# E **C** 

# / **R Incorporated Providing Environmental Technical Support Since 1989** 

501 Eastowne Dr., Suite 250  Chapel Hill, North Carolina 27514 Telephone: (919) 484 - 0222  Fax: (919) 484 - 0122 MEMORANDUM TO: Gil Wood, USEPA

David Cole, USEPA FROM: Jill Mozier, EC/R Inc. DATE: September 18, 2013 SUBJECT: Notes from OMB

– Alliance for Green Heat Conference Call on 9/16/201 3

regarding Wood Heater NSPS Proposal The Office of Management and Budget ( OMB ) , the Small Business A dministration ( SBA ) , the C ouncil on Environmental Quality ( CEQ ) , and EPA were on the call. Primary speakers were Tom Morrissey , President of Woodstock Soapstone in New Hampshire, John Ackerl y of The Alliance for Green Heat, and Britt Fleming, counsel to The Alliance for Green Heat. Tom Morrissey

comments :  Here in supp ort of the rule representing a very small (“micro”) business of 30 employ ees. Noted that because Soapstone is so small it represents the most vulnerable segment of the manufacturers impacted by the NSPS, and further noted several times how transparent EPA/ Gil has been with development of proposed rule.  Speaking as a small business, the emission limits being considered are “eminently possible”. Soapstone already has 3 stoves in neighborhood of 1.3 g/hr already and a 4 th stove that should be ready in Novembe r to be certified at 1 or 0.9 g/hr, and be cheaper, too.  Soapstone’s R&D plus certification cost for new stove = ~$200,000. Tom has heard some industry estimates at twice this amount and noted he could see spending ~$400,000 for very first model but after that the manufacturers tend to copy an existing model, so the costs shouldn’t be that high. In response to question from OMB about whether the $200,000 is representative of the industry as a whole, Tom said yes and furthermore that he has seen some higher industry estimates and some are “almost unbelievable”.  Soapstone supports NSPS also because the public health benefits way exceed the cost to us, as manufacturers. Our industry can ruin air quality

for entire community . The regulations Tom’s seen are wel l done, thoughtful, and bring in sources that have not been regulated before.2

 This set of regulations in the best possible thing that could happen to our industry because we need to be able to say our products are clean, efficient and non - polluting while pass ing the “giggle test”.  In response to question from OMB about lessons learned during last go - round, Tom responded the primary

lesson is to not wait until the end. His compan y has been diligently working for 5 or 6 years to develop better stoves [ i.e. , those noted above]. This can’t be done last minute, but a 2 to 5 - ye ar window is adequate. All progress is iterative and 2 or even 3 design cycles are possible within 5 y ear window.  In response to question from OMB about how the compan y budgets, Tom respon ded that while there are fixed costs at the end for EPA and ULtesting, in the beginning the cost is all man - hours, as even the material is inexpensive (~$1.20/lb of steel). In response to question as to whether costs come out of additional operating expen ses rather than capital expenditures, Tom explained that as a C - corp he has retained earnings and a line of credit. So this line of credit can be used for development. The compan y budgets 4 - 5% every year for R&D plus can easily get equipment loans through hometown banks, as money is so cheap currently . So it’s a mix of retained earnings, line of credit, equipment loans, and eager emplo ye es. John Ackerly

(Alliance for Green Heat) comments :  The Alliance for Green Heat is very supportive of most of the regulations although the Alliance would like the rule to be stricter in a few key places. More people in the US use wood than use oil and propane and, in the 2000 to 2010 time frame, wood heati ng has grown the fastest. The US needs cleaner models as Europe is trouncing the US in this regard, since the US hasn’t kept up.  The Alliance wants to see the regulations in place ASAP, and thinks efficiency is very important. The proposed 4.5 g/hr standard is too easy and doesn’t raise the bar at all. In particular, the standard needs to be tighter for pellet stoves as the average pellet stoves is at 2.5 g/hr and a 1g/hr difference is important, especiall y in urban areas where pellet stoves can be used. T here is no reason for the 4.5 g/hr standard

– this is backsliding and will allow Chinese units to swamp the market.  The 5 - ye ar timing is reasonable except for h ydronic heaters where the standard needs to get stricter sooner. HH give wood burning a bad nam e – it’s a pernicious technology that should have been disallowed. A 2 - ye ar time frame, rather than a 5 - ye ar period, is needed for HH. Small businesses should not be protected if their product is dirty.  The Alliance agrees with T. Morrissey and is impress ed with how transparent EPA has been. But there should be a minimum efficiency standard. Disclosure is needed at least, but a minimum efficiency standard is good because efficiency is a prox y for CO; a minimum efficiency

is not a huge challenge to manufac turers; and yet it will give some assurance to consumers.3

 The Alliance would like the green label effort mentioned in the Preamble. Since there is no energy star rating, it’s at least worth mentioning the green label effort to show EPA supports it.  There is an increasing number of way s to produce clean stoves affordably (e.g., oxygen sensors/monitors). The Alliance invites OMB rep to visit the wood stove challenge on the lawn in DC in November.  Britt Fleming noted that although EPA is likely not including efficiency

in the regulation, it should at least be mentioned in the Preamble as an option/alternative EPA is taking comment on. (Tom Morrissey agreed that publishing efficiencies are absolutely essential for consumer comparison.) Britt noted that EPA sho uld also take comments on tighter standards than are in the reg text. The Alliance would like to keep as man y options open as possible in the rulemaking package

– that is, keep logic in the Preamble for a different pathway . These products last a very long time, so it’s critical we get low emitting units that are also efficient as soon as possible.