E.O. 12866 Ferroalloys RIA 2060

- AQ11 Propos al 20111006



# Regulatory Impact Analysis (RIA) for the Proposed Manganese Ferroalloys RTR

Draft ReportSeptember 2011

Regulatory Impact Analysis (RIA) for the Proposed Manganese Ferroalloys RTR

By : Larry Sorrels and Souad Benromdane U.S. Environmental Protection Agency Office of Air Quality Planning and Standards (OAQPS) Air Economics Group (A E G) and Risk and Benefits Group (RBG)

Research Triangle Park, NC 27711

U.S. Environmental Protection Agency Office of Air Quality Planning and Standards Health and Environmental Impacts Division Research Triangle Park, North Carolinaiii CO NTENTS

Section Page

Table of Contents

Contents

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Section 1 Executive S ummary

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1.1 Analysis Summary

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1.2 Or ganization of this Report

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Section 2 Introduction

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2.1 Background for Proposed Rule

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- 1 2.1.1 What is this source category and how did the MACT regulate its HAP emissions?

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Section 3 Industry Profile

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Section 4 Baseline Emissions, Emission Reductions, A nd Costs

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4.1 Introduction

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Section 5 Economic Impact Analysis and S tatutory and Executive Order Analyses

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5.1 Background

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5.2 Regulatory Flexibility Act

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5.3 Energy Impacts

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5.4 Unfunded Mandates Reform Act

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- 3 5.4.1 Future and Disproportionate Costs

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- 3 5.4.2 Effects on the National Economy

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5.5 Executive Order 13045: Protection of Children from Environmental Healt h Risks and Safety Risks

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5.6 Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low

- Income Populations

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Section 6 Human Health Benefits of Emissions Reductions

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6.1 Synopsis

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6.2 Calculation of PM 2.5 Human Health Benefits

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6.3 Unquantified Benefits

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- 12 6.3.1 HAP Benefits

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6.4 Characterization of Uncertainty in the Monetized PM 2.5 Benefits

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Section 7 Comparison of Monetized Benefits and Costs

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7.1 Summary

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Section 8 Refere nces F or RIA

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- 1 SECTION 1 EXECUTIVE SUMMARY
The U.S. Environmental Protection Agency (EPA) is proposing amendments to the national emissions standards for hazardous air pollutants (NESHAP) for Ferroalloys Production to address the results of the residual risk and technology review that EPA is required to conduct by the Clean Air Act. These proposed amendment s include revisions to particulate matter standards for electric arc furnaces, metal oxygen refining process, and crushing and screening operations. The amendments add hydrochloric acid, mercury, polycyclic aromatic hydrocarbons, and formaldehyde emission limits to electric arc furnaces. The amendments also expand and revise the requirements to control fugitive emissions from furnace operations and casting. Other requirements related to testing, monitoring, notification, recordkeeping, and reporting require ments are included. We are also proposing to revise provisions addressing periods of startup, shutdown, and malfunction to ensure that the rules are consistent with a recent court decision.
This is an economically significant rule as defined by Executive Order 12866 since the annual effects (in this case, benefits ) are estimated to exceed $100 million

. Therefore , EPA is required to develop a regulatory impact analysis (RIA) as part of the regulatory process . The RIA includes an eco nomic impact analysis (EIA), and a benefits analysis along with documentation for the methods and results.
1.1 Analysis Summary The key results of the RIA are as follows: Engineering Cost Analysis: EPA estimates the revised NSPS’s tot al annualized costs will b e $ 4

. 1 m illion ( $20 1 0 ). This estimate includes all of the compliance costs, with both control and administrative (monitoring, testing) costs included. Economic Impact Analysis: T he economic impacts for the firms affected by this proposed rule range are annual compliance costs of less than 0.01 percent of sales. Thus, consumers will also experience minimal changes in the price of ferroalloy output. Social Cost Analysis: The estimated social cost of the major source rule will be $ 4

. 1 million, which is also the to t al annualized cost of compliance , ( $ 20 10 ). Small Entity Analyses: Neither of the two affected firm s are small businesses according to the Small Business Administration’s (SBA’s) small business size standard for this industry . Thus, there are no small business or entity impacts associated with this proposed rule.1

- 2  Benefits Analysis:

– The benefits from reducing some air pollutants have not been monetized in this analysis, including black carbon and HAPs emissions. We assess ed the benefits of these emission reductions qualitatively later in this analysis.

– We monetized the benefits from reducing particulate matter ( PM ) . Thus all monetized benefi ts reported reflect decreases in ambient PM 2.5 concentrations due to reduction of close to 257 tons of PM 2.5 . A lthough the monetized benefits likely underestimate the total benefits, the extent of the underestimate is unclear.

– Using a 3% discount rate, we estimate d the total monetized benefits of the proposed rule to be $ 70 m illion to $ 180 m illion (20 10 dollars) in the year of analysis (201 5 ). Using a 7% discount rate, we estimate the total monetized benefits of the proposed rule to be $ 60 billion to $ 160 billion (20 10 dollars ) in 201 5 . Using alternat iv e relationships betw een PM 2.5 and premature mortality supplied by experts, higher and lower benefits estimates are plausible, but most of the expert

- based estimates fall between these estimates.
Net Benefits: For the ferroalloys proposal , the net benefits are $ 66 m illion to $ 176

m illion in 201 5 at a 3% discou nt rate for the benefits and $ 56 m illion to $ 156 m illion in 2017 at a 7% discount rate for the benefits

. These results are shown in Table 1

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. 1.2 Organization of this Report The remainder of this report supports and details the meth odology and the results of the R IA:

 Section 2 describes the proposed regulation

.

 Section 3 presents the profile of the affected industry

.

 Section 4 describes the baseline emissions and emission reductions for the proposed regulation.

 Section 5 des cribes the economic impacts and analyses to comply with Executive Orders.

 Section 6 presents the benefits estimates.

 Section 7 presents the net benefits of the proposed rule.

 Section 8 contains the references for the RIA.1

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Table 1

- 1. Summary of the Annua l Monetized Benefits, Social Costs, and Net Benefits for

the Proposed Ferroalloys RTR in 201 5 ( $20 10 millions ) a

3% Discount Rate 7% Discount Rate Proposed Standard Total Monetized Benefits b $ 70 to $ 180 $ 60 to $ 160 Total Social Costs $ 4 $ 4 Net Benefits $ 7 0 to $ 180 $ 60 to $ 160 Nonmonetized Benefits Reduced exposure to HAPs, including mercury, nickel, cadmium , and formaldehyde Reduced Climate effects due to reduced black carbon emissions Ecosystem effects Visibility impairment

a All estimates are f

or the year of implementation (201 5 ) and are rounded to two significant figures. These results include units anticipated to come online and the lowest cost disposal assumption.
b The total monetized benefits reflect the human health benefits associated with reducing exposure to PM 2.5 through reductions of directly emitted PM 2.5

. It is important to note that the monetized benefits include many but not all health effects associated with PM 2.5 exposure. Benefits are shown as a range from Pope et al. (2002) to Laden et al. (2006) . These models assume that all fine particles, regardless of their chemical composition, are equally potent in causing premature mortality because the scientif ic evidence is not yet sufficient to allow differentiation of effect estimates by particle type.SECTION 2 INTRODUCTION
2.1 Background for Proposed Rule
2.1.1 What is this source category and how did the MACT regulate its HAP emissions? The NESHAP (or MACT rule) for Ferroalloys Production: Ferromanganese and Silicomanganese was promulgated on May 20, 1999 (64 FR 27450) and codified at 40 CFR part 63, subpart XXX. 1 The 1999 NESHAP (40 CFR 63.1650(a)) applies to all new and existing ferroalloys production facilities that manufacture ferromanganese or silicomanganese and are major sources or are co

- located at major sources of HAP emissions. The rule’s product

- specific applicability reflected the only known major source at the time of promulgation. Since the n, one other producer of silicomanganese has started production.
Today, there are two ferroalloys production facilities that are subject to the MACT rule. No new ferroalloys production facilities have been built in over 20 years, and we anticipate no new f erroalloys production facilities in the foreseeable future, although one facility is currently exploring expanding operations.
Ferroalloys are alloys of iron in which one or more chemical elements (such as chromium, manganese, and silicon) are added into molten metal. Ferroalloys are consumed primarily in iron and steel making and are used to produce steel and cast iron products with enhanced or special properties.
Ferroalloys within the scope of this source category are produced using submerged electric arc furnaces, which are furnaces in which the electrodes are submerged into the charge. The submerged arc process is a reduction smelting operation. The reactants consist of metallic ores (ferrous oxides, silicon oxides, manganese oxides, etc.) and a carbo n

- source reducing agent, usually in the form of coke, charcoal, high

- and low

- volatility coal, or wood chips. Raw materials are crushed and sized and then conveyed to a mix house for weighing and blending. Conveyors, buckets, skip hoists, or cars transport the processed material to hoppers above the furnace. The mix is gravity

- fed

1 The emission limits were revised on March 22, 2001 (66 FR 16024) in response to a petition for reconsideration submitted to EPA following promulgation of the final rule, and a petition for review filed in the U.S. Court of Appeals for the District of Colu mbia Circuit.through a feed chute either continuously or intermittently, as needed. At high

temperatures in the reaction zone, the carbon source reacts with metal oxides to form carbon monoxid e and to reduce the ores to base metal. 2 The molten material (product and slag) is tapped from the furnace, sometimes subject to post

- furnace refining, and poured into casting beds on the furnace room floor. Once the material hardens, it is transported to product crushing and sizing systems and packaged for transport to the customer.
HAP generating processes include electrometallurgical (furnace) operations (primary and tapping), other furnace room operations (ladle treatment and casting), building fugitive s, raw material handling and product handling. HAP are emitted from ferroalloys production as process emissions, process fugitive emissions, and outdoor fugitive dust emissions.
Process emissions are the exhaust gases from the control devices, primarily t he furnace control device, metal oxygen refining control device and crushing operations control device. The HAP in process emissions are primarily composed of metals (mostly manganese, arsenic, nickel, lead and chromium) and also may include organic compou nds that result from incomplete combustion of coal or coke that is charged to the furnaces as a reducing agent. There is also evidence of mercury emissions. There are process metal HAP emissions from the product crushing control devices. Process fugitive

e missions occur at various points during the smelting process (such as during charging and tapping of furnaces and casting) and are assumed to be similar in composition to the process emissions. Outdoor fugitive dust emissions result from the entrainment of HAP in ambient air due to material handling, vehicle traffic, wind erosion from storage piles, and other various activities. Outdoor fugitive dust emissions are composed of metal HAP only.
The MACT rule applies to process emissions and process fugitive em issions from the submerged arc furnaces, the metal oxygen refining process, and the product crushing equipment and outdoor fugitive dust emissions sources such as roadways, yard areas, and outdoor material storage and transfer operations. For process sourc es, the NESHAP specifies numerical emissions limits for particulate matter (as a surrogate for metal HAP) from the electric (submerged) arc furnaces (including primary and tapping emissions), depending on furnace type, size, and product being made. Particu late matter emission

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.limits (again as a surrogate for metal HAP) are also in place for the metal oxygen refining

process and product crushing and screening equipment. Table 2

- 1 contains a summary of the applicable limits.Table 2

- 1 . Emission Limits in Subpart XXX

New or Reconstructed or Existing Source Affected Source Applicable PM Emission Standards Subpart XXX Reference

New or reconstructed Submerged arc furnace 0.23 kilograms per hour per megawatt (kb/hr/MW) (0.51 pounds per hour per megawatt (lb/hr/MW) or 35 milligrams per dry standard cubic meter (mg/dscm) (0.015 grains per dry standard cubic foot (gr/dscf) 40 CFR 63.1652(a)(1) and (a)(2)

Existing Open submerged arc furnace producing ferromanganese and operating at a furnace power input of 22 MW or less 9.8 kg/hr (21.7 lb/hr) 40 CFR 63.1652(b)(1)

Existing Open submerged arc furnace producing ferromanganese and operating at a furnace power input greater than 22 MW 13.5 kg/hr (29.8 lb/hr) 40 CFR 63.1652(b)(2)New or Reconstructed

or Existing Source Affected Source Applicable PM Emission Standards Subpart XXX Reference

Ex isting Open submerged arc furnace producing silicomanganese and operating at a furnace power input greater than 25 MW 16.3 kg/hr (35.9 lb/hr) 40 CFR 63.1652(b)(3)

Existing Open submerged arc furnace producing silicomanganese and operating at a furnace power input of 25 MW or less 12.3 kg/hr (27.2 lb/hr) 40 CFR 63.1652(b)(4)

Existing Semi

- sealed submerged arc furnace (primary, tapping, and vent stacks) producing ferromanganese 11.2 kg/hr (24.7 lb/hr) 40 CFR 63.1652(c)

New, reconstructed, or existing Metal oxygen refining process 69 mg/dscm (0.03 gr/dscf) 40 CFR 63.1652(d)

New or reconstructed Individual equipment associated with the product crushing and screening operation 50 mg/dscm (0.022 gr/dscf) 40 CFR 63.1652(e)(1)
Existing Individual equipment associated with the product crushing and screening operation 69 mg/dscm (0.03 gr/dscf) 40 CFR 63.1652(e)(2)The 1999 NESHAP established a building opacity limit of 20 percent that is measured

during the required furnace control device performance test. The rule provides an excursion limit of 60 percent opacity for one 6

- munute period during the performance test. The opacity observation is focused only on emissions exiting the shop due solely to operations of any affected submerged arc f

urnace. In addition, blowing taps, poling and oxygen lancing of the tap hole; burndowns associated with electrode measurements; and maintenance activities associated with submerged arc furnaces and casting operations are exempt from the opacity standards

s pecified in §63.1653.
For outdoor fugitive dust sources, as defined in §63.1651, the 1999 NESHAP requires that plants prepare and operate according to an outdoor fugitive dust control plan that describes in detail the measures that will be put in place to control outdoor fugitive dust emissions from the individual outdoor fugitive dust sources at the facility. The owner or operator must submit a copy of the outdoor fugitive dust control plan to the designated permitting authority on or before the applicable compliance date.

2.1.2 What data collection activities were conducted to support this action?
In April 2010, we issued an information collection request (ICR), pursuant to CAA section 114, to the two companies that own and operate the two ferroalloys production facilities producing ferromanganese and silicomanganese. The ICR requested available information regarding process equipment, control devices, point and fugitive emissions, practices used to control fugitive emissions, and other aspects of facil ity operations. The two companies completed the surveys for their facilities and submitted the responses to us in the fall of 2010. We also requested that the two facilities conduct additional emissions tests in 2010 for certain HAP from specific processes that were considered representative of the industry. Pollutants tested included most HAP metals, hydrochloric acid, hydrofluoric acid, formaldehyde, mercury, polycyclic aromatic hydrocarbons and dioxins and furans. The results of these tests were submitte d to the EPA in the fall of 2010 and are available in the docket for this action.

The proposed rule is economically significant according to Executive Order 12866. As part of the regulatory process of preparing these standards, EPA has prepared a regulato ry impact analysis (RIA). This analysis includes an analysis of impacts to small entities as part of compliance with the Small Business Regulatory Enforcement Fairness Act (SBREFA) and analyses to comply with other Executive Orders.3

- 1 SECTION 3 IND USTRY PROFILE EPA has developed this industry profile to provide the reader with a general understanding of the technical and economic aspects of the industr y that would be directly affected by this proposal.
Ferroalloys are alloys of iron in which one or more chemical elements (such as chromium, manganese, and silicon) are added into molten metal. Ferroalloys are consumed primarily in iron and steel making and are used to produce steel and cast iron products w ith enhanced or special properties.

Ferroalloys within the scope of this source category are produced using submerged electric arc furnaces, which are furnaces in which the electrodes are submerged into the charge. The submerged arc process is a reductio n smelting operation. The reactants consist of metallic ores (ferrous oxides, silicon oxides, manganese oxides, etc.) and a carbon

- source reducing agent, usually in the form of coke, charcoal, high

- and low

- volatility coal, or wood chips. Raw materials are crushed and sized and then conveyed to a mix house for weighing and blending. Conveyors, buckets, skip hoists, or cars transport the processed material to hoppers above the furnace. The mix is gravity

- fed through a feed chute either continuously or interm ittently, as needed. At high temperatures in the reaction zone, the carbon source reacts with metal oxides to form carbon monoxide and to reduce the ores to base metal. 1 The molten material (product and slag) is tapped from the furnace, sometimes subject t o post

- furnace refining, and poured into casting beds on the furnace room floor. Once the material hardens, it is transported to product crushing and sizing systems and packaged for transport to the customer.

Ferroalloys are master alloys containing iron a nd one or more non

- ferrous metals as alloying elements. The ferroalloys are usually classified in two groups: bulk ferroalloys (produced in large quantities in electric arc furnaces), and special ferroalloys (produced in smaller quantities, but with growin g importance). Bulk ferroalloys are used in steel making and

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steel or iron foundries exclusively, while the use of special ferroalloys i s far more varied (used in batteries, animal feed). The U.S. military is a particularly notable consumer of manganese: In its weapons systems and munitions, the Department of Defense uses approximately 25,000 short tons of manganese ore chemical/metal grade, 7,900 short tons of ferro

- manganese (either carbon or silicon) and 1,370 short tons of electrolytic manganese metal (EMM) each year. Manganese is a key ingredient in the production of ferroalloys for use in the steel and other industries. According the U.S. Geological Survey, ―there are no substitutes for manganese in its major applications

- the manufacture of steel , steel alloys, non

- steel alloys, batteries, and fertilizers and animal feed.‖ (USGS, 2008). In total, about 8 7 % of the ferroalloys produced are used in the steel industry (European Commission, 2001).

Very little ferroalloy production takes place in the U.S. and Canada. Less than 1 percent of worldwide ferroalloy production takes place in the United States (SFSA, 2008). The amount of worldwide ferroalloy production occurs in North America has declined over time. As of 2008, more than 56 percent of fer roalloy production took place in Asia (SFSA, 2008). The largest producer of ferroalloys is China, with more than 18 million tons produced in 2008. South Africa is second highest production, but is well behind China at around 4 million tons produced that same year. More than 80 percent of the ferroalloys consumed in the U.S. are imported.

Worldwide, the top four ferroalloys produced are: ferrochromium (7.84 million metric tons), silicomanganese (7.46 million metric tons), ferrosilicon (7.32 million me tric tons), and ferromanganese (5.7 million metric tons) (SFSA, 2008).

Today, there are two ferroalloys production facilities that are subject to the MACT rule. No new ferroalloys production facilities have been built in over 20 years, and we anticipate no new ferroalloys production facilities in the foreseeable future, although one facility is currently exploring expanding operations.

The affected facilities are owned by the Eramet Group and Group Privat. The Eramet Group is a French

- owned conglomera te with more than 16,000 employees worldwide and revenues in 2010 of around $5 billion. Group Privat is a loose conglomerate of several large Ukrainian firms that have interests in metals, chemicals, banking, and other industries in that3

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country and worl dwide. There are at least 20,000 employees in this conglomerate and at least $10 billion in revenues generated in 2008. The ferroalloys produced by these firm’s U.S. facilities use manganese as an input, and the mines for this manganese are owned by the se firms.4

- 1 SECTION 4 BASELINE EMISSIONS , EMISSION REDUCTIONS , AND COSTS
4.1 Introduction This section presents the baseline emissions for the pollutants emitted by affected units and also the resulting emissions in 201 5 after imposition of the proposed RTR rule . We present the baseline emissions and emission reductions for HAP and other emissions such as PM 2.5 . Emission reductions

were calculated from the baseline emissions based on the proposed emissions limits, and the emission reductions were used as inputs to the benefits analysis presented in Section 7.

4.2 S ummary O f C ost E stimates A nd E missions R eductions F or T he R egulatory O ptions C onsidered For P roposal Regulatory options were considered for control of emissions of particulate metal hazardous air pollutants (HAP) , Mercury (Hg), organic HAP, and Polycyclic Aromatic Hydrocarbons (PAH) from furnace stacks , and metal HAP from product sizing stacks and fugitive sources.
Emissions of each pollutant vary c onsiderably among facilities, and multiple control options are available for different groups of pollutants. Because of this, and the limited number of facilities in the source category (two), specific regulatory options were assessed for each facility ba sed on both technology review and modeled risk. Because of differences in modeled risk and existing controls, some options were not considered for all process lines at all facilities. Emissions reductions were estimated for each facility based on emission s data received in an information collection request (ICR) sent to the industry

. A brief description of the options selected for the proposed revisions to the NESHAP and the associated costs and emissions reductions for each facility in the source catego ry are summarized in Table 4

- 1. All the options considered in this analysis are summarized in Table 4

- 2 , along with the total estimated cost for implementing each option . A more detailed description of all the regulatory options considered for proposal and their associated cost and emissions reductions estimates are presented in section 2.0 of th e cost memorandum for this proposal

.4

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The e missions reductions associated with the control options are calculated as the difference between baseline emissions and the estimated emissions for each control scenario. Details of the methodology employed to calculate these emissions are included in a separate memorandum. All costs are estimated in 2010 dollars. The HAP emission reductions estimated for this proposal a re 83.6 . tons

. PM emissions in this memo refer to total PM. Of the total PM, approximately 41 percent of the emissions are fine particulate (PM 2.5 ). Thus, of the 62 6 tons of total PM reduced, 257 tons are PM 2.5 .2

Table 4

- 1: Summary of the Estimated Costs and Emissions Reductions of Regulatory Options Selected for Proposal

Table 4

- 2: Summary of the Estimated Costs and Reductions for All Considered Options4

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4

. 3 Regulatory O ptions C onsidered F or P roposal This section provides a detailed description of all regulatory options that were considered for the proposed revisions to the Ferroalloys NESHAP and their associa ted cost s and emissions reductions.

4. 3 .1 Furnace Stack Emissions

– Metal HAP
The selected standard for furnace stack emissions of PM (as a surrogate for metal HAP) is based on a technology review, and is designed to ensure that the standard in place will reflect actual current performance of existing sources. The selected option is a numeric emission standard with which both facilities are already in compliance through current controls. Although it was not selected for proposal, costs for a beyond

- the

- floor reg ulatory option were estimated, and are presented here.

4.3.1.1 Replacement of Existing control device with a new negative

- pressure fabric filter
This option was considered for a single furnace at one of the facilities, and represents a scenario of reducing fugitive PM emissions from the facility by 25 tons per year (and HAP emissions by 3 t ons per y ear ) by replacing a wet scrubber with a large negative pressure fabric filter . The total estimated capital cost for the replacement fabric filter is $13.2 million

. Annualized capital cost and operational and maintenance costs are estimated at $ 2.5 million or $1.5 million above the current annual cost for the existing scrubber, according to the facility ICR
response.

4.3

. 2 Furnace Stack Emissions

– Hg, PAH, Formald ehyde 1
The selected standards for Hg and PAH are numeric emission standards that represent a beyond

- the

- floor option considered under section 112(d) of the Clean Air Act (the Act). We selected this option largely based on the potential risk impacts based o n multi

- pathway screening and because of the potential to reduce the global pool of mercury. We determined that only one

1 The Hg and PAH controls will also achieve co

- control of formaldehyde. We propose to set a MACT floor limit for this pollutant because there are no compelling risk or environmental reasons to control the relatively low levels of formaldehyde emitted at a b eyond

- the

- floor level.4

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of the facilit ies would be required to implement controls for these pollutants. 2 Estimated costs associated with these controls are pr esented here.

4.3.2.1 Addition of Activated Carbon Injection for Fabric Filters and Scrubbers
This option was selected for two furnaces at one facility, and it represents a scenario of reducing emissions of Hg, PAH, and Formaldehyde from the facility by 3.2 tpy by installation of activated carbon injection (ACI). The total estimated capital cost for the retrofit of ACI is $ 1.7 million. Annualized capital cost and operational and maintenance costs are estimated at $ 1.4 million.

2 Memorandum from Bradley Nelson, Ec/R to Conrad Chin, US EPA/OAQPS/SPPD/MMG, Methodology Used to Estimate Mercury Control Costs for the Ferroalloys Production Industry, September 8, 2011.4

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4 .3

. 3 Process Fugitive Emissi ons

– Metal HAP
Several regulatory options were considered for control of fugitive metal HAP emissions , based on modeled risk

. We focused the options on the individual emissions sources at each plant that appeared to be risk drivers. We looked at several options to capture and control these process fugitives ranging from local ventilation and control, building ventilation and cont rol, and fenceline monitoring. The regulatory options considered for control of process fugitive metal HAP emissions are presented in the following section.

4.3.3.1 Improvements to Capture Hoods for Tapping Operations
This option was considered for tapping operations at two furnaces each for both of the facilities, not including some hoods which were recently upgraded. This option represents a scenario of reducing fugitive PM emissions from the facilities by 63 tpy (and HAP emissions by 6.9 tpy) by upgrading the capture efficiency of capture hoods for tapping operations . The total estimated capital cost for the hood upgrades is approximately $ 315,000 . Annualized capital cost and operational and maintenance costs are estimated at approximately $ 82,000.

4.3.3. 2 Addition of Capture and Control for Casting Operations
Some casting operations are already controlled at each facility. We developed costs to capture and control casting emissions the remaining uncontrolled casting operations. The estimated costs were bas ed on the assumption that one of the two facilities would require addition of capture and control for two of their three casting operations and the second facility would require addition of capture and control for one of their three casting operations. Thi s scenario would reduce fugitive PM emissions from the facilities by 100 tpy (and HAP emissions by 23 tpy) by adding hoods, ductwork, and fabric filters to capture and control emissions from currently uncontrolled casting operations . The total estimated ca pital cost for the hoods, ductwork, and fabric filters is approximately $ 5 million . Annualized capital cost and operational and maintenance costs are estimated at approximately $ 1.6 million.4

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4.3.3.3 Building Ventilation
The selected control option involves installation of building ventilation for furnace buildings 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 and a new fabric f ilter for each building. We assumed that one of the two facilities would require building ventilation for two buildings and the second facility would require it for a single building. This option would reduce fugitive PM emissions from the facilities by 6 2 6 tpy (and HAP emissions by 80

. 4 tpy) by adding ductwork and fabric filters to capture and control all fugitive emissions from furnace buildings . The total estimated capital cost for the ductwork, and fabric filters is approximately $ 9.4 million . Annualize d capital cost and operational and maintenance costs are estimated at approximately $ 2.3 million.

4.3.3.4 Tapping and Casting Control with Fence line Monitoring

This is an alternative regulatory option selected by EPA for proposal in the revised NESHAP fo r the Ferroalloys Production source category. This option allows facilities who may have already implemented improved capture and control of tapping and casting emissions to avoid installation of building ventilation by performing ambient monitoring for ma nganese at or near the boundaries of the facilities. Estimated emissions reductions would be the same as for the tapping and casting capture/control options described previously. Cost estimates were not prepared for this option.

4.3.5 Product Sizing Operat ions

– Metal HAP

– Improvements to Fabric Filters
The selected standard for product sizing stack emissions of PM (as a surrogate for metal HAP) is based on a technology review, and is designed to ensure that the standard in place will reflect actual curren t performance of existing sources. The selected option is a numeric emission standard with which both facilities are already in compliance through current controls (fabric filters). Although it was not selected for proposal, costs for a beyond

- the

- floor re gulatory option were estimated, and are presented here.4

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4.3.5.1 Upgrade fabric filter
For one facility, improvements to product sizing fabric filters were considered, and represent a scenario of reducing fugitive PM emissions from the facility by 11 tpy (and HAP emissions by 4.6 tpy) by upgrading the bag material of fabric filters and conversion to reverse

- air cleaning . The total estimated capital cost for the fabric filter upgrades is approximately $ 59,000

. Annualized capital cost and operational and maintenance costs are estimated at approximately $ 14,400.

4

. 3.6 Metal Oxygen Refining (MOR) Operations

– Metal HAP
Metal Oxygen Refining (MOR) is a post

- tapping process applied to the molten metal at one of the facilities. The selected standard for MOR stack emissions of PM (as a surrogate for metal HAP) is based on a technology review, and is designed to ensure that the standard in place will reflect actual current performance of existing sources. The selected option is a numeric emission standard with which the facility is already in compliance through current controls (a fabric filter). Modeled risk did not indicate any need for consideration of a beyond

- the

- floor control option, so no costs were estimated for this emission source.

4

. 4 M ethodology F or E stimating C ontrol C osts
The following sections present the methodologies used to estimate the costs associated with the regulatory options considered for proposal in the revised NESHAP for the Ferroalloys Produ ction source category.

4

. 4

. 1 Furnace Stack Emissions

– Metal HAP
The primary technologies used to control furnace stack emissions of metal HAP in the Ferroalloys source category are fabric filters (also known as baghouses) . One facility uses a wet scrubb er to control emissions from one of their furnaces. Data from emission tests performed in conjunction with the ICR indicate that baghouses that are properly designed, installed, maintained and operated can meet all of the metal HAP stack emissions limits s elected for proposal in the revised NESHAP.4

- 6

In order to estimate the capital cost associated with a particular option, we first determined which stacks would be required to reduce emissions. Only one stack was considered for any emission reductions, the o ne with a wet scrubber, for which an above

- the

- floor option was considered

– replacing the stack with a large negative pressure fabric filter. Because the required fabric filter would be a large, custom model, we contacted a vendor who had recently supplie d a similar model for installation at a ferroalloys facility to obtain assistance in developing a cost estimate. The equipment

- only cost supplied by the vendor was used in conjunction with techniques described in the sixth edition of the EPA Air Pollution Control Cost Manual 3 to estimate total installed capital cost and annual costs.
Our cost model included installation of the fabric filter and any necessary fans, ductwork, and site work. The total installed capital cost of a fabric filter designed for a flow

- rate of 180,000 actual cubic feet per minute (acfm) was estimated at $13.2 million. The a nnualized capital cost and operational and maintenance costs are estimated at $ 2.5 million , via techniques described in the sixth edition of the EPA Air Pollution Control Cost Manual . The annualized cost assumes a 20 year life expectancy for the unit and, to be consistent with OMB Guidance in Circular A

- 4, a 7 percent cost of capital as an estimate of the annualized capital cost as is commonly done for EPA standard s such as this one

. All costs for this estimate were based on 2010 dollars from a current vendor estimate. The annual cost for operation of the scrubber was estimated to be $1.0 million based on information obtained from the ICR submitted by the facility. Therefore, the incremental annual cost of replacing the current operating scrubber with a new negative pressure fabric filter was estimated to be $1.5 million. The incremental cost was used to calculate the cost effectiveness of this control option.

4

. 4. 2 Furnace Stack Emissions

– Hg, PAH, Formaldehyde
EPA believes that the most appropriate technology for control of exhaust emissions of Hg, PAH, and formaldehyde for the Ferroalloys Production source category is Activated Carbon Injection (ACI). Based o n the proposed emission limit, we believe one facility would require installation of controls for Hg and PAH on two furnaces. To minimize generation of potentially

3 U.S. Environmental Protection Agency, EPA Air Pollution Control Cost Manual. October 2002, Sixth Edition, Found on the Internet at http://epa.gov/ttn/catc/products.html#cccinfo4

- 7

hazardous waste (from contaminated carbon media) and avoid contamination of the saleable byp roduct baghouse dust, it was assumed that the carbon injection would be performed at the outlet of the negative pressure fabric filter, with the carbon media collected by a second, small polishing baghouse. Activated carbon for the furnace equipped with a scrubber would be injected prior to the scrubber with no additional particulate control required.
Costs for ACI were estimated using cost equations developed for the Utility NESHAP 4 and information provided by activated carbon vendors. 5 The calculated equi pment costs for ACI and fabric filters were used in conjunction with techniques described in the sixth edition of the EPA Air Pollution Control Cost Manual to estimate total installed capital cost and annual costs. It was estimated that one facility would require installation of ACI on two furnaces, one exhausting to a fabric filter with an outlet flow rate of 245,000 acfm, and a second exhausting to a scrubber with an outlet flow rate of 184,000 acfm.

Our cost model included installation of the two activa ted carbon injection systems, one polishing fabric filter, and associated fans, ductwork, and site work. The total installed capital cost was estimated at $1.7 million. The a nnualized capital cost and operational and maintenance
costs we re estimated at $ 1. 4 million. Annualized costs assume a 20 year life expectancy for the units and, to be consistent with OMB Guidance in Circular A

- 4, a 7 percent cost of capital as an estimate of the annualized capital cost as is commonly done for EPA standards such as this one. 6 All costs for this estimate were adjusted to 2010 dollars using Chemical Engineering Plant Cost Indices (CEPCI). 7 We did not consider the downtime associated with installation for the unit in
our costs.

4.4

. 3 Process Fugitive Emissions

– Metal HAP

4 Sargent & Lundy, IPM Model

- Revisions to Cost and Performance for APC Technologies, Mercury Control Cost Development Methodology Final, March, 2011. http://www.epa.gov/airmarkt/progsregs/epa

ipm/docs/append5_3.pdf 5 Contact R eport, Daryl Lipscomb, Albemarle, August 22, 2011. 6 U.S. Office of Management and Budget. Circular A

- 4, September 17, 2003. Found on the Internet at http://www.whitehouse.gov/omb/c irculars_a004_a

- 4/#e

. 7 Estimates of the Chemical Engineering Plant Cost Index can be found at http://www.che.com . CEPCI values employed were: 539.1 for 2010, 575.4 for 2008, and 361.3 for 1991.4

- 8

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 emissions can also result from in complete capture of emissions by tapping hoods, or from casting opera tions, some of which are uncontrolled at both facilities

. The 1999 NESHAP established a building opacity limit of 20 percent that is measured during the required furnace control device performance test. The rule provides an excursion limit of 60 percent o pacity for one 6

- m i nute period during the performance test. The opacity observation is focused only on emissions exiting the shop due solely to operations of any affected submerged arc furnace. In addition, blowing taps, poling and oxygen lancing of the ta p hole; burndowns associated with electrode measurements; and maintenance activities associated with submerged arc furnaces and casting operations are exempt from the opacity standards specified in §63.1653.
Both facilities employ negative

- pressure hoods t o 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.

Costs were estimate d for several options for process fugitive control:
Improvements to Capture Hoods for Tapping Operations
Addition of Capture and Control for Casting Operations
Building Ventilation
Building ventilation was the option selected for proposal, because it was associated with the lowest levels of modeled risk, and would capture any emissions that would have been collected by improved tapping capture and capture control of casting emissions , in addition to any furnace fugitives which escape current controls.4

- 9

a) Improvements to Capture Hoods for Tapping Operations

Estimated costs for tap hood improvements were assumed to cover only the cost of an improved replacement tapping hood on the assumpt ion that sufficient control device capacity is already in place, since both facilities already have tapping capture and control in place. Because the capture hood equations in EPA’s cost manual were insufficient for large, metal hoods of the type required, an equation from a book by Bill Vatavuk (the author of EPA’s Air Pollution Control Cost Manual) was used 8 , in conjunction with techniques described in the sixth edition of the EPA Air Pollution Control Cost Manual 9 to estimate total installed capital cost and annual costs.
Our cost model included installation of the replacement tap hood. The total installed capital cost of four replacement tapping hoods (two at each facility) was estimated at $315,000. The a nnualized capital cost and operational and mai ntenance costs are estimated at $ 81,000 via techniques described in the sixth edition of the EPA Air Pollution Control Cost Manual . The annualized cost assumes a 20 year life expectancy for the equipment and, to be consistent with OMB Guidance in Circular A

- 4, a 7 percent cost of capital as an estimate of the annualized capital cost as is commonly done for EPA standards such as this one. All costs for this estimate were adjusted to 2010 dollars using Chemical Engineering Plant Cost Indices (CEPCI). We did not consider the downtime associated with installation for the unit in our costs.

b) Addition of Capture and Control for Casting Operations

Estimated costs for addition of capture and control of casting emissions were assumed to cover the cost of hoods and du ctwork for capture, plus a fabric filter for control of particulate emissions. Because each facility already has installed capture and control for some of their casting operations, we estimated that additional capture and control for two casting operations would be required at one facility and for one casting operation at the second. Equipment costs for the hoods and ductwork, plus a fabric filter a

8 Vatavuk, W.M., Est imating Costs of Air Pollution Control. Chelsea, Michigan, Lewis Book Publishers. 1990. Pp. 92 9 http://epa.gov/ttn/catc/products.html#cccinfo4

- 10

fabric filter designed for a flow

- rate of 60,000 actual cubic feet per minute (acfm) were estimated via techn iques described in the sixth edition of the EPA Air Pollution Control Cost Manual 10 to estimate total installed capital cost and annual costs.
Our cost model included installation of casting hoods, ductwork, and a fabric filter. The total installed capit al cost to add capture and control for three casting operations was estimated at $ 5

. 0 million. The a nnualized capital cost and operational and maintenance costs are estimated at $ 1.6 millionvia techniques described in the sixth edition of the EPA Air Pollu tion Control Cost Manual . The annualized cost assumes a 20 year life expectancy for the equipment and, to be consistent with OMB Guidance in Circular A

- 4, a 7 percent cost of capital as an estimate of the annualized capital cost as is commonly done for EPA standards such as this one. All costs for this estimate were adjusted to 2010 dollars using Chemical Engineering Plant Cost Indices (CEPCI). We did not consider the downtime associated with installation for the unit in our costs.

c) Building Ventilation

To e stimate the cost for the building ventilation fabric filter, EPA cont acted a vendor who had recently supplied a fabric filter to one of the facilities to obtain assistance in developing a cost estimate for the installation. The equipment

- only cost supplied by the vendor was used in conjunction with techniques described in the sixth edition of the EPA Air Pollution Control Cost Manual 11 to estimate total installed capital cost and annual costs.
Our cost model included installation of the baghouse and any ne cessary fans, ductwork, and site work, including extra ductwork for connection to the building roof monitors. The total installed capital cost of three fabric filters (two at one facility, one at the second facility) designed for a flow

- rate of 150,000 act ual cubic feet per minute (acfm) was estimated at $9.4 million. The a nnualized capital cost and operational and maintenance costs are estimated at $ 2.3 million , via techniques described in the sixth edition of the EPA Air Pollution Control Cost Manual . The annualized cost assumes a 20

10 http://epa.gov/ttn/catc/products.html#cccinfo 11 http://epa.gov/ttn/catc/products.html#cccinfo4

- 11

year life expectancy for the unit and, to be consistent with OMB Guidance in Circular A

4, a 7 percent cost of capital as an estimate of the annualized capital cost as is commonly done for EPA standards such as this one. All costs for this estimate were based on 2010 dollars from a current vendor estimate. We did not consider the downtime associated with installation for the unit in our costs.4

- 12

4 .4 .4 Product Sizing Operations

– Metal HAP

– Improvements to Fabric Filters

The primary technology used to control emissions of particulate metal HAP from product sizing operations in the Ferroalloys Production source category are fabric filters. The fabric filters currently in use at the facilities are capable of meeting the proposed standard. Although it was not selected for proposal, costs for a beyond

- the

- floor regulatory option were estimated, and are presented here. The beyond

- the

- floor option was based on modeled risk, and only one product sizing line at one facility was determi ned to pose any exiting risk. The option considered was an upgrade to the fabric filter via improved bag materials and conversion to reverse

- air cleaning. The costs associated with this upgrade were calculated via techniques described in the sixth edition of the EPA Air Pollution Control Cost Manual 12 to estimate total installed capital cost and annual costs. At the end, we concluded that the potential risk reduction was not meaningful compared to the risk reduction achieved by the building ventilation optio n. The total installed capital cost of the fabric filter upgrade was estimated at $59,000. The Annualized capital cost and operational and maintenance costs are estimated at $14,000, via techniques described in the sixth edition of the EPA Air Pollution Co ntrol Cost Manual . The annualized cost assumes a 5 year life expectancy for the equipment (fabric filter bags) and, to be consistent with OMB Guidance in Circular A

- 4, a 7 percent cost of capital as an estimate of the annualized capital cost as is commonly done for EPA standards such as this one. All costs for this estimate were adjusted to 2010 dollars using Chemical Engineering Plant Cost Indices (CEPCI). We did not consider the downtime associated with installation for the unit in our costs.

4

. 4 S ummary o f C ost B y F acility

Table 4

- 3 summarizes estimated costs for each facility in the Ferroalloys source category, assuming implementation of the emission reduction options selected for proposal.

12 http://epa.gov/ttn/catc/products.html#cccinfo4

- 13 Table 4

- 3 : Summary Cost Estimates by Facility *

* Overall cost estimates may be overstated since some facilities may be able to comply with the rule under the alternative compliance option (i.e., monitoring at facility boundary and improved casting/tapping capture & control) and may not need to install building ventilation. If so, actual costs would be significantly lower than shown here

.5

- 1 SECTION 5 ECONOMIC IMPACT ANAL YSIS AND STATUTORY AND EXECUTIVE ORDER ANALYSES

5.1 Background
In this chapter, we present the results of the economic impact analysis and analyses prepared in adherence to statutory and Executive Order requirements.

5.2 Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) generally requires an agency to pre pare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions.
For purposes of assessing the impacts of this proposed rule on small entities, small entity is defined as: (1) a smal l business as defined by the Small Business Administration’s (SBA) regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not

- for

- profit enterprise that is independently owned and operated and is not dominant in its field. For this source category, which has the NAICS code 331112 ( i.e. , Electrometallurgical ferroalloy product manufact uring), the SBA small business size standard is 750 employees according to the SBA small business standards definitions.
After considering the economic impacts of today’s proposed rule on small entities, I certify that this action will not have a signific ant economic impact on a substantial number of small entities. Neither of the companies affected by this rule is considered to be a small entity per the definition provided in this section.
Although this proposed rule will not have a significant economic impact on a substantial number of small entities, the EPA nonetheless has tried to reduce the impact of this rule on small5

- 2

entities. To reduce the impacts, we are proposing emissions standards in a format that allow companies flexibility on how best to com ply with them. Moreover, we are proposing stack limits that are based on a weighted average approach (as described in Sections V.C and V.D of the preamble) and have been established at the least stringent levels that we estimate will still result in accept able risks to public health. Thus, the proposed stack limits are based on the least costly approach that will still provide an ample margin of safety for human health and the environment. In addition, the proposed compliance testing requirements were estab lished in a way that minimizes the costs for testing and reporting while still providing the Agency the necessary information needed to ensure continuous compliance with the proposed standards. We continue to be interested in the potential impacts of the p roposed rule on small entities and welcome comments on issues related to such impacts.

5.3 Energy Impacts Executive Order 13211 (66 FR 28355, May 22, 2001) provides that agencies will prepare and submit to the Administrator of the Office of Information and Re gulatory Affairs, Office of Management and Budget, a Statement of Energy Effects for certain actions identified as ―significant energy actions.‖ Section 4(b) of Executive Order 13211 defines ―significant energy actions‖ as any action by an agency (normally published in the Federal Register ) that promulgates or is expected to lead to the promulgation of a final rule or regulation, including notices of inquiry, advance notices of proposed rulemaking, and notices of proposed rulemaking: (1) (i) that is a signi ficant regulatory action under Executive Order 12866 or any successor order, and (ii) is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (2) that is designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action.
This rule is not a significant energy action as designated by the Administrator of the Office of Information and Regulatory Affairs because it is not likely to have a significant adverse impact on the supply, distribution, or use of energy. This action will not create any new requirements and therefore no additional costs for sources in the energy supply, distribution, or
use sectors.5

- 3

5.4 Unfunded Mandates Reform Act
5.4.1 Future and Disproportionate Costs The UMRA requires that we estimate, where accurate estimation is reasonably feasible, future compliance costs imposed by the rule and any disproportionate budgetary effects. Our estimates of the future compliance costs of the proposed rule are discussed p reviously in this RIA. We do not believe that there will be any disproportionate budgetary effects of the proposed rule on any particular areas of the country, s tate or local governments, types of communities (e.g., urban, rural), or particular industry se gments.
5.4.2 Effects on the National Economy The UMRA requires that we estimate the effect of the proposed rule on the national economy. To the extent feasible, we must estimate the effect on productivity, economic growth, full employment, creation of productive jobs, and international competitiveness of U.S. goods and services if we determine that accurate estimates are reasonably feasible and that such effect is relevant and material. The nationwide economic impact of the proposed rule is presented

ea rlier in this RIA chapter. This analysis provides estimates of the effect of the proposed rule on most of the categories mentioned above, and these estimates are presented earlier in this RIA chapter. The nature of this rule is such that it is not practica l for us to use existing approaches, such as the Morgenstern et al. approach , 1 to estimate the impact on employment to the regulated entities and others from this proposed rule. In addition, we have determined that the proposed rule contains no regulatory requirements that might significantly or uniquely affect small governments. Therefore, today ’ s rule is not subject to the requirements of section 203 of the UMRA.

5.5 Executive Order 13045: Protection of Children from Environmental Health Risks and Safety Ri sks
Executive Order 13045, ― Protection of Children from Environmental Health Risks and Safety Risks ‖ (62 FR 19885, April 23, 1997), applies to any rule that (1) is determined to be

― economically significant, ‖ as defined under Executive Order 12866, and (2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, EPA must evaluate the environmental health or safety effects of the planned rule o n children and explain why the

1 Morgenstern, R. D., W. A. Pizer, and J. S. Shih. 2002. ― Jobs versus the Environment: An Industry

- Level Perspective. ‖ Journal of Environmental Economics and Management 43 (3):412

- 436

.5

- 4

planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency.
This proposed rule is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997) because t he Agency does not believe the environmental health risks or safety risks addressed by this action present a disproportionate effect o n children

. If the regulatory action meets both criteria, the EPA must evaluate the environmental health or safety effect s of the planned rule on children and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency.
This proposed rule is not subject to Executive Order 13045 (62 FR 19885, A pril 23, 1997) because the Agency does not believe the environmental health risks or safety risks addressed by this action present a disproportionate risk to children. The report, Analysis of Socio

- Economic Factors for Populations Living Near Ferroalloys F acilities , shows that on a nationwide basis, there are approximately 26,000 people exposed to a cancer risk at or above 1

- in

- 1 million and approximately 28,000 people exposed to a chronic noncancer TOSHI greater than 1 due to emissions from the source category. Except for persons in the ―Ages 65 and Up‖ demographic group which are slightly elevated compared to the national average, the percentages for the other demographic groups, including children 18 years and younger, are similar to or lower than their respective nationwide percentages.
This propo sed rule is expected to reduce environmental impacts for everyone, including children. This action proposes emissions limits at the levels based on MACT, as required by the Clean Air Act. Based on our analysis, we believe that this rule does not have a dis proportionate impact on children.
The public is invited to submit comments or identify peer

- reviewed studies and data that assess effects of early life exposure to manganese, lead, arsenic, nickel, or mercury.
5.6 Executive Order 12898: Federal Actions to Add ress Environmental Justice in Minority Populations and Low

- Income Populations
Executive Order 12898 (59 FR 7629 (Feb. 16, 1994) ) e stablishes federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest ext ent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities o n minority populations and low

income populations in the United States.5

- 5

For the proposed ferroalloys rule, the EPA has determined that the current health risks posed to anyone by emissions from this source category are unacceptable. There are about 26,000 to 28,000 people nationwide that are currently subject to health risks which are non

negligible (i.e., cancer risks greater than 1 in a million or chronic noncancer TOSHI greater than 1) due to emissions from this source category. The demographic distribu tion of this ―at

- risk‖ population is similar or below the national distribution of demographics for all groups except for the ―ages 65 and up‖ age group, which is 4 percent greater than its corresponding national percentage. The proposed rule will reduce t he number of people in this at

- risk group from 26,000

- 28,000 people to about 1,000 people, thereby providing disproportionate benefits to a greater percentage of minorities. Therefore, the EPA has determined that the proposed rule will not have dispropor tionately high and adverse human health or environmental effects on minority or low

income populations. Further, since it so significantly reduces the at

- risk population in the process of ensuring public health protection with an ample margin of safety, it will actually provide disproportionate benefit to people ages 65 and up since they comprise a larger portion of the
current at

- risk group.6

- 1 SECTION 6 HUMAN HEALTH BENEFIT S OF EMISSIONS REDUC TIONS
6.1 Synopsis In this section, we provide an estimate of the monetized benefits associated with reducing particulate matter (PM) for the proposed NESHAP for Ferroalloys Production to address the results of the residual risk and technology review , RTR. For this rule, the PM reductions are the result of emission limits on the PM 2.5 . The total PM 2.5 reductions are the consequence of the technologies installed to meet these limits . These estimates reflect the monetized human health benefits of reducing cases of morbidity and premature mortality among populations exposed to the PM 2.5 reduced by this rulemaking. Using a 3% discount rate, we estimate the total monetized benefits of the proposed ferroalloy RTR to be $ 70 m illion to $ 180 m illion in t he implementation year (2015). U sing a 7% discount rate, we estimate the total monetized benefits of the Ferroalloy
RTR to be $ 60 m illion to $ 160 m illion in the year of analysis (2015). All estimates are in 20 10 $

. These estimates reflect EPA’s most current interpretation of the scientif ic literature. Higher or lower estimates of benefits are possible using other assumptions; examples of th is are provided in Figure 6

- 2 below

. Data, resource, and methodological limitations prevented EPA from monetizing the benefits from several important b enefit categories, including benefits from reducing hazardous air pollutants, ecosystem effec ts, and visibility impairment. The benefits from reducing other air pollutants have not been monetized in this analysis, including reducing mercury, HF, HCl and other HAPs emissions such as formaldehyde

.
6.2 Calculation of PM 2.5 Human Health Benefits This rulemaking would reduce emissions of PM 2.5 , and the incidence of PM 2.5 - related health effects. For this rule, the PM reductions are the result of emission limits on PM. The total
PM 2.5 reductions are the consequence of the technologies installed to meet these limits. Due to analytical limitations, it was not possible to provide a comprehensive estimate of PM 2.5 - related benefits. Instead, we used the ―benefit

- per

- ton‖ approach to estimate these benefits based on the methodology described in Fann, Fulcher, and Hubbell (2009) . The key assumptions are6

- 2

described in detail below. These PM 2.5 benefit

- per

- ton estimates provide the tota l monetized human health benefits (the sum of premature mortality and premature morbidity) of reducing one ton of PM 2.5 f

rom a specified source. EPA has used the benefit per

- ton technique in several previous RIAs, including the recent S O 2 NAAQS RIA (U.S. E PA, 2010b ). Table 6

- 1 shows the quantified and unquantified benefits captured in those benefit

- per

- ton estimates.

Table 6

- 1. Human Health and Welfare Effects of PM 2.5

Pollutant / Effect Quantified and Monetized in Primary Estimates Unquantified Effects Changes in:
PM 2.5 Adult premature mortality

Bronchitis: chronic and acute Hospital admissions: respiratory and cardiovascular Emergency room visits for asthma Nonfatal heart attacks (myocardial infarction) Lower and upper respiratory illness Minor restricted

- activity days Work loss days Asthma exacerbations (asthmatic population) Infant mortality Subchronic bronchitis cases Low birth weight Pre

- term births Pulmonary function Nonfatal cardiovascular outcomes other than myocardial infarctions Chronic respiratory diseases other than chronic bronchitis Non

- asthma respiratory emergency room visits Visibility Household soiling
Consistent with the Portland Cement NESHAP (U.S. EPA, 2009a ), the PM 2.5 benefits estimates utilize the concentration

- response functions as reported in the epidemiology literature, as well as the 12 functions obtained in EPA ’ s expert elicitation study as a sensitivity analysis.

 One estimate is based on the concentration

- respon se (C

- R) function developed from the extended analysis of American Cancer Society (ACS) cohort, as reported in Pope et al. (2002) , a study that EPA has previously used to generate its primary benefits esti mate. When calculating the estimate, EPA applied the effect coefficient as reported in the study without an adjustment for assume d concentration threshold of 10 μg/m 3 as was done in recent (2006

– 2009) Office of Air and Radiation RIAs.

 One estimate is based on the C

- R function developed from the extended analysis of the Harvard Six Cities cohort, as reported by Laden et al. (2006)

. This study, published after the completion of the Staff Paper for the 2006 PM 2.5 NAAQS, has been used as an alternative e stimate in the PM 2.5 NAAQS RIA and PM 2.5 benefits estimates in RIAs completed since the PM 2.5 NAAQS. When calculating the estimate, EPA applied the effect coefficient as reported in the study without an adjustment for assumed concentration threshold of 10 μg/m 3 as was done in recent (2006

– 2009) RIAs.6

- 3  Twelve estimates are based on the C

- R functions from EPA ’ s expert elicitation study (IEc, 2006 ; Roman et al., 2008 ) on the PM 2.5 - mortality relationship and interpr eted for benefits analysis in EPA ’ s final RIA for the PM 2.5 NAAQS. For that study, twelve experts (labeled A through L) provided independent estimates of the PM 2.5 - mortality concentration

- response function. EPA practice has been to develop independent est imates of PM 2.5 - mortality estimates corresponding to the concentration

- response function provided by each of the twelve experts, to better characterize the degree of variability in the expert responses. Readers interested in reviewing the general methodol ogy for creating the benefit

- per

- ton estimates used in this analysis should consult Fann, Fulcher, and Hubbell (2009) . As described in Fann, Fulcher, and Hubbell (2009) , benefit

- per

- ton estimates are developed for selected pollutant/source category combinations. The per

- ton values calculated therefore apply only to tons reduced from those specific pollutant/source combinations (e.g., SO 2 emitted from electric generating un its; NO 2 emitted from mobile sources). In this analysis , we apply the national
average benefit

- per

- ton estimate for a 2017 analysis year and multiply it by the corresponding emission reductions of directly emitted PM 2.5 , and VOCs to qua ntify the benefits o f this rule

. The benefit

- per

- ton estimates found in Fann, Fulcher, and Hubbell (2009) reflect a specific set of key assumptions and input data. As we update these underlying assumptions to reflect the scientific li terature, we re

- estimate the benefit

- per

- ton estimates and post the updated estimates at http:// www.epa.gov/air/benmap/bpt.html . In addition, we adjust these estimates to match the currency year for th e costs in this analysis.
These models assume that all fine particles, regardless of their chemical composition, are equally potent in causing premature mortality because the scientific evidence is not yet sufficient to allow differentiation of effect est imates by particle typ e (U.S. EPA, 2009b)

. Directly emitted PM and VOCs are the dominant PM 2.5 precursors affected by this rule. Even though we assume that all fine particles have equivalent health effects, the benefit

- per

- ton estimates vary between precu rsors because each ton of precursor reduced has a different propensity to form PM 2.5 and a different pattern of transport , resulting geographic distribution of exposure. When more people are exposed, the benefits per ton are greater. For example, VOC emission has a lower benefit

- per

- ton estimate than direct PM 2.5 because it does not directly transform into PM 2.5 and because particles formed from VOC can transport many miles, including over areas with low populations. The benefit

- per

- ton coefficients in this analysis were derived using modified versions of the health impact functions used in the PM NAAQS6

- 4

Regulatory Impact Analysis. Specifically, this analysis uses the benefit

- per

- ton method first applied in the Portland Cement NESHAP RIA (U.S. EPA, 2009a ), which incorporated three updates: a new population dataset, an expanded geographic scope of the benefit

- per

- ton calculation, and the functions directly from the epidemiology studies without an adjustment for an assumed threshold. 1 Removing the threshold assumption is a key difference between the method used in this analysis of PM benefits and the methods used in RIAs prior to the Portland Cement proposal , and we now calculate incremental benefits down to the lowest modeled PM 2.5 air quality levels.
In addition in this rule, we did have current air quality modeling results reflecting source apportionment specific data related to the ferroalloy industry, and interested readers may find a more detailed description of the methodology in the draft Technical Support Document (TSD) on estimating the benefits per ton of reducing PM2.5 and its precursors from the Ferroalloy Sector. 2
EPA strives to use the best available science to support our benefits analyses, and we recognize that interpre tation of the science regarding air pollution and health is dynamic and evolving. Based on our review of the current body of scientific literature, EPA now estimates
PM

- related mortality without applying an assumed concentration threshold. EPA ’ s Integrated Science Assessment for Particulate Matter (U.S. EPA, 2009b ), which was recently reviewed by EPA ’ s Clean Air Scientific Advisory Committee (U.S. EPA

- SAB, 2009a ; U.S. EPA

- SAB, 2009b ), concluded that the scientific literature consistently finds that a no

- threshold log

- linear model most adequately portrays the PM

- mortality concentration

- response relationship while recognizing potential uncertainty about the exact shape of the conce ntration

- response function. Since then, the Health Effects Subcommittee (U.S. EPA

- SAB, 2010 ) of EPA ’ s Council concluded, ―The HES fully supports EPA ’ s decision to use a no

- threshold model to estimate mortality reductions. This de cision is supported by the data, which are quite consistent in showing effects down to the lowest measured levels. Analyses of cohorts using data from more recent years, during which time PM concentrations have fallen, continue to report strong

1 These updates were already included in Fann et al. (2009). An example of the effect of these updates is available in the Portland Cement proposal RIA (U.S. EPA, 2009a). The benefit

- per

- ton estimat es have also been updated since the Portland Cement proposal RIA (U.S. EPA, 2009a) to incorporate a revised VSL, as discussed on the next page. 2 U.S. Environmental Protection Agency. 2011. Technical support document: Estimating the benefit per ton of reducing PM

2.5 precursors from the ferroalloy sector (Draft) ; EPA: Research Triangle Park, NC.6

- 5

association s with mortality. Therefore, there is no evidence to support a truncation of the CRF.‖ In conjunction with the underlying scientific literature, this document provided a basis for reconsidering the application of thresholds in PM 2.5 concentration

- response functions used in EPA ’ s RIAs. For a summary of these scientific review statements and the panel members commenting on thresholds since 2002, please consult the Technical Support Document (TSD) Summary of Expert Opinions on the Existence of a Threshold (U.S . EPA, 2010c )

. Consistent with this recent scientific advice, we are replacing the previous threshold sensitivity analysis with a new ―Lowest Measured Level‖ (LML) assessment. This information allows readers to determine the portion of population exposed to annual mean P M 2.5 levels at or above the LML of each study; in general, our confidence in the estimated PM mortality decreases as we consider air quality levels further below the LML in major cohort studies that estimate PM

- related mortality. While an LML assessment pr ovides some insight into the level of uncertainty in the estimated PM mortality benefits, EPA does not view the LML as a threshold and continues to quantify PM

- related mortality impacts using a full range of modeled air quality concentrations. It is import ant to emphasize that we have high confidence in PM 2.5 - related effects down to the lowest LML of the major cohort studies. J ust because we have greater confidence in the benefits above the LML, this does not mean that we have no confidence that benefits oc cur below the LML.
For this analysis, policy

- specific air quality data is not available due to time or reso urce limitations. For this rule , we are unable to estimate the percentage of premature mortality associated with this specific rule ’ s emission reduct ions at each PM 2.5 level. However, we believe that it is still important to characterize the distribution of exposure to baseline air quality levels. As a surrogate measure of mortality impacts, we provide the percentage of the population exposed at each P M 2.5 level using the most recent modeling available from the recently proposed Transport Rule (U.S. EPA, 2010e ). It is important to note that baseline exposure is only one parameter in the health impact function, along with baseline incidence rates population, and change in air quality. In other words, the percentage of the population exposed to air pollution below the LML is not the same as the percentage of the population experiencing health impacts as a result of a specific emissi on reduction policy. The most important aspect, which we are unable to quantify for rules without air quality modeling, is the shift in exposure associated with6

- 6

this specific rule. Therefore, caution is warranted when interpreting the LML assessment. For

m ore information on the data and conclusions in the LML assessment for rules without policy

specific air quality modeling, please consult the LML TSD (U.S. EPA, 2010d ) . The results of this analysis are provided in Section 6 .4 of this RIA

. As is the nature of Regulatory Impact Analyses (RIAs), the assumptions and methods used to estimate air quality benefits evolve over time to reflect the Agency ’ s most current interpretation of the scientific and economic literature. For a period of t ime (2004

– 2008), the Office of Air and Radiation (OAR) valued mortality risk reductions using a value of statistical life (VSL) estimate derived from a limited analysis of some of the available studies. OAR arrived at a VSL using a range of $1 million to $ 10 million (2000$) consistent with two meta

- analyses of the wage

- risk literature. The $1 million value represented the lower end of the interquartile range from the Mrozek and Taylor (2002) meta

- analysis of 33 studies. The $1 0 million value represented the upper end of the interquartile range from the Viscusi and Aldy (2003) meta

analysis of 43 studies. The mean estimate of $5.5 million (2000$) 3 was also consistent with the mean VSL of $5.4 millio n estimated in the Kochi et al. (2006) meta

- analysis. However, the Agency neither changed its official guidance on the use of VSL in rule

- makings nor subjected the interim estimate to a scientific peer

- review process through the S cience Advisory Board (SAB) or other peer

- review group.
During this time, the Agency continued work to update its guidance on valuing mortality risk reductions; including commissioning a report from meta

- analytic experts to evaluate methodological questio ns raised by EPA and the SAB on combining estimates from the various data sources. In addition, the Agency consulted several times with the Science Advisory Board Environmental Economics Advisory Committee (SAB

- EEAC) on the issue. With input from the
meta

- analytic experts, the SAB

- EEAC advised the Agency to update its guidance using specific, appropriate meta

- analytic techniques to combine estimates from unique data sources and different studies, including those using different methodologies (i.e., wage

- ris k and stated preference) (U.S. EPA

- SAB, 2007 ).

3 After adjust ing the VSL to account for a different currency year (2008$) and to acco unt for income growth to 2015, the $5.5 mi llion VSL is $7.9 million. In this analysis, we use 2015 estimates as a surrogate for 2017 estimates, which results in a slight underestimate of the benefits.6

- 7

Until updated guidance is available, the Agency determined that a single, peer

- reviewed estimate applied consistently best reflects the SAB

- EEAC advice it has received. Therefore, the Agency has decided to apply the VSL that was vetted and endorsed by the SAB in the Guidelines for Preparing Economic Analyses (U.S. EPA, 2000 ) 4 while the Agency continues its efforts to update its guidance on this issue. This approach calculates a mean value across VSL estimates derived from 26 labor market and contingent valuation studies published between 1974 and 1991. The mean VSL across thes e studies is $6.3 million (2000$). 5 The Agency is committed to using scientifically sound, appropriately reviewed evidence in valuing mortality risk reductions and has made significant progress in responding to the SAB

- EEAC ’ s specific recommendations.

In i mplementing these rules, emission controls may lead to reductions in ambient PM 2.5 below the National Ambient Air Quality Standards (NAAQS) for PM in some areas and assist other areas with attaining the PM NAAQS. Because the PM NAAQS RIAs also calculate PM benefits, t here are important differences worth noting in the design and analytical objectives of each RIA. The NAAQS RIAs illustrate the potential costs and benefits of attaining a new air quality standard nationwide based on an array of emission control strategies for different sources. In short, NAAQS RIAs hypothesize, but do not predict, the control strategies that States may choose to enact when implementing a NAAQS. The setting of a NAAQS does not directly result in costs or benefits, and as such, th e NAAQS RIAs are merely illustrative and are not intended to be added to the costs and benefits of other regulations that result in specific costs of control and emission reductions. However, some costs and benefits estimated in this RIA account for the

sa me air quality improvements as estimated in the illustrative PM 2.5 NAAQS RIA.
By contrast, the emission reductions for this RTR rule are from a specific class of well

characterized sources (ferroalloy facilities) . In general, EPA is more confident in the magnitude and location of the emission reductions for these rules. It is important to note that emission reductions anticipated from these rules do not result in emission increases elsewhere (other than

4 In the (draft) update of the Economic Guidelines (U.S. EPA, 2008 b ), EPA retained the VSL endorsed by the SAB with the understanding that further updates to the mortality risk valuation guidance would be f orthcoming in the near future. Therefore, this report does not represent final agency polic y. 5 In this analysis, we adjust the VSL to account for a differen t currency year (2008$) and to acco unt for income growth to 2015. After applying these adjustments to the $6.3 million value, the VSL is $9.1 m illion

. In this analysis, we use 2015 estimates as a surrogate for 2017 estimates, which results in a slight underestimate of the benefits.6

- 8

potential energy disbenefits). Emission reductions a chieved under these and other promulgated rules will ultimately be reflected in the baseline of future NAAQS analyses, which would reduce the incremental costs and benefits associated with attaining the NAAQS. EPA remains forward looking towards the next i teration of the 5

- year review cycle for the NAAQS, and as a result does not issue updated RIAs for existing NAAQS that retroactively update the baseline for NAAQS implementation. For more information on the relationship between the NAAQS and rules such as analyzed here, please see Section 1.2.4 of the SO 2 NAAQS RIA (U.S. EPA, 2010 f ).

Figure 6

- 1. Breakdown of Monetized PM 2.5 Health Benefits Estimates using Mortality

Function from Pope et al . (2002) a

a This pie chart breakdown is illustrative, using the results based on Pope et al. (2002) as an example. Using the Laden et al. (2006) function for premature mortality, the percentage of total monetized benefits due to adult mortal ity would be 97%. This chart shows the breakdown using a 3% discount rate, and the results would be similar if a 7% discount rate was used.
Table 6

- 2 provides a general summary of the primary approach results by pollutant, including the emission reduction s and monetized benefits

- per

- ton at discount rates of 3% and 7%. 6 Table 6

- 3 provides a summary of the reductions in health incidences as a result of the

6 To comply with Circular A

- 4, EPA provides monetized benefits using discount rates of 3% and 7% (OMB, 2003 ). These benefits are estimated for a specific analysis year (i.e., 2017 using 2015 values as a surro gate ), and most of the PM benefits occur within that year with two exceptions: acute myocardial infarctions (AMIs) and prematu re mortality. For AMIs, we assume 5 years of follow

- up medical costs and lost wages. For premature mortality, we6

- 9

polluti on reductions. In Table 6

- 4 , we provide the benefits using our anchor points of Pope et al. and Laden et al. as well as the results from the expert elicitation on P M mortality. Figure 6

- 2 provide s a visual representation of the range of benefits estimates of PM 2.5 reductions

.
Table 6

- 2. Summary of Monetized Benefits Estimates for the Ferroalloy Industry in 2015

( 2010$ ) a

Pollutant Emissions

Reductions (tons) Benefit

per ton (Pope, 3%) Benefit

per ton (Laden, 3%) Benefit

per ton (Pope, 7%) Benefit

per ton (Laden, 7%) Total Monetized

Benefits (millions 20 10 $ at 3%) Total Monetized

Benefits (millions 20 10 $ at 7%) Direct PM 2.5 257 $ 279,419 $ 689,629 $ 249,248 $ 618,705 $ 70 to $ 180 $ 60 to $ 160

Total $ 70 to $ 180 $ 60 to $ 160

a All estimates are for the year of analysis (2015 ), and are rounded to two significant figures so numbers may not sum across columns. In this analysis, we use 2016 estimates as a surrogate for 2015 estimates, which results in a slight o v erestimate of the benefits. These models assume that all fine particles, regardless of their chemical composition, are equally potent in causing premature mortality the scientific evidence is not yet sufficient to allow differentiation of effect estimat es by particle type

. The benefit

- per

- ton estimates are updated and reflect new air quality modeling specific to the ferroalloys sector. The monetized benefits incorporate the conversion from precursor emissions to ambient fine particles. Confidence intervals are unavailable for this analysis because of the benefit

- per

- ton methodology.

assume that there is a ―cessation‖ lag between PM exposures and the total realization of changes in health effects. Although the structure of the lag is uncertain, EPA follows the advice of the SAB

- HES to assume a segmented lag structure characterized by 30% of mortality r eductions in the first year, 50% over years 2 to 5, and 20% over the years 6 to 20 after the reduction in PM 2.5 (U.S. EPA

- SAB, 2004 ). Changes in the lag assumptions do not change the total number of estimated deaths but rath er th e timing of those deaths. Therefore, discounting only affects the AMI costs after the analysis year and the valuation of premature mortalities that oc cur after the analysis year. As such, the monetized benefits using a 7% discount rate are only approximate ly 10% less than the monetized benefits using a 3% discount rate.6

- 10

Table 6

- 3

. Summary of Reductions in Health Incidences from PM 2.5 B enefits for the

Ferroalloy Sector in 201 5 a

Reductions Avoided Premature Mortality Pope et al. 8
Laden et al. 20 Avoided Morbidity Chronic Bronchitis 5 Acute Myocardial Infarction 9 Hospital Admissions, Respiratory 2 Hospital Admissions, Cardiovascular 3 Emergency Room Visits, Respiratory 5
Acute Bronchitis 11 Work Loss Days 946
Asthma Exacerbation 231 Lower Respiratory Symptoms 139 Upper Respiratory Symptoms 105

a All estimates are for the year of analysis (201 5) and are rounded to whole numbers with two significant figures. In this analysis, we use 2016 estimates as a surrogate for 2015 estimates, which results in a slight ov erestimate of the benefits. These models assume that all fine particles, regardless of their chemical composition, are equally potent in causing prematu re mortality because the scientific evidence is not yet sufficient to allow differentiation of effect estimates by particle type.6

- 11

Table 6

- 4. All PM 2.5 Benefits Estimates for the Ferroalloy Sector at Discount Rates of 3%

and 7% in 2015 (in millions of 2010$ ) a

PM 2.5 Benefits 3% 7% Benefit

- per - ton Coefficients Derived from Epidemiology Literature Pope et al. $ 70 $ 60 Laden et al. $ 180 $ 160 Benefit

- per - ton Coefficients Derived from Expert Elicitation Expert A $ 190 $ 170 Expert B $ 60 $ 60 Expert C $ 40 $ 130 Expert D $ 100 $ 90 Expert E $ 230 $ 210 Expert F $ 60 $ 50 Expert G $ 90 $ 80 Expert H $ 110 $ 100 Expert I $ 140 $ 130 Expert J $ 120 $ 100 Expert K $ 13 $ 12
Expert L $ 40 $ 35

a All estimates are rounded to two significant figures. Estimates do not include confidence intervals because they were derived through the benefit

- per

- ton technique described above. The benefits estimates from the expert elicitation are provided as a reaso nable characterization of the uncertainty in the mortality estimates associated with the concentration

- response function. Confidence intervals are unavailable for this analysis because of the benefit

- per

- ton methodology.6

- 12

Figure 6

- 2. Total Monetized PM 2.5 Benefits Estimates for the Ferroalloy Sector in 2015

a This graph shows the estimated benefits at discount rates of 3% and 7% using effect coefficients derived from the Pope et al. (2002) study and the Laden et al

. (2006) study, as well as 12 effect coefficients derived from EPA’s expert elicitation on PM mortality. The results shown are not the direct results from the studies or expert elicitation; rather, the estimates are based in part on the c oncentration

- response function provided in those studies.
6.3 Unquantified Benefits The monetized benefits estimated in this RIA only reflect the portion of benefits attributable to the health effect reductions associated with ambient fine particles. M ethodol ogical and time limitations prevented EPA from quantifying or monetizing the benefits from several important benefit categories, including benefits from reducing toxic emissions, ecosystem effects, and visibility impairment. The health benefits from reduci ng hazardous air pollutants (HAPs) including metals, HCl, HF, and formaldehyde as well as mercury have not been monetized in this analysis. Because we were unable to monetize the direct benefits associated

$0 $50,000,000 $100,000,000 $150,000,000 $200,000,000 $250,000,000 

### Benefits Estimated from 2 Epidemiology Functions and 12 Expert Functions

3%
7%6

- 13

with reducing HAPs among others , the monetized ben efits estimate is an underestimate of the total benefits. The extent of this underestimate, whether small or large, is unknown.

6.3.1 HAP Benefits Even though emissions of air toxics from all sources in the U.S. declined by approximately 42% since 1990, the 2005 National

- Scale Air Toxics Assessment (NATA) predicts that most Americans are exposed to ambient concentrations of air toxics at levels that have the pot ential to cause adverse health effects (U.S. EPA, 2011 b ). 7 The levels of air toxics to which people are exposed vary depending on where people live and work and the kinds of activities in which they engage. In order to identify and prioritize air toxics, emission source types and locations that are of greatest p otential concern, U.S. EPA conducts the NATA. 8 The most recent NATA was conducted for calendar year 2005 and was released in March 2011. NATA includes four steps:
1) Compiling a national emissions inventory of air toxics emissions from outdoor sources 2) Estimating ambient and exposure concentrations of air toxics across the United States 3) Estimating population exposures across the United States 4) Characterizing potential public health risk due to inhalation of air toxics including both cancer and nonc ancer effects
Based on the 2005 NATA, EPA estimates that about 5% of census tracts nationwide have increased cancer risks greater than 100 in a million. The average national cancer risk is about 50 in a million. Nationwide, the key pollutants that contri bute most to the overall cancer risks are formaldehyde and benzene. 9 Secondary formation (e.g., formaldehyde forming from other emitted pollutants) was the largest contributor to cancer risks, while stationary, mobile and background sources contribute alm ost equal portions of the remaining cancer risk.

7 The 2005 NATA is available on the Internet at http://www.epa.gov/ttn/atw/nata2005/.
8 The NATA modeling framework has a number of limitations that prevent its use as the sole basis for se tting regulatory standards. These limitations and uncertainties are discussed on the 2005 NATA website. Even so, this modeling framework is very useful in identifying air toxic pollutants and sources of greatest concern, setting regulatory priorities, an d informing the decision making process. U.S. EPA. (2011) 2005 National

- Scale Air Toxics Assessment. http://www.epa.gov/ttn/atw/nata2005/
9 Details about the overall confidence of certainty ranking of the individual pieces of NATA assessments including both quantitative (e.g., model

- to

- monitor ratios) and qualitative (e.g., quality of data, review of emission inventories) judgments can be found at http://www.epa.gov/ttn/atw/nata/roy/page16.html.6

- 14

Noncancer health effects can result from chronic, 10 subchronic, 11 or acute 12 inhalation exposures to air toxics, and include neurological, cardiovascular, liver, kidney, and respiratory effects as well as effec ts on the immune and reproductive systems. According to the 2005 NATA, about three

- fourths of the U.S. population was exposed to an average chronic concentration of air toxics that has the potential for adverse noncancer respiratory health effects. Result s from the 2005 NATA indicate that acrolein is the primary driver for noncancer respiratory risk.
Figure 6

- 3 and Figure 6

- 4 depict the estimated census tract

- level carcinogenic risk and noncancer respiratory hazard from the assessment. It is important to note that l arge reductions in HAP emissions may not necessarily translate into significant reductions in health risk because toxicity varies by pollutant, and exposures may or may not exceed levels of concern. For example, acetaldehyde mass emissions are more than double acrolein emissions on a nat ional basis, according to EPA’s 2005 National Emissions Inventory (NEI). However, the Integrated Risk Information System (IRIS) reference concentration (RfC) for acrolein is considerably lower than that for acetaldehyde, suggesting that acrolein could be potentially more toxic than acetaldehyde. Thus, it is important to account for the toxicity and exposure, as well as the mass of the targeted emissions.

10 Chronic exposure is defined in the glossary of the Integr ated Risk Information (IRIS) database (http://www.epa.gov/iris) as repeated exposure by the oral, dermal, or inhalation route for more than approximately 10% of the life span in humans (more than approximately 90 days to 2 years in typically used laborator y animal species).
11 Defined in the IRIS database as r epeated exposure by the oral, dermal, or inhalation route for more than 30 days, up to approximately 10% of the life span in humans (more than 30 days up to approximately 90 days in typically used labor atory animal species)

. 12 Defined in the IRIS database as exposure by the oral, dermal, or inhalation route for 24 hours or less.6

- 15

Figure 6

- 3 Estimated Chronic Census Tract Carcinogenic Risk from HAP exposure from outdoor sources (2005 NATA)6

- 16

Figure 6

- 4 Estimated Chronic Census Tract Noncancer (Respiratory) Risk from HAP exposure from outdoor sources (2005 NATA)
Due to methodology and time limitations under the court

- ordered schedule, we were unable to estimate the benefits assoc iated with the hazardous air pollutants that would be reduced as a result of these rules. In a few previous analyses of the benefits of reductions in HAPs, EPA has quantified the benefits of potential reductions in the incidences of cancer and non

- cancer r isk (e.g., U.S. EPA, 1995 ). In those analyses, EPA relied on unit risk factors (URF) developed through risk assessment procedures. 13 These URFs are designed to be conservative, and as such, are more likely to represent the high end of the distribution of risk rather than a best or most likely estimate of risk. As the purpose of a benefit analysis is to describe the benefits most likely to occur from a reduction in pollution, use of high

- end, conservative risk estimates would

13 The unit risk factor is a quantitative estimate of the carcinogenic potency of a pollutant, often expressed as the probability of contracting cancer from a 70

- year lifetime continuous exposure to a concentration of one μg/m 3 of a pollutant.6

- 17

overestima te the benefits of the regulation. While we used high

- end risk estimates in past analyses, advice from the EPA’s Science Advisory Board (SAB) recommended that we avoid using high

- end estimates in benefit analyses (U.S. EPA

- SAB, 2002 ) . Since this time, EPA has continued to develop better methods for analyzing the benefits of reductions in HAPs.
As part of the second prospective analysis of the benefits and costs of the Clean Air Act (U.S. EPA, 2011 a ), EPA conducted a case study analysi s of the health effects associated with reducing exposure to benzene in Houston from implementation of the Clean Air Act (IEc, 2009 ). While reviewing the draft report, EPA’s Advisory Council on Clean Air Compliance Analysis concluded that ―the challenges for assessing progress in health improvement as a result of reductions in emissions of hazardous air pollutants (HAPs) are daunting...due to a lack of
exposure

- response functions, uncertainties in emissions inventories and background level s, the difficulty of extrapolating risk estimates to low doses and the challenges of tracking health progress for diseases, such as cancer, that have long latency periods‖ (U.S. EPA

- SAB, 2008 ).
In 2009, EPA convened a workshop to address the inherent complexities, limitations, and uncertainties in current methods to quantify the benefits of reducing HAPs. Recommendations from this workshop included identifying research priorities, focusing on susceptible and vulnerable populations , and improving dose

- response relationships (Gwinn et al., 2011 ).
In summary, monetization of the benefits of reductions in cancer incidences requires several important inputs, including central estimates of cancer risks, estima tes of exposure to carcinogenic HAPs, and estimates of the value of an avoided case of cancer (fatal and non

- fatal). Due to methodology and time limitations under the court

- ordered schedule, we did not attempt to monetize the health benefits of reductions in HAPs in this analysis. Instead, we provide a qualitative analysis of the health effects associated with the HAPs anticipated to be reduced by these rules and we summarize the results of the residual risk assessment for the NESHAP. EPA remains committed to improving methods for estimating HAP benefits by continuing to explore additional concepts of benefits, including changes in the distribution of risk.

Available emissions data show that several different HAPs are emitted from this sector. In the subs equent sections, we describe the health effects associated with the main HAPs of6

- 18

concern. This rule is anticipated to reduce 8 4 .6 tons of total HAPs per year as shown in Chapter 4 of this RIA , with 80 tons being metal HAP, 0.2 tons being mercury, and 2.4 tons being PAH s

.

6 .3.3.1 Arsenic (As) Arsenic, a naturally occurring element, is found throughout the environment and is considered toxic through the oral, inhalation and dermal routes. Acute (short

- term) high

- level inhalation exposure to As dust or fumes has resulted in gastrointestinal effects (nausea, diarrhea, abdominal pain, and gastrointestinal hemorrhage); central and peripheral nervous system disorders have occurred in workers acutely exposed to inorganic As. Chronic (long

- term) inhalation
exposur e to inorganic As in humans is associated with irritation of the skin and mucous membranes. Chronic inhalation can also lead to conjunctivitis, irritation of the throat and respiratory tract and perforation of the nasal septum. 14 Chronic oral exposure has resulted in gastrointestinal effects, anemia, peripheral neuropathy, skin lesions, hyperpigmentation, and liver or kidney damage in humans. Inorganic As exposure in humans, by the inhalation route, has been shown to be strongly associated with lung cance r, while ingestion of inorganic As in humans has been linked to a form of skin cancer and also to bladder, liver, and lung cancer. EPA has classified inorganic As as a Group A, human carcinogen. 15

6 .3.3.2 Formaldehyde Since 1987, EPA has classified formal dehyde as a probable human carcinogen based on evidence in humans and in rats, mice, hamsters, and monkeys. 16 EPA is currently reviewing recently published epidemiological data. For instance, research conducted by the National Cancer Institute (NCI) found an increased risk of nasopharyngeal cancer and lymphohematopoietic malignancies such as leukemia among workers exposed to

14 Agency for Toxic Substances and Disease Registry (ATSDR). Medical Management Guidelines for Arsenic. Atlanta, GA: U.S. Department of Healt h and Human Services. Available on the Internet at < http://www.atsdr.cdc.gov/mhmi/mmg168.html#bookmark02>
15 U.S. Environmental Protection Agency (U.S. EPA). 1998. Integrated Risk Information System File for Arsenic. Research and Development, National Ce nter for Environmental Assessment, Washington, DC. This material is available electronically at: http://www.epa.gov/iris/subst/0278.htm.
16 U.S. EPA. 1987. Assessment of Health Risks to Garment Workers and Certain Home Residents from Exposure to Formaldeh yde, Office of Pesticides and Toxic Substances, April 1987.6

- 19

formaldehyde. 17 , 18 In an analysis of the lymphohematopoietic cancer mortality from an extended follow

- up of these workers, NCI confirm ed an association between lymphohematopoietic cancer risk and peak exposures. 19 A recent National Institute of Occupational Safety and Health (NIOSH) study of garment workers also found increased risk of death due to leukemia among workers exposed to formal dehyde. 20 Extended follow

- up of a cohort of British chemical workers did not find evidence of an increase in nasopharyngeal or lymphohematopoietic cancers, but a continuing statistically significant excess in lung cancers was reported. 21
In the past 15 yea rs there has been substantial research on the inhalation dosimetry for formaldehyde in rodents and primates by the CIIT Centers for Health Research (formerly the Chemical Industry Institute of Toxicology), with a focus on use of rodent data for refinement of the quantitative cancer dose

- response assessment. 22 , 23 , 24 CIIT’s risk assessment of formaldehyde incorporated mechanistic and dosimetric information on formaldehyde. However, it should be noted that recent research published by EPA indicates that when two

- stage modeling assumptions are varied, resulting dose

- response estimates can vary by several orders of magnitude. 25 , 26 , 27 , 28 These findings are not supportive of interpreting the CIIT model results as

17 Hauptmann, M..; Lubin, J. H.; Stewart, P. A.; Hayes, R. B.; Blair, A. 2003. Mortality from lymphohematopoetic malignancies among workers in formaldehyde industries. Journal of the National Ca ncer Institute 95: 1615

- 1623. 18 Hauptmann, M..; Lubin, J. H.; Stewart, P. A.; Hayes, R. B.; Blair, A. 2004. Mortality from solid cancers among workers in formaldehyde industries. American Journal of Epidemiology 159: 1117

- 1130. 19 Beane Freeman, L. E.; Blair, A.; Lubin, J. H.; Stewart, P. A.; Hayes, R. B.; Hoover, R. N.; Hauptmann, M. 2009. Mortality from lymphohematopoietic malignancies among workers in formaldehyde industries: The National Cancer Institute cohort. J. National Can cer Inst. 101: 751

- 761. 20 Pinkerton, L. E. 2004. Mortality among a cohort of garment workers exposed to formaldehyde: an update. Occup. Environ. Med. 61: 193

- 200. 21 Coggon, D, EC Harris, J Poole, KT Palmer. 2003. Extended follow

- up of a cohort of British chemical workers exposed to formaldehyde. J National Cancer Inst. 95:1608

- 1615. 22 Conolly, RB, JS Kimbell, D Janszen, PM Schlosser, D Kalisak, J Preston, and FJ Mill er. 2003. Biologically motivated computational modeling of formaldehyde carcinogenicity in the F344 rat. Tox Sci 75: 432

- 447. 23 Conolly, RB, JS Kimbell, D Janszen, PM Schlosser, D Kalisak, J Preston, and FJ Miller. 2004. Human respiratory tract cancer ri sks of inhaled formaldehyde: Dose

- response predictions derived from biologically

- motivated computational modeling of a combined rodent and human dataset. Tox Sci 82: 279

- 296. 24 Chemical Industry Institute of Toxicology (CIIT).1999. Formaldehyde: Hazard ch aracterization and dose

- response assessment for carcinogenicity by the route of inhalation. CIIT, September 28, 1999. Research Triangle Park, NC. 25 U.S. EPA. Analysis of the Sensitivity and Uncertainty in 2

- Stage Clonal Growth Models for Formaldehyde with Relevance to Other Biologically

- Based Dose Response (BBDR) Models. U.S. Environmental Protection Agency, Washington, D.C., EPA/600/R

- 08/103, 2008 26 Subramaniam, R; Chen, C; Crump, K; .et .al. (2008) Uncertainties in biologically

- based modeling of formalde hyde

- induced cancer risk: identification of key issues. Risk Anal 28(4):907

- 923. 27 Subramaniam, R; Chen, C; Crump, K; .et .al. (2007). Uncertainties in the CIIT 2

- stage model for formaldehyde

induced nasal cancer in the F344 rat: a limited sensitivity anal ysis

- I. Risk Anal 27:12376

- 20

providing a conservative (health protective) estimate of human risk. 29 EPA research also examined the contribution of the two

- stage modeling for formaldehyde towards characterizing the relative weights of key events in the mode

- of

- action of a carcinogen. For example, the model

- based inference in the published C IIT study that formaldehyde’s direct mutagenic action is not relevant to the compound’s tumorigenicity was found not to hold under variations of modeling assumptions. 30
Based on the developments of the last decade, i n 2004, the working group of the IARC concluded that formaldehyde is carcinogenic to humans (Group 1), on the basis of sufficient evidence in humans and sufficient evidence in experimental animals

- a higher classification than previous IARC evaluations. After reviewing the currently available epidemiological evidence, the IARC (2006) characterized the human evidence for formaldehyde carcinogenicity as ―sufficient,‖ based upon the data on nasopharyngeal cancers; the epidemiologic evidence on leukemia was c haracterized as ―strong.‖ 31 EPA is reviewing the recent work cited above from the NCI and NIOSH, as well as the analysis by the CIIT Centers for Health Research and other studies, as part of a reassessment of the human hazard and dose

- response associated w ith formaldehyde.
Formaldehyde exposure also causes a range of noncancer health effects, including irritation of the eyes (burning and watering of the eyes), nose and throat. Effects from repeated exposure in humans include respiratory tract irritation, c hronic bronchitis and nasal epithelial lesions such as metaplasia and loss of cilia. Animal studies suggest that formaldehyde may also cause airway inflammation

– including eosinophil infiltration into the airways. There are several studies that suggest t hat formaldehyde may increase the risk of asthma

– particularly in the
young. 32 , 33

28 Crump, K; Chen, C; Fox, J; .et .al. (2008) Sensitivity analysis of biologically motivated model for formaldehyde

induced respiratory cancer in humans. Ann Occup Hyg 52:481

- 495. 29 Crump, K; Chen, C; Fox, J; .et .al. (2008) Sensit ivity analysis of biologically motivated model for formaldehyde

induced respiratory cancer in humans. Ann Occup Hyg 52:481

- 495. 30 Subramaniam, R; Chen, C; Crump, K; .et .al. (2007). Uncertainties in the CIIT 2

- stage model for formaldehyde

induced nasal cancer in the F344 rat: a limited sensitivity analysis

- I. Risk Anal 27:1237 31 International Agency for Research on Cancer (2006) Formaldehyde, 2

- Butoxyethanol and 1

- tert

- Butoxypropan

- 2

- ol. Monographs Volume 88. World Health Organization, Lyon, France. 32 A gency for Toxic Substances and Disease Registry (ATSDR). 1999. Toxicological profile for Formaldehyde. Atlanta, GA: U.S. Department of Health and Human Services, Public Health Service.6

- 21

6 .3.3.3 Chromium (Cr) 34
Chromium may be emitted in two forms, trivalent Cr (Cr +3 ) or hexavalent Cr (Cr +6 ). The respiratory tract is the major target organ for Cr +6 toxicity, f or acute and chronic inhalation exposures. Shortness of breath, coughing, and wheezing have been reported from acute exposure to Cr +6 , while perforations and ulcerations of the septum, bronchitis, decreased pulmonary function, pneumonia, and other respira tory effects have been noted from chronic exposures. Limited human studies suggest that Cr +6 inhalation exposure may be associated with complications during pregnancy and childbirth, but there are no supporting data from animal studies reporting reproduct ive effects from inhalation exposure to Cr +6 . Human and animal studies have clearly established the carcinogenic potential of Cr +6 by the inhalation route, resulting in an increased risk of lung cancer. EPA has classified Cr +6 as a Group A, human carcino gen. Trivalent Cr is less toxic than Cr +6 . The respiratory tract is also the major target organ for Cr +3 toxicity, similar to Cr +6 . EPA has not classified Cr +3 with respect to carcinogenicity.

6 .3.3.4 Dioxins (Chlorinated dibenzodioxins (CDDs) 35
A number of effects have been observed in people exposed to 2,3,7,8

- TCDD levels that are at least 10 times higher than background levels. The most obvious health effect in people exposure to relatively large amounts of 2,3,7,8

- TCDD is chloracne. Chloracne is a severe skin disease with acne

- like lesions that occur mainly on the face and upper body. Other skin effects noted in people exposed to high doses of 2,3,7,8

- TCDD include skin rashes, discoloration, and excessive body hair. Changes in blood and urine t hat may indicate liver damage also are seen in people. Alterations in the ability of the liver to metabolize (or breakdown) hemoglobin, lipids, sugar, and protein have been reported in people exposed to relatively high concentrations of 2,3,7,8

- TCDD. Most of the effects are considered mild and were reversible. However, in some

http://www.atsdr.cdc.gov/toxprofiles/tp111.html 33 WHO (2002) Concise In ternational Chemical Assessment Document 40: Formaldehyde. Published under the joint sponsorship of the United Nations Environment Programme, the International Labour Organization, and the World Health Organization, and produced within the framework of th e Inter

- Organization Programme for the Sound Management of Chemicals. Geneva. 34 U.S. Environmental Protection Agency. Integrated Risk Information System (IRIS) on Chromium VI. National Center for Environmental Assessment, Office of Research and Development, Washington, DC. 1999.
35 All health effects language for this section came fro m: Agency for Toxic Substances and Disease Registry (ATSDR). 1999. ToxFAQs for Chlorinated Dibenzo

- p

- dioxins (CDDs) (CAS# : 2,3,7,8

- TCDD 1746

- 01

- 6 ). Atlanta, GA: U.S. Department of Health and Human Services, Public Health Service. Available on the Internet at http://www.atsdr.cdc.gov/tfacts104.html

.6

- 22

people these effects may last for many years. Slight increases in the risk of diabetes and abnormal glucose tolerance have been observed in some studies of people exposed to 2,3,7,8

- T CDD. We do not have enough information to know if exposure to 2,3,7,8

- TCDD would result in reproductive or developmental effects in people, but animal studies suggest that this is a potential health concern.
In certain animal species, 2,3,7,8

- TCDD is espe cially harmful and can cause death after a single exposure. Exposure to lower levels can cause a variety of effects in animals, such as weight loss, liver damage, and disruption of the endocrine system. In many species of animals, 2,3,7,8

- TCDD weakens the immune system and causes a decrease in the system's ability to fight bacteria and viruses at relatively low levels (approximately 10 times higher than human background body burdens). In other animal studies, exposure to 2,3,7,8

- TCDD has caused reproductive damage and birth defects. Some animal species exposed to CDDs during pregnancy had miscarriages and the offspring of animals exposed to 2,3,7,8

- TCDD during pregnancy often had severe birth defects including skeletal deformities, kidney defects, and weaken ed immune responses. In some studies, effects were observed at body burdens 10 times higher than human background levels.

6 .3.3.5 Furans (Chlorinated dibenzofurans (CDFs)) 36

Most of the information on the adverse health effects comes from studies in people who were accidentally exposed to food contaminated with CDFs. The amounts that these people were exposed to were much higher than are likely from environmental exposures or from a normal diet. Skin and eye irritations, especially severe acne, darken ed skin color, and swollen eyelids with discharge, were the most obvious health effects of the CDF poisoning. CDF poisoning also caused vomiting and diarrhea, anemia, more frequent lung infections, numbness, effects on the nervous system, and mild changes in the liver. Children born to exposed mothers had skin irritation and more difficulty learning, but it is unknown if this effect was permanent or caused by CDFs alone or CDFs and polychlorinated biphenyls in combination.

36 All health effects language for this section came from: Agency for Toxic Substances and Disease Registry (ATSDR). 1995. ToxFAQsTM for Chlorodibenzofurans (CDFs)

. Atlanta, GA: U.S. Department of Health and Human Services, Public Health Service. Available on the Internet at <http://www.atsdr.cdc.gov/tfacts32.html>.6

- 23

Many of the same effects that occu rred in people accidentally exposed also occurred in laboratory animals that ate CDFs. Animals also had severe weight loss, and their stomachs, livers, kidneys, and immune systems were seriously injured. Some animals had birth defects and testicular damage , and in severe cases, some animals died. These effects in animals were seen when they were fed large amounts of CDFs over a short time, or small amounts over several weeks or months. Nothing is known about the possible health effects in animals from eatin g CDFs over a lifetime.

6 .3.3.6 Hydrogen Chloride (HCl)
Hydrogen chloride is a corrosive gas that can cause irritation of the mucous membranes of the nose, throat, and respiratory tract. Brief exposure to 35 ppm causes throat irritation, and levels of 50 to 100 ppm are barely tolerable for 1 hour. 37 The greatest impact is on the upper respiratory tract; exposure to high concentrations can rapidly lead to swelling and spasm of the throat and suffocation. Most seriously exposed persons have immediate onset of rapid breathing, blue coloring of the skin, and narrowing of the bronchioles. Exposure to HCl can lead to RADS, a chemically

- or irritant

- induced type of asthma. Children may be more vulnerable to corrosive agents than adults because of the relativel y smaller diameter of their airways. Children may also be more vulnerable to gas exposure because of increased minute ventilation per kg and failure to evacuate an area promptly when exposed. Hydrogen chloride has not been classified for carcinogenic eff

ects. 38

6 .3.3.7 Hydrogen Fluoride (HF) 39 Acute (short

- term) inhalation exposure to gaseous HF can cause severe respiratory damage in humans, including severe irritation and pulmonary edema. Chronic (long

- term) oral

37 Agency for Toxic Substances and Disease Registry (ATSDR). Medical Management Guidelines for Hydrogen Chloride. Atlanta, GA: U.S. Department of Health and Human Services. Available online at http://www.atsdr.cdc.gov/mmg/mmg.asp?id=758&tid=147#bookmark02.
38 U.S. Environmental Protection Agency (U.S. EPA). 1995. Integrated Risk Information System F ile of Hydrogen Chloride. Research and Development, National Center for Environmental Assessment, Washington, DC. This material is available electronically at .http://www.epa.gov/iris/subst/0396.htm.
39 U.S. Environmental Protection Agency. Health Issue Ass essment: Summary Review of Health Effects Associated with Hydrogen Fluoride and Related Compounds. EPA/600/8

- 89/002F. Environmental Criteria and Assessment Office, Office of Health and Environmental Assessment, Office of Research and Development, Cincinnat i, OH. 1989.6

- 24

exposure to fluoride at low levels has a beneficial effect of dental cavity prevention and may also be useful for the treatment of osteoporosis. Exposure to higher levels of fluoride may cause dental fluorosis. One study reported menstrual irregularities in women occupationally exposed to fluor ide via inhalation. The EPA has not classified HF for carcinogenicity.

6 .3.3.8 Manganese (Mn) 40

Health effects in humans have been associated with both deficiencies and excess intakes of Mn. Chronic exposure to high levels of Mn by inhalation in humans r esults primarily in central nervous system effects. Visual reaction time, hand steadiness, and eye

- hand coordination were affected in chronically

- exposed workers. Manganism, characterized by feelings of weakness and lethargy, tremors, a masklike face, an d psychological disturbances, may result from chronic exposure to higher levels. Impotence and loss of libido have been noted in male workers afflicted with manganism attributed to inhalation exposures. The EPA has classified Mn in Group D, not classifia ble as to carcinogenicity in humans.

6 .3.3.9 Mercury (Hg) Mercury exists in three forms: elemental mercury, inorganic mercury compounds, and organic mercury compounds (primarily methylmercury), which may exhibit different health effects. EGUs emit elemental or inorganic mercury into the atmosphere, but not methylmercury. However, elemental and inorganic mercury are deposited on surface water, where they are converted by microscopic organisms to methylmercury, which is an important f ood contaminant. For the developing fetus, infants, and children, the primary health effect of methylmercury exposure is impaired neurological development. Methylmercury exposure in the womb, which can result from a mother's consumption of fish and shell fish contaminated with methylmercury, can adversely affect a baby's growing brain and nervous system. Observations from outbreaks of methylmercury poisoning (i.e. mothers poisoned with methylmercury showing no symptoms of nervous system damage that gave b irth to infants with severe neurological disabilities) suggest that

40 U.S. Environmental Protection Agency. Integrated Risk Information System (IRIS) on Manganese. National Center for Environmental Assessment, Office of Research and Development, Washington, DC. 1999.6

- 25

the developing nervous system of the fetus may be more vulnerable to methylmercury than the adult nervous system. 41

6 .3.3.10 Nickel (Ni) 42 Respiratory effects have been reported in humans f rom inhalation exposure to Ni. No information is available regarding the reproductive or developmental effects of Ni in humans, but animal studies have reported such effects. Human and animal studies have reported an increased risk of lung and nasal canc ers from exposure to Ni refinery dusts and nickel subsulfide. The EPA has classified nickel subsulfide as a human carcinogen and nickel carbonyl as a probable human carcinogen 43 , 44

. The IARC has classified Ni compounds as carcinogenic to humans.

6

. 3.3.11 Other Metals

Metals can cause a range of effects including, mucous membrane irritation (e.g. bronchitis, decreased lung function); gastrointestinal effects; nervous system disorders (from loss of function to tremors and numbness); skin irritation; and reproductive and developmental disorders. Additionally, several of the metals accumulate in the environment and in the human body. Cadmium, for example, is a cumulative pollutant which causes kidney effects after the cessation of
exp osure. Similarly, the onset of effects from beryllium exposure may be delayed by months to years. Many of the metal listed above are also known (arsenic, chromium (VI), nickel) or probable (cadmium, nickel carbonyl, lead, and beryllium) human carcinogens

.

6 .3.3.12 Polycyclic organic matter (POM) The term polycyclic organic matter (POM) defines a broad class of compounds that includes the polycyclic aromatic hydrocarbon compounds (PAHs), of which benzo[a]pyrene is a member. POM compounds are formed primarily from combustion and are present in the

41 US EPA Mercury Web page available at http ://www.epa.gov/mercury/effects.htm

. 42 Nickel (IARC Summary & Evaluation , Volume 49, 1990), http://www.inchem.org/documents/iarc/vol49/nickel.html
43 U.S. Environmental Protection Agency. Integrated Risk Information System (IRIS) on Nickel Subsulfide. Natio nal Center for Environmental Assessment, Office of Research and Development, Washington, DC. 1999.
44 U.S. Environmental Protection Agency. Integrated Risk Information System (IRIS) on Nickel Carbonyl. National Center for Environmental Assessment, Office of Research and Development, Washington, DC. 1999.6

- 26

atmosphere in particulate form. Sources of air emissions are diverse and include cigarette smoke, vehicle exhaust, home heating, laying tar, and grilling meat. Cancer is the major concern from exposure to POM. Epidemiologic studies have reported an increase in lung cancer in humans exposed to coke oven emissions, roofing tar emissions, and cigarette smoke; all of these mixtures contain POM compounds. Animal studies have reported respiratory tract tumors f rom inhalation exposure to benzo[a]pyrene and forestomach tumors, leukemia, and lung tumors from oral exposure to benzo[a]pyrene. EPA has classified seven PAHs (benzo[a]pyrene, benz[a]anthracene, chrysene, benzo[b]fluoranthene, benzo[k]fluoranthene, diben z[a,h]anthracene, and indeno[1,2,3

- cd]pyrene) as Group B2, probable human carcinogens

6.3.3.13 Other Air Toxics In addition to the compounds described above, other compounds from the ferroalloy
sector would be affected by this rule. Information regarding th e health effects of these compounds can be found in EPA’s IRIS database. 45

6.4 Characterization of Uncertainty in the Monetized PM 2.5 Benefits In any complex analysis, there are likely to be many sources of uncertainty. Many inputs are used to derive the final estimate of economic benefits, including emission inventories, air quality models (with their associated parameters and inputs), epidemiol ogical estimates of concentration

- response (C

- R) functions, estimates of values, population estimates, income estimates, and estimates of the future state of the world (i.e., regulations, technology, and human behavior). For some parameters or inputs it ma y be possible to provide a statistical representation of the underlying uncertainty distribution. For other parameters or inputs, the necessary information is not available.
The annual benefit estimates presented in this analysis are also inherently varia ble due to the processes that govern pollutant emissions and ambient air quality in a given year. Factors such as hours of equipment use and weather are constantly variable, regardless of our ability to measure them accurately. As discussed in the PM 2.5 NA AQS RIA (Table 4

- 5) (U.S. EPA, 2006 ), there are a variety of uncertainties associated with these PM benefits. Therefore, the estimates of annual benefits should be viewed as representative of the magnitude of benefits expected, rathe r than the actual benefits that would occur every year.

45 U.S. EPA Integrated Risk Information System (IRIS) database is available at: www.epa.gov/iris6

- 27

It is important to note that the monetized benefit

- per

- ton estimates used here reflect specific geographic patterns of emissions reductions and specific air quality and benefits modeling assumptions. For example, these estimates do not reflect local variability in population density, meteorology, exposure, baseline health incidence rates, or other local factors. Use of these $/ton values to estimate benefits associated with different emission control programs (e.g., for reducing emissions from large stationary sources like EGUs) may lead to higher or lower benefit estimates than if benefits were calculated based on direct air quality modeling. Great care should be taken in applying these estimates to e mission reductions occurring in any specific location, as these are all based on national or broad regional emission reduction programs and therefore represent average benefits

- per

- ton over the entire United States. The benefits

- per

- ton for emission reduct ions in specific locations may be very different than the estimates presented here.

PM 2.5 mortality benefits are the largest benefit category that we monetized in this analysis. To better characterize the uncertainty associated with mortality impacts that are estimated to occur in areas with low baseline levels of PM 2.5 , we included the LML assessment. Without policy

- specific air quality modeling, we are unable to quantify the shift in exposure associated with this specific rule. For this rule, as a surrog ate measure of mortality impacts, we provide the percentage of the population exposed at each PM 2.5 level using the most recent modeling available from the proposed Transport Rule (U.S. EPA, 2010e ). A very large proportion of the population is exposed at or above the lowest LML of the cohort studies (Figures 6

- 7 and 6

- 8 ), increasing our confidence in the PM mortality analysis. Figure 6

- 7 shows a bar chart of the p ercentage of the population exposed t o various air quality levels in the pre

and post

- policy policy. Figure 6

- 8 shows a cumulative distribution function of the same data. Both figures identify the LML for each of the major cohort studies. As the policy shifts the distribution of air quality levels, fewer people are exposed to PM 2.5 levels at or above the LML. Using the Pope et al. (2002) study, the 85% of the population is exposed to annual mean PM 2.5 levels at or above the LML of 7.5 μg/m 3

. Using the Laden et al. (2006) study, 40% of the population is exposed above the LML of 10 μg/m 3

. As we model mortality impacts among populations exposed to levels of PM 2.5 that are successively lower than the LML of the lowest cohort study, our confid ence in the results diminishes. However, the analysis above confirms that the great majority of the impacts occur at or above the lowest cohort study ’ s LML. It is important to emphasize that we have high confidence in PM 2.5 - related effects down to the lowe st LML of the major cohort studies. Just because we have greater confidence in the benefits above the LML, this does not mean that we have no confidence that benefits occur below the LML.6

- 28

Figure 6

- 7
. Percentage of Adult Population by Annual Mean PM 2.5 Exposure

(pre

- and post

- policy policy)

Figure 6

- 8

. Cumulative Distribution of Adult Population at Annual Mean PM 2.5 levels

(pre

- and post

- policy policy)6

- 29

Above we present the estimates of the total monetized benefits, bas ed on our interpretation of the best available scientific literature and methods and supported by the SAB

HES and the NAS (NRC, 2002 ). The benefits estimates are subject to a number of assumptions and uncertainties. For example, for key ass umptions underlying the estimates for premature mortality, which typically account for at least 90% of the total monetized benefits, we were able to quantify include the following:

1. PM 2.5 benefits were derived through benefit per

- ton estimates, which do not reflect local variability in population density, meteorology, exposure, baseline health incidence rates, or other local factors that might lead to an over

- estimate or under

estimate of the actual benefits of controlling directly emitted fine particula tes.
2. We assume that all fine particles, regardless of their chemical composition, are equally potent in causing premature mortality. This is an important assumption, because PM 2.5 produced via transported precursors emitted from EGUs may differ signifi cantly from direct PM 2.5 released from diesel engines and other industrial sources, but the scientific evidence is not yet sufficient to allow differentiation of effect estimates by particle type

. 3. We assume that the health impact function for fine part icles is linear down to the lowest air quality levels modeled in this analysis. Thus, the estimates include health benefits from reducing fine particles in areas with varied concentrations of PM 2.5, including both regions that are in attainment with fine p article standard and those that do not meet the standard down to the lowest modeled concentrations.
4. To characterize the uncertainty in the relationship between PM 2.5 and premature mortality (which typically accounts for 85% to 95% of total monetized be nefits), we include a set of twelve estimates based on results of the expert elicitation study in addition to our core estimates. Even these multiple characterizations omit the uncertainty in air quality estimates, baseline incidence rates, populations exp osed and transferability of the effect estimate to diverse locations. As a result, the reported confidence intervals and range of estimates give an incomplete picture about the overall uncertainty in the PM 2.5 estimates. This information should be interpre ted within the context of the larger uncertainty surrounding the entire analysis. For more information on the uncertainties associated with PM 2.5 benefits, please consult the PM 2.5 NAAQS RIA (Table 5

- 5). This RIA does not include the type of detailed uncertainty assessment found in the PM NAAQS RIA (U.S. EPA, 2006 ) because we lack the necessary air quality input and monitoring data to run the benefits model. In addition, we have not conducted any air quality modeling for this rule. Moreover, it was not possible to develop benefit

- per

- ton metrics and associated6

- 30

estimates of uncertainty using the benefits estimates from the PM RIA because of the significant dif ferences between the sources affected in that rule and those regulated here. However, the results of the Monte Carlo analyses of the health and welfare benefits presented in Chapter 5 of the PM RIA can provide some evidence of the uncertainty surrounding t he benefits results presented in this analysis.6

- 31

References Agency for Toxic Substances and Disease Registry (ATSDR). 1995. Toxicological profile for Polycyclic Aromatic Hydrocarbons (PAHs). Atlanta, GA: U.S. Department of Health and Human Services, Public Health Service. Available electronically at http://www.atsdr.cdc.gov/ToxProfiles/TP.asp?id=122&tid=25

. Fann, N., C. M. Fulcher, and B. J. Hubbell. 2009. The influence of location, source, and emission type in estimates of the human health b enefits of reducing a ton of air pollution. Air Qual ity and Atmos

pheric Health 2:169

– 176. Industrial Economics, Inc (IEc). 2006. Expanded Expert Judgment Assessment of the Concentration

- Response Relationship Between PM 2.5 Exposure and Mortality . Prepared f or the U.S. EPA, Office of Air Quality Planning and Standards, September. Available on the Internet at <http://www.epa.gov/ttn/ecas/regdata/Uncertainty/pm_ee_report.pdf>. Kochi, I., B. Hubbell, and R. Kramer. 2006. An Empirical Bayes Approach to Combining Estimates of the Value of Statistical Life for Environmental Policy Analysis. Environmental and Resource Economics 34:385

– 406. Laden, F., J. Schwartz, F. E. Speizer, and D. W. Dockery. 2006. Reduction in Fine Particulate Air Pollution and Mortality. Americ an Journal of Respiratory and Critical Care Medicine 173:667

- 672. Mrozek, J. R., and L. O. Taylor. 2002. What Determines the Value of Life? A Meta

- Analysis. Journal of Policy Analysis and Management 21(2):253

- 270. National Research Council (NRC). 2002. Est imating the Public Health Benefits of Proposed Air Pollution Regulations . Washington, DC: The National Academies Press. Pope, C. A., III, R. T. Burnett, M. J. Thun, E. E. Calle, D. Krewski, K. Ito, and G. D. Thurston. 2002. Lung Cancer, Cardiopulmonary Mortality, and Long

- term Exposure to Fine Particulate Air Pollution. Journal of the American Medical Association 287:1132

- 1 141. Roman, Henry A., Katherine D. Walker, Tyra L. Walsh, Lisa Conner, Harvey M. Richmond, Bryan J. Hubbell, and Patrick L. Kinney. 2008. Expert Judgment Assessment of the Mortality Impact of Changes in Ambient Fine Particulate Matter in the U.S. Environ. Sci. Technol. 42(7):2268

- 2274. U.S. Environmental Protection Agency (U.S. EPA). 2000. Guidelines for Preparing Economic Analyses. EPA 240

- R

- 00

- 003. National Center for Environmental Economics, Office of Policy Economics and Innovation. Washington, DC. September. Available on the Internet at < http://yosemite.epa.gov/ee/epa/eed.nsf/webpages/Guidelines.html/$file/cover.pdf >.6

- 32

U.S. Environmental Protection Agen cy (U.S. EPA). September 2000. Guidelines for Preparing Economic Analyses . EPA 240

- R

- 00

- 003. Washington, DC: EPA. http://yosemite.epa.gov/ee/epa/eed.nsf/webpages/Guidelines.htm l . Accessed August 2009. U.S. Environmental Protection Agency (U.S. EPA). 2002. ―Profile of the Pulp and Paper Industry.‖ Sector Notebook Project

. <http://www.epa.gov/Compliance/resources/publications/assistance/ sectors/notebooks/index.html>.
U.S. Environ mental Protection Agency(U.S. EPA). 2006. Regulatory Impact Analysis, 2006 National Ambient Air Quality Standards for Particulate Matter, Chapter 5. Available at < http://www .epa.gov/ttn/ecas/regdata/RIAs/Chapter%205

-- Benefits.pdf >. U.S. Environmental Protection Agency (U.S. EPA). 2008a. Integrated Science Assessment for Sulfur Oxides

— Health Criteria (Final Report). National Center for Environmental Assessment, Research Triang le Park, NC. Available at <http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=198843>. U.S. Environmental Protection Agency (U.S. EPA). 2009a. Regulatory Impact Analysis: National Emission Standards for Hazardous Air Pollutants from the Portland Cement Ma nufacturing Industry . Office of Air Quality Planning and Standards, Research Triangle Park, NC. April. Available at < http://www.epa.gov/ttn/ecas/regdata/RIAs/portland cementria_4

- 20

- 09.pdf >. U.S. Environmental Protection Agency (U.S. EPA). 2009b. Integrated Science Assessment for Particulate Matter (Final Report). EPA

- 600

- R

- 08

- 139F. National Center for Environmental Assessment

— RTP Division. December. Available at <http ://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=216546>. U.S. Environmental Protection Agency (U.S. EPA). 2010a. Integrated Science Assessment for Carbon Monoxide. National Center for Environmental Assessment, Research Triangle Park, NC. EPA/600/R

- 09/019F. January. Available on the Internet at < http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=218686 >. U.S. Environmental Protection Agency (U.S. EPA). 2010b. Final Regulatory Impact Analysis (RIA) for the SO 2 National Ambient Air Quality Standards (NAAQS)

. Office of Air Quality Planning and Standards, Research Triangle Park, NC. June. Available at <http://www.epa.gov/ttn/ecas/regdata/RIAs/fso2ria100602full.pdf>. U.S. Environmental Protection Agency (U.S. EPA). 2010c. Summary of Expert Opinions on the Existen ce of a Threshold in the Concentration

- Response Function for PM 2.5 - related Mortality: Technical Support Document . Compiled by Office of Air Quality Planning and Standards, Research Triangle Park, NC. July. Available at <http://www.epa.gov/ttn/ecas/benefits .html>.6

- 33

U.S. Environmental Protection Agency (U.S. EPA). 2010d. Lowest Measured Level (LML) Assessment for Rules without Policy

- Specific Air Quality Data Available: Technical Support Document . Office of Air Quality Planning and Standards, Research Triangle Park, NC. July. Available at < http://www.epa.gov/ttn/ecas/regdata/Benefits/thresholdstsd.pdf >. U.S. Environmental Protection Agency (U.S. EPA). 2010e. Regulatory Impact Analysis for the Proposed Federal Transport Rule. Office of Air Quality Planning and Standards, Research Triangle Park, NC. July. Available at <http://www.epa.gov/ttn/ecas/regdata/RIAs/proposaltrria_final.pdf>. U.S. Environmental Protection Agency

- Science Advisory Board (U.S. EPA

- SAB). 2007. SAB Advis ory on EPA’s Issues in Valuing Mortality Risk Reduction. EPA

- SAB

- 08

- 001. October. Available on the Internet at <http://yosemite.epa.gov/sab/sabproduct.nsf/4128007E7876B8F0852573760058A978/$F ile/sab

- 08

- 001.pdf >. U.S. Environmental Protection Agency

- Scien ce Advisory Board (U.S. EPA

- SAB). 2009a. Review of EPA’s Integrated Science Assessment for Particulate Matter (First External Review Draft, December 2008). EPA

- COUNCIL

- 09

- 008. May. Available on the Internet at <http://yosemite.epa.gov/sab/SABPRODUCT.NSF/81 e39f4c09954fcb8525 6ead006be86e/73ACCA834AB44A10852575BD0064346B/$File/EPA

- CASAC

- 09

- 008

- unsigned.pdf>. U.S. Environmental Protection Agency

- Science Advisory Board (U.S. EPA

- SAB). 2009b. Consultation on EPA’s Particulate Matter National Ambient Air Qualit y Standards: Scope and Methods Plan for Health Risk and Exposure Assessment. EPA

- COUNCIL

- 09

- 009. May. Available on the Internet at <http://yosemite.epa.gov/sab/ SABPRODUCT.NSF/81e39f4c09954fcb85256ead006be86e/723FE644C5D758DF85257 5BD00763A32/$File/EPA

- CASA C

- 09

- 009

- unsigned.pdf>. U.S. Environmental Protection Agency

- Science Advisory Board (U.S. EPA

- SAB). 2010. Review of EPA’s DRAFT Health Benefits of the Second Section 812 Prospective Study of the Clean Air Act . EPA

- COUNCIL

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- 001. June. Available on the I nternet at <http://yosemite.epa.gov/sab/sabproduct.nsf/0/72D4EFA39E48CDB2852577450073877 6/$File/EPA

- COUNCIL

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- 001

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- 76.7

- 1 SECTION 7 COMPARISON OF MONETI ZED BENEFITS AND COS TS
7.1 Summary Because we were unable to monetize the co

- benefits associated with reducing HAPs, all monetized benefits reflect improvements in ambient PM 2.5 concentrations from reductions in
PM 2.5 emissions

. This results in an underestimate of the monetized benefits. Using a 3% discount rate, we estimate the total monetized benefits of t h is proposed rule to be $9 0 m illion to $ 220 m illion in the year of implementation (201 5 ) as shown in Table 7

- 1. Using a 7% discount rate, we estimate the to tal monetized benefits to be $ 80 m illion to $ 190 m illion in 2017. The annualized social costs are $ 4

. 1 mil lion

. The net benefits are th erefore $ 6 m illion to $ 176 m illion at a 3% discount rate for the benefits and $ 56 m illion to $ 156 m illion at a 7% discount rate. All estimates are in 20 1 0$. The benefits from reducing other air pollutants have not been monetized in this analysis, including reducing tons of, black carbon and several HAPs emissions such as formaldehyde , mercury and nickel among others e ach year

. Figure 7

- 1 show s the full range of net benefits estimates (i.e., annual benefits minus annualized costs) quantified in terms of PM 2.5 benefits f or the year of implementation (201 5 ).

Table 7

- 1. Summary of the Annual Monetized Benefits, Social Costs, and Net Benefits for

the P roposed Ferroalloys RTR in 201 5 ($20 10 millions ) a

3% Discount Rate 7% Discount Rate Proposed Standard Total Monetized Benefits b $ 70 to $ 180 $ 60 to $ 160 Total Social Costs $ 4 $ 4 Net Benefits $ 70 to $ 180 $ 60 to $ 160 Nonmonetized Benefits tons of Reduced exposure to HAPs, including formaldehyde, mercury , and nickel, cad m ium Reduced Climate effects due to black carbon emissions Ecosystem effects Visibility impairment

a All estimates are f

or the year of implementation (201 5 ) and are rounded to two significant figures. These results include units anticipated to come online and the lowest cost disposal assumption.7

- 2 b The total monetized benefits reflect the human health benefits associated with reducing exposure to PM 2.5 throu gh reductions of directly emitted PM 2.5 . It is important to note that the monetized benefits include many but not all health effects associated with PM 2.5 exposure. Benefits are shown as a range from Pope et al. (2002) to Laden e t al. (2006) . These models assume that all fine particles, regardless of their chemical composition, are equally potent in causing premature mortality because the scientific evidence is not yet sufficient to allow differentiatio n of effect estimates by particle type.

F igure 7

- 1. Net Annual Benefits Ran ge in 201 5 for PM 2.5 Reductions for the Proposed

Standard $0 $50,000,000 $100,000,000 $150,000,000 $200,000,000 $250,000,000

Pope et al. Laden et al. (2010$)

Cost estimate combined with total monetized benefits estimates derived from 2 epidemiology functions and 12 expert functions7

- 38

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