1

MEMORANDUM

To: David Putney, U.S. Environmental Protection Ag ency (EPA), OAQPS

From: David Green and Matt Hakos, RTI Internationa l

Date: November 13, 2014

Subject: Revised Draft Cost Impacts for the Primary Aluminum Production Source Category

This memo describes the estimated costs, in 2014 do llars, resulting from the proposed residual risk an d technology review amendments to the National Emissi on Standards (NESHAP) for Hazardous Air Pollutants for Primary Aluminum Reduction Plants. M aximum achievable control technology (MACT) floors were established for the following six previ ously unregulated hazardous air pollutant (HAP) sources at primary aluminum reduction plants:

1. Polycyclic organic matter (POM) emissions from p rebake potlines,

2. Carbonyl sulfide (COS) emissions from prebake an d Soderberg potlines,

3. POM emissions from existing pitch storage tanks,

4. Metal HAP emissions from potlines,

5. Metal HAP emissions from anode bake furnaces, an d

6. Metal HAP emissions from paste production plants

.

In addition, to reduce residual risk, revised stand ards for POM emissions from Soderberg potlines, as

well as standards for nickel and arsenic emissions from Soderberg potlines have been proposed. The nickel and arsenic standards also apply to new Sode rberg potlines. The proposed MACT floor limits were established by calculating the 99 percent uppe r prediction limit based on performance test data a s detailed in the Revised MACT Floor Analysis for the Primary Aluminum Production Source Category (available in Docket ID No. EPA-HQ-OAR-2011-0797). Risk-based standards, where needed, were established at a level that would provide an ample margin of safety. Note that particulate matter (PM) has been used as a surrogate for metal HAP in the p roposed MACT standards.

Also, decreased emission testing frequencies have b een proposed for:

1. Total fluoride (TF) from prebake and Soderberg potlines, and

2. POM from Soderberg potlines.

POM Emissions from Potlines

Impacts at MACT Floor Level for Prebake Potlines

We expect that all prebake facilities presently in operation would be able to comply with the proposed potline POM MACT floor emission limits without any additional controls. While no additional control costs would be expected to comply with the MACT flo or limits, the proposed rule would require periodic demonstrations of compliance with the appr opriate POM emission limit. A compliance demonstration would be required for each potline se miannually and this demonstration would be made2

by summing the results of the most recent annual pr imary control system emissions test result with the average of the two most recent semiannual secondary (roof vent) emissions test results. We estimate th e annual cost of POM testing to be $15,000 per prebak e potline (includes one annual test for primary POM and two semiannual tests for secondary POM). Th e 12 prebake facilities would need to conduct performance tests for POM emissions from 38 prebake potlines resulting in an average annual cost of $47,500 per prebake facility or $570,000 total annu al cost for the industry.

Impacts of Risk-Based Emission Standards for Soder berg Potlines

We have proposed more stringent POM emission standa rds for existing Soderberg potlines than those currently established. These standards were based o n a finding that allowable emissions under the current regulation present an unacceptable risk. Th e one existing Soderberg facility has been idle sin ce 2009 and is not expected to reopen. However, if tha t facility does reopen, we estimate that the potlin es could meet the proposed risk-based standard if wet roof scrubbers were installed and operated at an estimated capital cost of about $30 million and ann ual cost of about $8 million per year.

Beyond the Floor Analysis

Because the primary control devices for potroom POM emissions are very effective, the appropriate beyond the floor potline POM emission control optio n is the installation of wet scrubbers to control r oof vent emissions on the 11 existing facilities that a re not currently equipped with these devices. An estimate of the cost of retrofitting wet roof scrub bers on a Soderberg primary aluminum facility was developed for EPA Region 8 1,2 as part of a Best Available Retrofit Technology (B ART) analysis. The objective was improved visibility associated with d ecreased SO 2 and PM emissions. These scrubbers are also expected to provide a high degree of control o f TF and some control (estimated at approximately 5 0 percent control) of POM and PM. At scrubber tempera tures nearly all of the POM would be PM. Scaling the estimated capital costs for this retrofit by th e facility aluminum production capacity raised to t he 0.6 power, and assuming that operating costs are direct ly proportional to aluminum production capacity, th e industry wide capital costs are estimated at $490 m illion and annual costs are estimated at $155 milli on per year. This is equivalent to $155,000 per ton of POM controlled. Additional information provided by

The Aluminum Association 3 indicates that for prebake facilities, these costs are underestimates because the buildings housing the prebake potlines would li kely require modification (e.g., expansion and structural reinforcement) in order to accommodate t he wet scrubbers. According to this information, th e costs associated with installing wet scrubbers on p rebake facilities could be on the order of 3 times the cost estimates provided above. The BART analysis 1 also considered the installation of fabric filters

. This type of system would control approximately twi ce the mass of PM and HAP metals at a capital cost approximately 16 times the cost of wet roof scrubbe rs and an annual cost of approximately 9 times the

cost of wet roof scrubbers.

COS Emissions from Potlines

Impacts at MACT Floor Level

The proposed MACT floor limit for existing faciliti es is 3.9 lb COS per ton of aluminum produced. The proposed COS MACT floor for new sources is 3.1 lb C OS per ton of aluminum produced. It is expected that all primary aluminum production facilities pre sently in operation would be able to comply with th e existing source COS MACT floor emission limit witho ut any additional controls. The owner or operator would be required to demonstrate compliance on a mo nthly basis via a mass balance equation with 3 variables: anode consumption rate, aluminum product ion rate and anode coke sulfur content. However,3

the owners or operators of the affected facilities already monitor all 3 variables. Therefore, we esti mate that there would be no cost impacts due to the prop osed COS MACT floor limit.

Beyond the Floor Analysis

In regard to beyond the floor analyses for COS emis sions, we considered COS emission limits of 3.5 lb COS per ton of aluminum produced and 3.1 lb COS per ton of aluminum produced. Facilities could comply with these lower COS emission limits by util izing lower sulfur content coke in their anodes. Based on current anode coke cost data, we estimate that the limits of 3.5 lb COS per ton of aluminum produced and 3.1 lb COS per ton of aluminum produce d would impose annual costs of approximately $2 million on two facilities and $13 million on 5 faci lities, respectively. We predict these options woul d reduce COS emissions by about 52 tons per year and 220 tons per year, respectively, and result in cost effectiveness of about $38,000 per ton of COS remov ed and $59,000 per ton of COS removed, respectively. However, it is estimated that the amo unt of anode grade coke available with sulfur conte nt low enough to comply with these standards is insuff icient to accommodate current primary aluminum production rates. We also considered substitution o f metallurgical coke for petroleum coke as a means of decreasing COS emissions, but ruled this out on the basis of technical infeasibility due to increased ash content and mechanical weakness in anodes produced from metallurgical coke (for more information

refer to the memorandum titled Revised Draft Techno logy Review for the Primary Aluminum Production Source Category which is available in Do cket ID No. EPA-HQ-OAR-2011-0797).

POM Emissions from Existing Pitch Storage Tanks

Impacts at MACT Floor Level

The proposed MACT floor for existing pitch storage tanks is a HAP control efficiency of 95 percent, represented by a fume capture and return system acc ompanied by a charcoal scrubber. This is equivalent to the MACT floor for new pitch storage tanks in th e 1997 NESHAP. We estimate that eight facilities would be affected by this standard and would need t o add controls, at a capital cost of approximately $75,000 per facility or $600,000 for the industry a nd an annual cost of approximately $21,000 per facility or $168,000 for the industry. There are no available data on pitch storage tank emissions.

Potential emissions were estimated on the basis of vapor displacement during loading. These calculations assumed anode paste was comprised of 2 2 percent pitch (the industry average value provided by The Aluminum Association), a pitch spec ific gravity of 1.25 and vapor pressure equal to that of oxidized asphalt at 300 °F (estimates based on available data), 35 percent HAP content and an average HAP molecular weight of 250 (based on testi ng conducted at the Kaiser-Tacoma Soderberg facility). Estimated emission reductions are 1.55 t ons of POM per year.

Beyond the Floor Analysis

One existing facility is required by permit to achi eve 99 percent control of pitch storage tank POM emissions. This facility operates a water-cooled co ndenser to recover pitch storage tank emissions. We have limited data regarding the capital and operati ng costs of this system, and there are no test data to confirm that it is actually more effective than the untested systems which are estimated to control 95 percent of POM emissions. The installed capital cos t of a non-contact single stage refrigerated watercooled condenser system, assuming 1 ton of refriger ation, and 35 degree F cooling water, is estimated at $31,000. Total annualized cost for such a system, i ncluding capital recovery, labor, maintenance materials, electricity, overhead, administration, p roperty tax and insurance is estimated at $184,000 per facility or $2.02 million per year for 11 facilitie s in the source category. This beyond the floor opt ion4

represents an incremental cost of $1.94 million and would be expected to control an estimated addition al

0.081 tons of POM.

Metal HAP Emissions from Potlines

Impacts at MACT Floor Level for Potlines

We expect that all existing facilities would be abl e to comply with the proposed potline metal HAP MACT floor emission limits without any additional c ontrols. Performance test data obtained from one facility operating center-worked prebake one potlin es exceeded the proposed standard, however the facility indicated 4 that conditions during testing may not have been r epresentative, and that expected emissions would meet the proposed emission limit. U nder the proposed rule, annual tests of PM (used as a surrogate for metal HAP) emissions would be requi red from primary potline exhausts and semiannual tests of PM emissions would be required from second ary potroom exhausts at prebake and Soderberg

facilities. Since these tests can be combined with currently required tests of TF emissions, the incremental cost of the PM test beyond the cost of the currently required TF test is estimated at $1,0 00 per test. We estimate the annual cost of PM testing to be $3,000 per potline (includes one annual test for primary PM and two semiannual tests for secondary P M). Thirteen facilities would be required to conduct performance tests for PM emissions from 41 potlines resulting in an average annual cost of approximately $9,462 per facility or $123,000 total annual cost for the industry. Further, since monitoring presently required for compliance with T F emission standards is adequate to ensure compliance with the proposed metal HAP standards, n o additional monitoring costs are expected.

Impacts of Risk-Based Emission Standards for Soder berg Potlines

We have proposed facility-wide limits on nickel and arsenic emissions from Soderberg potlines. These standards were based on a finding that allowable em issions under the current regulation present an unacceptable risk. We estimate that the one existin g (presently idle) Soderberg facility could meet th e proposed risk-based standard if wet roof scrubbers were installed at an estimated capital cost of abou t $30 million and operated at an estimated annual cos t of about $8 million per year. The incremental cos t of the nickel and arsenic test beyond the cost of t he currently required TF/PM tests is estimated at $4,000 per test. We estimate the annual cost of tes ting to be $12,000 per potline (includes one annual test for primary and two semiannual tests for secon dary). One existing Soderberg facility (presently i dle) would need to conduct performance tests from 3 potl ines resulting in an average annual cost of approximately $36,000 per facility and for the indu stry (since there is only one Soderberg facility).

Beyond the Floor Analysis

Because the primary control devices for potroom met al HAP emissions are very effective, the appropriate beyond the floor potline metal HAP emis sion control option is the installation of wet scrubbers on the roof vent (secondary) emissions on the 11 existing facilities that are not currently equipped with these devices. The annual cost of wet scrubbers (described above under “Beyond the Floor Analysis” for POM emissions from potlines) in cluding capital recovery and operating costs is $155 million for the industry. This is equivalent t o $6.7 million per ton of metal HAP controlled. Not e again that, as discussed above, additional informat ion provided by The Aluminum Association suggests that the actual capital and annual costs could be 3 times these cited values. As described under “Beyo nd the Floor Analysis” for POM emissions from potlines , the installation of fabric filters would control approximately twice as much metal HAP at approximat ely 9 times the annual cost of wet roof scrubbers. We also considered substitution of metallurgical co ke for petroleum coke as a means of decreasing5

metal HAP emissions, but ruled this out on the basi s of technical infeasibility due to increased ash content and mechanical weakness in anodes produced from metallurgical coke (for more information

refer to the memorandum titled Revised Draft Techno logy Review for the Primary Aluminum Production Source Category which is available in Do cket ID No. EPA-HQ-OAR-2011-0797).

Metal HAP Emissions from Anode Bake Furnaces

Impacts at MACT Floor Level

We expect that all existing facilities would be abl e to comply with the proposed anode bake furnace metal HAP MACT floor emission limits without any ad ditional controls. Performance test data obtained from one facility exceeded the proposed standard, h owever the facility indicated 5 that conditions during testing may not have been representative, and that expected emissions would meet the proposed emission limit. Each facility would be required to conduct an annual compliance test for PM (as a surrogate for metal HAP), at an estimated cost of $ 5,000 per test, or $60,000 per year for the industr y. Monitoring costs for the industry’s 12 bake furnace s are estimated at $67,500 per year.

Beyond the Floor Analysis

A beyond the floor option for control of metal HAP emissions from anode bake furnaces is the retrofit of membrane bags in existing baghouses. The capital co st of this retrofit is estimated at $20.9 million f or 10 facilities. Assuming capital recovery based on a 3 year bag life and a 7 percent interest rate, ann ual costs for the 10 facilities would be $7.9 million. This is equivalent to $292 million per ton of metal HAP

controlled.

Metal HAP Emissions from Paste Production Plants

Impacts at MACT Floor Level

We expect that all existing facilities would be abl e to comply with the proposed paste production plan t metal HAP MACT floor emission limits without any ad ditional controls. Performance test data obtained from one facility exceeded the proposed standard, h owever the facility indicated 6 that conditions during testing may not have been representative, and that expected emissions would meet the proposed emission limit. Each facility would be required to conduct an annual compliance test for PM (as a surrogate for metal HAP), at an estimated cost of $ 5,000 per test, or $55,000 per year for the industr y. Monitoring costs for the 11 paste production plants are estimated at $61,900 per year.

Beyond the Floor Analysis

A beyond the floor option for control of metal HAP emissions from paste production plants is the retrofit of membrane bags in existing baghouses. Th e capital cost of this retrofit is estimated at $1. 48 million for 11 facilities. Assuming capital recover y based on a 3 year bag life and a 7 percent intere st rate, annual costs for the 11 facilities would be a bout $560,000. This is equivalent to about $96 mill ion per ton of metal HAP controlled.

Reduced Testing Frequency for TF from Potlines

The proposed change in TF testing frequency for sec ondary potroom emissions from monthly to

semiannual is estimated to result in a cost reducti on of $2.05 million per year for the 41 existing6

potrooms (assuming operation of all 38 existing pre bake potlines and that 3 existing Soderberg potline s resume operation).

Reduced Testing Frequency for POM from Soderberg Po tlines

The proposed change in POM testing frequency for se condary Soderberg potroom emissions from quarterly to semiannual is estimated to result in a cost reduction of $30,000 per year (assuming that 3 existing Soderberg potrooms resume operation).

Total Cost of Proposed Standards at the MACT Floor

It is estimated that the proposed standards, if imp lemented at the MACT floor levels, would result in a cost savings to the primary aluminum industry of $9 59,000 per year, assuming that the one idle Soderberg facility does not resume operation. In th e event that this facility restarts, the proposed

standards would result in a cost increase to the al uminum industry of $7.0 million per year.

1 Bison Engineering Inc., Best Available Retrofit Te chnology (BART) Analysis: Columbia Falls Aluminum Company, LLC, November 5, 2007

2 Robbins, H. W., Bison Engineering, to C. Videtich, EPA Region 8, June 19, 2008

3 Johnson, C.D., Aluminum Association, email to D. P utney, US EPA. July 9, 2014.

4 Backfisch, D., Noranda Aluminum, email to D. Putne y, US EPA. April 29, 2014.

5 Coomes, J., Century Aluminum of Kentucky, email to D. Putney, US EPA. May 29, 2014.

6 Mitchell, K., Alcoa Intalco Works, email to D. Put ney, US EPA. June 6, 2014.