1

MEMORANDUM

DATE: August 11 , 2014

SUBJECT: Revised Cost Impacts of the Amended NESHAP for the Amino/Phenolic Resins

Production, Acrylic and Modacrylic Fibers Production, and Polycarbonate Production Source Categories

FROM: Lesley Stobert, EC/R Incorporated

TO: Nick Parsons, EPA

The purpose of this memorandum is to present the revised estimated cost impacts of the final amendments to the Amino and Phenolic Resins Production (APR), Acrylic and Modacrylic Fibers Production (AMF), and Polycarbon ate Production (PC) National Emissions Standards for Hazardous Air Pollutants (NESHAP) under the EPA’s Risk and Technology Review (RTR) program. This program addresses the requirements of sections 112(d)(6) and 112(f)(2) of the Clean Air Act (CAA). The sta ndards for the APR source category are codified at 40 CFR 63, subpart OOO, and the standards for the AMF and PC source categories are codified at subpart YY. The revised cost impacts include an additional facility that the EPA learned is subject to the APR NESHAP during the comment period for the proposed amendments to the
rule ; removal of costs associated with the proposed affirmative defense provisions for all three source categories, which are not being finalized ; and revised costs for continuous process vents in the APR
source category

.

1. BACKGROUND

The EPA proposed amendments to the APR, AMF

, and PC NESHAP to address the requirements of CAA sections 112(d)(6) and 112(f)(2) on January 9, 2014 (79 FR 1676) . The EPA is finalizing most of the
amendments as proposed, with a few exceptions. The affirmative defense provisions, which were proposed for all three source categories, are not being finalized due to a recent court decision that vacated
the same affirmative defense provisions in another NESHAP ( NRDC v. EPA , No. 10

- 1371 (D.C. Cir. April 18, 2014) 2014 U.S. App. LEXIS 7281). During the public comment period for the January 2014 proposal, the EPA received information that additional existing facilities have continuous process vents in
the APR source cat egory. This information, combined with additional data regarding the continuous processes and process vents at these facilities cause d the EPA to reanalyze the MACT floor and beyond

the

- floor levels of control and to revise the requirements and estimated c ost impacts associated with those requirements. Also, while no additional changes to the proposed requirements for the three source categories are being made that change the estimated cost impacts of the requirements, an additional facility is being includ ed in the APR source category, which affects the estimated cost impacts for that source category. This additional facility is added to the total number of facilities in the source category
based on a comment the EPA received from the Occidental Chemical Co rporation, which noted that it operates a facility in Petrolia, Pennsylvania that is subject the APR MACT standards, but which was not considered in the analyses conducted prior to the proposal of the rule amendments

.2

Considering these changes since propos al, the final rule amendments for the APR, AMF, and PC source categories are shown in Table 1 and described in the following paragraphs

.

Table 1. Final Amendments for the APR, AMF, and PC Source Categories

Source Category(s) Requirements

Apply to New or Existing Sources Process or Equipment Requirement

APR, AMF, PC Existing and new Pressure relief devices (PRDs) Add itional monitoring

AMF and PC Existing and new Equipment leaks Eliminat ion of a compliance option

AMF Existing Spinning lines that use a spin dope produced from a solution polymerization

process Add itional emission s control

APR Existing Storage vessels Add itional emission s control

APR Existing Continuous process vents Add itional emission s control

APR New Storage vessels Revis ion to emission s control requirements

The EPA is not finalizing any new requirements or changes to 40 CFR 63, subparts YY or OOO as a result of the residual risk review for the APR, AMF

, and PC source categories. As a result of the technology review, the EPA is revisi ng the requirements for all three source categories. The AMF and PC MACT standards currently require compliance with either 40 CFR 63, subpart TT or 40 CFR 63, subpart

UU to control emissions from equipment leaks. However, subpart UU requires the use of a lower leak definition for valves, pumps and connectors as compared to subpart TT. The EPA is eliminat ing the option of complying with 40 CFR 63, subpart TT for the control of emissions from equipment leaks and require compliance only with 40 CFR 63, subpart UU for these source categories, with the exception of connectors in gas and vapor service and in light liquid service. The EPA is retain ing the option for

sources to comply with subpart TT or subpart UU for these components. Also as part of the technology review, the EPA is revis ing the APR MACT standards to expand the requirements for storage vessels at new sources to include additional storage vessels with smaller capaciti es and those storing material with lower vapor pressures.

In addition to the residual risk and technology reviews performed regarding the NESHAP, the EPA also reviews the existing provisions of the NESHAP during the RTR process. In 2008, the United States Court of Appeals for the District of Columbia Circuit vacated portions of two provisions in the EPA’s CAA section 112 regulations governing the emissions of HAP during periods of startup, shutdown and malfunction (SSM). Sierra Club v. EPA , 551 F.3d 1019 (D .C. Cir. 2008). Specifically, the Court vacated the SSM exemption contained in 40 CFR 63.6(f)(1) and 40 CFR 63.6(h)(1), that are part of a regulation, commonly referred to as the “General Provisions Rule,” that the EPA promulgated under section 112 of

the CAA. When incorporated into CAA Section 112(d) regulations for specific source categories, these two provisions exempt sources from the requirement to comply with the otherwise applicable CAA3

section 112(d) emission standard during periods of SSM. In light of and consistent with Sierra Club v.

EPA , the EPA is eliminat ing the SSM exemptions in the APR, AMF, and PC production NESHAP and require that the standards in these rules would apply at all times.

Also as part of the revisions to address periods of SSM in response to the 2008 Sierra Club ruling, the EPA is specify ing that PRDs in organic HAP service may not release to the atmosphere. To ensure compliance with this requirement, facility owners or operators are required to monitor each PRD such that they would be able to identify and record the time and duration of each pressure release and immediately notify operators that a pressure release has occurred.

Where the EPA identifies emission points that were erroneously not regulated under a MACT rule, the EPA may identify MACT floor and beyond

- the

- floor control options for existing and new sources and set standards for these sources under CAA section 112(d)(2) and (3). During review of the existing provisions of the NESHAP, the EPA identified unregulated em issions sources in the AMF and APR source categories. For the AMF source category, the unregulated emission sources identified are fiber spinning lines that use a spin dope produced from a solution polymerization process. For these sources,
the EPA is fina lizing an emission standard that reflects the MACT floor level of control, which is the existing level of emissions from the one facility in the source category. The final emissions limit is 20 kg organic HAP/Mg (40 lb organic HAP/ton) of acrylic and modac rylic fiber produced, which takes into account expected variability in the production

- based emission rates. For the APR source category, storage vessels and continuous process vents at existing facilities were both identified as unregulated emissions

sourc es. For storage vessels at APR facilities, the EPA is finalizing requirements that reflect a beyond

the

- floor control option. The requirements are to maintain and operate the storage vessel with an internal or an external floating roof, or use a fixed roof tank with emissions vented through a closed vent system to any combination of control devices that achieve a 95

- percent emissions reduction or reduce emissions to specified control device outlet concentrations. These requirements apply to storage vessels of capacities greater than or equal to 20,000 gallons (gal), but less than 40,000 gal if the maximum true vapor pressure (MTVP) is 1.9 pou n ds per square inch absolute (psia) or greater, and for storage vessels of capacities greater than or equal to 40,000 gal, but less than 90,000 gal if the MTVP is 0.75 psia or greater. Control is also required for storage vessels of 90,000 gal or greater, i f the MTVP is 0.15 psia or greater. For continuous process vents at existing APR facilities, the EPA is finalizing requirements that reflect the MACT floor level of control. These requirements are to reduce organic HAP to 1.9 pounds per ton of resin produc ed

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2. IMPACTS OF RISK REDUCTION OPTIONS

Table 1 presents the estimated costs of the final rule amendments for the APR, AMF, and PC source categories.

For purposes of estimating the costs for facilities in the PC source category to comply with the requir ements of subpart UU, it was conservatively assumed that each facility is complying with subpart TT (and would incur costs to transition to subpart UU), even though some facilities may currently be complying with subpart UU. The only facility in the AMF so urce category is currently complying with subpart TT. Capital, annualized capital , operation, maintenance, and annual recordkeeping and reporting costs are expected as a result of the requirement for facilities to comply with the lower leak definitions set forth in subpart UU. More information about how these costs were estimated can be found in the two4

memoranda, Technology Review and Estimated Cost Impacts for the Acrylic and Modacrylic Fibers Production Source Category and Technology Review and Estimated Cost Impacts for the Polycarbonate
Production Source Category

, which are available in the rulemaking docket ( EPA

- HQ

- OAR

- 2012

- 0133 ).

For purposes of estimating the costs of the PRD monitoring requirement, it was assumed that all facilities
would install el ectronic indicators on each PRD that would be able to identify and record the time and duration of each pressure release. However, the EPA is allow ing a range of methods to satisfy these requirements, including the use of a parameter monitoring system that may already be in place. The PRD monitoring costs were estimated based on the number of PRDs at model APR and PC facilities, and the actual number of PRDs at the one AMF facility. More information about how these costs were estimated
can be found in the m emora nda

, Cost Impacts of Pressure Relief Device Monitoring for Acrylic and Modacrylic Fibers Production, Polycarbonate Production, and Amino/Phenolic Resins Production Source Categories

, and Revised Cost Impacts of Pressure Relief Device Monitoring for the Amino/Phenolic Resins Production Source Category

, which are available in the rulemaking docket ( EPA

HQ

- OAR

- 2012

- 0133 ).

The costs of complying with the APR source category continuous process vent emissions limit are based on the average cost of a carbo n adsorption system for the t hree facilities in the source category expected to require additional emissions controls to meet the emissions limit. Additional recordkeeping and reporting costs are expected for compliance with the c ontinuous process vent req uirements. More information about how the continuous process vent costs were estimated can be found in the memorandum, MACT Floor and Beyond

- the

- Floor Analyses for Existing Unregulated Emission Sources
in the Amino and Phenolic Resins Production Source Cat egor y , available in the rulemaking docket ( EPA

HQ

- OAR

- 2012

- 0133 ).

For fiber spinning lines that use a spin dope produced from a solution polymerization process in the AMF source category, no capital or annualized capital and O&M costs are expected because the control requirements reflect current operations at the one facility in the source category. However, some additional recordkeeping and reporting costs are expected for compliance with the requirements for these spinning lines. More information about th e analysis conducted for the fiber spinning lines that use a spin dope produced from a solution polymerization process can be found in the memorandum, MACT Floor and Beyond

- the

- Floor Analyses for Unregulated Emission Sources in the Acrylic and Modacrylic F ibers
Production and Amino/Phenolic Resins Production Source Categories , available in the rulemaking docket ( EPA

- HQ

- OAR

- 2012

- 0133 ).

For reporting and recordkeeping costs associated with the amendments to the requirements for t he APR, AMF, and PC source cat egor ies, labor costs were based on the following labor rates:

Technical $54.66 ($26.03 + 110%) Managerial $115.96 ($55.22 + 110%) Clerical $38.14 ($18.16 + 110%)

These labor rates are based on the May 2012 National Occupational Employment and Wage Estimate s for the United States, occupational codes 51

- 8091 for chemical plant and system operators (technical), 11

- 1021 for general and operations managers (managerial) and 43

- 6010 for secretaries and administrative assistants (clerical). The Appendix to this do c ument includes more details regarding the estimated5

reporting and recordkeeping activities and costs associated with the final amendments to subparts OOO and YY for the APR, AMF and PC source categories.

Table 1. Estimated Costs of Final Amendments to the APR, AMF, and PC Source Categories

Source Category Number

of Facilities Requirement Capital Cost per Facility Annualized

Capital Cost per Facility Total

Capital Cost per Source Category Total

Annual Cost per Source Category
Amino and Phenolic Resins Production (APR) 1 9 PRD monitoring $21,919 $3,121 $ 416,461 $ 59,299

3 * Continuous process vents $ 1,206,621 * $ 287,408 * $ 3,619,86 3 $ 862

, 225

1 9 Annual Operation, Maintenance, Recordkeeping and Reporting - - - $ 9 8

, 076

APR Source Category Total (all new requirements): $ 4,036,32 4 $ 1,019,600

Acrylic and Modacrylic Fibers Production (AMF) 1 PRD monitoring $37,063 $5,277 $37,063 $5,277

1 LDAR

program $1,428 $223 $1,428 $223

1 Annual Operation, Maintenance, Recordkeeping and Reporting - - - $ 6,069

AMF Source Category Total (all new requirements): $38,491 $ 11,569

Polycarbonate Production (PC) 4 PRD monitoring $12,649 $1,804 $50,596 $7,216

4 LDAR

program $3,899 $541 $15,596 $2,164

4 Annual Operation, Maintenance, Recordkeeping and Reporting - - - $ 1 8,102

PC Source Category Total (all new requirements): $66,192 $ 2 7
, 482

*There are 1 9 facilities in the APR source category; however, only three facilities are expected to install control
devices to meet the continuous process vent emission limit . Costs per facility are the average costs per facility

.A

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## Appendix

Reporting and Recordkeeping Costs by Source Category

Table 1 . A PR Source Category Reporting and Recordkeeping Costs Associated with Amendments to Subpart OOO

Reporting or Recordkeeping Activity Hours per year for the source category

Cost Technical Management Clerical Reports
Notification of compliance status (PRDs) 76 3.8 7.6 $4,885
Notification of compliance status (Storage vessels) 76 3.8 7.6 $4,885
Notification of compliance status (Continuous process vents) 12 0.6 1.2 $771
Semiannual summary report (PRDs) 209 10.45 20.9 $13,433
Semiannual summary report (Storage vessels) 209 10.45 20.9 $13,433
Semiannual summary report (Continuous process vents) 33 1.65 3.3 $2,121
REPORTING SUBTOTAL (Rounded) 707.25 $39,529
Recordkeeping
Implement recordkeeping requirements (Storage vessels) 152 7.6 15.2 $9,770
Implement recordkeeping requirements (Continuous process vents) 24 1.2 2.4 $1,543
Implement recordkeeping requirements (PRDs) 38 1.9 3.8 $2,442
Develop record system (PRDs) 38 1.9 3.8 $2,442
Record information (Storage vessels) 152 7.6 15.2 $9,770
Record information (Continuous process vents) 24 1.2 2.4 $1,543
Record information (PRDs) 38 1.9 3.8 $2,442

RECORDKEEPING SUBTOTAL (Rounded) 535.9 $29,952
OPERATIONS AND MAINTENANCE (Rounded) $28,595
TOTAL LABOR BURDEN AND COST (Rounded) 1,243 $98,076A

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### Table 2 . AMF Source Category Reporting and Recordkeeping Costs Associated with Amendments to Subpart YY

Reporting or Recordkeeping Activity Hours per year for the source category

Cost Technical Management Clerical Reports

Initial notification 4 0.2 0.4 $257
Periodic reports 15 0.75 1.5 $964
Leak detection and repair reporting 8 0.4 0.8 $514

REPORTING SUBTOTAL (Rounded) 3 1 $ 1 , 735 Recordkeeping Implement recordkeeping devices: PRDs 2 0.1 0.2 $129
Leak detection and repair program: identify all affected streams 2 0.1 0.2 $129
Develop record system for PRDs 2 0.1 0.2 $129
Develop record system for spinning lines 8 0.4 0.8 $514
Revise record system for new LDAR requirements 16 0.8 1.6 $ 1,028 Record information required for PRDs 2 0.1 0.2 $129
Record information required for new LDAR requirements 4 0.2 0.4 $257
Train personnel on new requirements 8 0.4 0.8 $514
RECORDKEEPING SUBTOTAL (Rounded) 51 $2, 828
OPERATIONS AND MAINTENANCE (Rounded) $1,505
TOTAL LABOR BURDEN AND COST (Rounded) 8 2 $ 6,069A

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### Table 3

. PC Source Category Reporting and Recordkeeping Costs Associated with Amendments to Subpart YY

Reporting or Recordkeeping Activity Hours per year for the source category

Cost Technical Management Clerical Reports

Initial notification 16 0.8 1.6 $1,028
Periodic reports 44 2.2 4.4 $2,828
Leak detection and repair reporting 32 1.6 3.2 $2,057
REPORTING SUBTOTAL (Rounded) 1 0 6 $ 5 , 913 Recordkeeping Implement recordkeeping devices: PRDs 8 0.4 0.8 $514 Leak detection and repair program: identify all affected

streams 8 0.4 0.8 $514

Develop record system for PRDs 8 0.4 0.8 $514
Revise record system for new LDAR requirements 16 0.8 1.6 $1,028
Record information required for PRDs 8 0.4 0.8 $514
Record information required for new LDAR requirements 16 0.8 1.6 $1,028
Train personnel on new requirements 32 1.6 3.2 $2,057
RECORDKEEPING SUBTOTAL (Rounded) 110 $6,169
OPERATIONS AND MAINTENANCE (Rounded) $6,020

TOTAL LABOR BURDEN AND COST (Rounded) 2 1 6 $1 8 , 102