### MEMORANDUM

Date: December 16, 2013

Subject: Revised Cost Impacts Associated with the Final Pressure Relief Device

Monitoring Requirements for the Pesticide Active Ingredient Production, Polyether Polyols Production, and Group IV Polymers and Resins Source Categories

From: Lesley Stobert, EC/R Incorporated

To: Nick Parsons, EPA/OAQPS/SPPD

______________________________________________________________________________

The purpose of t his memorandum is to present the estimated cost impacts of the final requirements for pressure relief device (PRD) monitoring for the seven source categories that are subject to the Pesticide Active Ingredient Production (PAI), Polyether Polyols Production (PEPO), and Group IV Polymers and Resins (P&R IV) National Emission Standards for Hazardous Air Pollutants (NESHAP)

– 40 CRF 63, subparts MMM, PPP, and JJJ, respectively. These source categories are PAI, PEPO, and the following P&R IV source categories: A crylic

Butadiene

- Styrene (ABS) Production, Methyl Methacrylate

- Butadiene

- Styrene (MBS) Production, Polyethylene Terephthalate (PET) Production, Polystyrene Production and Styrene

Acrylonitrile (SAN) Production. The addition of PRD monitoring requirements t o the NESHAP for these source categories was proposed along with proposed changes evaluated under the EPA’s Residual Risk and Technology Review (RTR) program, under the statutory requirements of section 112(d)(6) and 112(f)(2) of the Clean Air Act (77 FR 1 268, January 9, 2012). The final rule requirements specify that PRDs in organic hazardous air pollutant (HAP) service may not release to the atmosphere. To ensure compliance with this requirement, the final rule amendments require that owners or operators employ monitoring capable of immediately alerting an operator when there is an atmospheric release from a PRD in organic HAP service and capable of recording the time and duration of each pressure release. Owners or operators are required to report all pre ssure releases and an estimate of the amount of organic HAP released to the atmosphere with their next periodic report. This memorandum includes revised cost impact estimates for the seven source categories considering comments received on the proposed rul e regarding the cost of PRD monitoring systems and also the number of PRDs expected at these types of facilities and revisions to the number of facilities in some of the source categories. Section 1 of this memorandum provides background information regard ing the final PRD requirements, and Section 2 presents the estimated PAI, PEPO and P&R IV source category PRD monitoring requirement cost impacts.

1.0 BACKGROUND

Section 112 of the Clean Air Act (CAA) establishes a comprehensive regulatory process

to address emissions of HAP from stationary sources. In accordance with CAA section 112(c), the EPA identifies categories and subcategories of major sources that emit one or more of the HAP listed in CAA section 112(b). CAA section 112(d)(2) then calls for th e EPA to promulgate2



### national technology

- based emission standards for each listed category or subcategory of sources. For “major sources” that emit or have the potential to emit any single HAP at a rate of 10 tons or more per year or any combination of HAP at a rate of 25 tons or more per year, these technology

- based standards must reflect the maximum reductions of HAP achievable (after considering cost, energy requirements, and non

- air health and environmental impacts) and are commonly referred to as maximu m achievable control technology (MACT) standards.

Section 112(d)(6) then requires the EPA to review the CAA section 112(d) technology

- based standards and to revise them “as necessary, taking into account developments in practices, processes, and control te chnologies,” no less frequently than every 8 years. The residual risk review is described in section 112(f) of the CAA. CAA section 112(f)(2) requires the EPA to promulgate standards for each category or subcategory of CAA section 112(d) sources “if promul gation of such standards is required in order to provide an ample margin of safety to protect public health . . . or to prevent, taking into consideration costs, energy, safety, and other relevant factors, an adverse environmental effect.”

In addition to the residual risk and technology reviews performed regarding the NESHAP, the EPA also reviews the existing provisions of the NESHAP during the RTR process. In 2008, the United States Court of Appeals for the District of Columbia Circuit vacated portions

o f two provisions in the EPA’s CAA section 112 regulations governing the emissions of HAP during periods of SSM. Sierra Club v. EPA , 551 F.3d 1019 (D.C. Cir. 2008), cert. denied , 130 S. Ct. 1735 (U.S. 2010). Specifically, the Court vacated the SSM exemption contained in 40 CFR 63.6(f)(1) and 40 CFR 63.6(h)(1), that are part of a regulation, commonly referred to as the “General Provisions Rule,” that the EPA promulgated under section 112 of the CAA. When incorporated into CAA Section 112(d) regulations for sp ecific source categories, these two provisions exempt sources from the requirement to comply with the otherwise applicable CAA section 112(d) emission standard during periods of SSM. In light of, and consistent with, Sierra

Club v. EPA , the EPA is eliminat ing the SSM exemption in the PAI, PEPO and P&R IV NESHAP and require that the standards in these rules would apply at all times , including during periods of SSM.

As part of the elimination of the SSM exemption in these NESHAP, the EPA proposed

and is fi nalizing requirements for the monitoring of PRDs in organic HAP service that release to the atmosphere and that a pressure release from such a PRD is a violation. To ensure compliance with this requirement, facility owners or operators are required to moni tor PRDs in organic HAP service using a device or system that is capable of identifying and recording the time and duration of each pressure release and of notifying operators that a release has occurred. Owners or operators are required to report any pres sure release and an estimate of the amount of organic HAP released to the atmosphere with the next periodic report.

2.0 COST IMPACTS

In order to estimate the costs associated with requiring monitoring of PRDs for P& R IV, PAI, and PEPO facilities, it was assumed that operators would install electronic indicators on each PRD in organic HAP service that vents to the atmosphere to identify and record the time and duration of each pressure release. However, owners or oper ators could use a range of methods to satisfy these requirements, including the use of a parameter monitoring system that may already have been in place on the process operating pressure that is sufficient to notify3



### operators immediately that a pressure re lease is occurring, as well as recording the time and duration of that release. To estimate the cost of electronic indicators, analyses performed by the South Coast Air Quality Management District (SCAQMD) of California were referred to, which requires con tinuous monitoring of a percentage of PRDs at refineries by installing a monitoring device capable of recording the duration of each release and quantifying emissions. Wireless technology allows continuous monitoring of PRDs and makes it easier for operato rs to identify

releases and leaks. 1 

### There are several monitoring devices that can be used, including acoustic sensors and pressure/differential pressure sensors. These sensor units communicate with a base radio that interfaces with the existing control sys tem. The costs for PRD wireless monitoring are summarized in Table 2. These costs are based on an analysis documented by the SCAQMD for electronic monitoring devices for PRDs.

To estimate PRD monitoring requirement costs, we made assumptions regarding PR D equipment component counts based on available information. For the PEPO source category, the model plant PRD equipment component counts developed for the original MACT standard were

used. 2 

### For the PAI and P&R IV source categories, no information was read ily available regarding PRD component counts. As a result, it was assumed that, for the P&R IV source categories, the simple, medium, and complex model plants developed for the chemical industry would best represent the P&R IV source category PRD equipment component counts. 3 

### For the PAI source category, equipment leak component counts were developed for model PAI plants during development of the NESHAP, however PRDs were not included in the component counts. Based on the other PAI equipment leak component c ounts, it was assumed that the number of PRDs at batch and continuous plants would best be represented by the simple and medium model plants developed for the chemical industry. 4 

### Table 1 presents the model plant PRD equipment component counts used for esti mating PRD monitoring system costs for the PAI, PEPO and P&R IV source categories.

Table 1. Model Plants for PAI, PEPO and P&R IV Source Categories

Equipment Component Number of Components

P&R IV Source Category PAI Source Category PEPO Source Categor y

Simple

Model

Plant Medium

Model

Plant Complex

Model

Plant Batch

Model

Plant Continuous

Model

Plant Small

Model

Plant Large

Model

Plant Solvent

Extraction

Model

Plant

PRD 2 45 76 2 45 8 11 34

1 Ellis, Kennard, SCAQMD. Final Staff Report for Proposed Amended Rule 1173

- Control of Volatile Organic Compound Leaks and Releases from Com ponents at Petroleum Facilities and Chemical Plants. May 15, 2007.

Docket No. EPA

- HQ

- OAR

- 2010

- 0869

- 0024.

2 Memorandum from Hendricks, D. and Joanne Seaman, EC/R Incorporated to Svendsgaard, D., EPA/OAQPS. Estimated Impacts for the Polyether Polyols NESHAP. April 25, 1997. (included in the Supplementary Information Document (SID) for the PEPO Proposed NESHAP)

3 Memorandum from Hancy, C., RTI International, to Howard, J., EPA/OAQPS. Analysis of Emission Reduction Techniques for Equipment Leaks. December 21, 2011. EPA Docket No. EPA

- HQ

- OAR

- 2010

- 0869

- 0029.

4 Memorandum from Randall, D. and Karen Schmidtke, Midwest Research Institute to Banker, L., EPA/OAQPS. Model Plants for the Pesticide Active Ingredient Manufacturing Industry. April 30, 1997. (included in the Supplementary Information Document (SID) for the PAI Proposed NESHAP)4



### The capital costs estimated for PRD monitoring are summarized in Table 2. These costs are based on an analysis documented by the SCAQMD for electronic monitoring devices for

PRDs. 5 

### The monitoring device cost provided by SCAQMD was based on vendor costs and ranged from $5,000 to $10,000, with an average of $7,500, and includes device parts, installation, and maintenance, as well as a data retrieval system. It was assumed for this analysis that these costs were presented in 2007 dollars and the costs were escalated to 2012 dollars. As a result, the total capi tal investment was determined to be $8,345 per PRD. According to the SCAQMD document, the cost of electronic monitoring systems is not linear, and facilities requiring a larger number of monitors are expected to benefit from economies of scale. Therefore, the sixth

- tenths rule was applied to calculate initial costs. 6 

### In determining the annualized capital costs, it was assumed that the monitoring system would last for 10 years and the interest rate assumed was seven percent. No operating costs were estimated as they are

assumed to be minimal.

Table 2. Total Capital Investment and Annualized Cost of Pressure Relief Devices for APR Source Category Model Plants

Model Number of

PRDs per

Model Facility a 

### PRD Costs per Facility

Capital

Costs b 

### Annualized

Capital Costs c


### Pesticides Active Ingredients

Batch Model Plant 2 $12,649 $1,796

Continuous Model Plant 45 $81,913 $11,632
Polyether Polyols

Small Model Plant 8 $29,059 $4,126 Large Model Plant 11 $35,177 $4,995

Solvent Extraction Model

Plant 34 $69,233 $9,831

Group IV Polymers and

Resins Simple Model Plant 2 $12,649 $1,796

Medium Model Plant 45 $81,913 $11,632 Complex Model Plant 76 $112,180 $15,930

Minor discrepancies are due to rounding.

a See Table 1.

b Unit device installation cost of $7,500 in 2007 dollars escalated to 2012 dollars using Chemical Engineering (CE) Index resulting in a cost of $8,345 per unit. CE Index for 2007 is 525.4 and 584.6 for 2012. Facility capital investment calculated using six th

- tenths rule. Facility Cost ($) = PRD Unit Cost ($) * (No. of PRDs)^0.6

c Annualized costs calculated using capital recovery factor of 0.142, calculated based on 7 percent interest and 10 year equipment life.

5 Ellis, Kennard, SCAQMD. Final Sta ff Report for Proposed Amended Rule 1173

- Control of Volatile Organic Compound Leaks and Releases from Components at Petroleum Facilities and Chemical Plants. May 15, 2007.

Docket Item No. EPA

- HQ

- OAR

- 2010

- 0869

- 0024.

6 Sixth

- tenths rule is used to adjust f or economies of scale. Cost to Facility = cost of one PRD * (number of PRDs at facility)^0.6.5



### To estimate PRD monitoring system costs for PAI, PEPO, and P&R IV source category facilities, we assumed the most conservative source category model costs (the costs associated with the model plants for the source category that were estimated to have the m ost PRD equipment components).

To estimate the PAI, PEPO, and P&R IV source category labor costs associated with PRD monitoring, recordkeeping and reporting, we assumed the following labor rates 7 

### :

Technical $54.66 ($26.03 + 110%) Managerial $115.96 ($55.22 + 110%)

Clerical $38.14 ($18.16 + 110%)

We assumed that owners or operators will need to expend an additional 11 technical labor hours, 0.55 managerial hours, and 1.1 clerical hours per facility annually for recordkeeping and reporting requ irements associated with the final PRD provisions. This adds up to an additional $707 per year per facility.

Tables 3, 4 and 5 present the estimated PRD monitoring costs per facility for the PAI, PEPO, and P&R IV source categories, respectively. Table 6 presents a summary of the nationwide estimated annual PRD monitoring requirement costs by source category.

7 These labor rates are based on the May 2012 National Occupational Employment and Wage Estimates for the United States, occupational codes 51

- 8091 for chemical p lant and system operators (technical), 11

- 1021 for general and operations managers (managerial) and 43

- 6010 for secretaries and administrative assistants (clerical). These rates represent salaries plus fringe benefits. The wages provided above were increa sed by a rate of 110 percent to account for overhead.6



### Table 3. Summary of PRD Monitoring System and Associated Recordkeeping and

Reporting Requirement Cost s for the PAI Production Facilities

Company/Facility Cost of PRD Monitoring System PRD Annual Recordkeeping and Reporting

Labor Costs ($) PRD

Total

Annualized

Costs ($) Capital

Costs ($) Annualized

Capital

Costs ($/yr)

Dow Chemical Company

– Freeport, Texas 81,913 11,632 707 12,339

Arvesta Corporation

– Perry, OH 81,913 11,632 707 12,339

Dow Chemical Company

– Midland, MI 81,913 11,632 707 12,339

Monsanto Company

– Muscatine, IA 81,913 11,632 707 12,339

Dow Chemical Company

– Pittsburg, CA 81,913 11,632 707 12,339

American Cyanamid/BASF Corporation

– Palmyra, MO 81,913 11,632 707 12,339

Syngenta Crop Protection

– St. Gabriel, LA 81,913 11,632 707 12,339

Du Pont

– La Porte, TX 81,913 11,632 707 12,339

GB Biosciences Corporation

– Houston, TX 81,913 11,632 707 12,339

Eastman Chemical Company

– Batesville,

AR 81,913 11,632 707 12,339

EI DuPont De Nemours & Company

– Axis, AL 81,913 11,632 707 12,339

Great Lakes Chemical

– El Dorado, AR 81,913 11,632 707 12,339

Occidental Chemical

– Luling, LA 81,913 11,632 707 12,339

Dow Agrosciences

– Harbor Beach, MI 81,913 11,632 707 12,339

McLaughlin Gormley King Company

– Chaska, MN 81,913 11,632 707 12,339

Du Pont

– Belle, WV 81,913 11,632 707 12,339

Bayer Crop Science LP

– Institute, WV 81,913 11,632 707 12,339

Weylchem US

– Elgin, SC 81,913 11,632 707 12,339

TOTAL 1,474,434 209,376 12,726 222,1027



### Table 4. Summary of PRD Monitoring System and Associated Recordkeeping and Reporting Requirement Costs for the PEPO Production Facilities

Company/Facility Cost of PRD Monitoring System PRD Annual

Recordkeeping and Reporting

Labor Costs ($) PRD

Total

Annualized

Costs ($) Capital

Costs ($) Annualized

Capital

Costs ($/yr)

Dow Chemical Company

– Freeport, Texas 69,233 9,831 707 10,538

Lyondell Chemical Company

– Channel View, TX 69,233 9,831 707 10,538

BASF Corporation

– Wyandotte, MI 69,233 9,831 707 10,538

Dow Chemical Company U.S.A.

– Midland, MI 69,233 9,831 707 10,538

Huntsman Petrochemical Corporation

– Conroe, TX 69,233 9,831 707 10,538

Arch Chemicals, Inc.

– Bradenburg, KY 69,233 9,831 707 10,538

Cognis Corporation

– Charlotte, NC 69,233 9,831 707 10,538

Union Carbide Corporation

– South Charleston, WV 69,233 9,831 707 10,538

Stepan Company

– Elwood, IL 69,233 9,831 707 10,538

Shell Chemical LP

– Geismar, LA 69,233 9,831 707 10,538

BASF Corporation

– Geismar, LA 69,233 9,831 707 10,538

Rubicon, LLC

– Geismar, LA 69,233 9,831 707 10,538

Roger W. Powell Plant

– Pasadena, TX 69,233 9,831 707 10,538

Eastman Chemical Company

– Longview, TX 69,233 9,831 707 10,538

Houston Plant

– Houston, TX 69,233 9,831 707 10,538

Dow Seadrift Plant

– Seadrift, TX 69,233 9,831 707 10,538

Huntsman Petrochemical Corporation

– Dayton, TX 69,233 9,831 707 10,538

Union Carbide Corporation

– Hahnville, LA 69,233 9,831 707 10,538

Croda Inc.

– Mill Hall, PA 69,233 9,831 707 10,538

Milliken Chemical Dewey Plant

– Inman, SC 69,233 9,831 707 10,538

Bayer Corporation

– Institute, WV 69,233 9,831 707 10,538

Union Carbide Corporation

– New Martinsville, WV 69,233 9,831 707 10,538

Bayer Material Science

– Institute, WV 69,233 9,831 707 10,538

TOTAL 1,592,359 226,113 16,261 242,3748



### Table 5. Summary of PRD Monitoring System and Associated Recordkeeping and Reporting Requirement Costs for the Group IV Polymers and Resins Production Facilities

Company/Facility Cost of PRD Monitoring System PRD Annual

Recordkeeping and Reporting

Labor Costs ($) PRD

Total

Annualized

Costs ($) Capital

Costs ($) Annualized

Capital Costs ($/yr)

Dow Chemical Company

– Freeport, TX 112,180 15,930 707 16,637

Dow Chemical Company U.S.A

– Midland, MI a 336,540 47,790 2,121 49,911

Eastman Chemical Company

– Kingsport, TN 112,180 15,930 707 16,637

DAK Americas LLC

– Moncks Corner, SC 112,180 15,930 707 16,637

Dart Polymer, Inc.

– Owensboro, KY 112,180 15,930 707 16,637

Zeon Chemicals

– Louisville, KY 112,180 15,930 707 16,637

Rohm & Haas Company

– Louisville, KY 112,180 15,930 707 16,637

Emerald Polymer Additives LLC

– Akron, OH 112,180 15,930 707 16,637

INEOS ABS

– Addyston, OH 112,180 15,930 707 16,637

Chevron Phillips Chemical Company LP

– Marietta, OH 112,180 15,930 707 16,637

Nan Ya Plastics

– Lake City, SC 112,180 15,930 707 16,637

3M Film Plant

– Greenville, SC 112,180 15,930 707 16,637

Eastman Chemical Company

– Columbia, SC 112,180 15,930 707 16,637

Invista S.A.R.L.

– Spartanburg, SC 112,180 15,930 707 16,637

Dart Container Corporation

– Leola, PA 112,180 15,930 707 16,637

Dow North America

– Gales Ferry, CT b 224,360 31,860 1,414 33,274

Arkema, Inc.

– Axis, AL 112,180 15,930 707 16,637

Atofina Petrochemical Inc.

– Carville, LA 112,180 15,930 707 16,637

General Electric Company, Inc.

– Washington,

WV 112,180 15,930 707 16,637

General Electric

– Bethlehem, NY 112,180 15,930 707 16,637

M&G Polymers U.S.A.

– Apple Grove, WV 112,180 15,930 707 16,637

Performance Fibers, Inc.

– Moncure, NC 112,180 15,930 707 16,637

General Electric Company

– Plastics

– Ottawa,

IL 112,180 15,930 707 16,637

3M Company

– Decatur, AL 112,180 15,930 707 16,637

DAK Americas LLC Cape Fear Site

– Leland,

NC 112,180 15,930 707 16,637

Huntsman Expandable Polymer Company, LLC

– Peru, IL 112,180 15,930 707 16,637

INEOS Americas, LLC

– Channahon, IL 112,180 15,930 707 16,637

Dow Chemical Company

– Pevely, MO 112,180 15,930 707 16,637

Mitsubishi Polyester Film, LLC

– Greer, SC 112,180 15,930 707 16,637

Du Pont Teijin Films

– Chester, VA 112,180 15,930 707 16,6379 a Facility has ABS, PS and SAN P& R IV source categories. Costs replicated for each source category and totaled for the facility.

b Facility has ABS and PS source categories. Costs replicated for both source categories and totaled for the facility.

Company/Facility Cost of

PRD

Monitori

ng System PRD Annual

Recordkeepi ng and Reporting

Labor Costs ($) PRD

Total

Annualized

Costs ($) Company/F

acility

Performance Fibers, Inc.

– Salisbury, NC 112,180 15,930 707 16,637

TOTAL 3,814,120 541,620 24,038 565,65810 

### Table 6. Estimated Costs of PRD Monitoring for the PAI, PEPO, and

P&R IV Source Categories

Source Category Number of

Facilities in

Source Category PRD

Monitoring System TCI per Facility ($) PRD Monitoring

System TAC per Facility ($) Annual R&R Labor

Costs per Facility ($) PRD Monitoring System

Costs per Source Category ($) Annual PRD

Monitoring System and R&R Costs per Source Category ($)

Pesticide Active Ingredient Production (PAI) 18 81,913 11,632 707 1,474,434 222,102

Polyether Polyols Production (PEPO) 23 69,233 9,831 707 1,592,359 242,374

Group IV Polymers and Resins*

Acrylic

- Butadiene

Styrene (ABS)

Production 6 112,180 15,930 707 673,080 99,822

Styrene

- Acrylonitrile (SAN) Production 3 112,180 15,930 707 336,540 49,911

Methyl Methacrylate

Butadiene

- Styrene (MBS) Production 2 112,180 15,930 707 224,360 33,274

Polyethylene Terephthalate (PET)

Production 13 112,180 15,930 707 1,458,340 216,281

Polystyrene

Production 10 112,180 15,930 707 1,121,800 166,370

TCI

– Total Capital Investment

TAC

– Total Annual Cost

R&R

– Recordkeeping and Reporting



### * Note that the estimated costs allocated to source categories are based on production type at a given facility. Where a facili ty has co

- located source categories, these facility costs are replicated for all of the co

- located source categories. For example, if a facility has both an ABS and SAN production line, the costs are replicated for both source categories.