1



### ASSESSMENT OF THE POTENTIAL COSTS, BENEFITS,

AND OTHER IMPACTS

FOR THE

PROPOSED RULE

CATEGORICAL NON-WASTE DETERMINATION FOR SELECTED NO N

HAZARDOUS SECONDARY MATERIALS (NHSMs):

CONSTRUCTION AND DEMOLITION WOOD, RECYCLING PROCESS RESIDUALS,

and CREOSOTE-TREATED RAILROAD TIES



### (Additions to List of Section 241.4 Categorical Non -Waste Fuels)

Economics and Risk Analysis Staff Office of Resource Conservation and Recovery U. S. Environmental Protection Agency 1200 Pennsylvania Ave., N. W. Washington, DC 20460

July 22, 2013

8/27132 INTRODUCTION

Background:

Section 129 of the Clean Air Act (CAA) directs EPA to promulgate regulations to control emissions of nine specified pollutants from “solid waste incineration units.” EPA did so in December 2000 with the publication of the final Sta ndards of Performance for New Stationary Sources and Emission Guidelines for Existing Source s: Commercial and Industrial Solid Waste Incineration Units (the “CISWI Rule”). In Septembe r 2004, under section 112(d) of the CAA, the Agency promulgated the National Emissions Stand ards for Hazardous Air Pollutants for Industrial, Commercial, and Institutional Boilers a nd Process Heaters (the “Boilers Rule”). This

rule established Maximum Achievable Control Technol ogy (MACT) standards for this source category. Units regulated under section 129 cannot be subject to any rule promulgated under

section 112. 1

Responding to a petition for reconsideration, EPA amended the CISWI Rule in September 2005 with a rule that revised definitions for “solid waste,” “commercial or industrial waste,” and “commercial and industrial solid waste incineration unit” (the “CISWI Definitions Rule”). As part of the CISWI Definitions Rule, EPA made a distinction between solid waste incinerators and boilers, characterizing the former as units that are designed and operated to discard materials through high temperature combusti on. However, EPA excluded from the

definition of a solid waste incinerator those units designed to recover energy for “useful purposes such as steam generation or process heating.”

In July 2007, the Court of Appeals for the District of Columbia Circuit vacated and

remanded to EPA both the CISWI Definitions Rule and the Boilers Rule. In vacating the Definitions Rule, the Court noted that, despite the potential reasonableness of the functional distinction between boilers and incinerators, the C AA is unambiguous in its requirement that EPA regulate as a solid waste incineration unit any commercial or industrial incinerator that combusts any solid waste material, regardless of wh ether the waste is burned as a “fuel.” The Court also concluded that EPA erred in excluding fr om the CISWI Definitions Rule units that combust solid waste for the purposes of energy reco very and including these units in the Boilers

Rule.

In partial response to the Court’s decision, EPA pu blished the Non-Hazardous Secondary Materials (NHSM) Rule on March 21, 2011. Amendment s to this rule were published in the Federal Register on February 7, 2013. These amendm ents provided clarification on certain issues on which EPA received new information, as we ll as specific targeted revisions. In addition, these amendments listed several NHSMs as categorical non-wastes when used as fuels. The Agency also indicated that we would consider ad ding additional materials to the categorical listings as more information became available.

1 However, sources have the option to switch back an d forth between CAA sections 112 and 129 applicabil ity

.3

Today’s action proposes to add three additional mat erials to the list of categorical nonwaste fuels: construction and demolition (C&D) wood , paper recycling residuals, and cresote

treated railroad ties. These materials are describe d more fully below.

Need for Regulatory Action:

Today’s proposed categorical non waste determinatio n for selected NHSMs is an ongoing response to the Court’s decision that required a cl ear determination of the status of these

materials when combusted.

Purpose of this Document:

This document presents our assessment of costs, ben efits, and economic impacts of the proposed categorical determination amendments to th e NHSM rule. These new categorical non waste determinations may affect the behavior of the generators of these materials, or the behavior of affected combustion units concerning a choice of fuels. The identification of these potential behavioral changes, and the economic effe cts they may indirectly engender, are the focus of this economic assessment. Any behavioral c hanges and corresponding cost, economic, and environmental effects will occur in response to the implementation of this NHSM rule, combined with requirements established under the bo iler MACT and CISWI final rules.

SUMMARY OF THE PROPOSED RULE AND ALTERNATIVES

Proposed Rule:

The March 2011 NHSM final rule, as amended in Febr uary 2013, established standards and procedures to be used to identify whether non-h azardous secondary materials are solid wastes when used as fuels or ingredients in combust ion units. This rule also listed various materials that are not solid wastes provided certai n conditions are met. These materials are known as “categorical” non-waste fuels. Today’s ac tion proposes to add three additional materials to the list of categorical non-waste fuel s: (1) construction and demolition (C&D) wood processed by trained workers from construction and demolition debris according to best management practices; (2) paper recycling residuals (PRRs), including old corrugated cardboard (OCC) rejects, generated from the recycling of reco vered paper and paperboard products and burned on-site by paper recycling mills whose boile rs are designed to burn solid fuel, and (3) creosote-treated railroad ties that are processed a nd combusted in units designed to burn both

biomass and fuel oil.

Regulatory Alternatives:

Consistent with Executive Order 12866 requirements and Agency guidance, this assessment briefly considers two regulatory alterna tives, identified below as Option 1 and Option 2. These options are examined for comparative purp oses only and should not be considered part of the proposal.4

Option 1: Selected NHSMs Defined as RCRA Solid Was te:

Under this Option, C&D wood and PRRs would be defin ed as RCRA solid wastes, while allowing for non waste consideration using the prev iously established petition process. 2 Under this option, without a successful petition, these m aterials, when burned, would be required to be managed under CAA section 129 standards, or dispose d in an appropriate landfill.

Option 2: Expanded RCRA Management Requirements:

Rather than proposing the selected NHSMs as categ orical non wastes (subject to identified management requirements), another altern ative regulatory option may be to propose expanded management requirements for, or associated with the fuel use of these materials. These requirements would be incorporated into the c ontingencies and best management practices currently proposed for non-waste determinations for specific non-hazardous secondary materials when used as a fuel. Such requirements may include one or more of the following: transportation restrictions/requirements, storage l imitations/controls, specific container or material labeling, enhanced materials processing, e xpanded training, material sampling and analysis, and comprehensive recordkeeping and repor ting. These requirements would, where applicable, be incremental to any current baseline management requirements for the three materials, whether currently burned as a solid wast e or non waste.

Non Regulatory Alternatives:

Non regulatory alternatives to this proposed actio n may include the following: no action, expanded voluntary training and educational program s, and working with the states to implement targeted generation and use fees/taxes at the state level that are designed to modify behavior.

The purpose of this action is to establish a categ orical non waste determination for the three selected materials (C&D wood, PRRs, and CTRTs ), and to provide for greater regulatory clarity and certainty. In addition, this proposal s eeks to help remove or reduce cost and liability issues potentially associated with the combustion o f these materials for energy recovery, while maintaining appropriate emission standards to ensur e effective protection of human health and the environment. Thus, non regulatory alternatives would not adequately serve the purpose of

this action.

SUMMARY OF THE AFFECTED SECONDARY MATERIALS

As noted above, the Agency is proposing to list thr ee additional non hazardous secondary materials as “categorical” non-waste fuels provided certain conditions are met. Categorical nonwaste fuels do not need to be evaluated under the g eneral standards and procedures that would otherwise apply to such materials used in combustio n units. The three additional materials are:

2 CTRTs are recognized as a solid waste fuel in the baseline.5

• construction and demolition (C&D) wood processed by trained workers from construction and demolition debris according to bes t management practices;

• paper recycling residuals (PRRs) , including old corrugated cardboard (OCC) rejects, generated from the recycling of recovered paper and paperboard products and burned onsite by paper recycling mills whose boilers are des igned to burn solid fuel, and

• creosote-treated railroad ties that are processed and combusted in units designed to
burn both biomass and fuel oil.

This section provides summary information concernin g these non-hazardous secondary

materials.

Construction and Demolition (C&D) Wood:

C&D wood from construction activities results from cutting wood down to size during installation or from purchasing more wood than a pr oject ultimately requires. C&D wood from

demolition activities results from dismantling buildings or r emoving materials during remodeling. Construction materials are produced by NAICS 236: Construction of Buildings. Demolition materials are produced by NAICS 238910: Site Preparation Contractors.

While contractors may segregate C&D materials at the building site, the more common practice (especially at demolition sites) appears t o be to send co-mingled debris to independent C&D recycling or processing facilities. These faci lities separate the wood scraps from metals, plastics, non-combustibles, and other undesirable i tems. Wood scraps may be picked out of the co-mingled debris (positive picking), or the unwant ed materials may be removed from the debris stream (negative picking). In both scenarios, steps are taken to remove lead-based paint and wood treated with chromated copper arsenate (CCA). C&D wood reclaimed from construction activities is generally unused and untreated, there by falling under the definition of “clean

cellulosic biomass.” C&D wood reclaimed from demolition activities is, under normal circumstances believed to be sufficiently processed to meet the legitimacy criteria. Processing facilities grind the recovered wood to a specified size and deliver the material to energy recovery

facilities.

C&D wood that has been picked, sorted, and proces sed for energy recovery has an asfired energy content, on average, ranging from app roximately 6,640 Btu/lb to 6,800 Btu/lb. 3
Wood residues may also be converted into gaseous co mponents (carbon monoxide, hydrogen, methane, and other inert gases) through gasificatio n. This process is designed so the biomass can be directly converted into the intermediate pro ducts of gas and charcoal, which can be used for further energy recovery. 4

3 EPA-HQ-RCRA-2008-0329-1946-A1, pg 63-65 estimates 6 ,800 Btu/lb. Appendix A of the April 26, 2013
submittal from Susan Bodine, on behalf of BPA and C MRA, indicates an average energy content of 6,640 B tu/lb (EPA-HQ-RCRA-2013-0110).

4 Natural Resources Institute (NRI). “What do we mea n by Gasification?” Undated. Available at: http://www.nri.org/projects/biomass/conference_pape rs/gasification_process.pdf6

The USDA estimates that approximately 30 percent of all C&D wood originates in construction activities while about 70 percent is f rom demolition activities. 5 C&D activities generate an estimated 33 to 49 million tons of scra p wood each year, with about 50 percent considered to be of acceptable size, quality, and c ondition to be considered available for general

recovery. 6 Available information indicates that as much as 1 00 percent of all C&D wood destined as a boiler fuel may go off-site. 7,8 Comprehensive information on the quantity of processed C&D wood currently combusted for energy r ecovery is unavailable. However, the combustor survey database developed by EPA for the 2010 proposal of the Commercial and Industrial Solid Waste Incinerator (CISWI) standard s and the Industrial Boilers Maximum Achievable Control Technology (MACT) standards appe ars to indicate that the sources surveyed for these rules may combust anywhere from 4.7 milli on tons to 11.2 million tons of C&D wood per year (Appendix B). 9,10

Paper Recycling Residuals (PRRs):

Paper Recycling Residuals (PRRs) are paper fibers resulting from the recycling process that are unusable for making new paper and paperboa rd products primarily due to impurities or fibers too small for the recycling process. As a s econdary product derived from the processing of post-consumer paper and paperboard, this materia l is an integral part of the on-site industrial process at paper recycling mills.

Some processing occurs before burning PRRs for ener gy recovery. 11 Processors generally use a slotted screen to select cellulosic fibers that have adequate heating value and are considered too small or inadequate for paper produc tion. Some plants will then use hydraulic presses to squeeze unwanted moisture out of the res iduals before shredding the material to the

5 McKeever, David B. 2002, "Inventories of Woody Re sidues and Solid Wood Waste in the United States, 2 002,"

USDA Forest Service.

6 U.S. EPA, Office of Resource Conservation and Reco very. February 3, 2011. “Materials Characterizati on Paper In Support of the Final Rulemaking: Identification of Nonhazardous Se condary Materials That Are Solid Waste Construction and Demolition Materials – Building-Re lated C&D Materials.” EPA-HQ-RCRA-2008-0329-1811.

7 U.S. EPA, Office of Air Quality Planning and Stand ards, Draft combustor database in support of the re vised CISWI Rule, April 14, 2009 and U.S. EPA, Office of Air Quality Planning and Standards, Draft combustor database in support of the revised Boilers Rule, March 20, 2 009.

8 The Agency recognizes that there are currently lar ge numbers of wood-fired hydronic heaters operating throughout the country. These are generally on-site units des igned to burn dry, seasoned clean biomass wood and mostly serve households, small businesses, or small government f acilities. Some of these units are known to burn construction debris, the status of which is undetermined.

9 United States Environmental Protection Agency (EPA ). 2009, Combustor survey database in support of th e 2010 proposal of the Commercial and Industrial Solid Was te Incinerator (CISWI) standards and the Industrial Boilers Maximum Achievable Control Technology (MACT) standa rds, April 2009.

10 The categories of wood material in the combustion database that may contain C&D building wood includ e (1) adulterated wood; (2) painted or varnished wood; (3 ) plywood, particleboard (containing glues or resin s); (4) treated wood; (5) treated wood and cardboard; (6) unadulter ated wood; and (7) unadulterated lumber. Also note that some of these categories could be disaster debris, land clearing debris, or biomass (as defined in the thre e biomass materials characterization papers) rather than cons truction and demolition building debris.

11 American Forest & Paper Association, et al. , public comments submitted on the Rule to Categori ze NonHazardous Secondary Materials That Are Solid Waste (EPA-HQ-RCRA- 2008-0329) and Commercial and

Industrial Solid Waste Incineration Units: Reconsid eration and Proposed Amendments (EPA-HQ-OAR-2003-01 19). Comment ID EPA-HQ-RCRA-2008-0329-1946-A1. February 21, 2012. P.557

optimal size for combustion. 12 Some plants may also apply a drying process to th ese residuals before firing them. However, the minimal processin g necessary to convert these materials into a valuable fuel is generally applied. These PRRs are then conveyed to the boiler for mixing with

other biomass. 13 Our evidence indicates that PRRs are handled prom ptly and contained in storage units (or covered buildings) along with tra ditional fuels.

Once processed and ready for the boiler, the as-fi red heating value of PRRs normally averages about 3,700 Btu/lb (or on a dry basis, ave rages 9,100 Btu/lb). 14 While this is lower than the general guideline of 5,000 Btu/lb, as fired, 15 the Agency has previously stated that flexibility exists for facilities with energy recovery units th at use NHSMs as fuels with an energy content lower than 5,000 Btu/lb. Considering the relatively low heating value of this material (i.e., <5,000 Btu/lb on a wet basis), a facility using PRR s as a supplementary fuel in an energy recovery unit would normally first assess the cost- effectiveness of this action. Factors identified by the Agency in the March 2011 rule that may indic ate a material has meaningful heating value even when the heating value of the material is less than 5,000 Btu/lb included the following: anticipated cost savings from avoided purchase of t raditional fuels (primarily coal or other biomass), avoided disposal costs, whether the PRR m aterial could self-sustain combustion, and/or whether the operation produces energy that c ould be sold for a profit.

The industry has noted that many paper recycling m ills with solid fuel boilers are designed to burn PRRs, with each mill optimizing it s operation around boiler design. Typical

boilers used include stoker fired and fluidized bed combustion, which often have over-fire and/or under-grate air that assists in the efficient burni ng of wetter fuels. This allows paper recycling mills to burn clean cellulosic biomass fuels, such as hog fuel and bark, which is the primary fuel, as well as PRRs, that have varying degrees of moist ure content. Materials fed to the boiler that are too dry can cause combustion temperatures to be come too hot, requiring operational adjustments. Consequently wet materials are handled well in these boilers, leading to fewer temperature swings and minimized boiler tuning adju stments. The industry has also noted that PRRs are analogous to the primary fuels (hog fuel a nd bark), used in solid fuel boilers at paper recycling mills in that they both have high moistur e content, usually > 40 percent and can have Btu values below 5,000 Btu/lb, as fired.

Paper recycling facilities are estimated to gener ate between 450,000 and 600,000 tons of PRRs (including old corrugated cardboard) per year (Appendix B). 16,17 These values reflect the residuals generated by the initial screening proces s (i.e., to remove metals and other materials), materials that do not break down during processing (e.g., paper treated to repel water), and fibers

12 American Forest & Paper Association, et al. , public comments submitted on the Rule to Categori ze NonHazardous Secondary Materials That Are Solid Waste (EPA-HQ-RCRA-2008-0329) and Commercial and Industri al

Solid Waste Incineration Units: Reconsideration and Proposed Amendments (EPA-HQ-OAR-2003-0119). Commen t ID EPA-HQ-RCRA-2008-0329-1946-A1. February 21, 2012 . P. 55

13 Gavrilescu, D. “Energy from biomass in pulp and pa per mills.” Environmental Engineering and Management

Journal , Vol. 7, No. 5, 537-546. September/October 2008. P . 542

14 See AF&PA Comments, p 62, to Docket document ID: EPA-HQ-RCRA-2008-0329-0871.

15 76 FR 15522

16 Price, Jason, Kase, W., and E. Reker, October 26, 2012. Generation, Management, and Processing of Paper Processing Residuals . Memo to Tab Tesnau, U.S. EPA from Industrial Eco nomics, Inc.

17 Note: These data are not for the most recent year and the amounts are likely to have changed with the increase in recycling.8

too small to be re-used. There are no definitive da ta on what portion of this material is old corrugated cardboard, but a broad array of types of recovered fiber, such as old magazines, old newsprint and office paper, are increasingly used a t paper recycling mills.

Approximately 30 percent of the total generation o f PRRs generated (135,000 tons to 180,000 tons) are burned for fuel value across 15 t o 20 different pulp and paper mills. 18 For the mills capable of burning PRRs on-site (i.e., their boilers are designed to burn solid fuel), 55 to 100 percent of the PRRs generated are burned and ma y represent between 20 to 25 percent of the total solid fuel burned. Of the 30 percent of PRR s burned as fuel, no more than five percent are

estimated to be burned off-site. 19 For the PRRs burned off-site, they appear to be u sed to supplement other fuels burned at commercial cogener ation facilities.

Creosote-Treated Railroad Ties (CTRTs):

Railroad crossties that have been removed from serv ice and are processed for fuel are the primary source of CTRTs. These crossties are overw helmingly comprised of North American

hardwoods that have been treated with creosote. As a wood preservative, creosote is primarily

used for the treatment of railroad ties and remains the preservative of choice by U.S. railroads due to durability, cost effectiveness, and sustaina bility. Creosote is a by-product of coal tar distillation, and coal tar is a by-product of makin g coke from coal. Depending upon railroad maintenance operations, anywhere from 13 million to as many as 20 million 20 crossties may be removed from service each year (Appendix B). About one third of these crossties are used for landscaping, while the majority of the rest are use d for energy recovery. Only a small percentage of crossties are landfilled each year.

Because of their high energy content, 21 processed CTRTs are beneficially used as an alternative to traditional fuels for heat and energ y recovery in a wide variety of different unit types and industrial sectors. These may include uni ts designed specifically to burn crossties, industrial wood fired boilers, utility boilers, or cement kilns. The beneficial use of crossties as a

fuel substitute is considered to be carbon neutral. As a result, for each tie burned for energy recovery, only the creosote portion of the tie is c onsidered to be a fossil fuel. Thus, burning of the tie results in the addition of approximately 39 pounds of carbon dioxide into the atmosphere, compared to approximately 288 pounds which would re sult from burning a quantity of coal of equal energy. 22

The energy recovery market for crossties is domina ted by third party energy producers who generally collect and process the ties prior to selling the material for fuel. This processing of crossties meets the definition of processing in 40 CFR 241.2. Finally, CTRTs were found to

18 Although there are over 100 paper mills across the U.S., only 15 to 20 mills have the capability to u tilize solid fuel in their boilers; the majority of mills’ boilers us e natural gas and thus, PRRs generated in their pro cesses are typically landfilled.

19 Price, Jason, Kase, W., and E. Reker, October 26, 2 012. Generation, Management, and Processing of Paper Processing Residuals . Memo to Tab Tesnau, U.S. EPA from Industrial Eco nomics, Incorporated.

20 Smith, Stephen and Chris Bolin. Feb. 18, 2010. Cre osote-Treated Ties End-of-Life Evaluation (Used for the highend estimate).

21 The energy value of one tie is approximately equal to that of 125 pounds of coal (Source: see Smith a nd Bolin).

22 Smith, Stephen and Chris Bolin. Feb. 18, 2010. Creosote-Treated Ties End-of-Life Evaluation.9

mostly contain contaminants at levels comparable to or lower than those in traditional fuel(s) used in equivalent units. 23 No other creosote-treated wood is included in t his proposal.

GENERAL APPROACH

Introduction

This assessment evaluates the general scope and dir ection of impacts potentially associated with the rule, as proposed. The assessm ent first considers the regulatory baseline, followed by an examination of the potential indirec t incremental cost impacts (positive or negative) to burners. We also briefly discuss indi rect market adjustments potentially stimulated by this action. Finally, we present a qualitative consideration of benefits. The proposed approach and key options are considered.

As previously discussed, all impacts associated wit h this action, aside from minor costs of reading and understanding the rule, are not real ized until regulated entities apply the definitions established in this rule to the managem ent of these materials for fuel under regulatory requirements established under sections 112 and/or 129 of the CAA.

The findings discussed in this assessment should be used only to inform the reader as to the potential magnitude and direction of the indire ct impacts that may occur in response to the implementation of the categorical non waste determi nations established in this rule. The evaluation of social costs and net welfare potentia lly resulting from this action is beyond the scope of this assessment.

Baseline Determination

Proper baseline determination is the first step in the assessment of impacts. The baseline

reflects the behavior that affected entities would be expected to display in the absence of the proposed rule. By definition, the baseline assumes no regulatory change, thus it has no associated incremental costs, cost savings, economic impacts, or environmental/health benefits/disbenefits. The baseline serves as a reference point from which the incremental impacts of the proposed rule can be estimated. Once the baseline is determined, we can estimate how the potentially affected CAA section 112 or section 129 units may manage the selected non waste fuel materials in response to the proposed RCRA rule.

Based on readily available data, we have estimated baseline burn rates for the affected materials, plus additional quantities potentially a vailable for use as a fuel. Anywhere from 22.6% to 55.2% of all C&D Wood potentially availabl e for energy recovery is currently being burned as a fuel. Thus, anywhere from 44.8% to 77.4 % of all potential fuel-value C&D Wood remains available for energy recovery. For paper re cycling residuals, we estimate anywhere from 25.0% to 44.4% of all potential fuel-value PRRs are currently burned for energy recovery, leaving a maximum of anywhere from 55.6% to 75.0% o f all PRRs potentially available for

23 See Preamble to the Proposal: Table 4 – Contaminant Ranges in Traditional Fuels & CTRT.10

diversion to fuel use, depending upon PRR boiler de sign. 24 Approximately 62 percent of

creosote-treated railroad crossties removed annuall y are currently burned for fuel. The

Association of American Railroads indicates that as much as 67% of all CTRTs are suitable for use as a fuel. Thus, we assume that an additional 5% of all CTRTs are available for use as a fuel. Appendix B presents more details on these estimates , and identifies all sources.

C&D Wood available for fuel use, but that is curren tly not burned is assumed to be sent to C&D landfills, while potential fuel-value PRRs g enerated on-site that are not burned on-site

are assumed to be sent off-site to an MSW landfill. 25 CTRTs of potential fuel value that are not burned in the baseline are assumed to be used prima rily as legacy ties. 26

Impacts Assessment Methodology

This assessment considers two alternative approach es 27 to assessing the indirect impacts potentially associated with the proposed rule. We first examine the potential impacts using a simple engineering combustion cost comparison betwe en CAA section 112 and section 129 units. This difference represents the cost savings from potentially avoided incremental upgrade costs required to move from CAA section 112 to sect ion 129 standards. 28 Alternatively, this difference may roughly represent the potential incr emental cost savings of modifying a unit to

burn under CAA section 112 standards rather than CA A section 129 standards. Appendix A presents more details on data used for this burner comparative cost assessment.

Our second approach is presented as a simple asses sment of the market adjustments potentially associated with increased fuel use of t he selected materials. These market adjustments may occur in response to reduced waste determination needs, plus the enhanced regulatory clarity and certainty provided by the ru le, as proposed. Appendix B presents full details on data and assumptions that are applied fo r the market adjustment assessment.

FINDINGS

Cost and Economic Impacts:

Introduction:

This section presents estimated cost impacts on a combustion unit basis for burners operating under CAA section 112 versus section 129 requirements. We also briefly examine the

24 This is a maximum expanded fuel-use estimate that does not take into account the on-site limitation o r potential engineering restrictions and design limitations pot entially associated with the baseline boiler univer se at PRR facilties currently not burning PRRs for fuel.

25 We recognize that a very small portion of PRRs are sent off-site for use as a supplementary fuel in o ther facilities capable of burning this low-energy material.

26 Railroad legacy ties are those that are used or st ored along the railroad right-of-way

27 This is not to be confused with the two alternativ e regulatory options that are examined for this ass essment only (i.e., not in the Proposal).

28 This may depend upon the current baseline status o f units exclusively burning CTRTs prior to the effe ctive implementation date(s) for the associated rules.11

potential adjustments that may occur in the selecte d materials markets in response to the rule. Potential burner impacts are examined under the pro posed approach and two alternative regulatory options: Option 1 - Selected NHSMs Defin ed as RCRA Solid Waste, and Option 2 - Expanded RCRA Management Requirements. These option s are more fully described above under “Regulatory Alternatives.”

Lastly, in this section we briefly examine the find ings associated with C&D certification, and other potential impacts. As previously discuss ed, this assessment is presented for general informational purposes only, reflecting the potenti al indirect impacts of this action as part of the Agency’s larger rulemaking system that encompasses this rule plus the associated final rules recently promulgated under sections 112 and 129 of the CAA.

Estimated Impacts to Burners:

This section examines the representative average pe r unit cost differential for combustors operating under CAA section 112 requirements versus CAA section 129 requirements. Without the proposed rule, this cost differential would rou ghly reflect the average per unit cost impact for burners currently operating under section 112 requi rements to upgrade to meet the required section 129 standards, depending upon facility base line status and material(s) burned (and planned to be burned). With this rule, the differe ntial may reflect the avoidance of these anticipated costs. For current section 129 burners , this difference may roughly reflect the potential annual per unit cost savings associated w ith O&M and design modifications necessary to meet the (less stringent) section 112 standards. Once again, this would be dependent upon many baseline conditions, including which NHSMs are currently burned, and future fuel use plans or needs. This section only considers potent ial cost impacts on a per unit level. Impacts at the facility level 29 and aggregate nationwide impacts are not assessed.

Proposed Rule

Facilities currently burning only CTRTs in CAA sect ion 129 units, who had planned to continue burning these materials in the same unit(s ), may experience cost savings should they choose to modify affected combustion unit(s) to mee t the CAA section 112 standards. In this case, the unit-level cost savings are estimated, on average, to be approximately $266,000 per year (Appendix A). This would reflect an avoided u pgrade cost if affected units are currently operating under section112 standards. 30 Facilities currently burning C&D wood and PRRs as a non waste may also experience some cost savings ass ociated with avoided case-by-case waste determinations, documentation, and recordkeeping. 31

Regulatory Options

Option 1: Selected NHSMs Defined as RCRA Solid Wast e:

29 A facility may operate one or more combustion unit s.

30 Considering the actual implementation dates for th e associated rules.

31 There would remain the burden associated with 40 C FR 241.4 (categorical non-waste determination provi sions).12

Under this option, C&D wood and PRRs would be propo sed as RCRA solid wastes, while allowing for a non waste determination using the previously established petition process. In this case, $266,000 would be the average annual per unit cost increase for CAA section 112 boilers currently burning these materials who wish to pursue the necessary upgrades to meet

CAA section 129 standards. If these facilities wou ld present a petition to establish the material as a non waste, and this petition was successful, t he total cost is estimated at just over $10,000 per submission. 32 Based on the materials burned, a successful petit ion would allow a facility to avoid the $266,000 per unit upgrade cost.

Option 2: Expanded RCRA Management Requirements:

Contingent upon regulatory authority and legal fea sibility, additional RCRA contingent requirements above and beyond the proposed continge ncies could be considered as a regulatory option. These may include manifesting, transportat ion restrictions, storage limitations/controls, specific container or material labeling, enhanced m aterial management and handling training, material sampling and analysis, and comprehensive r ecordkeeping and reporting. A regulatory alternative that required one or more of these mate rial-specific requirements would likely result in increased costs to the regulated community. Unde r this alternative, such costs would be weighed against benefits to human health and the en vironment expected to result from such requirement(s). Under this option, the handlers of the affected material(s) could be expected to compare the costs of alternative management methods (e.g., MSW disposal, CAA section 129 incineration upgrade needs) to the increased costs associated with the new fuel source requirements. Should the regulated community decid e that alternative material management methods are less expensive than the new fuel-source requirements, some or all of this material may be diverted away from boilers and the supplemen tary fuel value would be lost.

Potential Market Adjustments:

This proposed rule, if finalized, and implemented in conjunction with the existing boiler and CISWI final rules, will provide increased regul atory certainty and management clarity for the selected materials. This increased certainty m ay stimulate increased energy recovery use for one or more of these materials. The potential exten t of this increase cannot be determined. However, we have developed generalized preliminary estimates of the quantities of the selected materials potentially available for fuel based on o ur estimates of maximum annual generation of

these materials.

Based on the total annual C&D wood generation and use quantities discussed above under “Summary of Affected Secondary Materials,” it is feasible that anywhere from 9.08

million tons to 15.58 million tons of additional C& D wood of fuel value quality is available annually beyond the quantity currently burned for f uel. Paper recycling mills generate between 450,000 and 600,000 tons of PRRs per year. 33,34 Of this, about 10 percent is believed to be used

32 Supporting Statement for EPA Information Collection Request Number 2382.04 Reporting and Recordkeeping Requirements for the Final Rule on the Identificati on of Non-Hazardous Secondary Materials that are So lid Waste, January 2011, (Addendum added June 26, 2012). [See Exhibit 1]

33 Price, Jason, Kase, W., and E. Reker, October 26, 2 012. Generation, Management, and Processing of Paper Processing Residuals . Memo to Tab Tesnau, U.S. EPA from Industrial Eco nomics, Inc.13

in land application activities, 35 indicating about 405,000 tons to 540,000 tons of P RRs are available each year for energy recovery. Deducting current burn estimates, we find that, at a maximum, anywhere from 205,000 tons to 405,000 tons of additional PRRs may be available each year for energy recovery. 36 We estimate that anywhere from 13 million 37 to 20 million 38
CTRTs are generated (removed from service) each yea r. Approximately 62 percent 39 of this total is currently burned for energy recovery. Bas ed on comments from the Association of American Railroads, approximately 67 percent of all creosote-treated railroad ties removed from service each year are suitable for energy recovery in today’s market. Converting the five percentage point incremental increase in the number of ties to tons of CTRTs, we estimate there may be about 59,150 tons to 91,000 U.S. tons equiva lent of additional railroad ties available for energy recovery each year. Appendix B presents deta iled information on all inputs, calculations, assumptions, and sources used in the development of these estimates.

The above estimates clearly demonstrate the market potential for increased fuel-use of the materials addressed in this proposal. However, the extent of any potential market adjustment is undetermined, and would depend upon a multitude of economic, regulatory (state and local), and engineering factors. In addition to market-adjustm ents, there would be increased upstream environmental benefits resulting from reduced extra ction of traditional fuels.

Under regulatory Option 1, where C&D wood and PRRs would be clearly defined as RCRA solid wastes, facilities who do not present a successful petition, may decide to cease burning the selected material(s) in an effort to av oid potential unit upgrade costs. As a result, the generators of these materials would need to seek al ternative management methods. In some cases, this may be the same facility that burns the material, while in other cases this may be another facility. When a combustion unit stops bur ning a secondary material, the ultimate

destination of that material is uncertain. Under t his option, the quantities of NHSMs potentially diverted away from fuel use to alternative manageme nt are not estimated, but could be significant.

Other Potential Impacts

In addition to potential materials diversion and a lternative management impacts, this action may also indirectly foster market-related se condary impacts. These may include changes in material transportation patterns, changes in mat erial collection and consolidation patterns, and changes in material processing patterns. There may also be minor incremental changes in consumer prices and employment patterns related to the potential change in management

associated with these materials. The actual occurr ence, or extent of any such impacts, has not

34 Note: These data are not for the most recent year and the amounts are likely to have changed with the increase in recycling.

35 Price, Jason, Kase, W., and E. Reker, October 26, 2012. Generation, Management, and Processing of Paper Processing Residuals . Memo to Tab Tesnau, U.S. EPA from Industrial Eco nomics, Inc. [See page 2].

36 The potential for expanded fuel use is a high-end estimate and does not take into account engineering restrictions and design limitations potentially associated with the baseline boiler universe at PRR facilities curr ently not burning

PRRs for fuel.

37 Waste Age, Sep 1, 1995. Recycling Keeps Railroad Ties Off The Landfill Track

38 Smith, Stephen and Chris Bolin. Feb. 18, 2010. C reosote-Treated Ties End-of-Life Evaluation.

39 Comments of the Association of American Railroads (EPA-HQ-RCRA-2008-0329)14

been assessed. Finally, all affected entities woul d face the one-time direct RCRA associated cost of reading and understanding the rule, estimated at $74 per entity. 40

Certification Statement for C&D Wood

The proposal also adds a certification requirement to ensure that C&D wood will be processed according to the conditions established i n the rule. These conditions are as follows:

• Construction and demolition (C&D) wood processed fr om construction and demolition debris must be managed according to best management practices. Best management practices for purposes of this categorical listing must include sorting by trained operators that excludes or removes the following materials fr om the final product fuel: non-wood materials ( e.g. , polyvinyl chloride and other plastics, drywall, c oncrete, aggregates, dirt, and asbestos), and wood treated with creosote, pent achlorophenol, chromium copper arsenate, or other copper, chromium, or arsenical p reservatives. In addition:

o C&D processing facilities that use positive sorting —where operators pick out desirable wood from co-mingled debris—must either: (1) exclude all painted wood from the final product fuel, (2) use X-ray Flu orescence to ensure that painted wood included in the final product fuel doe s not contain lead-based paint, or (3) require documentation that a building has be en tested for and does not include lead-based paint before accepting demolitio n debris from that building.

o C&D processing facilities that use negative sorting —where operators remove

contaminated or otherwise undesirable materials fro m co-mingled debris—must remove fines ( i.e. , small-sized particles that may contain relatively high concentrations of lead and other contaminants) and either: (1) remove painted wood, (2) use X-ray Fluorescence to detect and remo ve lead-painted wood, or (3) require documentation that a building has been test ed for and does not include lead-based paint before accepting demolition debris from that building.

o Combustors of C&D wood must request a written certi fication from C&D processing facilities that the C&D wood has been pr ocessed by trained operators

in accordance w ith best management practices, as defined above.

The preparation of the written certification state ment and the requirement to maintain certification is the responsibility of the processo r. The certification recordkeeping requirement for the categorical non-waste C&D materials is part of the existing recordkeeping requirements

in the air boiler MACT and CISWI CAA rules. 41

40 ICR for Additions to List of Section 241.4 Categorical Non- Waste Fuels

. 41 The relevant recordkeeping regulations in the exis ting CAA Air rules under sections 60.2175 (v), 60.2 740(u) or 63.7555(d)(2), and 63.11225(c)(2)(ii) state that a burner must show they are in compliance with 40 CFR part 241.3 or 241.4 to burn a non waste fuel and has been proc essed pursuant to 241.2.15

Our preliminary estimate indicates that this certi fication statement would cost approximately $299 for each processor to prepare. Appendix C presents more details on this certification cost estimation. In addition, the co st to the burner to receive, review, file and

maintain the certification statement is estimated a t $23.40 per submission. 42 However, as indicated above, the certification recordkeeping re quirement for the categorical non-waste C&D materials is part of existing CAA recordkeeping req uirements. Thus, some or all of this cost may simply replace the existing recordkeeping requireme nts for the burners.

Human Health, Environmental, and Economic Benefits/ Disbenefits:

Together with the corresponding CAA rules, this pro posed rule will likely result in various changes in materials management practices t hat may yield a variety of human health, environmental, and economic benefits or disbenefits . To the extent that the proposed rule affects the CAA regulatory status of individual combustion units burning the selected material(s), the proposed rule may affect criteria pollutant and air toxics emissions. In addition, any increased quantities of these NHSMs burned as a non waste fue l would result in upstream life cycle

benefits associated with reduced extraction of trad itional fuel(s). Finally, to the extent that the rule may influence market dynamics within affected industries, economic benefits or disbenefits

may occur.

Human Health and Environmental Benefits/Disbenefits :

Our research finds that the NHSM fuels selected in the current proposal are generally comparable to fuels that the combustors would other wise burn. 43 Therefore, the overall level of emissions, or the emissions mix from boilers is not expected to change significantly under this proposal. However, we cannot confirm that there wou ld be no cases of an incremental increase in exposure (negative impacts) as an indirect result o f this rule if the affected facilities accept more,

or a different combination of non-hazardous seconda ry materials.

This rule, as proposed, may stimulate the increas ed use of the selected NHSMs for use as

a fuel in CAA section 112 boilers. The increased us e of these NHSMs would likely result in the displacement of selected traditional fuels, or othe r non waste fuels, depending upon availability, prices, and unit design. A net displacement of coa l or other fossil fuels could result in various environmental benefits, including reduced upstream emissions of particulate matter, criteria pollutants, and toxic emissions. There may also be reduced water and energy usage. Any reduced emissions or activities at virgin fuel mini ng or processing facilities may result in reduced environmental impacts to citizens living near or ar ound the affected operations.

The net

human health and environmental impacts from the po tential changes discussed

above have not been assessed. This net impact could be either positive or negative.

42 Supporting Statement for Information Collection Re quest Number 2421.04 - Hazardous Waste Management System: Conditional Exclusion for Carbon Dioxide (C O2) Streams in Geological Sequestration Activities – Final Rule, July 2, 2013.(Exhibit 5)

43 See Section V of the Proposed Rule Preamble: Propo sed Categorical Non-Waste Listing Determinations.16

Economic Benefits/Disbenefits:

Increased beneficial fuel use of the selected mate rials could lead to increased market valuations of these materials, and potentially redu ced valuations of substitutes. These changes in market valuations, and corresponding supply and dem and, could disrupt the market equilibrium

and alter the economics of the affected materials a nd industries. This could potentially lead to incremental changes in employment, revenues, and pr ofitability for certain industrial sectors, subsectors, or individual companies. Liability and goodwill considerations may also be factors. Facilities burning the newly-proposed materials as a non waste fuel may receive economic value from the avoided stigma of burning a solid waste, a nd the corresponding liability concerns.

EQUITY CONSIDERATIONS AND OTHER IMPACTS

As required by applicable statutes and executive or ders, this section summarizes our analysis of equity considerations and other regulat ory concerns associated with the proposed rule. This chapter assesses potential impacts, with respect to the following issues:

• Regulatory planning and review : discusses determination of regulatory significanc e under Executive Order 12866: Regulatory Planning an d Review and Executive Order 13563: Improving Regulation and Regulatory Review t he Agency. These Orders are also the basis for this analysis.

• Regulatory flexibility: focuses on the potential effects of the proposed ru le on small entities;

• Unfunded mandates: examines the implications of the proposed rule with respect to unfunded mandates;

• Federalism: considers potential issues related to state soverei gnty;

• Tribal governments: extends the discussion of federal unfunded mandates to include impacts on Native American tribal governments and t heir communities;

• Children's health protection: examines the potential impact of the proposed rule on the health of children;

• Energy Impacts: examines the impacts of the proposed rule on energy use, supply, and distribution;

• Environmental justice: considers potential issues for minority and low-inc ome populations.

Joint Impacts of Rules17

Regulatory Planning and Review:

Under Executive Order 12866: Regulatory Planning an d Review and Executive Order 13563: Improving Regulation and Regulatory Review, the Age ncy, in conjunction with the Office of Management and Budget’s (OMB’s) Office of Informati on and Regulatory Affairs (OIRA) must determine whether a regulatory action is “significa nt” and therefore subject to OMB review. The Order defines a “significant regulatory action” as one that is likely to result in a rule that may:

(1) Have an annual effect on the economy of $100 mi llion or more or adversely affect in a material way the economy, a sector of the economy , productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) Create a serious inconsistency or otherwise int erfere with an action taken or planned by another agency; (3) Materially alter the budgetary impact of entitl ements, grants, user fees, or loan programs or the rights and obligations of recipient s thereof; or (4) Raise novel legal or policy issues arising out of legal mandates, the President’s priorities, or the principles set forth in the Exec utive Order.

Pursuant to the terms of Executive Order 12866, thi s action is a “significant regulatory action” because it may raise novel legal or policy issues. Accordingly, the EPA submitted this

Assessment to OMB for review under Executive Order 12866. Any changes made to this document in response to OMB recommendations have be en documented in the docket for this

action.

Regulatory Flexibility:

The Regulatory Flexibility Act (RFA) as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 USC 60 1 et seq., generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act , or any other statute. This analysis must be completed unless the agency certifies that the r ule will not have a significant economic impact

on a substantial number of small entities. Small e ntities include small businesses, small organizations, and small governmental jurisdictions

.

For purposes of assessing the impacts of this rule on small entities, small entity is defined as: (1) a small business as defined by the Small Bu siness Administration’s (SBA) regulations at 13 CFR 121.201; (2) a small governmental jurisdicti on that is a government of a city, county, town, school district or special district with a po pulation of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and

is not dominant in its field.

In determining whether a rule has a significant eco nomic impact on a substantial number of small entities, the impact of concern is any sig nificant adverse economic impact on small18

entities, since the primary purpose of the regulato ry flexibility analysis is to identify and address regulatory alternatives “which minimize any signifi cant economic impact of the rule on small entities” (5 USC 603 and 604). Thus, an agency may certify that a rule will not have a significant economic impact on a substantial number of small en tities if the rule relieves regulatory burden, or otherwise has a positive economic effect on all of the small entities subject to the rule.

The proposed addition of the three NHSMs to the lis t of categorical non-waste fuels is expected to indirectly reduce materials management costs. In addition, this action will provide greater clarity and reduce regulatory uncertainty a ssociated with these materials and help increase management efficiency. We have therefore determined that today's proposed rule will not have a significant economic impact on a substan tial number of small entities.

Unfunded Mandates:

The Unfunded Mandates Reform Act (UMRA) of March 22 , 1995, calls on all federal agencies to provide a statement supporting the need to issue any regulation containing an unfunded federal mandate, and to describe prior con sultation with representatives of affected state, local, and tribal governments.

The proposed rule is not subject to the requirement s of sections 202, 204 and 205 of UMRA. In general, a rule is subject to the require ments of these sections if it contains “Federal mandates” that may result in the expenditure by Sta te, local, and tribal governments, in the aggregate, or by the private sector, of $100 millio n or more in any one year. The proposed rule does not result in $100 million or more in expendit ures for any of these groups.

Federalism:

Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “me aningful and timely input by state and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in th e Executive Order to include regulations that have “substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.” Internal EPA guidance indicates that a policy has federalism implications if it results in the expenditure by State and/or local go vernments in the aggregate of $25 million or more in any one year.

Under Executive Order 13132, EPA may not issue a re gulation that has federalism implications, that imposes substantial direct compl iance costs, and that is not required by statute, unless the Federal government provides the funds ne cessary to pay the direct compliance costs incurred by State and local governments, or EPA con sults with State and local officials early in the process of developing the regulation.

This action does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities amon g the various levels of government, as specified in the Order. This rule, as proposed, wi ll not impose direct compliance costs on state19

or local governments and will not preempt state law . Thus, Executive Order 13132 does not apply to this action.

Consultation and Coordination with Indian Tribal Go vernments:

Executive Order 13175, entitled “Consultation and C oordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000), requi res EPA to develop an accountable process to ensure “meaningful and timely input by t ribal officials in the development of regulatory policies that have tribal implications.”

EPA has concluded that this action may have tribal implications. However, it will neither impose substantial direct compliance costs on triba l governments, nor preempt Tribal law. Potential aspects associated with the categorical n on-waste fuel determinations under this proposed rule may invoke minor indirect tribal impl ications to the extent that entities generating or consolidating these NHSMs on tribal lands could be affected. However, any impacts are expected to be negligible.

Children’s Health Protection:

Executive Order 13045, entitled “Protection of Chil dren from Environmental Health Risks and Safety Risks” (62 FR. 19885, April 23, 19 97) applies to any rule that: (1) is determined to be “economically significant” as defi ned under E.O. 12866 44 , and (2) concerns an environmental health or safety risk that EPA has re ason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the plann ed rule on children, and explain why the planned regulation is preferable to other potential ly effective and reasonably feasible alternatives considered by the Agency.

This action is not subject to EO 13045 (62 FR 1988 5, April 23, 1997) because it is not economically significant as defined in EO 12866, an d because the Agency does not believe the environmental health or safety risks addressed by t his action present a disproportionate risk to children. Based on the discussion below, the Agenc y found that the populations of children near potentially affected boilers are either not signifi cantly greater than national averages, or in the case of landfills, may potentially result in reduce d discharges near such populations.

The proposed rule may indirectly stimulate the inc reased fuel use of one or more of the three NHSMs by providing enhanced regulatory clarit y and certainty. This increased fuel use may also result in the diversion of a certain quant ity of these NHSMs away from current baseline management practices. Any corresponding disproport ionate impacts among children would depend upon: (1) any potential change in emissions from combustion units subject to the CAA section 112 standards, relative to baseline managem ent patterns, and (2) whether children make up a disproportionate share of the population near the affected combustion units. Therefore, to assess the potential for the proposed rule to resul t in an indirect disproportionate effect on

44 An “economically significant” action is one estima ted to have an annual effect on the economy of $100 million or more, or adversely affect in a material way the eco nomy, a sector of the economy, productivity, compet ition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities;20

children, we conducted a demographic analysis for t his population group surrounding CAA section 112 major source boilers, municipal solid w aste (MSW) landfills, and construction and demolition (C&D) landfills. 45 We assessed the share of the population under the age of 18 living within a three-mile (approximately five kilometers) radius of these facilities.

For major source boilers, our findings indicate that the percentage of the population in these areas under age 18 years of age is generally the same as the national average. 46 While the fuel source and corresponding emission mix for some of these boilers may change as an indirect response to this rule, emissions from these sources remain subject to the CAA section 112 standards. For MSW e and C&D landfills, we do not have demographic results specific to children. However, using the population below the poverty level as a rough surrogate for children, we found that within three miles of facil ities that may experience diversions of one or more of these NHSMs, low-income populations, as a p ercent of the total population, are disproportionately high relative to the national av erage. Thus, to the extent that these NHSMs are diverted away from MSW or C&D landfills, any la ndfill-related emissions, discharges, or other negative activity potentially impacting low-i ncome (children) populations living near these units are likely to be reduced. Transportation emis sions associated with the diversion of some of this material away from landfills to boilers are li kely to be generally unchanged, while these emissions are likely to be reduced for on-site gene rators of paper recycling residuals that would reduce off-site shipments.

Energy Impact:

Executive Order 13211, “Actions Concerning Regulati ons that Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001), addresses the need for regulators to more fully consider the potential energy impacts of regu latory action. Under Executive Order 13211, agencies are required to prepare a Statement of Ene rgy Effects when a regulatory action may have significant adverse effects on energy supply, distribution, or use, including impacts on price and foreign supplies. Additionally, the requiremen ts obligate agencies to consider reasonable alternatives to regulatory actions with adverse eff ects and the impacts that such alternatives might have on energy supply, distribution, or use.

This action is not a “significant energy action” as defined under the Order because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The selected NHSMs affected by this proposed action are not generated in quantities sufficient to significantly (adversely or positively) impact the supply, distribution, or use of energy at the

national level.

45 The extremely large number of area source boilers and the absence of site-specific coordinates preven ted us from assessing the demographics of populations located n ear these sources. In addition, we did not assess child population percentages surrounding cement kilns tha t may use some out-of-service railroad crossties fo r their

thermal value.

46 U.S. EPA, Office of Resource Conservation and Reco very. Summary of Environmental Justice Impacts for the Non-Hazardous Secondary Material (NHSM) Rule, the 2 010 Commercial and Industrial Solid Waste Incinerat or (CISWI) Standards, the 2010 Major Source Boiler NES HAP and the 2010 Area Source Boiler NESHAP. February

201121

Environmental Justice:

Executive Order (EO) 12898 (59 FR 7629, Feb. 16, 19 94) establishes federal executive policy on environmental justice. Its main provisio n directs federal agencies, to the greatest extent practicable and permitted by law, to make en vironmental justice part of their mission by identifying and addressing, as appropriate, disprop ortionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and lowincome populations in the United States.

The overall level of emissions, or the emissions m ix from affected boilers are not expected to change significantly as a result of thi s rule, as proposed. The NHSMs proposed to be categorically listed as non-waste fuels are general ly comparable to the types of fuels that the combustors would otherwise burn. Therefore, while we cannot definitively determine that there would be no cases of an incremental increase in exp osure (negative impacts) if the affected facilities accept more, or a different combination of non-hazardous secondary materials, the boilers indirectly affected by this action would re main subject to the safe CAA section 112

standards.

Our environmental justice assessment 47 reviewed the distributions of minority and lowincome groups that might be impacted by the sources indirectly affected by this proposal. We focused on census blocks within three miles (approx imately five kilometers) of these facilities. We then determined the demographic composition ( e.g. , race, income, etc.) of these census blocks and compared them to the corresponding natio nal compositions. Our findings indicate that populations living within three miles of major source boilers represent areas with minority and low-income populations that are higher than the national averages. In these areas, the minority share 48 of the population was found to be 33 percent, comp ared to the national average of 25 percent. For these same areas, the percent o f the population below the poverty line (16 percent) is also higher than the national average ( 13 percent).

We also considered the potential for non-combustio n environmental justice concerns related to the potential incremental increase in NH SMs diversions from current baseline management practices. These may include the follow ing:

• Reduced upstream emissions resulting from the reduc ed production of virgin

fuel : Any reduced upstream emissions that may indirectl y occur in response to reduced virgin fuel mining or extraction may result in a human health and/or environmental benefit to minority and low-income po pulations living near these projects.

• Alternative materials transport patterns: Transportation emissions associated

with NHSMs diverted from landfills to boilers are l ikely to be similar, except for

47 U.S. EPA, Office of Resource Conservation and Reco very. Summary of Environmental Justice Impacts for the Non-Hazardous Secondary Material (NHSM) Rule, the 2 010 Commercial and Industrial Solid Waste Incinerat or (CISWI) Standards, the 2010 Major Source Boiler NES HAP and the 2010 Area Source Boiler NESHAP. February

2011.

48 This figure is for overall population minus white population and does not include the Census group de fined as “White Hispanic.”22 on-site paper recycling residuals, where the potent ial for less offsite transport to landfills may result in reduced truck traffic and e missions. Reduced environmental impacts may occur where such transpor t patterns pass through minority or low-income communities.

• Change in emissions from baseline management units: The diversion of some of these NHSMs away from disposal in landfills may result in a marginal decrease in activity at these facilities. This may include non-adverse impacts, such as marginally reduced emissions, odors, groundwater an d surface water impacts, noise pollution, and reduced maintenance cost to lo cal infrastructure. Because

MSW and C&D landfills were found to be located in a reas where minority and low-income populations are disproportionately high relative to the national average, any reduction in activity and emissions ar ound these facilities is likely to benefit (even if only marginally) the citizens livi ng near these facilities.

This rule, in conjunction with the corresponding C AA rules, may also help accelerate the abatement of any existing stockpiles of the selecte d NHSMs. To the extent that these stockpiles may represent negative human health or environmenta l implications, minority and/or lowincome populations that live near such stockpiles m ay experience marginal health or environmental improvements. Aesthetics may also be improved in such areas.

Joint Impacts of Rules:

The proposed rule has applicability to the universe of facilities subject to CAA sections 112 or 129, as well as other rules and agency regul atory programs. In fact, the proposed rule, with the exception of certain administrative requir ements, only engenders economic effects by its actual application in the context of these other re gulatory regimes. Thus, the proposed rule shares joint impacts with existing, and prospective regulatory initiatives.

Examples of other rules or regulatory initiatives w ith which the proposed rule may have joint impacts include: the Portland Cement MACT, th e Commercial, Industrial Solid Waste Incinerators (CISWI) rules, the Boiler MACT rules ( Major Source and Area Source), and the Other Solid Waste Incinerators (OSWI) rule.23 APPENDIX A24

Estimating Section 129 Compliance Costs Compared to Section 112 Compliance Costs

This Appendix details our assessment of the deriva tion of representative unit and average CAA section 129 and section 112 compliance costs fo r model units. Table A-1 presents the following information for each of the 30 representa tive units 49 : (1) unit and facility identification data, (2) the estimated annual costs of section 129 compliance, (3) the estimated annual costs of section 112 compliance, and (4) the annual costs of section 129 incremental to section 112 (i.e., the difference between (2) and (3) for each unit). Averaging the incremental section 129 costs for the 30 representative units, we find that the c ost of upgrading to section 129 standards (incremental to Section 112), is nearly $266,000 pe r unit.

Table A-1

Facility Name City State Unit

Number Section 129

Unit Costs (year 2008$) Section 112

Unit Costs (year 2008$) Incremental Costs

of Section 129 (year 2008$)
OFS Fitel, LLC Norcross Facility Norcross GA Unit 1 325,382 111,194 214,188

OFS Fitel, LLC Norcross Facility Norcross GA Unit 2 325,382 152,643 172,739

J.R. Simplot Company Pocatello ID Unit 1 325,382 0 325,382

J.R. Simplot Company Pocatello ID Unit 2 325,382 0 325,382

Thermafiber, Inc Wabash IN Unit 1 325,382 0 325,382
3M Alexandria Alexandria MN Unit 1 325,382 0 325,38 2
3M Alexandria Alexandria MN Unit 2 325,382 0 325,38 2
PPG Industries, Inc. (Lexington, NC) Lexington NC Unit 1 325,382 152,643 172,739

PPG Industries, Inc. (Lexington, NC) Lexington NC Unit 2 325,382 152,643 172,739

PPG Industries, Inc. (Lexington, NC) Lexington NC Unit 3 325,382 152,643 172,739

PPG Industries, Inc. (Lexington, NC) Lexington NC Unit 4 325,382 152,643 172,739

PPG Industries, Inc. (Shelby, NC) Shelby NC Unit 1 325,382 152,643 172,739

PPG Industries, Inc. (Shelby, NC) Shelby NC Unit 2 325,382 152,643 172,739

AGY Huntingdon,

LLC Huntingdon PA Unit 1 325,382 0 325,382

AGY Huntingdon,

LLC Huntingdon PA Unit 2 325,382 0 325,382

49 U.S. EPA, Office of Air Quality Planning and Stand ards, Draft combustor database in support of the re vised CISWI Rule, April 14, 2009 and U.S. EPA, Office of Air Quality Planning and Standards, Draft combustor database in support of the revised Boilers Rule, March 20, 2 009.25 Table A-1

Facility Name City State Unit

Number Section 129

Unit Costs (year 2008$) Section 112

Unit Costs (year 2008$) Incremental Costs

of Section 129 (year 2008$) McAvoy Vitrified

Brick Co. Phoenixville PA Unit 1 325,382 0 325,382

AGY Aiken LLC Aiken SC Unit 1 325,382 0 325,382
AGY Aiken LLC Aiken SC Unit 2 325,382 0 325,382
AGY Aiken LLC Aiken SC Unit 3 325,382 0 325,382 Kohler Co. Spartanburg SC Unit 1 325,382 0 325,382 Kohler Co. Spartanburg SC Unit 2 325,382 0 325,382 Owens Corning Insulating Systems,

LLC Waxahachie

Plant Waxahachie TX Unit 1 325,382 0 325,382

Owens Corning Insulating Systems,

LLC Waxahachie

Plant Waxahachie TX Unit 2 325,382 0 325,382

Corning Incorporated Danville VA Unit 1 325,382 0 3 25,382 Corning Incorporated Danville VA Unit 2 325,382 0 3 25,382

3M Prairie du Chien Prairie du

Chien WI Unit 1 325,382 152,643 172,739

3M Prairie du Chien Prairie du

Chien WI Unit 2 325,382 152,643 172,739

3M Prairie du Chien Prairie du

Chien WI Unit 3 325,382 152,643 172,739

3M Wausau -

Downtown Wausau WI Unit 1 325,382 152,643 172,739

Guardian Fiberglass,

Inc Inwood WV Unit 1 325,382 0 325,382

AVERAGE PER UNIT INCREMENTAL COST OF SECTION 129 OV ER SECITON 112 $265,70626 APPENDIX B27Estimated NHSM Quantities Generated and Burned for FuelInput FactorValue/QuantityUnitsYearSource/CommentsLow-End: Maximum Potential Quantityof Paper Recycling Residuals (includingOCC) that Could Possibly Be Burned asFuel405,000short tons peryear2013*** Generation, Management, and Processing of Paper P rocessing Residuals.** Industrial Economics Corporation, October26, 2012.* Maximum Reported Quantity: 450,000 tons/yr. Estimate assumes 10 percent will be used for land applications (seestatement on page 2 of reference.* Assumes 100% generated on-site.High-End: Maximum Potential Quantityof Paper Recycling Residuals (includingOCC) that Could Possibly Be Burned asFuel540,000short tons peryear2013*** Generation, Management, and Processing of Paper P rocessing Residuals.** Industrial Economics Corporation, October26, 2012.* Maximum Reported Quantity: 600,000 tons/yr. Estimate assumes 10 percent will be used for land applications (seestatement on page 2 of reference.* Assumes 100% generated on-site.Low-End Estimate: Paper RecyclingResiduals (including OCC) CurrentlyBurned for Fuel135,000 short tons/year 2012*** Generation, Management, and Processing of Paper P rocessing Residuals.** Industrial Economics Corporation, October26, 2012.* Assumes 100% generated on-site.High-End Estimate: Paper RecyclingResiduals (including OCC) CurrentlyBurned for Fuel180,000 short tons/year 2012*** Generatio n, Management, and Processing of Paper Processing R** **esiduals.**Industrial Economics Corporation, October26, 2012.* Assumes 100% generated on-site.Estimated Maximum Quantity ofConstruction and Demolition (C&D)Wood that May be Available for EnergyRecovery20,280,000 short tons/year 2002* U.S. EPA.**Materials Characterization Paper in Support of the Final Rulemaking: Identification of Nonhazardous** **Secondary Materials That are Solid Waste - Construc tion and Demolition Materials - Building Related C&** **D Materials.**February 3, 2011Low-End Estimate: C&D WoodCurrently Burned for Fuel4,700,000 short tons/year**2010*** U.S. EPA.**Materials Characterization Paper in Support of the Final Rulemaking: Identification of Nonhazardous** **Secondary Materials That are Solid Waste - Construc tion and Demolition Materials - Building Related C&** **D Materials.**February 3, 2011High-End Estimate: C&D WoodCurrently Burned for Fuel11,200,000 short tons/year**2010*** U.S. EPA.**Materials Characterization Paper in Support of the Final Rulemaking: Identification of Nonhazardous** **Secondary Materials That are Solid Waste - Construc tion and Demolition Materials - Building Related C&** **D Materials.**February 3, 201128Estimated NHSM Quantities Generated and Burned for FuelInput FactorValue/QuantityUnitsYearSource/Comments* Note: 4.7 million ton estimate and 6.5 million ton estimate added together. (See paper)* Note: The high-end estimate may include an undetermined portion ofnon C&D building material wood (e.g., landclearing wood, disaster debris)Low-End Estimate of Creosote-TreatedRail Road CrossTies Removed Annually13,000,000actual number of8 foot ties1995* Waste Age, Sep 1, 1995. Recycling Keeps RailroadTies Off The Landfill Track* Lowest estimate identifiedHigh-End Estimate of Creosote-TreatedRail Road CrossTies Removed Annually20,000,000actual number of8 foot ties2010* Smith, Stephen and Chris Bolin. Feb. 18, 2010.Creosote-Treated Ties End-of-Life Evaluation.* Highest estimate identifiedEstimated Percent of RailRoad CrossTiesRemoved Annually that are CurrentlyBurned for Fuel62% percent 2012* Comments of the Association of American Railroads (EPA-HQ-RCRA-2008-0329)Estimated Maximum Percent ofRailRoad CrossTies Removed Annuallythat Might be Burned for Fuel67% percent 2012* Comments of the Association of American Railroads (EPA-HQ-RCRA-2008-0329)* Note: Assumed that the 5 percent of total that is currently going to legacy or unused on RR land would be diverted tofuel. Low quality landscaping quantities may alsobe affected, based on market conditions.* Note: Crossties no longer going to burning assumed to be used as legacy ties or for landscaping atno incrementalcost or cost savings to generator or burner.Estimated Average End of Life Weightper Standard Treated Wood Tie182 LBS 2010* Smith, Stephen and Chris Bolin. Feb. 18, 2010.Creosote-Treated Ties End-of-Life Evaluation.* Note: Estimates ranged from about 130 to 200. However, the Smith paper (referenced above) appearedto be themost carefully researched.29 APPENDIX C30



### NHSM Categorical Non Waste Determination - Proposed Rule

Burden and Cost Assessment for Proposed Certificati on Statement for C&D Wood Processors

Summary of Requirement:

Combustors of C&D wood must request a written certi fication statement from C&D wood processing facilities certifying that that the C&D wood has been processed by trained operators

in accordance with best management practices, as defined in the rule.

Assumptions and Data:

Certification Activities and Assumptions per Proces sing Facility: 50

• Read the regulation in sufficient detail to fully u nderstand certification requirement;

• Review the facility wood processing activities and examine final fuel product to ensure product consistently meets necessary require ments;

• Prepare certification statement;

• Have certification statement signed by the authoriz ed representative or authority;

• Submit certification statement to the C&D wood burn er;

• One hundred percent labor costs, no capital or main tenance costs;

• The certification cost is assumed to be on a per fa cility basis, not per unit.

Analytical Inputs:

Total average annual hours and cost per hour estim ated to prepare, and make statement

available for review:

• Estimated hours 50 and hourly cost 51 per facility

o 1.00 (60 min) hrs for legal @ $92 per hour,

o 1.50 (90 min) hrs for management @ $76 per hour,

o 1.25 (75 min) hrs for technical @ $66 per hr,

o 0.35 (21 min) hrs for clerical @ $29 per hr.

Findings:

Estimated Total Annual Average Cost per facility: $ 298.65 Estimated Total Annual Average Burden per facility: 4.1 hours

50 Supporting Statement for Information Collection Re quest Number 2421.01, “Conditional Exemption From R CRA

Definition of Hazardous Waste for Carbon Dioxide St reams Injected Into Class VI UIC Wells – Proposed R ule.” Exhibit 1. October 28, 2010

51 Supporting Statement for EPA Information Collecti on Request Number 2382.04 Reporting and Recordkeep ing Requirements for the Final Rule on the Identificati on of Non-Hazardous Secondary Materials that are So lid Waste, January 2011.