MEMORANDUM TO: Docket No.: EPA-HQ-OAR-2010-0786 DATE: September 2, 2010

SUBJECT: Residual Risk a nd Technology Review (RTR) Cost Analyses for Add-on Controls for Surface Coating Operations at Shipbuilding and Ship Repair Facilities FROM: Kaye Whitfield, EPA/OAQPS/SPPD/NRCG

The purpose of this memorandum is to present the estimated emissions reductions, costs, and cost effectiveness of add-on controls for cer tain types of surface coating operations at shipbuilding and ship repair facilities subject to MACT subpart II. Two add-on control options were analyzed: 1) the addition of spray booths eq uipped with an RTO syst em for facilities that have new construction operations with large sh ip component/module painting operations, and 2) installing RTO equipped enclosures large enough to enclose an entire ship (or large portion of a ship) during shipside coating. The shipbuilding and ship repair source category includes facilities (shipyard s) that vary greatly in size and operations. The location of surface coating operations in a shipyard depends on many factors, including the size of the shipyard and whet her a ship is being buil t or repaired. In new construction operations, assembly is usually modul ar, and coating is done in several stages at various locations, including out doors on assembled ships (dockside coating operations). During ship repair and maintenance ope rations, most of the coatings are applied shipside, including along docks, inside dry docks and gravi ng docks, and along marine railways.

I. ROTARY ADSORPOTION/RTO SYSTEM – COATING BOOTH The use of spray booths at a facility is genera lly only applicable when coating ship parts indoors (usually during new ship constructi on as smaller components are put together into larger modules and spray painted) and not during shipside coating operations. Spray booths can vary significantly in size, number , and exhaust rates. Some spray booths are partially enclosed, so emissions may not be fu lly captured by the enclosure. In general, facilities that use compliant coatings do not have add-on controls on spray booths. One

1shipyard in the U.S., the NASSCO facility in San Diego, CA, has been identified to have installed spray booths. 1 The cost analysis for the addition of spra y booths equipped with a combination rotary adsorption/regenerative thermal oxidizer (RTO ) system is provided below. For the purposes of this analysis, it was estimated that an averag e shipyard that is doing new construction would need to build or install three large spray booths. Each enclosed spray booth is vented to its own rotary concentrat or, which is then followed by the RTO. The estimated costs are based on capital and operating costs provided by vendors and provided in Attachment 1.

A. Capital Costs The capital cost of the spray booths were based on a quote from Fini sh Pro Spray Booths, provided in Attachment 1, and scaled up to dimensions 100 ft x 80 ft x 65 ft; the quote does not include shipping or installations costs. 2 The capital costs of a rotary adsorption/RTO system is based on quotes from Munters and includes capital cost for the concentrator, filters, process fan, controls, integrated desorption heater, integrated RTO, and startup services and is based on a sk id mounted system for easy installation. Additional capital costs to account for interest , taxes, and engineering were based on a 25 percent estimate from the OAQPS cost manual were included for the spray booths and the RTO system. Table 1 provides capital cost s based on Munters’ estimates (provided in Attachment 1). As shown in Table 1, ope rating costs are greater for smaller systems because costs associated with engineering design, controls, instrumentation, and startup labor are the same regardless of a system’s size. Table 1. Capital and Operating costs of rotary adsorption/RTO system

. Airflow Range (cfm) $/cfm* Range ($) <10,000 30 < 300K 10,000 – 20,000 25 250K-500K 20,000 – 40,000 20 400K-800K 40,000 – 60,000 18 720K1.08M 60,000 – 80,000 15 900K-1.2M >80,000 13 >1.04M

1 See the Technology Review for more information on this facility. 2 Dimensions based on booths located at the NASSCO facil ity in an email from Art Gonzales on May 11, 2008. 2*Cubic feet per minute (cfm)

B. Operating Costs Operating costs for a rotary adsorption/RTO system depend on flow rate, VOC load, and desired efficiency. Munters estimated that $2 - $3/cfm would be accurate to use for annual operating costs (which includes natura l gas and electricity). The following costs are not included in the $2-3/cfm estimat e: labor, monitoring and recordkeeping, maintenance, and insurance costs. Operat ing and maintenance cost for the booths was not included in this analysis.

C. Annualized Cost Estimates

In order to calculate annualized cost estim ates per facility, an airflow of 52,000 cfm was used to represent an average spray booth. 3 Operating costs of electricity and natural gas (based on $3/cfm estimate provided by Munters) were not annualized. Initial Capital Costs – Booth $140,616 per Booth x 3 Booths = $422,000 Initial Capital Costs – RTO System (based on Table 1) 52,000 cfm x $18/cfm x 3 Booths = $2,808,000 Additional Capital Costs (for interest, taxes, engineer ing, and shipping/delivery - based on a 25% estimate from the OAQPS cost manual) Spray Booths $422,000 x 1.25 = $528,000 RTO System $ 2,808,000 x 1.25 = $3,510,000 Annualized Capital Costs (based on 10 year equipment life and 7% interest rate) ($3,510,000 + $528,000) x 0.1424 = $575,000 Operating Costs – RTO System 52,000 cfm x $3/cfm = $156,000 Total Estimated Annual Costs (A nnualized Capital + Operating) $575,000 + $156,000 = $731,000 [per facility]

3 Based on the NASSCO Shipyard’s exhaust airflow of five recently installed spray coating booths. 3D. Estimated amount of VOC/HAP controlled It was assumed that 25% of total coating ope rations at a facility would occur in spray booths and that each booth has a capture efficiency of 90 percent. 4 The control efficiency for the adsorption/RTO system used was 95%. Since spray booth coating can only be performed at shipyards that operate modular indoor coating, it was estimated that 20 facilities of the 85 include d in risk analysis modeling would incur these costs. Using the estimated total HAP emitted from 20 shipbuilding facilities, 224 tpy, the amount of VOHAP cont rolled industry wide would be 5 : Amount of VOHAP captured and controlled 224 tpy x 0.25 (estimated % of coating that would occur in booths) x 0.90 Capture Efficiency x 0.95 Control Efficiency = 48 tpy

E. Estimated Cost Effectiveness of Booth equipped with a RTO system Based on the annualized cost estimate and the estimated amount of HAP controlled, the cost effectiveness of the ship enclosure was calculated. Cost effectiveness for spray booths equipped with RTO system

Cost Effectiveness = Total A nnual Costs/Annual HAP controlled Cost Effectiveness = $731,000 per facility x 20 Facilities / 48 tons = $305,000/ ton of HAP reduced

II. ENCLOSURE FOR SHIPSIDE COATING A second, more theoretical, cost analysis wa s also performed for controlling shipside emissions using a large painting and blasti ng enclosure around an entire ship. As previously mentioned shipside emissions usua lly occur during ship repair operations and new ship construction once the ship has been assembled. The number of docks a shipyard contains varies; it wa s assumed that an average sh ipyard contains four docks that would be enclosed. The cost estimate was based on capital cost quotes from Munters and Kelly Klosure, a manufacturer of pr e-framed, modular, and temporary steel structures.

A. Capital Costs

4 Based on NASSCO estimates that 25% of coating occurs in booths. 5 224 tpy based on HAP coating operation emissions of 85 facilities modeled for the Shipbuilding and Ship Repair risk analysis 950 tpy x (20/85). 4In order to calculate capital co sts for a structure that enclos es a typical si ze ship, Kelly Klosure was contacted for a commercial quote based on a 54 ft wide x 99 ft long x 22 ft tall painting and blasting enclos ure (provided in Attachment 2) . This cost was scaled up to a structure with 70 ft wide x 800 ft long x 100 ft tall dimensions that could enclose a large ship (or portion of a large ship) and was estimated to be $5.4 million dollars.
Similar to the spray booth controls discussed previously, the capita l costs of a rotary adsorption/RTO system includes capital cost for the concentrator, filters, process fan, controls, integrated desorption heater, integrated RTO, and st artup services, and is based on an skid mounted systems for easy installa tion. The cost analys is for the rotary adsorption/RTO system was based on Munter ’s costs in Table 1 and an estimated 250,000 cfm exhaust airflow from the enclosure. Additional capital costs to account for interest, taxes, and engineer ing were based on a 25 per cent estimate from the OAQPS cost manual were added to the capital cost s of the enclosure and the RTO system.

B. Operating Costs As previously mentioned, no operating and maintenance costs were included for the enclosure. Similar to the booths, the opera ting costs for the RTO system depend on flow rate, VOC load, and desired efficiency. Th e $2 - $3/cfm estimate was used to calculate O&M costs for the rotary adsorption/RTO sy stem. This cost includes natural gas and electricity, but does not include labor, monitoring and recordkeepi ng, maintenance, and insurance costs.

C. Annualized Cost Estimates The capital costs of the encl osure and the rotary adsorpti on/RTO system were annualized based on a 10 year equipment lifetime and a 7.0 percent interest rate. Operating and maintenance costs were not annualized.

Enclosure Capital Cost of One Enclosure: $5.4 Million Additional Capital Costs of Enclosure (for interest, taxes, and engineering - based on a 25% estimate) $5,400,000 x 0.25 = $1,350,000 Annualized Capital Costs (based on 10 year equipment life and 7% interest rate) ($1,350,000 + $5,400,000) x 0.1424 = $961,000

Total Estimated Annual Costs of Encl osure (Annualized Capital + Operating)

5$961,000 + $0 O&M Cost = $961,000 per year Rotary Adsorption/RTO System Capital Cost of RTO (based on Table 1) 250,000 cfm x $13/cfm = $3,250,000 Additional Capital Costs for RTO (for interest, taxes, engineering, and shipping/delivery - based on a 25% estimate from cost manual) $3,250,000 x 0.25 = $813,000 Annualized Capital Costs of RTO (based on 10 year equipment life and 7% interest rate) ($3,250,000 + $813,000) x 0.1424 = $579,000 Operating Costs 250,000 cfm x $3/cfm = $750,000

Total Estimated Annual Costs of RT O (Annualized Capital + Operating) $579,000 + $750,000 = $1,329,000 per year

Total Estimated Annual Costs of RTO + Enclosure $1,329,000 + $961,000 = $2,290,000 per shipside coating location Since most major source shipyards have mu ltiple locations where shipside coating occurs, we estimated that an average shi pyard will have 4 locations (e.g., drydocks, graving docks, marine railways) where su ch painting operations are conducted. Therefore, the average facility costs are: $2,290,000 per location x 4 locatio ns (docks) = $9,160,000 per facility

D. Estimated amount of VOC/HAP controlled The enclosure quoted by Kelly Klosures c ontains one removable end wall but can be entirely closed. It was assumed that th e enclosure would capture 90 percent of the volatile organic emissions from coating operati ons performed inside the structure. In order to estimate the amount of painting and so lvent use that occurs shipside, estimates from the NASSCO facility were used and are summarized in Table 2. A 95 percent control efficiency for the adsorption/RTO system was used.

6Table 2. Percentage of coating operations that occurs shipside. 6 Type of Coating Operation Percentage that Occurs Shipside Painting 56.5

Solvents 56.5 Penetrating Dyes 32.4 Average of all coating operations 49

Using the total HAP emitted from shipbuilding facilities subject to Subpart II (950 tpy) and the estimated 90 percent enclosure (cap ture) and 95 percent control (destruction) efficiency, the amount of VOHAP c ontrolled industry wide would be 7 : Amount of VOHAP captured and controlled 950 tpy x 0.49 (% of coating that occurs Shipside) x 0.90 Capture Efficiency x 0.95 Control Efficiency = 398 tpy

E. Estimated Cost Effectiveness of Enclosure and RTO system

Based on the annualized cost estimate and th e estimated amount of HAP controlled the cost effectiveness of the ship enclosure was calculated. Cost effectiveness for shipside coating enclosure

Cost Effectiveness = Annualized Costs/Annual HAP controlled Cost Effectiveness = $9,160,000 per facili ty x 85 facilities / 398 tons = $1,956,000/ton of HAP controlled

6 Based on 1993 AB 2588 Health Risk Assesment – NASSCO. January 1997. 7 HAP coating operation emissions of 85 facilities modeled for the Shipbuilding and Ship Repair risk analysis. 7Attachment 1. Booth Quote

8Email from Munters containing Cost Estimate Information and NASSCO ----- Original Message -----

From: < Cheryl.Thibault@munters.com > To: "Mary-Jo Caldwell" < mjcaldwell@nc.rr.com > Sent: Thursday, June 10, 2010 4:39 PM Subject: Re: Costing rules of thumb > Hello Mary-Jo, > > Munters Zeol Rotor Concentrators are best suited for high volume/low > concentration applications. Our te chnical rules of thumb for determining > if a particular ap plication is a good one are as follows: > > 1) Inlet temperature should be less than 100 degrees F. > 2) Inlet relative humidit y should be less than 90% > 3) Inlet VOC concentration should be less than 500 ppm. (This does depend > on the types of VOCs so certain VOCs may have a lower limit.) > 4) VOCs should have boiling points a bove ambient temperature. Any low > boiling compounds or gases at ambien t temperature will not adsorb well. > > For scope, we would propose a zeolite ro tor concentrator in tegrated with an > RTO for larger ship building/spray pa inting applications. We used to use > catalytic oxidizers but have found that paint formulations are constantly > changing and some VOCs can harm and poi son catalyst. An RTO is much more > fuel efficient that a catalytic oxidizer and comparable in price anyway. > They eliminate the need for replacem ent catalyst. Our systems can be > designed to meet whatever destructi on efficiency is required up to about > 99%. Typically, customers are required to meet 95% system efficiency. The > higher the DRE, the more expensive the system gets. The lower the DRE, the > smaller the rotor we can use and the smaller the oxidizer for a much more > cost-effective system. > > In terms of budget costing, you could use a $/cfm but as you may expected > smaller systems will have a larger $/cfm because much of the cost > (engineering design, controls, instrume ntation, startup labor) are the same > regardless of the size of the system . So budget pricing would be $30/cfm > for flows less than 10,000 cfm, $25/cfm for flows 10,000-20,000 cfm, > $20/cfm for 20,000 cfm-40,000 cfm, $18/cfm 40,000-60,000 cfm, $15/cfm for

9> 60,000 - 80,000cfm and $13/cfm for > 80,000 cfm. These prices would > include concentrator, filters, proces s fan, controls, integrated desorption > heater and integrated RTO and star tup services. M unters manufactures > systems and factory tests them. As long as they are within shipping size > restrictions, they ship as one piec e, skid mounted for easy installation. > Not included in the pricing woul d be installation, freight, taxes, > compliance testing, etc. Oper ating costs are more specific to the > project depending on flow rate, VOC lo ad and desired efficiency. I think > it would be safe to use $2 - $3/cfm fo r annual operating costs (natural gas > & electricity). See tables below for example operating costs for a 80,000 > cfm system and a 40,000 cfm system. I also provided comparison tables for > an 80,000 cfm straight RTO and 40,000 cfm RTO. Munters concentrator system > saves the company about $300,000 per ye ar in operating costs based on > 80,000 cfm. > > As for Northrup in MS, we don't feel comfortable giving out details on VOC > loading and booth type. The sales pers on involved with this project is no > longer with us so we don't have details on spray booth type. I would > encourage you to go direct to the customer. > > However, I will say that we have s upplied concentrator/oxidizer abatement > system for lots of different types of painting applica tions including spray > painting with manual spray and automatic spray, with dry particulate > filtration and with water wash filtration systems. We like to treat oven > exhaust direct in the oxidizer rather than combine it with booth exhaust > through the concentrator. Typical inlet VOC concen trations are 30-150 ppm. > Typical VOCs are butanol, isopropa nol, ethyl acetate, butyl acetate, > xylene, toluene, naptha, MEK, MI BK, acetone, ethyl benzene, trimethyl > benzene, PGMEA, propanol. Many times , there are multiple booths tied to > one abatement system with differentflow conditions (ie, one booth on, two > booths on, etc.) We can operate th e concentrators at different flow > conditions (i.e., 25,000 cfm from one booth or 50,000 cfm from two booths). > > I hope this helps for your analysis. If you need anything further, let me > know. > > Regards, > Cheryl Thibault > Munters Corporation > 79 Monroe St. Amesbury, MA 01913

10> work 978-241-1163 > cell 978-660-3243 > > > Munters Rotor Concentrator | No VOC | 50% VOC | 100% VOC > System - treating 80,000 | | 21 lbs/hr | 42 lbs/hr > cfm | | | > ----------------- --------------+--- -----------+----- --------+----- --------- > Fuel Use (mmBtu/hr) | 1.70 | 1.41 | 1.36 > ----------------- --------------+--- -----------+----- --------+----- --------- > Fuel Cost (per hour) | $17.04 | $14.07 | $13.65 > ----------------- --------------+--- -----------+----- --------+----- --------- > Fuel Cost (annual) | $68,161 | $56,291 | $54,609 > ----------------- --------------+--- -----------+----- --------+----- --------- > | | | > ----------------- --------------+--- -----------+----- --------+----- --------- > Electricity Use (kW) | 193 | 193 | 193 > ----------------- --------------+--- -----------+----- --------+----- --------- > Electricity Cost (per hour) | $19.27 | $19.27 | $19.27 > ----------------- --------------+--- -----------+----- --------+----- --------- > Electricity Cost (annual) | $77,077 | $77,077 | $77,077 > ----------------- --------------+--- -----------+----- --------+----- --------- > | | | > Total (per hour) | $36.31 | $33.34 | $32.92 > (annual) | $145,238 | $133,368 | $131,686 > > > > > Munters Rotor Concentrator | No VOC | 50% VOC | 100% VOC > System - treating 40,000 | | 10.5 | 21 lbs/hr > cfm | | lbs/hr | > ----------------- ---------------+--------------+ ------------+-- ------------ > Fuel Use (mmBtu/hr) | 0.85 | 0.70 | 0.68 > ----------------- ---------------+--------------+ ------------+-- ------------ > Fuel Cost (per hour) | $8.52 | $7.04 | $6.83 > ----------------- ---------------+--------------+ ------------+-- ------------ > Fuel Cost (annual) | $34,080 | $28,146 | $27,304 > ----------------- ---------------+--------------+ ------------+-- ------------ > | | |

11> ----------------- ---------------+--------------+ ------------+-- ------------ > Electricity Use (kW) | 96 | 96 | 96 > ----------------- ---------------+--------------+ ------------+-- ------------ > Electricity Cost (per hour) | $9.63 | $9.63 | $9.63 > ----------------- ---------------+--------------+ ------------+-- ------------ > Electricity Cost (annual) | $38,538 | $38,538 | $38,538 > ----------------- ---------------+--------------+ ------------+-- ------------ > | | | > Total (per hour) | $18.15 | $16.67 | $16.46 > (annual) | $72,618 | $66,684 | $62,842 > > > > > Straight | No VOC | 50% VOC | 100% VOC > RTO | | 21 lbs/hr | 42 lbs/hr > treating | | | > 80,000 cfm | | | > ----------------- --------------+------ -----------+-- ----------+--- ----------- > Fuel Use (mmBtu/hr) | 8.79 | 8.49 | 8.20 > ----------------- --------------+------ -----------+-- ----------+--- ----------- > Fuel Cost (per hour) | $87.92 | $84.90 | $82.00 > ----------------- --------------+------ -----------+-- ----------+--- ----------- > Fuel Cost (annual) | $351,680 | $339,600 | $328,000 > ----------------- --------------+------ -----------+-- ----------+--- ----------- > | | | > ----------------- --------------+------ -----------+-- ----------+--- ----------- > Electricity Use (kW) | 273 | 273 | 273 > ----------------- --------------+------ -----------+-- ----------+--- ----------- > Electricity Cost (per hour) | $27.27 | $27.27 | $27.27 > ----------------- --------------+------ -----------+-- ----------+--- ----------- > Electricity Cost (annual) | $109,000 | $109,000 | $109,000 > ----------------- --------------+------ -----------+-- ----------+--- ----------- > | | | > Total (per hour) | $115.19 | $112.17 | $109.27 > (annual) | $460,760 | $448,680 | $437,080 > > > >

12> Straight | No VOC | 50% VOC | 100% VOC > RTO | | 10.5 | 21 lbs/hr > treating | | lbs/hr | > 40,000 cfm | | | > | | | > ----------------- --------------+------ -----------+-- ----------+--- ---------- > Fuel Use (mmBtu/hr) | 4.39 | 4.25 | 4.1 > ----------------- --------------+------ -----------+-- ----------+--- ---------- > Fuel Cost (per hour) | $43.90 | $42.50 | $41.00 > ----------------- --------------+------ -----------+-- ----------+--- ---------- > Fuel Cost (annual) | $175,600 | $170,000 | $164,000 > ----------------- --------------+------ -----------+-- ----------+--- ---------- > | | | > ----------------- --------------+------ -----------+-- ----------+--- ---------- > Electricity Use (kW) | 136 | 136 | 136 > ----------------- --------------+------ -----------+-- ----------+--- ---------- > Electricity Cost (per hour) | $13.60 | $13.60 | $13.60 > ----------------- --------------+------ -----------+-- ----------+--- ---------- > Electricity Cost (annual) | $54,400 | $54,400 | $54,400 > ----------------- --------------+------ -----------+-- ----------+--- ---------- > | | | > Total (per hour) | $57.50 | $56.10 | $54.60 > (annual) | $230,000 | $224,400 | $218,400 > > > > > Based on $10.00 per MM Btu, $0.10 per kW, 4,000 hours/year

13CORRESPONDENCE WITH AG ENCIES AND INDUSTRY

Date: 5/11/10 Person Calling: Art Gonzalez Source Name: San Diego County APCD City, State, County: San Diego, CA

NEI Number: N/A

State #: N/A Dept/Phone Number: 858-586-2721; ar t.gonzalez@sdcounty.ca.gov

Mr. Gonzalez was listed as the agency contact for a project that involved the installation of concentrator/regenerative thermal oxidizers on spray booths at the NAASCO facility in San Diego County. I co ntacted Mr. Gonzalez to find out if the permitted add on control units were ever installed and if so, to learn more about the installation.

Mr. Gonzalez said that the five concentr ator/regenerative thermal oxidizers were installed on five spray booths last summe r. He said he thought they had been installed last August, and would confirm the installation date in a subsequent email to me. He said so far th e units have been operating as designed, as far as he knows. He’s not aware of any problems . The facility originally considered modifying existing permits to allow installation of the spray booths, but due to concerns about emission caps, decided to get new permits for the spray booths. Because offsets are complex and expensive, the facility decided to install add-on controls to control HAP emissions from coating operations.

14Mr. Gonzalez is going to email me the data sheets for the installation. He indicated the units are manufactured by Triton. The coating booths, or cells, are quite large. Four of the paint spra y booths, or cells are approximately 100’x80’x65’; and one is slightly smaller. The airflow from each of the spray booths is approximately 52,000 cfm. Mr . Gonzalez said he thought his file contained information regarding th e VOC/HAP concentration into the concentrator, and would include that info rmation in his email to me. He said primers and topcoats are sprayed in the booths, and that he would include more specifics regarding the types of paints as available, in his email.

I asked Mr. Gonzalez if he knew of any installations at shipyards that use add-on controls to control HAP emissions from ship side painting operations (i.e., painting of assembled ship, outside of any spray booth or cell). He said he was not aware of any such installations. I asked him if he knew of any add-on controls being used to control abrasive blasting or welding emissions from shipside blasting or welding. He said that was not his area, and promis ed to provide the contact information for the San Diego APCD person to ask.

15Attachment 2. Kelly Klosure Quote

1617