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OAR Box 1828 

Prepped by Ollie Stewart 

Document Number: 

122) ll-K- (B) -111 

Docket Number: 

A-83-27 

Printed 11/12/2008 11:12:52 AM Sheet 122 of 325 
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ENERGY AND ENVIRONMENTAL ANALYSIS, INC. 

II-K-(B)-111 

May 25, 1983

 V 

Mr. Robert Short 

Economic Analysis Branch 

U.S. Environmental Protection Agency 

Mail Drop-12 

Research Triangle Park, NC 27711 

Subject: EPA Contract No. 68-02-3564, Work Assignment #9 

Dear Robert: 

National environmental, energy and cost impacts of alternative industrial boiler NSPS S0„ emission regulations were forwarded to you on May 

12, 1983. The purpose of this letter is to explain how the ICF coal 

price projections were applied to the IFCAM coal types in this analysis. 

Projected F.O.B. mine coal prices for the 38 IFCAM coal types were not 

adjusted. They are identical to the F.O.B. mine coal price forecast 

used in March 1983 and earlier IFCAM runs. The projected IFCAM transportation costs were adjusted so that the projected IFCAM delivered coal 

price approximated (within 5 or 10 cents per million Btu) the appropriate ICF delivered coal price (same demand region, same coal type — 

bituminous or subbituminous, the IFCAM sulfur content was in the same 

sulfur class as the ICF coal type). 

ICF Included projected coal prices for all bituminous coal types in 

regions 1, 2, 3, 4, 5, 6, and 7. Therefore, all IFCAM bituminous coal 

types were permitted to be selected in these regions. 

ICF did not include bituminous coal prices ln region 8 for coal types 

with a sulfur content greater than 2.5 lb SO./MMBtu. Therefore, EEA did 

not permit IFCAM bituminous coal types with sulfur contents greater than 

2.5 lb S02/MMBtu in region 8. 

Another example: ICF did not include prices for low sulfur or lowmedium sulfur subbituminous coal types in region 9. ICF did include a 

price for a medium sulfur subbituminous coal type. EEA permitted a 

medium sulfur subbituminous coal type in IFCAM and blocked lower sulfur 

subbituminous coal types in region 9. 

Economics / Engineering 
P.3 

Mr. Robert Short 

May 25, 1983 

Page 2 

ICF has a bituminous low sulfur coal type (<1.08 lb S02/MMBtu). The 

annual average emission rate for this coal type is 0.95 lb SO./MMBtu. 

This coal type is a compliance coal type for a 1.2 lb S0„/MMBtu 30-day 

rolling-average emission rate (assumed to be equivalent to a 1.0 lb 

S0„/MMBtu annual average emission rate). There are no IFCAM bituminous 

coal types which will comply with this regulation. 

There are examples of more than one IFCAM coal type corresponding with 

a single ICF coal type. For example, consider the ICF bituminous medium 

sulfur (1.67-2.50 lb S02/MMBtu) coal type. There are eight IFCAM coal 

types in this category fsupply region/lb S02 per MMBtu): 

• Northern Appalachia/2.3, 2.29, 1.72, 1.71; 

• Central Appalachia/1.77, 1.73; 

• Southern Appalachia/2.27; and 

• Rockies/1.85. 

In cases like this, all eight IFCAM coal types were assigned approximately the same ICF coal price in any one demand region by adjusting the 

old MEFS industrial coal transportation costs. This procedure was 

followed regardless of whether or not the IFCAM coal type was a raw coal 

or a cleaned coal. 

To summarize, 1) there was one set of coal quality characteristics 

(sulfur, ash and Btu content) per coal price when the ICF coal types 

were run In IFCAM. There were a larger number of coal quality characteristics with nearly identical prices in the May 12, 1983 IFCAM runs 

(in the example summarized in the previous paragraph, eight IFCAM coal 

types had nearly identical coal prices). The IFCAM runs with ICF prices 

and IFCAM coal types included a wider variety of coal quality characteristics than IFCAM runs with ICF prices and coal types; 2) EEA did not 

attempt to adjust the coal prices to reflect any quality distinctions. 

For example, it is noted above that eight IFCAM coal types correspond to 

a single ICF coal type. EEA set the delivered prices of these eight 

coal types to be approximately equal regardless of their variability in 

sulfur, ash and Btu content; and 3) ICF has a low sulfur "compliance" 

bituminous coal type and IFCAM does not. 

I hope that this letter is more illuminating than confusing. 

Sincerely, 

Tlm Hogan (j 

TH:mk 

cc: Al Wehe