Using damage estimates from one site for 

another quite different vista is a highly questionable procedure. 

In this case, we believe the specific application of Grand Canyon 

data to Bryce Canyon is inappropriate. Existence benefits at 

Bryce were functionally related in the RIA to Grand Canyon, 

estimates by, in part, the ratio of visitor days at Grand Canyon 

and Bryce. This assumes a simple function form and linearity 

that are not obvious. The estimates provided should, therefore, 

be even more highly caveated than is presently done. A large 

uncertainty band surrounds the estimates, and should be better 

noted. 

Given the likely overestimate of health and visibility effects 

noted above, and controversy about the presence of existence 

value generally and in this specific application, it seems likely 

that total benefits have been overestimated, not underestimated, 

in the numeric values provided. Additionally, such a variety in 

definitions of existence value suggests that the economics 

profession has not reached a consensus on what constitutes the 

benefit achieved by its protection. Being extremely sensitive to 

questionnaire design, existence value is therefore at an 

experimental stage of development and should not be used in a 

policy document. EPA research support for such work may yield 

benefits for future policy analysis, however, and we support 

continuing^research on this concept. 

Considerations of the appropriateness of existence value in the 

visibility case, and of its potential magnitude, where the damage 

level fluctuates due to natural conditions and mining patterns, 

suggest that existence value may be quite small in this case. As 

the RIA notes, there have been very few attempts at measuring 

existence value, even under circumstances where it has been more 

traditionally applied. DOE staff,•therefore, does not believe 

that the RIA should describe the insufficiently analyzed 

existence value as "potentially large." 
P.36 

DOE staff considers the most appropriate course is to provide a 

short, objective discussion of existence value and its 

application to these regulatory alternatives, noting that the RIA 

assigns no value to these existence benefits without presenting 

inadequately-supported conclusions or any quantitative values. 
P.37 

5 

BIBLIOGRAPHY 

Brookshire, D.S., L.S. Eubanks, and A. Randall, "Estimating 

Option Prices and Existence Values for Wildlife Resources," Land 

Economics, 59(1):1-15 (1983) 

Desvousges, W.H., V.K. Smith, and M.P. McGivney, "A Comparison of 

Alternative Approaches for Estimating Recreation and Related 

Benefits of Water Quality Improvements," Report to USEPA, Office 

of Policy Analysis, Washington, D.C. (1983). 

Horvath, J.C, "Economic Survey of Southeastern Wildlife and 

Wildlife-Oriented Recreation," Transactions of the 39th North 

American Wildlife and Natural Resources Conference, 187-194 

(1974). 

Meyer, P.A., Recreation and Preservation Values Associated with 

the Salmon of the Fraser River, Information Report Series,*No. 

PAC/N-74-1, Vancouver, Canada; Fisheries and Marine Service 

(1974). 

Schulze, W.D., D.S. Brookshire, E.G. Walther and K. Kelley, 

"Methods Development for Environmental Control Benefits 

Assessment," Volume VIII, The Benefits of Preserving Visibility 

in the National Parklands of the Southwest, USEPA, Office of 

Exploratory Research, Office of Research and Development, 

Washington, D.C. (1980). 

Welsh, R.G., R.A. Gillman and J.B. Loomis, "Wilderness Resource 

Economics: Recreation Use and Preservation Values," America 

Wilderness Alliance, Denver, Colorado (1982). 
Other Comments 

Subjective Terminology 

The RIA is generally forthright in identifying those assumptions 

which could have a significant effect on the relative strengths 

of the various estimates made. The inherent weaknesses in the 

analysis, in great measure caused by the uncertainties of the 

site-specific nature of the PSD regulatory program, are generally 

acknowledged. There is, however, often a greater degree of 

subjective judgment used in presenting the degree with which the 

benefits estimates may vary from "reality," than for the cost 

estimates. In addition, the geographic extent of air quality 

improvements needs to be put into perspective, especially in the 

Executive Summary. Actual population exposure figures would be 

more appropriate than stating that the population is low (RIA, 

page xxiv). 

Baseline 

We are concerned that inadequate attention has been given to 

several factors which may result in the over-estimation of air 

quality benefits achieved under the regulatory alternatives 

considered. Among these are those requirements which, although 

not designed for ambient air quality protection, provide some 

degree of emissions control for other reasons, including worker 

safety. For example, State, Federal and/or collective bargaining 

contracts' worker health and safety requirements may require some 

control of fugitive emissions. Yet with the exception, of some 

State air quality-related permit requirements, these are not 

included in the baseline. In addition, any DOI Office of Surface 

Mining permit requirements which may provide some air quality 

protection are not addressed. We believe that DOI should furnish 

the relevant information solicited by EPA, and that EPA should 

analyze how these impact the analysis prior to reopening the 

listing comment period. 

Pit Retention/Sensitivity Analysis 

While the RIA does acknowledge the counter-intuitive lack of pit 

retention accommodation in the ambient air impact analysis, the 

only sensitivity analysis performed by PEI appears to be the 

Equivalent Source Method (ESM), (PEI report, Appendix C). ESM 

does not include pit retention, and seems to compound the error 

it was designed to cross-check against--that surface coal mines 

are, unlike most sources subject to PSD, not static. In 

addition, as the estimated range of pit retention of particulate 

matter may be 25 to 90 percent, mentioned in the PEI report as 

preliminary (PEI report, page A-13), potential ambient emissions 
P.39 

and air quality impact would be better reflected by providing a 

range of results that incorporate such estimated factors for pit 

retention of particulates. The use throughout the RIA of linear 

factors to allow the analysis to be completed makes the lack of a 

similar assumption to factor in some pit retention effects to be 

singularly unfortunate. Both health and visibility estimates 

would be substantially changed if such a consistent procedure had 

been applied. 

Analysis of Mines Near Class I and Mandatory Class II Areas 

The analysis for Alternative IV, which assumes relocation of an 

actual proposed mine (for the Class I area, Bryce Canyon National 

Park), at the distance from the park where ambient impact is 

below the Class I increments, is incomplete. While assuming the 

relocation of this mine approximately 25 miles from the park, 

several important factors are not addressed. For example, . 

whereas downsizing the mine from "historical" production size is 

the air quality compliance method analyzed in Alternatives'll and 

III, it is not considered as an alternate compliance method for 

Alternative IV. Rather, only relocation at a distance from the 

Class I area, without limiting production, is analyzed. In 

addition, the adequacy of coal reserves at the assumed location 

and distance is not discussed. 

Use of National Cost Data in Alternative IV 

The RIA points out that if a coal site in the Southwest is not 

available, the substitute production will probably be taken from 

this area (RIA, page V-7; "For the most part, the San Juan Basin 

is the only competitor in these two states," referring to New 

Mexico and Arizona). The text which follows is even more 

restrictive. Therefore, we question the use of the national 

reserves to set the price of coal from the alternative source,, 

rather than a price set by consideration of San Juan Basin only. 

We assume that such a procedure would cause the price of 

competitive coal in Alternative IV to increase, causing the cost 

element of the net benefits calculation to be increased. 
Departntent of Energy 

Washington, D.C. 20585 

P.40 

Enclosure 3 

June 7, 19 85 

Honorable Lee M. Thomas 

Administrator 

U. S. Environmental Protection Agency 

401 M Street-, S. W. -

Washington, D. C. 20460 

Dear Mr. Thomas: 

The Department of Energy (DOE) appreciates the 

opportunity to provide comments on the proposed revisions 

to the National Ambient Air Quality Standards (NAAQS) 

for particulate matter (49 FR 10408; March 20, 1984), and 

related revisions to regulations implementing these 

revised standards and associated air quality programs 

(50 FR 13130; April 2, 1985; and 49 FR 10421; March 20, 

1984). 

The Department's detailed comments and supporting 

analyses are contained in enclosed Attachments 1-A 

through 1-F, and Attachments 2 through 6, respectively. 

We note the recent extension (50 FR 21629; May 28, 

1985) to July.3, 1985, of the public comment period on 

the April proposal, and may be providing supplemental 

comments on those proposed regulations. 

Our primary concerns regarding the proposed primary 

standards include the selection of an improper size 

indicator for health protection. The Department of Energy, 

recognizing both the complexities involved in revising 

the 1971 NAAQS for particulate matter (PM), and the 

scientific consensus that the existing size indicator for 

health-protection PM standards is unsatisfactory, suggests 

that fine particulates, due to their ability for deep 

pulmonary penetration and their specific (and potentially 

biologically active) nature, are the appropriate ambient 

pollution target for control. However, we believe that, 

if the primary standards are set based on the ten micron 

indicator, the upper end of each proposed range provides 

at least the requisite statutory margin of safety to 

protect public health. The lower end, from which you 

stated you are predisposed to select, is unnecessarily 

restrictive based on known and suspected health effects, 

as well as documented historical changes in species of 

ambient particulate matter. 
P.41 

- 2 -

Our primary concern with the proposed Total 

Suspended Particulate (TSP) secondary standard is that it 

is incomplete, potentially unnecessary, and insufficiently 

supported by the data relating TSP to the single welfare 

value the proposed standard is designed to protect. There 

is sufficient evidence to support the conclusion that the 

primary standards in the ranges proposed for the selected 

size indicator will provide adequate protection for the 

soiling welfare value on which the proposal is based. 

In addition, since other welfare values are not 

addressed by this proposed standard, the potential exists 

for ongoing studies to result-, over the next several years, 

in an additional regulatory ambient program and the attendant 

review and revision of State Implementation Plans to 

attain/maintain any subsequently revised secondary standard. 

As the Environmental Protection Agency (EPA) has recently 

reported in "National Air Quality and Emissions Trends Report, 

1983," average annual TSP ambient levels have decreased 20 

percent since 1975. In light of this trend, we suggest that 

withdrawal of the proposed secondary standard, until a more 

complete welfare-protection standard can be justified and 

designed, is the appropriate course of action. 

Our detailed comments on the Staff Paper and , 

Regulatory Impact Assessment are also enclosed as Attachments. 

In summary, DOE has serious concerns regarding some of the 

analytic methodology and the presentation of various scientific 

data used to support the proposed ranges for the standards. 

We believe that these inadequacies cast serious doubt that 

the recommendations presented to you in the Staff Paper are 

sufficiently justified. 

The Department supports your Agency's efforts to improve 

the management of our Nation's air resources. In great part, 

these regulatory proposals seek to reflect the increased 

sophistication in both scientific understanding and public 

policy perspective since the clean Air Act was enacted in 

1970. The recent EPA reports on emissions levels and ambient 

air concentrations demonstrate that the NAAQS process has been 

remarkably effective. Revisions of these standards based on 

new, demonstrated scientific findings provide an important 

continuation of this effective air quality management program. 
P.42 

- 3 -

I look forward to continuing our mutual efforts and 

cooperation as DOE and EPA seek the appropriate balance in 

our Nation's energy and environmental goals, and hope our 

comments prove useful as you seek to take final action on 

these proposals. Should you wish further information or 

clarification on the points presented, please call me or 

Ted Williams, Director of our Office of Environmental Analysis 

(252-2061). 

Yours truly, 

BlM^.&Off^ 

Danny J. Boggs 

Deputy Secretary 

Enclosures 

cc: Charles Elkins 

Acting Assistant Administrator for 

Air and Radiation 

U.S. Environmental Protection Agency 

Central Docket Section (LE-131) 

Docket No'. A-82-37 

Docket No. A-82-38 

Docket No. A-83-48 

- 3 copies 
P.43 

ATTACHMENT 1-A 

SIZE INDICATOR FOR PRIMARY STANDARDS 

While revision of the size-dependent particulate matter 

standard from Total Suspended particulate (TSP) to include only 

particles with an aerodynamic diameter (d ) smaller or equal 

to a nominal 10 micrometers (PM 10) is an improvement from the 

current primary standard, data indicates that a fine 

particulate (FP).standard,.including only those particles with 

an aerodynamic diameter smaller or equal to a nominal 2.5 um, 

would provide a better basis for human health protective 

regulation. 

Recent analyses conducted at Harvard University for the 

Department of Energy's Health and Environment Risk Analysis 

Program (HERAP) indicate that variations in ambient FP mass 

correlate better with health effects than variations in levels 

of larger-sized particulate measures.— in this work, 

neither TSP nor IP (inhalable particulates) mass (d,-15 um, 

mass roughly 1.1 times PM 10) were found to be significant 

predictors of residual mortality; in contrast, FP was a 

statistically significant predictor of variations in residual 

mortality, and thus provides a preferable basis for health 

protection. 

1/ Attachment 2. Ozkaynak, H., G. D. Thurston, T. D. Tosteson, 

D. M. Smith, P. L. Kinney, B. Beck, W. Skornick, S. D. Colome 

and A. Schatz, "Analysis of Health Effects Resulting from 

Population Exposures to Ambient Particulate Matter," prepared 

for the Health and Environment Risk Analysis Program, U. S. 

Department of Energy (October 1983). 
P.44 

ATTACHMENT 1-A (Cont.) 

Even though PM 10 mass would encompass the FP mass, it rs 

important to control, as specifically as possible, the most 

deleterious portion of particulate matter. It is especially 

the fine particle fraction of ambient aerosols which includes 

greater amounts of the toxic organic and acidic components 

resulting from uncontrolled motor vehicle, oil, and coal 

combustion emissions. Since coarse particles are largely 

comprised of relatively non-toxic natural crustal material, it 

is probable that the inappropriate practice of trading off 

controls of fugitive coarse particles (e.g., via the paving of 

dirt roads) in return for regulatory allowances that do not 

stimulate emissions reductions/control of more toxic fine 

particles will continue under the proposed PM 10 standards. 

It seems clear that, from both the regulatory and public health 

perspective, it is the FP mass or chemical species within it 

which should be regulated, not PM 10 or TSP. 
P.45 

1 

ATTACHMENT 1-B 

PROPOSED LEVEL FOR PRIMARY STANDARDS 

In his proposal of revised primary NAAQS (49 FR 10408), the 

Administrator stated his predisposition to select final 

standards from the low end of the ranges of ambient levels 

under consideration, in order to provide the adequate margin of 

safety required by the Clean Air Act. The Department of Energy 

believes that the various, and sometimes extremely, 

conservative assumptions used in most steps of the analytic 

work leading to proposal of this range, inappropriately 

compound the margin of safety provided to levels well beyond 

those necessary for adequate public health protection. In 

addition, the background documents, most notably the Staff 

Paper, fail to adequately inform both the Administrator and the 

public of the identity, nature and extent of these conservative 

assumptions. See Attachment 3. 

Two major points are made here with regard to the level of the 

proposed primary standards. First, although the initial ranges 

evaluated in the revision process (Staff Paper, pages 111 et 

seq.) were 150 to 350 ug/m (24-hour average) and 55 to 110 

ug/m (annual average), the proposal (49 FR 10408) reduced 

the ranges of consideration to 150 to 250 ug/m and 50 to 65 

ug/m , respectively. Both OAQPS staff (Staff Paper, pages 

111 et seq.) and CASAC (Closure Memorandum; Staff Paper, page 

E-4) stated that the upper portions of the original (i.e., 150 

to 350, and 55 to 110) ranges of interest provided little or no 

margin of safety. Thus, by eliminating the upper half of-the 

original range for both standards, the proposed ranges set 
P.46 

ATTACHMENT 1-B (Cont.) 

forth do address a margin of safety at their upper levels as 

proposed on March 20, 1984. Thus, the predisposition of the 

Administrator to select from the lower end of the revised 

ranges appears to "double-count" the required margin of safety, 

as judged by both EPA staff and the statutorily required expert 

review group. 

The second point is the conservative approach used to translate 

data of existing studies based on British Smoke (BS) and TSP 

ambient levels to PM 10. Since neither the BS nor TSP levels 

are easily converted to PM 10 levels, the conservative 

assumptions used to translate the effects levels appear to 

provide a further "double-counting" toward a higher margin of 

safety, which is neither adequately enumerated nor documented 

in the background reports. 

Included in these conservative assumptions are the conversion 

factors for British Smoke concentrations to PM 10 

concentrations as equivalent or equivalent plus 100 micrograms 

(i.e., PM 10 = BS,- or PM 10 = BS + 100). Yet the Staff Paper 

points out that 0.8 PM 10 = PM 6, and that BS is a subset of 

PM 4.5 concentrations, hence a smaller subset of PM 6 

particles. If it were (conservatively) assumed that BS = 0.7 

3 PM 10, then BS concentrations as low as 150 mg/m convert to 

greater than 210 ug/m of PM 10. Through use of 

overconservative assumptions on the physical and chemical 

properties of BS concentrations relative to PM 10, these 

conversion factors are improperly designed in the Staff Paper 

and the proposal (See Attachment 3). 
P.47 

ATTACHMENT 1-B (Cont.) 

A detailed critique of these assumptions, as well as on the 

underlying scientific data, are provided in Attachments 3 and 4. 

Since' our view is that the analysis leading to selection of 

both the original ranges (150 to 350, and 50 to 110 ug/m ), 

3 

and the reduced ranges (150 to 250, and 50 to 65 mg/m ) of 

the standards proposed include extremely conservative (and not 

well documented) assumptions, the Department of Energy suggests 

that, if PM 10 is the selected size indicator for primary 

standards, these standards be set as values that are not lower 

than the upper end of the ranges of the March 20, 1984, 

proposal. The upper end of the present range provides the 

requisite margin of safety as required by the Act. 
ATTACHMENT 1-C 

SECONDARY STANDARD PROPOSED IS INSUFFICIENTLY SUPPORTED 

BY DATA, AND INCOMPLETE 

The proposal to replace the current 24-hour secondary TSP 

standard with an expected annual (arithmetic mean) TSP 

3 

standard, selected from a range of 70 to 90 ug/m , is stated 

as based solely on protection against the soiling effects of 

airborne particulates. While soiling can be one of many 

welfare effects for which a secondary ambient standard is 

designed to protect, it is by no means the only one. EPA 

clearly states that visibility and prevention of significant 

deterioration of air quality are welfare aspects protected 

through other regulatory programs; the proposed secondary 

standard is designed solely to protect against soiling of 

fabrics and surfaces. The EPA Staff Paper specifically notes 

that an additional (or separate from the primary) standard is 

unnecessary to protect against materials or vegetation damage 

(Staff Paper, page 148). 

Both the Staff Paper and Regulatory Impact Analysis (RIA) note 

that soiling data are largely qualitative, and that it is 

impossible to make clear determinations of particle size 

dimensions with respect to soiling. The studies relied upon 

r 

indicate that no additional costs are incurred by the public as 

a result of fabric/surface soiling, and that differences in 

cleaning cycles and costs of these items are based on 

socio-economic variables, not on levels of airborne 

particulates. The Clean Air Science Advisory Committee *' 

(CASAC), in its January 29, 1982, Closure Memorandum, stated 

that it reached no consensus regarding retention or elimination 

of a secondary standard for TSP (Staff Paper, page E-6). 
P.49 

ATTACHMENT 1-C (Cont.) 

The Department of Energy's basic resource management concern 

here is the issue of the "moving target" standard. EPA, often 

together with other Federal agencies, currently has efforts 

underway which may lead to additional revision(s) of the 

secondary PM standard. Perhaps the- clearest examples are the 

interagency Visibility Task Force on "Phase II" (haze) 

visibility protection, and the interagency National Acid 

Precipitation Assessment Program (NAPAP). DOE is an active 

participant in both groups. 

The Visibility Task Force studied appropriate mechanisms to 

address the impairment of visibility by regional haze-related 

emissions. The current proposal is inconsistent with the 

recommendations of both OAQPS Staff and CASAC to establish a 

fine particle secondary standard to protect this welfare 

value. While sufficient quantitative data needed to establish 

such a standard may not yet be available, recently (April 1985) 

the Task Force staff preliminarily recommended that any linkage 

between the ongoing NAAQS programs and regional haze be 

addressed by the Agency. An additional Task Force staff 

preliminary recommendation suggests further examination of an 

alternative fine particle NAAQS, which may lead to an 

additional regulatory program for secondary standard setting 

motivated by the visibility welfare concern. Thus, if the 

proposed secondary TSP standard is promulgated, states and EPA 

will expend resources to review and revise, as necessary, State 

Implementation Plans for the new standard, and then 

subsequently go through this process again for a 

visibility-based secondary standard. 
P__50 

• ATTACHMENT 1-C (Cont.)-

This same process could result from the determinations•of the 

NAPAP. The welfare effects of acid deposition related.to 

particulate matter, uncertain as to both their nature and 

cause(s), are also specifically not addressed by this 

proposal. The extensive ongoing research in this area, 

coordinated by the NAPAP, may also lead to an additional 

regulatory program foe secondary standard setting. The NAPAP's 

findings may lead to a control program for atmospherically 

formed and emitted acidic particles, to protect against the 

ecological impacts of these deposited particles. Thus, the 

problem of the "moving target" issue involves at least this 

potential regulatory program and the possible regulatory 

program for regional haze. Since national and regional PM air 

quality are improving, as noted in EPA's recent report, 

•National Air Quality and Emissions Trends, 1983", there 

appears to be no need to promulgate such an incomplete 

secondary standard revision at this time. 

Of even deeper concern is the uncertainty for existing, new, 

and planned emission sources as to necessary control 

requirements, and the potential for siting constraints for new 

fossil-related facilities (See Attachment 6). Given

 ;the 

weakness of the data utilized to support the proposed 

soiling-based secondary standard, and conflicting data which, 

in part, supports the conclusion that the proposed primary 

standard will provide the same degree of soiling protection as 

the proposed secondary standard, we suggest withdrawal of the 

proposed additional welfare standard until decisions on 

visibility haze protection and other particulate impacts 

regulations are made. Multiple, sequential changes to a 

national standard, especially one of such broad scope as the 

secondary NAAQS for PM, are inappropriate, particularly where 

the first revision is done for a relatively minor reason which 

includes no measurable benefit. 
P.51 

ATTACHMENT 1-D 

THE STATISTICAL DETERMINATION OF NONATTAINMENT 

Statistical Form vs. Deterministic Form - EPA indicates 

estimated exceedances improve the probability of detection of a 

violation. However, the use of an estimated exceedances 

concept does not improve the probability of the detection of 

actual exceedances of the standard level, the basic element 

used in the determination of a violation. At a given 

monitoring site currently under a partial sampling schedule 

(e.g., once every six days), the probability of detecting 

exceedances does not increase unless the sampling frequency is 

increased, or the level of the standard is lowered. The 

proposed standard with a single exceedance in fact increases 

the probability of having an area classified as nonattainment, 

compared to the current standard which requires two exceedances 

to determine an area as nonattainment. This fact is not the 

result of the use of the estimated exceedance concept, but of 

the sampling frequency causing a reduction in the number of 

exceedances considered in the determination of a violation. 

The use of the estimated jexceedances concept increases the 

number of exceedances by adjusting for the undetected, but 

potential, exceedances during the days without samples if there 

are one or more exceedances detected. For example, if there 

were one or more detected exceedances in one of the last three 

years (when the sampling frequency was once every six days), 

then the number of estimated exceedances in that year at the 

sample monitoring site is six or higher and the number of 

expected annual exceedances (per the EPA proposal) becomes'* two 

or higher, resulting in an attainment violation for three 

years. However, if there were no detected exceedances, i.e., 

zero observed exceedances-, then the number of estimated 
P.52 

ATTACHMENT 1-D (Cont.) 

exceedances as well as the number of expected exceedances is 

zero, resulting in no violation even if the site has several 

actual exceedances in the year on days where no sample is taken. 

Therefore, unless the probability of detection of exceedances 

is increased, the probability of detection of a violation is 

not increased. Thus, since the EPA proposal does not modify 

the sampling frequency, the probability of detecting an 

exceedance is unchanged. The probability of misclassifying 

areas, particularly those in marginal nonattainment, is not 

reduced with the use of the estimated exceedances concept, but 

may be perpetuated for a much longer time. 

Exceptions for unusual Events and Trends - The proposal states 

that exceptions would be allowed, under the guidelines 

currently being developed, to reduce the effects of unusual 

events and other trends. It is not possible to determine how 

objective the guidelines would be. The guidelines may not be 

useful in identifying marginally unusual events which are not 

identified, but which resulted in an exceedance that happened 

to be detected. This "exception allowance" in the guidelines 

could also be inappropriately used, resulting in misclassifying 

nonattainment areas as attainment areas. 

The proposed statistical form with allowable exception 

introduces a subjective human element in determining whether 

single or multiple detected exceedances in one year are due to 

unusual events or not, while the current form in effect 

automatically allows one (the highest) exceedance per year to 

be excluded from being considered in determining attainment 

status. 
P.53 

ATTACHMENT 1-D (Cont.) 

o 

Three Years of Data 'vs. One Year of Data - The proposed 

requirement of three consecutive years of data in determining 

attainment/nonattainment status may be useful under certain 

circumstances, e.g., when the data recovery rate is very poor 

during the latest year of sampling, thus missing detection of a 

number of actual exceedances altogether. However, the 

requirement could adversely penalize sites with good data 

recovery in remote past years (resulting in detected 

exceedances), or reward sites with poor data recovery rates in 

the past (missing actual exceedances altogether). It^could 

also penalize an area with past detected exceedances, but 

without current exceedances, due to slightly improving air 

quality, trends that may not have been fully identified, or may 

penalize an area with past exceedances due to unusual events 

which may not have been documented. These trends or- unusual 

events, when not fully documented, could not be used to exclude 

these past exceedances from being considered in determining 

nonattainment status. For example, one single exceedance that 

occurred three years.ago could inappropriately classify an area 

as nonattainment. We suggest that use of one year of data, 

with an increased sampling frequency and improved data recovery 

rate, is preferred over the three years of data for 

nonattainment determinations. 

Single Exceedance vs. Multiple Exceedances - Since the number 

of allowable exceedances and the associated level of standard 

under the multiple exceedance form of standard are not 

proposed, it is not possible to provide comments as to which 

alternative would provide better protection. However, from the 

standpoint of eliminating the human element in determining 

observed exceedances as due to unusual events or not, the 

multiple exceedance alternative is preferred to single 
P.54 

exceedance form. It is worth noting that, for a 

once-every-six-day sampling schedule, a case of allowing five 

expected exceedances is almost equivalent to the current form 

of the standard in eliminating one (the highest) observed 

exceedance in one year from being considered in the 

determination of attainment status. With five expected 

exceedances allowed, a site must have at least three observed 

exceedances in three years (e.g., one occurrence each year for 

three years) to be classified as nonattainment, while two or 

less exceedances in these years will result in attainment 

certification. 
ATTACHMENT 1-E 

IMPLEMENTATION OF REVISED STANDARDS 

In light of the recent extension of the public comment period 

on the proposed implementing regulations (50 FR 21629; May 28, 

1985), the Department of Energy may provide supplemental 

comments on the April 2, 1985, proposal. The following 

presents our initial comments, which may be expanded or 

modified within the extended comment period. 

SIP Development Policy - Primary PM 10 NAAQS 

The DOE believes that the procedures outlined in the April 2, 

1985, proposal (50 FR at 13140, et seq) for classifying areas 

into three classes, each determining the schedule and 

requirements for adequate State Implementation Plan (SIP) 

submittals for attainment/maintenance, provide a reasonable and 

practical approach to implementing the requirements for 

attainment demonstrations. The approach outlined by EPA 

provides an appropriate balancing among the paucity of 

available PM 10 ambient data upon which to base determinations 

of attainment status, the resource-intensive nature of 

developing a sound attainment demonstration, and the 

health-protective purpose of the primary standard. 

SIP Development Policy - Secondary TSP NAAQS 

If the EPA promulgates a secondary standard for TSP at the 

upper end of the proposed range (see Attachment 1-C, "Secondary 

Standard Proposed is Insufficiently Supported by Data, and*' 

Incomplete," for a discussion of the lack of need for such a 

standard), .DOE has no strong initial preference between the 

implementation alternatives of Part D or Section 110. 
P.56 

ATTACHMENT 1-E (Cont.) 

Since the revised secondary standard, at the upper end of the 

range proposed, would be roughly equivalent to the current 

primary NAAQS for which the attainment date has long-passed, 

equitable considerations may support the part D alternative 

.with its potentially more onerous SIP .requirements, and clearly 

available funding sanctions where States fail to respond to 

notices of SIP inadequacy.. 

The unsettled question of EPA's authority to redesignate, under 

Section 107(d), areas as nonattainment without State 

concurrence (See Bethlehem Steel Corp. v EPA, 723 F. 2d 1303 

(7th Cir. 1983)), may provide a method for States to delay the 

deadline submittal of an adequate secondary standard SIP by 

merely choosing not to designate an area as nonattainment even 

though violations of the revised secondary standard are found. 

For these reasons, the Administrator should carefully consider 

whether the potential ease of administration of the revised 

secondary standard under the Section 110 alternative, selected 

for implementing the revised primary standard, is preferable. 
P.57 

ATTACHMENT 1-F 

SUGGESTIONS FOR IMPROVEMENT OF 

PROBABILITY GUIDELINE 

EPA has requested comments on the February 1984 draft 

"Procedures for Estimating Probability of Nonattainment of a 

PMIO NAAQS Using Total Suspended Particulate or Inhalable 

Particulate Data." Application of the procedures in this 

guideline to existing particulate ambient data will determine 

the timing and details of acceptable State Implementation Plan 

submittal provisions. 

Most of the guideline procedures are straightforward. Two 

minor points are worthy of mention here, and described in more 

detail.in Attachment 5. First, region- and season-specific 

probability distribution curves, in place of the national 

curve, should be investigated, in order that proper evaluation 

be given to known variations in the PM10/TSP ratio by region 

and season. Second, a consistent data requirement (i.e., 

number of data points) for use of various years of PMIO data 

should be expressed in the guideline. 
ATTACHMENT 3 

CRITIQUE OF THE PMIO STAFF PAPER 

AND THE REGULATORY IMPACT ASSESSMENT 

INTRODUCTION 

There are a number of fundamental problems in the Office of Air 

Quality Planning and Standards (OAQPS) Staff Paper entitled, 

•Review of the National Ambient Air Quality Standards for 

Particulate Matter: Assessment of Scientific and Technical 

Information" (Staff Paper), and with the "Regulatory Impact 

Assessment on the National Ambient Air Quality Standards for 

Particulate Matter " (RIA). These problems are of such 

consequence that they render the Staff Paper unacceptable as a 

basis for standard setting. 

A careful examination of the Staff Paper, with its use of 

overly conservative assumptions apart from appropriate 

consideration for the quality of the available scientific data, 

leaves the impression that EPA Staff was predisposed to justify 

as low a standard as possible. In the opinion of DOE staff, 

th,e scientific evidence does not adequately support the EPA 

staff recommendation that the Administrator choose a primary 

standard from the low end of the range provided by his staff. 

Not only does the available science not support such a choice, 

but even considerations of uncertainties and the statutory 

requirement to provide an adequate margin of safety fail to 

justify a standard from the extreme lower bound of the range. 

In the two documents (the Staff Paper and the RIA), the 

problems are of several classes: 
P.59 

- 2 -

(1) methodological errors in the interpretation and/or use 

of scientific studies on the health effects of particulate 

exposures; 

(2) presentational errors which indicate bias and poor 

organization of the subject matter; and 

(3) extreme extrapolation and unjustified use of 

scientific data in the calculation of costs and benefits. 

METHODOLOGICAL PROBLEMS 

o Existence of Threshold Effects - The Staff Paper states, 

"The data do not, however, show evidence of clear 

population thresholds but suggest a continuum of response 

with both the risk of effects occurring and the magnitude 

of any potential effect decreasing with concentration." 

(Staff Paper, p.xiii) This assertion is not justified by 

the evidence presented. Several of the epidemiological 

studies have been misinterpreted or incorrectly applied 

(See the discussion below of the Lawther, et al, results 

for documentation). 

Additionally, the Staff Paper is confusing and 

contradictory on the question of the existence of threshold 

effect levels. For example, the existence of thresholds 

(at least for effects of consequence) is indicated by 

Tables 1 and 2 (Staff Paper, pp. xiv and xvi). Table 2, 

which, presents the data on health effects from chronic 

exposure, indicates that at concentrations below 55 ug/m3 

there are "no significant effects noted." The lack of 
P.60 

-' 3 -

observed effects below some chronic level of exposure 

strongly suggests the presence of a threshold. Table 1 

(which indicates acute exposure risks) fails to show a "no 

significant effects noted" level of risk. That chronic 

exposure could exhibit a threshold, but acute exposure 

would not,•violates our understanding of biological 

processes. 

If the chronic exposure data suggest a threshold below 

which no significant effects are noted, then the only other 

source of information indicating a threshold would come 

from qualitative scientific data. Yet the qualitative 

scientific evidence, according to the Staff Paper, suggests 

the existence of a threshold. "Neither the studies 

summarized above (those studies in Table 2) nor more 

qualitative studies of effects in other sensitive 

population groups (e.g, asthmatics, children), or effects 

in controlled human or animal studies provide scientific 

support for health risks of consequence below 150 ug/m3." 

(Staff Paper, p. xv, referring to Thoracic particles) 

DOE staff believe that the available evidence does suggest 

the real possibility of a threshold and the remaining 

relevant question is at what level. 

Conversion Procedures - Tables 1 and 2 treat the 

conversions between British Smoke (BS), Thoracic Particles 

(TP), and Total Suspended particulates (TSP) exposure 

measurements differently. In Table 1, BS is assumed to be 

equal to TP in the case of the "effects possible" level of 

uncertainty. This is, therefore, the lower bound estimate 

of health effects. The upper bound range used in the 
P.61 

- 4 -

conversions is defined as TSP = TP = 3S + 100 g/m3. In 

Table 2, a TSP/TP ratio of between 0.5 and 0.6 is used, 

based on estimates -of U. S. atmospheric composition- in the 

•years 1980-81. (The RIA also uses that range, but does 

take note of an updated estimate of 0.43 for the ratio.) 

There are two important problems with these conversion 

procedures: 

(1) For reasons of consistency, both tables should use the 

same conversion procedures; and 

(2) the assumption of BS = TP is inappropriate and 

unnecessary. While the precisely correct conversion 

formula may be impossible to know, by the same token the 

actual conversion procedure used is known to be 

scientifically incorrect. BS is, in fact, composed of a 

subset of the atmospheric particles less than 4.5 microns. 

TP includes all particles less than 10 microns. . Hence, BS 

is less than TP in atmospheric concentrations. Whatever 

the appropriate conversion assumption, it is 

methodologically unsound to choose one that is 

demonstratably incorrect. 

U. S. air quality, data should be us-ed to generate the BS 

and TP ratios for current data determinations; use of prior 

year's data, which is expected to have significantly 

differing size and chemical distributions, deserve an 

adequate and reviewable discussion. Data from the Uni'ted 

Kingdom studies of the 1950's and 1960's certainly require 

such a process. 

The Staff Paper chooses the assumption (TP = BS) because it 

•incorporates some margin of safety." (Staff Paper, 

p. xiv) However, given the distribution of particle sizes 
- 5 -

typically found in several California cities and presented 

in Figures 4-2 and 4-3 (Staff Paper, p. 15), it is a 

considerable understatement to say that "some margin of 

safety" has been incorporated. BS particles are, in some 

cases, a subset composing less than 60 percent of TP 

particles. . 

Correction of these problems is especially important since 

these tables are incorporated in the Executive Summary of 

the Staff Paper which will have a relatively large impact 

on public opinion and understanding, as it will have 

greater readership than the basic report. Also, in this 

section of the Staff Paper these tables are the principal 

presentational device used to persuade the reader of the 

appropriateness of the staff's recommended ranges for the 

24-hour and annual average PMIO standards. 

o Size-based versus Chemical-based Standards - The Staff 

Paper 'notes that there is great variability in the'chemical 

composition of particles in various present and historic 

ambient concentrations and that not all particles are 

equally harmful to human health. However, it concludes, 

"Identification and control of each of the many ambient 

aerosol components (which are believed to be harmful) would 

be difficult to accomplish, time-consuming, and would place 

excessive monitoring, compliance, and other requirements on 

affected agencies and industries with no clear potential 

for improving public health protection over general 

particulate regulation." (Staff Paper, p. 67) 

The form of the standard (size-based or chemical-based) is 

a fundamental question with respect to effective 

policymaking. It should not be dismissed without empirical 
P.63 

- 6 -

support (as was. done in the Staff Paper). It is amenable 

to quantification, and an adequate Staff Paper and RIA 

would provide supporting estimates for the assertion that 

the costs of chemically-based standards exceed the benefits 

of regulating specifically those pollutants which cause 

health and welfare damage. The potential cost of 

size-based standards is considerable, as nonharmful 

particles will be needlessly controlled. The RIA does not 

even raise the issue, and the Staff Paper relegates it to 

an assertion without any supporting evidence. 

rf an adequate margin of safety can be obtained with a 

chemical-based standard and at less cost, then it should be 

chosen since it meets regulatory objectives at less cost to 

society. In either case, some empirical support for EPA 

staff's position is necessary, given the importance of this 

issue of acceptable standard-setting practice. 

Generalization from Atypical Particle Data - The range of 

•possible effects," as indicated by the epidemiological 

studies, is used as the basis for determining the range 

(frora which the Administrator will choose the actual 

standard) for the long-term primary standard. It is 

obtained by using 1961-1973 data from Berlin, New 

Hampshire, where the major local source of particulate 

emissions was a pulp mill. This study provides the only 

quantitative results justifying the range of the annual 

_. 

average standard, and yet it comes from essentially a 

single-industry area (from an emission perspective). These 

pulp mill emissions have a particular chemical composition, 

not typical of national emissions profiles, and would in 

fact be highly atypical. 
- 7.-

It is neither scientifically justified nor good public 

policy to regulate all industries on the basis of a range 

derived (with suspect conversion procedures) from one study 

of particulate emissions from paper and pulp manufacturing. 

Significant Weaknesses in.Epidemiological Studies - The 

Staff paper and the RIA take note of the difficulties 

inherent in establishing a relationship between particulate 

emissions and mortality and morbidity, using ~~~ 

epidemiological studies. However, the Staff Paper does not 

adequately address the considerable weaknesses in the 

quantititive record. Some of those difficulties include: 

(1) the omission of potentially important explanatory 

factors from the analysis; 

(2) interdependencies among included explanatory factors 

and between included and excluded factors; and 

(3) differences in the concepts and techniques used to 

measure ambient concentrations of air pollutants in 

different geographic areas and at different times. 

In spite of these substantial limitations., the Staff Paper 

concludes that the actual standards chosen should come from 

the ranges which were developed from these very few 

studies. DOE staff believes that the quite limited 

geographic and chemical composition profiles of these 

studies (as noted above), and these other weaknesses, have 

the effect of calling into question the scientific validity 

of the quantitative information available, especially below 

250 ug/m3 TP. 
- 8 -

In addition, Attachment 4 contains a detailed examination 

of the health effects literature as it applies to acute 

exposure below 250 ug/m3 BS. That document finds no 

supportive evidence of health effects below that level. 

There appears.to be a substantial gulf between 

substantiated effects levels and the lower-end of the 

standard range proposed by EPA staff. This difference 

implies a very considerable margin of safety which apears 

to be a much greater factor than has been used in other 

earlier and contemporary standard setting. 

o Unsupportable Extrapolation of Author's Results - One of 

the authors of the central work used to support the EPA 

range disagrees with the use to which his work has been 

put. That is the work on the London data of the 1950's and 

1960's by Lawther, et al. The author has informed the EPA, 

in the strongest possible terms on many occasions, that the 

EPA staff interpretation of his work was inappropriate and 

scientifically illegitimate. Copies of those letters are 

enclosed as Attachment 4-A. The depth of the author's 

disagreement with the EPA's use of his work is demonstrated 

by his own words. "I must say yet again, with all the 

force at my command, that it is a complete and absurd 

misuse of our Table III to claim that it presents evidence 

of adverse effects of 24-hour levels below 250 ug/m3 BS." 

(Letter from P. J. Lawther to J. Bachman, 26 February 

1982; see Attachment 4-A.) 

o ' Hidden and Compounded Margins of Safety - At many points 

in the analysis, the Staff Paper takes very extreme,, 

conservative assumptions in building a case for the 
P.66 

- 9- -

proposed standard ranges, and for their recommendation that 

the Administrator's choice for a standard be selected from 

the lower end of that range: e.g., by choosing extreme 

conversion procedures for TSP, BS, and TP equivalency; by 

extrapolating results from health'effects studies to levels 

lower than is justified by the data or lower than 

acceptable by the original authors, as in the Lawther, et 

al, studies; and by requiring unassailable evidence before 

accepting existence of threshold effects for the analysis. 

While previous judicial decisions have permitted the 

Administrator to choose to build an adequate margin of 

safety that incorporates some consideration of these 

factors, DOE staff believe that the wholesale 

implementation of such practices is ill-advised in the case 

presented for the revision of the particulate standard. 

The major reason is the level of scientific ignorance about 

the health implications of a generalized particulate 

standard below 250 ug/m3 BS. When so many conservative 

assumptions are integrated into the analysis, and are 

neither quantitatively stated nor discussed, it makes it 

impossible for the Administrator to know what margin of 

safety was implicitly incorporated in the options provided 

for his decision. Additionally, while the exact margin is 

of course unknowable, efforts to deal with uncertainty 

through the methods found (or alluded to) in the staff 

document mask from the public the general level of the 

margin of safety embodied in the Administrator's decision. 

We believe that a documented estimate of the probable 

ranges of the margin of safety, and associated comments by 

reviewers, should be part of the record provided the 

Administrator for this set of decisions. 
P.67 

- 10 -

PRESENTATIONAL PR03LEMS -

o Misleading Tables - Table 1 of the Staff Paper provides 

two qualitative categories of risk levels.associated with • 

short-term (24-hour) particulate exposure. The first risk 

level is called "effects likely," and is defined as the 

•concentration ranges derived from the criteria document at 

or above which there appears greatest certainty that 

effects would occur". The second level is identified as 

•effects possible." These judgmental labels are especially 

inappropriate because of their imprecision, as well as 

their potentially misleading and biased connotations. 

•Effects likely" means, in common usage, that there is a 

high probability of there being some damage. In general, 

this would at least imply a probability of happening that 

would exceed 0.5. "Greatest certainty," however, has no 

such implication. It is simply the outcome with the 

greatest probability of occurrence, and may have any 

probability associated with it, including one much less 

than 0.5. 

In using the label "effects likely," the Staff Paper 

implies that it is probable that an effect will be observed 

at the concentration levels noted. As indicated above, 

DOE's assessment of the health effects literature is that 

the contrary outcome is most probable, namely that it is 

highly unlikely that an effect will be observed. In either 

event, EPA should be clearer in its meaning in Tables 

1 and 2. While it is impossible to associate precise 

probabilities with the concentration ranges, it is 

nevertheless inappropriate to use such poorly defined and 

value-oriented expressions for summarizing the relative 

risks.. . 
P.68 

- 11 -

PROBLEMS WITH COSTS AND BENEFITS 

o Weaknesses in Electricity-Generating Control Cost 

Estimates - Attachment 4 contains an analysis of the 

methodology used in the RIA for estimating control costs 

for electric generation plants. Several weaknesses and at 

least one major flaw are noted, namely the failure to 

consider other plant and fuel characteristics upon which 

control costs are dependent. Particulate control costs are 

sensitive to resistivity and sulfur content of fuel. The 

model used in the RIA appears to only use one type of coal, 

namely Eastern coal with a sulfur content of 3.5 percent. 

The effect of this assumption is that the cost of meeting 

the PMIO standard is significantly overstated for plants 

burning low sulfur coal. 

In addition to incorrectly estimating the cost, improbable 

choice of control device is selected by the model for 

low-sulfur coal burning power plants. The model, because . 

of various assumptions, always selects electrostatic 

precipitators in preference to baghouses. The analysis in 

Attachment 4 indicates that in some cases baghouses will be 

selected. A recent description of highlights in new 

powerplant pollution control indicates that bag filters are 

used in about half of the recent powerplant control device 

installations. (See Attachment 4.) Their use is 

correlated with low sulfur coal use. 

* 

o Weaknesses in Soiling Cost Estimates - The Staff Paper 

concludes that, "Because fine particles are a significant 

contributor, soiling effects also should be considered in 
- 12 -

determining whether a fine particle secondary standard is 

needed. Given the uncertainties in the data, 

recommendations on. ranges of interest are not 

appropriate." (Staff Paper, p. 141.) DOE staff believe 

that the studies cited by the Staff Paper contain several 

fundamental.weaknesses and therefore do not support the 

conclusion that soiling costs are substantial. Therefore, 

such potential damages are insufficiently documented to be 

considered in the establishment of a secondary standard. 

The weaknesses can be summarized as follows': 

(1) There is a failure in several of the papers to control 

for factors that can covary with particulate emissions. 

F6r example, the study by Mathetech, Inc., does a 

multivariate statistical analysis of the relationship 

between production costs in the manufacturing sector and 

ambient levels of particulate matter and SO., wage rates, 

capital costs, tax bills, costs of input materials, and 

ambient temperatures and precipitation. - Of the six 

industrial sectors considered, a statistically significant 

relationship was found in only two. More significantly, 

the study fails to control for the extent of unionization 

and the age of the plants, both of which affect production 

cost. In the more polluted Eastern part of the United 

States, the plants are, on average, older and the extent of 

unionization is greater. Accordingly, the production costs 

are greater. These important variables therefore covary 

with pollution. 

Most of the studies fail to account for important covarying 

variables. One exception is the Waston and Jaksch study, 

which did incorporate such considerations into an 

estimation of cleaning and maintenance cost. Account was 
P.70 

- 13 -

taken of sociecbnomic and attitudinal differences among 

residents of different pollution areas. Their results 

indicate that such costs are statistically insignificant. 

(2) The analysis in the Criteria Document and the RIA fail 

to account for thresholds of perception for soiling. When 

the Criteria Document discusses the work of Watson and 

jaksch, it extrapolates the benefits of reducing soiling to 

zero (which is well below background levels, and is 

therefore not achievable), in fact, since particulate 

concentrations nationally average roughly 50 ug/m3, and 

background national averages are 40 ug/m3, there is little 

benefit from further reductions in the levels for most 

areas of the country. 

(3) The Staff Paper and the RIA consider an important 

element of cost to be indoor cleaning and maintenance costs 

resulting from outdoor pollution. But, increasingly the 

use of air conditioning, and changes in house construction 

for heating efficiency have the effect of decoupling the 

indoor ambient concentrations from the external air 

environment. This type of potential cost associated with 

indoor effects is not as important as it was 20 years ago. 

Thus, DOE staff does not believe that the available 

quantitative studies on the cost imposed by soiling are of 

sufficient scientific merit to use as a basis for setting a 

secondary standard. The Staff Paper's conclusion that an 

effects range cannot be quantitatively ascertained is an 

implicit admission of the merit of this position. In 

effect, the Staff Paper concludes that EPA 
P.71 

- 14 -

staff believe a damage occurs with soiling and that the 

damage is considerable, but cannot derive a quantitative 

relationship (between ambient concentrations and damage), 

or estimate the empirical magnitude. The mere belief that 

the damage is large, without being able to relate size of 

damage to any measure of concentration, is hardly the basis 

for setting a quantitative standard. 

Indequate Scientific Basis for Benefits Estimates - The 

considerable weaknesses iri the health effects literature 

have been documented in Attachment 4 and noted above. The 

RIA uses this weak base to estimate the benefits of 

reducing particulate emissions. The DOE staff believes 

that the RIA overstates benefits, as a result of the 

deficient use of the health effects literature, as 

discussed earlier. 

Underestimates of Nationwide Control Costs - The 

estimates in Table 2 of EPA's RIA indicate the total 

nationwide particulate matter control costs required to 

achieve full compliance with various alternative NAAQS 

levels. DOE staff believe that those estimates understate 

the actual nationwide costs of achieving compliance with 

those standards by a substantial amount. The RIA's 

underestimation of total nationwide control costs 

originates from four major sources: 

(1) using data bases for air quality; and particulate' 

matter emission levels that are incomplete and inaccurate; 

(2) assuming that only 1 percent of the emissions from 

area sources (such as paved and unpaved municipal roads) 

affect the level of monitored air quality for any county; 
P.72 

- 15 -

(3) excluding from the nationwide cost estimates all costs 

of emission controls that are applied to point sources for 

the purpose of meeting New Source Performance Standards; and 

(4) assuming that incremental costs of reaching full 

compliance, in geographic areas where residual 

nonattainment is projected, would be directly proportional 

to the average cost of all controls applied in achieving 

the attainable levels of air quality. 

To assess the quantitative importance of these sources of 

cost estimation, independent estimates of the total 

nationwide costs of particulate matter control have been 

derived on the basis of historical expenditures on 

particulate matter control equipment and associated 

improvements in national average ambient levels of 

particulate matter. (See Attachment 4.) These independent 

estimates indicate that the estimates of total nationwide 

control costs reported in the RIA are understated by at 

least a factor of two, and quite probably by a considerably 

higher multiple. Moreover, those independent estimates 

have been derived on the basis of consistently conservative 

assumptions that cause the independent estimates to 

represent extreme lower bound estimates of actual 

nationwide costs of control. Most notably, it has been 

conservatively assumed that all improvements in national 

average ambient levels between 1975 and 1983 are 

attributable to the installation of additional control 

equipment, and not to other effects, including the general 

downturn in industrial activity during the period from 1979 

through 1982, and the subsequent relatively slow recovery 

of the heavily polluting basic manufacturing sector.