OAR Box 1875 

Prepped by Ollie Stewart 

Document Number: 

76) ll-F-23 

Docket Number: 

A-90-19 

Printed 12/1/2008 11:12:49 AM 

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Sheet 76 of 86 

p.1 
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A-90-19 

ll-F-23 

TO: Frank Hodsoll 

FROM: Lydia Wegman 

DATE: October 20, 1992 

Attached please find our revised discussion of the rationale 

for the control levels for process vents. The revised language 

includes changes previously agreed to in conversations with you 

and your staff. The rationale also includes language previously 

sent to you by Mike Shapiro which addresses cost benefit 

analysis. You should be aware that EPA's Office of General 

Counsel has expressed serious concern that interpreting section 

112(d)(2) to pennit cost-benefit analysis to be used as a basis 

for setting standards could lead to a remand of the standards. 

The principal basis for this concern is the attached language 

from page 169 of the Senate Report discussing the "cost" language 

that was ultimately enacted in the 1990 amendments. In addition, 

the House bill would have specifically allowed EPA to consider 

"air quality related health and environmental impacts." This 

language was deleted by the conferees in favor of the Senate 

version, which allows consideration of "cost of achieving such 

emission reduction, and any non-air quality health and 

environmental impacts." The inference that EPA may not consider 

air quality benefits is a strong one. 

Please call me at (919) 541-5504 if you have any questions 

or want to discuss this language. 

cc: Tim Hunt 

Troy Hillier 

1992 
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Draft Rationale for Decision on Existing Source Process Vents 

In selection of the proposed standard for existing sources, 

EPA believes that a level of emission reduction from process 

vents more stringent than the level associated with the floor is 

achievable. The EPA is proposing to require the control level in 

Option 2, which has an incremental cost-effectiveness of 

$1,800/Mg and would require control of vents that have costeffectiveness values of up to $2,000/Mg. Although EPA is 

proposing this specific control level, EPA is requesting comment 

on options 1 through 4. These options span the range of control 

for vents with TRE cost-effectiveness values of up to $1,500/Mg 

in Option 1 (the floor component) to those with TRE costeffectiveness values of up to $5,000/Mg in Option 4. The EPA 

anticipates that in consideration of the final decision EPA will 

give more weight to options 1 through 3. The option 2 control 

level was selected in the proposed rule based on considerations 

specific to the SOCMI category and would not necessarily be 

appropriate for other source categories. Therefore, it should 

not be viewed as a precedent for decisions on other standards. 

The EPA recognizes that there are differing views regarding the 

appropriate criteria for determining the control level. 

Consequently, EPA is requesting comments on the appropriateness 

of particular control choices within the range of options 

described above and asks that commenters provide supporting 

rationale for their preferences. 
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The EPA selected the proposed control level considering the 

emission reduction achieved by the alternative control options 

and considering the criteria enumerated in Section 112(d) of the 

Act: the cost of achieving such emission reduction; any non-air 

quality health and environmental impacts; and energy 

requirements. As a matter of general policy in decisions to 

select control levels above the floor, EPA believes that the 

cost-effectiveness of controls and a comparison of benefits, both 

quantifiable and nonquantifiable, and costs is a primary 

consideration. In any such comparison of costs and benefits, the 

uncertainties associated with the benefit and cost estimates 

should be characterized. 

In this proposed rulemaking, however, EPA's ability to do 

such a comparison was severely limited due to the limited data on 

the characteristics of the emission sources and the complexity of 

the SOCMI category. A preliminary assessment of the benefits of 

the potential emission reductions was prepared using the 

available data. However, because of the data limitations cited 

above, EPA does not believe that the analysis provides an 

adequate basis for decisionmaking. This analysis has been placed 

in Docket A-90-19. The EPA invites comment on this analysis, its 

usefulness and defensibility, and requests the submittal of data 

or could on methods that could improve the analysis. The EPA 

will review any such comments and data and will, to the extent 

practicable, evaluate their implications for the risk assessment 

prior to the final rule. Despite the difficulty of estimating 
P.5 

quantitative benefits for this rulemaking, due to the complexity 

of the source category, data limitations, and timing of the rule, 

EPA remains committed to evaluating benefits as well as costs 

associated with decisions to go above the floor in future MACT 

standards. The EPA also intends to review cost-effectiveness of 

decisions as part of these future rulemakings. 

Due to this lack of a benefits assessment, EPA used 

benchmarks from previous air toxics regulatory decisions and past 

air toxics benefits studies as a surrogate measure for benefits 

considerations in the decision on the proposed control level. 

The information considered consisted of the Benzene NESHAP 

decisions ( FR _) and the Vinyl Chloride NESHAP ( 

FR ). For example, one decision that reflected consideration 

of balancing emission reductions against costs was the benzene 

storage standard ( FR ). In that decision, the costeffectiveness of the selected option was estimated to range from 

$128/Mg to $909/Mg in 1982$ ( $160/Mg to 1,100/Mg in 1989$ ). 

Although the cost-effectiveness measures from past decisions 

were considered in selection of the proposed control level, EPA 

also considered the differences between this proposed rule and 

the earlier decisions on benzene and vinyl chloride. This rule 

applies to emissions of over 100 HAP's while the earlier rules 

only addressed cancer health effects of a single HAP (i.e., 

benzene or vinyl chloride). Because many of the 100 HAP's 

emitted from HON facilities have noncancer health effects, there 

are questions about the relevance of the past decisions to this 
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proposal. 

Additional factors were considered in the selection of the 

proposed control level. These factors include the magnitude of 

the emission reduction, the cost of this reduction, consistency 

with past decisions, location of facilities near population 

centers, and other environmental benefits from the control. The 

consideration of these factors is summarized below. 

Existing source process vents are the single largest 

contributor of HAP emissions from the SOCMI source category. The 

additional emission reduction beyond that achieved at the floor 

that would result from the proposed control level is about 

1,600 Mg/yr. This additional control has a cost effectiveness of 

$1,800/Mg of HAP and with a TRE equivalent to a costeffectiveness of $2,000/Mg. The cost of this additional control 

(along with the cost of the other proposed control requirements) 

is estimated to result in less than a 3% price increase for SOCMI 

chemicals. The EPA requests comments on whether the costs of the 

selected control requirements are reasonable and the basis for 

the commenter's assessment of the costs. 

The EPA is requesting comment on a range of control options 

because of the uncertainties in the measure of the benefits of 

control and the uncertainties in the cost that would actually be 

experienced. Because of the conservative assumptions used to 

develop the control costs and the TRE format of the vent 

provisions, it is unlikely that any source would actually incur 

cost at the TRE level (the criterion for defining vents that must 
P.7 

apply control) that is equivalent to $2,000/Mg . The cost 

analysis used in developing the supporting information for this 

standard was based on use of a dedicated control device for each 

vent. Actual costs would be lower where one device could be used 

to control emissions from several vents. The cost of control 

would also be lower in those cases where it is feasible to use a 

boiler or process heater. Finally, the provisions are structured 

using a TRE index approach. Since the standard is in a TRE 

format, many facilities may be able to use product recovery to 

change vent stream characteristics so that they are below the 

relevant applicability criteria. This flexibility is expected to 

allow some sources through changes in equipment or operations to 

lower their cost of compliance. As a result, the impacts 

analysis may overstate the costs of complying with the proposed 

control requirement. The EPA solicits comments concerning 

whether the control costs for process vents are overestimated and 

the extent of the overestimate. 
suant to this au-

-ductioh in emis-

>urcea in the catg., scrubber, adnay be the techluction for severIn cases where a. 

ire, for instance) 

ays depending on 

rator shall select 

the greatest prohealth protection 

ronmental values 

configuration)- In 

fferent pollutanta -

>ly the same prin11 be th-* objective 

are-emitted from 

y are particularly 

e than one control 

^equate control of 

.tion units ia best 

;tion practices and k$ 

• case, a particular .^ 

i non-point sources \S 

be determined for xJ 

ity as a whole. ' :v 

h are to be conaid-^ 

baection go beyond u 

abatement system.-VJ 

•logies or strategies {a 

ed through process/1 

azardous. Pollution; 

ver possible. • •r'M 

ng on the' enclosuren* 

nent system is also?| 

•e or treat the emia-^f 

.te combustion as at 

rate these concepts^ 

endently by another 1 

i combustion are ex-| 

ies for ash handling] 

. and secondary conv_ 

work practice stand-j 

. catalytic reductions 

ystems. All four-ap^l 

the degree of control]' 

;gory or subcategory.* 

ieving the maximum, 

health and environaccount when deterjf 

.vable for the sources! 

itions are reflected ia | 

169 

the selection of emissions limitations which have been achieved in 

practice (rather than those which are merely theoretical) by 

sources of a similar type or character. An emissions limitation"! 

achieved in practice is one based on control technology that works 

reasonably well (doesn't require frequent and extensive modification or repair) under .realistic operating conditions. This is not a 

cost-effectiveness or cost-benefit test. Specifically, the policy enunciated by the Office or Management and Budget in a letter to the 

then-Ass_6tant Administrator for Policy at the Environmental Pro-1 

, tection Agency and dated December 9, 1988 calling for a cost-effec-

: tiveness test in the NESHAPs for inorganic arsenic and radionu-

; - elides is rejected. The number of cancers prevented per dollar invested is not any part of the definition of maximum achievable con- \ 

\ trol technology as used here (or elsewhere in the Act). J 

The legislation allows emissions limitations applicable to,existing 

- sources to be less stringent than those which apply to "new sources 

of the same type. In testimony before the Committee, some have 

argued that the legislation provides no "floor" for standards and 

gives the Administrator authority to undermine the essential 

meaning of a standard which requires the "maximum" reduction 

'••: in emissions which is achievable. 

'•'.. The considerations which the Administrator is to balance when 

f setting standards under this or other sections of the Act are often a 

r tangled web. Here, there are three competing principles which 

must be reconciled: 

(1) the Administrator is to mandate the maximum reductions 

,,;.' ^achievable; 

(2) the standard is to take cost into account; and 

.".'... (3) the Administrator can establish categories and subcateK^Ok gories of sources. 

hXk Requiring an arbitrary "floor" or targat for an emissions limitaI;; tion which is designed to override the principle that costs are to be 

% ^considered, simply invites the. Administrator, to subdivide the uniR

-

: .verae of sources into groups so small that each unit is required to 

t.'' achieve no more than its own reflection to satisfy an MACT stand-

's: tard.'1 .... . 

j'V This bill describes the standard-setting process from a point of 

^'departure. First, standards for all sources, both new and existing, 

M-are to achieve the '.'maximum reduction.achievable". That may inS: elude emissions limitations lower than are being achieved by any 

".'other comparable source in practice including a prohibition on 

S^missions. . . - . ,. .,

 : .'• • . . 

gMtir.Second, and with respect to existing sources,.the emissions UmiS&tation for a category or subcategory is to be as stringent as that 

Inapplicable to new sources unless the Administrator determines 

^.that compliance with such a limitation is infeasible for some 

^sources in the category. Infeasible means that the sources would 

^.discontinue operation or be severly damaged as economic entities, 

|>:if.the limitation was imposed. To deny that this should be a consid-

|r*fation or that-the variation from the limitation (which can be 

pachieved by new sources) should be capped or constrained arbitrarfr"iily by a floor or target, is to deny the role for consideration of cost 

Ijiwhich is clearly stated in the legislation. 

f 

m-