1

MEMORANDUM

TO: Phil Mulrine , U.S. Environmental Protection Agency, OAQPS /SPPD/MICG

FROM: Jeff Harris

, Brad Nelson, EC/R

DATE : August 13 , 201 4

SUBJECT: Cost Impacts of Control Options Considered for the Ferroalloys Production NESHAP to

Address Fugitive HAP Emissions

T he purpose of this memorandum is to describe the methodology used to estimate the costs and
emissions reductions for the main option s considered for the supplemental proposed revisions to the National Emissions Standards for Hazardous Air Pollutants (NESHAP) for the Ferroalloys Production source category. These impacts were calculated for existing units only, as no new facilities are ex pected to become operational within the next 5 years . The results of the impacts analyses are presented for the regulatory options that were considered for the supplemental proposal

. As described below, the focus of this analysis is process fugitive control costs. Process fugitives are emissions generated during the

F erroalloys Production process that not captured and sent to a control device.

The development of the emissions estimate s (baseline and for the control option ) for this source category are discussed in Revised Development of the Risk and Technology Review (RTR) Emissions Dataset for the Ferroalloys Production Source Category

. Development of revised emissions limits for
part iculate matter (PM) are described in the Technology Review memo, and development of maximum
achievable control technology (MACT) limits for polycyclic aromatic compounds (PAH) and hydrogen chloride ( HCl ) are d escribed in the Revised MACT Floor Analysis for the Ferroalloys Production Source Category. Furthermore, t he MACT limits for mercury (Hg) are described in the Mercury Control Options and Impacts for the Ferroalloys Production Industry document . These four documents
are available in the docket for this rulemaking

.
The organization of this document is as follows:

1.0 Summary of Cost Estimates and Emissions Reductions for the Regulatory Options for Process Fugitive Emissions for the Supplemental Proposal

2.0 Regulatory Options for the Supplemental Proposal

3.0 Details of Fugitive Emission Control Option s for the Supplemental Proposal

4 .0 Methodology for Estimating Control Costs2

1.0 SUMMARY OF COST ESTIMATES AND EMISSIONS REDUCTIONS FOR THE
REGULA TORY OPTIONS FOR PROCESS FUGITIVE EMISSIONS FOR THE
SUPPLEMENTAL PROPOSAL

At proposal in November 2011

, 1 r egulatory options were considered for control of emissions of m etal

HAP and o rganic HAP from furnace stacks

, and m etal HAP from product sizing stacks and fugitive

sources. For this analysis, we assume the final emissions limits for stacks (PM, formaldehyde, PAH, and HCL) will be similar to those proposed in November 2011

, and that control of these stack emissions via existing control devices will be adequate to meet these li mits. Furthermore, the control options for mercury emissions from stacks and the costs of those options are evaluated and presented in a separate
technical memorand um . Therefore, this memo randum only assesses the options and costs for the control of fugi tive HAP emissions (which are mainly Mn and other HAP metals in particulate form such as nickel, cadmium, chromium and lead).

Emissions of each pollutant vary considerably among the facilities, and multiple control options are
available

. Because of this, a nd the limited number of facilities in the source category (two), specific regulatory options were considered for each facility. Emissions reductions were estimated for each facility based on emissions data received in an information collection request (IC R) sent to the industry along with application of emissions factors, and other data analyses and calculations

. 2

Selection of control options for fugitive HAP emissions w as less straightforward than those for stack
emissions

. D iscussions with vendors and ventilation experts and our research led to a conclusion that implementation of fugitive capture and control systems is complex and that system parameters are highly dependent on specific localized parameters (e.g., building vol ume, process locations, and airflow.) Any plans to implement a system for ventilation to control fugitive emissions should begin with a rigorous, systematic examination of the ventilation requirements throughout the building leading to design and implement ation of a n enhanced fugitive capture and control system ( potentially consisting of primary hoods, secondary hoods, enclosures and/or building roof monitor ventilation ducted to particulate matter control device(s)) that can be designed and operated to ach ieve effective reductions of fugitive emissions (such as about 95%) and meet potential regulatory requirements such as tight opacity
standards.

.
Brief descriptions of the costs and emissions reductions associated with the two main options considered
for th e supplemental proposal of the NESHAP are summarized in Table 1

- 1. Option 1 include s enhanced local capt ure and roofline ventilation for both facilities

. Option 2 reflect s full building enclosure with negative pressure for both facilities. A more detailed description of the re gulatory options considered

1 The EPA proposed amendments to the national emission standards for hazardous air pollutants for the ferroalloys production source category published in the Federal Register on November 23, 2011 (76 FR 72508).

2 See Revised Development of the Risk and Technology Review (RTR) Emissions Dataset for the Ferroalloys Production Source Category , which is available in the docket for this rulemaking

.3

and their associated cost and emissions reductions estimates are presented in the remaining sections of
this memorandum

.

The cost estimates for Option 1 contained in Table 1

- 1 of this memo r epresent our expectations of the controls likely to be installed as a result of facility

- specific ventilation analyses, the controls likely to be
needed to address risk , and existing capture and control systems at the facilities. These estimates are
direct ly based on cost estimates supplied by the facilities 3 after discussions with EPA regarding the
standards being considered , and incorporating their best estimates of the improvements to fugitive emission capture and control they would implement to achieve “enhanced” capture” . Attachments 1 and 2 contain copies of the cost estimates provided by the facilities. The cost estimates for Option 2
contained in Table 1

- 1 are based on revised analyses we conducted after considering comments

, information and data submitted by the facilities in response to EPA’s November 2011 proposal

. 4

, 5

The emissions reductions associated with the control option s presented in this memorandum are
calculated as the difference between baseline emissions and the estimated emissions w ith enhanced fugitive capture and control

. These estimated reductions reflect full implementation of the options,
which will likely need to occur 2 years after promulgation of the final standard ( expected to occur in
201 5 ). All costs are estimated in 201 2 dollars

. PM emissions in this memo refer to total PM

. Of the total PM, approximately 2 1 percent of the emissions are assumed to be fine particulate (PM 2.5 )

, based on analysis performed by EPA's National Environmental Investigation Center of TSP data colle cted in the Marietta area by Ohio EPA and the federal Agency for Toxic Substances and Disease Registry (ATSDR) during 2007

- 8. Costs and emissions reductions for option 2 for Eramet reflect the assumption
that building ventilation will not be required for E ramet building #18 , which does not contain an operational furnace

.

3 “Estimated Costs For Potential Fugitive Particulate Control Modifications at Eramet Marietta Inc. (as of 11/22 /2013)”, Eramet Marietta Inc, 11/22/13. “Answers for EPA”, Felman Production Inc, 11/12/13.

4 Eramet: "Engineering Review of Proposed Ferroalloy NESHAP Requirements for Eramet Marietta Inc.", EPA

- HQ

- OAR

2010

- 0895

- 0106.

5 Felman : "Building Ventilation Cost s January 30, 2012", EPA

- HQ

- OAR

- 2010

- 0895

- 0073.4 Table 1

- 1: Summary of the Estimated Costs and Emissions Reductions for Control Option s5

2.0 REGULATORY OPTIONS FOR THE SUPPLEMENTAL PROPOSAL

This section provides a detailed description of regulatory options for fugitive emissions for the supplemental proposal of the Ferroalloys NESHAP and their associated costs and emissions reductions.

T he first option (Option 1) evaluated for fugitive metal HAP emissions in this document is based on enhanced local capture and c ontrol, including primary and secondary hooding. The option is mainly based on the assumption that facilities will achieve about 95% capture of the total fugitive emissions
with a combination of primary and secondary c apture of emissions and vent ilation of those emissions to a PM control device (either a FF or wet scrubber). This control option (i.e., about 95% capture of fugitives) was also used to estimate post control risks under this option. The precise form of the standard under this option (which would eventually be presented in the regulatory text) has not yet been determined, but will likely include a tight opacity limit which facilities are expected to comply with via
enhanced fugitive capture and control systems and could also include other req uirements

. Design of these enhanced systems would be preceded by a rigorous, systematic examination of the ventilation requirements

. Th e enhanced capture and control systems that would be used by the facilities to comply
with th is type of standard would l ikely include primary and secondary hoods collecting emissions from tapping and casting operations and directing them to control device s ( assumed to be fabric filters ) and capture of fugitive emissions a t roof vents over some process areas, directed to con trol systems ( assumed to be fabric filters )

.

The first control option for the supplemental proposal represents a scenario of reducing PM emissions from the facilities by an estimated 229 tons per year (and HAP emissions by an estimated 77 tons per year) by installing enhanced local capture and control of fugitive emissions (with primary hooding close to the tapping and casting operations) and secondary hooding near the roofline to capture and control the remaining fugitive emissions (not c aptured by the primary hooding) and ventilation of those emissions
to PM control devices . The total estimated capital cost for these fugitive controls is $ 38 million. Annualized capital cost and operational and maintenance costs are estimated at $ 7 million

.
The second option (Option 2) is full building enclosure. The EPA proposed this option in the November 2011 proposal. However, EPA received significant comments indicating that EPA had substantially
underestimated the costs and noted several other issu es, such as the need to account for more air exchanges to protect workers, and need for additional control capacity, fans

, duct work, and structural
support. Therefore, we are presenting that option again in this document with updated estimates of the

cost s and effectiveness of that option.

The second control option for the supplemental proposal represents a scenario of reducing PM emissions from the facilities by an estimated 252 tons per year (and HAP emissions by an estimated 83 tons per year) by installing full building enclosure . The total estimated capital cost for fugitive controls is $ 61 million. Annualized capital cost and operational and maintenance costs are estimated at $ 19 million.6

Details of the emission control syste ms for option 1 are presented in Section 3. Details of the estimated costs for both options are presented in section 4.

3.0 DETAILS OF FUGITIVE EMISSION CONTROL OPTION S FOR THE
SUPPLEMENTAL PROPOSAL

This section contains details of the estimated costs, em ission reductions, and cost effecti veness for the two presented option s for fugitive emissions control , as described in Section 2.

3.1 Option 1: Enhanced Local Capture

Table 3

- 1 contains details of the estimated costs, emission reductions, and cost effectiveness of our best estimate of the systems the facilities are likely to install to comply with option 1

, based on currently existing local emission capture systems.

As previous ly mentioned, design of a local ventilation system begins with a detailed analysis of specific localized parameters (e.g., building volume, process locations, and airflow) leading to development of a
site

- specific local ventilation plan and installation of custom hoods and ventilation equipment

. Such a system might rely on a variety of specific ventilation systems

. Installed systems may include the following:

 C urtains or doors surrounding furnace tops to contain fugitive emissions

,

 Improvements to hoods col lecting tapping emissions,

 Upgrade d fans to improve the airflow of fabric filters controlling fugitive emissions,

 Addition of “Secondary Capture”, or additional hoods to capture emissions from tapping platforms or crucibles,

 Addition of fugitive capture for casting operations,

 Addition of additional fabric filters where necessary, and

 Addition of rooftop ventilation, in which fugitive emissions escaping local control are collected in the roof canopy over process areas through addition of partitions, then directed through roof vents and ducts to control systems.

For the purposes of this analysis, it has been assumed that enhanced fugitive capture and control systems and roofline ventilation will be installed for all operational furnaces at both facilities

, and for MOR operations at Eramet Marietta . The specific elements of the capture and control systems selected for each facility are based directly on information supplied by the facilities incorporating their best estimates of the improvements to fugitive e mission capture and control they would implement to achieve7

the standards to be included in the supplemental proposal. Attachment s 1 and 2 contain copies of the cost estimates provided by the facilities.

3.2 Option 2: Full Building Enclosure

Option 2 ( i.e ., full building enclosure ) remain s generally the same as in EPA’s November 2011 proposal

. 1 However, the estimated costs are significantly higher than previously estimated. This control option involves installation of full building ventilation at negative pressure for furnace buil dings instead of installing fugitive controls on individual tapping and casting operations. This option would require installation of ductwork from the roof vents of furnace buildings

, structural repairs to buildings, and a
new fabric filter for each build ing. For emissions modeling and cost estimation purposes w e assumed
that building ventilation would be required for buildings containing furnaces, ( i.e.

, Eramet buildings #1 and #12, and the melt shop building at Felman)

.8 Table 3

- 1 : Option 1: Enhanced Local Capture/Control for Fugitive Emissions9

4 .0 METHODOLOGY FOR ESTIMATING CONTROL COSTS

This section contains additional details regarding the methodology employed to estimate the
costs associated with the two regulatory options described in Section 2.

4.1 Option 1

– Enhanced Fugitive Capture

Fugitive emissions of metal HAP at Ferroalloys Production facilities result from several areas of the process . Process fugitive emissions primarily result from furnace leaks and incomplete capture of emissions during tapping and casting of product . Furnace upsets can result in release of emissions that would normally be contained by negative pressure occurring inside furnace
hood . Process fugitive emi ssions can also result from in complete capture of emissions by tapping hoods, or from casting operations, some of which are uncontrolled

.
Both facilities employ negative

- pressure hoods to collect emissions from tapping operations and
direct them to a control device

. Some casting operations at both facilities capture emissions and
direct them to a fabric filter , while some casting operations are currently uncontrolled.

As previously mentioned, design of a local ventilation system begins with a detailed analysis of specific localized parameters (e.g., building volume, process locations, and airflow) leading to development of a site

- specific local ventilation plan and installation of custom hoods and ventilation equipment. Both facilities which will be su bject to the NESHAP have performed preliminary analyses to assess the measures that they are likely to need to take to comply with
EPA’s potential requirements, and have submitted cost estimates to EPA based on their analyses.
Attachments 1 and 2 contain copies of the cost estimates provided by the facilities

.

Costs were estimated for enhanced process fugitive contro l including roofline ventilation , as described in Section 3 above

. Details of the methodology employed to estimate these costs
follow

.

4.1 .1 General Considerations

As described in Sections 2 and 3, a variety of potential enhancements to local ventilation and control of fugitive emissions may be used by the facilities depending on their individual situation. Specific enhancements for each facili ty were selected for cost estimation based on estimates directly provided by the facilities based on their own engineering analyses and discussions with EPA (see Attachments 1 and 2 for these cost estimates, and Table 3

- 1 for details of the specific option s in the cost estimate for each facility). Analyses and cost estimates provided by the facilities were reviewed by EPA and then used in the cost impacts assessment where they were available. In addition, t he following general considerations apply to all

e stimated costs for process fugitives:10

 A nnualized costs assume a 20

- year life expectancy for the installed control devices and other equipment and, to be consistent with OMB Guidance in Circular A

- 4, a 7

- percent cost of capital as an estimate of the annu alized capital cost

.

 Costs provided by the facility were assumed to be in current dollars. All other costs
for this e stimate were adjusted to 201 2 dollars using Chemical Engineering Plant Cost Indices (CEPCI 6 ) where necessary

.

 D owntime associated with in stallation was not directly included in in cost estimates

. 7

 Costs were not included for items noted by the facilities as currently being in place.

4. 1. 2 Facility

- Specific Considerations

The following facility

- specific considerations also apply :

 Felman Production pro vided two general cost estimate scenarios :

o T he first assumes a scenario in which one of their three furnaces is not in operation and its fabric filter is used to control the process fugitive emissions collected through roofline capture and ventilation fr om the other two furnaces ; and

o T he second scenario assumes all three furnaces are operational with the
addition of a new fabric filter to control the process fugitive emissions
collected f

rom roofline capture and ventilation of fugitives from all three
furnaces

.

 The e stimated costs for Felman provided in this memorandum are based on the
second scenario . This scenario was selected to be in line with modeled emissions

, which are based on the assumption that all three furnaces are operational

.

 Because Felman Production did not provide detailed estimated costs for the additional
fabric filter included in the second scenario

, total installed capital cost and annual

costs for the fabric filter were estimated using EPA’s Integrated Planning Model

6 CEPCI values employed: 584.6 for 2012, 521.9 for 2009, and 359.2 for 1993.

7 Eramet Marietta provided costs for downtime associated with installation , while Felman did not. These costs were significant, bu t because these costs were declared to be confidential by Eramet, they were considered by EPA, but not directly included in these analyses.11 (I PM) for Particulate Control Cost Development 8 , with additional costs for ductwork estimated using EPA’s Air Pollution Control Cost Manual

. 9 The estimated cost for
this fabric filter is s ignificantly higher than Felman Production ’s brief estimate of the difference between the two cost scenarios, but the higher estimate has been retained
to be conservative. Details of these cost estimates are included in Attachment 3.

 Eramet’s cost estimate assumed capital costs of about $7.3M for addition of “Scrubber upgrades OR dust collector” for Furnace #12. Adding proportional amounts of the associated installation and engineering costs results in total capital costs of approximately $12.5M for upgrades to the control device for Furnace #12.

Furnace # 12 currently is equipped with 2 venturi scrubbers used to control fugitive emissions from the furnace and tapping. The scrubbers are designed to handle approximately 127,000 acfm each and the average flow rate from the current capture configuration is 17 1,000 acfm , or roughly 67% of the estimated capacity o f the
scrubbers. Assuming that t he enhanced capture system which Eramet has suggested for Furnace 12 (increased tapping capture and roof line ventilation) would increase the required airflow over current levels by 50 to 100 % ( i.e., to a total of 256,000 to 342,000 acfm)

, t he low end of the estimated range would put them very near the maximum capacity of the current controls in place. Accordingly, it seems reasonable

to assume that additional control capacity will be required, whether in the form of upgrades to the scrubber(s) or their replacement with a fabric filter.

4. 2 Option 2

– Building Ventilation

As described in Sections 2 and 3, EPA proposed the full building enclosure option in the

No vember 2011 proposal. However, EPA received significant comments and information indicating that EPA had substantially underestimated the cost. Both Eramet and Felman provided
extensive comments and information regarding implementation of building ventilation, including

cost estimates based on their own engineering analyses. After further review and evaluation, we have determined it is appropriate to incorporate much of the a nalyses and cost estimates provided
b y the facilities in developing our revised cost estimates . In addition, the following facility

specific considerations apply to estimated costs for building ventilation :

 Felman’s cost estimate 5 applied overhead and contingency adjustments to ductwork costs
twice (once in the ductwork cost calculations by Chu & Gassman, and again in the costs prepared by Lan Associates)

. Our cost estimate corrects th is. For consistency with the overhead adjustments used in preparation of the two sections of Felman's overall cost estimate, we have calculated the Total Capital Investment ( TCI ) for the fabric filter as

8 Sargent & Lundy, IPM Model

- Updates to Cost and Performance for APC Technologies, Particulate Control Cost Development Methodology Final, March 201 3

9 http://epa.gov/ttn/catc/products.html#cccinfo12

2.17* Purchased Equipment Cost ( PEC ) , and for ductwor k as TCI=1.41*PEC

. Details of the revised cost estimate for Felman are included in Attachment 4.

 Eramet ’s cost estimate 4 included costs for installation of building ventilation for building #18. For consistency with the option contained in the 2011 proposal, and with modeled emissions, our cost estimate only a ssumes building ventilation is installed for buildings #1 and #12. Only the “Building 1” and “Building 12” costs from Eramet’s cost estimate are included.13

4. 3 O ption s for Monitoring Process Fugitive Emissions

In addition to the fugitive control options, the EPA also considered various monitoring options to help ensure the effective capture of fugitive emissions from the ferroalloy production buildings. These monitoring options include: EPA Method 9 furnace opacity readings ; digital opacity compliance syst em (DOCS) to measure opacity ; the installation of roof monitors to measure fugitive emissions at the roof vent ; and fenceline monitoring. A brief description of these monitoring approaches and the estimated costs for each of these options is provided in the following sections.

4 .3 .1 Method 9 Opacity Reading s

One option for determining continuing compliance with the fugitive cap ture requirements in the NESHAP is to require weekly EPA Method 9 opacity readings to measure opacity from the ferroalloy production buildings and demonstrate that those readings are below an established opacity limit in the rule. Opacity limits can ensure effective capture and control of these fugitive emissions if they are established at the appropriate levels and have appropriate compliance monitoring requirements to ensure the fugitive emissions are minimized continuously over time. For this NESHAP, the EPA Method 9 option would involve taking opacity readings at the roof line above the furnace during a complete furnace cycle (e.g., from one tapping event to the next subsequent tapping event). Tapping at the furnaces occurs approximately every 2 hours (a nd typically lasts about 90 minutes), therefore the opacity readings during each cycle would take approximately 90 minutes. We assume the reader would also need another 30 minutes for set

- up and documentation. Therefore, each reading would require 2 hours of labor. As a result, the cost for doing Method 9 opacity readings was estimated to be approximately $200 per furnace for each occurrence, which includes the costs for labor (technical, managerial, and administrative). Assuming that facilities would need to do the Method 9 opacity readings once per week per furnace, we estimate that the annual operating costs would be $10,400 per furnace. The same costs would also apply to the MOR. Therefore, the total costs for Opacity readings for the source category (as suming once per week for each of the 5 furnaces and for the one MOR operation) is estimated to be $62,400 per year (or $31,200 per facility).

4 .3

. 2 Digital Opacity Compliance System

Another compliance monitoring option that is being considered is the use of a Digital Opacity Compliance System (DOCS). The DOCS translates images from a n imaging digital camera into visual plume opacity measurements using computer software , and is proposed as an alternate reporting method to EPA Method 9 (see Preliminary Metho d 008)

. Currently the American Society for Testing and Materials (ASTM) has approved a method for the use of the DOCS (see ASTM D7520

- 09). For this option, the DOCS would read 6 minutes of opacity every hour during the daylight at the roof of each of the f erroalloy production buildings (every day per year). The cost for setting up the system was estimated to be $4,900 per furnace building, and includes the cost of 2 cameras to be set up to read from the single roof vent to cover sun angle during different t imes of the day, mounts, cables, computer and accessories, and training. Annual cost of operating the system per furnace building was estimated to be $129,000 and includes the costs for the software license, analyzing and review of images, and quarterly re porting of results.14

As explained in the FR Notice, EPA is also considering the possibility of including a provision in the rule whereby if a facility achieves DOCS readings over an extended period of time that are well below the opacity limit then that fa cility may be able to reduce the frequency of such readings and therefore the annual operating costs would also decrease accordingly.

4 .3

. 3 Roof Monitors

The third option that is being considered involves the use of PM monitors to capture and measure the f ugitive emissions from the roof vents of the ferroalloy production buildings. The monitors would capture PM on a Teflon filter and the filters would be analyzed for manganese (Mn). In addition, the velocity of the fugitive emissions would be measured and u sed to calculate fugitive Mn emission rates. The EPA is considering an option where the system would include 3 PM monitors installed along the length of the roof opening for each furnace building. Each monitor would capture 2 to 5 samples per monitor each week. The capital cost of the monitors, filter, and filter holders are estimated to be $25,770 for each furnace building. The capital cost of the anemometers and associated equipment are estimated to be $2,414. The total cost of installing
the PM monitorin g system is estimated to be $166,000 per building and includes the cost of equipment, mounting labor, operating labor, filter analysis, filter shi pping, data acquisition and reporting of the analyses. Annual operating costs are estimated to be between $60,000 and $150,000 per building depending on the number of samples taken each week.

4.3.4 Fenceline Ambient Monitoring:

The fourth option being considered is fugitive fence line filter based measurements of particulate matter and manganese emissions at the facilities with no less than 3 monitoring systems at the property boundaries to monitor trends in ambient concentrations at these locations and to use this information (along with meteorological data and modeling tools) to attempt to quantify trend s in emissions that are leaving and entering the facility property. The rental cost for each monitoring system is estimated to be $20,000 per year. If we assume each monitor takes one 24

- hour sample of PM and manganese every 6 days (i.e., about 70 samples per year) and the analysis is approximately $100 per sample then the total costs for lab analyses would be $7,000 per

year

. Regarding the labor to obtain the filter samples and replace with new filters, we estimated 1 hour of labor per sample for an additi onal $7,000 per year. This yields an annual cost of $34,000 per monitor which would be a total operating cost of approximately $10 0 ,000 per year per facility.15 

### Attachment 1: Cost Estimate Provided by Eramet Marietta1617 

### Attachment 2: Cost Estimate Provided by Felman Production1819 

### Attachment 3 : Additional Detailed Cost Estimates for Felman2021 

### Attachment 4 : Revised Building Ventilation Cost Estimates for Felman22