# OAR Box 1875

Prepped byOllie Stewart



### Document

Number: 

# 76 ) ll-F-23 Docket Number: 

# A-90-1 9

Printed 12/1/200811:12:49AM •

Sheet 76 of 86 p. 1

### P. 2

* , 

## A-90-1 9 ll-F-2 3 TO : Fran

k Hodsol l FROM : Lydi a Wegma n DATE : Octobe r 20 , 199 2 Attache d pleas e fin d our revise d discussio n o f th e rational e fo r the contro l level s fo r proces s vents . Th e revise d languag e include s change s previousl yagreed t o i n conversation s wit hyo u an d your staff . Th e rational e als o include s languag e previousl y sen t t o yo u b

yMik e Shapir o whic haddresse s cos t benefi t analysis . Yo u shoul d be awar e tha t EPA' s Offic e o f Genera l Counse l ha s expresse d seriou s concern tha t interpreting sectio n 112(d)(2 ) t o penni t cost-benefi t analysi s t o b e use d a s a basi s fo r setting standard s coul d lea d t o a remand o f th e standards . Th e principa l basi s fo r thi s concern i s th e attache d languag e fro mpag e 16 9 o f th e Senat e Repor t discussing th e "cost " languag e tha t wa s ultimatel yenacte d in the 199 0 amendments . I n addition , the Hous e bil l woul d hav e specificall yallowe d EP At o conside r "ai r qualit yrelate d healt han d environmenta l impacts. " Thi s languag e wa s delete d b yth e conferee s in favo r o f th e Senat e version , whic hallow s consideratio n o f "cos t o f achieving such emissio n reduction , an d an ynon-ai r qualit yhealt han d environmenta l impacts. " Th e inferenc e tha t EP Ama yno t conside r ai r qualit ybenefit s i s a stron g one . Pleas e cal l m e a t (919 ) 541-550 4 i f yo u hav e an yquestion s o r wan t t o discus s thi s language . cc : Ti mHun t TroyHillie r



### 199 2P. 3

Draf t Rational e fo

r Decisio

no nExistin

g Sourc e Proces s Vent s

I n selectio n o f th e propose d standard fo r existing sources , EP Abelieve s tha t a leve l o f emissio n reductio n from proces s vent s mor e stringen t tha n th e leve l associate d wit hth e floo r i s achievable . Th e EPAi s proposing t o requir e th e contro l leve l i n Optio n 2 , whic hha s an incrementa l cost-effectivenes s o f $1,800/M

g an d woul d requir e contro l o f vent s tha t hav e cost effectivenes s value s o f u p t o $2,000/Mg . AlthoughEPAi s proposing thi s specifi c contro l level , EP Ai s requesting commen t o n option s 1 through4 . Thes e option s span th e rang e o f contro l fo r vent s wit hTR E cost-effectivenes s value s o f up t o $1,500/M g i n Optio n 1 (th

e floo r component ) t o thos e wit hTR E cost effectivenes s value s o f up t o $5,000/M g i n Optio n 4 . Th e EP A anticipate s tha t i n consideratio n o f th e fina l decisio n EP Awil l giv e mor e weigh t t o option s 1 through3 . Th e optio n 2 contro l leve l wa s selecte d i n th e propose d rul e base d o n consideration s specifi c t o th e SOCM I categoryan d woul d no t necessaril ybe appropriat e fo r othe r sourc e categories . Therefore , i t shoul d no t b e viewe d a s a preceden t fo r decision s o n othe r standards . Th e EP Arecognize s tha t ther e ar e differing view s regarding th e appropriat e criteri a fo r determining th e contro l level . Consequently , EP

Ai s requesting comment s o n th e appropriatenes s o f particula r contro l choice s withi n th e rang e o f option s describe d above an

d ask s tha t commenter s provid e supporting rational e fo r thei r preferences .P. 4

Th e EP Aselecte d th e propose d contro l leve l considering the emissio n reductio n achieve d b yth e alternativ e contro l option s an d considering th e criteri a enumerate d i n Sectio n 112(d ) o f th e Act : th e cos t o f achieving suc hemissio n reduction ; an ynon-ai r qualit yhealt han

d environmenta l impacts ; an d energ y requirements . A s a matte r o f genera l policyi n decision s t o selec t contro l level s abov e th e floor , EP Abelieve s tha t th e cost-effectivenes s o f control s an d a compariso n o f benefits , bot h quantifiabl e an

d nonquantifiable , an d cost s i s a primary consideration . I n an ysuc hcompariso n o f cost s an d benefits , th e uncertaintie s associate d wit hth e benefi t an d cos t estimate s shoul d b e characterized . I n thi s propose d rulemaking , however , EPA' s abilit yt o d o suc ha compariso n wa s severel ylimite d du e t o th e limite d dat a o n th e characteristic s o f th e emissio n source s an d th e complexit yo f th e SOCM I category . Apreliminaryassessmen t o f th e benefit s o f th e potentia l emissio n reduction s wa s prepare d usin g th e availabl e data . However , becaus e o f th e dat a limitation s cite d above , EP

Adoe s no t believ e tha t th e analysi s provide s an adequat e basi s fo r decisionmaking . Thi s analysi s ha s bee n place d i n Docke t A-90-19 . Th e EP Ainvite s commen t o n thi s analysis , it s usefulnes s an

d defensibility , an d request s th e submitta l o f dat a o r coul d o n method s tha t coul d improv e the analysis . Th e EPA wil l revie wan

ysuchcomment s an

d dat a an

d will , t o th e exten t practicable , evaluat e thei r implication s fo r th e ris k assessmen t prio r t o th e fina l rule . Despit e th e difficult yo f estimatingP. 5

quantitativ e benefit s fo r thi s rulemaking , du e t o th e complexit y o f th e sourc e category , dat a limitations , an d timing o f th e rule , EP Aremain s committe d t o evaluating benefit s a s wel l a s cost s associate d wit hdecision s t o g o abov e th e floo r i n futur e MAC T standards . Th e EP

Aals o intend s t o revie wcost-effectivenes s o f decision s a s par t o f thes e futur e rulemakings . Du e t o thi s lack o f a benefit s assessment , EP Ause d benchmark s fro

m previou s ai r toxic s regulatorydecision s an d pas t ai r toxic s benefit s studie s a s a surrogat e measur e fo r benefit s consideration s i n th e decisio n o n th e propose d contro l level . Th e informatio n considere d consiste d o f th e Benzen e NESHAP decision s ( F

R _ ) an

d th e Viny l Chlorid e NESHAP ( FR ) . Fo r example , on e decisio n tha t reflecte d consideratio n o f balancing emissio n reduction s agains t cost s wa s th e benzen e storag e standar d ( F R ) . I n tha t decision , th e cost effectivenes s o f th e selecte d optio n wa s estimate d t o rang e fro m $128/Mg t o $909/Mg i n 1982 $ ( $160/Mg t o 1,100/M g i n 1989 $ ) . Althoughth e cost-effectivenes s measure s fro mpas t decision s wer e considere d i n selectio n o f th e propose d contro l level , EP A als o considere d th e difference s betwee n thi s propose d rul e an d th e earlie r decision s on benzen e an d viny l chloride . Thi s rul e applie s t o emission s o f ove r 10 0 HAP' s whil e th e earlie r rule s onl yaddresse d cance r healt heffect s o f a singl e HAP (i.e. , benzen e o r viny l chloride) . Becaus e man yo f th e 10 0 HAP' s emitte d fro

mHO Nfacilitie s hav e noncance r healt heffects , ther e ar e question s abou t th e relevanc e o f th e pas t decision s t o thi sP. 6

proposal . Additiona l factor s wer e considere d i n th e selectio n o f th e propose d contro l level . Thes e factor s includ e th e magnitud e o f th e emissio n reduction , th e cos t o f thi s reduction , consistency wit hpas t decisions , locatio n o f facilitie s nea r populatio n centers , an

d othe r environmenta l benefit s fromth e control . Th e consideratio n o f thes e factor s i s summarize d below . Existing sourc e proces s vent s ar e th e singl e larges t contributo r o f HA P emission s fro mth e SOCM I sourc e category . Th e additiona l emissio n reductio n beyon d tha t achieve d a t th e floo r tha t woul d resul t fro mth e propose d contro l leve l i s abou t 1,60 0 Mg/yr . Thi s additiona l contro l ha s a cos t effectivenes s o f $1,800/M

g o f HA P an

d wit ha TR E equivalen t t o a cost effectivenes s o f $2,000/Mg . Th e cos t o f thi s additiona l contro l (alon g wit hth e cos t o f th e othe r propose d contro l requirements ) i s estimate d t o resul t i n les s tha n a 3 % pric e increas e fo r SOCM I chemicals . Th e EPArequest s comment s o n whethe r th e cost s o f th e selecte d contro l requirement s ar e reasonabl e an d th e basi s fo r th e commenter' s assessmen t o f th e costs . Th e EP Ai s requesting commen t o n a rang e o f contro l option s becaus e o f th e uncertaintie s i n th e measur e o f th e benefit s o f contro l an

d th e uncertaintie s i n th e cos t tha t woul d actuall yb e experienced . Becaus e o f th e conservativ e assumption s use d t o develop th e contro l cost s an d th e TR E forma t o f th e ven t provisions , i t i s unlikel ytha t an ysourc e woul d actuall yincur cos t a t th e TR E leve l (th e criterio n fo r defining vent s tha t mus tP. 7

appl ycontrol ) tha t i s equivalen t t o $2,000/Mg . Th e cos t analysi s use d i n developing th e supporting informatio n fo r thi s standar d wa s base d o n us e o f a dedicate d contro l devic e fo r eac h vent . Actua l cost s woul d b e lowe r wher e on e devic e coul d b e use d t o contro l emission s fro msevera l vents . Th e cos t o f contro l woul d als o b e lowe r i n thos e case s wher e i t i s feasibl e t o us e a boile r o r proces s heater . Finally , th e provision s ar e structure d using a TR E inde xapproach . Sinc e th e standar d i s i n a TR E format , man

yfacilitie s mayb e abl e t o us e produc t recoveryt o chang e ven t strea

m characteristic s s o tha t the yar e belo wth e relevan t applicabilit ycriteria . Thi s flexibilit yi s expecte d t o allo wsome source s throughchange s i n equipmen t o r operation s t o lowe r thei r cos t o f compliance . A s a result , th e impact s analysi s mayoverstat e th e cost s o f complying wit hth e propose d contro l requirement . Th e EP Asolicit s comment s concerning whethe r th e contro l cost s fo r proces s vent s ar e overestimate d an d th e exten t o f th e overestimate .suan t

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a e dthroug hprocess/ 1 azardous . Pollution ; ve r possible . • •r'

M n g o nthe ' enclosure n * nen t syste mi s also? | • e o r trea t th e emia-^f .t e combustio na s a t rat e thes e concepts ^ endentl y b y anothe r

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. catalyti c reduction s ystems . Al l four-ap^ l th e degre e of

control] ' ;gor y o r subcategory. * ievin g th e maximum , healt han denviron

accoun t whe ndeterj f .vabl e for th e sources ! ition s ar e reflecte dia | 169 th e selectio no

f emission s limitation s whic hhav ebee nachieve di n practic e (rathe r

tha nthos ewhic har e merel y theoretical ) b y source s o

f asimila r

typ e o r character . A nemission s limitation" ! achieve di npractic e i s on ebase do ncontro l technolog y tha t work s reasonabl y well (doesn' t requir efrequen t

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cost-benefi t

test . Specifically , th epolic y enunci

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Managemen t

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i nalette r

t o th e then-Ass_6tant

Administrato r

for Polic y a t

th e Environmenta l Pro- 1
, tectio nAgenc y an ddate dDecembe r 9 , 198 8 callin g for

acost-effec

- : tivenes s tes t

i nth e NESHAP s fo r

inorgani c arseni c an dradionu

- ; - elide s i s rejected . Th e numbe r o f cancer s prevente dpe r dolla r in

veste di s no t

an y par t o f th e definitio no

f maximu machievabl econ - \ \ tro l technolog y a s use dher e(o r elsewher e i nth e Act) . J Th e legislatio nallow s emission s limitation s applicabl e to,existing

- source s t o b e les s stringen t tha nthos e whic happl y t o "ne w source s o f th e sam e type . I ntestimon y befor eth e Committee , som ehav e argue dtha t

th elegislatio nprovide s n o "floor " for standard s an d give s th e Administrato r authorit y t o undermin e th eessentia l meanin g o

f astandar dwhic hrequire s th e "maximum " reductio n '••: inemission s whic hi s achievable . '•'. . Th e consideration s whic hth eAdministrato r i s t o balanc ewhe n f settin g standard s unde r thi s o r othe r section s o

f th e Ac t ar eofte na r tangle dweb . Here , ther e ar e thre e competin g principle s whic h mus t b e reconciled: (1 ) th e Administrato r

i s t o mandat e th emaximu mreduction s ,,;. ' ^achievable ; (2 ) th e standar di s t o tak ecos t int o account ; an d .".'.. . (3 ) th e Administrato r ca nestablis hcategorie s an dsubcate

K^Ok gorie s o f sources . hXk Requirin g a narbitrar y "floor " o r targa t for a nemission s limita

I; ; tionwhic hi s designe dt o overrid e th e principl etha t cost s ar et o b e %^considered , simpl y invite s the . Administrator , t o subdivid eth euni

R - : .vera e o f source s int o group s s o smal l tha t eac huni t

i s require dt o t.' ' achieve n o mor e tha nit s ow nreflectio nt o satisf y a nMAC Tstand

- 's : tard.' 1

.... . j' V Thi s bil l describe s th estandard-settin g proces s fro mapoin t o f ^'departure . First , standard s for al l sources , bot hne w an dexisting , M-ar e to achiev eth e '.'maximu mreduction.achievable" . Tha t ma y in

S : elud e emission s limitation s lowe r tha nar e bein g achieve db y an y ".'othe r comparabl e sourc e i npractic eincludin g aprohibitio no n S^missions . . . - . , . . , : .' • • . . gMtir.Second

, an dwit hrespec t

t o existin g sources,.th e emission s Umi

S&tationfo

r acategor y o r

subcategor y i s t o b ea s stringen t a s tha t Inapplicabl e t o ne w source s unles s th e Administrato r determine s ^.tha t complianc e wit hsuc halimitatio ni s infeasibl efor som e ^source s i nth e category . Infeasibl emean s tha t th esource s woul d ^.discontinu e operatio no r b e severl y damage da s economi c entities , |>:if.th e limitatio nwa s imposed . T o den y tha t thi s shoul db eaconsid

- |r*fatio nor

that-th e variatio nfro mth elimitatio n(whichca nb e pachieve dby ne w sources ) shoul db e cappe do r constraine darbitrar

fr"iil y b y afloo r o r target , i s t o den y th erol e fo r consideratio no

f cos t Ijiwhichi s clearl y state di nth elegislation . 

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