MEMORANDUM

Date: July 31 , 2014

Subject: Revised Cost Impacts of Pressure Relief Device Monitoring for the

Amino/Phenolic Resins Production Source Categor y

From: Lesley Stobert, EC/R Incorporated

To: Nick Parsons, EPA/ OAR/ OAQPS/SPPD

______________________________________________________________________________

The purpose of this memorandum is to present revised estimated cost impacts of the final requirements for pressure re lief device (PRD) monitoring for the Amino/Phenolic Resins (APR) Production source categor y. The addition of PRD monitoring to the NESHAP for th is source categor y is being finalized along with other changes evaluated under EPA’s Risk and Technology Review (RTR) program, which is addressing statutory requirements under section 112(d)(6) and 112(f)(2) of the Clean Air Act (CAA). The revised cost impacts for PRD monitoring include an additional facility that the EPA learned is subject to the APR MACT

standards during the comment period for the proposed amendments to the rule. Section 1 provides background information, followed by the revised estimated costs impacts of the PRD monitoring program for the source category in section 2.

1.0 BACKGROUND

T he EPA is finalizing require ments for monitoring PRDs in organic HAP service that release to the atmosphere. This PRD monitoring system must be able to identify pressure releases, record the time and duration of each pressure release and immediately notify operators that a pressure release is occurr ing . Owners or operators would be required to keep records and report any pressure release with an estimate of the amount of organic HAP released to the atmosphere with the next periodic report. These provisions are being finalized to address concerns that PRD releases may emit large quantities of HAP, may not be identified and controlled in a timely manner and may be due to repeat problems that have not been corrected.

The EPA proposed th ese monitoring requiremen t and estimated the cost impacts associated with

the se requirement s on January 9, 2014 (79 FR 1676) for the APR Production source category, as
well as for the Polycarbonate (PC) Production and the Acrylic and Modacrylic Fibers (AMF) Production source categ ories . During the public comment period for the proposed rule

amendment s, the EPA received a comment from the Occidental Chemical Corporation, which noted that it operates a facility in Petrolia, Pennsylvania that is subject the APR MACT standards, but whi ch was not considered in the analyses conducted prior to the proposal of the

rule amendments

. We are revising the PRD cost impact estimates for the APR Production source category to include this additional facility. No other comments affecting the cost impacts analyses were received for the APR source category or for the AMF or PC Production source categories , and no other revisions to these analyses are being made

.2

2.0 COST IMPACTS

Owners or operators could use a range of methods to identify pressure releases, record the time and duration of each pressure release and immediately notify operators that a pressure release is occurring, including parameter monitoring systems that facilities may already have in place

. However, i n order to estimate the costs associated with requiring monitoring of PRDs for APR production facilities, it was conservatively assumed that operators would install wireless electronic indicators on each PRD in organic HAP service that vents to the atmosphere to identify and record the time and duration of each pressure release and notify operators of the

release . To estimate the cost of these electronic indicators, we used information from analyses performed by the South Coast Air Quality Management District (SCAQMD) of Calif ornia,

which were conducted in support of a rule that requires continuous monitoring of a percentage of PRDs at refineries by installing a monitoring device capable of recording the duration of each release and quantifying emissions. Wireless technology al lows continuous monitoring of PRDs and makes it easier for operators to identify releases and leaks. 1 There are several monitoring

devices available , including acoustic sensors and pressure/differential pressure sensors. These

sensor units communicate with a base radio that interfaces with the existing control system. The costs for PRD wireless monitoring , based on information from the SCAQMD analyses, are summarized in Table 1.

The monitoring device cost provided by the SCAQMD was based on vendor costs a nd ranged from $5,000 to $10,000, with an average of $7,500, and includes device parts, installation, and maintenance, as well as a data retrieval system. According to SCAQMD, annual operating costs are minimal because they typically only include periodic replacement of inexpensive batteries. It was assumed that, for this analysis, these costs were presented in 2007

dollars and were escalated to 2012 dollars. As a result, the total capital investment was determined to be $8,345 per PRD. Acc ording to the SCAQMD analyses , the cost of electronic monitoring systems is not linear, and facilities requiring a larger number of monitors are expected to benefit from economies of scale. Therefore, the sixth

- tenths rule was applied to

calculate initial costs. 2

To estimate PRD monitoring requirement costs, we made assumptions regarding PRD equipment component counts based on available information. For the APR Production source category, PRD equipment component counts for individual facilities that were reported in a memorandum developed for the original APR Production MACT standard s were used. I t was
assumed that the a verage of the reported number of PRDs, which is 5 PRDs, would be most representative of a typical APR production facility . As such, using this average number of PRDs and scaled costs per PRD, the total capital investment is estimated to be $21,919 and annual

costs are estimated to be $3,121 per APR production facility. There are 1 9 facilities in the APR source category each estimated to have five PRDs. Therefore, the total capital cost associated

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

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

Docket No. EPA

- HQ

- OAR

- 2010

- 0869

- 0024.

2 Sixth

- te nths rule is used to adjust for economies of scale. Cost to facility = cost of one PRD * (number of PRDs at facility)^0.6.3

with the requirement to monitor PRDs is $ 416 ,000 with an annualized cost of $5 9 ,000 for the APR source category.

Table 1. Revised Estimate of Total Capital Investment and Annualized Cost of PRD

Monitoring for the APR Source Categor y

Cost Parameter APR Source Category

Number of PRDs at Model Plant a 5

Unit Device Installation Cost $7,500 (2007 Dollars) $8,345 (2012 Dollars) b
Plant Site Total Capital Investment c $21,919 Capital Recovery Factor d 0.142

Plant Site Total Annualized Cost $3,121 Number of Plants in Source Category 19
Source Category Total Capital Cost $416,000
Source Category Total Annualized

Cost $59,000

a Based on average number of PRDs at APR facilities reported in a memorandum developed for the original MACT standards: Memorandum from Meardon, K., Pacific Environmental Services, Inc ., to Schaefer, J., EPA/OCG. Eq u i pment Leak Analysis for Amino and Phenolic Resins NESHAP. May 4,

1998.

b Chemical Engineering Index fo r 2007 is 525.4 and 584.6 for 2012.

c Calculated using sixth

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

d Capital recovery factor calculated based on 7 percent interest and 10 year equipment life.