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 UNFUNDED MANDATES REFORM ACT ANALYSIS 

FOR THE COMPRESSION-IGNITION (CI) STATIONARY 

RECIPROCATING INTERNAL COMBUSTION ENGINE (RICE) 

 NESHAP UNDER THE CLEAN AIR ACT 

 (February, 2010) 

 This document provides an analysis of the effects of the U.S. Environmental Protection 

Agency’s (“EPA”) stationary compression-ignition (CI) reciprocating internal combustion 

engine (RICE) national emissions standard for hazardous air pollutants (NESHAP) rulemaking 

under Title III of the Clean Air Act (“CAA”) on State, local, and tribal governments, and the 

private sector as required by the Unfunded Mandates Reform Act of 1995 (“UMRA”). EPA has 

determined that an UMRA analysis is required because the CI RICE rulemaking will affect units 

operated by State and local governments, and will impose a cost on the private sector greater 

than $100 million in any one year. 

 This UMRA analysis examines the impacts of the rule on units that are owned by State, 

local, tribal governments and the private sector. This analysis is based on the regulatory impact 

analysis (“RIA”) prepared for this rule. The RIA for this rule includes EPA’s assessment of 

costs, benefits, and economic impacts and can be found in the docket for this rulemaking at 

www.regulations.gov. 

 This rule includes a maximum achievable control technology (MACT) standard for CI 

RICE that are major sources of HAP and a generally available control technology (GACT) 

standard for RICE that are area sources of HAP. Spark-ignition (SI) RICE, a type of RICE 

covered in the proposed rule published in March of last year, will be regulated under a final 

rulemaking that will be signed by August 10, 2010. Existing compression ignition engines will 

incur compliance costs (the costs of control measures and testing, monitoring, recordkeeping, 

and reporting) under this rule. 

This rule affects existing CI RICE (defined as RICE constructed before 2006) but not 

new ones. Estimates of existing CI RICE by engine type and compliance cost estimates by 

engine type were used as inputs to calculate the economic impact of the rule. 

The economic impact analysis (“EIA”) that is included in the RIA indicates that prices of 

affected output from the affected industries will increase as a result of the rule, but the changes 

will be small. The largest impacts are on the electric power generating industry because it bears 

more costs from the rule than any other affected industry (nearly 80 percent of the total 

annualized costs). For all affected industries, annualized compliance costs are 0.6 percent or less 

on average of sales for firms. 
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Based on the estimated compliance costs associated with this rule and the predicted 

changes in prices and output in affected markets, the estimated social costs are $373 million 

(2008 dollars), which is the same as the estimated compliance costs. 

 It is estimated that HAP emissions from existing RICE will be reduced by 1,000 tons per 

year by 2013. Reductions in formaldehyde, acetaldehyde, acrolein, methanol, and other HAPs 

are included in this estimate. The rule will also achieve in 2013 reductions in criteria pollutants. 

Reductions in carbon monoxide (CO) will total about 14,000 tons per year, about 27,000 tons of 

volatile organic compounds (VOC), nearly 2,800 tons per year of particulate matter (PM), all of 

which are in the fine fraction (PM2.5 - 2.5 microns in diameter and below). The final rule will 

also reduce emissions of SOx through the use of ultra-low sulfur diesel fuel (ULSD). We have 

not quantified the SOx reductions that would occur as a result of engines switching to ULSD 

because we are unable to estimate the number of engines that already use ULSD and therefore 

we are unable to estimate the percentage of engines that may switch to ULSD due to this rule. If 

none of the affected engines would use ULSD without this rule, then we estimate the SOx

reductions are 31,000 tpy in the year 2013. If all of the affected engines would use ULSD 

regardless of the rule, then the additional SOx reductions would be zero.

Exposure to CO can affect the cardiovascular system and the central nervous system. 

Emissions of PM can result in premature fatalities and many respiratory problems (such as 

asthma and bronchitis) and emissions of NOx and SO2 can also transform into PM in the 

atmosphere. NOx and VOC can also transform into ozone, and this can also lead to premature 

mortalities and many respiratory problems. 

The total monetized benefits of the rule range from $940 million to $2.3 billion (2008 

dollars) in 2013 with a 3 percent discount rate and $850 million to $2.1 billion (2008 dollars) in 

2013 with a 7 percent discount rate. The monetized benefits are comprised primarily of the 

benefits from reductions in directly emitted PM2.5 and PM2.5 created from transformation of NOx 

and SO2. We cannot provide a monetary estimate for the benefits associated with reductions of 

HAP and CO due to a lack of scientific knowledge of the links between the reductions in 

incidence of the health and environmental effects listed and a value that can be placed on them. 

EPA currently has research going on to provide such monetized estimates. The methodology for 

estimating monetized benefits is discussed in more detail in the RIA. 

Our analysis also includes the economic impacts on small entities. The analysis of 

impacts on small entities is done as part of compliance with the Small Business Regulatory 

Enforcement Fairness Act (SBREFA), and is referred to by reference in this report. We estimate 

that all small private sector entities will have annualized costs of less than 1 percent of their sales 

in all industries except NAICS 2211 (electric power generation, transmission, and distribution) 

and NAICS 111 (Crop and Animal Production). For these industries, the number of private 

sector small entities having annualized costs of greater than 1 percent of their sales is less than 5 

percent. 

Small government entities may also be affected by this rule as well as small private sector 

entities. As presented in the RIA, we find that no small government entity will have compliance 

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costs of more than 0.2 percent of their revenues. Hence, no small government entity will be 

impacted significantly by this rule. 

Although this rule will not have a significant impact on a substantial number of small 

entities (SISNOSE), EPA nonetheless has tried to reduce the impact of this rule on small entities. 

EPA carefully examined the regulatory alternatives, and selected the lowest cost/least 

burdensome alternative that EPA deems adequate to achieve the statutory requirements of Clean 

Air Act section 112 and effectively reduce emissions of HAP. Some alternatives considered that 

provided more than the minimum level of control were deemed as not technically feasible or 

cost-effective for EPA to implement for small engines and emergency engines. All of these 

actions should reduce the level of small entity impacts including impacts to small governments..