Reciprocating Internal Combustion Engine

National Emission Standard for Hazardous Air Pollutants

(RICE NESHAP) Proposed Revisions – Emission Control Cost

Analysis Background for “Above the Floor” Emission Controls for

Natural Gas-Fired RICE

Technical Report

Prepared for:

Interstate Natural Gas Association of America American Petroleum Institute

 10 G Street NE, Suite 700 1220 L Street, NW

 Washington, DC 20002 Washington, DC 20005

Prepared by:

Innovative Environmental Solutions, Inc.

P.O. Box 177

Cary, IL 60013

October 2009
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

i

TABLE OF CONTENTS

Executive Summary ....................................................................................................................1

1. Introduction...........................................................................................................................3

2. Background on Cost Effectiveness Inputs and Computations.................................................5

3. Summary of “Above the Floor” Cost effectiveness Data and Analyses ..................................8

4. Implications of Cost Effectiveness Estimates.......................................................................16

5. References...........................................................................................................................18

ATTACHMENTS

The attachments present detailed tables of cost effectiveness calculations and document

assumptions:

Attachment A: Cost Effectiveness Calculations for Gas-Fired 4SRB Engines NSCR/PostCombustion Controls: Proposed Rule Values ..............................................................................21

Attachment B: “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SRB Engines

NSCR/Post-Combustion Controls: Proposed Rule Values with Adjustments for Best Estimates

for Useful Equipment Life (10 years) & AP-42 HAP Emission Factor (2.43E-04 lb HAP/hp-hr).

Control efficiency = 90%. ............................................................................................................27

Attachment C: “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SRB Engines

NSCR/Post-Combustion Controls: Revised EPA Proposed Rule data. Cost Effectiveness

approach from docket was revised. Adjustments were made to best estimates for useful

equipment life (10 years) and AP-42 HAP emission factor (2.43E-04 lb HAP/hp-hr), capital

costs (inflation adjust docket cost data and include costs for AFRC and power source), and O&M

costs (EPA assumption that NSCR annual O&M is equivalent to diesel particulate filter cleaning

is incorrect and severely underestimates cost) and a fuel penalty associated with engine operation

at a less efficient AFR for NSCR is considered. Control Efficiency = 90%..................................32

Attachment D: “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SRB Engines

NSCR/Post-Combustion Controls: Industry Cost Effectiveness Values - based on capital and

operating cost data provided by industry and vendors, and using best estimate values for useful

equipment life (10 years), AP-42 HAP emission factor (2.43E-04 lb HAP/hp-hr), and HAP

control efficiency (90%)...............................................................................................................38

Attachment E: “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SRB, 4SLB, and

2SLB Engines Post-Combustion Controls: Original RICE NESHAP cost effectiveness data with

adjustments for inflation, annual operating hours, and best estimate values for HAP emission

factor, and HAP control efficiency ...............................................................................................42

Attachment F: “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SRB & 4SLB Engines

Post-Combustion Controls: Estimated costs from cost data presented in “Engine Classification

Matrix Control Options and Costs” prepared by Argonne National Laboratory and the State of

New Mexico Department of Environmental Quality and using best estimate values for useful

equipment life (10 years), HAP emission factor, and HAP control efficiency (90%) ...............................43
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

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ii

Attachment G: “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SRB Engines NSCR/

Post-Combustion Controls: Proposed Rule Values were adjusted for useful equipment life (10

years), HAP emission factor (2.43E-04 lb HAP/hp-hr), and annual operating hours (6,500) .........44

Attachment H: “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SRB Engines

NSCR/Post-Combustion Controls: Revised EPA Proposed Rule data. Cost Effectiveness

approach from docket document EPA-HQ-OAR-2008-0708-0017 was revised. Adjustments

were made to useful equipment life (10 years), HAP emission factor (2.43E-04 lb HAP/hp-hr),

capital costs (inflation adjust docket cost data and include costs for AFRC & power source),

annual operating hours (6,500), and O&M costs (EPA assumption that NSCR annual O&M is

equivalent to diesel particulate filter cleaning is incorrect and severely underestimates cost).

Includes a fuel penalty associated with engine operation at a less efficient AFR for NSCR...........49

Attachment I: “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SRB Engines

NSCR/Post-Combustion Controls: Industry Cost Effectiveness Values - based on capital and

operating cost data provided by industry and vendors, 6,500 annual operating hours, and using

best estimate values for useful equipment life (10 years), AP-42 HAP emission factor (2.43E-04

lb HAP/hp-hr), and HAP control efficiency (90%) .......................................................................55

Attachment J: Cost Effectiveness Calculations for Gas-Fired 4SLB and 2SLB Engines PostCombustion Controls: Proposed Rule Values ..............................................................................59

Attachment K: “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SLB Engines PostCombustion Controls: Proposed Rule Values with Adjustments Using Best Estimates for Useful

Equipment Life (10 years) & HAP Emission Factor (4.78E-4 lb HAP/hp-hr) ...............................63

Attachment L: “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SLB Engines PostCombustion Controls: Industry Cost Effectiveness Values - based on capital and operating cost

data provided by industry and vendors and using best estimate values for useful equipment life

(10 years), HAP emission factor (0.000478 lb HAP/hp-hr), and HAP control efficiency (90%) ....67

Attachment M: “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SLB and 2SLB

Engines Post-Combustion Controls: Proposed Rule Values. Adjustments were made using best

estimate values to useful equipment life (10 years) and HAP emission factor (4.78E-4 lb

HAP/hp-hr), and to annual operating hours (6,500) .....................................................................69

Attachment N: “Baseline” Cost Effectiveness Calculations for Gas-Fired 2SLB Engines PostCombustion Controls: Industry Cost Effectiveness Values - based on capital and operating cost

data provided by industry and vendors, 2,800 annual operating hours, and best estimate values

for useful equipment life (10 years), HAP emission factor (4.78E-03 lb HAP/hp-hr), and HAP

control efficiency (73%)...............................................................................................................73

Attachment O: “Baseline” Cost Effectiveness Calculations for Gas-Fired 2SLB Engines PostCombustion Controls: Industry Cost Effectiveness Values - based on capital and operating cost

data provided by industry and vendors and using best estimate values for useful equipment life

(10 years), HAP emission factor (0.000478 lb HAP/hp-hr), and HAP control efficiency (73%),

and 6,500 annual operating hours .................................................................................................77

Attachment P: Vendor Quote for Gas-Fired 2SLB Engine Oxidation Catalyst .............................81

Attachment Q: Text of email from Bruce Chrisman of Cameron to Melanie King of EPA

Discussing Control Efficiencies for 2SLB Oxidation Catalysts.....................................................82
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

1

Executive Summary

Proposed revisions to the National Emission Standards for Hazardous Air Pollutants (NESHAPs)

for Reciprocating Internal Combustion (IC) Engines (40 CFR 63 Subpart ZZZZ) were published in

the Federal Register on March 5, 2009 at 74 FR 9698 (hereafter referred to as the Proposed Rule).

The Interstate Natural Gas Association of America (INGAA) and the American Petroleum Institute

(API) provided comments on the proposed rule. In establishing 40 CFR Part 63 emission standards

for existing sources, EPA is required to determine “the average emission limitation achieved by the

best performing 12 percent”, which is called the “MACT floor”. Then, EPA considers more

stringent standards that are “above the floor” based on costs and benefits associated with “above the

floor” controls. EPA’s analysis approach considers cost effectiveness (i.e., control costs in dollars

per ton of HAP) and related costs and benefits from application of above the floor controls. For the

Proposed Rule, EPA concluded that above the floor controls are warranted and requires postcombustion catalytic controls for many subcategories of natural gas-fired RICE.

INGAA comments and API comments in June 2009 indicated that the EPA cost effectiveness

analysis was based on limited and erroneous data and assumptions. This resulted in flawed “cost

effectiveness” values and incorrect conclusions on whether above the floor controls are warranted.

INGAA and API provided cost effectiveness estimates based on more realistic cost assumptions and

more complete capital, and operating & maintenance (O&M) cost data. After comments were

submitted, EPA requested additional detail on the cost effectiveness analyses from INGAA and

API. This report provides the requested information in a single response.

This report tabulates, analyzes, and compares cost effectiveness estimates based on five different

sources of capital and operating cost data. These comparative cost cases include:

(1) the EPA analysis from the Proposed Rule;

(2) revisions to the Proposed Rule costs based on EPA cost documentation that fills data gaps in

the Proposed Rule analysis;

(3) costs based on vendor quotes and operating companies experience and historical costs;

(4) similar cost analysis from the original 2004 RICE MACT; and

(5) third party/independent cost information developed by Argonne National Labs and the New

Mexico Department of Environmental Quality (NMDEQ).

Tables 3 - 5 in Section 3 show the cost effectiveness values for operating hour scenarios and

baseline cases by 2SLB, 4SLB, and 4SRB engines, respectively. Computations and references for

cost data and other assumptions are detailed in the Attachments. Costs based on the vendor and

operating company quotes (case 3) and/or revisions to the Proposed Rule costs (case 2 – relevant

only for four-stroke rich burn (4SRB) engines) are recommended as the most appropriate data for

evaluating cost-effectiveness for this rulemaking.

The EPA cost effectiveness estimates (i.e., dollars per ton for control) presented in the Proposed

Rule are significantly lower than estimates based on other cost data sources, including analysis that

reviewed the “sensitivity” to key assumptions. For all the engine types and size ranges, the cost

effectiveness results from the other four cases are at least a factor of four, and typically a factor
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

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2

of ten or more, higher than the Proposed Rule cost estimate. In addition, the costs are higher than

cost effectiveness thresholds EPA has identified as too costly for above the floor controls in other

NESHAP documents for reciprocating IC engines. Therefore, both INGAA and API have

concluded that the June 2009 comments related to above the floor cost effectiveness are validated

and above the floor controls for affected gas-fired engines are not warranted.

Additional key summary points regarding the cost effectiveness estimates include:

• The primary reason for the significantly lower costs from the EPA Proposed Rule is erroneous

cost data. For example, capital equipment costs are not consistent with standard vendor

estimates or do not include significant components, and operating and maintenance costs are

based on faulty assumptions. Detailed documentation is provided in this report and examples

include:

- For 4SRB engine estimates, the Proposed Rule capital costs omitted major required

equipment elements including the air/fuel ratio controller (AFRC) and a power

source/battery for remote engine applications;

- The O&M costs presented in the EPA analysis for oxidation catalysts and NSCR catalysts

assume annual maintenance costs are the same as required for catalytic diesel particulate

filters. This simplistic assumption is incorrect, and additional O&M costs are included for

gas-fired engine controls based on available data. In addition, for 4SRB engines, a

significant fuel penalty can be incurred due to NSCR operating requirements;

- Two-stroke lean burn (2SLB) engines typically have backpressure limitations and high

excess air levels that result in low engine exhaust temperatures. Thus, oxidation catalyst

retrofits incur additional costs for premium catalysts and engineering, and engine

performance suffers. 2SLB engines have comparatively higher cost effectiveness values.

• For the 4SRB engine estimates, the Revised EPA Model (i.e., using data from EPA dockets to

fill data gaps) and Industry Data estimates generally agree within about 25% over the range of

engine sizes. This agreement is well within the uncertainty of EPA Control Cost Manual cost

effectiveness estimates that are “nominally accurate to within ± 30%.” These costs are also

similar to the cost effectiveness estimates from the Argonne / NMDEQ data, indicating good

agreement across three different cost sources;

• The range of cost effectiveness estimates for analyses other than the Proposed Rule are:

- $25,000 to $207,000 per ton for 2SLB engines;

- $9,000 to $36,000 per ton for 4SLB engines; and

- $25,000 to $269,000 per ton for 4SRB engines.

• Based on comparison of these costs to above the floor control feasibility criteria from EPA

background documents in the dockets for this rulemaking and the original 2004 RICE MACT,

the assertions from the June 2009 INGAA comments and API comments are affirmed: Above

the floor catalytic controls for natural gas-fired engines are not warranted.
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

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1.0 Introduction

Proposed revisions to the National Emission Standards for Hazardous Air Pollutants (NESHAPs)

for Reciprocating Internal Combustion Engines (40 CFR 63 Subpart ZZZZ) were published in the

Federal Register on March 5, 2009 at 74 FR 9698 (hereafter referred to as the Proposed Rule). The

Interstate Natural Gas Association of America (INGAA) and the American Petroleum Institute

(API) provided comments on the proposed rule. The INGAA comments were entered into the rule

docket as Docket Document EPA-HQ-OAR-2008-0708-0155 (hereafter referred to as “INGAA

Comments”) and the API comments were entered into the rule docket as Docket Document EPAHQ-OAR-2008-0708-0242 (hereafter referred to as “API Comments”).

In establishing 40 CFR Part 63 emission standards for existing sources, EPA is required to

determine “the average emission limitation achieved by the best performing 12 percent”, which is

called the “MACT floor”. Then, EPA considers more stringent standards that are “above the floor”

based on costs and benefits associated with “above the floor” controls. EPA’s analysis approach

considers cost effectiveness (i.e., control costs in dollars per ton) and related costs and benefits from

application of above the floor controls. For the Proposed Rule, EPA concluded that catalytic

controls are warranted as above the floor controls for many subcategories of natural gas-fired RICE.

INGAA Comment No. 13 and API Comment No. 7 addressed EPA’s “above-the-floor” cost

effectiveness analysis for post-combustion emission controls for gas-fired reciprocating internal

combustion (IC) engines. Review and analysis presented in those comments indicated that the EPA

cost effectiveness analysis was based on limited and erroneous data and assumptions. This flawed

cost data resulted in erroneous conclusions regarding “cost effectiveness” values and whether above

the floor controls are warranted.

Innovative Environmental Solutions, Incorporated (IES) supported comment development for both

INGAA and API, and similar cost data based on actual vendor quotes and company documented

costs were used in both cases. INGAA and API provided cost effectiveness estimates based on

more realistic cost assumptions and more complete capital, and operating and maintenance (O&M)

cost data. These analyses lead to the conclusion that post-combustion, above the floor controls are

not cost effective and thus not warranted for existing natural gas-fired engines addressed by the

Proposed Rule. The comments submitted were relatively lengthy, but did not provide complete

documentation of the cost basis and stepwise analysis to determine the cost effectiveness values

presented in the comments. Such detail was beyond the scope of a comment document. After

INGAA and API submitted comments, EPA contacted both INGAA and API and requested

additional detail on the cost effectiveness analyses. Since similar analysis was completed by IES

for each of the trade associations, this document provides the requested information in a single

response.

Cost information is provided and summarized from five different sources in this document. The

EPA dollars per ton conclusions presented in the proposed rule are significantly lower than the other

four sources discussed below. The various control and cost scenarios analyzed for “sensitivity”

consistently demonstrate much higher costs - including cost “corrections” based on EPA’s own

data. The resulting cost effectiveness values (see Tables 3-5 below) are higher than thresholds EPA

has identified as too costly in other NESHAP documents. Therefore, both INGAA and API have
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

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concluded that above the floor controls are not warranted and the June 2009 comments related to

above the floor cost effectiveness are validated.

For a summary of the INGAA or API conclusions and recommendations, refer to the comments

identified above, which are available in the docket for the rulemaking. API comments are in the online docket at: http://www.regulations.gov/search/Regs/home.html#documentDetail?R=09000064809ccebe

INGAA comments: http://www.regulations.gov/search/Regs/home.html#documentDetail?R=09000064809c460a

This report provides additional detail requested by EPA to better document the basis for the cost

effectiveness results discussed in the INGAA comments and API comments. Section 2 presents

background information including a discussion of parameters that impact cost effectiveness

estimates. Section 3 then tabulates, analyzes, and compares cost effectiveness estimates based on

different sources of capital and operating cost data. These comparisons include the EPA analysis

from the Proposed Rule, revised costs based on the EPA documentation, costs based on vendor

quotes and experiences of operating companies, cost analysis from the original 2004 RICE MACT,

and other similar cost information from the literature. Section 4 discusses implications and

references related EPA determinations regarding cost effectiveness thresholds – i.e. cost

effectiveness values above which post-combustion controls are not warranted. Detailed tables that

document the cost effectiveness calculations, assumptions, and references are provided as

Attachments.

The specific cases and cost references are defined in Section 3. Tables 3 - 5 in Section 3 show the

actual cost effectiveness values for the different cases. These comparisons reinforce the original

conclusion in the June 2009 INGAA comments and API comments that EPA’s analysis

significantly under-estimated the cost effectiveness for “above the floor” controls. The more

realistic cases shown in Tables 3 – 5 consistently document significantly higher costs considering

multiple sources and case studies. Costs based on the vendor and operating company quotes and/or

revisions to the Proposed Rule costs are recommended as the most appropriate data for evaluating

costs effectiveness for this rulemaking. When compared to EPA referenced cost effectiveness

thresholds, these cost effectiveness values support the conclusion that above the floor controls are

not cost effective and thus not warranted for existing natural gas-fired engines.

The section 3 tables summarize cost information and provide references for the basis for the cost

inputs for the cost effectiveness calculations. Detailed calculations and documentation of the cost

effectiveness estimates for each of the cases are provided in Attachments to this report.

This report has been prepared with the understanding that the reader is familiar with the information

provided in INGAA Comment 13 and API Comment 7. If not, the reader should read those

comments in the documents referenced above to ensure an understanding of the issues. Detailed

information provided in those comments is not repeated here; rather the reader is referred to the

original text. The cost effectiveness estimates presented in the tables in the comments often differ

from the values in this report. The differences are due to minor corrections that were completed

during the more comprehensive review and analysis presented in this report, as well as refined

assumptions for key inputs as discussed in this report.
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

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2.0 Background on Cost Effectiveness Inputs and Computations

Cost effectiveness is defined as the annualized cost to install and operate emission controls divided

by the annual hazardous air pollutant (HAP) emission reduction ($/ton HAP removed). For twostroke lean burn (2SLB) and four-stroke lean burn (4SLB) engines, the post combustion control is

oxidation catalyst and for four-stoke rich burn (4SRB) engines, the post combustion control is nonselective catalytic reduction (NSCR). Equation 1 shows the cost effectiveness calculation.

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CE

where:

CE – Cost Effectiveness;

TAC – Total Annual Costs = Total Annual Operating Costs + Capital Recovery

where: Capital Recovery = Total Capital Costs * Capital Recovery Factor (function of

equipment life (yrs))

ER – Engine Rating;

Load – engine operating horsepower relative to engine rating (assumed to be 100%);

OH – annual Operating Hours;

HAP EF – Hazardous Air Pollutants Emission Factor; and

ǻHAP = HAP control efficiency.

There are five primary sources of cost data (i.e., “case studies”) that serve as the basis for the cost

effectiveness estimates presented in this report. These case studies are based on different cost data

and methodologies, emission assumptions, and information sources. Additional cost effectiveness

calculations were also completed using a common set of assumptions (e.g., operating hours, HAP

emission factor) for these cases to provide a common basis to compare results from the different

cases. The methodologies and assumptions for the five primary cases are described in detail in

Section 3 and the Attachments. The five primary cases include:

• “EPA Proposed Rule” – The EPA analysis from the 2009 rule proposal;

• “Revised EPA Model” – The 2009 EPA analysis corrected to include significant costs for 4-

stroke rich burn engines that were inappropriately excluded from the analysis (e.g., air-to-fuel

ratio controller costs for NSCR);

• “Industry Data” – The analyses are based on cost quotes for capital equipment, peripheral

installation and startup costs, and annual operating costs based on actual operator data.

• “2004 RICE NESHAP” – Similar analysis completed by EPA for its above the floor analysis

referenced in the original RICE NESHAP rulemaking; and

• “Argonne / NMDEQ” – Literature report of control costs that provides another independent

reference for comparison purposes.
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These cases represent five sources of capital and operating costs. In the analysis below, these cases

have also been combined with different emission and operating assumptions (e.g., emissions factor,

control performance, operating hours) to determine cost effectiveness values and investigate

sensitivity to key assumptions. For the last case from the literature, Argonne / NMDEQ provided

cost data, and that data was used to calculate cost effectiveness for this case.

Cost effectiveness calculations conducted by EPA and industry for the first four cases included a

range of values for HAP EF, ǻHAP, equipment useful life, and annual operating hours. The values

of these parameters found in the literature and used for the cost effectiveness calculations are

discussed here. Because ranges of these parameters have been considered for the different cases, it

is difficult to compare some cost effectiveness estimates because too many parameters vary from

case to case. Thus, to facilitate comparison of cost effectiveness estimates, a “best estimate” value

is identified and used in Section 3 to calculate cost effectiveness values for the different cases.

These calculations allow a common basis or “baseline” for comparison of the different cost

effectiveness calculations.

• HAP EF. Table 1 lists HAP emission factors for gas-fired engines used for the EPA and

INGAA or API cost effectiveness analyses and found in the literature. The emission factors for

the Proposed Rule (i.e., “case 1”) do not differentiate between engine types – i.e., rich burn and

lean burn emissions are not differentiated. The other emission factors and current

understanding of natural gas-fired engine emissions indicate that HAP emissions from 4SRB

engines are lower than from lean burn engines. For the 4SLB and 2SLB cost effectiveness

methodologies comparison, the Proposed Rule emission factor for engines < 500 hp was

selected as a “best estimate” because it is the most recent emission factor and based on data for

engines in the range of interest (i.e. less than 500 hp). This emission factor is slightly lower

that the AP-42 factors for lean burn engines; thus, it is expected to provide conservative cost

effectiveness estimates.

The AP-42 emission factor for 4SRB engines was selected as the best estimate based on current

understanding of emissions and the fact that the AP-42 rich burn factor is marginally lower than

for lean burn engines. The AP-42 factor is equivalent to about 10 ppmv HAP which is more

typical of “on average” emissions for rich-burn engines than the other cited factors. The “All,

< 500 hp” emission factor is too high on a ppm basis for typical rich-burn engine emissions and

the 4SRB emission factor used in the original RICE NESHAP analysis is relatively low.

Table 1. HAP Emission Factors for Gas-Fired Reciprocating Internal Combustion Engines.

Emission Factor (lb/hp-hr)

EF Source All 2SLB 4SLB 4SRB < 500 hp All hp

Proposed RuleA 4.78E-04 6.88E-04

Original RICE NESHAPB 4.7E-04 4.42E-04 8.30E-05

AP-42C5.96E-04 5.50E-04 2.43E-04

A. EPA docket documents EPA-HQ-OAR-2008-0708-0017; EPA-HQ-OAR-2005-0030-0009.

B. EPA docket document OAR-2002-0059-0225

C. Sum of AP-42 HAP emission factors for gas-fired RICE. Lb/MMBtu emission factors converted to

lb/hp-hr assuming engine efficiency of 0.34 per EPA-HQ-OAR-2005-0030-0009
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

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• ǻHAP EF. Table 2 summarizes the HAP control efficiencies for gas-fired engine postcombustion controls used for the EPA and INGAA or API cost effectiveness analyses and

found in the literature. The Proposed Rule’s assumption of 90% control for 2SLB engines is

not supported by vendor quotes or limited experience with catalytic control for 2SLB engines,

which exhibit lower characteristic exhaust temperature. Cameron has provided correspondence

regarding a developmental premium catalyst, which cites 73% reduction. Although that

performance level may be optimistic for 2SLB engines, the control efficiency provided by

Cameron/Ajax is assumed used as the best estimate. Note that Cameron is the primary

company currently providing oxidation catalysts for small 2SLB engines (i.e., Ajax units) and

Cameron provided equipment capital cost data used for the industry cost effectiveness estimates

provided below. For 4SLB and 4SRB engines, 90% control from the Proposed Rule is used as

the best estimate of typical field operation.

Table 2. HAP Control Efficiencies for Gas-Fired Reciprocating Internal Combustion

Engines Post-Combustion Controls.

Post-Combustion HAP Control Efficiency

EF Source

2SLB 4SLB 4SRB

Proposed RuleA90% 90% 90%

Original RICE NESHAPB40% 65% 75%

40 CFR 63 Subpart ZZZZ 58% 93% 76%

Cameron/Ajax C73%

A. EPA docket document EPA-HQ-OAR-2008-0708-0017

B. EPA docket document OAR-2002-0059-0225. Control efficiency is for formaldehyde.

C. email from Bruce Chrisman of Cameron Compression Systems to Melanie King of EPA.

Control efficiency is one year guarantee level for formaldehyde. Refer to Attachment Q.

• Equipment Useful Lifetime – the Proposed Rule based cost effectiveness analyses on an

equipment lifetime of 20 years. However, post-combustion control equipment is exposed to

hot, corrosive gases, thermal cycling, and environmental factors (precipitation, etc.). Industry

experience is that a catalytic control system replacement schedule is typically on the order of 10

years. Vendors would not anticipate a 20 year life for catalytic systems. For example, for

4SRB NSCR systems, air-to-fuel ratio controllers typically must be replaced or rebuilt on the

order of every 10 years. Thus, 10 years is believed to be a best estimate of equipment life.

• Annual operating hours. Engine operating hours will depend on the application. Emergency

engines can operate less than 100 hours per year. For the oil and gas industry, well-site engines

used in production will typically operate periodically – that is, only when the well is producing

– while engines employed for central compression will generally operate on a more continuous

basis. EPA docket document EPA-HQ-OAR-2008-0708-0017 for the Proposed Rule assumed

2,800 annual operating hours for the cost effectiveness analyses. This value is used in the

analyses below as representative of periodic operation engines. EPA docket document OAR2002-0059-0225, which presented cost effectiveness estimates for the original RICE NESHAP,

assumed 6,500 annual operating hours for cost effectiveness analyses. This value is used in the

analyses below as representative of the operation of engines with higher utilization.
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

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For the cost effectiveness analyses summarized in Section 3 and detailed in the Attachments, best

estimate/average capital and operating costs based on industry and literature data are used. The

case studies are based on different capital and operating costs; thus, the “baseline” cost

effectiveness estimates presented below – based on the best estimates for HAP EF, ǻHAP,

equipment lifetime, and annual operating hours – provide a range of cost effectiveness for these

controls. The analyses also include ranges for other costs. For example: capital costs are different

depending upon the information source; and, annual operating and maintenance costs can vary –

e.g., based on run time.

3.0 Summary of “Above the Floor” Cost effectiveness Data and Analyses

This section summarizes and compares cost effectiveness estimates from the different cases

identified above. In comparison to cost effectiveness values included in the June 2009 INGAA

comments or API comments, refined analysis completed for this report results in marginally

different cost effectiveness results. Those differences are not discussed in detail, but are due to

refinements in the assumptions (e.g., “best estimates” as discussed above) and corrections to minor

errors that occurred while preparing the June 2009 comments under a strict deadline. The

differences do not alter relative values of the results or change the substance of the comments or

conclusions regarding the cost effectiveness of catalytic controls.

The five primary cases were introduced in Section 2 and are reiterated here:

1. “EPA Proposed Rule” – EPA estimated cost effectiveness values for post-combustion controls

for reciprocating IC engines using select industry capital and operating and maintenance (O&M)

cost data presented in the docket and methodologies prescribed in the EPA Cost Control Manual

(CCM); hereafter referred to as the “Proposed Rule” costs. Tables 3 – 5 compare these

Proposed Rule cost effectiveness estimates for 2SLB, 4SLB, and 4SRB engines, respectively,

with estimates based on industry, vendor, and published cost data per the other four cases or

methodologies.

2. “Revised EPA Model” – For 4SRB engines equipped with NSCR, the Proposed Rule EPA CCM

estimate was revised by including costs for all required equipment, and using more realistic

assumptions and real world capital and operating cost requirements;

3. “Industry Data” – Cost effectiveness values are based on capital and operating cost data

provided by industry and vendors. This includes engineering, installation, and startup costs that

can be compared to the engineering cost algorithms (i.e., percentage of equipment costs) defined

in the CCM;

4. “2004 RICE NESHAP” – Cost effectiveness estimates developed by EPA for the original RICE

NESHAP – i.e., the analogous cost analysis completed by EPA for the original rulemaking but

not reconciled by EPA in the 2009 proposed rule; and

5. “Argonne / NMDEQ” – Cost effectiveness estimates developed using guidelines prepared by

Argonne National Laboratory and the State of New Mexico Department of Environmental

Quality for the Four Corners Air Quality Task Force work group. The Argonne / NMDEQ

capital and operating cost data were introduced in the June 2009 comments and are further

analyzed for cost effectiveness as an additional example for comparison purposes.
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Tables 3 though 5 summarize the cost effectiveness results for the different cases and scenarios

(e.g., operating hours) considered. Table footnotes include important details regarding key

assumptions and references. The Attachments present the detailed computations and references for

information / cost sources. Following the tables, summary points regarding the cost effectiveness

estimates are provided. Section 4 provides additional discussion of implications and comparison to

cost feasibility thresholds defined in other EPA documents for NESHAP rulemakings.
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Table 3. Cost Effectiveness Estimates for 2-Stroke Lean Burn Engines (2007 $).

<50 hp 50-100 hp 100-175 hp 175-300 hp 300-500 hp 500-1000 hp

DocketA

19,887 7,798 5,039 3,658 2,887 2,316

BaselineB

11,961 8,069 6,122 5,034 4,288

Industry

DataC Baseline 206,791 132,397 84,366

2004 RICE

NESHAPD Baseline 57,830

Proposed

RuleE Baseline 5,152 3,476 2,637 2,169 1,847

Industry

DataF Baseline 89,079 57,033 36,342

DocketG

25,122

BaselineH

24,911

6,500 Operating Hours per Year

2004 RICE

NESHAP

Proposed

Rule

Cost Method Cost Basis Engine Size Range /Post-Combustion Emssion Control Cost-Effectiveness ($/ton

2,800 Operating Hours per Year

A. Cost Effectiveness data from docket document EPA-HQ-OAR-2008-0708-0017 Table 2. For 500 – 1,000 hp

size category, value is average of 600-750 hp and > 750 hp cost per ton ($/ton) HAP reduction values. Refer to

Attachment J for additional detail.

B. Cost Effectiveness calculated using data from docket document EPA-HQ-OAR-2008-0708-0017 with

adjustments using best estimate values for useful equipment life (10 years) and HAP emission factor (0.000478

lb HAP/hp-hr). HAP control efficiency = 73%. Refer to Attachment K for additional detail.

C. Industry cost effectiveness values based on capital and operating cost data provided by industry and vendors and

using best estimate values for useful equipment life (10 years), HAP emission factor (0.000478 lb HAP/hp-hr),

and HAP control efficiency (73%). Refer to Attachment N for additional detail.

D. 2001 cost effectiveness data from original RICE NESHAP (docket document no. OAR-2002-0059-0225) with

adjustments for inflation (to 2007 dollars based on 3% annual cost escalation/inflation), annual operating hours

(2,800), and best estimate value for HAP emission factor (0.000478 lb HAP/hp-hr). The original control

efficiency of 40% was retained because these cost estimates were developed before premium catalysts, required

to achieve higher control efficiencies for 2SLB engines, were available. Refer to Attachment E for additional

detail.

E. Cost Effectiveness calculated using Proposed Rule data from docket document EPA-HQ-OAR-2008-0708-0017

with adjustments for annual operating hours (6,500) and using best estimate values for useful equipment life (10

years), and HAP emission factor (0.000478 lb HAP/hp-hr). ). HAP control efficiency = 73% Refer to

Attachment M for additional detail.

F. Industry cost effectiveness values based on capital and operating cost data provided by industry and vendors and

using best estimate values for useful equipment life (10 years), HAP emission factor (0.000478 lb HAP/hp-hr),

and HAP control efficiency (73%). Refer to Attachment O for additional detail.

G. 2001 cost effectiveness data from original RICE NESHAP (docket document no. OAR-2002-0059-0225) with

adjustment for inflation (to 2007 dollars based on 3% annual cost escalation/inflation). Refer to Attachment E, for

additional detail.
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H. 2001 cost effectiveness data from original RICE NESHAP (docket document number OAR-2002-0059-0225)

with adjustments for inflation (to 2007 dollars based on 3% annual cost escalation/inflation), and best estimate

value for HAP emission factor (0.000478 lb HAP/hp-hr). The original control efficiency of 40% was retained

because these cost estimates were developed before premium catalysts, required to achieve higher control

efficiencies for 2SLB engines, were available. Refer to Attachment E for additional detail.
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Table 4. Cost Effectiveness Estimates for 4-Stroke Lean Burn Engines (2007 $).

<50 hp 50-100 hp 100-175 hp 175-300 hp 300-500 hp 500-1000 hp

DocketA 19,887 7,798 5,039 3,658 2,887 2,316

BaselineB

11,961 8,069 6,122 5,034 4,288

Industry DataC Baseline 26,420

2004 RICE NESHAPD Baseline 24,415

Argonne/ NMDEQE Baseline 36,148 21,407

Proposed RuleF Baseline 5,152 3,476 2,637 2,169 1,847

Industry DataC Baseline 11,381

DocketG

15,748

BaselineH

10,517

Argonne/ NMDEQE Baseline 15,572 9,221

Cost Basis

6,500 Operating Hours per Year

Cost Method Engine Size Range /Post-Combustion Emssion Control Cost-Effectiveness ($/ton

2,800 Operating Hours per Year

2004 RICE NESHAP

Proposed Rule

A. Cost Effectiveness data from docket document EPA-HQ-OAR-2008-0708-0017 Table 2. For 500 – 1,000 hp

size category, value is average of 600-750 hp and > 750 hp cost per ton ($/ton) HAP reduction values. Refer to

Attachment J for additional detail.

B. Cost Effectiveness calculated using data from docket document EPA-HQ-OAR-2008-0708-0017 with

adjustments using best estimates for useful equipment life (10 years) and HAP emission factor (0.000478 lb

HAP/hp-hr). Control efficiency = 90%. Refer to Attachment K for additional detail.

C. Industry cost effectiveness values based on capital and operating cost data provided by industry and vendors and

using best estimate values for useful equipment life (10 years), HAP emission factor (0.000478 lb HAP/hp-hr),

and HAP control efficiency (90%). Refer to Attachment L for additional detail.

D. 2001 cost effectiveness data from original RICE NESHAP (docket document number OAR-2002-0059-0225)

with adjustments for inflation (to 2007 dollars based on 3% annual cost escalation/inflation), annual operating

hours (2,800) and using best estimate values for HAP emission factor (0.000478 lb HAP/hp-hr) and control

efficiency (90%). Refer to Attachment E for additional detail.

E. Estimated costs from cost data presented in “Engine Classification Matrix Control Options and Costs” prepared

by Argonne National Laboratory and the State of New Mexico Department of Environmental Quality [Argonne

2007] using best estimate values for useful equipment life (10 years), HAP emission factor (0.000478 lb

HAP/hp-hr), and HAP control efficiency (90%). Refer to Attachment F for additional detail.

F. Cost Effectiveness calculated using Proposed Rule data from docket document EPA-HQ-OAR-2008-0708-0017

with adjustments for annual operating hours (6,500), and using best estimate values for useful equipment life (10

years), HAP emission factor (0.000478 lb HAP/hp-hr), and control efficiency (90%). Refer to Attachment M for

additional detail.

G. 2001 cost effectiveness data from original RICE NESHAP (docket document number OAR-2002-0059-0225)

with adjustment for inflation (to 2007 dollars based on 3% annual cost escalation/inflation). Refer to Attachment

E for additional detail.

H. 2001 cost effectiveness data from original RICE NESHAP (docket document number OAR-2002-0059-0225)

with adjustments for inflation (to 2007 dollars based on 3% annual cost escalation/inflation) and using best

estimates for HAP emission factor (0.000478 lb HAP/hp-hr) and control efficiency (90%). Refer to Attachment

E for additional detail.
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Table 5. Cost Effectiveness Estimates for 4-Stroke Rich Burn Engines (2007 $).

<50 hp 50-100 hp 100-175 hp 175-300 hp 300-500 hp 500-1000 hp

DocketA 33,373 13,162 8,549 6,241 4,952 3,998

BaselineB 44,168 29,372 21,971 17,835 14,999

Revised EPA ModelC Baseline 269,008 267,273 178,868 129,486

Industry DataD Baseline 176,718 219,935 147,039 101,867

2004 RICE NESHAPE Baseline 57,444

Argonne/ NMDEQF Baseline 107,820 65,791

Proposed RuleG Baseline 19,206 12,653 9,464 7,683 6,461

Revised EPA ModelH Baseline 138,223 133,132 92,850 70,349

Industry DataI Baseline 112,906 119,063 81,494 58,522

DocketJ 86,935

BaselineK 24,745

Argonne/ NMDEQF Baseline 46,446 28,341

2004 RICE NESHAP

Cost Basis Engine Size Range /Post-Combustion Emssion Control Cost-Effectiveness ($/ton HAP)

2,800 Operating Hours per Year

6,500 Operating Hours per Year

Proposed Rule

A. Cost Effectiveness data from docket document EPA-HQ-OAR-2008-0708-0017 Table 2. For 500 – 1,000 hp size

category, value is average of 600-750 hp and > 750 hp cost per ton ($/ton) HAP reduction values. Refer to

Attachment A for additional detail.

B. Cost Effectiveness calculated using data from docket document EPA-HQ-OAR-2008-0708-0017 with adjustments to

best estimates for useful equipment life (10 years) and AP-42 HAP emission factor (2.43E-04 lb HAP/hp-hr). Control

efficiency = 90%. Refer to Attachment B for additional detail.

C. Revised EPA Model data. Cost Effectiveness approach from docket document EPA-HQ-OAR-2008-0708-0017 was

revised. Adjustments were made to best estimates for useful equipment life (10 years) and AP-42 HAP emission factor

(2.43E-04 lb HAP/hp-hr), capital costs (inflation adjust docket cost data and include costs for AFRC and power

source), and O&M costs (EPA assumption that NSCR annual O&M is equivalent to diesel particulate filter cleaning is

incorrect and severely underestimates cost) and a fuel penalty associated with engine operation at a less efficient AFR

for NSCR is considered. Control efficiency = 90%. Refer to Attachment C for additional detail.

D. Industry cost effectiveness values based on capital and operating cost data provided by industry and vendors and using

best estimate values for useful equipment life (10 years), AP-42 HAP emission factor (2.43E-04 lb HAP/hp-hr), and

HAP control efficiency (90%). Refer to Attachment D for additional detail.

E. 2001 cost effectiveness data from original RICE NESHAP (docket document number OAR-2002-0059-0225) with

adjustments for inflation (to 2007 dollars based on 3% annual cost escalation/inflation), annual operating hours

(2,800), and using best estimate values for AP-42 HAP emission factor (2.43E-04 lb HAP/hp-hr) and control efficiency

(90%). Refer to Attachment E for additional detail.

F. Estimated costs from cost data presented in “Engine Classification Matrix Control Options and Costs” prepared by

Argonne National Laboratory and the New Mexico Department of Environmental Quality [Argonne 2007] using best

estimate values for useful equipment life (10 years), AP-42 HAP emission factor (2.43E-04 lb HAP/hp-hr), and HAP

control efficiency (90%). Refer to Att. F for detail.

G. Proposed Rule Values (Docket Document EPA-HQ-OAR-2008-0708-0017 Table 2) with adjustments ] using best

estimate values for useful equipment life (10 years) and AP-42 HAP emission factor (2.43E-04 lb HAP/hp-hr), and

annual operating hours (6,500). Refer to Attachment G for additional detail.
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H. Revised EPA Model data. Cost Effectiveness approach from docket document EPA-HQ-OAR-2008-0708-0017 was

revised with adjustments to 6,500 annual operating hours and as described in footnote C. Refer to Attachment H for

additional detail.

I. Industry cost effectiveness values based on capital and operating cost data provided by industry and vendors and using

best estimate values for useful equipment life (10 years), AP-42 HAP emission factor (2.43E-04 lb HAP/hp-hr), and

HAP control efficiency (90%). Refer to Attachment I for additional detail.

J. 2001 cost effectiveness data from original RICE NESHAP (docket document number OAR-2002-0059-0225) with

adjustment for inflation (to 2007 dollars based on 3% annual cost escalation/inflation). Refer to Attachment E for

additional detail.

K. 2001 cost effectiveness data from original RICE NESHAP (docket document no. OAR-2002-0059-0225) with

adjustments for inflation (to 2007 dollars based on 3% annual cost escalation/inflation), and using best estimate values

for AP-42 HAP emission factor (2.43E-04 lb HAP/hp-hr) and control efficiency (90%). Refer to Attachment E for

additional detail.

Summary points regarding the cost effectiveness estimates in Tables 3 – 5 include:

• The EPA Proposed Rule cost effectiveness estimates ($/ton HAP removed) are generally an

order of magnitude or more lower than the other analyses, indicating the Proposed Rule costs

are flawed and erroneous. This includes the EPA’s own cost effectiveness analysis for 500 –

1,000 hp engines that was conducted for the 2004 RICE NESHAP;

- The primary reason for lower costs from the EPA Proposed Rule is erroneous cost data. For

example, capital equipment costs are not consistent with standard vendor estimates or do not

include significant components, and operating and maintenance costs are based on faulty

assumptions. The costs and basis for the different cases and scenarios are discussed in these

bullets and detailed in the Attachments.

• For several estimation approaches and engine types and categories, especially smaller 2SLB and

4SLB engines (likely because oxidation catalysts are infrequently installed on small engines),

data were not available for cost effectiveness calculations. Because cost effectiveness values

would be expected to be higher for smaller engines, the cost effectiveness estimate from larger

engines could serve as a lower estimate for the smaller engines (i.e., cost effectiveness will be at

least this high).

• For the 4SRB engine estimates, the Proposed Rule capital costs omitted major required

equipment elements including the air/fuel ratio controller (AFRC) and a power source/battery

for remote engine applications. In addition, the Proposed Rule capital costs appear to be from

2003 and 2005 and were not corrected for inflation to 2007 dollars. These omissions and errors

results in the very low Proposed Rule TCC values;

• For the 4SRB engine estimates, the Revised EPA Model and Industry Data estimates agree

within about 25% over the range of engine sizes. For the Revised EPA Model, costs from other

EPA analysis were used to fill gaps for missing costs (e.g., AFRC cost). This agreement is well

within the uncertainty of the cost effectiveness estimates because, per EPA, “Cost Control

Manual estimating procedure rests on the notion of the “study” (or rough order of magnitude –

ROM) estimate, nominally accurate to within ± 30%.” This agreement suggests the

“corrections” to the docket data for the “Proposed Rule” case to develop the Revised EPA

Model estimates provide consistency with the estimate based on current industry equipment,
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operations, and costs. These costs are also similar to the cost effectiveness estimate from the

Argonne / NMDEQ data, indicating good agreement across three different cost sources;

• 2SLB engines typically have backpressure limitations and high excess air levels that result in

low engine exhaust temperatures; thus, oxidation catalyst retrofits often require expensive

premium catalysts to compensate for lower operating temperatures and high muffler and catalyst

retrofit engineering costs to minimize backpressure. These factors contribute to the high

Industry Data capital costs for 2SLB engines (see detail in Attachments), as well as higher

catalyst replacement costs due to the “premium” associated with 2SLB catalyst requirements for

lower temperature performance and lower pressure drop. 4SLB engines typically have higher

engine exhaust temperatures than 2SLB engines and less restrictive backpressure requirements;

thus, 4SLB capital costs are lower than 2SLB capital costs as indicated by the “Industry Data”

TCC estimates;

• The operating and maintenance (O&M) costs presented in the EPA analysis for oxidation

catalysts and NSCR catalysts assume annual maintenance costs are the same as required for

catalytic diesel particulate filters (CDPF). This simplistic assumption is incorrect. CDPF

maintenance requirements are basically limited to periodic filter cleaning that consists of ash

removal from the filter. Conversely, operating and maintenance requirements for catalysts are

multi-faceted and can include periodic (e.g., every three years) catalyst replacement, periodic

(e.g., annual) catalyst cleaning (total catalyst replacement and cleaning costs include

replacement or cleaning cost, shipping, downtime, crane rental, and labor for catalyst removal

and installation and engine start up and shutdown), performance testing whenever catalysts are

replaced or rotated for cleaning, thermocouple replacement, and for 4SRB engines, periodic

oxygen sensor replacement and AFRC setpoint testing, and periodic replacement or

maintenance of the AFRC, fuel flow control valve, battery, and battery recharger (alternator or

solar panel). These O&M costs are reflected in the large difference between the Proposed Rule

TAC and TAC estimated by the Revised EPA Model and the Industry Data approaches as

shown in the Attachments;

In addition, for 4SRB engines, a significant fuel penalty can be incurred when engine operation

is adjusted from a maximum efficiency AFR of about 1.06 to an NSCR optimization AFR

slightly rich of stoichiometric – about 0.995;

• The HAP emission factor used for the Proposed Rule cost effectiveness analyses, 6.88 x 10-4 lb

HAP/hp-hr is based on emission data from all engine sizes. The docket includes a HAP

emission factor for gas-fired engines < 500 hp (4.78 x 10-4 lb HAP/hp-hr) that is more

appropriate for cost effectiveness analyses for engines in this size range. This emission factor

was used for the Revised EPA Model, Industry Data, and Argonne cost effectiveness

calculations – i.e., judged the “best estimate” as the input for a common comparison across the

different cases;

• The assumption of 90% catalytic control for engines under all operating conditions is not

supported in the docket by data and documentation. In addition, the assumed performance for

the 2SLB engine is also optimistic. Oxidation catalyst control efficiencies are often well below

90% (or 73% for 2SLB engines). Thus, these cost effectiveness estimates would be higher if a

lower catalyst performance level is assumed.
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4.0 Implications of Cost Effectiveness Estimates

The tables above indicate that the EPA Proposed Rule costs are inordinately low, while the Revised

EPA Model, Industry Data, 2004 RICE NESHAP, and Argonne/NMEQ cost effectiveness values in

Tables 3 – 5 are consistently significantly higher and generally the same magnitude.

In their June 2009 comments, INGAA Comment 14 and API Comment 7 discuss cost feasibility

based on EPA decisions in the original RICE MACT (2004 Final Rule) and decisions made for the

2009 proposed rule. Precedent for cost effectiveness thresholds from EPA documents for the

Proposed Rule and the original 2004 RICE NESHAP indicates that post-combustion controls are

not cost effective or warranted for gas-fired engines less than 500 hp.

Two EPA documents were referenced regarding cost feasibility thresholds for lean burn gas-fired

engines. In the 2002 analysis for the original 2004 NESHAP, EPA concluded that the control costs

(presented in Tables 3 and 4) were not reasonable and above the floor controls were not required for

existing engines. Thus, for 500 – 1,000 hp 4SLB engines, a cost effectiveness of $15,748/ton HAP

($13,189/ton HAP in 2001 dollars) was not considered cost effective and for 500 – 1,000 hp 2SLB

engines, a cost effectiveness of $25,122/ton HAP ($21,039/ton HAP in 2001 dollars) was not

considered cost effective. A comparison with the estimated Industry Data and Argonne/NMDEQ

cost effectiveness values would conclude that post-combustion controls cannot be justified for

existing gas-fired lean burn engines less than 500 hp. This document identified costs that were too

high, but did not imply a threshold that is considered reasonable. An EPA document from the

Proposed Rule docket further informs that issue.

EPA perspective on the cost effectiveness threshold is found in docket document no. OAR-2008-

0708-0017 for the Proposed Rule. The cost effectiveness values in Table 2 of that document for

non-emergency gas-fired engines are reproduced here for reference. Shading is added to the table

to indicate cost per ton values for engines that do not require above the floor controls in the

Proposed Rule. Thus, it is implied that these dollar per ton values are not reasonable for that engine

subcategory. The next cell to the right indicates a “reasonable” dollar per ton value. This table

indicates that the “reasonable” threshold for cost effective controls should lie within this range. For

example, the threshold is between $2,887 and $3,658 per ton for lean burn engines (note that the

250 hp subcategory size threshold in the rule is not specifically identified in the table) and between

$13,162 and $33,373 per ton for 4SRB engines.

 Docket Document OAR-2008-0708-0117; Table 2. Cost per ton ($/ton) of HAP Reduced per Engine

Size Range (HP) Engine

<50 50 – 100 100 – 175 175 - 300 300 – 500 500 – 600 600 – 750 >750

2SLB (OxCat) $19,887 $7,798 $5,039 $3,658 $2,887 $2,578 $2,425 $2,207

4SLB (OxCat) $19,887 $7,798 $5,039 $3,658 $2,887 $2,578 $2,425 $2,207

4SRB (NSCR) $33,373 $13,162 $8,549 $6,241 $4,952 $4,435 $4,180 $3,815

For 2SLB and 4SLB engines, this document states, “The cost per ton of reducing formaldehyde by

oxidation catalyst range from about $2,000 to $8,000. The costs for engines 250 hp and above
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

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equipped with oxidation catalyst are reasonable and can be justified in light of the significant

reductions of HAP that would be achieved from these particular engines.” The extrapolated cost

per ton HAP removed for a 250 hp engine is about $3,600. The EPA 2004 RICE NESHAP,

Industry Data, and Argonne/NMDEQ cost per ton estimates in Tables 3 and 4 for lean burn engines

are significantly greater than this EPA defined threshold for lean burn engines.

For 4SRB engines equipped with NSCR, docket document OAR-2008-0708-0017 states (for

engines less than 50 hp) “The cost of above-the-floor options based of (on) add-on controls for

engines less than 50 hp are considered significant. Therefore, MACT is equivalent to the MACT

floor” and “The MACT floor for stationary engines less than 50 hp is the level that is achievable by

existing engines of this size operating without add-on control technology.” The referenced cost per

ton of HAP removed for 4SRB engines less than 50 hp is $33,373. A comparison with the cost

effectiveness values in Table 5 for all engine sizes and for all the cost effectiveness calculation

approaches would conclude that post-combustion controls cannot be justified for existing gas-fired

4SRB engines 500 hp and smaller.

EPA notes that NSCR also controls CO and NOx emissions and these emission reductions reduce

the cost per ton pollutant removed when HAP, CO, and NOx reductions are considered. However,

this analysis is simplistic and does not consider potential deleterious emission impacts of NSCR. A

detailed accounting of this issue is beyond the scope of this report, but there are several noteworthy

negative impacts including greater fuel consumption, increased greenhouse gas emissions, and

increased emissions of ammonia. When considering potential benefits, EPA should not over-state

the benefits of NSCR reductions in CO and NOx without considering potential negative impacts on

an array of emissions and complicating factors, which are briefly discussed here.

Because NSCR equipped rich burn engines must operate at a lower, sub-stoichiometric air-to-fuel

ratio (AFR) than uncontrolled engines, engine efficiency decreases; thus, CO2 emissions will

increase (i.e. more fuel carbon is oxidized). In addition, methane concentrations upstream of an

NSCR catalyst can be much higher than from an uncontrolled engine operating at maximum

efficiency (i.e., poorer combustion efficiency at the sub-stoichiometric AFR setpoint for NSCR

engines). Because NSCR control efficiency for methane is much lower than for CO and HAPs

(methane is very refractory), retrofit application of NSCR could result in a net methane emissions

increase.

Higher engine exhaust flowrates from increased fuel consumption will also contribute to increased

methane emissions for NSCR-equipped engines. Similarly, uncontrolled CO emissions from an

NSCR equipped engine operating at a sub-stoichiometric AFR can be an order of magnitude or

more higher than from an uncontrolled engine operating at maximum efficiency. Thus, retrofit

application of NSCR could result in a net CO emissions increase or only marginal reductions.

Ammonia participates in atmospheric chemistry for fine particulate/haze formation and in areas

where regional haze is a primary air quality issue, ammonia may be a rate-limiting reactant in some

geographical areas. That is, other haze-formation reactants (e.g. NOx, VOC) are available in the

atmosphere while ammonia is not, and increases in ammonia emissions impact atmospheric

chemistry that contributes to haze. Thus, NSCR application could reduce NOx emissions yet

negatively impact regional haze from the ammonia contribution. EPA should consider a relative
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weighting of natural gas-fired HAP emissions including the projected ancillary air quality benefits

and recognize and include disbenefits when finalizing the above the floor decision.

Collectively, these cost analyses document that EPA significantly underestimated costs and cost

effectiveness in the Proposed Rule. As noted throughout this document, a detailed accounting of

costs, calculations, and references for source material is provided in the Attachments. In addition,

analyses based on several different “alternative” cases indicate similar costs significantly higher

than the Proposed Rule estimate. These alternative cases include “corrections” to the Proposed

Rule analysis based on EPA’s own information, an independent cost determination based on

industry and vendor data, and additional costs available in the literature from an independent third

party. When considering realistic cost estimates and comparing those cost effectiveness values to

feasibility criteria from related EPA background documents, the assertions from the INGAA

comments and API comments are affirmed: The proposed rule significantly under-estimates costs

for the above the floor analysis, cost effectiveness values are well above thresholds defined from

other NESHAP related documents, and above the floor catalytic controls for natural gas-fired

engines are not warranted.

5.0 References

Argonne/NMDEQ 2007 - http://www.nmenv.state.nm.us/aqb/4C/Docs/ArgonneRICEmat.DOC
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ATTACHMENTS

A list of attachments is included with the Table of Contents and is repeated here. Detailed line-byline computations for the cost effectiveness calculations are shown for the different cases as well as

scenarios for each of the cases that consider different assumptions. References for source

information are provided in the “notes / comments” column, including primary references for cost

data used in the analysis. The basis for key assumptions and best estimates are discussed in the

report – i.e., see Sections 2 and 3.

List of Attachments Page No.

Attachment A: Cost Effectiveness Calculations for Gas-Fired 4SRB Engines NSCR/PostCombustion Controls: Proposed Rule Values.............................................................................. 21

Attachment B: “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SRB Engines

NSCR/Post-Combustion Controls: Proposed Rule Values with Adjustments for Best Estimates for

Useful Equipment Life (10 years) & AP-42 HAP Emission Factor (2.43E-04 lb HAP/hp-hr).

Control efficiency = 90%............................................................................................................. 27

Attachment C: “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SRB Engines

NSCR/Post-Combustion Controls: Revised EPA Proposed Rule data. Cost Effectiveness approach

from docket was revised. Adjustments were made to best estimates for useful equipment life (10

years) and AP-42 HAP emission factor (2.43E-04 lb HAP/hp-hr), capital costs (inflation adjust

docket cost data and include costs for AFRC and power source), and O&M costs (EPA assumption

that NSCR annual O&M is equivalent to diesel particulate filter cleaning is incorrect and severely

underestimates cost) and a fuel penalty associated with engine operation at a less efficient AFR for

NSCR is considered. Control Efficiency = 90%.......................................................................... 32

Attachment D: “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SRB Engines

NSCR/Post-Combustion Controls: Industry Cost Effectiveness Values - based on capital and

operating cost data provided by industry and vendors, and using best estimate values for useful

equipment life (10 years), AP-42 HAP emission factor (2.43E-04 lb HAP/hp-hr), and HAP control

efficiency (90%).......................................................................................................................... 38

Attachment E: “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SRB, 4SLB, and 2SLB

Engines Post-Combustion Controls: Original RICE NESHAP cost effectiveness data with

adjustments for inflation, annual operating hours, and best estimate values for HAP emission factor,

and HAP control efficiency ......................................................................................................... 42

Attachment F: “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SRB & 4SLB Engines

Post-Combustion Controls: Estimated costs from cost data presented in “Engine Classification

Matrix Control Options and Costs” prepared by Argonne National Laboratory and the State of New

Mexico Department of Environmental Quality and using best estimate values for useful equipment life

(10 years), HAP emission factor, and HAP control efficiency (90%).................................................... 43

Attachment G: “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SRB Engines NSCR/

Post-Combustion Controls: Proposed Rule Values were adjusted for useful equipment life (10

years), HAP emission factor (2.43E-04 lb HAP/hp-hr), and annual operating hours (6,500)......... 44
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

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Attachment H: “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SRB Engines

NSCR/Post-Combustion Controls: Revised EPA Proposed Rule data. Cost Effectiveness approach

from docket document EPA-HQ-OAR-2008-0708-0017 was revised. Adjustments were made to

useful equipment life (10 years), HAP emission factor (2.43E-04 lb HAP/hp-hr), capital costs

(inflation adjust docket cost data and include costs for AFRC & power source), annual operating

hours (6,500), and O&M costs (EPA assumption that NSCR annual O&M is equivalent to diesel

particulate filter cleaning is incorrect and severely underestimates cost). Includes a fuel penalty

associated with engine operation at a less efficient AFR for NSCR.............................................. 49

Attachment I: “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SRB Engines

NSCR/Post-Combustion Controls: Industry Cost Effectiveness Values - based on capital and

operating cost data provided by industry and vendors, 6,500 annual operating hours, and using best

estimate values for useful equipment life (10 years), AP-42 HAP emission factor (2.43E-04 lb

HAP/hp-hr), and HAP control efficiency (90%)........................................................................... 55

Attachment J: Cost Effectiveness Calculations for Gas-Fired 4SLB and 2SLB Engines PostCombustion Controls: Proposed Rule Values.............................................................................. 59

Attachment K: “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SLB Engines PostCombustion Controls: Proposed Rule Values with Adjustments Using Best Estimates for Useful

Equipment Life (10 years) & HAP Emission Factor (4.78E-4 lb HAP/hp-hr)............................... 63

Attachment L: “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SLB Engines PostCombustion Controls: Industry Cost Effectiveness Values - based on capital and operating cost

data provided by industry and vendors and using best estimate values for useful equipment life (10

years), HAP emission factor (0.000478 lb HAP/hp-hr), and HAP control efficiency (90%) ......... 67

Attachment M: “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SLB and 2SLB Engines

Post-Combustion Controls: Proposed Rule Values. Adjustments were made using best estimate

values to useful equipment life (10 years) and HAP emission factor (4.78E-4 lb HAP/hp-hr), and to

annual operating hours (6,500) ................................................................................................... 69

Attachment N: “Baseline” Cost Effectiveness Calculations for Gas-Fired 2SLB Engines PostCombustion Controls: Industry Cost Effectiveness Values - based on capital and operating cost

data provided by industry and vendors, 2,800 annual operating hours, and best estimate values for

useful equipment life (10 years), HAP emission factor (4.78E-03 lb HAP/hp-hr), and HAP control

efficiency (73%).......................................................................................................................... 73

Attachment O: “Baseline” Cost Effectiveness Calculations for Gas-Fired 2SLB Engines PostCombustion Controls: Industry Cost Effectiveness Values - based on capital and operating cost

data provided by industry and vendors and using best estimate values for useful equipment life (10

years), HAP emission factor (0.000478 lb HAP/hp-hr), and HAP control efficiency (73%), and

6,500 annual operating hours....................................................................................................... 77

Attachment P: Vendor Quote for Gas-Fired 2SLB Engine Oxidation Catalyst ............................ 81

Attachment Q: Text of email from Bruce Chrisman of Cameron to Melanie King of EPA

Discussing Control Efficiencies for 2SLB Oxidation Catalysts .................................................... 82
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

21

Attachment A – Cost Effectiveness Calculations for Gas-Fired 4SRB Engines NSCR/Post-Combustion Controls: Proposed

Rule Values (Docket Document EPA-HQ-OAR-2008-0708-0017 Table 2)

1 Parameter Value Units Notes/Comments

2

Engine

Manufacturer CAT CAT CAT OAR-2005-0030-0005

3 Model No. G3304 G3408 G3408 OAR-2005-0030-0005

4 Engine Type 4SRB OAR-2005-0030-0005

5 Fuel Used Natural Gas OAR-2005-0030-0005

6

Post Combustion

Control NSCR OAR-2005-0030-0005

7 Control Purpose CH2O, CO, & NOx

8

Target Reduction -

Catalyst Control

Efficiency (CCE)

90% 90% 90% 90% 90% 90% 90% 90% %

Assumed control efficiency for

NSCR catalysts (OAR-2008-0708-

0017, OAR-2008-0708-0001)

9 Project Duration (n) 20 20 20 20 20 20 20 20 years

10 Project Discount

Interest Rate (i) 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% % (OAR-2005-0030-0005)

11 Site-Rated Power

(SR) 167 255 300 300 500 800 1500 3000 hp OAR-2005-0030-0005

12 Average Operating

Load (OL) 100% 100% 100% 100% 100% 100% 100% 100% % Assume 100% load for cost analysis

13 Annual Operating

Hours (AOH) 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 hrs

Annual operating hours that are the

basis for the EPA control cost

analysis (OAR-2005-0030-0005).

14 HAP Emission

Factor (HAPEF) 6.88E-4 6.88E-4 6.88E-4 6.88E-4 6.88E-4 6.88E-4 6.88E-4 6.88E-4 lb HAP/ hphr

EF for total HAP for NG-fired

engines (OAR-2005-0030-0009)

15 HAP Emission

Reductions (ǻHAP) 289.54 442.11 520.13 520.13 866.88 1387.01 2600.64 5201.28 lb HAP/ yr ǻHAP = SR * OL * AOH * HAPEF* CCE

16 Direct Costs

17 EPA Model NSCR

Capital Costs (CC) $1,980 $4,660 $4,620 $5,180 $6,610 $8,410 $13,370 $33,630 $

OAR-2005-0030-0005, OAR-2005-

0029-0038, OAR-2005-0030-0087

18 Instrumentation

(IC) $198 $466 $462 $518 $661 $841 $1,337 $3,363 $

IC = 0.10 * EC. EPA Cost Control

Manual, OAR-2005-0030-0005

19 Sales Taxes (STC) $59 $140 $139 $155 $198 $252 $401 $1,009 $

STC = 0.03 * EC. EPA Cost

Control Manual, OAR-2005-0030-
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

22

0005

20 Freight (FC) $99 $233 $231 $259 $331 $421 $669 $1,682 $

FC = 0.05 * EC. EPA Cost Control

Manual, OAR-2005-0030-0005

21

Purchased

Equipment Cost

(PEC)

$2,336 $5,499 $5,452 $6,112 $7,800 $9,924 $15,777 $39,683 $ PEC = EC + IC + STC + FC

22 Direct Installation Costs

23 Foundations and

Supports (FSC) $187 $440 $436 $489 $624 $794 $1,262 $3,175 $

FSC = 0.08 * PEC. EPA Cost

Control Manual, OAR-2005-0030-

0005

24 Handling and

Erection (HEC) $327 $770 $763 $856 $1,092 $1,389 $2,209 $5,556 $

HEC = 0.14 * PEC. EPA Cost

Control Manual, OAR-2005-0030-

0005

25 Electrical (EEC) $93 $220 $218 $244 $312 $397 $631 $1,587 $

EEC = 0.04 * PEC. EPA Cost

Control Manual, OAR-2005-0030-

0005

26 Piping (PIC) $47 $110 $109 $122 $156 $198 $316 $794 $

PIC = 0.02 * PEC. EPA Cost

Control Manual, OAR-2005-0030-

0005

27 Insulation for

ductwork (IDC) $23 $55 $55 $61 $78 $99 $158 $397 $

IDC = 0.01 * PEC. EPA Cost

Control Manual, OAR-2005-0030-

0005

28 Painting (PAC) $23 $55 $55 $61 $78 $99 $158 $397 $

PAC = 0.01 * PEC. EPA Cost

Control Manual, OAR-2005-0030-

0005

29 Site Preparation

(SPC) $0 $0 $0 $0 $0 $0 $0 $0 $

SPC = 0.00 * PEC. EPA Cost

Control Manual, OAR-2005-0030-

0005

30 Buildings (BC) $0 $0 $0 $0 $0 $0 $0 $0 $

BC = 0.00 * PEC. EPA Cost

Control Manual, OAR-2005-0030-

0005

31 Direct Installation

Cost (DIC) $701 $1,650 $1,635 $1,834 $2,340 $2,977 $4,733 $11,905 $

DIC = FSC + HEC + EEC + PIC +

IDC + PAC +SPC + BC
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

23

32 Total Direct Capital

Costs (TDC) $3,037 $7,148 $7,087 $7,946 $10,140 $12,901 $20,510 $51,588 $ TDC = PEC + DIC

33 Indirect Installation Costs

34 Engineering (EIC) $234 $550 $545 $611 $780 $992 $1,578 $3,968 $

EIC = 0.10 * PEC. EPA Cost

Control Manual, OAR-2005-0030-

0005

35

Construction and

field expenses

(CFEC)

$117 $275 $273 $306 $390 $496 $789 $1,984 $

CFEC = 0.05 * PEC. EPA Cost

Control Manual, OAR-2005-0030-

0005

36 Contractor fees

(CFC) $234 $550 $545 $611 $780 $992 $1,578 $3,968 $

CFC = 0.10 * PEC. EPA Cost

Control Manual, OAR-2005-0030-

0005

37 Start-up (SUC) $47 $110 $109 $122 $156 $198 $316 $794 $

SUC = 0.02 * PEC. EPA Cost

Control Manual, OAR-2005-0030-

0005

38 Performance test

(PTC) $23 $55 $55 $61 $78 $99 $158 $397 $

PTC = 0.01 * PEC. EPA Cost

Control Manual, OAR-2005-0030-

0005

39

Total Indirect

Installation Costs

(IIC)

$654 $1,540 $1,526 $1,711 $2,184 $2,779 $4,417 $11,111 $

IIC = EIC + CFEC + CFC + SUC +

PTC

40 Contingencies

41 Contingencies

(COC) $70 $165 $164 $183 $234 $298 $473 $1,191 $

COC = 0.03 * PEC. EPA Cost

Control Manual, OAR-2005-0030-

0005

42

Total Indirect

Capital Costs

(TICC)

$724 $1,705 $1,690 $1,895 $2,418 $3,076 $4,891 $12,302 $ TICC = IIC + COC

43 Capital Cost Summary

44 Total Direct Capital

Costs (TDC) $3,037 $7,148 $7,087 $7,946 $10,140 $12,901 $20,510 $51,588 $
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

24

45

Total Indirect

Capital Costs

(TICC)

$724 $1,705 $1,690 $1,895 $2,418 $3,076 $4,891 $12,302 $

46 Total Capital Cost

(TCC) $3,762 $8,853 $8,777 $9,841 $12,558 $15,977 $25,400 $63,890 $ TCC = TDC + TICC

47 Direct Annual Costs

48 Operator Labor

(OLC) $0 $0 $0 $0 $0 $0 $0 $0 $

49 Supervisor Labor

(SLC) $0 $0 $0 $0 $0 $0 $0 $0 $

SLC = 0.15 * OLC. EPA Cost

Control Manual, OAR-2005-0030-

0005

50 Operating Materials

(OMC) $0 $0 $0 $0 $0 $0 $0 $0 $

51 Maintenance -

Labor (MLC) $260 $260 $260 $260 $260 $260 $260 $260 $

52 Maintenance -

Materials (MMC) $0 $0 $0 $0 $0 $0 $0 $0 $

Annual operating & maintenance

costs for parts (e.g. O2 sensor,

catalyst, battery, alternator, TC,

crankcase filter), labor (parts &

catalyst replacement & testing), and

outside services (i.e., catalyst

cleaning, crane rental for catalyst

removal for engines > 300 hp).

Based on Industry O&M cost

records.

53 Annual Combustion

Control (ACC) $0 $0 $0 $0 $0 $0 $0 $0 $

54 Electricity (ELC) $0 $0 $0 $0 $0 $0 $0 $0 $

55 Total Direct Annual

Costs (TDAC) $260 $260 $260 $260 $260 $260 $260 $260 $

TDAC = OLC + SLC + OMC +

MLC + MMC + ACC + ATC +

ELC

56 Indirect Annual Costs

57 Overhead (OHC) $156 $156 $156 $156 $156 $156 $156 $156 $

OHC = 0.60 * (OLC + SLC + MLC

+ MMC). EPA Cost Control

Manual, OAR-2005-0030-0005.

58 Administrative

Charges (ADC) $75 $177 $176 $197 $251 $320 $508 $1,278 $

ADC = 0.02 * TCC. EPA Cost

Control Manual, OAR-2005-0030-

0005.
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

25

59 Property Taxes

(PTC) $38 $89 $88 $98 $126 $160 $254 $639 $

PTC = 0.01 * TCC. EPA Cost

Control Manual, OAR-2005-0030-

0005.

60 Insurance (INC) $38 $89 $88 $98 $126 $160 $254 $639 $

INC = 0.01 * TCC. EPA Cost

Control Manual, OAR-2005-0030-

0005.

61 Capital Recovery

Factor (CRF) 0.094393 0.094393 0.094393 0.094393 0.094393 0.094393 0.094393 0.094393

CRF = i * (1+i)^n / [(1+i)^n - 1] (i

expressed as a decimal - e.g., 10% =

0.1)

62 Capital Recovery

(CRC) $355 $836 $828 $929 $1,185 $1,508 $2,398 $6,031 $ CRC = CRF * TCC

63

Total Indirect

Annual Costs

(TIAC)

$662 $1,346 $1,336 $1,479 $1,844 $2,303 $3,570 $8,742 $

TIAC = OHC + ADC + FPC + PTC

+ INC + CRC

64 Cost Summary

65

Total Direct Annual

Operating Costs

(TDAC)

$260 $260 $260 $260 $260 $260 $260 $260 $

66

Total Indirect

Annual Operating

Costs (TIAC)

$662 $1,346 $1,336 $1,479 $1,844 $2,303 $3,570 $8,742 $

67 Total Annual Costs

(TAC) $922 $1,606 $1,596 $1,739 $2,104 $2,563 $3,830 $9,002 $ TAC = TDAC + TIAC

68

69 Site-Rated Power

(SR) 167 255 300 300 500 800 1,500 3,000 hp

70

71 Linear Regression

of TAC vs. SR:

m = 2.65 $/hp

Total annual operating costs as

function of 4SRB engine

horsepower. Determined from

linear regression of Total Annual

Costs vs. Site-Rated Power.

Truncated at 3 significant figures.

"b" set at $657 rather than $658 to

equal EPA calculations.
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

26

72 b = 657 $

73 r

2

 = 0.9775

74 Cost Effectiveness Estimates

75 Size Range (SRg) < 50 50 - 100 100 -

175

175 -

300

300 -

500

500-

1000 hp

76 Size Range Average

(SRgA) 25 75 138 238 400 750 hp

77 HAP Emission

Reductions (ǻHAP) 43.34 130.03 239.26 412.63 693.50 1300.32 lb HAP/ yr ǻHAP = SRgA * OL * AOH *HAPEF * CCE

78

Total Annual Costs

from Regression

(TACR)

$723 $856 $1,023 $1,288 $1,717 $2,645 $657 $657 $/yr TACR = SRgA * m + b.

79 Cost Effectiveness

(CE) $33,373 $13,162 $8,549 $6,241 $4,952 $4,067 #DIV/0! #DIV/0! $/ton HAP CE = TACR/(ǻHAP/2,000)
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

27

Attachment B – “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SRB Engines NSCR/Post-Combustion Controls:

Proposed Rule Values w/Adjustments for Best Estimates for Useful Equipment Life (10 years) & AP-42 HAP Emission Factor

(2.43E-04 lb HAP/hp-hr). Control efficiency = 90%.

1 Parameter Value Units Notes/Comments

2 Engine Manufacturer CAT CAT CAT OAR-2005-0030-0005

3 Model No. G3304 G3408 G3408 OAR-2005-0030-0005

4 Engine Type 4SRB 4SRB 4SRB 4SRB 4SRB 4SRB 4SRB 4SRB OAR-2005-0030-0005

5 Fuel Used Natural Gas OAR-2005-0030-0005

6

Post Combustion

Control NSCR NSCR NSCR NSCR NSCR NSCR NSCR NSCR OAR-2005-0030-0005

7 Control Purpose CH2O, CO, & NOx

8

Target Reduction -

Catalyst Control

Efficiency (CCE)

90% 90% 90% 90% 90% 90% 90% 90% %

Assumed control efficiency for NSCR

catalysts (OAR-2008-0708-0017, OAR2008-0708-0001)

9 Project Duration (n) 10 10 10 10 10 10 10 10 years

10 Project Discount

Interest Rate (i) 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% % OAR-2005-0030-0005

11 Site-Rated Power

(SR) 167 255 300 300 500 800 1500 3000 hp OAR-2005-0030-0005

12 Average Operating

Load (OL) 100% 100% 100% 100% 100% 100% 100% 100% % Assume 100% load for cost analysis

13 Annual Operating

Hours (AOH) 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 hrs

Annual operating hours that are the basis

for the EPA control cost analysis (OAR2005-0030-0005).

14 HAP Emission

Factor (HAPEF) 2.43E-4 2.43E-4 2.43E-4 2.43E-4 2.43E-4 2.43E-4 2.43E-4 2.43E-4 lb HAP/

hp-hr

AP-42 EF for total HAP for 4SRB NGfired engines.

15 HAP Emission

Reductions (ǻHAP) 102.26 156.15 183.71 183.71 306.18 489.89 918.54 1837.08 lb HAP/

yr

ǻHAP = SR * OL * AOH * HAPEF *

CCE

16 Direct Costs

17 EPA Model NSCR

Capital Costs (CC) $1,980 $4,660 $4,620 $5,180 $6,610 $8,410 $13,370 $33,630 $

OAR-2005-0030-0005, OAR-2005-

0029-0038, OAR-2005-0030-0087

18 Instrumentation (IC) $198 $466 $462 $518 $661 $841 $1,337 $3,363 $

IC = 0.10 * EC. EPA Cost Control

Manual, OAR-2005-0030-0005

19 Sales Taxes (STC) $59 $140 $139 $155 $198 $252 $401 $1,009 $

STC = 0.03 * EC. EPA Cost Control

Manual, OAR-2005-0030-0005
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

28

20 Freight (FC) $99 $233 $231 $259 $331 $421 $669 $1,682 $

FC = 0.05 * EC. EPA Cost Control

Manual, OAR-2005-0030-0005

21

Purchased

Equipment Cost

(PEC)

$2,336 $5,499 $5,452 $6,112 $7,800 $9,924 $15,777 $39,683 $ PEC = EC + IC + STC + FC

22 Direct Installation Costs

23 Foundations and

Supports (FSC) $187 $440 $436 $489 $624 $794 $1,262 $3,175 $

FSC = 0.08 * PEC. EPA Cost Control

Manual, OAR-2005-0030-0005

24 Handling and

Erection (HEC) $327 $770 $763 $856 $1,092 $1,389 $2,209 $5,556 $

HEC = 0.14 * PEC. EPA Cost Control

Manual, OAR-2005-0030-0005

25 Electrical (EEC) $93 $220 $218 $244 $312 $397 $631 $1,587 $

EEC = 0.04 * PEC. EPA Cost Control

Manual, OAR-2005-0030-0005

26 Piping (PIC) $47 $110 $109 $122 $156 $198 $316 $794 $

PIC = 0.02 * PEC. EPA Cost Control

Manual, OAR-2005-0030-0005

27 Insulation for

ductwork (IDC) $23 $55 $55 $61 $78 $99 $158 $397 $

IDC = 0.01 * PEC. EPA Cost Control

Manual, OAR-2005-0030-0005

28 Painting (PAC) $23 $55 $55 $61 $78 $99 $158 $397 $

PAC = 0.01 * PEC. EPA Cost Control

Manual, OAR-2005-0030-0005

29 Site Preparation

(SPC) $0 $0 $0 $0 $0 $0 $0 $0 $

SPC = 0.00 * PEC. EPA Cost Control

Manual, OAR-2005-0030-0005

30 Buildings (BC) $0 $0 $0 $0 $0 $0 $0 $0 $

BC = 0.00 * PEC. EPA Cost Control

Manual, OAR-2005-0030-0005

31 Direct Installation

Cost (DIC) $701 $1,650 $1,635 $1,834 $2,340 $2,977 $4,733 $11,905 $

DIC = FSC + HEC + EEC + PIC + IDC

+ PAC +SPC + BC

32 Total Direct Capital

Costs (TDC) $3,037 $7,148 $7,087 $7,946 $10,140 $12,901 $20,510 $51,588 $ TDC = PEC + DIC

33 Indirect Installation Costs

34 Engineering (EIC) $234 $550 $545 $611 $780 $992 $1,578 $3,968 $

EIC = 0.10 * PEC. EPA Cost Control

Manual, OAR-2005-0030-0005
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

29

35

Construction and

field expenses

(CFEC)

$117 $275 $273 $306 $390 $496 $789 $1,984 $

CFEC = 0.05 * PEC. EPA Cost Control

Manual, OAR-2005-0030-0005

36 Contractor fees

(CFC) $234 $550 $545 $611 $780 $992 $1,578 $3,968 $

CFC = 0.10 * PEC. EPA Cost Control

Manual, OAR-2005-0030-0005

37 Start-up (SUC) $47 $110 $109 $122 $156 $198 $316 $794 $

SUC = 0.02 * PEC. EPA Cost Control

Manual, OAR-2005-0030-0005

38 Performance test

(PTC) $23 $55 $55 $61 $78 $99 $158 $397 $

PTC = 0.01 * PEC. EPA Cost Control

Manual, OAR-2005-0030-0005

39

Total Indirect

Installation Costs

(IIC)

$654 $1,540 $1,526 $1,711 $2,184 $2,779 $4,417 $11,111 $

IIC = EIC + CFEC + CFC + SUC +

PTC

40 Contingencies

41 Contingencies

(COC) $70 $165 $164 $183 $234 $298 $473 $1,191 $

COC = 0.03 * PEC. EPA Cost Control

Manual, OAR-2005-0030-0005

42

Total Indirect

Capital Costs

(TICC)

$724 $1,705 $1,690 $1,895 $2,418 $3,076 $4,891 $12,302 $ TICC = IIC + COC

43 Capital Cost Summary

44 Total Direct Capital

Costs (TDC) $3,037 $7,148 $7,087 $7,946 $10,140 $12,901 $20,510 $51,588 $

45 Total Indirect

Capital Costs (TICC) $724 $1,705 $1,690 $1,895 $2,418 $3,076 $4,891 $12,302 $

46 Total Capital Cost

(TCC) $3,762 $8,853 $8,777 $9,841 $12,558 $15,977 $25,400 $63,890 $ TCC = TDC + TICC

47 Direct Annual Costs

48 Operator Labor

(OLC) $0 $0 $0 $0 $0 $0 $0 $0 $

49 Supervisor Labor

(SLC) $0 $0 $0 $0 $0 $0 $0 $0 $

SLC = 0.15 * OLC. EPA Cost Control

Manual, OAR-2005-0030-0005
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

30

50 Operating Materials

(OMC) $0 $0 $0 $0 $0 $0 $0 $0 $

51 Maintenance - Labor

(MLC) $260 $260 $260 $260 $260 $260 $260 $260 $

52 Maintenance -

Materials (MMC) $0 $0 $0 $0 $0 $0 $0 $0 $

Annual operating & maintenance costs

for parts (e.g. O2 sensor, catalyst,

battery, alternator, TC, crankcase filter),

labor (parts & catalyst replacement &

testing), and outside services (i.e.,

catalyst cleaning, crane rental for

catalyst removal for engines > 300 hp).

Based on Industry O&M cost records.

53 Annual Combustion

Control (ACC) $0 $0 $0 $0 $0 $0 $0 $0 $

54 Electricity (ELC) $0 $0 $0 $0 $0 $0 $0 $0 $

55 Total Direct Annual

Costs (TDAC) $260 $260 $260 $260 $260 $260 $260 $260 $

TDAC = OLC + SLC + OMC + MLC +

MMC + ACC + ATC + ELC

56 Indirect Annual Costs

57 Overhead (OHC) $156 $156 $156 $156 $156 $156 $156 $156 $

OHC = 0.60 * (OLC + SLC + MLC +

MMC). EPA Cost Control Manual,

OAR-2005-0030-0005.

58 Administrative

Charges (ADC) $75 $177 $176 $197 $251 $320 $508 $1,278 $

ADC = 0.02 * TCC. EPA Cost Control

Manual, OAR-2005-0030-0005.

59 Property Taxes

(PTC) $38 $89 $88 $98 $126 $160 $254 $639 $

PTC = 0.01 * TCC. EPA Cost Control

Manual, OAR-2005-0030-0005.

60 Insurance (INC) $38 $89 $88 $98 $126 $160 $254 $639 $

INC = 0.01 * TCC. EPA Cost Control

Manual, OAR-2005-0030-0005.

61 Capital Recovery

Factor (CRF) 0.142378 0.142378 0.142378 0.142378 0.142378 0.142378 0.142378 0.142378 CRF = i * (1+i)^n / [(1+i)^n - 1] (iexpressed as a decimal - e.g., 10% = 0.1)

62 Capital Recovery

(CRC) $536 $1,260 $1,250 $1,401 $1,788 $2,275 $3,616 $9,097 $ CRC = CRF * TCC

63

Total Indirect

Annual Costs

(TIAC)

$842 $1,771 $1,757 $1,951 $2,446 $3,070 $4,789 $11,808 $

TIAC = OHC + ADC + FPC + PTC +

INC + CRC

64 Cost Summary

65

Total Direct Annual

Operating Costs

(TDAC)

$260 $260 $260 $260 $260 $260 $260 $260 $
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

31

66

Total Indirect

Annual Operating

Costs (TIAC)

$842 $1,771 $1,757 $1,951 $2,446 $3,070 $4,789 $11,808 $

67 Total Annual Costs

(TAC) $1,102 $2,031 $2,017 $2,211 $2,706 $3,330 $5,049 $12,068 $ TAC = TDAC + TIAC

68

69 Site-Rated Power

(SR) 167 255 300 300 500 800 1,500 3,000 hp

70

71 Linear Regression of

TAC vs. SR:

m = 3.60 $/hp

Total annual operating costs as function

of 4SRB engine horsepower.

Determined from linear regression of

Total Annual Costs vs. Site-Rated

Power. Truncated at 3 significant

figures.

72 b = 744 $

73 r

2

 = 0.9775

74 Cost Effectiveness Estimates

75 Size Range (SRg) < 50 50 - 100 100 -

175

175 -

300

300 -

500

500-

1000 hp

76 Size Range Average

(SRgA) 25 75 138 238 400 750 hp

77 HAP Emission

Reductions (ǻHAP) 15.31 45.93 84.51 145.74 244.94 459.27 lb HAP/

yr

ǻHAP = SRgA * OL * AOH * HAPEF

* CCE

78

Total Annual Costs

from Regression

(TACR)

$834 $1,014 $1,241 $1,601 $2,184 $3,444 $744 $744 $/yr TACR = SRgA * m + b.

79 Cost Effectiveness

(CE) $108,989 $44,168 $29,372 $21,971 $17,835 $14,999 #DIV/0! #DIV/0! $/tonHAP CE = TACR/(ǻHAP/2,000)
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

32

Attachment C – “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SRB Engines NSCR/Post-Combustion Controls:

Revised EPA Proposed Rule data. Cost Effectiveness approach from docket document EPA-HQ-OAR-2008-0708-0017 was

revised. Adjustments were made to best estimates for useful equipment life (10 years) and AP-42 HAP emission factor (2.43E04 lb HAP/hp-hr), capital costs (inflation adjust docket cost data and include costs for AFRC and power source), and O&M

costs (EPA assumption that NSCR annual O&M is equivalent to diesel particulate filter cleaning is incorrect and severely

underestimates cost) and a fuel penalty associated with engine operation at a less efficient AFR for NSCR is considered.

Control Efficiency = 90%.

1 Parameter Value Units Notes/Comments

2 Engine Manufacturer CAT CAT CAT OAR-2005-0030-0005

3 Model No. G3304 G3408 G3408 OAR-2005-0030-0005

4 Engine Type 4SRB 4SRB 4SRB 4SRB 4SRB OAR-2005-0030-0005

5 Fuel Used Natural Gas OAR-2005-0030-0005

6 Post Combustion Control NSCR NSCR NSCR NSCR NSCR OAR-2005-0030-0005

7 Control Purpose CH2O, CO, & NOx

8

Target Reduction - Catalyst

Control Efficiency (CCE) 90% 90% 90% 90% 90% % Assumed control efficiency for NSCR catalysts (OAR2008-0708-0017, OAR-2008-0708-0001)

9 Project Duration (n) 10 10 10 10 10 years

 Industry budgets for AFRC and alternator

replacement/system overhaul every 10 years. Miratech

notes that for budgetary reasons should expect to replace

a catalyst element after 24,000 to 32,000 hours of

operation. Average = 28,000 = 10 years (OAR-2005-

0030-0087). These hours not based on any performance

guarantees, industry experience for guaranteed

performance is more frequent catalyst replacement.

OAR-2005-0029-0038 lists catalyst replacement every 3

- 5 years.

10 Project Discount Interest

Rate (i) 7.0% 7.0% 7.0% 7.0% 7.0% % (OAR-2005-0030-0005)

11 Site-Rated Power (SR) 167 255 300 300 500 hp OAR-2005-0030-0005

12 Average Load (OL) 100% 100% 100% 100% 100% % Assume 100% load for cost analysis

13 Annual Operating Hours

(AOH) 2,800 2,800 2,800 2,800 2,800 hrs Annual operating hours that are the basis for the EPA

control cost analysis (OAR-2005-0030-0005).

14 HAP Emission Factor

(HAPEF) 2.43E-4 2.43E-4 2.43E-4 2.43E-4 2.43E-4 lb HAP/ hphr AP-42 EF for total HAP for 4SRB NG-fired engines.
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

33

15 HAP Emission Reductions

ǻHAP) 102.26 156.15 183.71 183.71 306.18 lb HAP/ yr ǻHAP = SR * OL * AOH * HAPEF * CCE

16 Direct Costs

17 NSCR Capital Cost Year

(CCY) 2003 2003 2003 2005 2005 Year OAR-2005-0030-0005, OAR-2005-0029-0038, OAR2005-0030-0087

18 EPA Model NSCR Capital

Costs (CC) $1,980 $4,660 $4,620 $5,180 $6,610 $

OAR-2005-0030-0005, OAR-2005-0029-0038, OAR2005-0030-0087

19 AFRC Capital Cost Year

(CCY2) 2003 2003 2003 2003 2005 Year OAR-2005-0029-0038 for engines < 300 hp, OAR-2005-0030-0086 for engines > 300 hp,

20 AFRC Capital Costs (CC2) $5,440 $5,440 $5,440 $5,440 $7,500 $

OAR-2005-0029-0038 for engines < 300 hp, OAR-2005-

0030-0086 for engines > 300 hp (avg of $5,000 &

$10,000),

21 Adjusted Capital Costs

(ACC) $8,351 $11,368 $11,323 $11,618 $14,969 $

Capital costs adjusted for inflation (to 2007 dollars at 3%

per year) and inclusion of AFRC: ACC =

CC*1.03^(2007-CCY) + CC2*1.03^(2007-CCY2)

22 Additional Capital

Equipment (AEC) $600 $600 $600 $600 $600 $

Additional capital equipment – battery, battery housing,

alternator or solar panel – were assumed to cost $600 per

engine. This assumes 50% of the engines do not have

access to electricity and require this additional equipment

for an NSCR retrofit

23

Combustion Control

Equipment and Auxiliary

Equipment (EC)

$8,951 $11,968 $11,923 $12,218 $15,569 $ EC = AEC + ACC

24 Instrumentation (IC) $895 $1,197 $1,192 $1,222 $1,557 $

IC = 0.10 * EC. EPA Cost Control Manual, OAR-2005-

0030-0005

25 Sales Taxes (STC) $269 $359 $358 $367 $467 $

STC = 0.03 * EC. EPA Cost Control Manual, OAR2005-0030-0005

26 Freight (FC) $448 $598 $596 $611 $778 $

FC = 0.05 * EC. EPA Cost Control Manual, OAR-2005-

0030-0005

27 Purchased Equipment Cost

(PEC) $10,563 $14,122 $14,069 $14,418 $18,372 $ PEC = EC + IC + STC + FC

28 Direct Installation Costs

29 Foundations and Supports

(FSC) $845 $1,130 $1,125 $1,153 $1,470 $

FSC = 0.08 * PEC. EPA Cost Control Manual, OAR2005-0030-0005
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

34

30 Handling and Erection

(HEC) $1,479 $1,977 $1,970 $2,018 $2,572 $

HEC = 0.14 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

31 Electrical (EEC) $423 $565 $563 $577 $735 $

EEC = 0.04 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

32 Piping (PIC) $211 $282 $281 $288 $367 $

PIC = 0.02 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

33 Insulation for ductwork

(IDC) $106 $141 $141 $144 $184 $

IDC = 0.01 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

34 Painting (PAC) $106 $141 $141 $144 $184 $

PAC = 0.01 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

35 Site Preparation (SPC) $0 $0 $0 $0 $0 $

SPC = 0.00 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

36 Buildings (BC) $0 $0 $0 $0 $0 $

BC = 0.00 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

37 Direct Installation Cost

(DIC) $3,169 $4,237 $4,221 $4,325 $5,512 $

DIC = FSC + HEC + EEC + PIC + IDC + PAC +SPC +

BC

38 Total Direct Capital Costs

(TDC) $13,731 $18,358 $18,289 $18,743 $23,883 $ TDC = PEC + DIC

39 Indirect Installation Costs

40 Engineering (EIC) $1,056 $1,412 $1,407 $1,442 $1,837 $

EIC = 0.10 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

41 Construction and field

expenses (CFEC) $528 $706 $703 $721 $919 $

CFEC = 0.05 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

42 Contractor fees (CFC) $1,056 $1,412 $1,407 $1,442 $1,837 $

CFC = 0.10 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

43 Start-up (SUC) $211 $282 $281 $288 $367 $

SUC = 0.02 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

44 Performance test (PTC) $106 $141 $141 $144 $184 $

PTC = 0.01 * PEC. EPA Cost Control Manual, OAR2005-0030-0005
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

35

45 Total Indirect Installation

Costs (IIC) $2,958 $3,954 $3,939 $4,037 $5,144 $ IIC = EIC + CFEC + CFC + SUC + PTC

46 Contingencies

47 Contingencies (COC) $317 $424 $422 $433 $551 $

COC = 0.03 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

48 Total Indirect Capital Costs

(TICC) $3,274 $4,378 $4,361 $4,469 $5,695 $ TICC = IIC + COC

49 Capital Cost Summary

50 Total Direct Capital Costs

(TDC) $13,731 $18,358 $18,289 $18,743 $23,883 $

51 Total Indirect Capital Costs

(TICC) $3,274 $4,378 $4,361 $4,469 $5,695 $

52 Total Capital Cost (TCC) $17,006 $22,736 $22,651 $23,212 $29,579 $ TCC = TDC + TICC

53 Direct Annual Costs

54 Operator Labor (OLC) $200 $200 $200 $200 $200 $

55 Supervisor Labor (SLC) $30 $30 $30 $30 $30 $

SLC = 0.15 * OLC. EPA Cost Control Manual, OAR2005-0030-0005

56 Operating Materials (OMC) $0 $0 $0 $0 $0 $

57 Maintenance - Labor

(MLC) $846 $846 $846 $846 $846 $

58 Maintenance - Materials

(MMC) $1,070 $1,700 $1,700 $1,700 $2,400 $

Annual operating & maintenance costs for parts (e.g. O2

sensor, catalyst, battery, alternator, TC, crankcase filter),

labor (parts & catalyst replacement & testing), and

outside services (i.e., catalyst cleaning, crane rental for

catalyst removal for engines > 300 hp). Based on

Industry O&M cost records.

59 Annual Combustion

Control (ACC) $0 $0 $0 $0 $0 $

60

Annual Testing or

Downtime or other

allowance for Catalyst

washing (ATC)

$3,978 $3,978 $3,978 $3,978 $3,978 $

Estimated cost for annual FTIR performance test and

associated cost.

61 Electricity (ELC) $0 $0 $0 $0 $0 $

62 Total Direct Annual Costs

(TDAC) $6,124 $6,754 $6,754 $6,754 $7,454 $

TDAC = OLC + SLC + OMC + MLC + MMC + ACC +

ATC + ELC
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

36

63 Indirect Annual Costs

64 Overhead (OHC) $1,287 $1,665 $1,665 $1,665 $2,085 $

OHC = 0.60 * (OLC + SLC + MLC + MMC). EPA Cost

Control Manual, OAR-2005-0030-0005.

65 Administrative Charges

(ADC) $340 $455 $453 $464 $592 $

ADC = 0.02 * TCC. EPA Cost Control Manual, OAR2005-0030-0005.

FPC = [7,420 - 7,188] (Btu/hp-hr) * 1/900 (LHV =

scf/Btu) * 1/1000 (scf/Mcf) * SR (hp) * OL (hp/hp) *

AOH (hrs) * $7/Mcf.

• 7,420 Btu/hp-hr is brake specific fuel consumption

(BSFC) for Waukesha VGF GSI 4SRB engines operated

at AFR = 0.995 (AFR for optimum NSCR performance)

• 7,188 Btu/hp-hr is brake specific fuel consumption for

Waukesha VGF GSI 4SRB engines operated at AFR

=1.06 (AFR for optimum engine efficiency)

• Waukesha VGF GSI BSFC data provided by Nick

Kosinski, Waukesha engineer.

66 Fuel Penalty (FPC) $844 $1,288 $1,516 $1,516 $2,526 $

• $7/Mcf - estimated average natural gas price in 2007

[DOE/EIA website]

67 Property Taxes (PTC) $170 $227 $227 $232 $296 $

PTC = 0.01 * TCC. EPA Cost Control Manual, OAR2005-0030-0005.

68 Insurance (INC) $170 $227 $227 $232 $296 $

INC = 0.01 * TCC. EPA Cost Control Manual, OAR2005-0030-0005.

69 Capital Recovery Factor

(CRF) 0.142378 0.142378 0.142378 0.142378 0.142378 CRF = i * (1+i)^n / [(1+i)^n - 1] (i expressed as adecimal - e.g., 10% = 0.1)

70 Capital Recovery (CRC) $2,421 $3,237 $3,225 $3,305 $4,211 $ CRC = CRF * TCC

71 Total Indirect Annual Costs

(TIAC) $5,233 $7,100 $7,312 $7,415 $10,006 $ TIAC = OHC + ADC + FPC + PTC + INC + CRC

72 Cost Summary

73 Total Direct Annual

Operating Costs (TDAC) $6,124 $6,754 $6,754 $6,754 $7,454 $

74 Total Indirect Annual

Operating Costs (TIAC) $5,233 $7,100 $7,312 $7,415 $10,006 $

75 Total Annual Costs (TAC) $11,356 $13,854 $14,066 $14,168 $17,460 $ TAC = TDAC + TIAC
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

37

76

77 Site-Rated Power (SR) 167 255 300 300 500 hp

78

79 Linear Regression of TAC

vs. SR:

m = 17.5 $/hp

Total annual operating costs as function of 4SRB engine

horsepower. Determined from linear regression of Total

Annual Costs vs. Site-Rated Power.

80 b = 8,839 $

81 r

2

 = 0.9739

82 Cost Effectiveness Estimates

83 Size Range (SRg) < 50 50 - 100 100 - 175 175 - 300 300 - 500 hp

84 Size Range Average

(SRgA) 25 75 137.5 237.5 400 hp

85 HAP Emission Reductions

ǻHAP) 15.31 45.93 84.20 145.44 244.94 lb HAP/ yr ǻHAP = SRgA * OL * AOH * HAPEF * CCE

86 Total Annual Costs from

Regression (TACR) $9,278 $10,155 $11,252 $13,007 $15,858 $/yr

TACR = SRgA * m + b. Note, engines < 100 hp are not

required to conduct performance tests; thus, TACR for "<

50" and "50 - 100" reduced by $3,777 from linear

regression estimate.

87 Cost Effectiveness (CE) $689,525 $269,008 $267,273 $178,868 $129,486 $/ton HAP CE = TACR/(ǻHAP/2,000)
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

38

Attachment D – “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SRB Engines NSCR/Post-Combustion Controls:

Industry Cost Effectiveness Values - based on capital and operating cost data provided by industry and vendors, and using

best estimate values for useful equipment life (10 years), AP-42 HAP emission factor (2.43E-04 lb HAP/hp-hr), and HAP

control efficiency (90%).

1 Parameter Value Units Notes/Comments

2 Engine Type 4SRB 4SRB 4SRB 4SRB

3 Fuel Used Natural Gas

4 Post Combustion Control NSCR NSCR NSCR NSCR

5 Control Purpose CH2O, CO, & NOx

6

Target Reduction - Catalyst

Control Efficiency (CCE) 90% 90% 90% 90% % Assumed control efficiency for NSCR catalysts (OAR2008-0708-0017, OAR-2008-0708-0001)

7 Project Duration (n) 10 10 10 10 years

 Industry budgets for AFRC and alternator

replacement/system overhaul every 10 years. Miratech

notes that for budgetary reasons should expect to replace a

catalyst element after 24,000 to 32,000 hours of operation.

Average = 28,000 = 10 years (OAR-2005-0030-0087).

These hours not based on any performance guarantees,

industry experience for guaranteed performance is more

frequent catalyst replacement. OAR-2005-0029-0038 lists

catalyst replacement every 3 - 5 years.

8 Project Discount Interest Rate (i) 7.0% 7.0% 7.0% 7.0% % (OAR-2005-0030-0005)

9 Engine Size Range (ESR) 50 - 100 100 - 175 175 - 300 300 - 500 hp OAR-2008-0708-0017 Table 2.

10 Site-Rated Power (SR) 75 137.5 237.5 400 hp Midpoint of Engine Size Range

11 Average Operating Load (OL) 100% 100% 100% 100% % Assume 100% load for cost analysis

12 Annual Operating Hours (AOH) 2,800 2,800 2,800 2,800 hrs Annual operating hours that are the basis for the EPA

control cost analysis (OAR-2005-0030-0005).

13 HAP Emission Factor (HAPEF) 2.43E-4 2.43E-4 2.43E-4 2.43E-4 lb HAP/

hp-hr AP-42 EF for total HAP for 4SRB NG-fired engines.

14 HAP Emission Reductions (ǻHAP) 45.9 84.2 145.4 244.9 lb HAP/ yr ǻHAP = SR * OL * AOH * HAPEF * CCE

15 Capital Costs

16 Purchased Equipment Cost (PEC) $9,195 - - - Refer to Footnote A.

17 Purchased Equipment Cost (PEC) - $11,008 - - Refer to Footnote B.

18 Purchased Equipment Cost (PEC) - - $12,706 - Refer to Footnote C.
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

39

19 Purchased Equipment Cost (PEC) - - - $14,769 Refer to Footnote D.

20 Total Capital Cost (TCC) $12,222 - - - $ Refer to Footnotes A, E

21 Total Capital Cost (TCC) - $13,840 - - $ Refer to Footnotes B, E

22 Total Capital Cost (TCC) - - $15,616 - $ Refer to Footnotes C, E

23 Total Capital Cost (TCC) - - - $17,474 $ Refer to Footnotes D, E

24 Direct Annual Costs

25 Operating and Maintenance

Material Costs (O&MM) $664 $1,071 $1,706 $2,384 $

Annualized equipment Cost to replace Catalyst (every 3

years), O2 Sensors (8 months, ~ 2,000 operating hours),

Thermocouples (7.5 years), Crankcase Filters (3 months),

Fuel Valve (4 - 8 years), and Battery (2 years). Cost for

annual catalyst cleaning, crane (for larger engines), and

rotational catalyst.

26 O&M Labor Cost (O&ML) $1,275 $1,320 $1,360 $1,380 $

Annualized labor Cost to replace and rotate (for cleaning)

Catalyst, O2 Sensor, Thermocouples, Fuel Valve, Crankcase

Filter, Battery, and Perform Equipment Testing (e.g. O2

Sensor Test, AFRC optimization after O2 sensor

replacement)

27

Annual Performance Testing or

Downtime or other allowance for

Catalyst washing (ATC)

$0 $3,978 $3,978 $3,978 $

Estimated cost for annual FTIR performance test and

associated cost; required when catalysts are replaced or

rotated for outside cleaning.

28 Total Direct Annual Costs (TDAC) $1,939 $6,369 $7,044 $7,742 $ = O&MM + O&ML + ATC

29 Indirect Annual Costs

 Administrative Charges (ADMC) $0 $225 $225 $225

FPC = [7,420 - 7,188] (Btu/hp-hr) * 1/900 (scf/Btu (gas

LHV)) * 1/1000 (scf/Mcf) * SR (hp) * OL (hp/hp) * AOH

(hrs) * $7/Mcf.

• 7,420 Btu/hp-hr is brake specific fuel consumption (BSFC)

for Waukesha VGF GSI 4SRB engines operated at AFR =

0.995 (AFR for optimum NSCR performance)

• 7,188 Btu/hp-hr is brake specific fuel consumption for

Waukesha VGF GSI 4SRB engines operated at AFR =1.06

(AFR for optimum engine efficiency)

30 Fuel Penalty (FPC) $379 $695 $1,200 $2,021 $

• Waukesha VGF GSI BSFC data provided by Nick

Kosinski, Waukesha engineer.
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

40

• $7/Mcf - estimated average natural gas price in 2007

[DOE/EIA website]

31 Capital Recovery Factor (CRF) 0.142378 0.142378 0.142378 0.142378 CRF = i * (1+i)^n / [(1+i)^n - 1] (i expressed as a decimal -

e.g., 10% = 0.1)

32 Capital Recovery (CRC) $1,740 $1,971 $2,223 $2,488 $ CRC = CRF * TCC

33 Total Indirect Annual Costs

(TIAC) $2,119 $2,890 $3,648 $4,734 $ TIAC = ADMC + FPC + CRC

34 Cost Summary - Total Annual Costs (TAC)

35 Total Direct Annual Costs (TDAC) $1,939 $6,369 $7,044 $7,742 $

36 Total Indirect Annual Costs

(TIAC) $2,119 $2,890 $3,648 $4,734 $

37 Total Annual Costs (TAC) $4,058 $9,259 $10,692 $12,476 $ TAC = TDAC + TIAC

38 Cost Effectiveness

39 Cost Effectiveness (CE) $176,718 $219,935 $147,039 $101,867 $/ton HAP CE = TAC / ǻHAP / 2000

40

A. Based on capital cost data provided by Devon, Exterran, and MCBU for engines ranging from 50 to 100 hp. Exterran provided cost data for ten recent

installations with average PEC = $9,195 (range of $8,979 - $9,203) and average installed TCC = $12,665 (range of $11,989 to $13,362). Engines include

Arrow VRG 220 and VRG 330; Waukesha VRG 265, 195 GK, VRG 310, 135 GZ, VRG 330, 140 GZ, and F554G; and Caterpillar G3304NA (range of

53 - 95 hp) and the costs do not include an initial performance test. Devon estimated installed NSCR cost/TCC = $14,000 for engines 50 - 500 hp "based

on some recent catalyst installations performed in two different operational areas." MCBU provided that "Rich burn NSCR and AFR procurement and

installation costs for 50-250 HP range from $10,000 - $15,000." MCBU has five engines of 50 - 100 hp equipped with NSCR. For this smallest engine

range (50 - 100 hp), the low end of these costs were used. TCC used for cost effectiveness calculations based on average of Exterran average and the

Devon and MCBU values. The average ratio of Total Capital Cost to Purchased Equipment Cost (for engines where PEC was provided) was 1.38.

41

B. Based on capital cost data provided by Devon, Exterran, and MCBU for engines ranging from 100 to 175 hp. Exterran provided cost data for six

recent installations with average PEC = $11,008 (range of $10,167 - $12,284) and average installed TCC = $15,391 (range of $14,737 to $16,731).

Engines include Waukesha F11G, F817G, WAK-B, 145 GZ; and Caterpillar G3306NA and G333NA (range of 116 - 172 hp) and the costs do not include

an initial performance test. Devon estimated installed NSCR cost/TCC = $14,000 for engines 50 - 500 hp "based on some recent catalyst installations

performed in two different operational areas." MCBU provided that "Rich burn NSCR and AFR procurement and installation costs for 50-250 HP range

from $10,000 - $15,000." MCBU has 51 engines of 100 - 250 hp equipped with NSCR. For this engine range (100 - 175 hp), a linearly extrapolated

estimate based on 137.5 hp was used. TCC used for cost effectiveness calculations based on average of Exterran average and the Devon and MCBU

values. The average ratio of Total Capital Cost to Purchased Equipment Cost (for engines where PEC was provided) was 1.40.
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

41

42

C. Based on capital cost data provided by Devon, Exterran, and MCBU for engines ranging from 175 to 300 hp. Exterran provided cost data for 13

recent installations with average PEC = $12,706 (range of $10,703 - $19,337) and average installed TCC = $17,849 (range of $15,763 to $24,934).

Engines include Waukesha F1197G, F1905G, F18G, and F11GSI; and Caterpillar G3306TA, G3406NA, G3306TAA, G342NA, G343NA, G353NA,

G3408NA, G342TA, and G342TAA... (range of 203 - 265 hp) and the costs do not include an initial performance test. Devon estimated installed NSCR

cost/TCC = $14,000 for engines 50 - 500 hp "based on some recent catalyst installations performed in two different operational areas." MCBU provided

that "Rich burn NSCR and AFR procurement and installation costs for 50-250 HP range from $10,000 - $15,000." MCBU has 51 engines of 100 - 250 hp

equipped with NSCR. For this engine range (175 - 300 hp), the maximum of $15,000 was used. TCC used for cost effectiveness calculations based on

average of Exterran average and the Devon and MCBU values. The average ratio of Total Capital Cost to Purchased Equipment Cost (for engines where

PEC was provided) was 1.40.

43

D. Based on capital cost data provided by Devon, Exterran, and MCBU for engines ranging from 300 to 500 hp. Exterran provided cost data for 15

recent installations with average PEC = $14,769 (range of $11,777 - $18,547) and average installed TCC = $20,948 (range of $16,838 to $24,100).

Engines include Waukesha H2475G, LRO, F18GSI, F18GSID, F2895G, LRZ, L3711G; and Caterpillar G3508NA, G306TA, G379NA, G3408TA,

G3408TAW, G379TA, G379TAA, AND G398NA. (range of 310 - 500 hp) and the costs do not include an initial performance test. Devon estimated

installed NSCR cost/TCC = $14,000 for engines 50 - 500 hp "based on some recent catalyst installations performed in two different operational areas."

TCC used for cost effectiveness calculations based on average of Exterran average and the Devon value. The average ratio of Total Capital Cost to

Purchased Equipment Cost (for engines where PEC was provided) was 1.42.

44 E. Total Capital Costs do not include initial performance test which would be required with or without post-combustion controls installation.
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

42

Attachment E – “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SRB, 4SLB, and 2SLB Engines Post-Combustion

Controls: Original RICE NESHAP (docket document number OAR-2002-0059-0225) cost effectiveness data with adjustments

for inflation, annual operating hours, and best estimate values for HAP emission factor, and HAP control efficiency.

Cost Effectiveness

Analysis

Engine

Type

Engine

Size

(hp)

2001 CE

($ton)

Inflation

Rate

2007 CE

($ton)

HAP EF -

Docket

(lb/hp-hr)

HAP EF -

Baseline

(lb/hp-hr)

ǻHAP -

Docket

ǻHAP -

baseline

Op

Hours -

Docket

Op

Hours -

Baseline

Baseline

CE

($ton)

Notes

 A B C D = B*C^6 E F G H I J K*

Baseline 2,800 hours 4SRB 750 $72,807 1.03 $86,935 8.30E-05 2.43E-04 75% 90% 6,500 2,800 $57,444 1

Baseline 2,800 hours 4SLB 750 $13,189 1.03 $15,748 4.42E-04 4.78E-04 65% 90% 6,500 2,800 $24,415 2

Baseline 2,800 hours 2SLB 750 $21,039 1.03 $25,122 4.74E-04 4.78E-04 40% 40% 6,500 2,800 $57,830 3

Baseline 6,500 hours 4SRB 750 $72,807 1.03 $86,935 8.30E-05 2.43E-04 75% 90% 6,500 6,500 $24,745 4

Baseline 6,500 hours 4SLB 750 $13,189 1.03 $15,748 4.42E-04 4.78E-04 65% 90% 6,500 6,500 $10,517 5

Baseline 6,500 hours 2SLB 750 $21,039 1.03 $25,122 4.74E-04 4.78E-04 40% 40% 6,500 6,500 $24,911 6

* K = D * (E/F) * G/H) * (I/J)

1. Cost effectiveness adjusted for inflation, HAP emission factor, HAP control efficiency, and operating hours.

2. Cost effectiveness adjusted for inflation, HAP emission factor, HAP control efficiency, and operating hours.

3. Cost effectiveness adjusted for inflation, HAP emission factor, and operating hours. The original control efficiency of 40% was retained because these cost

estimates were developed before premium catalysts, required to achieve higher control efficiencies for 2SLB engines, were available.

4. Cost effectiveness adjusted for inflation, HAP emission factor, and HAP control efficiency.

5. Cost effectiveness adjusted for inflation, HAP emission factor, and HAP control efficiency.

6. Cost effectiveness adjusted for inflation and HAP emission factor. The original control efficiency of 40% was retained because these cost estimates were

developed before premium catalysts, required to achieve higher control efficiencies for 2SLB engines, were available.
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

43

Attachment F – “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SRB & 4SLB Engines Post-Combustion Controls:

Estimated costs from cost data presented in “Engine Classification Matrix Control Options and Costs” prepared by Argonne

National Laboratory and the State of New Mexico Department of Environmental Quality [Argonne 2007] and using best

estimate values for useful equipment life (10 years), HAP emission factor, and HAP control efficiency (90%).

Cost

Effectiveness

Analysis

Engine

Type

Engine

Size (hp)

Capital

Cost

Capital

Recovery

Factor

Annualized

Capital

Cost

Annual

Operating

Cost

Perf

Test

Cost

HAP EF

(lb/hp-hr)

Annual

Operating

Hours

Control

Efficiency

ǻHAP (lb

HAP/yr)

Cost

Effectiveness

($/ton HAP)

 A B* C D = B*C E F G H I J** K***

Baseline 2,800 hrs 4SRB 400 $22,510 0.14238 $3,205 $6,000 $4,000 2.43E-4 2,800 90% 244.9 107,820

Baseline 2,800 hrs 4SLB 400 $12,000 0.14238 $1,709 $6,000 $1,000 4.78E-4 2,800 90% 481.8 36,148

Baseline 2,800 hrs 4SRB 750 $35,876 0.14238 $5,108 $6,000 $4,000 2.43E-4 2,800 90% 459.3 65,791

Baseline 2,800 hrs 4SLB 750 $18,750 0.14238 $2,670 $6,000 $1,000 4.78E-4 2,800 90% 903.4 21,407

Baseline 6,500 hrs 4SRB 400 $22,510 0.14238 $3,205 $6,000 $4,000 2.43E-4 6,500 90% 568.6 46,446

Baseline 6,500 hrs 4SLB 400 $12,000 0.14238 $1,709 $6,000 $1,000 4.78E-4 6,500 90% 1118.5 15,572

Baseline 6,500 hrs 4SRB 750 $35,876 0.14238 $5,108 $6,000 $4,000 2.43E-4 6,500 90% 1066.2 28,341

Baseline 6,500 hrs 4SLB 750 $18,750 0.14238 $2,670 $6,000 $1,000 4.78E-4 6,500 90% 2097.2 9,221

* For 400 hp 4SRB engines, B = A (hp) * $50/hp * 1.03^4

 For 400 hp 4SLB engines, B = A (hp) * $30/hp

 For 750 hp 4SRB engines, B = A (hp) * $42.5/hp * 1.03^4 (750 hp cost based on linear extrapolation between 500 hp and 1100 hp costs)

 For 750 hp 4SLB engines, B = A (hp) * $25/hp (750 hp cost based on linear extrapolation between 500 hp and 1100 hp costs)

** J = A * G * H * I

*** K = (D +E + F)/(M/2000)
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

44

Attachment G – “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SRB Engines NSCR/Post-Combustion Controls:

Proposed Rule Values (Docket Document EPA-HQ-OAR-2008-0708-0017 Table 2) were adjusted for useful equipment life

(10 years), HAP emission factor (2.43E-04 lb HAP/hp-hr), and annual operating hours (6,500).

1 Parameter Value Units Notes/Comments

2 Engine Manufacturer CAT CAT CAT OAR-2005-0030-0005

3 Model No. G3304 G3408 G3408 OAR-2005-0030-0005

4 Engine Type 4SRB OAR-2005-0030-0005

5 Fuel Used Natural Gas OAR-2005-0030-0005

6

Post Combustion

Control NSCR OAR-2005-0030-0005

7 Control Purpose CH2O, CO, & NOx

8

Target Reduction -

Catalyst Control

Efficiency (CCE)

90% 90% 90% 90% 90% 90% 90% 90% %

Assumed control efficiency for

NSCR catalysts (OAR-2008-0708-

0017, OAR-2008-0708-0001)

9 Project Duration (n) 10 10 10 10 10 10 10 10 years

10 Project Discount

Interest Rate (i) 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% % (OAR-2005-0030-0005)

11 Site-Rated Power (SR) 167 255 300 300 500 800 1500 3000 hp OAR-2005-0030-0005

12 Average Operating

Load (OL) 100% 100% 100% 100% 100% 100% 100% 100% % Assume 100% load for cost analysis

13 Annual Operating

Hours (AOH) 6,500 6,500 6,500 6,500 6,500 6,500 6,500 6,500 hrs

Annual operating hours that are the

basis for the EPA control cost

analysis (OAR-2005-0030-0005).

14 HAP Emission Factor

(HAPEF) 2.43E-4 2.43E-4 2.43E-4 2.43E-4 2.43E-4 2.43E-4 2.43E-4 2.43E-4 lb HAP/hp-hr

AP-42 EF for total HAP for 4SRB

NG-fired engines.

15 HAP Emission

Reductions (ǻHAP) 237.40 362.50 426.47 426.47 710.78 1137.24 2132.33 4264.65 lb HAP/yr

ǻHAP = SR * OL * AOH * HAPEF

* CCE

16 Direct Costs

17 EPA Model NSCR

Capital Costs (CC) $1,980 $4,660 $4,620 $5,180 $6,610 $8,410 $13,370 $33,630 $

OAR-2005-0030-0005, OAR-2005-

0029-0038, OAR-2005-0030-0087

18 Instrumentation (IC) $198 $466 $462 $518 $661 $841 $1,337 $3,363 $

IC = 0.10 * EC. EPA Cost Control

Manual, OAR-2005-0030-0005

19 Sales Taxes (STC) $59 $140 $139 $155 $198 $252 $401 $1,009 $

STC = 0.03 * EC. EPA Cost

Control Manual, OAR-2005-0030-

0005
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

45

20 Freight (FC) $99 $233 $231 $259 $331 $421 $669 $1,682 $

FC = 0.05 * EC. EPA Cost Control

Manual, OAR-2005-0030-0005

21 Purchased Equipment

Cost (PEC) $2,336 $5,499 $5,452 $6,112 $7,800 $9,924 $15,777 $39,683 $ PEC = EC + IC + STC + FC

22 Direct Installation Costs

23 Foundations and

Supports (FSC) $187 $440 $436 $489 $624 $794 $1,262 $3,175 $

FSC = 0.08 * PEC. EPA Cost

Control Manual, OAR-2005-0030-

0005

24 Handling and Erection

(HEC) $327 $770 $763 $856 $1,092 $1,389 $2,209 $5,556 $

HEC = 0.14 * PEC. EPA Cost

Control Manual, OAR-2005-0030-

0005

25 Electrical (EEC) $93 $220 $218 $244 $312 $397 $631 $1,587 $

EEC = 0.04 * PEC. EPA Cost

Control Manual, OAR-2005-0030-

0005

26 Piping (PIC) $47 $110 $109 $122 $156 $198 $316 $794 $

PIC = 0.02 * PEC. EPA Cost

Control Manual, OAR-2005-0030-

0005

27 Insulation for

ductwork (IDC) $23 $55 $55 $61 $78 $99 $158 $397 $

IDC = 0.01 * PEC. EPA Cost

Control Manual, OAR-2005-0030-

0005

28 Painting (PAC) $23 $55 $55 $61 $78 $99 $158 $397 $

PAC = 0.01 * PEC. EPA Cost

Control Manual, OAR-2005-0030-

0005

29 Site Preparation (SPC) $0 $0 $0 $0 $0 $0 $0 $0 $

SPC = 0.00 * PEC. EPA Cost

Control Manual, OAR-2005-0030-

0005

30 Buildings (BC) $0 $0 $0 $0 $0 $0 $0 $0 $

BC = 0.00 * PEC. EPA Cost

Control Manual, OAR-2005-0030-

0005

31 Direct Installation

Cost (DIC) $701 $1,650 $1,635 $1,834 $2,340 $2,977 $4,733 $11,905 $

DIC = FSC + HEC + EEC + PIC +

IDC + PAC +SPC + BC

32 Total Direct Capital

Costs (TDC) $3,037 $7,148 $7,087 $7,946 $10,140 $12,901 $20,510 $51,588 $ TDC = PEC + DIC

33 Indirect Installation Costs
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

46

34 Engineering (EIC) $234 $550 $545 $611 $780 $992 $1,578 $3,968 $

EIC = 0.10 * PEC. EPA Cost

Control Manual, OAR-2005-0030-

0005

35 Construction and field

expenses (CFEC) $117 $275 $273 $306 $390 $496 $789 $1,984 $

CFEC = 0.05 * PEC. EPA Cost

Control Manual, OAR-2005-0030-

0005

36 Contractor fees (CFC) $234 $550 $545 $611 $780 $992 $1,578 $3,968 $

CFC = 0.10 * PEC. EPA Cost

Control Manual, OAR-2005-0030-

0005

37 Start-up (SUC) $47 $110 $109 $122 $156 $198 $316 $794 $

SUC = 0.02 * PEC. EPA Cost

Control Manual, OAR-2005-0030-

0005

38 Performance test

(PTC) $23 $55 $55 $61 $78 $99 $158 $397 $

PTC = 0.01 * PEC. EPA Cost

Control Manual, OAR-2005-0030-

0005

39 Total Indirect

Installation Costs (IIC) $654 $1,540 $1,526 $1,711 $2,184 $2,779 $4,417 $11,111 $

IIC = EIC + CFEC + CFC + SUC +

PTC

40 Contingencies

41 Contingencies (COC) $70 $165 $164 $183 $234 $298 $473 $1,191 $

COC = 0.03 * PEC. EPA Cost

Control Manual, OAR-2005-0030-

0005

42 Total Indirect Capital

Costs (TICC) $724 $1,705 $1,690 $1,895 $2,418 $3,076 $4,891 $12,302 $ TICC = IIC + COC

43 Capital Cost Summary

44 Total Direct Capital

Costs (TDC) $3,037 $7,148 $7,087 $7,946 $10,140 $12,901 $20,510 $51,588 $

45 Total Indirect Capital

Costs (TICC) $724 $1,705 $1,690 $1,895 $2,418 $3,076 $4,891 $12,302 $

46 Total Capital Cost

(TCC) $3,762 $8,853 $8,777 $9,841 $12,558 $15,977 $25,400 $63,890 $ TCC = TDC + TICC

47 Direct Annual Costs

48 Operator Labor (OLC) $0 $0 $0 $0 $0 $0 $0 $0 $
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

47

49 Supervisor Labor

(SLC) $0 $0 $0 $0 $0 $0 $0 $0 $

SLC = 0.15 * OLC. EPA Cost

Control Manual, OAR-2005-0030-

0005

50 Operating Materials

(OMC) $0 $0 $0 $0 $0 $0 $0 $0 $

51 Maintenance - Labor

(MLC) $260 $260 $260 $260 $260 $260 $260 $260 $

52 Maintenance -

Materials (MMC) $0 $0 $0 $0 $0 $0 $0 $0 $

Annual operating & maintenance

costs for parts (e.g. O2 sensor,

catalyst, battery, alternator, TC,

crankcase filter), labor (parts &

catalyst replacement & testing), and

outside services (i.e., catalyst

cleaning, crane rental for catalyst

removal for engines > 300 hp).

Based on Industry O&M cost

records.

53 Annual Combustion

Control (ACC) $0 $0 $0 $0 $0 $0 $0 $0 $

54 Electricity (ELC) $0 $0 $0 $0 $0 $0 $0 $0 $

55 Total Direct Annual

Costs (TDAC) $260 $260 $260 $260 $260 $260 $260 $260 $

TDAC = OLC + SLC + OMC +

MLC + MMC + ACC + ATC +

ELC

56 Indirect Annual Costs

57 Overhead (OHC) $156 $156 $156 $156 $156 $156 $156 $156 $

OHC = 0.60 * (OLC + SLC + MLC

+ MMC). EPA Cost Control

Manual, OAR-2005-0030-0005.

58 Administrative

Charges (ADC) $75 $177 $176 $197 $251 $320 $508 $1,278 $

ADC = 0.02 * TCC. EPA Cost

Control Manual, OAR-2005-0030-

0005.

59 Property Taxes (PTC) $38 $89 $88 $98 $126 $160 $254 $639 $

PTC = 0.01 * TCC. EPA Cost

Control Manual, OAR-2005-0030-

0005.

60 Insurance (INC) $38 $89 $88 $98 $126 $160 $254 $639 $

INC = 0.01 * TCC. EPA Cost

Control Manual, OAR-2005-0030-

0005.

61 Capital Recovery

Factor (CRF) 0.142378 0.142378 0.142378 0.142378 0.142378 0.142378 0.142378 0.142378

CRF = i * (1+i)^n / [(1+i)^n - 1] (i

expressed as a decimal - e.g., 10% =

0.1)
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

48

62 Capital Recovery

(CRC) $536 $1,260 $1,250 $1,401 $1,788 $2,275 $3,616 $9,097 $ CRC = CRF * TCC

63 Total Indirect Annual

Costs (TIAC) $842 $1,771 $1,757 $1,951 $2,446 $3,070 $4,789 $11,808 $

TIAC = OHC + ADC + FPC + PTC

+ INC + CRC

64 Cost Summary

65

Total Direct Annual

Operating Costs

(TDAC)

$260 $260 $260 $260 $260 $260 $260 $260 $

66

Total Indirect Annual

Operating Costs

(TIAC)

$842 $1,771 $1,757 $1,951 $2,446 $3,070 $4,789 $11,808 $

67 Total Annual Costs

(TAC) $1,102 $2,031 $2,017 $2,211 $2,706 $3,330 $5,049 $12,068 $ TAC = TDAC + TIAC

68

69 Site-Rated Power (SR) 167 255 300 300 500 800 1,500 3,000 hp

70

71 Linear Regression of

TAC vs. SR:

m = 3.60 $/hp

Total annual operating costs as

function of 4SRB engine hp.

Determined from linear regression

of Total Annual Costs vs. Site-Rated

Power. Truncated at 3 sig figures.

72 b = 744 $

73 r

2

 = 0.9775

74 Cost Effectiveness Estimates

75 Size Range (SRg) < 50 50 - 100 100 -

175

175 -

300

300 -

500

500-

1000 hp

76 Size Range Average

(SRgA) 25 75 138 238 400 750 hp

77 HAP Emission

Reductions (ǻHAP) 35.54 106.62 196.17 338.33 568.62 1066.16 lb HAP/yr

ǻHAP = SRgA * OL * AOH *

HAPEF * CCE

78

Total Annual Costs

from Regression

(TACR)

$834 $1,014 $1,241 $1,601 $2,184 $3,444 $744 $744 $/yr TACR = SRgA * m + b.

79 Cost Effectiveness

(CE) $46,949 $19,026 $12,653 $9,464 $7,683 $6,461 #DIV/0! #DIV/0! $/tonHAP CE = TACR/(ǻHAP/2,000)
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

49

Attachment H – “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SRB Engines NSCR/Post-Combustion Controls:

Revised EPA Proposed Rule data. Cost Effectiveness approach from docket document EPA-HQ-OAR-2008-0708-0017 was

revised. Adjustments were made to useful equipment life (10 years), HAP emission factor (2.43E-04 lb HAP/hp-hr), capital

costs (inflation adjust docket cost data and include costs for AFRC & power source), annual operating hours (6,500), and

O&M costs (EPA assumption that NSCR annual O&M is equivalent to diesel particulate filter cleaning is incorrect and

severely underestimates cost). Includes a fuel penalty associated with engine operation at a less efficient AFR for NSCR.

1 Parameter Value Units Notes/Comments

2 Engine Manufacturer CAT CAT CAT OAR-2005-0030-0005

3 Model No. G3304 G3408 G3408 OAR-2005-0030-0005

4 Engine Type 4SRB 4SRB 4SRB 4SRB 4SRB OAR-2005-0030-0005

5 Fuel Used Natural Gas OAR-2005-0030-0005

6 Post Combustion Control NSCR NSCR NSCR NSCR NSCR OAR-2005-0030-0005

7 Control Purpose CH2O, CO, & NOx

8

Target Reduction - Catalyst

Control Efficiency (CCE) 90% 90% 90% 90% 90% % Assumed control efficiency for NSCR catalysts (OAR2008-0708-0017, OAR-2008-0708-0001)

9 Project Duration (n) 10 10 10 10 10 years

 Industry budgets for AFRC and alternator

replacement/system overhaul every 10 years. Miratech

notes that for budgetary reasons should expect to replace

a catalyst element after 24,000 to 32,000 hours of

operation. Average = 28,000 = 10 years (OAR-2005-

0030-0087). These hours not based on any performance

guarantees, industry experience for guaranteed

performance is more frequent catalyst replacement.

OAR-2005-0029-0038 lists catalyst replacement every 3

- 5 years.

10 Project Discount Interest Rate

(i) 7.0% 7.0% 7.0% 7.0% 7.0% % (OAR-2005-0030-0005)

11 Site-Rated Power (SR) 167 255 300 300 500 hp OAR-2005-0030-0005

12 Average Operating Load (OL) 100% 100% 100% 100% 100% % Assume 100% load for cost analysis

13 Annual Operating Hours

(AOH) 6,500 6,500 6,500 6,500 6,500 hrs Annual operating hours that are the basis for the EPA

control cost analysis (OAR-2005-0030-0005).

14 HAP Emission Factor (HAPEF) 2.43E-4 2.43E-4 2.43E-4 2.43E-4 2.43E-4 lb HAP/

hp-hr AP-42 EF for total HAP for 4SRB NG-fired engines.

15 HAP Emission Reductions

ǻHAP) 237.40 362.50 426.47 426.47 710.78 lb HAP/

yr

ǻHAP = SR * OL * AOH * HAPEF * CCE

16 Direct Costs
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

50

17 NSCR Capital Cost Year

(CCY) 2003 2003 2003 2005 2005 Year OAR-2005-0030-0005, OAR-2005-0029-0038, OAR2005-0030-0087

18 EPA Model NSCR Capital

Costs (CC) $1,980 $4,660 $4,620 $5,180 $6,610 $

OAR-2005-0030-0005, OAR-2005-0029-0038, OAR2005-0030-0087

19 AFRC Capital Cost Year

(CCY2) 2003 2003 2003 2003 2005 Year OAR-2005-0029-0038 for engines < 300 hp, OAR-2005-0030-0086 for engines > 300 hp,

20 AFRC Capital Costs (CC2) $5,440 $5,440 $5,440 $5,440 $7,500 $

OAR-2005-0029-0038 for engines < 300 hp, OAR-2005-

0030-0086 for engines > 300 hp (avg of $5,000 &

$10,000),

21 Adjusted Capital Costs (ACC) $8,351 $11,368 $11,323 $11,618 $14,969 $

Capital costs adjusted for inflation (to 2007 dollars at 3%

per year) and inclusion of AFRC: ACC =

CC*1.03^(2007-CCY) + CC2*1.03^(2007-CCY2)

22 Additional Capital Equipment

(AEC) $600 $600 $600 $600 $600 $

Additional capital equipment – battery, battery housing,

alternator or solar panel – were assumed to cost $600 per

engine. This assumes 50% of the engines do not have

access to electricity and require this additional equipment

for an NSCR retrofit

23 Combustion Control Equipment

and Auxiliary Equipment (EC) $8,951 $11,968 $11,923 $12,218 $15,569 $ EC = AEC + ACC

24 Instrumentation (IC) $895 $1,197 $1,192 $1,222 $1,557 $

IC = 0.10 * EC. EPA Cost Control Manual, OAR-2005-

0030-0005

25 Sales Taxes (STC) $269 $359 $358 $367 $467 $

STC = 0.03 * EC. EPA Cost Control Manual, OAR2005-0030-0005

26 Freight (FC) $448 $598 $596 $611 $778 $

FC = 0.05 * EC. EPA Cost Control Manual, OAR-2005-

0030-0005

27 Purchased Equipment Cost

(PEC) $10,563 $14,122 $14,069 $14,418 $18,372 $ PEC = EC + IC + STC + FC

28 Direct Installation Costs

29 Foundations and Supports

(FSC) $845 $1,130 $1,125 $1,153 $1,470 $

FSC = 0.08 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

30 Handling and Erection (HEC) $1,479 $1,977 $1,970 $2,018 $2,572 $

HEC = 0.14 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

31 Electrical (EEC) $423 $565 $563 $577 $735 $

EEC = 0.04 * PEC. EPA Cost Control Manual, OAR2005-0030-0005
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

51

32 Piping (PIC) $211 $282 $281 $288 $367 $

PIC = 0.02 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

33 Insulation for ductwork (IDC) $106 $141 $141 $144 $184 $

IDC = 0.01 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

34 Painting (PAC) $106 $141 $141 $144 $184 $

PAC = 0.01 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

35 Site Preparation (SPC) $0 $0 $0 $0 $0 $

SPC = 0.00 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

36 Buildings (BC) $0 $0 $0 $0 $0 $

BC = 0.00 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

37 Direct Installation Cost (DIC) $3,169 $4,237 $4,221 $4,325 $5,512 $

DIC = FSC + HEC + EEC + PIC + IDC + PAC +SPC +

BC

38 Total Direct Capital Costs

(TDC) $13,731 $18,358 $18,289 $18,743 $23,883 $ TDC = PEC + DIC

39 Indirect Installation Costs

40 Engineering (EIC) $1,056 $1,412 $1,407 $1,442 $1,837 $

EIC = 0.10 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

41 Construction and field expenses

(CFEC) $528 $706 $703 $721 $919 $

CFEC = 0.05 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

42 Contractor fees (CFC) $1,056 $1,412 $1,407 $1,442 $1,837 $

CFC = 0.10 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

43 Start-up (SUC) $211 $282 $281 $288 $367 $

SUC = 0.02 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

44 Performance test (PTC) $106 $141 $141 $144 $184 $

PTC = 0.01 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

45 Total Indirect Installation Costs

(IIC) $2,958 $3,954 $3,939 $4,037 $5,144 $ IIC = EIC + CFEC + CFC + SUC + PTC

46 Contingencies

47 Contingencies (COC) $317 $424 $422 $433 $551 $

COC = 0.03 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

48 Total Indirect Capital Costs

(TICC) $3,274 $4,378 $4,361 $4,469 $5,695 $ TICC = IIC + COC

49 Capital Cost Summary
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

October 2009

52

50 Total Direct Capital Costs

(TDC) $13,731 $18,358 $18,289 $18,743 $23,883 $

51 Total Indirect Capital Costs

(TICC) $3,274 $4,378 $4,361 $4,469 $5,695 $

52 Total Capital Cost (TCC) $17,006 $22,736 $22,651 $23,212 $29,579 $ TCC = TDC + TICC

53 Direct Annual Costs

54 Operator Labor (OLC) $200 $200 $200 $200 $200 $

55 Supervisor Labor (SLC) $30 $30 $30 $30 $30 $

SLC = 0.15 * OLC. EPA Cost Control Manual, OAR2005-0030-0005

56 Operating Materials (OMC) $0 $0 $0 $0 $0 $

57 Maintenance - Labor (MLC) $1,649 $1,649 $1,649 $1,649 $1,649 $

58 Maintenance - Materials

(MMC) $839 $1,246 $1,881 $1,881 $2,589 $

Annual operating & maintenance costs for parts (e.g. O2

sensor, catalyst, battery, alternator, TC, crankcase filter),

labor (parts & catalyst replacement & testing), and

outside services (i.e., catalyst cleaning, crane rental for

catalyst removal for engines > 300 hp). Based on

Industry O&M cost records.

59 Annual Combustion Control

(ACC) $0 $0 $0 $0 $0 $

60

Annual Testing or Downtime or

other allowance for Catalyst

washing (ATC)

$3,978 $3,978 $3,978 $3,978 $3,978 $

Estimated cost for annual FTIR performance test and

associated cost.

61 Electricity (ELC) $0 $0 $0 $0 $0 $

62 Total Direct Annual Costs

(TDAC) $6,696 $7,103 $7,738 $7,738 $8,446 $

TDAC = OLC + SLC + OMC + MLC + MMC + ACC +

ATC + ELC

63 Indirect Annual Costs

64 Overhead (OHC) $1,631 $1,875 $2,256 $2,256 $2,681 $

OHC = 0.60 * (OLC + SLC + MLC + MMC). EPA Cost

Control Manual, OAR-2005-0030-0005.

65 Administrative Charges (ADC) $340 $455 $453 $464 $592 $

ADC = 0.02 * TCC. EPA Cost Control Manual, OAR2005-0030-0005.

FPC = [7,420 - 7,188] (Btu/hp-hr) * 1/900 (LHV =

scf/Btu) * 1/1000 (scf/Mcf) * SR (hp) * OL (hp/hp) *

AOH (hrs) * $7/Mcf.

66 Fuel Penalty (FPC) $1,959 $2,991 $3,519 $3,519 $5,864 $

• 7,420 Btu/hp-hr is brake specific fuel consumption

(BSFC) for Waukesha VGF GSI 4SRB engines operated

at AFR = 0.995 (AFR for optimum NSCR performance)
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• 7,188 Btu/hp-hr is brake specific fuel consumption for

Waukesha VGF GSI 4SRB engines operated at AFR

=1.06 (AFR for optimum engine efficiency)

• Waukesha VGF GSI BSFC data provided by Nick

Kosinski, Waukesha engineer.

• $7/Mcf - estimated average natural gas price in 2007

[DOE/EIA website]

67 Property Taxes (PTC) $170 $227 $227 $232 $296 $

PTC = 0.01 * TCC. EPA Cost Control Manual, OAR2005-0030-0005.

68 Insurance (INC) $170 $227 $227 $232 $296 $

INC = 0.01 * TCC. EPA Cost Control Manual, OAR2005-0030-0005.

69 Capital Recovery Factor (CRF) 0.142378 0.142378 0.142378 0.142378 0.142378 CRF = i * (1+i)^n / [(1+i)^n - 1] (i expressed as a

decimal - e.g., 10% = 0.1)

70 Capital Recovery (CRC) $2,421 $3,237 $3,225 $3,305 $4,211 $ CRC = CRF * TCC

71 Total Indirect Annual Costs

(TIAC) $6,691 $9,012 $9,906 $10,008 $13,940 $ TIAC = OHC + ADC + FPC + PTC + INC + CRC

72 Cost Summary

73 Total Direct Annual Operating

Costs (TDAC) $6,696 $7,103 $7,738 $7,738 $8,446 $

74 Total Indirect Annual Operating

Costs (TIAC) $6,691 $9,012 $9,906 $10,008 $13,940 $

75 Total Annual Costs (TAC) $13,387 $16,115 $17,643 $17,746 $22,385 $ TAC = TDAC + TIAC

76

77 Site-Rated Power (SR) 167 255 300 300 500 hp

78

79 Linear Regression of TAC vs.

SR:

m = 26.6 $/hp

Total annual operating costs as function of 4SRB engine

horsepower. Determined from linear regression of Total

Annual Costs vs. Site-Rated Power.

80 b = 9,350 $

81 r

2

 = 0.9882

82 Cost Effectiveness Estimates

83 Size Range (SRg) < 50 50 - 100 100 - 175 175 - 300 300 - 500 hp

84 Size Range Average (SRgA) 25 75 137.5 237.5 400 hp

85 HAP Emission Reductions

ǻHAP) 35.54 106.62 195.46 337.62 568.62 lb HAP/

yr

ǻHAP = SRgA * OL * AOH * HAPEF * CCE
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

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86 Total Annual Costs from

Regression (TACR) $10,016 $11,347 $13,011 $15,674 $20,001 $/yr

TACR = SRgA * m + b. Note, engines < 100 hp are not

required to conduct performance tests; thus, TACR for "<

50" and "50 - 100" reduced by $3,777 from linear

regression estimate.

87 Cost Effectiveness (CE) $339,774 $138,233 $133,132 $92,850 $70,349 $/ton

HAP CE = TACR/(ǻHAP/2,000)
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

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55

Attachment I – “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SRB Engines NSCR/Post-Combustion Controls:

Industry Cost Effectiveness Values - based on capital and operating cost data provided by industry and vendors, 6,500 annual

operating hours, and using best estimate values for useful equipment life (10 years), AP-42 HAP emission factor (2.43E-04 lb

HAP/hp-hr), and HAP control efficiency (90%).

1 Parameter Value Units Notes/Comments

2 Engine Type 4SRB 4SRB 4SRB 4SRB

3 Fuel Used Natural Gas

4 Post Combustion Control NSCR NSCR NSCR NSCR

5 Control Purpose CH2O, CO, & NOx

6

Target Reduction - Catalyst

Control Efficiency (CCE) 90% 90% 90% 90% % Assumed control efficiency for NSCR catalysts (OAR-2008-0708-0017, OAR-2008-0708-0001)

7 Project Duration (n) 10 10 10 10 years

 Industry budgets for AFRC and alternator replacement/system

overhaul every 10 years. Miratech notes that for budgetary reasons

should expect to replace a catalyst element after 24,000 to 32,000

hours of operation. Average = 28,000 = 10 years (OAR-2005-0030-

0087). These hours not based on any performance guarantees,

industry experience for guaranteed performance is more frequent

catalyst replacement. OAR-2005-0029-0038 lists catalyst

replacement every 3 - 5 years.

8 Project Discount Interest Rate (i) 7.0% 7.0% 7.0% 7.0% % (OAR-2005-0030-0005)

9 Engine Size Range (ESR) 50 - 100 100 -

175

175 -

300

300 -

500 hp OAR-2008-0708-0017 Table 2.

10 Site-Rated Power (SR) 75 137.5 237.5 400 hp Midpoint of Engine Size Range

11 Average Operating Load (OL) 100% 100% 100% 100% % Assume 100% load for cost analysis

12 Annual Operating Hours (AOH) 6,500 6,500 6,500 6,500 hrs Annual operating hours that are the basis for the EPA control cost

analysis (OAR-2005-0030-0005).

13 HAP Emission Factor (HAPEF) 2.43E-4 2.43E-4 2.43E-4 2.43E-4 lb HAP/

hp-hr AP-42 EF for total HAP for 4SRB NG-fired engines.

14 HAP Emission Reductions

ǻHAP) 106.6 195.5 337.6 568.6 lb HAP/yr

ǻHAP = SR * OL * AOH * HAPEF * CCE

15 Capital Costs

16 Purchased Equipment Cost (PEC) $9,195 - - - Refer to Footnote A.

17 Purchased Equipment Cost (PEC) - $11,008 - - Refer to Footnote B.

18 Purchased Equipment Cost (PEC) - - $12,706 - Refer to Footnote C.

19 Purchased Equipment Cost (PEC) - - - $14,769 Refer to Footnote D.
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

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20 Total Capital Cost (TCC) $12,222 - - - $ Refer to Footnotes A, E

21 Total Capital Cost (TCC) - $13,840 - - $ Refer to Footnotes B, E

22 Total Capital Cost (TCC) - - $15,616 - $ Refer to Footnotes C, E

23 Total Capital Cost (TCC) - - - $17,474 $ Refer to Footnotes D, E

24 Direct Annual Costs

25 Operating and Maintenance

Material Costs (O&MM) $839 $1,246 $1,881 $2,589 $

Annualized equipment Cost to replace Catalyst (every 3 years), O2

Sensors (8 months, ~ 2,000 operating hours), Thermocouples (7.5

years), Crankcase Filters (3 months), Fuel Valve (4 - 8 years), and

Battery (2 years). Cost for annual catalyst cleaning, crane (for

larger engines), and rotational catalyst.

26 O&M Labor Cost (O&ML) $2,560 $2,604 $2,664 $2,667 $

Annualized labor Cost to replace and rotate (for cleaning) Catalyst,

O2 Sensor, Thermocouples, Fuel Valve, Crankcase Filter, Battery,

and Perform Equipment Testing (e.g. O2 Sensor Test, AFRC

optimization after O2 sensor replacement)

27

Annual Performance Testing or

Downtime or other allowance for

Catalyst washing (ATC)

$0 $3,978 $3,978 $3,978 $

Estimated cost for annual FTIR performance test and associated

cost; required when catalysts are replaced or rotated for outside

cleaning.

28 Total Direct Annual Costs

(TDAC) $3,399 $7,828 $8,523 $9,234 $ = O&MM + O&ML + ATC

29 Indirect Annual Costs

 Administrative Charges (ADMC) $0 $225 $225 $225

FPC = [7,420 - 7,188] (Btu/hp-hr) * 1/900 (scf/Btu (gas LHV)) *

1/1000 (scf/Mcf) * SR (hp) * OL (hp/hp) * AOH (hrs) * $7/Mcf.

• 7,420 Btu/hp-hr is brake specific fuel consumption (BSFC) for

Waukesha VGF GSI 4SRB engines operated at AFR = 0.995 (AFR

for optimum NSCR performance)

• 7,188 Btu/hp-hr is brake specific fuel consumption for Waukesha

VGF GSI 4SRB engines operated at AFR =1.06 (AFR for optimum

engine efficiency)

• Waukesha VGF GSI BSFC data provided by Nick Kosinski,

Waukesha engineer.

30 Fuel Penalty (FPC) $880 $1,613 $2,786 $4,692 $

• $7/Mcf - estimated average natural gas price in 2007 [DOE/EIA

website]

31 Capital Recovery Factor (CRF) 0.142378 0.142378 0.142378 0.142378 CRF = i * (1+i)^n / [(1+i)^n - 1] (i expressed as a decimal - e.g.,

10% = 0.1)

32 Capital Recovery (CRC) $1,740 $1,971 $2,223 $2,488 $ CRC = CRF * TCC
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

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33 Total Indirect Annual Costs

(TIAC) $2,620 $3,808 $5,234 $7,404 $ TIAC = ADMC + FPC + CRC

34 Cost Summary - Total Annual Costs (TAC)

35 Total Direct Annual Costs

(TDAC) $3,399 $7,828 $8,523 $9,234 $

36 Total Indirect Annual Costs

(TIAC) $2,620 $3,808 $5,234 $7,404 $

37 Total Annual Costs (TAC) $6,019 $11,636 $13,757 $16,638 $ TAC = TDAC + TIAC

38 Cost Effectiveness

39 Cost Effectiveness (CE) $112,906 $119,063 $81,494 $58,522 $/ton HAP CE = TAC / ǻHAP / 2000

40

A. Based on capital cost data provided by Devon, Exterran, and MCBU for engines ranging from 50 to 100 hp. Exterran provided cost data for ten recent

installations with average PEC = $9,195 (range of $8,979 - $9,203) and average installed TCC = $12,665 (range of $11,989 to $13,362). Engines include

Arrow VRG 220 and VRG 330; Waukesha VRG 265, 195 GK, VRG 310, 135 GZ, VRG 330, 140 GZ, and F554G; and Caterpillar G3304NA (range of 53 -

95 hp) and the costs do not include an initial performance test. Devon estimated installed NSCR cost/TCC = $14,000 for engines 50 - 500 hp "based on some

recent catalyst installations performed in two different operational areas." MCBU provided that "Rich burn NSCR and AFR procurement and installation

costs for 50-250 HP range from $10,000 - $15,000." MCBU has five engines of 50 - 100 hp equipped with NSCR. For this smallest engine range (50 - 100

hp), the low end of these costs were used. TCC used for cost effectiveness calculations based on average of Exterran average and the Devon and MCBU

values. The average ratio of Total Capital Cost to Purchased Equipment Cost (for engines where PEC was provided) was 1.38.

41

B. Based on capital cost data provided by Devon, Exterran, and MCBU for engines ranging from 100 to 175 hp. Exterran provided cost data for six recent

installations with average PEC = $11,008 (range of $10,167 - $12,284) and average installed TCC = $15,391 (range of $14,737 to $16,731). Engines include

Waukesha F11G, F817G, WAK-B, 145 GZ; and Caterpillar G3306NA and G333NA (range of 116 - 172 hp) and the costs do not include an initial

performance test. Devon estimated installed NSCR cost/TCC = $14,000 for engines 50 - 500 hp "based on some recent catalyst installations performed in two

different operational areas." MCBU provided that "Rich burn NSCR and AFR procurement and installation costs for 50-250 HP range from $10,000 -

$15,000." MCBU has 51 engines of 100 - 250 hp equipped with NSCR. For this engine range (100 - 175 hp), a linearly extrapolated estimate based on 137.5

hp was used. TCC used for cost effectiveness calculations based on average of Exterran average and the Devon and MCBU values. The average ratio of

Total Capital Cost to Purchased Equipment Cost (for engines where PEC was provided) was 1.40.

42

C. Based on capital cost data provided by Devon, Exterran, and MCBU for engines ranging from 175 to 300 hp. Exterran provided cost data for 13 recent

installations with average PEC = $12,706 (range of $10,703 - $19,337) and average installed TCC = $17,849 (range of $15,763 to $24,934). Engines include

Waukesha F1197G, F1905G, F18G, and F11GSI; and Caterpillar G3306TA, G3406NA, G3306TAA, G342NA, G343NA, G353NA, G3408NA, G342TA, and

G342TAA... (range of 203 - 265 hp) and the costs do not include an initial performance test. Devon estimated installed NSCR cost/TCC = $14,000 for

engines 50 - 500 hp "based on some recent catalyst installations performed in two different operational areas." MCBU provided that "Rich burn NSCR and

AFR procurement and installation costs for 50-250 HP range from $10,000 - $15,000." MCBU has 51 engines of 100 - 250 hp equipped with NSCR. For this

engine range (175 - 300 hp), the maximum of $15,000 was used. TCC used for cost effectiveness calculations based on average of Exterran average and the

Devon and MCBU values. The average ratio of Total Capital Cost to Purchased Equipment Cost (for engines where PEC was provided) was 1.40.
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

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43

D. Based on capital cost data provided by Devon, Exterran, and MCBU for engines ranging from 300 to 500 hp. Exterran provided cost data for 15 recent

installations with average PEC = $14,769 (range of $11,777 - $18,547) and average installed TCC = $20,948 (range of $16,838 to $24,100). Engines include

Waukesha H2475G, LRO, F18GSI, F18GSID, F2895G, LRZ, L3711G; and Caterpillar G3508NA, G306TA, G379NA, G3408TA, G3408TAW, G379TA,

G379TAA, AND G398NA. (range of 310 - 500 hp) and the costs do not include an initial performance test. Devon estimated installed NSCR cost/TCC =

$14,000 for engines 50 - 500 hp "based on some recent catalyst installations performed in two different operational areas." TCC used for cost effectiveness

calculations based on average of Exterran average and the Devon value. The average ratio of Total Capital Cost to Purchased Equipment Cost (for engines

where PEC was provided) was 1.42.

44 E. Total Capital Costs do not include initial performance test which would be required with or without post-combustion controls installation.
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

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Attachment J – Cost Effectiveness Calculations for Gas-Fired 4SLB and 2SLB Engines Post-Combustion Controls: Proposed

Rule Values (Docket Document EPA-HQ-OAR-2008-0708-0017 Table 2)

1 Parameter Value Units Notes/Comments

2 Engine Manufacturer

3 Model No.

4 Engine Type Lean Burn OAR-2005-0030-0005

5 Fuel Used Natural Gas OAR-2005-0030-0005

6 Post Combustion Control Ox cat OAR-2005-0030-0005

7 Control Purpose CH2O & CO

8

Target Reduction - Catalyst

Control Efficiency (CCE) 90% 90% 90% 90% 90% 90% % Assumed control efficiency for NSCR catalysts(OAR-2008-0708-0017, OAR-2008-0708-0001)

9 Project Duration (n) 20 20 20 20 20 20 years

10 Project Discount Interest Rate

(i) 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% % (OAR-2005-0030-0005)

11 Site-Rated Power (SR) 500 1000 2000 3000 5000 8000 hp OAR-2005-0030-0005

12 Average Operating Load (OL) 100% 100% 100% 100% 100% 100% % Assume 100% load for cost analysis

13 Annual Operating Hours

(AOH) 2,800 2,800 2,800 2,800 2,800 2,800 hrs

Annual operating hours that are the basis for the

EPA control cost analysis (OAR-2005-0030-

0005).

14 HAP Emission Factor (HAPEF) 6.88E-4 6.88E-4 6.88E-4 6.88E-4 6.88E-4 6.88E-4 lb HAP/

hp-hr

EF for total HAP for NG-fired engines (OAR2005-0030-0009)

15 HAP Emission Reductions

ǻHAP) 866.88 1733.76 3467.52 5201.28 8668.80 13870.08 lb HAP/yr

ǻHAP = SR * OL * AOH * HAPEF * CCE

16 Direct Costs

17 EPA Model NSCR Capital

Costs (CC) $5,390 $6,930 $11,180 $14,210 $28,480 $49,740 $

OAR-2005-0030-0005, OAR-2005-0029-0038,

OAR-2005-0030-0087

18 Instrumentation (IC) $539 $693 $1,118 $1,421 $2,848 $4,974 $

IC = 0.10 * EC. EPA Cost Control Manual,

OAR-2005-0030-0005

19 Sales Taxes (STC) $162 $208 $335 $426 $854 $1,492 $

STC = 0.03 * EC. EPA Cost Control Manual,

OAR-2005-0030-0005

20 Freight (FC) $270 $347 $559 $711 $1,424 $2,487 $

FC = 0.05 * EC. EPA Cost Control Manual,

OAR-2005-0030-0005

21 Purchased Equipment Cost

(PEC) $6,360 $8,177 $13,192 $16,768 $33,606 $58,693 $ PEC = EC + IC + STC + FC
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

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22 Direct Installation Costs

23 Foundations and Supports

(FSC) $509 $654 $1,055 $1,341 $2,689 $4,695 $

FSC = 0.08 * PEC. EPA Cost Control Manual,

OAR-2005-0030-0005

24 Handling and Erection (HEC) $890 $1,145 $1,847 $2,347 $4,705 $8,217 $

HEC = 0.14 * PEC. EPA Cost Control Manual,

OAR-2005-0030-0005

25 Electrical (EEC) $254 $327 $528 $671 $1,344 $2,348 $

EEC = 0.04 * PEC. EPA Cost Control Manual,

OAR-2005-0030-0005

26 Piping (PIC) $127 $164 $264 $335 $672 $1,174 $

PIC = 0.02 * PEC. EPA Cost Control Manual,

OAR-2005-0030-0005

27 Insulation for ductwork (IDC) $64 $82 $132 $168 $336 $587 $

IDC = 0.01 * PEC. EPA Cost Control Manual,

OAR-2005-0030-0005

28 Painting (PAC) $64 $82 $132 $168 $336 $587 $

PAC = 0.01 * PEC. EPA Cost Control Manual,

OAR-2005-0030-0005

29 Site Preparation (SPC) $0 $0 $0 $0 $0 $0 $

SPC = 0.00 * PEC. EPA Cost Control Manual,

OAR-2005-0030-0005

30 Buildings (BC) $0 $0 $0 $0 $0 $0 $

BC = 0.00 * PEC. EPA Cost Control Manual,

OAR-2005-0030-0005

31 Direct Installation Cost (DIC) $1,908 $2,453 $3,958 $5,030 $10,082 $17,608 $

DIC = FSC + HEC + EEC + PIC + IDC + PAC

+SPC + BC

32 Total Direct Capital Costs

(TDC) $8,268 $10,631 $17,150 $21,798 $43,688 $76,301 $ TDC = PEC + DIC

33 Indirect Installation Costs

34 Engineering (EIC) $636 $818 $1,319 $1,677 $3,361 $5,869 $

EIC = 0.10 * PEC. EPA Cost Control Manual,

OAR-2005-0030-0005

35 Construction and field expenses

(CFEC) $318 $409 $660 $838 $1,680 $2,935 $

CFEC = 0.05 * PEC. EPA Cost Control Manual,

OAR-2005-0030-0005

36 Contractor fees (CFC) $636 $818 $1,319 $1,677 $3,361 $5,869 $

CFC = 0.10 * PEC. EPA Cost Control Manual,

OAR-2005-0030-0005

37 Start-up (SUC) $127 $164 $264 $335 $672 $1,174 $

SUC = 0.02 * PEC. EPA Cost Control Manual,

OAR-2005-0030-0005

38 Performance test (PTC) $64 $82 $132 $168 $336 $587 $

PTC = 0.01 * PEC. EPA Cost Control Manual,

OAR-2005-0030-0005

39 Total Indirect Installation Costs

(IIC) $1,781 $2,290 $3,694 $4,695 $9,410 $16,434 $ IIC = EIC + CFEC + CFC + SUC + PTC

40 Contingencies
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41 Contingencies (COC) $191 $245 $396 $503 $1,008 $1,761 $

COC = 0.03 * PEC. EPA Cost Control Manual,

OAR-2005-0030-0005

42 Total Indirect Capital Costs

(TICC) $1,972 $2,535 $4,090 $5,198 $10,418 $18,195 $ TICC = IIC + COC

43 Capital Cost Summary

44 Total Direct Capital Costs

(TDC) $8,268 $10,631 $17,150 $21,798 $43,688 $76,301 $

45 Total Indirect Capital Costs

(TICC) $1,972 $2,535 $4,090 $5,198 $10,418 $18,195 $

46 Total Capital Cost (TCC) $10,240 $13,166 $21,240 $26,996 $54,106 $94,496 $ TCC = TDC + TICC

47 Direct Annual Costs

48 Operator Labor (OLC) $0 $0 $0 $0 $0 $0 $

49 Supervisor Labor (SLC) $0 $0 $0 $0 $0 $0 $

SLC = 0.15 * OLC. EPA Cost Control Manual,

OAR-2005-0030-0005

50 Operating Materials (OMC) $0 $0 $0 $0 $0 $0 $

51 Maintenance - Labor (MLC) $260 $260 $260 $260 $260 $260 $

52 Maintenance - Materials

(MMC) $0 $0 $0 $0 $0 $0 $

Annual operating & maintenance costs for parts

(e.g. O2 sensor, catalyst, battery, alternator, TC,

crankcase filter), labor (parts & catalyst

replacement & testing), and outside services (i.e.,

catalyst cleaning, crane rental for catalyst

removal for engines > 300 hp). Based on

Industry O&M cost records.

53 Annual Combustion Control

(ACC) $0 $0 $0 $0 $0 $0 $

54 Electricity (ELC) $0 $0 $0 $0 $0 $0 $

55 Total Direct Annual Costs

(TDAC) $260 $260 $260 $260 $260 $260 $

TDAC = OLC + SLC + OMC + MLC + MMC +

ACC + ATC + ELC

56 Indirect Annual Costs

57 Overhead (OHC) $156 $156 $156 $156 $156 $156 $

OHC = 0.60 * (OLC + SLC + MLC + MMC).

EPA Cost Control Manual, OAR-2005-0030-

0005.

58 Administrative Charges (ADC) $205 $263 $425 $540 $1,082 $1,890 $

ADC = 0.02 * TCC. EPA Cost Control Manual,

OAR-2005-0030-0005.

59 Property Taxes (PTC) $102 $132 $212 $270 $541 $945 $

PTC = 0.01 * TCC. EPA Cost Control Manual,

OAR-2005-0030-0005.
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60 Insurance (INC) $102 $132 $212 $270 $541 $945 $

INC = 0.01 * TCC. EPA Cost Control Manual,

OAR-2005-0030-0005.

61 Capital Recovery Factor (CRF) 0.094393 0.094393 0.094393 0.094393 0.094393 0.094393 CRF = i * (1+i)^n / [(1+i)^n - 1] (i expressed as a

decimal - e.g., 10% = 0.1)

62 Capital Recovery (CRC) $967 $1,243 $2,005 $2,548 $5,107 $8,920 $ CRC = CRF * TCC

63 Total Indirect Annual Costs

(TIAC) $1,532 $1,925 $3,011 $3,784 $7,428 $12,856 $

TIAC = OHC + ADC + FPC + PTC + INC +

CRC

64 Cost Summary

65 Total Direct Annual Operating

Costs (TDAC) $260 $260 $260 $260 $260 $260 $

66 Total Indirect Annual

Operating Costs (TIAC) $1,532 $1,925 $3,011 $3,784 $7,428 $12,856 $

67 Total Annual Costs (TAC) $1,792 $2,185 $3,271 $4,044 $7,688 $13,116 $ TAC = TDAC + TIAC

68

69 Site-Rated Power (SR) 500 1,000 2,000 3,000 5,000 8,000 hp

70

71 Linear Regression of TAC vs.

SR:

m = 1.52 $/hp

Total annual operating costs as function of 4SRB

engine horsepower. Determined from linear

regression of Total Annual Costs vs. Site-Rated

Power. Truncated at 3 significant figures. "b" set

at $657 rather than $658 to equal EPA calcs.

72 b = 393 $

73 r

2

 = 0.9816

74 Cost Effectiveness Estimates

75 Size Range (SRg) < 50 50 - 100 100 -

175

175 -

300

300 -

500

500-

1000 hp

76 Size Range Average (SRgA) 25 75 138 238 400 750 hp

77 HAP Emission Reductions

ǻHAP) 43.34 130.03 239.26 412.63 693.50 1300.32 lb HAP/yr

ǻHAP = SRgA * OL * AOH * HAPEF * CCE

78 Total Annual Costs from

Regression (TACR) $431 $507 $603 $755 $1,001 $1,533 $/yr TACR = SRgA * m + b.

79 Cost Effectiveness (CE) $19,887 $7,798 $5,039 $3,658 $2,887 $2,358 $/ton

HAP CE = TACR/(ǻHAP/2,000)
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

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Attachment K – “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SLB Engines Post-Combustion Controls:

Proposed Rule Values (Docket Document EPA-HQ-OAR-2008-0708-0017 Table 2) w/Adjustments Using Best Estimates for Useful

Equipment Life (10 years) & HAP Emission Factor (4.78E-4 lb HAP/hp-hr)

1 Parameter Value Units Notes/Comments

2 Engine Manufacturer

3 Model No.

4 Engine Type Lean Burn OAR-2005-0030-0005

5 Fuel Used Natural Gas OAR-2005-0030-0005

6 Post Combustion Control Ox Cat OAR-2005-0030-0005

7 Control Purpose CH2O & CO

8

Target Reduction - Catalyst

Control Efficiency (CCE) 90% 90% 90% 90% 90% 90% % Assumed control efficiency for NSCR catalysts (OAR2008-0708-0017, OAR-2008-0708-0001)

9 Project Duration (n) 10 10 10 10 10 10 years

10 Project Discount Interest

Rate (i) 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% % (OAR-2005-0030-0005)

11 Site-Rated Power (SR) 500 1000 2000 3000 5000 8000 hp OAR-2005-0030-0005

12 Average Operating Load

(OL) 100% 100% 100% 100% 100% 100% % Assume 100% load for cost analysis

13 Annual Operating Hours

(AOH) 2,800 2,800 2,800 2,800 2,800 2,800 hrs Annual operating hours that are the basis for the EPAcontrol cost analysis (OAR-2005-0030-0005).

14 HAP Emission Factor

(HAPEF) 4.78E-4 4.78E-4 4.78E-4 4.78E-4 4.78E-4 4.78E-4 lb HAP/ hphr

EF for total HAP for NG-fired engines < 500 hp

(OAR-2005-0030-0009)

15 HAP Emission Reductions

ǻHAP) 602.28 1204.56 2409.12 3613.68 6022.80 9636.48 lb HAP/ yr ǻHAP = SR * OL * AOH * HAPEF * CCE

16 Direct Costs

17 EPA Model NSCR Capital

Costs (CC) $5,390 $6,930 $11,180 $14,210 $28,480 $49,740 $

OAR-2005-0030-0005, OAR-2005-0029-0038, OAR2005-0030-0087

18 Instrumentation (IC) $539 $693 $1,118 $1,421 $2,848 $4,974 $

IC = 0.10 * EC. EPA Cost Control Manual, OAR2005-0030-0005

19 Sales Taxes (STC) $162 $208 $335 $426 $854 $1,492 $

STC = 0.03 * EC. EPA Cost Control Manual, OAR2005-0030-0005

20 Freight (FC) $270 $347 $559 $711 $1,424 $2,487 $

FC = 0.05 * EC. EPA Cost Control Manual, OAR2005-0030-0005

21 Purchased Equipment Cost

(PEC) $6,360 $8,177 $13,192 $16,768 $33,606 $58,693 $ PEC = EC + IC + STC + FC
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

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22 Direct Installation Costs

23 Foundations and Supports

(FSC) $509 $654 $1,055 $1,341 $2,689 $4,695 $

FSC = 0.08 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

24 Handling and Erection

(HEC) $890 $1,145 $1,847 $2,347 $4,705 $8,217 $

HEC = 0.14 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

25 Electrical (EEC) $254 $327 $528 $671 $1,344 $2,348 $

EEC = 0.04 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

26 Piping (PIC) $127 $164 $264 $335 $672 $1,174 $

PIC = 0.02 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

27 Insulation for ductwork

(IDC) $64 $82 $132 $168 $336 $587 $

IDC = 0.01 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

28 Painting (PAC) $64 $82 $132 $168 $336 $587 $

PAC = 0.01 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

29 Site Preparation (SPC) $0 $0 $0 $0 $0 $0 $

SPC = 0.00 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

30 Buildings (BC) $0 $0 $0 $0 $0 $0 $

BC = 0.00 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

31 Direct Installation Cost

(DIC) $1,908 $2,453 $3,958 $5,030 $10,082 $17,608 $

DIC = FSC + HEC + EEC + PIC + IDC + PAC +SPC

+ BC

32 Total Direct Capital Costs

(TDC) $8,268 $10,631 $17,150 $21,798 $43,688 $76,301 $ TDC = PEC + DIC

33 Indirect Installation Costs

34 Engineering (EIC) $636 $818 $1,319 $1,677 $3,361 $5,869 $

EIC = 0.10 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

35 Construction and field

expenses (CFEC) $318 $409 $660 $838 $1,680 $2,935 $

CFEC = 0.05 * PEC. EPA Cost Control Manual,

OAR-2005-0030-0005

36 Contractor fees (CFC) $636 $818 $1,319 $1,677 $3,361 $5,869 $

CFC = 0.10 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

37 Start-up (SUC) $127 $164 $264 $335 $672 $1,174 $

SUC = 0.02 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

38 Performance test (PTC) $64 $82 $132 $168 $336 $587 $

PTC = 0.01 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

39 Total Indirect Installation

Costs (IIC) $1,781 $2,290 $3,694 $4,695 $9,410 $16,434 $ IIC = EIC + CFEC + CFC + SUC + PTC
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40 Contingencies

41 Contingencies (COC) $191 $245 $396 $503 $1,008 $1,761 $

COC = 0.03 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

42 Total Indirect Capital Costs

(TICC) $1,972 $2,535 $4,090 $5,198 $10,418 $18,195 $ TICC = IIC + COC

43 Capital Cost Summary

44 Total Direct Capital Costs

(TDC) $8,268 $10,631 $17,150 $21,798 $43,688 $76,301 $

45 Total Indirect Capital Costs

(TICC) $1,972 $2,535 $4,090 $5,198 $10,418 $18,195 $

46 Total Capital Cost (TCC) $10,240 $13,166 $21,240 $26,996 $54,106 $94,496 $ TCC = TDC + TICC

47 Direct Annual Costs

48 Operator Labor (OLC) $0 $0 $0 $0 $0 $0 $

49 Supervisor Labor (SLC) $0 $0 $0 $0 $0 $0 $

SLC = 0.15 * OLC. EPA Cost Control Manual, OAR2005-0030-0005

50 Operating Materials

(OMC) $0 $0 $0 $0 $0 $0 $

51 Maintenance - Labor

(MLC) $260 $260 $260 $260 $260 $260 $

52 Maintenance - Materials

(MMC) $0 $0 $0 $0 $0 $0 $

Annual operating & maintenance costs for parts (e.g.

O2 sensor, catalyst, battery, alternator, TC, crankcase

filter), labor (parts & catalyst replacement & testing),

and outside services (i.e., catalyst cleaning, crane rental

for catalyst removal for engines > 300 hp). Based on

Industry O&M cost records.

53 Annual Combustion

Control (ACC) $0 $0 $0 $0 $0 $0 $

54 Electricity (ELC) $0 $0 $0 $0 $0 $0 $

55 Total Direct Annual Costs

(TDAC) $260 $260 $260 $260 $260 $260 $

TDAC = OLC + SLC + OMC + MLC + MMC + ACC

+ ATC + ELC

56 Indirect Annual Costs

57 Overhead (OHC) $156 $156 $156 $156 $156 $156 $

OHC = 0.60 * (OLC + SLC + MLC + MMC). EPA

Cost Control Manual, OAR-2005-0030-0005.

58 Administrative Charges

(ADC) $205 $263 $425 $540 $1,082 $1,890 $

ADC = 0.02 * TCC. EPA Cost Control Manual, OAR2005-0030-0005.

59 Property Taxes (PTC) $102 $132 $212 $270 $541 $945 $

PTC = 0.01 * TCC. EPA Cost Control Manual, OAR2005-0030-0005.
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60 Insurance (INC) $102 $132 $212 $270 $541 $945 $

INC = 0.01 * TCC. EPA Cost Control Manual, OAR2005-0030-0005.

61 Capital Recovery Factor

(CRF) 0.142378 0.142378 0.142378 0.142378 0.142378 0.142378 CRF = i * (1+i)^n / [(1+i)^n - 1] (i expressed as adecimal - e.g., 10% = 0.1)

62 Capital Recovery (CRC) $1,458 $1,874 $3,024 $3,844 $7,704 $13,454 $ CRC = CRF * TCC

63 Total Indirect Annual Costs

(TIAC) $2,024 $2,557 $4,030 $5,080 $10,024 $17,390 $ TIAC = OHC + ADC + FPC + PTC + INC + CRC

64 Cost Summary

65 Total Direct Annual

Operating Costs (TDAC) $260 $260 $260 $260 $260 $260 $

66 Total Indirect Annual

Operating Costs (TIAC) $2,024 $2,557 $4,030 $5,080 $10,024 $17,390 $

67 Total Annual Costs (TAC) $2,284 $2,817 $4,290 $5,340 $10,284 $17,650 $ TAC = TDAC + TIAC

68

69 Site-Rated Power (SR) 500 1,000 2,000 3,000 5,000 8,000 hp

70

71 Linear Regression of TAC

vs. SR:

m = 2.07 $/hp

72 b = 385 $

73 r

2

 = 0.9816

Total annual operating costs as function of 4SRB

engine horsepower. Determined from linear regression

of Total Annual Costs vs. Site-Rated Power. Truncated

at 3 significant figures. "b" set at $657 rather than

$658 to equal EPA calculations.

74 Cost Effectiveness Estimates

75 Size Range (SRg) < 50 50 - 100 100 -

175

175 -

300

300 -

500

500-

1000 hp

76 Size Range Avg. (SRgA) 25 75 138 238 400 750 hp

77 HAP Emission Reductions

ǻHAP) 30.11 90.34 166.23 286.69 481.82 903.42 lb HAP/ yr ǻHAP = SRgA * OL * AOH * HAPEF * CCE

78 Total Annual Costs from

Regression (TACR) $437 $540 $671 $878 $1,213 $1,937 $/yr TACR = SRgA * m + b.

79 Cost Effectiveness (CE) $29,010 $11,961 $8,069 $6,122 $5,034 $4,288 $/ton HAP CE = TACR/(ǻHAP/2,000)
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

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Attachment L – “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SLB Engines Post-Combustion Controls: Industry

Cost Effectiveness Values - based on capital and operating cost data provided by industry and vendors and using best estimate

values for useful equipment life (10 years), HAP emission factor (0.000478 lb HAP/hp-hr), and HAP control efficiency (90%).

1 Parameter Value Units Notes/Comments

2 Engine Type 4SLB

3 Fuel Used Natural Gas

4 Post Combustion Control Ox Cat Ox Cat

5 Control Purpose

6

Target Reduction - Catalyst

Control Efficiency (CCE) 90% 90% % Assumed control efficiency for Oxidation catalysts (OAR-2008-0708-0017,OAR-2008-0708-0001)

7 Project Duration (n) 10 10 years

Miratech notes that for budgetary reasons should expect to replace a catalyst

element after 24,000 to 32,000 hours of operation. Average = 28,000 = 10

years (OAR-2005-0030-0087). These hours not based on any performance

guarantees, industry experience for guaranteed performance is more frequent

catalyst replacement. OAR-2005-0029-0038 lists catalyst replacement every

3 - 5 years.

8 Project Discount Interest Rate (i) 7.0% 7.0% % (OAR-2005-0030-0005)

9 Engine Size Range (ESR) 300 -

500

300 -

500 hp OAR-2008-0708-0017 Table 2.

10 Site-Rated Power (SR) 400 400 hp Midpoint of Engine Size Range

11 Average Operating Load (OL) 100% 100% % Assume 100% load for cost analysis

12 Annual Operating Hours (AOH) 2,800 6,500 hrs Annual operating hours that are the basis for the EPA control cost analysis

(OAR-2005-0030-0005).

13 HAP Emission Factor (HAPEF) 0.000478 0.000478 lb HAP/

hp-hr

EF for total HAP for NG-fired engines < 500 hp; the size range that is the

basis for the above the floor analysis (OAR-2005-0030-0009)

14 HAP Emission Reductions

ǻHAP) 481.8 1118.5 lb HAP/yr

ǻHAP = SR * OL * AOH * HAPEF * CCE

15 Capital Costs

16 Purchased Equipment Cost

(PEC) $9,419 $9,419 Refer to Footnote A.

17 Total Capital Cost (TCC) $14,005 $14,005 $ Refer to Footnotes B.

18 Direct Annual Costs
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19 Operating and Maintenance

Material Costs (O&MM) $1,891 $1,891 $

Annualized equipment Cost to replace Catalyst (every 3 years),

Thermocouples (7.5 years), and Crankcase Filters (3 months) and annual

catalyst rotation for cleaning. Cost for rotational catalyst, catalyst cleaning,

and crane.

20 O&M Labor Cost (O&ML) $1,053 $1,053 $ Annualized labor Cost to replace and rotate (for cleaning) Catalyst,

Thermocouples, and Crankcase Filter.

21

Annual Performance Testing or

Downtime or other allowance for

Catalyst washing (ATC)

$1,202 $1,202 $ Estimated cost for annual performance test and associated cost; required when

catalysts are replaced or for annual rotation for outside cleaning.

22 Total Direct Annual Costs

(TDAC) $4,146 $4,146 $ = O&MM + O&ML + ATC

23 Indirect Annual Costs

24 Administrative Charges (ADMC) $225 $225

25 Capital Recovery Factor (CRF) 0.142378 0.142378 CRF = i * (1+i)^n / [(1+i)^n - 1] (i expressed as a decimal - e.g., 10% = 0.1)

26 Capital Recovery (CRC) $1,994 $1,994 $ CRC = CRF * TCC

27 Total Indirect Annual Costs

(TIAC) $2,219 $2,219 $ TIAC = ADMC + CRC

28 Cost Summary - Total Annual Costs (TAC)

29 Total Direct Annual Costs

(TDAC) $4,146 $4,146 $

30 Total Indirect Annual Costs

(TIAC) $2,219 $2,219 $

31 Total Annual Costs (TAC) $6,365 $6,365 $ TAC = TDAC + TIAC

32 Cost Effectiveness

33 Cost Effectiveness (CE) $26,420 $11,381 $/ton

HAP CE = TAC / ǻHAP / 2000

34

A. Based on capital cost data provided by Exterran for engines ranging from 300 to 500 hp. Exterran provided cost data for three recent installations

with average PEC = $9,419 (range of $7,149 - $10,555) and average installed TCC = $14,005 (range of $11,777 to $15,119). Engines include

Waukesha F18GL and F18GLD, caterpillar G3408CLE and the costs do not include an initial performance test. The average ratio of Total Capital

Cost to Purchased Equipment Cost was 1.49.

35 B. Total Capital Costs do not include initial performance test which would be required with or without post-combustion controls installation.
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

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Attachment M – “Baseline” Cost Effectiveness Calculations for Gas-Fired 4SLB and 2SLB Engines Post-Combustion

Controls: Proposed Rule Values (Docket Document EPA-HQ-OAR-2008-0708-0017 Table 2). Adjustments were made using

best estimate values to useful equipment life (10 years) and HAP emission factor (4.78E-4 lb HAP/hp-hr), and to annual

operating hours (6,500).

1 Parameter Value Units Notes/Comments

2 Engine Manufacturer

3 Model No.

4 Engine Type Lean Burn OAR-2005-0030-0005

5 Fuel Used Natural Gas OAR-2005-0030-0005

6 Post Combustion Control Ox Cat OAR-2005-0030-0005

7 Control Purpose CH2O & CO

8

Target Reduction - Catalyst

Control Efficiency (CCE) 90% 90% 90% 90% 90% 90% % Assumed control efficiency for NSCR catalysts (OAR2008-0708-0017, OAR-2008-0708-0001)

9 Project Duration (n) 10 10 10 10 10 10 years

10 Project Discount Interest Rate

(i) 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% % (OAR-2005-0030-0005)

11 Site-Rated Power (SR) 500 1000 2000 3000 5000 8000 hp OAR-2005-0030-0005

12 Average Operating Load (OL) 100% 100% 100% 100% 100% 100% % Assume 100% load for cost analysis

13 Annual Operating Hours

(AOH) 6,500 6,500 6,500 6,500 6,500 6,500 hrs Annual operating hours that are the basis for the EPA

control cost analysis (OAR-2005-0030-0005).

14 HAP Emission Factor

(HAPEF) 4.78E-4 4.78E-4 4.78E-4 4.78E-4 4.78E-4 4.78E-4 lb HAP/hp-hr

EF for total HAP for NG-fired engines < 500 hp

(OAR-2005-0030-0009)

15 HAP Emission Reductions

ǻHAP) 1398.15 2796.30 5592.60 8388.90 13981.50 22370.40 lb HAP/yr

ǻHAP = SR * OL * AOH * HAPEF * CCE

16 Direct Costs

17 EPA Model NSCR Capital

Costs (CC) $5,390 $6,930 $11,180 $14,210 $28,480 $49,740 $

OAR-2005-0030-0005, OAR-2005-0029-0038, OAR2005-0030-0087

18 Instrumentation (IC) $539 $693 $1,118 $1,421 $2,848 $4,974 $

IC = 0.10 * EC. EPA Cost Control Manual, OAR2005-0030-0005

19 Sales Taxes (STC) $162 $208 $335 $426 $854 $1,492 $

STC = 0.03 * EC. EPA Cost Control Manual, OAR2005-0030-0005

20 Freight (FC) $270 $347 $559 $711 $1,424 $2,487 $

FC = 0.05 * EC. EPA Cost Control Manual, OAR2005-0030-0005
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21 Purchased Equipment Cost

(PEC) $6,360 $8,177 $13,192 $16,768 $33,606 $58,693 $ PEC = EC + IC + STC + FC

22 Direct Installation Costs

23 Foundations and Supports

(FSC) $509 $654 $1,055 $1,341 $2,689 $4,695 $

FSC = 0.08 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

24 Handling and Erection (HEC) $890 $1,145 $1,847 $2,347 $4,705 $8,217 $

HEC = 0.14 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

25 Electrical (EEC) $254 $327 $528 $671 $1,344 $2,348 $

EEC = 0.04 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

26 Piping (PIC) $127 $164 $264 $335 $672 $1,174 $

PIC = 0.02 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

27 Insulation for ductwork (IDC) $64 $82 $132 $168 $336 $587 $

IDC = 0.01 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

28 Painting (PAC) $64 $82 $132 $168 $336 $587 $

PAC = 0.01 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

29 Site Preparation (SPC) $0 $0 $0 $0 $0 $0 $

SPC = 0.00 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

30 Buildings (BC) $0 $0 $0 $0 $0 $0 $

BC = 0.00 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

31 Direct Installation Cost (DIC) $1,908 $2,453 $3,958 $5,030 $10,082 $17,608 $

DIC = FSC + HEC + EEC + PIC + IDC + PAC +SPC

+ BC

32 Total Direct Capital Costs

(TDC) $8,268 $10,631 $17,150 $21,798 $43,688 $76,301 $ TDC = PEC + DIC

33 Indirect Installation Costs

34 Engineering (EIC) $636 $818 $1,319 $1,677 $3,361 $5,869 $

EIC = 0.10 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

35 Construction and field

expenses (CFEC) $318 $409 $660 $838 $1,680 $2,935 $

CFEC = 0.05 * PEC. EPA Cost Control Manual,

OAR-2005-0030-0005

36 Contractor fees (CFC) $636 $818 $1,319 $1,677 $3,361 $5,869 $

CFC = 0.10 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

37 Start-up (SUC) $127 $164 $264 $335 $672 $1,174 $

SUC = 0.02 * PEC. EPA Cost Control Manual, OAR2005-0030-0005
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

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38 Performance test (PTC) $64 $82 $132 $168 $336 $587 $

PTC = 0.01 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

39 Total Indirect Installation

Costs (IIC) $1,781 $2,290 $3,694 $4,695 $9,410 $16,434 $ IIC = EIC + CFEC + CFC + SUC + PTC

40 Contingencies

41 Contingencies (COC) $191 $245 $396 $503 $1,008 $1,761 $

COC = 0.03 * PEC. EPA Cost Control Manual, OAR2005-0030-0005

42 Total Indirect Capital Costs

(TICC) $1,972 $2,535 $4,090 $5,198 $10,418 $18,195 $ TICC = IIC + COC

43 Capital Cost Summary

44 Total Direct Capital Costs

(TDC) $8,268 $10,631 $17,150 $21,798 $43,688 $76,301 $

45 Total Indirect Capital Costs

(TICC) $1,972 $2,535 $4,090 $5,198 $10,418 $18,195 $

46 Total Capital Cost (TCC) $10,240 $13,166 $21,240 $26,996 $54,106 $94,496 $ TCC = TDC + TICC

47 Direct Annual Costs

48 Operator Labor (OLC) $0 $0 $0 $0 $0 $0 $

49 Supervisor Labor (SLC) $0 $0 $0 $0 $0 $0 $

SLC = 0.15 * OLC. EPA Cost Control Manual, OAR2005-0030-0005

50 Operating Materials (OMC) $0 $0 $0 $0 $0 $0 $

51 Maintenance - Labor (MLC) $260 $260 $260 $260 $260 $260 $

52 Maintenance - Materials

(MMC) $0 $0 $0 $0 $0 $0 $

Annual operating & maintenance costs for parts (e.g.

O2 sensor, catalyst, battery, alternator, TC, crankcase

filter), labor (parts & catalyst replacement & testing),

and outside services (i.e., catalyst cleaning, crane rental

for catalyst removal for engines > 300 hp). Based on

Industry O&M cost records.

53 Annual Combustion Control

(ACC) $0 $0 $0 $0 $0 $0 $

54 Electricity (ELC) $0 $0 $0 $0 $0 $0 $

55 Total Direct Annual Costs

(TDAC) $260 $260 $260 $260 $260 $260 $

TDAC = OLC + SLC + OMC + MLC + MMC + ACC

+ ATC + ELC

56 Indirect Annual Costs

57 Overhead (OHC) $156 $156 $156 $156 $156 $156 $

OHC = 0.60 * (OLC + SLC + MLC + MMC). EPA

Cost Control Manual, OAR-2005-0030-0005.
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58 Administrative Charges

(ADC) $205 $263 $425 $540 $1,082 $1,890 $

ADC = 0.02 * TCC. EPA Cost Control Manual, OAR2005-0030-0005.

59 Property Taxes (PTC) $102 $132 $212 $270 $541 $945 $

PTC = 0.01 * TCC. EPA Cost Control Manual, OAR2005-0030-0005.

60 Insurance (INC) $102 $132 $212 $270 $541 $945 $

INC = 0.01 * TCC. EPA Cost Control Manual, OAR2005-0030-0005.

61 Capital Recovery Factor

(CRF) 0.142378 0.142378 0.142378 0.142378 0.142378 0.142378 CRF = i * (1+i)^n / [(1+i)^n - 1] (i expressed as adecimal - e.g., 10% = 0.1)

62 Capital Recovery (CRC) $1,458 $1,874 $3,024 $3,844 $7,704 $13,454 $ CRC = CRF * TCC

63 Total Indirect Annual Costs

(TIAC) $2,024 $2,557 $4,030 $5,080 $10,024 $17,390 $ TIAC = OHC + ADC + FPC + PTC + INC + CRC

64 Cost Summary

65 Total Direct Annual Operating

Costs (TDAC) $260 $260 $260 $260 $260 $260 $

66 Total Indirect Annual

Operating Costs (TIAC) $2,024 $2,557 $4,030 $5,080 $10,024 $17,390 $

67 Total Annual Costs (TAC) $2,284 $2,817 $4,290 $5,340 $10,284 $17,650 $ TAC = TDAC + TIAC

68

69 Site-Rated Power (SR) 500 1,000 2,000 3,000 5,000 8,000 hp

70

71 Linear Regression of TAC vs.

SR:

m = 2.07 $/hp

Total annual operating costs as function of 4SRB

engine horsepower. Determined from linear regression

of Total Annual Costs vs. Site-Rated Power. Truncated

at 3 significant figures. "b" set at $657 rather than

$658 to equal EPA calculations.

72 b = 385 $

73 r

2

 = 0.9816

74 Cost Effectiveness Estimates

75 Size Range (SRg) < 50 50 - 100 100 -

175

175 -

300

300 -

500

500-

1000 hp

76 Size Range Average (SRgA) 25 75 138 238 400 750 hp

77 HAP Emission Reductions

ǻHAP) 69.91 209.72 385.89 665.52 1118.52 2097.23 lb HAP/yr

ǻHAP = SRgA * OL * AOH * HAPEF * CCE

78 Total Annual Costs from

Regression (TACR) $437 $540 $671 $878 $1,213 $1,937 $/yr TACR = SRgA * m + b.

79 Cost Effectiveness (CE) $12,497 $5,152 $3,476 $2,637 $2,169 $1,847 $/ton

HAP CE = TACR/(ǻHAP/2,000)
Technical Report: RICE NESHAP Control Costs Background for “Above the Floor Analysis”

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Attachment N – “Baseline” Cost Effectiveness Calculations for Gas-Fired 2SLB Engines Post-Combustion Controls: Industry

Cost Effectiveness Values - based on capital and operating cost data provided by industry and vendors, 2,800 annual operating

hours, and best estimate values for useful equipment life (10 years), HAP emission factor (4.78E-03 lb HAP/hp-hr), and HAP

control efficiency (73%).

1 Parameter Value Units Notes/Comments

2 Engine Manufacturer

3 Model No.

4 Engine Type 2SLB

5 Fuel Used Natural Gas

6 Post Combustion Control Ox Cat

7 Control Purpose CH2O & CO

8

Target Reduction - Catalyst

Control Efficiency (CCE) 73% 73% 73% %

Based on vendor (Cooper Cameron/Ajax) net pricing estimate for Premium

catalyst with muffler - offers 73% reduction for CH2O for one year of

operation before cleaning or replacement is required. Refer to Attachment O

and email from Bruce Chrisman of Cameron to Melanie King of EPA.

9 Project Duration (n) 10 10 10 years

Miratech notes that for budgetary reasons should expect to replace a catalyst

element after 24,000 to 32,000 hours of operation. Average = 28,000 = 10

years (OAR-2005-0030-0087). These hours not based on any performance

guarantees, industry experience for guaranteed performance is more frequent

catalyst replacement. OAR-2005-0029-0038 lists catalyst replacement every

3 - 5 years.

10 Project Discount Interest Rate (i) 7.0% 7.0% 7.0% % (OAR-2005-0030-0005)

11 Size range 175 - 300 300 - 500 500-1000 hp

12 Site-Rated Power (SR) 237.5 400 800 hp

 Mid-point of size ranges: 175 - 300, and 300 - 500 hp. For 500 - 1,000 hp,

800 hp is rating of Ajax DPC-2804LE that is basis for equipment capital

costs.

13 Average Operating Load (OL) 100% 100% 100% % Assume 100% load for cost analysis

14 Annual Operating Hours (AOH) 2,800 2,800 2,800 hrs Annual operating hours that are the basis for the EPA control cost analysis

(OAR-2005-0030-0005).

15 HAP Emission Factor (HAPEF) 0.000478 0.000478 0.000478 lb HAP/

hp-hr

EF for total HAP for NG-fired engines < 500 hp; the size range that is the

basis for the above the floor analysis (OAR-2005-0030-0009)

16 HAP Emission Reductions

ǻHAP) 232.05 390.81 781.63 lb HAP/

yr

ǻHAP = SR * OL * AOH * HAPEF * CCE

17 Direct Costs
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18 Combustion Control Equipment

and Auxiliary Equipment (EC) $24,987 $30,409 $50,901 $

Based on vendor (Cooper Cameron/Ajax) net pricing estimate for Premium

catalyst with muffler. For 175 - 300 hp range, equipment cost is average of

costs for Ajax DPC-2202LE (296 hp) and Ajax DPC-2801LE (192 hp). For

300 - 500 hp range, equipment cost is cost for Ajax DPC-2802LE (384 hp).

For 500 - 1,000 hp range, equipment cost is cost for Ajax DPC-2804LE (800

hp). Refer to Attachment O. The cost to retrofit an oxidation catalyst to a

2SLB engine is considerably greater than 4SLB retrofit applications. This is

primarily because 2SLB engines have backpressure limitations (high

backpressure would impact combustion cylinder scavenging and engine

operation) and catalysts must be constructed with large surface areas for low

backpressure. Other 2SLB cost impacts are muffler redesign to incorporate

catalyst elements and premium catalysts to operate at lower 2SLB engine

exhaust gas temperatures. Basic catalysts can be used but at significantly

lower emission reductions.

19 Instrumentation (IC) $2,499 $3,041 $5,090 $ IC = 0.10 * EC. EPA Cost Control Manual, OAR-2005-0030-0005

20 Sales Taxes (STC) $750 $912 $1,527 $ STC = 0.03 * EC. EPA Cost Control Manual, OAR-2005-0030-0005

21 Freight (FC) $1,249 $1,520 $2,545 $ FC = 0.05 * EC. EPA Cost Control Manual, OAR-2005-0030-0005

22 Purchased Equipment Cost

(PEC) $29,484 $35,883 $60,063 $ PEC = EC + IC + STC + FC

23 Direct Installation Costs

24 Foundations and Supports (FSC) $2,359 $2,871 $4,805 $

FSC = 0.08 * PEC. EPA Cost Control Manual, OAR-2005-0030-0005.

Includes supports and brackets.

25 Handling and Erection (HEC) $4,128 $5,024 $8,409 $

HEC = 0.14 * PEC. EPA Cost Control Manual, OAR-2005-0030-0005.

Install catalyst and silencer. Crane rental.

26 Electrical (EEC) $1,179 $1,435 $2,403 $

EEC = 0.04 * PEC. EPA Cost Control Manual, OAR-2005-0030-0005.

Install wiring, conduit, and thermocouple.

27 Piping (PIC) $590 $718 $1,201 $

PIC = 0.02 * PEC. EPA Cost Control Manual, OAR-2005-0030-0005.

Upgrade exhaust and vent.

28 Insulation for ductwork (IDC) $295 $359 $601 $ IDC = 0.01 * PEC. EPA Cost Control Manual, OAR-2005-0030-0005

29 Painting (PAC) $295 $359 $601 $ PAC = 0.01 * PEC. EPA Cost Control Manual, OAR-2005-0030-0005

30 Site Preparation (SPC) $0 $0 $0 $ SPC = 0.00 * PEC. EPA Cost Control Manual, OAR-2005-0030-0005

31 Buildings (BC) $0 $0 $0 $ BC = 0.00 * PEC. EPA Cost Control Manual, OAR-2005-0030-0005

32 Direct Installation Cost (DIC) $8,845 $10,765 $18,019 $ DIC = FSC + HEC + EEC + PIC + IDC + PAC +SPC + BC

33 Total Direct Capital Costs (TDC) $38,329 $46,647 $78,082 $ TDC = PEC + DIC

34 Indirect Installation Costs
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35 Engineering (EIC) $2,948 $3,588 $6,006 $ EIC = 0.10 * PEC. EPA Cost Control Manual, OAR-2005-0030-0005

36 Construction & field expenses

(CFEC) $1,474 $1,794 $3,003 $ CFEC = 0.05 * PEC. EPA Cost Control Manual, OAR-2005-0030-0005.

37 Contractor fees (CFC) $2,948 $3,588 $6,006 $ CFC = 0.10 * PEC. EPA Cost Control Manual, OAR-2005-0030-0005

38 Start-up (SUC) $590 $718 $1,201 $ SUC = 0.02 * PEC. EPA Cost Control Manual, OAR-2005-0030-0005

39 Performance test (PTC) $295 $359 $601 $ PTC = 0.01 * PEC. EPA Cost Control Manual, OAR-2005-0030-0005

40 Total Indirect Installation Costs

(IIC) $8,256 $10,047 $16,818 $ IIC = EIC + CFEC + CFC + SUC + PTC

41 Contingencies

42 Contingencies (COC) $885 $1,076 $1,802 $ COC = 0.03 * PEC. EPA Cost Control Manual, OAR-2005-0030-0005

43 Total Indirect Capital Costs

(TICC) $9,140 $11,124 $18,620 $ TICC = IIC + COC

44 Capital Cost Summary

45 Total Direct Capital Costs (TDC) $38,329 $46,647 $78,082 $

46 Total Indirect Capital Costs

(TICC) $9,140 $11,124 $18,620 $

47 Total Capital Cost (TCC) $47,469 $57,771 $96,702 $ TCC = TDC + TICC

48 Direct Annual Costs

49 Operator Labor (OLC) $201 $201 $201 $

50 Supervisor Labor (SLC) $0 $0 $0 $ No costs.

51 Operating Materials (OMC) $0 $0 $0 $

52 Maintenance - Labor (MLC) $674 $674 $674 $

Annualized Labor Cost to replace catalyst, thermocouples, general

maintenance.

53 Maintenance - Materials (MMC) $7,958 $7,958 $7,958 $

Annualized Materials Cost annual catalyst cleaning, and replace premium

catalyst (36 months) and thermocouples (90 months). Shared cost for extra

catalyst rotated during catalyst cleaning. Premium catalyst replacement is

primary cost.

54 Annual Combustion Control

(ACC) $0 $0 $0 $

55

Annual Testing or Downtime or

other allowance for Catalyst

washing (ATC)

$1,202 $1,202 $1,202 $

Retest required with each catalyst change (replacement or annual cleaning).

Cost includes outside contractor and operator labor.

56 Electricity (ELC) $0 $0 $0 $

57 Total Direct Annual Costs

(TDAC) $10,035 $10,035 $10,035 $ TDAC = OLC + SLC + OMC + MLC + MMC + ACC + ATC + ELC
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58 Indirect Annual Costs

59 Overhead (OHC) $5,300 $5,300 $5,300 $

OHC = 0.60 * (OLC + SLC + MLC + MMC). EPA Cost Control Manual,

OAR-2005-0030-0005.

60 Administrative Charges (ADC) $949 $1,155 $1,934 $ ADC = 0.02 * TCC. EPA Cost Control Manual, OAR-2005-0030-0005.

61 Property Taxes (PTC) $475 $578 $967 $ PTC = 0.01 * TCC. EPA Cost Control Manual, OAR-2005-0030-0005.

62 Insurance (INC) $475 $578 $967 $ INC = 0.01 * TCC. EPA Cost Control Manual, OAR-2005-0030-0005.

63 Capital Recovery Factor (CRF) 0.142378 0.142378 0.142378 CRF = i * (1+i)^n / [(1+i)^n - 1] (i expressed as a decimal - e.g., 10% = 0.1)

64 Capital Recovery (CRC) $6,759 $8,225 $13,768 $ CRC = CRF * TCC

65 Total Indirect Annual Costs

(TIAC) $13,957 $15,836 $22,936 $ TIAC = OHC + ADC + FPC + PTC + INC + CRC

66 Cost Summary

67 Total Direct Annual Operating

Costs (TDAC) $10,035 $10,035 $10,035 $

68 Total Indirect Annual Operating

Costs (TIAC) $13,957 $15,836 $22,936 $

69 Total Annual Costs (TAC) $23,992 $25,871 $32,971 $ TAC = TDAC + TIAC

70

71 Site-Rated Power (SR) 237.5 400 800 hp

72 Cost Effectiveness Estimates

73 Size Range (SRg) 175-300 300-500 500 - 1000 hp

74 Size Range Average (SRgA) 237.5 400 800 hp

75 HAP Emission Reductions

ǻHAP) 232.05 390.81 781.63 lb HAP/

yr

ǻHAP = SRgA * OL * AOH * HAPEF * CCE

76 Cost Effectiveness (CE) $206,791 $132,397 $84,366 $/ton

HAP CE = TACR/(ǻHAP/2,000)
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Attachment O – “Baseline” Cost Effectiveness Calculations for Gas-Fired 2SLB Engines Post-Combustion Controls: Industry

Cost Effectiveness Values - based on capital and operating cost data provided by industry and vendors and using best estimate

values for useful equipment life (10 years), HAP emission factor (0.000478 lb HAP/hp-hr), and HAP control efficiency (73%),

and 6,500 annual operating hours.

1 Parameter Value Units Notes/Comments

2 Engine Manufacturer

3 Model No.

4 Engine Type 2SLB

5 Fuel Used Natural Gas

6 Post Combustion Control Ox Cat

7 Control Purpose CH2O & CO

8

Target Reduction - Catalyst Control

Efficiency (CCE) 73% 73% 73% %

Based on vendor (Cooper Cameron/Ajax) net pricing estimate for

Premium catalyst with muffler - offers 73% reduction for CH2O for

one year of operation before cleaning or replacement is required. Refer

to Attachment P and email from Bruce Chrisman of Cameron to

Melanie King of EPA.

9 Project Duration (n) 10 10 10 years

Miratech notes that for budgetary reasons should expect to replace a

catalyst element after 24,000 to 32,000 hours of operation. Average =

28,000 = 10 years (OAR-2005-0030-0087). These hours not based on

any performance guarantees, industry experience for guaranteed

performance is more frequent catalyst replacement. OAR-2005-0029-

0038 lists catalyst replacement every 3 - 5 years.

10 Project Discount Interest Rate (i) 7.0% 7.0% 7.0% % (OAR-2005-0030-0005)

11 Size range 175 - 300 300 - 500 500-1000 hp

12 Site-Rated Power (SR) 237.5 400 800 hp

 Mid-point of size ranges: 175 - 300, and 300 - 500 hp. For 500 - 1,000

hp, 800 hp is rating of Ajax DPC-2804LE that is basis for equipment

capital costs.

13 Average Operating Load (OL) 100% 100% 100% % Assume 100% load for cost analysis

14 Annual Operating Hours (AOH) 6,500 6,500 6,500 hrs Annual operating hours that are the basis for the EPA control cost

analysis (OAR-2005-0030-0005).

15 HAP Emission Factor (HAPEF) 4.78E-4 4.78E-4 4.78E-4 lb HAP/ hphr

EF for total HAP for NG-fired engines < 500 hp; the size range that is

the basis for the above the floor analysis (OAR-2005-0030-0009)

16 HAP Emission Reductions (ǻHAP) 538.68 907.24 1814.49 lb HAP/ yr ǻHAP = SR * OL * AOH * HAPEF * CCE

17 Direct Costs
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18 Combustion Control Equipment and

Auxiliary Equipment (EC) $24,987 $30,409 $50,901 $

Based on vendor (Cooper Cameron/Ajax) net pricing estimate for

Premium catalyst with muffler. For 175 - 300 hp range, equipment

cost is average of costs for Ajax DPC-2202LE (296 hp) and Ajax DPC2801LE (192 hp). For 300 - 500 hp range, equipment cost is cost for

Ajax DPC-2802LE (384 hp). For 500 - 1,000 hp range, equipment cost

is cost for Ajax DPC-2804LE (800 hp). Refer to Attachment P. The

cost to retrofit an oxidation catalyst to a 2SLB engine is considerably

greater than 4SLB retrofit applications. This is primarily because

2SLB engines have backpressure limitations (high backpressure would

impact combustion cylinder scavenging and engine operation) and

catalysts must be constructed with large surface areas for low

backpressure. Other 2SLB cost impacts are muffler redesign to

incorporate catalyst elements and premium catalysts to operate at lower

2SLB engine exhaust gas temperatures. Basic catalysts can be used but

at significantly lower emission reductions.

19 Instrumentation (IC) $2,499 $3,041 $5,090 $ IC = 0.10 * EC. EPA Cost Control Manual, OAR-2005-0030-0005

20 Sales Taxes (STC) $750 $912 $1,527 $ STC = 0.03 * EC. EPA Cost Control Manual, OAR-2005-0030-0005

21 Freight (FC) $1,249 $1,520 $2,545 $ FC = 0.05 * EC. EPA Cost Control Manual, OAR-2005-0030-0005

22 Purchased Equipment Cost (PEC) $29,484 $35,883 $60,063 $ PEC = EC + IC + STC + FC

23 Direct Installation Costs

24 Foundations and Supports (FSC) $2,359 $2,871 $4,805 $

FSC = 0.08 * PEC. EPA Cost Control Manual, OAR-2005-0030-0005.

Includes supports and brackets.

25 Handling and Erection (HEC) $4,128 $5,024 $8,409 $

HEC = 0.14 * PEC. EPA Cost Control Manual, OAR-2005-0030-

0005. Install catalyst and silencer. Crane rental.

26 Electrical (EEC) $1,179 $1,435 $2,403 $

EEC = 0.04 * PEC. EPA Cost Control Manual, OAR-2005-0030-

0005. Install wiring, conduit, and thermocouple.

27 Piping (PIC) $590 $718 $1,201 $

PIC = 0.02 * PEC. EPA Cost Control Manual, OAR-2005-0030-0005.

Upgrade exhaust and vent.

28 Insulation for ductwork (IDC) $295 $359 $601 $ IDC = 0.01 * PEC. EPA Cost Control Manual, OAR-2005-0030-0005

29 Painting (PAC) $295 $359 $601 $ PAC = 0.01 * PEC. EPA Cost Control Manual, OAR-2005-0030-0005

30 Site Preparation (SPC) $0 $0 $0 $ SPC = 0.00 * PEC. EPA Cost Control Manual, OAR-2005-0030-0005

31 Buildings (BC) $0 $0 $0 $ BC = 0.00 * PEC. EPA Cost Control Manual, OAR-2005-0030-0005

32 Direct Installation Cost (DIC) $8,845 $10,765 $18,019 $ DIC = FSC + HEC + EEC + PIC + IDC + PAC +SPC + BC

33 Total Direct Capital Costs (TDC) $38,329 $46,647 $78,082 $ TDC = PEC + DIC

34 Indirect Installation Costs

35 Engineering (EIC) $2,948 $3,588 $6,006 $ EIC = 0.10 * PEC. EPA Cost Control Manual, OAR-2005-0030-0005
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36 Construction & field expenses

(CFEC) $1,474 $1,794 $3,003 $

CFEC = 0.05 * PEC. EPA Cost Control Manual, OAR-2005-0030-

0005.

37 Contractor fees (CFC) $2,948 $3,588 $6,006 $ CFC = 0.10 * PEC. EPA Cost Control Manual, OAR-2005-0030-0005

38 Start-up (SUC) $590 $718 $1,201 $ SUC = 0.02 * PEC. EPA Cost Control Manual, OAR-2005-0030-0005

39 Performance test (PTC) $295 $359 $601 $ PTC = 0.01 * PEC. EPA Cost Control Manual, OAR-2005-0030-0005

40 Total Indirect Installation Costs

(IIC) $8,256 $10,047 $16,818 $ IIC = EIC + CFEC + CFC + SUC + PTC

41 Contingencies

42 Contingencies (COC) $885 $1,076 $1,802 $ COC = 0.03 * PEC. EPA Cost Control Manual, OAR-2005-0030-0005

43 Total Indirect Capital Costs (TICC) $9,140 $11,124 $18,620 $ TICC = IIC + COC

44 Capital Cost Summary

45 Total Direct Capital Costs (TDC) $38,329 $46,647 $78,082 $

46 Total Indirect Capital Costs (TICC) $9,140 $11,124 $18,620 $

47 Total Capital Cost (TCC) $47,469 $57,771 $96,702 $ TCC = TDC + TICC

48 Direct Annual Costs

49 Operator Labor (OLC) $201 $201 $201 $

50 Supervisor Labor (SLC) $0 $0 $0 $ No costs.

51 Operating Materials (OMC) $0 $0 $0 $

52 Maintenance - Labor (MLC) $674 $674 $674 $

Annualized Labor Cost to replace catalyst, thermocouples, general

maintenance.

53 Maintenance - Materials (MMC) $7,958 $7,958 $7,958 $

Annualized Materials Cost annual catalyst cleaning, and replace

premium catalyst (36 months) and thermocouples (90 months). Shared

cost for extra catalyst rotated during catalyst cleaning. Premium

catalyst replacement is primary cost.

54 Annual Combustion Control (ACC) $0 $0 $0 $

55

Annual Testing or Downtime or

other allowance for Catalyst

washing (ATC)

$1,202 $1,202 $1,202 $

Retest required with each catalyst change (replacement or annual

cleaning). Cost includes outside contractor and operator labor.

56 Electricity (ELC) $0 $0 $0 $

57 Total Direct Annual Costs (TDAC) $10,035 $10,035 $10,035 $ TDAC = OLC + SLC + OMC + MLC + MMC + ACC + ATC + ELC

58 Indirect Annual Costs

59 Overhead (OHC) $5,300 $5,300 $5,300 $

OHC = 0.60 * (OLC + SLC + MLC + MMC). EPA Cost Control

Manual, OAR-2005-0030-0005.

60 Administrative Charges (ADC) $949 $1,155 $1,934 $

ADC = 0.02 * TCC. EPA Cost Control Manual, OAR-2005-0030-

0005.
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61 Property Taxes (PTC) $475 $578 $967 $

PTC = 0.01 * TCC. EPA Cost Control Manual, OAR-2005-0030-

0005.

62 Insurance (INC) $475 $578 $967 $

INC = 0.01 * TCC. EPA Cost Control Manual, OAR-2005-0030-

0005.

63 Capital Recovery Factor (CRF) 0.142378 0.142378 0.142378 CRF = i * (1+i)^n / [(1+i)^n - 1] (i expressed as a decimal - e.g., 10% =

0.1)

64 Capital Recovery (CRC) $6,759 $8,225 $13,768 $ CRC = CRF * TCC

65 Total Indirect Annual Costs (TIAC) $13,957 $15,836 $22,936 $ TIAC = OHC + ADC + FPC + PTC + INC + CRC

66 Cost Summary

67 Total Direct Annual Operating

Costs (TDAC) $10,035 $10,035 $10,035 $

68 Total Indirect Annual Operating

Costs (TIAC) $13,957 $15,836 $22,936 $

69 Total Annual Costs (TAC) $23,992 $25,871 $32,971 $ TAC = TDAC + TIAC

70

71 Site-Rated Power (SR) 237.5 400 800 hp

72 Cost Effectiveness Estimates

73 Size Range (SRg) 175-300 300-500 300-500 hp

74 Size Range Average (SRgA) 237.5 400.0 800.0 hp

75 HAP Emission Reductions (ǻHAP) 538.68 907.24 1814.49 lb HAP/ yr ǻHAP = SRgA * OL * AOH * HAPEF * CCE

76 Cost Effectiveness (CE) $89,079 $57,033 $36,342 $/ton HAP CE = TACR/(ǻHAP/2,000)
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Attachment P. Vendor Quote for Gas-Fired 2SLB Engine Oxidation Catalyst.
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Attachment Q. Text of email from Bruce Chrisman of Cameron to Melanie King of EPA

Discussing Control Efficiencies for 2SLB Oxidation Catalysts.

Melanie -

Your Aug. 21 e-mail includes several questions about the application of an oxidizing catalyst to a

two stroke engine. I'll provide answers for each of these questions, but to simplify the response, I

want to begin with the following comment about this subject that I sent to the EPA on June 1:

"Page 9705 - Section IV. Rationale for Proposed Rule (A): EPA states - "Oxidation catalyst

control has been widely used and has been available for decades for use with lean burn

stationary engines."

Comment: This statement is true only for 4SRB and 4SLB engines. The experience period for

2SLB engines with oxidizing catalysts is less than five years. Ajax has worked with oil

manufacturers to identify a suitable oil that does not contaminate the oxidation catalyst. This

catalyst friendly oil has been demonstrated as successful for the 2SLB engines during the last

five years of field validation testing.

Recommendation: It is suggested that the EPA recognize this as an emerging technology and

not make the requirements more stringent for 2SLB engines using this technology than the

requirements for 4SLB engines."

The successful application of an oxidizing converter to a two stroke engine is relatively new

technology. I have Patent # 7,464,543 for a "Two-Stroke Lean Burn Gas Engine with a

Silencer/Catalytic Converter."

The applications of this converter to Ajax two stroke engines was done in the Summer of 2004.

The first two of these field validation converters have now been operating successfully for about

five years. We now have many of these converters operating in several states, and we have

confirmations describing the field test results.

The comments which you've received about the challenges associated with applying an oxidizing

catalyst to two stroke engines were correct prior to the development of our converter. During the

design and Lab testing of our converter, we had to deal with each of those challenges, as

described below:

 1. Low exhaust temperatures - We located our catalyst box in the lower part of the muffler,

where the temperatures are typically in the 600 to 650 deg.F range. We have proven that our

catalyst will produce high emissions removal efficiencies with any temperatures above 450

deg.F. Below 450 deg. F, the emissions removal efficiencies begin to be reduced.

 2. Catalyst back pressure - We designed our muffler and catalyst so that the back pressure at

the entrance to the muffler is less than 5 " H2O, which has been our back pressure limitation for

at least the last 30 years.

3. Catalyst damage from "backfiring" - Two features are included in our converter design to

protect the catalyst from damage that could be incurred because of rapid pressure increases in the
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exhaust system: (1) The exhaust pipes are pointed directly at a pressure relief valve, and (2)

There is a large "accumulator volume" in the muffler before the exhaust reaches the catalyst.

 4. Oil contamination - Two features of our converter protect the catalyst form oil

contamination: (1) The muffler is designed to cause drop out of any liquid or solid particles

upstream from the catalyst, and (2) Our oil was reformulated ("catalyst friendly oil") to remove

additives which could degrade the catalyst efficiency.

 5. NOx increase across the catalyst - I have observed this phenomenon with catalysts on four

stroke engines, but we have never seen this increase with any of the Ajax converters.

All of our converter applications have demonstrated successful reduction of CO, VOC's, and

H2CO for long time periods in field applications. We feel very comfortable in guaranteeing the

following emissions reductions for at least one year before the catalyst needs to cleaned:

 CO - 83% removal

 VOC - 65% removal

 H2CO - 73% removal

Actual field results indicate that the catalysts can produce the above removal efficiencies for

much longer time periods. In fact some of these catalysts have operated for more than 24,000

hours without the need for cleaning. The 90% removal efficiency for CO that is proposed in the

new NESHAP regulations may be achievable, but it is a stretch for our current converters. That

was the reason for stating that the use of oxidizing catalysts should be considered as an emerging

technology for two stroke engines.

With the new NESHAP proposal, the CO emitted from the exhaust stack would have to be much

lower for a two stroke engine than it is for a four stroke engine, which is an extreme leap in

technology for the two stroke engines, when you consider that oxidation catalysts for four stroke

engines have been widely used for decades. As an illustration of what I mean by the above

comment about the proposed regulations requiring lower CO levels for two stroke engines,

consider the following typical data in which the CO levels are expressed in terms of gm/BHP-hr:

4SLB 2SLB

Typical pre-catalyst CO 2.3 1.2

Stack CO level with 90% removal 0.23 0.12

Hopefully the above information covered your questions about the application of oxidizing

catalyst to two stroke engines. Please let me know if you need any additional information.

Best regards,

Bruce Chrisman

Manager of Engineering

Cameron's Compression Systems

2101 S.E. 18th Street

Oklahoma City, OK 73129

Tel 405.619.5058