P.1 

OAR Box 1875 

Prepped by Ollie Stewart 

Document Number: 

57) ll-F-4 

Docket Number: 

A-90-19 

Printed 12/1/200811:12:47 AM Sheet 57 of 86 
P.2 

A-90-19 

ll-F-4 

Attached are materials distributed by the EPA at a meeting 

with OMB on June 11, 1992. Below is a list of attendees. 

EPA 

Jan Meyer 

Daphne McMurrer 

Bruce Jordan 

Lydia Wegman 

Andrew Otis 

Patricia Embrey 

Larry Weinstock 

Charlie Garlow 

OMB 

Tim Hunt 

Troy Hillier 

Rick Belzer 

Shantale Wong 

o) B___JL___,!rl! 

Jlii DEC I I 1992 ;i"J. 

EPA AIR DOCKET 
P.3 

Hazardous Organic NESHAP (HON) 

June 11, 1992 
P.4 

EMISSIONS AVERAGING FOR THE HON 

GOAL: 

Equal or greater emissions reductions 

At a lower cost 

By providing flexibility 

For sources with unusual characteristics 

That cause unusually high control costs 
P.5 

SCOPE 

Set by definition of "Source" 

SOCMI chemical manufacturing units 

Regulated by HON 

In a contiguous area 

Under common control 

Can average across 

Different process units 

Different HAPs 

Vents, tanks, transfer, wastewater 

Equipment leaks excluded from averaging 

Reg neg standard cannot be assigned a single reference 

control efficiency 

Including leaks would complicate implementation 

New separate from existing 

"Reconstructed" has new source MACT, considered a 

new and separate source 
P.6 

COMPLIANCE 

Compliance system designed to ensure 

That emissions with averaging are lower than emissions 

would have been without averaging 

That averaging does not decrease the public health 

protection provided by the HON 

That averages are straight forward to implement and 

enforce 

Requirements 

Point by point commitments 

• For each point in the average 

• Monitoring, recordkeeping and reporting 

requirements like Group 1 points 

• Same enforcement opportunities as Group 1 points 

Emissions accounting 

• Some additional monitoring for data elements in 

the emissions estimation equations 

• Specific emissions estimation equations in reg for 

consistency across sources 
P.7 

COMPLIANCE (continued) 

Compliance Period 

Emissions from points in an average must "balance" on 

a quarterly basis — quarterly compliance period 

Quarters consist of monthly emissions estimates 

Monthly emissions estimates are "rolled" for quarterly 

calculations 

System of credits and debits used to plan and balance 

averages 

Debits generated by under control of Group 1 points 

(Reference Control Technology [RCT] is not applied) 

Credits generated by over control of Group 1 or Group 

2 points 

Value of debit or credit based on difference between the 

"allowed" and "actual" emissions of each point 

Discount factor also influences value of credits 

generated by an over controlled point 
P.8 

CREDITS 

• Control must be more stringent than HON requirements to generate 

credits 

• 3 ways to generate credits: 

Controlling Group 2 points 

• With Reference Control Technology (RCT) 

• With alternative technologies 

Using higher efficiency controls than required on Group 1 

points 

• Cannot claim a RCT operates above its Reference Control 

Efficiency (RCE) 

• Alternative technologies must have an EPA assigned 

efficiency 

Pollution prevention 

• For Group 1 or Group 2 points 

• Value of credit tied to production level 

• Cannot generate credits with: 

Production cutbacks (except as part of pollution prevention) 

Pre-existing controls, except 

• Early Reduction Controls 

• Pollution prevention since 1987 
P.9 

HON CONTROL REQUIREMENTS 

• Statutory goal to achieve maximum degree of emission 

reduction considering statutory criteria 

Cost 

Nonair quality health and environmental impacts 

Energy impacts 

• Cost effectiveness (C/E) used to consider cost 

• Water pollution and solid waste implications used to consider 

nonair quality environmental impacts 

• Steam, natural gas and electricity demands used to consider 

energy impacts 
P.10 

COST EFFECTIVENESS CONSIDERATIONS 

Range of C/E values considered: $117 to $28,000/Mg 

VOC C/E values - air toxics C/E values 

Control decisions for existing rules 

Crude estimates of cancer benefits per Mg 

Incremental VOC C/E values (1989 $) 

SOCMI vents: Incr. $3,090/Mg 

[$1900/Mg 1978$] 

Polymers and Resins: Incr. $1,400/Mg 

[$930/Mg 1980$] 

Incremental air toxics C/E values (1989 $) 

Benzene NESHAP: $650 - $7,000/Mg 

Benzene Waste Operations: $28,000/Mg 

Vinyl Chloride NESHAP: $1,500/Mg 

Costs are consistent with benefits based on Benzene NESHAP 

and earlier HON risk assessment 

These benefit estimates do not include noncancer health 

effects 

No models exist for determining noncancer health 

benefits 

8 
P.11 

QUALITATIVE CONSIDERATIONS 

HON emissions are VOCs 

Majority of sources in nonattainment areas 

Control will make other VOC controls unnecessary 

Public perception is toxics are more dangerous than VOCs 

Consistency with past NSPS for same emission points in the 

category is administratively desirable 
P.12 

RATIONALE FOR DECISIONS 

General Points 

• Reference Control Technologies are demonstrated and reasonable 

• C/E estimates for the selected options are within range used in CAA 

cost estimates ($2000 to $5000/Mg) 

• C/E estimates for the selected options are consistent with previous 

NESHAP benefits analyses 

• Cost estimates are overstated 

Analysis assumes each emission point is controlled individually 

Analysis assumes the most expensive means of compliance for 

each point 

Rule is structured to provide flexibility and encourage pollution 

prevention, but these cost savings are not included: 

• Multiple RCTs 

• Emissions averaging 

• Low emission potential exemptions 

• Costs are a small fraction of production costs 

• HON facilities are considered high risk point sources 

• HON facilities are located in populated areas 

10 
P.13 

RATIONALE FOR SPECIFIC POINTS 

Process Vents: 

• Largest contributor to overall emissions 

• Cost estimates could be overstated 

TRE format based on cost related factors 

Vents can be co-controlled for cost savings 

TRE format allows lower cost compliance through 

product recovery and process changes 

• Significant control of VOCs 

• Selected option consistent with existing rules 

NSPS have marginal C/E of $3,090/Mg (1990 $) 

11 
P.14 

RATIONALE FOR SPECIFIC POINTS 

(continued) 

Wastewater: 

Major contributor to overall emissions - 2nd largest effect on 

costs and reductions of rule 

Important cross-media benefits from control at source 

Less groundwater contamination 

Reduction in volume of hazardous waste 

Costs do not include savings from compliance flexibility and 

pollution prevention options included in rule 

Significant co-control of VOCs 

Transfer: 

• Small emission reduction potential 

• C/E estimates significantly greater than other points 

• Technically limited in options for compliance flexibility 

12 
P.15 

RATIONALE FOR SPECIFIC POINTS 

(continued) 

Storage: 

• Small 

Small emission reduction potential 

C/E estimates higher than most other points 

Control requirements could establish reverse incentives 

• Medium 

Small emission reduction potential 

Floor provides reasonable emissions reduction 

• Large 

C/E of $2500/Mg is reasonable and consistent with 

marginal C/E for NSPS 

Application of controls saves product — pollution 

prevention 

13 
P.16 

States' Issues 

Interpollutant Trades 

Draft advises sources to avoid trades that would result 

in increased toxicity, sets no explicit limits on 

interpollutant trades 

States concerns: 

1) Averaging could result in more risk than point by 

point compliance 

2) To comply with risk based State statutes, they will 

have to disallow averaging or, at least, certain 

averages 

Averaging within New Sources 

Draft allows averaging within new sources, but not 

between new and existing sources 

States concerns: 

1) Most cost-effective to put state-of-the-art 

controls on at construction 

2) "Under control" at new sources is inconsistent with 

"floor" provisions in 1990 amendments 

Need for a Discount Factor 

Draft reguires that credits be discounted 

No specific value reguired 

Seeking comment on a range of 0 - 20% 

Reasons for Discount Factor: 

1) Savings shared between environment and source; 

2) Costs to be considered in setting maximum emission 

reduction requirements; and 

3) Technical concerns about emissions estimation. 

States have indicated that the Discount Factor should 

reflect: 

1) If HAP use is eliminated (pollution prevention); 

2) Height of the emissions reduction; and 

3) The emissions estimation or quantification process. 
Base Case 

Facility 

9 

10 

13 

14 

1 

4 

Cost 

Without 

Averaging 

($) 

357,965 

994,254 

405,570 

20,070 

743,866 

252,492 

Emission 

Reduction Without 

Averaging 

(Mg/Yr) 

1,207.81 

1,643.10 

752.600 

5.727 

13,322.8 

539.69 

Cost With 

Averaging 

($) 

356,030 

862,127 

388,056 

19,682 

738,357 

243,911 

Emission 

Reduction With 

Averaging 

(Mg/Yr) 

1,207.92 

1,647.5 

752.647 

6.128 

13,374.0 

540.01 

Percent 

Savings 

.5 

13.3 

4.3 

1.9 

.7 

3.3 

Max 

Discount 

Factor 

(%) 

19.6 

754.3 

14.7 

25.2 

9.6 

2.0540 

Average cost savings for 6 facilities that average: 6.0% 

Average cost savings for all 14 facilities: .99% 
Cost Variability Case* 

Facility 

1 

4 

9 

10 

11 

13 

14 

Cost 

Without 

Averaging 

($) 

967,026 

328,240 

465,355 

994,254 

389,591 

527,241 

26,091 

Emission 

Reduction 

Without 

Averaging 

(Mg/Yr) 

13,372.8 

539.69 

1,207.81 

1,643.1 

1,514.17 

752.6 

5.727 

Cost 

With 

Averaging 

tit :i 

943,154 

311,605 

455,460 

862,127 

386,922 

487,876 

21,262 

Emission 

Reduction 

With 

Averaging 

(Mg/Yr) 

13,375.5 

540.01 

1,207.92 

1,647.5 

1,514.84 

755.3 

6.129 

Percent 

Savings 

2.5 

5.1 

2.1 

13.3 

0.7 

7.5 

18.5 

Max 

Discount 

Factor 

(%) 

25.4 

205.4 

19.6 

754.3 

139.2 

25.3 

25.2 

*For this case the costs for all points requiring controls are increased by 30% and the costs for all points not 

requiring controls are decreased by 30%. This scenario is designed to simulate some of the effect of cost 

variability. 

Average cost savings for 7 facilities that average: 6.2 

Average cost savings for all 14 facilities: 1.0