E.O. 12866 Review 2060-AQ-42 email+att 4 012011 .txt From: French.Chuck@epamail.epa.gov Sent: Thursday, January 20, 2011 12:06 PM To: cortney_higgins@omb.eop.gov Cc: Guinnup.Dave@epamail.epa.gov; Talcott.Fred@epamail.epa.gov; tierney.jan@epamail.epa.gov; Stewart.Michael@epamail.epa.gov; Laney, Michael N.; Westlin.Peter@epamail.epa.gov; Fruh.Steve@epamail.epa.gov; Benner.Tim@epamail.epa.gov; Hanzel, Veronica; Nizich.Sharon@epamail.epa.gov Subject: Part of E.O. 12866 Review: EPA Staff Response to OMB questions pertaining to Primary Lead RTR pertaining to comments Regarding Affirmative Defense - received per Bin 1 and Bin 2 RTR proposal, RIN 2060-AQ42Attachments: 3XX_2010-12-06 API Marine Vessel Loading RTR Comments.pdf; EPA-HQOAR-2010-0600-0262.1.pdf; EPA-HQ-OAR-2010-0600-0264.1.pdf; EPA-HQOAR-2010-0600-0265.1.pdf; EPA-HQ-OAR-2010-0600-0273.1.pdf

Hi Cortney,

Attached are some of the comments that we received in response to the RTR Bin 1 and Bin 2 Proposal regarding Affirmative Defense. I will keep looking through the comments, and depending what I find, I may be sending you more later today. Meanwhile, let us know if you have questions.

Thanks.

Chuck French, EPA

(See attached file: 3XX_2010-12-06 API Marine Vessel Loading RTR Comments.pdf)(See attached file: EPA-HQ-OAR-2010-0600-0262.1.pdf)(See attached file: EPA-HQ-OAR-2010-0600-0264.1.pdf)(See attached file: EPA-HQ-OAR-2010-0600-0265.1.pdf)(See attached file: EPA-HQ-OAR-2010-0600-0273.1.pdf)

Page 1Matthew Todd

Regulatory and Scientific Affairs

1220 L Street, NW Washington, DC

20005

- 4070 USA Telephone: 202

- 682

- 8 319
Fax: 202

- 682

- 8031
Email: ToddM@api.org

www.a pi.org

Dec ember 6 , 20 1 0

Air and Radiation Docket

U.S. EPA
1301 Constitution Ave., NW

Room 3340 Washington, DC 20004

a

- and

- r

- docket@epa.gov

Ref.: Docket ID No. EPA

- HQ

- OAR

- 20 1 0

- 06 00

Comments on EPA’s Proposed Rule

– Residual Risk and Technology Review (RTR)

“ National Emission Standards for Marine Tank Vessel Loading Operation s ” 75 Federal Register 65068 (October 21, 2010)

The American Petroleum Institute (API) appreciate s the opportunity to comment on the Environmental Protection Agency’s (EPA or Agency) p r oposed revisions to 40 CFR Part 63 Subpart Y, ―National Emission Standards for Marine Tank Vessel Loading Operations‖ (MTVLO) published October 21, 2010 [75 Federal Register 65068] , which result from EPA’s residual risk and technology review (RTR) of the M TVLO rule

. The American Petroleum Institute (API) is a national trade association with nearly 400 member companies that are involved with all aspects of the oil and natural gas industry.

While we are , with certain exceptions, supportive of the outcome o f EPA’s RTR review of the MTVLO rule, we object to proposed changes in the rulemaking process with respect to the evaluation of risk to public

health. Our concerns are discussed below.

RESIDUAL RISK DETERMINATION

API has two general concerns with respect to the manner in which EPA evaluated residual risk. The first

concern is that there were errors in EPA’s evaluation which resulted in certain facilities appearing to pos e greater risks to public health than would have been predicted by a more accurate an alysis. The second concern is that EPA is proposing to change the protocol for determining residual risk in a manner that lacks statutory authority and which is inappropriate and unnecessary. These concerns are discussed below.

1. ERRORS IN THE DETERMINATIO N OF RESIDUAL RISK

. While EPA correctly concluded that

the health risk from the MTVLO source category is acceptable and that the existing rule provides an ample margin of safety, 1 the health risk determined by EPA was overstated due to errors in EPA ’ s

1 75 Federal Register 65068

- 65149, October 21

, 2010; page 65114, last two columns

.2

eva luation. These errors included errors or out

- of

- date data in the 2005 National Emission Inventory
(NEI), errors in the latitude/longitude location of sources in EPA’s modeling ( including mislocation of
sources into offsite residential areas) , and an error by one facility in the identification of a compound (i.e., naphtha emissions were incorrectly identified as naphthalene). As discussed in the report included
as Attachment 1 to these comments, the actual health risk for the facilities identified by EPA a s posing the highest risk is much lower than reported by EPA.

2. CHANGE IN THE PROTOCOL FOR DETERMINING RESIDUAL RISK

. As noted in the Federal Register (FR) announcement, EPA is required under section 112(f) of the Clean Air Act (CAA)

to evaluate the risk to public health that remains after implementation of the technology

- based national emission standards for hazardous air pollutants (MACT standards). EPA proposes, in this rulemaking, to change the manner in which this ―residual risk‖ is evaluated. API has several concerns with respect to these proposed changes.

2.1. Lack of s tatutory authority for the changes

. As EPA notes, the process that the agency has

followed for residual risk evaluations was established in accordance with a protocol mandated by
the CAA, including preparation and submission to Congress of the methods to be employed.

These methods include the two

- step process described in the FR announcement. The first step in this process is to determine whether the maximum individual lifetime cancer ri sk (MIR) exceeds a presumptive limit of approximately 1

- in

- 10 thousand. When the MIR is determined to be below this limit, the residual risk is deemed to be acceptable and the analysis moves to the second step

. The second step, for situations in which th e MIR is above 1

- in

- 1 million, is to determine whether the standard prov ides an ―ample margin of safety ‖ to protect human health. EPA has established

certain metrics for the determination of ample margin of safety through both the agency’s report to
Congr ess and a n extensive history of subsequent rulemaking.

API believes that EPA lacks statutory authority to make significant and substantive changes unilaterally to this procedure that has been established in accordance with CAA mandates, vetted with Congre ss, and ratified by precedent. There has been no indication from Congress or experience which indicates that the established procedure for evaluating residual risk has failed to be protective of human health. API objects to arbitrary changes which are un necessary and unauthorized, and which needlessly add further uncertainty and complexity to a process that is already unduly burdensome.

2.2. Ina ppropriateness of the changes

. The new measures which EPA proposes to apply to the determination of acceptable risk and ample margin of safety are inappropriate

. These new

measures include:

- ―total facility‖ consideration; consideration of risk from the total facility, rather than from only the portion of the facility subject to the rule,

- ―demographic‖ consid eration; consideration of risk across selected social, demographic, and economic groups within the population living near the facility, and

- ―allowable emissions‖ consideration; consideration of the hypothetical risk associated with the

level of emis sions allowed by the MACT standard (versus the actual emissions from the facility).3 Each of these considerations is discussed below and in Attachment 1

.

2.2.1. Total facility regulation is not legal

. If an unacceptable health risk is posed to the community by a facility due to emission sources that are not part of the affected source of the rule in question, then those emission sources should be addressed in separate rulemaking. The MACT standards have defined boundaries of applicability so as to bring some me asure of order to a highly confusing and complex regulatory framework. Consideration of

emission sources outside of those boundaries would unravel what semblance of order presently exists. Furthermore, in the event that further reductions could be reason ably achieved for the emission sources that are subject to the MACT standard in question, such measures would be determined in the technology review process.

Finally , EPA does not have authority to consider the combined emissions from entire

facilities wh en making § 112(f) risk assessment for a given source category , in that th e CAA requires residual risk determinations to be conducted on a category by category basis. Paragraph § 112(f)(2)(A) provides that, ―If standards promulgated pursuant to subsection (d) of this section and applicable to a category or subcategory of sources emitting a pollutant (or pollutants) classified as a known, probable or possible human carcinogen do not reduce lifetime excess cancer risks to the individual most exposed to emiss ions from a source in the
category or subcategory to less than one in one million, the Administrator shall promulgate standards under this subsection for such source category‖ (emphasis added). This provision
unambiguously requires the § 112(f) risk asses sment to be focused exclusively on ―emissions from a source in the category or subcategory.‖ For this reason, EPA does not
have authority to conduct a residual risk review for more than a single source category or subcategory at a time.

2.2.2. Demographic consi deration s should not arbitrarily trump sound risk assessments

. The established methodology for evaluating residual risk is based on ―risks to the individual most exposed,‖ without regard to the ethnicity, income level, education level, or other socio

econ omic factors concerning that individual. Under Section 112(f)(2) of the Clean Air Act,

residual risk standards must be set:

“If [MACT] standards...applicable to a category or subcategory of sources...do not reduce

lifetime excess cancer risk to the individua l most exposed to emissions from a source in the category or subcategory to less in one in a million, the A d ministrator shall promulgate

standards...”

The decision whether or not to set residual risk standards, then, is based on risk to the

―individual most exposed,‖ not the demographic distribution of risk.

EPA’s proposal to introduce demographic analyses to the determination of acceptable risk
suggests a protocol in which risk to some individuals is deemed more acceptable than risk to

other individuals. EPA refers to the use of demographic analyses to inform the4 determination of risk acceptability as ―an evolving science.‖ In fact, it is not a science at all

, but rather it is a political judgment, and it has no place in a scientific evaluation of risk to public health

.

The CAA mandate under § 112(f) (2)(A) is expressly to ―provide an ample margin of safety to protect public health.‖ I t is not reasonable to construe the term ―public health‖ as used in

§ 112(f) as allowing consideration of demographic clas sifications that bear no relationship to the potential health effects presented by the hazardous air pollutants ( HAPs ) at issue for the given source category or subcategory.

EPA’s proposal would unreasonably inject racial, ethnic, and other policy consi derations into a program designed to provide protection for the public at large. For example, EPA suggests that the population without a high school diploma should receive extra scrutiny, yet does not afford the same scrutiny to other reasonably definable educational groups, such as those with a high school diploma, those with college degrees, and those with advanced degrees. EPA is apparently making judgments or assumptions about the population without a high school diploma, distinct from the population living in poverty and the populations of the selected ethnic groups, but EPA fails to explain what those assumptions are or to provide any data to support the selection of this population for extra scrutiny.

There is simply no principled way to identify and define those groups that should receive extra scrutiny from those that do not. In short, EPA’s approach would inappropriately cause
arbitrary policy and political considerations to trump objective scientific analysis. This is patently unreasonable an d, as such, is not a supportable interpretation of § 112(f).

2.2.3. EP A ’s a llowable emissions approach is arbitrary and excessive

. The established methodology for evaluating residual risk is based on estimates of actual emissions, but EPA proposes to further c onsider so

- called ―MACT allowable ‖ emissions. EPA created these MACT allowable emissions by assigning an arbitrary ratio to the estimated actual emissions, without consideration of process limitations or enforceable permit limits. In that these

MACT allo wable emissions are at best hypothetical and the entire risk assessment protocol

is already based on worst

- case assumptions, rather than average or central

- tendency values, there is no need to further bias the risk assessment in an arbitrarily conservative manner

. EPA already acknowledges that the established method of evaluating health risk is based on modeling in a manner that overestimates the concentrate of hazardous pollutants in the ambient air, so it seems rather capricious to suggest introducing a hypothetical scenario that would further exaggerate the modeled concentration of pollutants.

PROPOSED CHANGES TO THE MTVLO RULE

3. SUBCATEGORIES THAT ARE PRESENTLY EXEMPT

. Two subcategories are exempt from control under the existing rule: (i) existing fa cilities below the 10/25 tpy threshold, and (ii) offshore5

facilities. EPA is proposing submerged fill as a new MACT floor for these two subcategories, and

collection and processing of vapors as a beyond

- the

- floor measure for those facilities that load at least 1 million bbl/yr of gasoline.

3.1. Submerged fill is cost effective . EPA states in the preamble that the agency is proposing to require submerged fill for both of the previously exempt subcategories. In the actual rule language, however, submerged fill is proposed only for offshore facilities [§63.560(d)(6)]. I n
response to a query [docket: EPA

- HQ

- OAR

- 2010

- 0600

- 0253] , EPA indicates that the submerged

fill requirement would be applied to existing facilities below the 10/25 tpy threshold by a new

paragrap h §63.560(f

)

. API supports the requirement of submerged fill for marine vessel loading operations that are not subject to a requirement to collect and process displaced vapors.

3.2. Lowering the applicability trigger from 10 to 1 million bbl/yr of gasoline is illegal

. The existing rule contains a requirement to collect and process vapors at marine vessel loading operations that load at least 10 million bbl/yr of gasoline . EPA proposes to lower this threshold to 1 million bbl/yr of gasoline loaded (1 M bbl/yr threshold). This lower threshold would potentially require collection and processing of vapors at certain facilities that were previously exempt

. API believes that EPA’s rationale for this change is both confusing and flawed

, and that a more correct

esti mate of the cost is in excess of $180,000 per ton of HAP reductions. We believe the proposed

action to be illegal , and we request that it be rescinded

.

Specific issues are discussed in more detail below.

3.2.1. EPA confuses MACT with RACT

. The discussion in the preamble is confusing, at best, concerning whether the proposed 1 M bbl/yr threshold is a MACT measure or a RACT

measure.

The preamble states that the existing MACT standards require collection and control of vapors for MTVLO facilities that load at l east 10 million (M) bbl/yr of gasoline. However, this provision is in the RACT provisions of the existing rule [§63.560(b) and §63.562(c)] rather than in the MACT provisions. Furthermore, the preamble justifies the proposed new 1 M bbl/yr threshold on a VOC (RACT) basis rather than a HAP (MACT) basis. Yet the preamble describes this lower threshold as a beyond

- the

- floor MACT measure for the two previously exempt subcategories.

The preamble also describes this proposed change in terms of lowering the th reshold for vapor collection and control requirements from 10 M bbl/yr of gasoline loaded to 1 M bbl/yr. The proposal, however, leaves the 10 M bbl/yr threshold unchanged in the RACT provisions of §63.560(b) and §63.562(c), but adds a new 1 M bbl/yr thres hold in the MACT provisions of §63.562(b).

The discussion of the 1 M bbl/yr threshold in the preamble should be consistent with both the basis presented for justification of this measure and the language of the rule.6 3.2.2. Illegal as a MACT measure. As noted a bove, t he 1 M bbl/yr threshold is presented as a MACT measure in the preamble discussion and in the manner in which this requirement is proposed to be implemented in the rule language. The preamble describes the proposed 1 M bbl/yr threshold as a ―beyond

- the

- floor‖ MACT standard. 2 This determination, however, would require the measure to be reasonably cost effective in reducing HAPs, in that the statutory authority given under CAA Section 112(d) is expressly for the reduction of HAPs.

EPA estimated a cos t for HAP reduction of $74,000 per ton, which EPA characterizes as ―higher than our historical values,‖ 3 Furthermore, E PA’s cost effectiveness calculation is seriously flawed, as discussed below. One of the errors in EPA’s calculation was to assume
a HAP level more than twice that which would be reasonably expected in gasoline vapors (see Attachment 2). Correcting to a conservative value of 3% HAP, rather than the 7.3% value assumed by EPA, would change EPA’s calculated cost effectiveness from $74,000 pe r ton to $180,000 per ton of HAP reductions. EPA acknowledges even the $74,000 per ton to be ―higher than our historical values,‖ and thus the corrected value of $180,000 per ton is
clearly not reasonable. Given that it is not a cost

- effective measure fo r the control of HAP, it

is illegal to promulgate this requirement as a MACT measure.

3.2.3. Cost effectiveness calculation flawed. EPA’s evaluation of cost effectiveness 4 relies on undocumented assertions and assumptions. The assumed cost of equipment was bas ed on an unsubstantiated verbal claim from a single equipment vendor, and the installation cost was estimated using ―EPA standard costing procedures.‖ This methodology relies on an assumed
ratio of installation costs to equipment cost, but EPA failed to d ocument that this ratio is reasonable for the particular case of installing vapor control systems at MTVLO facilities. Furthermore, the type of control equipment offered by the vendor in question is lean oil absorption, which is not in common usage for co ntrolling vapors from sources in the petroleum industry. EPA’s cost effectiveness evaluation relied on an assumption that this
technology is 99% effective in recovering VOCs, but EPA failed to present any evidence to substantiate this assumption, and API members doubt lean oil systems are 99% effective in practice. In fact, EPA failed to establish that this technology has ever been demonstrated in practice to be effective for MTVLO applications. In addition, EPA assumed the HAP content of gasoline vapors to be 7.3%, which is more than twice the value of 3% that is

shown in Attachment 2 to be conservative. As noted previously, this one correction would increase the estimated cost of HAP reductions from $74,000 to $180,000 per ton . Given the

numerous unsupp orted assumptions, EPA’s determination of cost effectiveness is seriously

flawed.

2 75 Federal Register 65068

- 65149, October 21

, 2010; page 65116, first column.

3 75 Federal Register 6506 8

- 65149, October 21

, 2010; page 65115, last column.

4 Memorandum from David Green and Karen Schaffner, RTI International to Stephen Shedd and Brenda Shine, EPA, “Cost Effectiveness and Impacts of Lean Oil Absorption for Control of Hazardous Air Pollutants from Gasoline Loading

– Residual Risk and Technology Review for the Marine Tank Vessel Loading Operations Source Category,” August 19, 2010 [Docket Document ID: EPA

- HQ

- OAR

- 2010

- 0600

- 0003].7 3.2.4. Affected MTVLO may not be major sources of HAP

. The preamble concludes that the HAP major source criteria would be triggered by the loading of 5 M bbl/yr of gasoline at an

M TVLO facility. If this is the case, then it would be inappropriate to impose a 1 M bbl/yr threshold as a MACT measure, in that MACT measures should be applicable only to major sources of HAP. Furthermore, EPA’s determination that the HAP major source cri teria would be met by the loading of 5 M bbl/yr of gasoline is flawed. The discussion in Attachment 2 demonstrates that it would likely require the loading of at least 10 M bbl/yr of gasoline to trigger the HAP major source criteria , corresponding to the threshold in the existing rule

. The arbitrary changes in EPA’s assumptions in support of the proposed rule
are erroneous and unjustified. It is inappropriate, then, to apply a MACT measure to marine

facilities that load less than 10 M bbl/yr of gasoline.

3.2.5. Confusing implementation. The proposed lowering of the gasoline loading threshold to 1 M bbl/yr is not only inappropriate, it is also confusing in the manner that it is implemented in the proposed rule language. While proposed edits to §63.562(b)(1) wou ld apply the vapor collection and vapor

- tightness requirements to facilities that load at least 1 M bbl/yr of gasoline, the control standard (emissions limit) for these facilities is specified separately in a proposed new paragraph §63.562(f). The manner in which this is done results in the following provisions not being applicable to the new subcategory:

- §63.562(b)(5) Prevention of carbon adsorber emissions during regeneration.

- §63.562(b)(6) Maintenance allowed for loading berths.

- §63.563(b) Com

pliance determination for affected sources (initial performance test). In that this situation is not discussed in the preamble, it is not apparent whether EPA intended for these provisions to not apply to the new subcategory of facilities that load at

leas t 1 M bbl/yr of gasoline.

3.2.6. Application to offshore facilities not justified

. The proposed revisions would apply the requirement to collect and process vapors from MTVLO to facilities that load at least 1 million bbl/yr of gasoline , regardless of whether th e facility is located o n shore or o ff shore. EPA failed, however, to demonstrate any benefit that would accrue from applying this requirement to offshore facilities, and EPA’s cost evaluation did not address the particular
cost impacts associated with an of fshore location.

EPA did not assess the nature and fate of emissions from marine vessel loading operations

located offshore in order to determine whether such emissions would be reasonably anticipated to endanger public health or to contribute materiall y to ozone non

- attainment

status

. In that offshore facilities, by the definition given in §63.561, have loading operations located at least 0.5 miles from the shore, and there are no permanent residents located immediately on the shore line , there is a n in herent buffer between these facilities and the potentially affected population that is not necessarily present for an onshore facility. The impact of emissions from offshore facilities, then, would be expected to be substantially less

than from a similar onshore facility.

Offshore facilities are typically quite different from most onshore MTVLO facilities , in that8 most onshore facilities large enough to be subject to the proposed rule are not dependent solely on marine loading for distribution of produc t. They are either located on a pipeline network and/or distribute product via a truck rack and distribute most of their product in this fashion, and thus have limited needs for docks and loading operations. Part of the reason for

this is that the Jones Act requires US flag vessels for transfers between US ports and there are very few US ships capable of carrying large cargoes of petroleum products, so that marine shipment is disfavored for most US MTVLO facilities that have other distribution options . O ffshore facilities are typically very large facilities that distribute most or all of their product/crude oil via ships, rather than barges. The result is that offshore facilities have many loading berths located on very long piers farther from shore, so t hat ships large enough to economically distribute the products can berth at them.

As a result, the offshore location require s much greater capital expenditure in order to install

controls. This additional cost would include either additional offshore pla tform structure to support the vapor control equipment, or piping from the offshore facility to carry vapors to onshore vapor control equipment. The preamble to the existing rule cited these costs as being ―between two and five times more expensive than c omparable onshore control techniques.‖ 5 Comments from at least one company which qualifies as an offshore facility support the much higher cost of controls at these locations. In the new rulemaking, however,

EPA’s cost

- effectiveness evaluation uses a fix ed assumption for the costs to install controls, without regard for the particular cost issues associated with an offshore location. 6 It also relies on technology not in use at MTVLOs or offshore facilities. In that EPA failed to

evaluate cost effectiven ess in a manner that accounted for the particular considerations

associated with the offshore subcategory, EPA cannot claim to have made a determination of reasonable cost effectiveness for this subcategory.

In the 1995 final rule for MTVLO, EPA recognize d these issues pertaining to offshore facilities. EPA concluded that, in light of the ― significantly higher costs and poor cost effectiveness shown by these sources

. . requirement for controls at offshore RACT terminals

would not be consistent with the r equirements for the technology to be ― reasonable. ‖‖ 7 EPA has not presented any documentation in the new rulemaking that would support a change to

this conclusion. P roposed new p aragraph §63.56 0(d)(6)(ii) should therefore be deleted.

4. STARTUP, SHUTDOWN, AN D MALFUNCTION PROVISIONS

. Given that the existing rule does not require a startup, shutdown, and malfunction (SSM) plan, and the SSM exemption has been vacated by the courts, API supports EPA’s edits to render SSM references in the General Provisions not applicable. API also supports EPA’s proposal to address malfunctions as distinct from routine operating

5 6 0 Federal Register 48388

- 48417, September 19 , 199 5; page 48393, middle column.

6 Memorandum from David Green and Karen Schaffner, RTI International to Stephen Shedd and Brenda Shine, EPA, “Cost Effectiveness and Impacts of Lean Oil Absorption for Control of Hazardous Air Pollutants from Gasoline Loading

– Residual Ris k and Technology Review for the Marine Tank Vessel Loading Operations Source Category,” August 19, 2010 [Docket Document ID: EPA

- HQ

- OAR

- 2010

- 0600

- 0003].

7 6 0 Federal Register 48388

- 48417, September 19 , 199 5; page 48393, middle column.9

conditions, but we object to the manner in which EPA proposes to do so. API believes it is illegal to subject malfunction events to an emissions stand ard for which EPA did not consider the emissions or

costs of control associated with malfunctions. API endorses the comments submitted separately from the SSM Coalition on this issue, particularly with respect to establishing an alternative emissions limi tation for malfunctions. Specific recommendations for an alternative emissions limitation for MTVLO malfunctions are presented below.

4.1. Notifications and reports for malfunctions

. Proposed paragraph §63.562(e)(7) (ii) would require

a notification of a malfu nction to be submitted within 2 business days after the initial occurrence of

the malfunction in order to preserve an affirmative defense. This paragraph would additionally require a report within 30 days after the malfunction. These deadlines are arbitr ary, unrealistic,

and unwarranted.

4.1.1. The proposed 2

- day notification is unrealistic and un necessary

. The provisions of
§63.562(e)(7) (i)(A)

– (I) would specify a 9

- step procedure for determining whether a given malfunction event qualifies for the affirmative d efense. In most cases, it would not be realistic to complete t his determination process within 2 days following the occurrence of the event. Facilities might therefore tend to routinely submit the 2

- day notification in order to preserve the potential for an affirmative defense, even in cases which subsequently are determined to not qualify. Furthermore, there is no environmental benefit that would accrue

from this notification , and similar provisions in refinery consent decrees do not require it.

The re sult of this unrealistic and unnecessary requirement, then, w ould be to burden both the facility and the regulatory agency having jurisdiction with the processing of paperwork that

has no associated environmental benefit.

4.1.2. Malfunction reports should be subm itted with the semi

- annual reports. The rule already requires , at §63.567(e), the submission of excess emissions and continuous monitoring system performance and summary reports on a semi

- annual basis, and EPA has

established the semi

- annual basis as bei ng appropriate for all compliance

- related reporting through numerous rulemakings under Part 63. In fact, EPA promulgated the Recordkeeping and Reporting Burden Reduction Rule for the expressed purpose of simplifying and unifying reporting schedules. EPA stated this intent in the preamble to that rule:

“The Agency now believes that the semiannual reporting frequencies contained in recently promulgated NSPS and NESHAP regulations and proposed in this rulemaking for all types of information are generally ap propriate. . . EPA sees no reason to retain different reporting frequencies in the NSPS and NESHAP General Provisions compared to the reporting frequencies contained in recently promulgated rules.” 8

As noted by EPA, there is no reason to require a repor ting frequency that differs from the

semi

- annual basis adopted by the agency. It would be contrary to the agency’s own

assessment of an appropriate reporting frequenc y to arbitrarily require malfunction reports to be submitted within 30 days.

8 6 1 Federal Registe r 47840

- 47852, September 11 , 199 6; page 47844, first two columns

.10

4.2. §63.562(e)(7 )(i)(A)

– (I) should constitute a work practice for compliance

. The steps specified

in §63.562(e)(7) (i)(A)

– (I) should be specified as a work practice for compliance in the event of a

malfunction , rather than being specified as a basis for an affirmative def ense

. In the preamble to the proposed rule revisions, EPA presents numerous reasons for not accounting for malfunctions in the setting of emission standards for routine operating conditions , yet proposes to apply these

emission standards to malfunction ev ents

. 9 This is logically inconsistent and statutorily inappropriate. If the standards are to apply to malfunction events, then the emissions and costs of

control associated with malfunction events should have been included in the evaluation of the

stand ards

. As explained by EPA, however, not only was this not done

– it would not be feasible to

do so.

On the one hand, then, EPA is obligated to set standards that are ― achievable ‖ under Section
112(d)(2) of the Clean Air Act

. On the other hand, it is not feasible to develop a n emission

standard t hat governs malfunction periods

. This scenario is expressly addressed in S ection 112(h)
of the Clean Air Act, which allows EPA to set work practice standards for situations where ― it is not feasible in the judgme nt of the Administrator to prescribe or enforce an emission standard . .

. ‖

Malfunctions fit within the situations described in the definition of ― not feasible to prescribe or

enforce an emission standard ‖ as any situation where ― the application of measur ement methodology to a particular class of sources is not practicable due to technological and economic

limitations. ‖ Consequently, EPA should set work practice requirements to address periods of

malfunction. The steps set forth in §63.562(e)(7) (i)(A)

– (I ) would constitute an appropriate work practice standard for malfunctions.

4.3. Provide an allowance for reasonable periods of maintenance

. EPA should provide an allowance for a reasonable period of routine maintenance for the control device. Proper operation of a control device includes periodic routine maintenance, and manufacturers of control devices typically recommend preventive maintenance on a semi

- annual basis. EPA has stipulated in other rulemakings 10 that standards do not apply during planned routine maintenance, other than a work practice standard that such periods shall not exceed 240 hours per year and records must be maintained to document such periods.

5. CITATION ERRORS IN THE PROPOSED RULE LANGUAGE

. API has identified two paragraphs cited by the proposed revisions which do not exist.

5.1. Proposed edits to § 63.560(a)(1), (2) & (3) refer to a paragraph (f) ―of this section,‖ but there is no
paragraph (f) of section § 63.560. This would be reconciled by adding a new paragraph §63.560(f)

,

as described in EPA’s response to a query [docket: EPA

- HQ

- OAR

- 2010

- 0600

- 0253].

5.2. Proposed edits to Table 1

, at § 63.10(c)(10) & (11)

, include a reference to § 63.657(m) (1) for reporting malfunctions, but there is no paragraph § 63.657(m)

.

9 75 Federal Register 65068

- 65149, October 21

, 2010; page 65074, last two columns, and page 65075, first

column

. 10 Examples of regulatory provisions for maintenance of the control device inc lude 60.102a(f)(3) and 63.119(e)(3) & (4).11

6. MISCELLANEOUS EDITORIAL COMMENTS

.

6.1. Prop osed edits to § 63. 562(b)(1 )(i ) should read ―1 million bbl/yr of gasoline‖ rather than ―1 M barrels of gasoline,‖ so as to read correctly and to be consistent with proposed edits to

§ 63. 562(b)( 1)(ii ) and ( iii ).

We appreciate your consideration of our comm ents

. If you have any questions, please contact me at 202

- 682

- 8 319 or toddm@api.org

.

Sincerely,

/s/

Matt hew Todd

CC: Mr. Stephen Shedd , EPA ( shedd.steve@epa.gov )ENVIRON International Corporation • Marketplace Tower • 6001 Shellmound Street, Suite 700 • Emery ville, California 94608

Voice: 510

- 655

- 7400 • Fax: 510

- 655

- 9517 ATTA CHMENT 1

– Report from Environ on EPA’s Residual Risk Determinations



### November 30, 2010



### MEMORANDUM

To: Matt Todd , Amer i can Petroleum Institute

From: Stan Hayes, ENVIRON

Subject: Comments on EPA’s Residual Risk Determination of Marine Ve ssel Loading

Operations Facilities

On October 21, 2010, EPA published in the Federal Register (75 FR 65068) a proposed

rule that addresses Clean Air Act residual risk and 8

- year technology review requirements for six

National Emission Standards for Haza rdous Air Pollutants (NESHAP) and sixteen source

cat e gories subject to those standards, including facilities conducting marine vessel loading operations (MVLO) and subject to the Marine Tank Vessel Loading Operations NESHAP (40

CFR 63 Su b part Y). Comments on the proposed rule and supporting material are due to EPA on

or before D e cember 6, 2010.

In its proposal and supporting material, EPA estimated the residual risk associated with facilities subject to each of the six NESHAP, including MTVLO facilitie s. To assist in its

prep a ration of comments, the American Petroleum Institute (API) retained ENVIRON to review and evaluate EPA’s determination of residual risk for MTVLO facilities, focusing particularly on

those facilities for which EPA calculated a can cer maximum individual risk (MIR) from MTVLO sources greater than 1 in a million. As a part of that review and evaluation, E N VIRON also examined the general methodology by which EPA’s RTR residual risk asses s ment s were done.

A. E RRORS IN 

### EPA’ S 

### D ETERMINATION OF 

### MTVLO R ESIDUAL 

### R ISK



### With its proposed rule (EPA 2010a), EPA also published residual risk e s timates for each of 152 modeled MTVLO facilities, both from MTVLO sources only and facility

- wide (EPA 2010b). As summarized in Table 1, EPA calculated that c ancer maximum individual risks (MIR) from MTVLO sources were greater than 1 in a million for just three of the 152 facilities

mo d eled.

None of the 152 modeled facilities were estimated to have noncancer target organ speci f ic hazard indexes (TOSHI) from MTVLO sources that exceeded 0.3 for actual emissions, well below the generally used maximum acceptable level of 1. EPA also calculated that the total

### ENVIRON memo

13



### cancer inc i dence from actual emissions from MTVLO sources at the 152 modeled facilities was

0.01 excess cancer cases per year, or one case in every 100 years.

Table 1. Facilities for which EPA estimated MTVLO cancer MIR

greater than 1 in a million

EPA Estimated Risk from

MTVLO Sources Based On

Actual Emissions

Facilities Cancer MIR ( in mi l lion) Noncancer

Chronic

TOS HI

EPA CANCER MIR > 1 IN MILLION IN PROPOSED RULE

Texas Petrochemicals (Houston) 20 0.3

KM Galena Park Terminal (Galena Park) 20 0.2

Chevron / Unocal (Nederland) 10 0.1

ALSO IDENTIFIED IN PRELIMINARY DISCUSSI ONS WITH API

TM Coastal (Ft. Lauderdale) 0.3 0.001

Total EPA modeled facilities = 152



### Based on its MTVLO residual risk analyses, EPA concluded that risks from the MTVLO source category are acceptable:

“Based on this low cancer risk level and in consideration of other health

mea s ures and factors, including the low cancer incidence (one case in every 100 years) and the low maximum noncancer risk level (TOSHI of 0.3 based on actual

emi s sions and 0.5 based on MACT

– allowable emissions), we propose that the risks from the MTVLO source ca t egory are acceptable.”

As a result, EPA proposed to re

- adopt existing MACT sta n dards:

“Therefore, we continue to propose that the current MACT

- based standards

pr o vide an ample margin of safety to protect public he alth and the environment, and we are proposing to re

- adopt the existing MACT standards to satisfy section 112(f) of the CAA.”

Our review of EPA’s MTVLO residual risk analyses provides additional support to

EPA’s conclusion that risks from the MTVLO sourc e category are acceptable. We have

ident i fied a number of data errors that have caused EPA to overestimate risk from each of those

facil i ties for which EPA calculated an MTVLO cancer MIR greater than 1 in a million. Risks for these facilities, when re

- cal culated using corrected data, demonstrate that both MTVLO source and facility

- wide risks are lower than calculated by EPA. Data errors that were identified

i n clude:

### ENVIRON memo

14



### (a) Incorrect specification of latitude/longitude coordinates of numerous sources in the

2005 NEI used by EPA as its baseline reference, with some sources mislocated off

site in residential areas

(b) Incorrect calculation of emissions due to such factors as:

 Misclassification of naphtha (a major class of VOCs) as naphthalene (a specific HAP)

 Incor rect speciation of tank HAP emissions.

In addition, more

- current 2009 emission data or other related information provided for

se v eral of the facilities analyzed indicate that significant emission reductions have occurred since the 2005 baseline year for EPA’s MTVLO residual risk assessments. These reductions have resulted from voluntary emission reduction measures, compliance with post

- 2005 regulatory

r e quirements, and agreements with regulatory agencies and local governments.

In discussions with API e arlier this year, EPA indicated that their preliminary residual

risk assessments had identified four facilities for which the estimated cancer MIR for MTVLO sources was greater than 1 in a million. EPA identified those facilities as: (a) TransMontaigne ( TM) in Fort Lauderdale, Florida (previously named Coastal Terminals in EPA’s risk analysis); (b) TX Petr o chemicals (now TPC Group) in Houston, Texas; (c) KinderMorgan (KM) in Galena Park, Texas (previously named the Galena Park Terminal); and (d) Ch e vron in Nederland, Texas (previously named Unocal). Because their preliminary e s timates of cancer MIR were greater than 1 in a million, EPA stated that particular effort would be focused on those four facilities, with EPA staff visiting each of them to observe facility operations and to confirm facility

info r mation.

Following these pre

- proposal discussion with API, ENVIRON was r e tained by API to review and evaluate for their accuracy EPA’s preliminary residual risk estimates for these four

facilities and the emission and source data on which they were based. Because EPA did not provide their preliminary risk assessment data and supporting risk modeling files, ENVIRON

conducted ind e pendent analyses to reconstruct EPA’s residual risk results. Source and emissi on data for the four facilities were extracted from the 2005 NEI used by EPA as its primary baseline

re f erence. The HEM

- 3/AERMOD risk model, which is the same model used by EPA for RTR

res i dual risk assessments, was employed to calculate MTVLO category

- sp ecific and facility

wide inhalation cancer MIR and chronic noncancer target o r gan specific hazard indexes (TOSHI).

Results of ENVIRON’s risk analyses were used to reconstruct EPA’s preliminary

res i dual risk estimates for the four facilities. In conducti ng these risk analyses, however, data errors were identified for all four facilities. These include source location errors, particularly

i n volving mislocation of sources into offsite residential areas, that caused EPA’s residual risk

estimates to be overs tated. In addition, data errors involving the use of incorrect or outdated emission amounts or incorrect VOC speciation profiles were identified that also caused EPA to

overest i mate residual risk.

### ENVIRON memo

15



### Results of our review and analysis of EPA’s residual r isk estimates for the four MTVLO

facilities are as fo l lows:

TransMontaigne

– Ft. Lauderdale, Florida . Emission sources listed in the 2005 NEI for the TM facility are shown in Figure 1. Of these sources, one has latitude/longitude coordinates

that corr espond to a location on site, just north of a group of tanks near the mid

- part of the facility. The other sources have the same latitude/longitude coordinates, all corresponding to an incorrect, of

f site location in a residential area to the west of the fa cility.

TM staff provided corrected location information for these sources, as shown in Figure 1, including the correct locations of the marine vapor recovery unit in the facility’s dock area and the Gasoline MACT tank/vapor recovery unit in the central portion of the facility. The HEM

- 3

/AERMOD model was used to re

- calculate residual risk with corrected location data. Re

calculated risk was significantly lower than calculated using the incorrect 2005 NEI location

d a ta. With corrected data, the cancer MIR was re

- calculated to be 0.27 in a million for MTVLO sources and 0.30 in a million for all sources facility

- wide. Both of these cancer MIR values are well below the widely accepted cancer risk de minimis level of 1 in a mi l lion.

In MTVLO residual r isk analyses released with its proposed RTR rule, EPA calculated that the cancer MIR for MTVLO sources at the TM facility is 0.32 in a million, very nearly the value calculated by ENVIRON. This close agreement suggests that, prior to final risk an a lyses

f or its proposed rule, EPA corrected the marine vapor recovery unit location error present in its

pr e liminary, pre

- proposal residual risk assessment.

However, in proposed rule residual risk analyses, EPA calculated that TM’s facility

- wide

cancer MIR is 6 in a million. This is about twenty times higher than the value of 0.30 in a

mi l lion calculated by ENVIRON. Reasons for this disparity are not known, but it may be that

EPA did not correct location errors of non

- MTVLO sources. If this is the case, we re c ommend

that EPA make those location corrections and re

- calculate facility

- wide risk. Going forward, the corrected data should be incorporated into the 2005 NEI and subsequent versions of that

dat a base.

Chevron/Unocal

– Nederland, Texas . As discussed pr eviously with EPA staff (e.g.,

Ch e vron 2010, API 2010a, EPA 2010d), naphthalene emissions for the Chevron /Unocal facility are incorrectly high in the 2005 NEI due to a mistaken reporting of naphtha as ―naphthalene.‖ Naphtha is a product of crude oil disti llation that contains a mixture of different hydrocarbons that boil within a particular temperature range. Naphtha is thus a broad term referring to this

mixture of different liquid hydrocarbons

, and it is not the same as naphthalene , a specific polycycli c aromatic h y drocarbon HAP formed through fusion of two benzene rings.

In its MTVLO residual risk assessment of this facility, EPA correctly identified as an MVTLO source the tank for which naphtha emissions are misclassified as naphthalene.

Howe v er, a s shown in Figure 2, the latitude/longitude coordinates of this tank in the 2005 NEI specify an incorrect loc a tion in the midst of a large tank farm, well away from the tank’s actual

location near marine ve s sel docks.

### ENVIRON memo

16



### Because of these errors, EPA calcula ted the cancer MIR to be 10 in a million, both for MTVLO sources and facility

- wide. ENVIRON risk modeling conducted using the same

inco rrect 2005 NEI data calculated a cancer MIR of 11 in a million for MTVLO sources and facility

- wide, closely co n sistent w ith EPA’s risk estimate.

With the HEM

- 3/AERMOD model, ENVIRON re

- calculated risk using corrected source

locations and re

- calculated naphthalene emissions, which were determined by f a cility staff (e.g., Chevron 2010) using a corrected VOC speciation profi le. The re

- calculated cancer MIR was

0.11 in a mi l lion for MTVLO sources and 0.47 in a million facility

- wide. Both of these values

are lower than the cancer risk de minimis le v el of 1 in a million.

# Copyrighted page/s removed. Copyrighted material is not available in Regulations.gov since it may not be reproduced without consent of the copyright holder.

Please contact the EPA Docket Center, Public Reading Room to view this document.

Address: 1301 Constitution Ave, NW

Room 3334 Washington, DC 20004

Telephone: 202-566-1744

Fax: 202-566-9744
Email: docket-customerservice@epa.gov

### ENVIRON memo

19



### Because EPA continues to list the cancer MIR for the facility as 10 in a million in its final residual risk analyses for the proposed RTR rule, it may be that EPA has not yet co r rected the misreporting of naphtha as naphthalene or MTVLO tank mislocation errors in the 2005 NEI. If this is the case, we recommend that EPA make those corrections and re

- calculate MTVLO source and facility

- wide risk. This shoul d result in the facility no longer being listed as having a cancer MIR greater than 1 in a million. Going forward, the corrected data should be incorporated in the 2005 NEI and subsequent versions of that d a tabase.

TX Petrochemicals

– Houston, Texas . A s shown in Figure 3, a number of sources at the TPC facility have incorrect latitude/longitude coordinates in the 2005 NEI that mi s locate them offsite, close to or in residential neighborhoods. Such source mislocations caused EPA to

ove r estimate the facil ity

- wide cancer MIR to be 200 in a million. That this is so was confirmed by ENVIRON risk analyses in which the same facility

- wide cancer MIR was calculated as EPA

when the inco rrect 2005 NEI source location data were modeled.

EPA calculated the cancer MIR for MTVLO sources at the TPC facility to be 20 in a

mi l lion. ENVIRON’s risk analyses, however, did not calculate the same value as EPA. Instead, ENVIRON calculated the cancer MIR for MTVLO sources (as shown in Figure 4, 2005 NEI emission release poin ts 70 and 218) to be 0.23 in a million, below the cancer risk de minimis

le v el of 1 in a million.

We were not able to determine why the two risk estimates are so different (nearly two orders of magnitude). Note that Figure 4 shows the locations of MTV LO sources to be more than a mile and a half to the north northeast of the main portion of the TPC facility, and farther away from residential areas. To resolve this difference in risk estimates, we recommend that

EPA re

- examine its identification of MTVL O sources and confirm their list of those source with facility staff. Should the list of MTVLO sources need to be revised, we further re c ommend that EPA modify its list of MTVLO sources and re

- calculate MTVLO source cancer MIR.

After consultation with facility staff and review of a facility plot plan, we determined that

a sy s tematic coordinate system translation error may have been responsible for source location errors in the 2005 NEI. That translation error was initially found by shifting the locatio n of a large flare, whose location could be clearly discerned in an aerial photograph. When shifted about 204 meters almost due north (toward an azimuth angle of 355 degrees), the 2005 NEI

loc a tion of that flare, shown in Figure 3 and labeled as emission release point ID 51, coincided with the location shown in the aerial photograph. A shift in incorrect 2005 NEI locations by the same amount aligned other sources with their correct locations as shown on the facility plot plan.

In addition, a number of voluntary emission reduction measures have been taken by TPC that have substantially lowered facility emissions since 2005. According to TPC (2010b), in 2005, TPC entered into a voluntary emission reduction agreement (VERA) with the Texas

Commission on E nvironmental Quality (TCEQ) and a settlement agreement with the City of Houston. From 2004 to 2008, TPC states that 1,3

- butadiene emissions have been reduced by over 75 percent. TPC further states that, in 2009, it entered into a second agreement with TC EQ providing for a d ditional emission reductions, and in 2009 and 2010, reduced the allowable 1,3

- butadiene emissions auth o rized by its permit to make those emission reductions permanent.

# Copyrighted page/s removed. Copyrighted material is not available in Regulations.gov since it may not be reproduced without consent of the copyright holder.

Please contact the EPA Docket Center, Public Reading Room to view this document.

Address: 1301 Constitution Ave, NW

Room 3334 Washington, DC 20004

Telephone: 202-566-1744

Fax: 202-566-9744
Email: docket-customerservice@epa.gov

### ENVIRON memo

22



### Risk was re

- calculated using corrected source locations and 2009 facility emissions. The cancer MIR for MTVLO sources was reduced to 0.19 in a million, below the cancer risk de m i nimis level of 1 in a million. Facility

- wide cancer MIR, originally estima ted by EPA to be 200 in a million, was r e duced more than a factor of two below 100 in a million.

KinderMorgan

– Galena Park, Texas . A large number of emission sources at the KM facility in Galena Park are represented in the 2005 NEI as being collocated at a single latitude/longitude

location. Those sources are d e noted in Figure 5 by lines originating from that single collocation point, which is located offsite, in the middle of Clinton Drive, just to the north of a group of tanks.

The facility has updated numerous errors found in the 2005 NEI. Source latitude/longitude

coordinates were replaced with locations provided by TCEQ, and emissions data for a subset of

sources were revised to correct anomalies regarding product speciation and tank roof landing loss

emission estimation m e thodology.

Kinder Morgan’s review has confirmed that, when the data are revised to reflect more accurate HAP emission rates and source locations, the facility

- wide MIR estimate is reduced to below one hundred in a million by a wide margin

. Further, the actual 2005 MI R is expected to be even lower, given that only the more substantive emissions estimation over reporting anomalies have

been revised.

More importantly, since 2005 Kinder Morgan has implemented many operational work practices and installed engineering con trols that have significantly reduced facility

- wide HAP

emissions

. For example, 1,3

- butadiene emissions were reduced by 97% from the revised 2005 emission estimates to 2009, from 48.79 tpy to 1.40 tpy. In addition, 2009 benzene emissions were reduced by 89% compared to the revised 2005 emissions, from 77.04 tpy to 8.29 tpy.

In s ummary, data errors were present in the 2005 NEI that c aused EPA to overestimate

ca n cer MIR for all of the facilities for which EPA calculated an MTVLO cancer MIR greater than 1 in a million. All four of these facilities had significant source location errors. Additionally, one of the facilities mistakenly r eported naphtha emissions as naphthalene because of incorrect VOC speci a tion, and at least two, and possibly all, may have had significant reductions in emissions since

2005.

After co r

rection of these data errors, re

- calculated risk is reduced signific antly lower than calculated by EPA. Only one of the 152 facilities modeled by EPA would have a re

- calculated

ca n cer MIR from MTVLO sources greater than 1 in a million, instead of three, and none of the these

facilities would have a f

a cility

- wide risk grea ter than 100 in a million, instead of two.

# Copyrighted page/s removed. Copyrighted material is not available in Regulations.gov since it may not be reproduced without consent of the copyright holder.

Please contact the EPA Docket Center, Public Reading Room to view this document.

Address: 1301 Constitution Ave, NW

Room 3334 Washington, DC 20004

Telephone: 202-566-1744

Fax: 202-566-9744
Email: docket-customerservice@epa.gov

### ENVIRON memo

24



### B. C HANGES IN THE 

### P ROTOCOL FOR 

### D ETERMINING 

### R ESIDUAL 

### R ISK



### In the residual risk analyses accompanying the proposed RTR rule, EPA has materially changed its previous protocol for d e termining residual risk. In particular, EPA has included:

Calculation of facility

- wide risks , in addition to risks from sources in the spec ific MACT category under consideration

Calculation of risks associated with MACT

- allowable emissions , in addition to risks

from actual emissions

Demographic analysis of risks across different social, demographic, and economic groups in the populations li ving nearby.

These changes appear to be an effort by EPA to implement recommendations of the Risk and Technology Review (RTR) Methods Panel of EPA’s Science Advisory Board (SAB 2009). This SAB panel was asked by EPA’s Office of Air Quality Planning and Standards to review and provide comment on the methodologies by which EPA was conducting RTR residual risk

a s sessments.

EPA states that it is ―considering all of this available health information to inform our determination of risk acceptability and amp le margin of safety under CAA section 112(f).‖ It is not clear what relative weight is accorded by EPA to each of the various metrics used to chara c terize risk, and particularly how judgments about risk acceptability and ample margin of safety are

affecte d by the addition of facility

- wide risk, MACT

- allowable risk, and environmental ju s tice

motivated demographic analyses. EPA states its belief that ―the relative weight of the many fa c tors that can be considered in selecting an ample margin of safety can o nly be determined for each specific source category.‖

Comments about the above new additions to EPA’s residual risk assessment protocol

i n clude the following:

Facility

- wide risk . Section 112(f) of the Clean Air Act appears to apply a source categ o r y, not the e n tire facility:

“...the Administrator shall...promulgate [residual risk] standards for such [source]

category or subcategory if promulgation of such standards is required in order to provide an ample margin of safety to protect public health...”

A plain reading of the statute, and its interpretation historically by EPA in previous residual risk assessments, suggests that Congress intended residual risk rulemaking to be based on cat e gory

specific risk, and not facility

- wide. Thus, EPA’s justificat ion for including facility

- wide risk in RTR rulemaking seems tenuous, and likely based on a generalized notion of ―ample ma r gin of safety.‖ For MTVLO sources, EPA does not appear to use facility

- wide risk as an explicit crit e ria in judging risk acceptabil ity.

### ENVIRON memo

25



### MACT

- allowable emissions . Previously, API offered comments on the SAB panel’s r e view and recommendations (API 2010b). As noted in those comments, EPA’s continued r e liance on risk

based on actual emissions seems warranted for reasons that include the fo l lowing:

1. Use of actual emissions as the basis for RTR residual risk assessments is more consi s tent
with:

(a) The residual risk language of the Clean Air Act,

(b) Risk assessment practice elsewhere at EPA and other age n cies, and

(c) The actual

- emission basi s of such important regulatory tools as the National Emission Inventory (NEI), the National Air Toxics Assessment (NATA), the To x ic Release Inventory (TRI) program, and state and local agency air toxics emission

i n ventory and risk assessment programs (such as California’s Air Toxics Hot Spots Program).

2. Even though based on actual emissions, RTR residual risk assessments contain a large margin of high

- side conservatism by assuming, for example, that exposures to the public occur continuously, each hour of every day for a 70

- year lifetime, while outdoors and remaining fixed at the same residence, without moving residences or traveling during the day to work, school, or for other pu rposes.

3. Risk estimates based on actual emissions provide more realistic and reliable inform a tion to decision makers and the public about actual risks because they are more repr e sentative of physical conditions that may a c tually occur.

4. Reliance on actual emissions better recognizes that, in the case of large, complex, and integrat ed facilities, it is not physically possible for equipment to operate simult a neously at maximum allowable levels, even for short p e riods of time, let alone for an entire lifetime as assumed by EPA in calculating ca n cer risks.

For the MTVLO source categor y, EPA statements in the proposed rule and supporting material appear contradictory. In the summary of residual risk assessment results in the pr o posed rule, EPA states that it assumed that MACT

- allowable emissions were 3 times greater than actual

emissio ns:

“

... the highest factor for one of these facilities [having a n MTVLO cancer MIR greater than 1 in a million] was 3.0, based on the ability of these facilities to achieve

98

- percent control of emissions where only 97

- percent emission control is required

b y the MACT standards for another facility , they could, under MACT, increase emissions by a factor of 3.”

The basis for this calculation is not clear. Suppose a facility achieved 98% control, while the MACT required only 97% control. If the facility rel axed its controls to the 97% required by the

### ENVIRON memo

26



### MACT, emissions would increase by 3%/2%, or a factor of 1.5, not 3. This factor of 1.5 is used elsewhere in EPA’s risk summary (EPA 2010b) and forms a basis of the Risk Acceptabil i ty discussion in the proposed rule (p. 65114). We recommend that EPA review its calculation of the

MACT

- allowable scaleup factor for MTVLO sources, and then use a consistent value throughout the proposed rule and supporting material.

In any event, risk estimated using MACT

- allowable emissions seems hypothetical and unrealistic. If a facility has already installed control equipment that exceeds control requirements

u n der the MACT, it seems highly unlikely that the facility would remove that better

- performing control equipment to inst all less

- effective MACT

- compliant equipment, even if the o retically allowed. Thus, risk estimates based on MACT

- allowable emissions may have little practical relevance in RTR rulemaking.

Demographic analyses . As with facility

- wide risk, demographic anal yses do not have an explicit statutory basis as a formal criterion in setting residual risk standards. Under Section 112(f)(2) of the Clean Air Act, residual risk standards must be set:

“If [MACT] standards...applicable to a category or subcategory of sour ces...do not reduce lifetime excess cancer risk to the individual most exposed to emissions from a source in the category or subcategory to less in one in a million, the A d ministrator shall promulgate standards...”

The decision whether or not to set residual risk standards, then, is based on risk to the ―individual most exposed,‖ not the demographic distribution of risk. The statutory basis for the use of such demographic analysis and how they are to be interpreted needs further clarification and ju s tificati on.

C. R EFERENCES



### API. 2010a. Letter to Stephen A. Shedd, EPA, from Matthew A. Todd, API, entitled ―Ongoing API Work to Review and Correct As Necessary Data on Four Marine Vessel Loading

Faci l ities.‖ American Petroleum Institute, Washington, D.C. August 16.

API. 2010b. Letter to Dr. Sue Shallal, EPA, from Matthew A. Todd, API, entitled ―Comments on Draft Report of SAB’s Risk and Technology Review Methods Panel.‖ American P e troleum Institute, Washington, D.C. March 17.

Chevron. 2010. Email to Kare n Shaffner, EPA, from Michelle Herman, Chevron Pipe Line Company. EPA

- HQ

- OAR

- 2010

- 0600

- 0042. July 6.

EPA. 2010a. ―National Emission Standards for Hazardous Air Pollutant Emissions: Hard and Decorative Chromium Electroplating and Chromium Anodizing Tan ks; Group I Pol y mers and Resins; Marine Tank Vessel Loading Operations; Pharmaceuti9cals Production; The Printing and Publishing Industry; and Steel Pickling

— HCl Process Facilities and Hydrochloric Acid Regeneration Plants; Proposed Rule.‖ U.S. Environment al Protection

### ENVIRON memo

27



### Agency, pu b lished in Federal Register , Vol. 74, No. 203, p. 65068. EPA

- HQ

- OAR

- 0600

- 0001. Oct o ber 31.

EPA. 2010b. ―Table 1

– Risk Assessment Results.‖ EPA

- HQ

- OAR

- 2010

- 0600

- 0243.1. U.S.

E n vironmental Protection Agency.

EPA. 2010c. ―Ap pendix 6, Detailed Risk Modeling Results.‖ EPA

- HQ

- OAR

- 2010

- 0600

- 0190.3. U.S. Environmental Protection Agency.

EPA. 2010d. Telephone Contact Summary

– 0210426.004.05, Conference Call Between EPA and

API. EPA

- HQ

- OAR

- 2010

- 0600

- 0027. August 16.

SAB. 2 009. ―Draft Report of the Risk and Technology Review Methods Panel.‖ EPA Science Advisory Board, U.S. Environme n tal Protection Agency, Washington, D.C. December 3.

TPC. 2010a. Email to Karen Shaffner, EPA, from James Scroggins, TPC Group. EPA

- HQ

- OAR

2010

- 0600

- 0037. June 3.

TPC. 2010b. Letter to Mr. Stephen Shedd, EPA, from Marise Lada Textor, TPC Group. EPA

OAR

- 2010

- 0600

- 0063. September 3.28

ATTACHMENT 2

– HAP Emissions per Million Gallons of Gasoline Loaded

The estimated HAP emissions per m illion barrels per year (M bbl/yr) of gasoline loaded depends upon the

assumed concentration of volatile organic compound (VOC) vapors in the air/vapor mixture displaced from the cargo compartments, and the concentration of HAP constituents in that vapor

.

VOC emission factors . Emission factors for the loading of gasoline at marine terminals are given in Table

5.2

- 2 of EPA’s AP

- 42 document. These values range from 0.7 pounds of VOCs per thousand gallons loaded
(lbs/10 3 gal) to 3.9 lbs/10 3 gal, depending upon the size of the vessel and the prior condition of the cargo compartment. The value that would result in the highest emissions estimate, then, would be 3.9 lbs/10 3 gal.

HAP content . EPA recommends, in paragraph 7.1 .4 of AP

- 42, the application of Raou lt’s Law to determine
the HAP content in the vapor phase of a hydrocarbon mixture from the HAP content in the liquid phase of

that mixture

. Typical HAP concentrations in the liquid phase of normal gasoline may be obtained from EPA’s TANKS software program (similar concentrations are given in EPA’s EPCRA Section 313 Industry
Guidance, Petroleum Terminals and Bulk Storage Facilities , EPA 745

- B

- 00

- 002, February 2000)

. The use of MTBE in motor gasoline has been phased out in the United States, and thus the co ncentration of MTBE should be given as 0%. Using typical values for the properties of gasoline and a temperature of 60 o F, the determination of vapor phase concentrations by Raoult’s Law is illustrated in the following table:

RVP Ml A B Pva (psia) Mv

Gasoline 10 92 11.724 5237.273 5.19 66

temp(F) 60 Yi ( Mi / Mvt )

liquid liquid phase liquid temp(C) 15.6 vapor partial vapor HAP/VOC

p hase molecular wt. phase pressure pressure phase vapor phase

Wi Mi Xi Antoine's Constants (de g.C) Pi* Pi Yi Zi

Species: {wt percent } {lb/lb

- mole} {mole frac.} A B C vapor pressure {psia} {mole frac.} {wt percent}

n

- hexane 1.0% 86.18 0.011 6.878 1171.5 224.37 1.9126 0.0204 0.0039 0.51%

benzene 1.8% 78.11 0.021 6.906 1211 220.79 1.1709 0.0248 0.0 048 0.57%

iso

- octane 4.0% 114.23 0.032 6.812 1257.8 220.74 0.5962 0.0192 0.0037 0.64%

toluene 7.0% 92.14 0.070 7.017 1377.6 222.64 0.3311 0.0231 0.0045 0.62%

ethylbenzene 1.4% 106.17 0.012 6.95 0 1419.3 212.61 0.1037 0.0013 0.0002 0.04%

xylene (

- m) 7.0% 106.17 0.061 7.009 1462.3 215.11 0.0903 0.0055 0.0011 0.17%

cumene 0.5% 120.19 0.004 6.929 1455.8 207.2 0 0.0479 0.0002 0.0000 0.01%

MTBE 0.0% 88.15 0 6.872 1116.8 224.74 3.2415 0.0000 0.0000 0.00%

naphthalene 0.0% 128.17 0 7.146 1831.6 211.82 0.0024 0. 0000 0.0000 0.00%

22.7 % = sum of HAP in the liquid sum of HAP in the vapor = 2.56%

This analysis is conservative, in that it uses a benzene concentration of 1.8%, whereas actual benzene

concentrations in gasoline in the United States has been driven down to the range of 0.5

- 0.6% by EPA’s
Fuels Specifications. Nevertheless, the HAP concentration in the vapor phase will be rounded up to 3% for purposes of this illustration.29

From the conservative values given above, HAP emissions from the loading of gas oline into marine vessels may be estimated as follows:

(3.9 lbs VOC/10 3 gal) x (3% HAP) = 0.12 lbs HAP / 10 3 gal

= 120 lbs HAP / 10 6 gal

= 5,040 lbs HAP / 10 6 bbl

= 2.5 tons HAP / M bbl

The volume of gasoline that would have to b e loaded in order to emit 25 tons per year of HAP, then, is 10 M bbl/yr. And, again, this is based on conservative assumptions. It is, therefore, unlikely that the loading of less than 10 M bbl/yr of gasoline into marine vessels would trigger a HAP major source status ( i.e. , more than 25 tons per year of HAP emissions)

.ExxonMobil Chemical Company

Safety, Security , Health and Environment 13501 Katy Freeway Houston, TX 77079-1398

December 6, 2010

Comments on EPA’s Proposed Rule: NESHAP for Group I Polymers and Resins; Residual Risk and Technology Reviews 75 Fed. Reg. 65068 (October 21, 2010)

Via Electronic Filing: a-and-r-docket@epa.gov

EPA Docket Center, EPA West (Air Docket) U.S. Environmental Protection Agency

Mailcode: 2822T 1200 Pennsylvania Ave., NW Washington, DC 20460

Attention: Docket ID No. EPA-HQ-OAR-2010-0600

Dear Sir or Madam:

ExxonMobil appreciates the opportunity to submit co mments on the Environmental Protection Agency's (EPA or the Agency) October 21, 2010 proposed rule on “National
Emission Standards for Hazardous Air Pollutant Emis sions: Hard and Decorative Chromium Electroplating and Chromium Anodizing Tank s; Group I Polymers and Resins; Marine Tank Vessel Loading Operations: Phar maceuticals Production; The Printing and Publishing Industry; and Steel Picklin g-HCl Process Facilities and Hydrochloric Acid Regeneration Plants”. Our commen ts focus on the Group I Polymers and Resins NESHAP (P&R1) source category requiremen ts as well as the policy issues relating to residual risk and technology reviews th at were included in the preamble.

ExxonMobil is a major integrated energy company wit h exploration, production, refining, transportation, marketing and chemical operations. The proposed rule will apply to four
ExxonMobil units at three facilities in Louisiana a nd Texas and will have a potentially substantive impact on three of the units. These fa cilities are in the Butyl Rubber and Ethylene Propylene Rubber (EPR) source categories. In addition, the policy issues included in the preamble will impact other ExxonMob il facilities that will be affected by future rulemakings related to the residual risk and technology reviews.

ExxonMobil has also been involved in the developmen t of comments from other trade organizations, including:

• International Institute of Synthetic Rubber Produc ers, Inc. (IISRP)

• Residual Risk Coalition

• American Petroleum Institute (including comments o n the Marine Tank Vessel Loading Operations NESHAP)2

We incorporate comments from these organizations in to ExxonMobil comments by
reference.

Our key comments on the proposed rule are summarize d as follows:

Basis for rulemaking

• Requiring the installation of additional emission controls, where the Agency has already determined that source emissions are at an acceptable risk level, is not sound regulatory policy.

• EPA is without authority to impose new standards u nder Clean Air Act §§ 112(d)(2) and (d)(3) for emission sources in source categorie s for which a MACT standard already has been promulgated – § 112(d)(6) provides the Agency’s only authority to adjust existing MACT standards.

• EPA already made the decision that beyond-the-floo r controls were not costeffective in the 1996 rulemaking. EPA has no autho rity and no grounds to perform a second § 112(d)(2) analysis and has provided no rat ionale as to why that analysis is deficient or no longer applicable.

• EPA does not have the legal authority to justify b eyond-the-floor controls in one source category by combining the source category wi th controls that are calculated to be cost-effective for another source category. Decisions are made on a source category by source category basis.

• EPA’s analysis, based on combining the Butyl Rubbe r (Halobutyl subcategory) and EPR source categories to justify beyond-the- floor front-end controls, is inconsistent with maintaining facility operating flexibility and how controls would be implemented.

Establishing emission standards

• EPA’s proposed emission limits for back-end Baton Rouge Halobutyl Rubber and Baytown Butyl Rubber process vents require further modification to reflect actual emissions performance and variability.

• EPA must recognize that maintenance of regenerativ e thermal oxidizers (RTOs) is required to achieve 98% organic HAP destruction.

• The proposed front-end beyond-the-floor controls f or Baton Rouge Halobutyl Rubber, Baton Rouge EPR, and Baytown Butyl Rubber a re not cost-effective and should not be finalized. EPA significantly underes timated the cost of controls.

• The proposed back-end beyond-the-floor controls fo r Baytown Butyl Rubber are not cost-effective, and a further analysis of back-end beyond-the-floor controls for Baton Rouge Halobutyl Rubber confirms EPA’s decision to n ot require additional controls. EPA significantly underestimated the cost of contro ls.3

• The Butyl Rubber source category subcategories sho uld be redefined to reflect the current process differences.

• EPA needs to clarify the definition of back-end pr ocess vents to avoid confusion and to remove operations that are already regulated und er P&R1 (40 CFR part 63 subpart U).

• EPA should revise the proposed rule to remove the requirement for halogen control for Group 2 continuous front-end process vents.

Compliance/other

• EPA should provide 4 years to comply with emission limits that require capital investment to install controls; the automatic one-y ear extension should be incorporated into the final rule. EPA should also allow four years for compliance
even when the emission limit for the floor is based on current operation and no beyond-the floor controls were proposed.

• EPA should clarify, in the absence of allowing fou r years as recommended above, that for emission limits not requiring controls the first compliance demonstration is 2 years (24 months) following the date of the final r ule.

• Since there is no consent decree deadline for fina lizing any rule related to the Butyl Rubber and EPR source categories, EPA should take t he appropriate time to thoroughly review the comments submitted and reasse ss the cost-effectiveness

determinations.

Startup/Shutdown/Malfunction (SSM) provisions

• EPA has misread the Sierra Club v. EPA court decision, which does not require the imposition of a single emission standard to all emi ssions; the decision merely requires that some standard to limit emissions appl ies at all times.

• EPA should propose a separate emission limit or ap ply work practice standards during periods of SSM to appropriately recognize th e operating and emission differences during these periods.

• The proposed affirmative defense is not a substitu te for setting emission standards for SSM periods.

• The proposed affirmative defense as written is unr easonable and impracticable.

Residual Risk and Technology Reviews

• ExxonMobil supports EPA’s conclusion that no furth er residual risk (§ 112(f)) or technology review (§ 112(d)(6)) is required for the Butyl Rubber and EPR source categories; the previously finalized analysis reach ed the appropriate conclusion.4

• EPA’s risk analysis for the Butyl Rubber and EPR s ource categories indicates that all facilities are low risk; EPA should delist the Butyl Rubber and EPR source categories under § 112(c)(9) and has the legal auth ority to do so.

• On residual risk and technology review policy and future rulemaking:

o Continuing implementation of residual risk and tec hnology reviews should be
consistent with the HON court decision.

o Risk assessments should be based on source categor y actual emissions.

o EPA should not expand the health information metri cs beyond those already

evaluated.

o In addition to the health risk metrics already est ablished, EPA should include central tendency or most expected risk to better co mmunicate the conservative
nature of EPA risk assessments.

o Residual risk under § 112(f)(2) should inform the § 112(d)(6) technology review decision; a review under § 112(d)(6) is not required if the pos t-MACT emission levels result in risks that are deemed to be protec tive of public health with an ample margin of safety.

Attached are our detailed comments. In addition, E xxonMobil is separately submitting additional process and cost information under a cla im of Confidential Business Information. This information provides additional support to the attached comments and
is referenced as the “CBI letter”.

Respectfully submitted,

Robert J. Morehouse
Downstream and Chemical SH&E

Attachment

cc: Ms. Mary Tom Kissell Sector Policies and Programs Division (E143-01) Office of Air Quality Planning and Standards U.S. Environmental Protection Agency Research Triangle Park, NC 27711

Mr. Randy McDonald Sector Policies and Programs Division (E143-01) Office of Air Quality Planning and Standards Environmental Protection Agency Research Triangle Park, NC 27711

Attn: Desk Officer for EPA Office of Information and Regulatory Affairs Office of Management and Budget (OMB)

725 17 th Street, NW. Washington, DC 205035 

### Table of Contents

ExxonMobil Comments on EPA’s Proposed Rule on Natio nal
Emission Standards for Hazardous Air Pollutants - G roup I Polymers and Resins; Residual Risk and Technology Reviews

I. Background On ExxonMobil Businesses Impacted By The Proposed Rule .........1

II. Source Category And Subcategory Issues

................................................... ................3

III. Applicability Issues

................................................... ................................................... .......5

IV. Basis for Establishing the Floor and the Proposed E mission Limitations ..............8

V. Basis for Beyond-The-Floor Decisions

................................................... ..................... 16

VI. Emission Control Cost

................................................... .................................................. 2 8

VII. Compliance Time

................................................... ................................................... ........ 39

VIII. Startup/Shutdown/Malfunction and Affirmative Defens e ......................................... 41

IX. Other Comments and Edits

................................................... ......................................... 54

X. Residual Risk and Technology Review: Butyl Rubber A nd EPR Source Categories

................................................... ................................................... .................... 58

XI. EPA Policy On Residual Risk And Technology Reviews ........................................ 621



### ExxonMobil Comments on EPA’s Proposed Rule on Natio nal
Emission Standards for Hazardous Air Pollutants - G roup I Polymers and Resins; Residual Risk and Technology Reviews
October 21, 2010 75 Fed. Reg. 65068

I. Background on ExxonMobil Businesses Impacted by the Proposed Rule

ExxonMobil Chemical is a major petrochemical compan y with manufacturing, technology and marketing operations around the worl d. The company’s broad range of petrochemical and polymer products provide the b uilding blocks for a wide range of products, ranging from packaging materials and plas tic bottles to automobile bumpers, synthetic rubber, solvents and countless c onsumer goods. Major petrochemical products include: polyethylene, polyp ropylene, Butyl polymers, polymer modifiers, specialty elastomers, tackifying resins, hydrocarbon and oxygenated fluids, plasticizers, synthetic fluids and lubricant basest ocks, chemical intermediates, and
films.

ExxonMobil, like other companies, manages product lines as separate businesses. The individual businesses develop strategies, produ ct plans, and investment plans, and each business is responsible for the financial stewardship of costs and profitability. A key activity is to assess cost-co mpetitiveness as our major businesses have worldwide competition. Adding significant cap ital cost to U.S. businesses, with no investment return, reduces international competi tiveness.

A. Butyl Rubber

ExxonMobil Chemical has been at the forefront of te chnology and innovation in the rubber industry since inventing and patenting Butyl rubber in 1937. The company markets high-quality synthetic rubber worldwide and is a global leader in Butyl technology, services and products for tires and oth er rubber products.

Butyl rubber is a worldwide business. ExxonMobil h as manufacturing facilities in the U.S. (Baton Rouge, Louisiana and Baytown, Texas ), Europe (Fawley, England and Notre-Dame-de-Gravenchon, France) and recently completed an expansion at an affiliate in Kawasaki, Japan. Major industry co mpetitors include : Lanxess (Sarnia, Canada and Antwerp, Belgium) and Yanshan, an affiliate of Sinopec. Butyl rubber demand is driven by growth in tire dem and, which in turn is driven by growth in personal and commercial vehicles, primari ly in the developing economies of the world. Growth has been, and is expected to continue, in excess of 4% per year, with the majority of the growth in Asia and i n particular China. This has led to the emergence of new entrants into the Butyl busine ss located in China, placing added cost competitiveness challenges to suppliers located in the U.S. and Europe.2

B. Ethylene Propylene Rubber (EPR)

ExxonMobil is a major producer of ethylene propylen e rubber products, including VistalonTM ethylene propylene diene (EPDM) rubber ma nufactured in Baton Rouge, Louisiana, based on proprietary Ziegler-Natt a catalysis technology. Since 2004 ExxonMobil has been producing VistalonTM EPDM r ubber at an additional location in Baton Rouge in a flexible asset based o n proprietary ExxpolTM metallocene technology, together with VistamaxxTM pr opylene-based elastomers (for use in compounding and polymer modification, f ilms and non-woven applications), and ExactTM Plastomers (for use in co mpounding and polymer modification applications). VistalonTM EPDM rubber is used in a wide variety of applications including: automotive (hoses, belts, w eatherseals, gaskets), construction (roof sheeting, glazing seals, and wir e and cable insulation), and durable goods (hoses and gaskets).

EPR is also a worldwide business. Product demand i s driven by the growth in automotive, construction and durable goods, primari ly in the developing economies of the world. Growth has been, and is expected to c ontinue, in excess of 3% per year, with the majority of the growth in Asia and i n particular China. This has led to significant new business investments, primarily in Asia (Singapore, China, Korea). Geographic changes in the automotive and durable go ods industries have also led to a significant increase of inter-regional trade f or EPR.

Demand in the Americas is not projected to meet the 2007 level until 2013, and in Europe until 2015, requiring U.S and Europe-based p roducers to be costcompetitive in the fast growing markets in Asia. R ecent and announced future cost-competitive assets in emerging regions are exp ected to make significant inroads in the more mature regions of Europe and No rth America, placing added cost competitiveness challenges to supply sources l ocated in the U.S. and Europe, and particularly those based on older non-metalloce ne technology. Over the last ten years industry has faced significant restructur ing resulting from the deployment of cost-competitive metallocene-based technology an d the emergence of new players, particularly in Asia.

Other U.S. producers include Dow Chemical (Louisian a), Lion Copolymer (Louisiana) and Lanxess (Texas). In recent years, the number of U.S. producing
sites has declined from 7 to 5 with the closure of assets by DSM (Louisiana) and Dow Chemical (Texas).

Outside the U.S., ExxonMobil has EPR facilities in France. Worldwide competitors include: DSM (Brazil and the Netherlands), Lanxess (Germany), Polimeri Europa (Italy), Mitsui Chemicals (Japan, Singapore), JSR C orporation (Japan), Kumho Polychem Co and SK Energy Co. (Korea), Nizhnekamskn eftekhim (Russia) and Jilin (China). In recent years, assets were shutdo wn by DSM (Japan), Mitsui Chemicals (Japan) and Herdillia (India).3

II. Source Category and Subcategory Issues

A. ExxonMobil has an EPR facility at the Baton Rou ge Plastics Plant.

As noted in our comments dated February 8, 2008 on the December 12, 2007 residual risk and technology review proposed rule c overing the Polymer and Resins 1 (P&R1) source category, and other communic ations to EPA, ExxonMobil started up an EPR facility in 2004 at th e ExxonMobil Baton Rouge Plastics Plant. 72 Fed. Reg. 70543. This EPR unit , identified as Line G, is a new source under the Polymers and Resins 1 NESHAP (P&R1 ), 40 CFR part 63, subpart U. The current proposal reports that there are three existing sources in the EPR source category, including the ExxonMobil C hemical unit at the Baton Rouge Chemical Plant, but the ExxonMobil Baton Roug e Plastics Plant unit is not

included in that count.

As for the two non-ExxonMobil EPR processes identif ied as being in the EPR source category, Line G does not have halogenated f ront-end process vents that result in HCl emissions. Thus, the current proposa l and the supporting analyses are not impacted by the inclusion of Line G in the EPR source category.

B. The Butyl Rubber source category subcategories h ave changed since subpart U was promulgated.

In the original 1996 subpart U rulemaking, EPA reco gnized the significant differences between the ExxonMobil Baton Rouge and Baytown Butyl Rubber facilities and therefore subdivided the Butyl Rubbe r source category into “Butyl” and “Halobutyl” subcategories. EPA explained the d ecision to establish separate subcategories as follows:

The Butyl rubber source category was divided into s ubcategories for production of Butyl rubber and production of Halobu tyl rubber, because of variations in both the production process and the H AP emitted. While the initial portion of the production processes are sim ilar, the Halobutyl rubber process contains two additional unique production s teps. In these additional steps additional HAP are used and are also, therefo re, emitted. [Hazardous
Air Pollutant Emissions from Process Units in the E lastomer Manufacturing Industry, Basis and Purpose Document for Proposed S tandards, EPA 453/R95-006a, May 1995, p. 4-1]

In the last 15 years there have been a number of pr ojects at the Baton Rouge and Baytown facilities to adjust product mix, incre ase capacity, provide operating flexibility, and improve process efficiency. As a net result of these changes, the Baytown Butyl Unit now produces more Halobutyl elas tomers than Butyl elastomers. There remain, however, basic differenc es between the processes at the two sites that warrant continuing segregation i nto two separate subcategories. We discuss the process differences in our CBI letter.4

C. The Butyl Rubber source category subcategories s hould be redefined to reflect the current process differences.

The proposal and the supporting analyses treat the Baytown Butyl unit as belonging to the “Butyl” subcategory and the Baton Rouge Butyl unit as belonging to the “Halobutyl” subcategory. While these were t he appropriate assignments

when the P&R1 rule was originally finalized, the Baytown unit now produces three major products with the primary elastomer product ( as defined in subpart U) being Halobutyl Rubber, both on a mass of elastomer produ ced basis and an operating time basis. Thus, under the current Butyl Rubber s ource category subcategory definitions in subpart U, both units would be consi dered part of the Halobutyl subcategory and there would be no units in the Buty l subcategory. However, there are significant differences between the two units, making it clear that they should remain in separate subcategories.

EPA should modify the subpart U criteria for determ ining subcategory applicability under the Butyl Rubber source category. Currently, subcategory assignment is based on the primary product of the Elastomer Unit. However, it is the process flexibility, even if the flexibility is applied to products that are not the primary product which drives process and emission differenc es. For instance, back-end hazardous air pollutant (HAP) emissions on a pounds per ton of product basis for our Baton Rouge Butyl Unit are significantly lower than the HAP emissions for our Baytown Butyl Unit because the latter unit is a fle xible operations unit and its HAP emissions are set by the conditions associated with a product that is not the primary product. We would therefore recommend that the Butyl subcategory descriptions be modified to distinguish Halobutyl-o nly production and flexible product production and that the primary product det ermination only be applied to facilities at the source category level, not at the subcategory level.

D. Combining the two ExxonMobil Butyl units into th e same subcategory is not a logical outgrowth of the proposal and would requi re new beyond the floor analyses and a new proposal.

If these two units were considered part of the same subcategory, the current proposal and its supporting analyses would not be a pplicable and new analyses and a new proposal would be required. On the other hand, minor revision of the subcategory definitions would be a logical outgrowt h of the proposal and the comments received and thus the Agency could proceed with evaluating the comments and promulgating a final rule.

Under the current proposal, halogen control of the halogenated continuous frontend process vents for both the Butyl and Halobutyl subcategories would be required 1 . Having the two units in the same subcategory wou ld preclude reaching

1 As EPA explains in the proposal, the floor for fro nt-end process vents for both subcategories and, th us both Butyl units, was established in the 1996 rulemaking as 98 % control of organic HAP. Thus, new floor analyses are not needed whether or not the two Butyl source category subcategories are combined.5

different beyond-the-floor decisions for each unit, a possibility given the costeffectiveness differences of controlling the HCl em issions from each site.

For back-end process operations, it is proposed to require control of the currently uncontrolled process vents at the Baytown Butyl uni t and not to require control of the currently uncontrolled process vents at the Bat on Rouge Butyl unit, as beyondthe-floor steps, based on the calculated cost-effec tiveness for these operations. With these units in the same subcategory, the Agenc y would need to consider cost-effectiveness on a total subcategory basis. U sing the EPA emission and cost-effectiveness estimates for each unit provided in the proposal and combining them on an emissions-weighted basis yields a combin ed cost effectiveness of approximately $30,000/ton of organic HAP. The Agen cy has clearly indicated in

this 2 and previous rulemakings 3 that they do not consider $30,000 per ton to be cost-effective for beyond-the-floor HAP reduction o ptions and we certainly concur.
A further discussion of cost-effectiveness is inclu ded in Section V.

III. Applicability Issues

A. EPA needs to clarify the definition of back-end process to avoid confusion and to remove operations that are already regulated under subpart U.

It is proposed to establish numeric emission limits for Butyl and Halobutyl back-end operations. Compliance is to be demonstrated by es timating emissions from those operations on a rolling 12-month basis. The defini tion of “back-end” in subpart U is “the unit operations in an EPPU following the strip ping operations. Back-end process operations include, but are not limited to, filtering, coagulation, blending, concentration, drying, separating, and other finish ing operations, as well as latex and crumb storage.” 40 CFR 63.482. This definitio n is broad and would appear to include operations that have no HAP emissions poten tial and/or which are usually remote from the process operation (e.g., bale wareh ousing and truck and rail loading). Since there are no HAP emissions from ha ndling finished product (Butyl and Halobutyl elastomers are gas impermeable and, i f there is any small amount of residual HAP present in the finished product, that HAP would not diffuse through the elastomer and would not be released during fina l product handling) it would be helpful for the Agency to clarify that such operati ons need not be considered when estimating emissions for compliance purposes. This would also make the backend definition and compliance requirements consiste nt with the data collected on these emissions during the information collection r equest (ICR) process.

2 At 75 Fed. Reg. 65099 (October 21, 2010), relative to controlling back-end Epichlorohydrin vents for organic HAPs (a parallel situation to the Halobutyl proposal), i t is stated that “We estimate that an incinerator w ould achieve an emissions reduction of 98 percent, resulting in a H AP decrease of approximately 35 TPY, with a cost ef fectiveness of approximately $31,000/ton. ... We believe that the co sts and other impacts of this beyond-the-floor opti on are not reasonable, given the level of emission reduction. Therefore, we are proposing an emission standard th at reflects the MACT floor option. We are requesting comment on thi s analysis and these options.”

3 e.g., At 75 Fed. Reg. 9648 (March 3, 2010) EPA fin alized its conclusion that beyond the floor control s of organic HAP from reciprocating internal combustion engines were not justified, based on cost effectiveness val ues in the range of $20-33,000/ton, as outlined in the proposa l (74 Fed. Reg. 9698 (March 5, 2009)).6

The current subpart U definition of back-end would also appear to include operations that are already regulated under other s ubpart U provisions. Those emissions were fully evaluated in the original rule making, the floor was established, and control requirements promulgated. Thus, such emissions are not “Significant Emission Points Not Previously Regulat ed” and thus cannot be the subject of a new § 112(d)(2) standard. The primary types of such emissions from Butyl Rubber source category units are from surge c ontrol vessels, a type of equipment leak emission regulated by § 63.502 of su bpart U, equipment leaks from some piping components, also regulated under § 63.502, storage vessels regulated by § 63.484 of subpart U, and wastewater, regulated under § 63.501 of subpart U. While these emission sources were repor ted in the ICR submissions, they were, rightfully, not included in EPA’s back-e nd emissions calculations and the subpart U definition needs to be made consisten t with the development of the

back-end emission limits.

For the above reasons, we suggest the definition of back-end in § 63.481 (or at least as it applies to the Butyl subcategories) be revised as follows:

Back-end refers to the unit operations in an EPPU following the stripping operations. Back-end process operations include, bu t are not limited to, filtering, coagulation, blending, concentration, dr ying, separating, and other finishing operations, as well as latex and crumb st orage. Back-end does not include storage and loading of finished product or emission points that are regulated under §§ 63.484, 63.501 or 63.502 of this subpart.

B. EPA should revise proposed § 63.483(q)(1) to re move the requirement for halogen control for Group 2 continuous front-end pr ocess vents.

Proposed § 63.483(q)(1) includes Group 2 halogenate d continuous front end process vents from Butyl, Halobutyl and EPR sources in the halogen control requirements along with Group 1 vents. No discussi on supporting this unprecedented requirement is provided in the propos al preamble or in the supporting documents, nor are Group 2 vents propose d to be made subject to the organic HAP control requirements. This proposal is illogical and, since it lacks supporting documentation or explanation, unlawful a nd should not be finalized.

For front-end process vents, subpart U follows the typical procedure used in process industry rules of identifying each process vent as either Group 1 or Group 2 on the basis of the vent’s properties. The crite ria used for distinguishing between Group 1 and Group 2 are the criteria established as the MACT floor or beyond-thefloor level that the supporting analysis demonstrat ed requires control. That is, Group 1 process vents meet the § 112(d) requirement s for control and Group 2 vents do not. In the case of subpart U, the defini tions of Group 1 and 2 front-end continuous process vents reflect this conclusion fr om the original rulemaking MACT analysis, which EPA has not proposed to change . Nor has the Agency proposed requiring control of the organic HAPs in t hese Group 2 streams, a critical step, since the halogen removal requirements are as sociated with process vents that are combusted to comply with an organic HAP re moval requirement.7

As explained in the preamble to this proposal, the Agency is proposing requiring halogen control of Group 1 halogenated front-end co ntinuous process vents where a facility opts to meet the existing 98% organic HA P control requirement by combustion. The logic for this proposal as present ed in the preamble is that 1) the halogen emissions are “significant emissions not pr eviously regulated,” 2) such control is required under other rules, and 3) this proposed requirement is costeffective as a beyond-the-floor step. Requiring ha logen control of Group 2 halogenated continuous front-end process vents is n ot mentioned in the preamble
discussions and meets none of these three criteria. In fact, such a requirement would discourage sources from voluntarily reducing organic HAP in these Group 2 vents and would cause sources to reroute Group 2 ha logenated continuous frontend process vents currently routed to the flare to the atmosphere. The original MACT analyses found that the vents meeting the Grou p 2 criteria are not significant, since the top 12% of sources were not controlling vents with Group 2 characteristics. No rule of which we are aware req uires halogen or organic HAP control for Group 2 process vents since the purpose of the Group 2 designation is to distinguish those vents that do not require cont rol. EPA’s own analysis for Group 1 continuous front-end process vents indicate s control of these vents is only marginally cost-effective and thus it certainly wou ld not be cost effective to control Group 2 vents.

The Agency has provided nothing in the record to su pport this proposed regulatory language. There is no preamble discussion and no a nalyses that would overturn the original MACT floor determination. Thus, requi rements of the Clean Air Act (CAA) and Administrative Procedures Act (APA) have not been met relative to requiring control of halogens generated by the comb ustion of Group 2 halogenated continuous front-end process vents.

Finally, we point out that proposed § 63.485(q) ind icates that paragraph (q)(1) contains exemptions to the requirements of (q), but the proposed new language for (q)(1), in fact, adds the halogen control requireme nt instead. Thus, the proposed language of (q)(1) and the existing language of (q) are inconsistent. As we discuss separately, we do not believe requiring halogen con trol of Group 1 halogenated continuous front-end process vent is justified as a beyond-the-floor step, but if the Agency decides to finalize that requirement it shou ld revise proposed §§ 63.483(q) and (q)(1) as follows to eliminate the Group 2 requ irement and to clarify the confusing language of the proposal:

1. If the Agency decides not to finalize the propo sed halogen control requirements for any of the three subcategories, as we recommend, it should leave the existing § 63.485(q) language unchanged.

2. If the Agency decides to require control of onl y Group 1 halogenated continuous front-end process vents from all three s ubcategories it should simply reserve § 63.485(q)(1).

3. If the Agency decides to require halogen control of some of the subcategories, but not all, it should maintain the existing §§ 63. 485(q) and (q)(1) language8 and delete the name of the subcategory for which it is adding the halogen control requirement from the existing §63.485(q)(1)

.

C. The proposed emission limit, and compliance dem onstrations, should be based on the mass of material going to the back-end

.

Proposed. § 63.494(a)(4) would establish back-end H AP emission limits for the Butyl and Halobutyl subcategories, among others. T hese limits are proposed to be expressed in units of Mg organic HAP emissions per Mg of Butyl or Halobutyl rubber produced. However, the “mass of rubber prod uced” is an ambiguous term as these units produce more than one product. We r ecommend the divisor of this term be clarified by using more precise terminology . The “mass of rubber produced” can be the mass of rubber produced in the polymerization reactor (reactor product), the mass of rubber leaving the s trippers, or the mass of rubber that is shipped to customers or storage (final prod uct or “boxed” production). The
mass of the latter is somewhat different than the m ass of the former two, since some off-specification product is discarded as wast e, some small amount of reactor product is lost through coating out on equi pment or being removed when equipment is cleared for maintenance, and some fini shed rubber is reprocessed.

The definition of back-end in § 63.481 of subpart U is clear on where the back-end

starts.

Back-end refers to the unit operations in an EPPU following the stripping operations. Back-end process operations include, bu t are not limited to, filtering, coagulation, blending, concentration, dr ying, separating, and other finishing operations, as well as latex and crumb st orage.

With clarity on where the back-end starts, we recom mend that the divisor for the back-end limit be clearly defined as the “mass of r ubber leaving the stripper (stripper product).” This is also consistent with the way production is reported in the ICR data that served as the basis for this prop osal and the CBI letter.

IV. Basis for Establishing the Floor and the Propos ed Emission Limitations

A. EPA does not have legal authority in this rulema king to establish new limits for process vents.

1. EPA is without authority to impose new standards under §§ 112(d)(2) and (d)(3) for the P&R1 source categories since a MACT standard already has been promulgated – § 112(d)(6) provides the Agency’ s only authority to adjust existing MACT standards.

Once EPA establishes a MACT standard for a particul ar source category, the Agency has the authority under § 112(d)(6) to “revi ew and revise as necessary (taking into account developments in practices, pro cesses, and control technologies), emissions standards promulgated unde r this section no less often than every 8 years.” In other words, EPA doe s not have unfettered9

discretion to revisit a prior MACT determination on ce that determination has been issued. Rather, EPA may revise a prior determ ination only “as necessary” according to explicit statutory criteria

. Cf. New Jersey v. EPA , 517 F.3d 574, 582 (D.C. Cir. 2008) (“Thus, EPA can poin t to no persuasive evidence suggesting that section 112(c)(9)’s plain text is ambiguous. It is therefore bound by section 112(c)(9) because ‘for E PA to avoid a literal interpretation at Chevron step one, it must show either that, as a matter of historical fact, Congress did not mean what it appe ars to have said, or that, as a matter of logic and statutory structure, it almos t surely could not have meant it,’ Engine Mfrs. Ass’n v. EPA , 88 F.3d 1075, 1089 (D.C. Cir. 1996), showings EPA has failed to make.”).

In this proposal, EPA explains that, “For eight sou rce categories subject to three of the MACT standards, we identified signific ant emission sources within the categories for which standards were not previou sly developed” and that, “We are proposing MACT standards for these emission sources pursuant to CAA section 112(d)(2) and (3)." 75 Fed. Reg. at 65 074. This explanation makes it clear that EPA is not invoking § 112(d)(6) as the authority for the new proposed standards – indeed, the preamble provides no analysis of “developments in practices, processes, and control technologies” to justify the proposed standards, as would be required if EPA wer e relying on § 112(d)(6). And, there is no mention of § 112(d)(6) in relation to the proposed new standards. Instead, the Agency is invoking §§ 112( d)(2) and (d)(3) directly, as if a MACT standard for these sources categories doe s not already exist.

As explained above, once EPA makes a MACT determina tion for a particular category, § 112(d)(6) provides the only authority f or the Agency to later review and possibly revise the determination. Section 112 (d)(6) expressly authorizes EPA to review existing determinations and provides specific criteria to guide
and constrain the review. The existence of this ex press authority forecloses the Agency’s ability to directly invoke §§ 112(d)(2) an d (d)(3) for a given source category when a MACT determination has already been issued for the source category.

Notably, even if the Agency had invoked § 112(d)(6) as authority for revising the existing P&R1 rule, it still would not have aut hority to regulate emissions points for which standards were not established in the original rulemaking. The original MACT determinations may be revised only “a s necessary (taking into account developments in practices, processes, and c ontrol technologies)....” Perceived “gaps” in the original MACT determination s are not “practices, processes, and control technologies” that are prope rly within the scope of a § 112(d)(6) review.

2

. In any event, it is not a reasonable exercise of au thority to establish new emissions limitations under an existing NESHAP stan dard when there is no significant risk associated with emissions from sources in the given source category.10

EPA asserts in the proposed rule the proposition th at standards must be established for “significant emissions points” not currently regulated under existing NESHAP standards – even in circumstances w here the Agency has determined that the existing NESHAP standard protec ts health and the environment with an ample margin of safety. Establ ishing new standards under these circumstances is patently unreasonable and ca nnot be justified under § 112(d)(6).

In the case of the P&R1 NESHAP, EPA explains that f or the Epichlorohydrin source category and based on a detailed assessment of risk to health and the
environment due to HAP emissions from these source categories, “we continue to propose that the current MACT standard provides an ample margin of safety to protect public health and the environment, and w e are proposing to re-adopt the existing MACT standard to satisfy section 112(f ) of the CAA.” 75 Fed. Reg. at 65098. EPA previously had made this determinati on for both the Butyl Rubber and EPR source categories and yet in this ru lemaking the Agency proposes new emission limitations/controls for Buty l Rubber and EPR front-end process vents and Butyl Rubber back-end process ven ts. 73 Fed. Reg. 76620 (Dec. 16, 2008).

As explained above, EPA has no direct authority und er §§ 112(d)(2) and (d)(3) to create new limits in source categories for which a MACT standard already has been promulgated. But, even if EPA had invoked § 112(d)(6) as authority for adopting the proposed new standard for back-end process operations, such a standard would not be justified because EPA’s own analysis demonstrates that the existing MACT standard provides an ample m argin of safety to health and the environment. In fact, EPA plainly admits f or the Epichlorohydrin source category that “the MACT standard, prior to the impl ementation of the proposed emission limitation to the back-end process operati ons discussed in this section, provides an ample margin of safety to prot ect public health.” 75 Fed. Reg. at 65099.

In the case of the Butyl Rubber and EPR source cate gories, EPA’s residual risk evaluation, 73 Fed. Reg. 76220, not only found that the public is protected with an ample margin of safety, but that the risks are s o low that they would not meet EPA’s criteria for population risk reduction ( i.e., reducing the number of people exposed to an above one in one million cance r risk). In fact, as EPA
states in the residual risk no further action notic e, for these source categories “No HAP that are known, probable, or possible human carcinogens are emitted from sources in the category.” Id. at 76225, Table 4, Note 6. A similar finding is reported relative to EPA hazard index of concern (HI 1.0). EPA concluded the maximum hazard index for the EPR source categor y is 0.5 (due to nhexane) and 0.2 for the butyl source category (due to methyl chloride). Id. at 76225, Table 4.

In these circumstances, it is patently unreasonable for EPA to regulate beyond the point that the standard has been found to alrea dy provide an ample margin of safety. This is regulation for the sake of regu lation and, as such, contradicts11

Congress’s clear intent that an ample margin of saf ety is an appropriate stopping point for emissions limitations under § 11 2 .4

B. Back-end Butyl and Halobutyl emissions potentia lly available for additional

control.

The following tables identify the n-hexane emission s that comprise the current floor
for the back-end and the n-hexane emissions that ar e potentially available for control from the ExxonMobil Baytown Butyl Rubber an d Baton Rouge Halobutyl Rubber units, based on the information provided to EPA in response to the ICR.

4 EPA also explains in the context of the proposed n ew limit for back-end process operations that, beca use the existing MACT standard already provides an ample ma rgin of safety, “we do not believe it will be neces sary to
conduct another residual risk review under CAA sect ion 112(f) for this source category 8 years followi ng promulgation of new front-end process vent and back-end process limitations, merely due to the addition of these ne w MACT requirements.” 75 Fed. Reg. at 65111. Implicit in this statement is the suggestion that a residual r isk review under § 112(f) may be needed for new emissions limits that are established for existing MACT standards. As wi th setting MACT standards in the first instance, § 112(f) prov ides a one-time opportunity for conducting a residu al risk review of
a MACT standard. There is no basis under the law f or the suggestion that a revision to an existing MA CT standard triggers the need for another § 112(f) residual ris k review. Indeed, the proposal provides no explana tion whatsoever as to why such a subsequent review could be require d under the law.12 Baytown Butyl Rubber Unit (Butyl Subcategory)

2009 Back-end Emissions, n-hexane

Emission ID/Description Emissions
Tons/Year Comments

RGTO 28.09 Partially controlled; reported to EPA in ICR; includes maintenance bypasses of existing RTO

BPBFinish 26.19 Uncontrolled; reported to EPA
in ICR

Subtotal 54.28

Less equipment leaks (including surge control vessel emissions) in
BPBFinish and RGTO 11.27 Emission limit should be

based on emissions not already subject to subpart U requirements

Basis for floor 43.01 Prior to including variability

Less emissions already controlled 17.24 Emissions from existing RTO

Emissions basis for beyond-thefloor analysis (Note 1) 25.77

Note 1: This item includes emissions not routed t o the RTO and emissions associated with maintaining the existing RTO, as di scussed in item E of this section and in our discussion of the beyond-the-flo or analysis in Section V.13 Baton Rouge Butyl Rubber Unit (Halobutyl Subcategor y)

2006 Back-end Emissions, n-hexane

Emission ID/Description Emissions,
Tons/Year Comments

S-88, TTU 18.32 Controlled: reported to EPA in ICR

M-53, M-58, V-127, V-131 41.66 Uncontrolled; reported to EPA in ICR; continuous process vents and maintenance bypasses of existing
RTO

Basis for floor 59.98 Prior to including variability

Less emissions already
controlled 18.32 Emissions from existing RTO

Emissions basis for beyondthe-floor analysis (Note 1) 41.66

Note 1: This item includes emissions not routed to the RTO and emissions associated with maintaining the existing RTO, as di scussed in item E of this section and in our discussion of the beyond-the-flo or analysis in Section V.

C. EPA must include variability in establishing ba ck-end emission limitations for the floor or for the proposed new requirements.

In establishing the back-end emission limits for th e Butyl and Halobutyl subcategories. EPA did not consider variability, w hich is appropriate in setting emission standards. It is acceptable and expected for EPA to consider emission levels associated with normally anticipated and rec urring operating conditions, and decisions of the D.C. Circuit acknowledge that data from more adverse operating conditions can inform the basis of the st andard. Thus, EPA should
establish a standard that MACT floor units can meet if operating “under the most adverse circumstances which can reasonably be expec ted to recur.” Sierra Club v. EPA, 167 F.3d 658, 665 (D.C. Cir. 1999), quoting National Lime Ass’n v. EPA, 627 F.2d 416, 431 n.46 (D.C. Cir. 1980).

Indeed, in that 1999 Sierra Club decision, the court emphasized:

"EPA would be justified in setting the floors at a level that is a reasonable estimate of the performance of the ‘best controlled similar unit’ under the worst reasonably foreseeable circumstances ... ."

167 F.3d at 665. Accord Cement Kiln Recycling Coalition v. EPA, 255 F.3d 855, 863 (D.C. Cir. 2001).14

In the Cement Kiln case, EPA argued that it is acceptable for it to co nsider the range of emissions from the best performing sources and that test results at more adverse conditions “’are more helpful than normal o perating data would be in estimating performance under a variety of condition s and thus in helping to assure that properly designed and operated sources can ach ieve the standard.’” Cement Kiln, 255 F.3d at 867 (quoting EPA). The court affirmed this interpretation. Id. Furthermore, the D.C. Circuit in its 2004 decision in Mossville Environmental

Action Now v. EPA "

held that floors may legitimately account for varia bility because "'each [source] must meet the [specified] s tandard every day and under all operating conditions.'” 370 F.3d 1232, 1242 (D .C. Cir. 2004), as quoted in Sierra Club v. EPA, 479 F.3d 875, 882 (D.C. Cir. 2007).

In this proposal, EPA only used one data point, th e emissions level for one year for the units in the Butyl Rubber source category, and did not look at statistical variation over time. And if EPA revisits the Butyl Rubber subcategories then EPA
should also consider other factors such as the vari ability in source design and operation within a subcategory.

D. The emission limitation for the back-end proce ss in the Butyl Rubber subcategories should reflect several variability fa ctors that impact

emissions.

For the Butyl Rubber subcategories, there are a num ber of factors that contribute to the variability of organic HAP emissions on an e missions per unit of production basis. These factors include production itself, as not all emissions (e.g., surge control vessels) are a function of production. Oth er factors include grade slate changes, operating and weather conditions, process reliability and control device reliability/service factor. As an example, several pieces of equipment (primarily the flash drums and strippers) are used to remove h exane from the polymer slurry fed to the back-end. Through normal process variations in temperature, pressure, liquid level, and fouling rates in the fl ash drum/stripper equipment, the amount of hexane fed to the back-end can vary. Als o, the current RTOs require maintenance on a variable frequency, oftentimes sev eral multi-day instances per year. This is impacted by equipment age and servic e life.

In determining annual emissions variability our foc us was on the Baton Rouge Halobutyl unit. The significant investments and mo difications at the Baytown unit over the last ten years results in a more difficult analysis to differentiate variability from the impact of process changes. The table incl uded in the CBI letter summarizes annual emissions per unit of production at the Baton Rouge facility for the last ten years.

As detailed in our CBI letter, over the last ten ye ars the n-hexane back-end emissions per unit of production varied by 43% from 2006 at Baton Rouge, with 2006, the year reported in the ICR, among the lowes t years in the time period. In order to appropriately capture the variability in e missions, with 2006 as the base year, the floor emission limit or the post new cont rol emission limit should be15

increased by at least 43%. Using only the 2006 dat a would mean that the site
could not have met the limit in four of the last fi ve years, which clearly would not represent the current floor or future capability un der the existing subpart U.

A variability adjustment of at least 43% is also a reasonable adjustment for the ExxonMobil Baytown Butyl Unit, because the factors it represents (i.e., proportion of emissions that vary with production, grade slate changes, operating conditions, process reliability and control device reliability/service factor) are similar to those for the ExxonMobil Baton Rouge Hal obutyl Unit.

E. EPA must recognize that maintenance of the exis ting regenerative thermal oxidizers (RTOs) is required to achieve maximum org anic HAP destruction.

As also discussed in section VI, RTOs are the prefe rred control devices for controlling back-end emissions because of their ene rgy efficiency (and thus much lower energy consumption and secondary emissio ns) when combusting large streams of air containing only low concentrat ions of hydrocarbon. However, in exchange for their efficiency in handli ng dilute air streams with a reasonable energy demand, RTOs require regular main tenance. RTOs operate by having two packed bed reactors, one that is hot and handling the hydrocarbon destruction and one that is being heated up by the exhaust gas from the first bed. These beds switch regularly as the bed temperature of the in-service reactor drops to a preset point. Large, automated valves m ake the bed switches quickly and efficiently. However, this is a difficult serv ice and valve leakage is a predictable problem. Such leakage allows some hydr ocarbon to bypass the hot reactor and the desired overall 98% organic HAP rem oval could quickly be unachievable. Thus, it is critical that these valv es be well-maintained, which also is required by the general duty requirement in prop osed § 63.483(a)(1) to maintain control equipment. In order to do this ma intenance, the RTO must sometimes be bypassed while the back-end continues to operate. In addition to valve maintenance, these systems have other moving parts and packed beds in demanding services that sometimes must be maintaine d with the RTO out-ofservice. For instance, corrosion is an ongoing pro blem in the collection system and repair of that system sometimes requires an RTO outage. The timing of RTO maintenance cannot always be set with back-end outages.

It appears that EPA’s proposed emission limit did n ot account for the need to bypass the back-end control devices to allow this m aintenance, though these emissions are reported in our ICR submissions. The existing Butyl back-end sources at Baytown are currently permitted to allow bypass emissions during maintenance work on the control device up to the pe rmitted limit, and with the use of purchased Emission Reduction Credits, the by pass is allowed under the State 30 TAC 115 VOC rules. At Baton Rouge an allo wance for bypass emissions is included in the unit operating permit.

This issue can be addressed by establishing a back- end emission limit that recognizes the bypassing that currently occurs for the current RTO-controlled emissions and by allowing for it for any additional emissions that will be16

controlled by an RTO. We have indicated this in ou r tables of emissions in
Section V.

F. Summary of Butyl Rubber back-end floor.

The following table summarizes the recommended emis sions basis for the floor level of emissions for the ExxonMobil Baytown Butyl and Baton Rouge Halobutyl

units:

Floor Analysis Summary

n-hexane, Tons

Baytown Butyl Baton Rouge Halobutyl

Basis for floor 43.01 59.98

Variability adjustment (43% minimum) 18.49 25.79

Floor emission limit 61.50 85.77

Should the Agency impose back-end emission limits, those limits should include at least a 43% adjustment for variability and include an equivalent maintenance
allowance to that demonstrated to be needed for the existing RTOs for any additional emissions that will require new control.

V. Basis for Beyond-the-Floor Decisions

As explained above, EPA has no direct authority und er §§ 112(d)(2) and (3) to create new limits in source categories for which a MACT standard already has been promulgated. Furthermore, as explained below, EPA has no authority or factual basis to re-visit the beyond-the-floor analyses con ducted in 1996.

A. EPA already made the decision that beyond the f loor controls for continuous front-end process vents were not cost-ef fective in the 1996 rulemaking. EPA has no authority and no grounds to perform a second § 112(d)(2) analysis for these emission points.

In the 1996 final rule, EPA was aware that halogena ted vent streams were vented to a flare or boiler at Butyl Rubber, Halobutyl Rub ber, and EPR facilities. While the flare or boiler provided control for the organi c HAP, methyl chloride, it was well-known that hydrogen chloride would be generate d by the combustion process. After considering this information, EPA d etermined that the floor for control of this organic HAP was combustion in a fla re or boiler and that beyondthe-floor control of the HCl generated in the combu stion was not cost-effective and not justified. EPA explained:17 Only one existing facility was identified in each o f the Halobutyl and the Butyl rubber subcategories. At both of these facilities, halogenated vent streams
were vented to a flare and/or boiler. Since both of these subcategories were single-facility subcategories, the MACT floor was d etermined to be the existing level of control. The EPA examined the imp acts of requiring halogenated vent streams at the Halobutyl and Butyl rubber facilities to comply with the proposed requirements for all other elastomer subcategories (i.e., the HON-level of control). The EPA concluded that the costs associated with this level of control were not reasonable, giv en the associated emission reduction. Therefore, the proposed regulation allow ed halogenated streams at Halobutyl and Butyl rubber facilities that were rou ted to a flare or boiler prior to proposal to continue to be controlled with these combustion devices, without additional control for the resulting halide s. ...

...[T]he EPA concluded that four of the five EPR faci lities have halogenated
streams that are routed to either a boiler or flare . For this reason, the EPA
has determined that the floor for EPR is the existi ng level of control for these halogenated vent streams. In addition, as with Halo butyl and Butyl rubber, the
EPA does not believe that it would be cost-effectiv e to require new
incinerators and scrubbers to be installed at these facilities, when the only net emission reduction would be the reduction of the hy drochloric acid, since the reduction of the halogenated organic compound in th e incinerator would be the same as was already being achieved in the boile r or flare. However, as noted above, sufficient stream-specific information was not available to conduct this analysis. Therefore, the final rule ha s been changed to extend the exemption for existing halogenated streams rout ed to a boiler or flare to EPR producers. Further, the final rule specifies th at this exemption does not apply to new sources.

61 Fed. Reg. at 46919.

This passage from the 1996 rulemaking clearly demon strates that EPA has conducted a complete analysis under §§ 112(d)(2) an d (d)(3). Therefore, EPA met its obligation to set a technology-based emissi ons standard for these HAPs in these categories and subcategories. EPA’s only aut hority to revisit the rulemaking, in the absence of a timely legal challe nge to this particular standard in the P&R1 rule, which was not lodged, are the 8-year technology review and the one-time residual risk review. Those reviews, too, were completed and final action noticed at 73 Fed. Reg. 76220, again without challenge. Even as part of a periodic technology review, EPA is not required, an d we believe not allowed, to
“start from scratch.” NRDC v. EPA, 529 F.3d 1077, 1084 (D.C. Cir. 2008).

The 1996 rulemaking also undercuts EPA’s claimed ba sis for revisiting the standard – the “absence of a standard for a signifi cant emissions source.” 75 Fed. Reg. at 65108-65109. EPA performed the required st andard-setting analysis under § 112(d)(2) consistent with D.C. Circuit prec edent. This is not a case of “no control floors” or source “exemptions,” which the D .C. Circuit has held to be
unlawful under section 112. Nat’l Lime Ass’n v. EPA, 233 F.3d 625 (D.C. Cir. 2000); Sierra Club v. EPA, 551 F.3d 1019 (D.C. Cir. 2008) cert. denied , 130 S. Ct.18

1735 (2010). In this case, EPA determined that the existing level of control for the halogenated compounds – a flare or boiler – was all that was required, and the
reduction in HCl was not the floor and not cost-eff ective. The “exemption” in the 1996 rule is from “HON-level” controls, not all con trol.

We are not aware of any prior MACT rule where EPA, in the absence of a court decision, rule vacatur, or settlement agreement, re visited a beyond-the-floor analysis. EPA should not do so in this rule.

B. EPA’s beyond-the-floor determination for haloge nated front-end process vents at the ExxonMobil Baton Rouge EPR Unit that i s based on sharing controls with the co-located Halobutyl Unit exceeds EPA’s legal authority and is technically and operationally impractical.

1. EPA does not have the legal authority to justify beyond-the-floor controls in one source category by combining the source cate gory with controls for another source category. Decisions must be mad e on a source category by source category basis.

Section 112(d) directs EPA to establish emission st andards for each category or subcategory of major sources of listed HAPs. In considering whether to impose a standard “beyond the MACT floor” on a cate gory or subcategory, EPA must consider among other factors “the cost of achi eving such emission reduction.” § 112(d)(2). To meet this directive, EPA performs a costeffectiveness analysis using the cost of potential beyond-the-floor controls and the resulting tons per year emission reduction.

Although EPA has discretion in considering costs in setting emission standards under CAA programs, e.g. Husqvarna AB v. EPA , 254 F.3d 195 (D.C. Cir. 2001), EPA’s discretion is not unlimited. Arteva Specialties v. EPA , 323 F.3d 1088 (D.C. Cir. 2003) (remanding LDAR provisions of Group IV Polymers &
Resins NESHAP to EPA based on fact that record did not support that EPA’s cost-effectiveness analysis was reasonable). EPA’s basis and methodology for analyzing costs must be reasonable and comport with the underlying statutory provisions. Section 112 is structured to impose em issions standards on individual source categories, and EPA is required t o conduct a separate analysis for each category or subcategory. § 112(d )(1). While EPA grouped nine source categories, and several subcategories, under subpart U based on similarities in emission points and types of contro ls, EPA originally considered each category and subcategory on its own merits, in cluding the cost of achieving emission reductions. 61 Fed. Reg. at 46 908.

In the current proposed rule, EPA found that one of three EPR existing units (the ExxonMobil Baton Rouge EPR Unit) combusted hal ogenated continuous front-end process vents in a flare, resulting in so me byproduct HCl emissions. 75 Fed. Reg. at 65108. EPA similarly determined th at the one unit in each of the subcategories Butyl Rubber and Halobutyl Rubber combusted halogenated continuous front-end process vents in a flare. Id. at 65109. As discussed, this was also the case during the 1996 rulemaking and wa s considered at that time.19

Hazardous Air Pollutant Emissions from Process Unit s in the Elastomer Manufacturing Industry, Basis and purpose Document for Proposed Standards, EPA 453/R-95-006a, May 1995, section 6. After cond ucting a new beyond-thefloor analysis, EPA is proposing beyond-the-floor r equirements for halogenated continuous front-end process vents for all three so urce categories. Under this new set of requirements, these vents could not be s ent to a flare and, if combustion is used to control the organic HAP, the HCl produced by the combustion would have to be removed. The most prac tical control alternate, and the one evaluated in the beyond-the-floor analy sis, is installation of a new thermal oxidizer followed by a halogen scrubber. Id. at 65108-65110.

For the Butyl Rubber and Halobutyl Rubber units, EP A’s cost analysis

concluded that the additional controls would be rea sonable and cost-effective. However, for the EPR unit, EPA found that the addit ional control was not costeffective. The Agency then re-evaluated controls f or that EPR facility on the

basis that it would share the additional controls w ith the Halobutyl Rubber unit,
with which it is co-located. For this shared contr ol case, EPA concluded that
the additional controls are cost-effective. Id. at 65109-65110. More specifically, in the “Regulatory Alternative Impact s for Group 1 Polymers and Resins Source Categories”, dated July 19, 2010, EPA notes that the costeffectiveness for halogenated continuous front-end process vent beyond-thefloor controls on the ExxonMobil Baton Rouge EPR Un it is $21,600/ton, for the ExxonMobil Baton Rouge Halobutyl Rubber Unit it is $5,800/ton, and if you

combine the vents from the two units the cost effec tiveness is $6,700/ton.

EPA is, however, required to perform the beyond-the -floor analysis, including cost consideration, separately for each source cate gory or subcategory. EPA recognized as much during the original subpart U ru lemaking when EPA determined that beyond-the-floor controls were not cost-effective for the Butyl Rubber and Halobutyl Rubber facilities. 61 Fed. Re g. 66919. Furthermore, in litigation over the Group IV P & R rule, 40 CFR Par t 63, Subpart JJJ, EPA clearly explained that it conducted a separate cost -effectiveness analysis for each subcategory. EPA told the court:

EPA then determined, with one exception, that the r ule was achievable considering costs, based on cost effectiveness for each subcategory .... FN5. Within the PET manufacturing category, plants use different feedstocks (dimethyl terephthalate (“DMT”) or terep hthalic acid (“TPA”)) and different processes (batch or continuous), which ma y affect emission characteristics and controllability. 60 Fed. Reg. a t 16,092 (March 29, 1995)

. Based on these factors, EPA created five subcategor ies: DMT-batch, DMTcontinuous, TPA-batch, TPA-continuous and TPA-conti nuous multiple end
finisher. Id. Any one facility may have multiple process units th at fall under different subcategories. In determining whether to adopt beyond-the-floor leak detection and repair standards for each subcat egory, EPA conducted separate analyses for each subcategory.

Brief of Respondent EPA, Arteva Specialties , 323 F.3d 1088 (emphasis added).20

Thus, EPA understood and represented to the court t hat it must conduct a separate cost analysis for each subcategory, even w hen affected units could be co-located and potentially share control equipment.

In the instant rulemaking, EPA cannot fabricate cos t-effectiveness by assuming units in separate source categories could share con trol devices. Section 112(d) requires category-by-category standard-setting, and we are aware of no other rulemaking where EPA has combined different source categories for the purpose of setting NESHAP standards. Moreover, it is unreasonable, arbitrary and capricious for EPA to take advantage of the fac t that these source categories and subcategories are comprised of a sin gle source (or essentially a single source in the case of the EPR analysis where only one facility reported HCl emissions). In a typical situation where a sou rce category would consist of multiple facilities, EPA would never be able to mak e a cost-effectiveness determination on such a facility-specific basis.

2. EPA’s analysis, based on combining the Butyl Rub ber (Halobutyl subcategory) and EPR source categories to justify b eyond-the-floor halogenated continuous front-end process vent contr ols for the EPR source category, is inappropriate and inconsistent with maintaining business operating flexibility and how controls wou ld be implemented.

While it is common practice to tie numerous operati ng units/ source categories to a flare system for control, this practice become s problematic for control devices that require a higher level of preventive a nd ongoing maintenance. Flare systems are relatively low-maintenance and op erate for many years without outages. Additionally, multiple flares are usually connected in order to provide continued emission control even if a partic ular flare is being maintained. Thermal oxidizers and halogen scrubbers, on the oth er hand, due to more moving parts and the severity of service, require m ore maintenance and typically are not spared (and the cost of sparing w as not included in the cost or cost-effectiveness analyses). In this particular s ervice, corrosion is expected to be a particular service factor issue. Sharing a th ermal oxidizer/scrubber system, as EPA proposes, puts the operation of both units at unacceptable risk. Any significant maintenance need or outage of the c ontrol would require the shutdown of both units. Unplanned shutdowns of the control would result in dual violations (since shutdowns take time) and pot entially large shutdown

excess emissions as both units would have to make s imultaneous emergency shutdowns. This causes many problems. Supplies of both products would be impacted and startup and shutdown costs and emissio n increases would occur unnecessarily. Another concern would be extended m aintenance shutdowns of the shared control, because advantage could not be taken of the downtime to coincide major turnarounds on the two process units . Because of the size and complexity of these units, simultaneous major turna rounds are not feasible. Overall, then, having a shared control, will cause lost production, extra process unit outages and increased emissions.

The Halobutyl Rubber and EPR businesses at Baton Ro uge are distinctly different in terms of the customer base, supply cha in for alternate sourcing, and21

operating flexibility. Since the proposed incinera tor/scrubber requirement, in EPA’s analysis, ties the two units together, operat ing flexibility is limited as
discussed above. Feedback from the businesses indi cates that this is an unacceptable business basis and that separate contr ol devices are needed to assure business viability. Consequently, EPA’s ana lysis either needs to consider significant lost business and other costs and emission impacts in the beyond-the-the floor analysis for the proposed comb ined control; include the significant cost of a spare thermal oxidizer and ha logen scrubber, which would clearly result in a determination that the controls are not cost-effective; or justify the new halogen control requirement on the basis of separate controls for each

unit.

While we do not provide detailed cost estimates in Section VI for incinerator/scrubber controls separately for the Ha lobutyl Rubber and EPR source categories (primarily because we knew even o n a combined basis controls are not cost-effective), we have scaled th e estimate we developed for a shared control to two separate units that would h andle the flow from the separate production units. Using that cost basis, results in the following costeffectiveness result:

1. Halobutyl Rubber: > $20,600/ton

2. EPR: > $51,000/ton

For both of these cases, this analysis indicates th at controls are not costeffective.

C. The cost-effectiveness criteria for this proposa l was not clearly defined by EPA, but recent experience suggests a level of appr oximately $10,000 per

ton of HAP reduced.

In the proposal, EPA does not clearly indicate what the cost-effectiveness criterion is for decision-making to require controls in the b eyond-the-floor analysis. EPA determined that front-end controls for Butyl Rubber ($7,900 per ton of HAP reduced), front-end controls for Halobutyl and EPR combined ($6,700), and backend controls for Butyl Rubber ($7,000) were cost-ef fective. Back-end controls for Halobutyl Rubber ($47,300) and front-end controls f or EPR alone ($21,600) were

not considered cost-effective.

In other rulemakings, factors that appear to be con sidered when EPA determines cost-effectiveness include the toxicity of the HAP (mercury, for example, would justify a higher cost-effectiveness criteria) and w hether or not there are significant co-pollutant reduction benefits. As already determ ined by EPA’s residual risk analysis, the health risk and concerns associated w ith the HAP emissions from the Butyl Rubber and EPR source categories are minimal. Although ExxonMobil generally does not agree that EPA has authority to base NESHAP decisions on co-pollution reductions, co-pollutant reductions fo r the proposed front-end controls and for the Butyl Rubber subcategory are minimal an d don’t factor into the analysis.22

Several other EPA decisions on cost-effectiveness w ere reviewed and noted as
follows:

1. For Epichlorohydrin Elastomer Production, which is also addressed in this proposal, EPA determined that the beyond-the-floor cost of $31,000/ton for back-end process operations, to achieve a 35 ton/ye ar HAP reduction, was not justified. EPA also noted that since the reduction was due to toluene there would be no reduction of cancer risk, a similar sit uation to the n-hexane emissions from the Butyl Rubber source category bac k-end operations. It was

also noted that there would be increases in criteri a pollutants and an increase in energy use. 75 Fed. Reg. 65099.

2. In another chemical industry rule EPA determined that “... the incremental cost-effectiveness relative to the 85 percent contr ol option is estimated to be $13,500/ton. This cost is unreasonable.” NESHAP f or Chemical Manufacturing Area Sources; October 29, 2009; 74 Fe d. Reg. 56023.

3. In the Miscellaneous Organic NESHAP (MON), anoth er chemical industry rulemaking, EPA determined that various beyond-the- floor options in the $13,300 to $17,300 range were not cost-effective. The options related to lowering the control trigger level for batch proces s vents, lowering the control trigger for flow and concentration for wastewater, and lowering the HAP vapor pressure trigger for storage vessels. Hazardous Air Pollutant Emissions from Miscellaneous Organic Chemical Manufacturing and Mi scellaneous Coating Manufacturing, able 5.1, p 5-8, September 2001.

In summary, while EPA did not clearly define the co st-effectiveness criteria for this rulemaking, it appears that using no more than $10, 000/ton would be consistent with other Agency decisions for a rule of this type and for the HAP emissions targeted. Any substantive increase in this metric for this rulemaking would be arbitrary as there appears to be no basis for a sub stantive change in policy.23

D. Summary of the emission sources to be included in evaluating the beyondthe-floor options.

If, despite its lack of authority, EPA proceeds to finalize further controls, the tables that follow summarize, for halogenated continuous f ront-end process vents, the appropriate HCI emissions basis for a beyond-the-fl oor analysis for the Butyl and EPR facilities and the potential maximum HCI reduct ions. The back-end beyondthe-floor emissions basis analysis was included in Section IV of these comments.

1. Baytown Butyl Rubber Front-End

2009 Emissions, HCl

Emission ID/Description Emissions tons/year Comments

FS12 (flare stack) 30.09 Reported to EPA in ICR

Less emissions not from continuous process vents 5.39 Loading rack, exchanger depressurization, safety bypass

Basis for beyond-the-floor analysis 24.70

Potential emissions
reduction with controls 24.5 99% control

2. Baton Rouge Halobutyl Rubber Front-End

2006 Emissions, HCl

Emission ID/Description Emissions tons/year Comments

Emissions reported to EPA 76.80 Reported to EPA in ICR

Basis for beyond-the-floor analysis 76.80

Potential emission reduction
with controls 76.0 99% control24

3. Baton Rouge EPR Front-End

2005 Emissions, HCl

Emission ID/Description Emissions tons/year Comments

Emissions reported to EPA 24.05 Reported to EPA in ICR

Basis for beyond-the-floor analysis 24.05

Emissions reduction with

controls 23.8 99% control

E. The proposed front-end beyond-the-floor control s for Baton Rouge Halobutyl, Baton Rouge EPR, and Baytown Butyl Rubbe r are not costeffective and should not be finalized.

In the proposed rule EPA determined that halogen co ntrols on the halogenated continuous front-end process vents for the EPR sour ce category and the Butyl and Halobuyl subcategories of the Butyl Rubber source c ategory, based on installation of an incinerator and scrubber, are justified based on cost-effectiveness. The ExxonMobil cost analysis, which is included in Sect ion VI of these comments and is based on a significant engineering scoping and c ost estimating effort, indicates that the controls are not justified.

In addition to cost, the cost-effectiveness calcula tion requires an estimate of the
emission reduction that will be achieved. For Grou p 1 halogenated front-end process vents, the potential emission reduction can be estimated as 99% (the required HCl removal) times the amount of HCl gener ated from combusting the chlorinated organic HAPs in the vents. In subsecti on D, above, we provided our estimate of the HCl emission reduction potential, w hich is slightly different from the EPA estimates due to clarifications of the data pro vided to EPA in our ICR

response.

The cost-effectiveness for the proposed halogenated continuous front-end process vent requirements ranges from $20,000/ton t o $80,000/ton. The EPA and ExxonMobil analyses are summarized below.25 Cost-Effectiveness for Proposed Front-end HCI Contr ol

EPA Analysis

Process Capital

Cost $K Annual

Cost $K HCl

Reductions
Tons/Year Costeffectiveness $/Ton

Baton Rouge

EPR 985 424 19.6 21,600

Baton Rouge Halobutyl 985 445 76.0 5,900

Baton Rouge
Combined 1,120 642 95.6 6,700

Baytown Butyl 669 235 29.8 7,900

ExxonMobil Analysis

Process Capital

Cost $K 1 Annual

Cost $K HCl

Reductions
Tons/Year Costeffectiveness $/Ton Comments

Baton Rouge

EPR 9,600 1,220 23.8 51,100

Baton Rouge Halobutyl 12,400 1,570 76.0 20,700

Baton Rouge
Combined 13,300 1,690 99.8 16,900 Not practical/ legal case

Baytown Butyl 16,200 1,960 24.5 80,100

1 Includes Project Services costs

Note: Annual cost includes capital cost times a cap ital recovery factor of .1098 (as proposed) plus operating costs.

F. The proposed back-end beyond-the-floor controls for Baton Rouge Halobutyl and Baytown Butyl Rubber are not cost-eff ective and should not
be finalized.26

In the proposal beyond-the-floor analysis, EPA dete rmined that additional controls on the back-end vents for the Baytown Butyl Rubber unit were justified based on cost-effectiveness, and that additional controls fo r the Baton Rouge Halobutyl Rubber unit were not cost-justified. The ExxonMobi l analysis, on the other hand shows that control of the back-end process is not c ost-effective for either unit. The cost-effectiveness for the proposed back-end co ntrol requirements ranges from $55,000/ton to $70,000/ton.

Section VI provides our estimates of the cost for t he controls that would be required to comply with the proposal, based on a si gnificant engineering scoping and cost estimating effort. For the reasons discus sed in Section VI, these cost

estimates are the best available cost basis for use in the beyond-the-floor calculations for the proposed Butyl and Halobutyl c ontrols and EPA should adopt

them.

In addition to cost, the cost-effectiveness calcula tion requires an estimate of the

emission reduction that will be achieved. For the back-end processes, the potential emission reductions are lower than EPA ha s estimated. Our estimate of the emission reduction potential is as follows, beg inning with our estimate of the emissions basis for the beyond-the-floor analysis, as derived in Section IV of

these comments.

Potential Emission Reductions (Tons organic HAP)

Baytown Butyl Baton Rouge

Halobutyl Comments

Emissions basis for the beyond-the-floor analysis
from Section IV.B 25.77 41.66

Less maintenance bypasses around existing
RTOs 20.77 34.91 Required to maintain 98% destruction during normal operation of the existing RTOs (See discussion in Section IV)

Emissions after allowance for capture inefficiency (1%) 20.56 34.56

Emissions after allowance
for RTO destruction inefficiency (2%) 20.15 33.87

Note: For base years reported in ICR27 The cost effectiveness for the proposed back-end pr ocess emission limitations
are summarized as follows.

Cost Effectiveness for Proposed Back-end Control

EPA Analysis

Process Capital

Cost $K Annual

Cost $K n-hexane

Reductions
Tons/Year Costeffectiveness $/Ton

Baton Rouge Halobutyl 951 1,607 34.0 47,300

Baytown Butyl 235 181 25.7 7,000

ExxonMobil Analysis

Process Capital

Cost $K 1 Annual

Cost $K n-hexane

Reductions
Tons/Year Costeffectiveness $/Ton

Baton Rouge Halobutyl 18,100 2,450 33.9 72,300

Baytown Butyl 12,500 1,530 20.2 75,600

1 Includes Project Services costs

G. EPA should update the Economic Impact Analysis t o reflect more realistic industry costs and the reduced U.S. competitiveness that will result from the proposed added control costs.

EPA included in the docket the “Economic Impact Ana lysis for National Emission
Standards for Hazardous Air Pollutant Emissions: Gr oup I Polymers and Resins”, dated July 16, 2010. In the memo EPA summarized th e annualized costs for the P&R1 facilities and provided an estimate of the cos t to sales ratio. EPA needs to update the Economic Impact Analysis for the followi ng reasons:

1. As indicated in this comment package, EPA has si gnificantly underestimated
the cost of controls.

2. The analysis lacks any assessment of the impact on U.S. supply competitiveness as a result of increased U.S. manuf acturing costs not incurred by other worldwide suppliers. In international mar kets added costs incurred by28 one geographic region are unlikely to be passed alo ng to customers, thereby reducing incentives to supply from the U.S.

3. The analysis lacks any assessment of the impact of the proposed shared Halobutyl/EPR control on operating flexibility, sup ply capability, or international competitiveness of the two businesses.

VI. Emission Control Cost

A. ExxonMobil has extensive experience and compreh ensive systems for the development and execution of capital projects.

For more than 125 years, ExxonMobil has been a lea der in the evolution of energy and energy technology. Worldwide capital an d exploration expenditures have averaged over $20 billion for the last five ye ars. A key to the company’s success has been a disciplined capital management p lan coupled with the goal of flawless project implementation.

ExxonMobil’s proven project management system inco rporates best practices developed around the world. Emphasis on the early phases of concept selection and effective project execution results in investme nts that maximize resource and asset value. We also complete a rigorous reapprais al of all major projects and incorporate the findings from these reappraisals in to future project planning and design, further strengthening our capabilities.

B. ExxonMobil has a structured process to develop capital projects, including

cost estimates.

ExxonMobil has a capital project management system that uses periodic management gate reviews and check points to ensure that capital investments are aligned with safety, environmental, and busines s needs. The structured activities included in the process are designed to assure that projects are conducted in a safe and environmentally responsible manner, deliver assets of appropriate quality, meet cost and schedule expecta tions, and achieve commercial success. The system provides a common f ramework for capital projects across the entire company.

The various project stages include: development pl anning; evaluation/selection of alternatives; further optimization/definition; deta iled design, procurement, construction; and startup/operation. A project pro ceeds through a series of gates with each gate representing a milestone decision po int based on an acceptable level of project definition. The gates typically r epresent go/no-go decision points for business ventures; for other projects (e.g. saf ety/environmental) they represent detailed reviews of project bases, critic al path activities, and project schedule/success risks. A gate review would includ e various project elements, including, for example, technology selection, fundi ng, staffing, planning issues, project cost estimates, contracting/purchasing stra tegies, safety and environmental considerations, information managemen t, and project timeline.29

C. ExxonMobil prepared cost estimates for the prop osed controls as the first step in project development.

During typical project development ExxonMobil prep ares a number of estimates with each reflecting cost of the project at some de fined milestone of design definition. As project definition is improved thro ughout the development process project estimating accuracy improves.

Typical project estimates include:

1. Direct material: identified material costs for the physical components of permanent plant facilities; equipment (e.g. emissio n control devices, heat exchangers, pumps, distillation columns); other mat erial items (e.g. piping, instrumentation, electrical, structural steel, conc rete pads).

2. Direct labor: field installation costs, includi ng prime contractor and

subcontractors.

3. Indirect costs: overhead costs associated with plant construction (e.g. scaffolding, field supervision, construction equipm ent); costs for engineering and procurement of permanent plant facilities.

4. Contingency: budget for future changes that are expected but are unknown at the time of the estimate (e.g. design changes, exec ution developments).

In developing cost estimates for the controls requ ired to comply with this proposal, ExxonMobil included the following steps:

1. Cost estimators worked closely with site technic al contacts to develop a project basis. This information includes:

(i) Location of each emission source and the routi ng of the piping/ducting to

the oxidizer. (ii) Stream characteristics, such as gas flow and concentration. (iii) Oxidizer location and location of utilities. (iv) Other items that will be required to install the oxidizers (e.g. demolition of old facilities to make room for the new equipment, structural modifications
needed to install the back-end controls on a finish ing (back-end) building’s roof).

2. The cost estimators visited the sites to survey the existing plants and the proposed locations of the new equipment. The purpo se of this visit was for the cost estimator to understand the project scope and to try to identify any complexities and complications that would affect th e cost estimate.

(i) The team reviewed potential issues with support ing systems (e.g. wastewater treatment facilities, availability of el ectrical connections, other utilities).30 (ii) The team reviewed site access and congestion i tems that could impact construction or design.

3. Major and specialty equipment quotes were solici ted from third party contractors based on specific flow conditions and d esign requirements. The quoted components include material costs and instal lation estimates for:

(i) Thermal Oxidizers and Acid-Gas Scrubbers. (ii) Ductwork from emission sources to oxidizers.

4. The other direct cost items (pumps, piping, inst rumentation, foundations, etc.) were estimated in detail using proprietary ExxonMob il estimating methods (based on data and experience from previous and on- going projects).

5. The indirect costs and contingency were then est imated by using ExxonMobil’s estimating methods for similar project s. Contingency is added based on estimate accuracy studies of previous proj ects at this projects development stage.

Some of these activities went beyond steps normally taken at this early phase of project development. Site visits are not usually ma de at this stage of a project, but it was deemed necessary because of the complexi ties associated with the installation and connection of the new equipment to an operating plant with limited space available.

D. Exxon Mobil has experience in the cost of insta llation and operation of thermal oxidizers at other locations; actual projec t costs support ExxonMobil’s current control cost estimates and hig hlights how EPA’s estimates are significantly understated.

Actual cost information was collected for thermal oxidizer projects completed by ExxonMobil in the last 10 years. These projects we re completed around the world, so, for comparison purposes, these costs wer e converted from their source location and source time frame to a comparab le cost in 2013 in Baytown, Texas. This conversion was made using ExxonMobil p roprietary factors based on regularly published cost updates. These cost up dates are produced from ExxonMobil’s worldwide project experience and regul ar surveys of Engineering /
Procurement / Construction contractors.

Each cost total represents the total cost of the t hermal oxidizer project scope. This means it includes the material, labor, and eng ineering of the thermal oxidizer itself and all the associated ducting, pip ing, electrical and instrument components, and other support facilities.31 Summary of Actual Project Capital Costs

Project Year of

Installation Airflow

(kscfm) VOC

(lb/hr) Capital

Cost ($M)

Site A: U.S. 2002 57 206.0 14.2

Site B: U.S. 2002 40 88.4 9.5

Site C: U.S. 2005 20 25.8 7.3

Site D: Europe 2003 /

2005 60 287.0 12.1

Note: M = million

More detailed information on these proje cts, including location, is included in the
CBI letter.

Each project is different due to such factors as d ifferent plant layouts, the availability of utilities, and plant specific requi rements. These four projects represent a good mix of possible thermal oxidizer p rojects. In summary, the
installed costs of thermal oxidizers at four locati ons shows a typical actual cost of $7M to $14M, which is comparable to, and supports, the cost estimates developed for the controls potentially required by EPA’s P&R1 proposal. Our actual experience also further highlights how EPA’s control cost estimates are deficient and significantly understated.

E. Equipment selection for n-hexane emissions cont rol

To support project development, a technology selec tion assessment was prepared to optimize control technology effectivene ss and costs for the intended service. This section, and the following, provide background on the assessment.

The back-end emission streams from the Butyl and H alobutyl finishing operations are characterized as having a high volume of ambien t air with a range of 20,000 - 80,000 acfm (actual cubic feet per minute) and with very low concentrations of VOCs (volatile organic compounds) with a range of 4 0 to 500 ppm (parts per million) by volume. Also, these streams approach s aturation with moisture and contain significant quantities of sticky particulat es. The particulates require filtration to prevent down-stream plugging of ducti ng and control equipment. A portion of the contained moisture condenses in the ducting, requiring removal, with the remaining portion staying in the process s tream and passing through the control equipment. The control equipment selection requires that all these issues be considered so that the chosen technology can mee t a high VOC destruction efficiency and reasonable service factor under thes e conditions.

Control of the VOCs contained in this stream requi res addition of a considerable quantity of energy, in the form of natural gas, to achieve the desired thermal32

destruction of 98%. Not only is the large volume o f air being heated, but the contained water vapor must also be raised to a temp erature of 1450 ° F - 1550 ° F
to achieve destruction of the contained VOCs. The control equipment selection therefore must accomplish these requirements with s ignificant thermal efficiency
and contribute minimum NOx emissions. Low NOx emis sions are of particular importance in the Baton Rouge and Baytown areas whe re ozone attainment is an

issue.

For this set of conditions, a Regenerative Thermal Oxidizer (RTO) is the technology of choice. A well-designed RTO has a de struction efficiency that can meet 98%. Also, the contained media can achieve a thermal efficiency of 95% which reduces the addition of natural gas by 95% as opposed to a conventional thermal oxidizer. The addition of natural gas is t ypically achieved by injection just upstream of the media bed. This injection point ha s the benefit of producing very low NOx emissions because the incoming process stre am is preheated to a temperature that approaches ignition by the heat re claimed from the destructed VOCs. A normal thermal oxidizer will have an ignit ion burner that will have a flame temperature that can approach 3000 ° F and will produce significant quantities of NOx even with the use of low NOx burn ers because the burner must provide all the heat required to bring the air stre am to VOC destruction temperatures. Even a recuperative thermal oxidizer , which has some heat recovery, requires much more fuel combustion than a n RTO, and therefore generates much more NOx..

Another desirable feature of a RTO is its ability to minimize the service factor impact of the significant amount of water vapor tha t is contained in the process stream. An RTO design has a limited amount of surf ace area that falls below the dew point temperature of the trace amounts of acid gases that may be present in the destructed gas stream, thereby significantly re ducing corrosion in the thermal oxidizer versus a standard design.

The presence of trace amounts of acid gases and mo isture requires that significant portions of the oxidizer and collection system be fabricated from metal alloys that can resist corrosion attack at temperat ures that range from ambient to

those in excess of 1500 ° F. Therefore, the ducting that connects the indivi dual
collection hoods to the RTO will be made of 304 SS (Stainless Steel). The inlet and outlet ducting manifolds are capable of seeing temperatures up to 600 ° F and will use a combination of 316 SS to RA 2205 (Royal Alloy). The media support beams within the RTO experience a wide swing of tem peratures and will be fabricated from AL 6XN alloy. All of these materia ls are selected specific to the conditions they will experience.

F. Equipment selection for MeCl/HCl emissions contr ol

The front-end emission streams from the Butyl Rubbe r and Halobutyl Rubber polymerization operations are characterized as havi ng highly variable flow rates and high, but very variable, concentrations of Meth yl Chloride (MeCl) and very low concentrations of other compounds. Therefore, the control equipment33

selection requires that additional ambient dilution air be introduced to achieve the desired 98% destruction efficiency.

Control of the MeCl contained in these streams als o requires energy addition, in the form of natural gas, to reliably accomplish the rmal destruction as the MeCl content and stream flow can vary greatly (e.g., <1 to > 800 lb/hr MeCl and 19 to >3900 lbs/hr stream flow at the Baytown Chemical Pl ant). Each process stream must be raised to a temperature of ~1400 ° F to achieve destruction. Following thermal oxidation the produced acid gases (HCl) wil l require cooling and scrubbing with a sodium hydroxide and water solutio n to neutralize the hydrochloric acid. The control equipment selectio n, therefore, must accomplish these requirements with significant thermal efficie ncy and contribute minimum NOx emissions to the atmosphere.

Selection of a Recuperative Thermal Oxidizer (RCO) followed by a quench and acid gas scrubber are the technologies of choice fo r this situation. A welldesigned RCO and acid gas scrubber can achieve the specified organic HAP destruction (98%) and HCl removal (99%). Also, the heat exchange surfaces can reclaim 60 to 65% of the heat produced during o xidation for use in preheating the combustion air and process gas stream. This will reduce the need for additional natural gas when low concentrations of MeCl are present in the feed stream. The ability to preheat a combustion a ir stream has the added benefit of producing very low NOx emissions because the incoming process stream and air mixture is preheated to a temperatur e that approaches ignition by
the heat reclaimed from the oxidized MeCl. A norma l thermal oxidizer will have a fired burner that will have a high flame temperatur e and will produce significant quantities of NOx, even with the use of low NOx bur ners.

Because of corrosion concerns, the RCO will be fab ricated from Inconel 625 and 316 SS (Stainless Steel) the quench section will be made of Hastelloy C-276, the acid gas scrubber will be FRP (Fiberglass Reinforce d Polyester) and the induced draft fan and discharge stack will be 304 SS. All of these materials are selected specific to the conditions they will experience.

G. Summary of capital costs for proposed control de vices.

The table below summarizes ExxonMobil’s estimates f or the controls identified in the proposal. For comparison purposes, a combined Halobutyl Rubber and EPR front-end control system was estimated, since that is the basis for EPA’s beyondthe-floor decision, though as we discuss in Section V, a shared system is neither legally or practically viable. Where we have evalu ated the cost-effectiveness of the realistic case of separate controls, we have sc aled this cost estimate for the combined unit using the design flows and well-estab lished scaling approaches.

The total capital cost covers the capital cost of e ngineering, buying, and installing the selected control device and all auxiliary items . These numbers are based on installation in Baytown or Baton Rouge and a 2013 m echanical completion date. They exclude Project Services Costs, which are disc ussed in the CBI letter. The
CBI letter also includes details on the cost estima tes, including vendor quotes.34 Controls Equipment

RTO RCO Scrubber Design Flow (scfm) Total Capital

Cost $M

Baytown Butyl Front-End
Controls 5,700 13.0

Baton Rouge Halobutyl and
EPR Front-End Controls 2,650 10.6

Baytown Butyl Back-End
Controls 70,000 10.0

Baton Rouge Halobutyl
Back-End Controls 80,000 14.5

H. Summary of operating costs for proposed control devices.

In addition to project costs there will be ongoing operating costs associated with the facilities. These costs typically include:

1. Energy-related (natural gas and electricity)

2. Maintenance (routine and preventive maintenance; materials and labor)

3. Operating labor

4. Other utilities (wastewater, steam, plant air, n itrogen)

5. Other costs such as administrative, taxes, insur ance, overhead

The following table summarizes the major operating costs for the four sets of

controls. Details on the cost estimate basis are i ncluded in the CBI letter.35 Operating Costs, k$

Cost Category Baton Rouge

Halobutyl and
EPR FrontEnd Controls Baytown Butyl

Front-End
Controls Baton Rouge

Halobutyl BackEnd Controls Baytown Butyl

Back-End
Controls

Natural Gas 52.0 11.8 71.0 23.7

Electricity 13.2 17.6 301.9 114.3

Maintenance 120.0 120.0 60.0 15.0

Operations 39.5 39.5 26.3 6.6

Total 224.7 188.9 459.2 159.5

Note: k = thousand

I. EPA’s capital and operating cost estimates for the controls proposed have major deficiencies and significantly underestimated the expected costs.

New Plant Installations versus Retrofits

EPA’s pollution control cost manual states,

“All costs are for new plant installations; no retr ofit cost considerations are

included.”

EPA Air Pollution Control Cost Manual - Sixth Editi on (EPA 452/B-02-001). Entire Document. Page 528/752.

The installation of a thermal oxidizer in an exist ing plant poses a number of challenges that the EPA Manual and method do not ad dress.

1. Oxidizer Location. Construction of a new unit a llows for optimization of the plot plan. This means that the designer can shuffl e equipment around and position an oxidizer very close to the emission sou rces. Because the proposed controls will be installed in existing uni ts with limited space to place equipment, the oxidizers will have to be located at least 300 feet from the emission sources. This leads to a significant cost in ducting to bring the

emissions to the oxidizers.

2. Working in and around an Operating Unit. Workin g near an online unit creates a number of delays that slow down work and cost more money. These include such things as a more thorough work-p ermitting procedure, interruptions from the plant (events such as gas le aks), extra safety requirements, and long distances between the work a reas and material staging areas. These delays can reduce productivit y by up to 30%.36

3. Tie-ins. When collecting emissions from existin g sources, connecting the new equipment or piping to existing equipment or pi ping is referred to as a tie-in. Tie-ins to operating units require extra p lanning and engineering, as

well as extra labor to make sure the connection occ urs smoothly. Many of the tie-ins for these projects will be hot-taps, wh ich are especially difficult. Hot-taps involve connecting a new pipe to an existi ng one that is in operation without disturbing the operation of the existing pi pe.

4. Limited Utilities Available. Adding an oxidizer to an existing unit requires electricity, natural gas, steam, and other utilitie s. A unit seldom has spare capacity for all the utilities needed; therefore ex tra capacity has to be built. For example, if all the electrical breakers in a su bstation are in use, an additional unit may need to be added to power just a few pumps or fans.

5. Engineering. Significant additional engineering will be required not only for the new facilities to be installed, but also to add ress the impact on existing equipment and operations.

Equipment Costs – RCO versus RTO

For the back-end controls, ExxonMobil typically use s Regenerative Thermal Oxidizers (RTOs) versus Recuperative Thermal Oxidiz ers (RCOs). RTOs require a higher initial investment, but make up fo r it in fuel savings. This is because RTOs can achieve up to 95% heat recovery. More details on the selection of RTOs can be found in the equipment sel ection discussion at the start
of this section.

The EPA estimate assumed a direct flame incinerator (0% heat recovery) for the back-end controls at the Baytown Butyl Plant, and a recuperative thermal oxidizer (70% heat recovery) for the Baton Rouge Ha lobutyl plant. This led to lower capital equipment costs than if they had used their methods to estimate RTOs. The table below shows what the equipment cos t would be for RTOs
based on EPA’s Cost Manual.

Baytown Butyl Baton

Rouge Halobutyl

Total Gas Flow (scfm) 13,037 28,096

0% Heat Recovery Incinerator 95,876

70% Heat Recovery Incinerator 276,310

Regenerative Thermal Oxidizer 1 371,238 545,471

Percent Increase 387% 197%

1 These calculations come directly from EPA’s Air Po llution Control Cost Manual.37

Auxiliary Equipment

According to the EPA’s Control Cost Manual, the tot al Purchased Equipment Cost (PEC) is the sum of the Equipment Cost (EC) pl us any auxiliary equipment, such as ducting or pumps. In the EPA’s cost estima te, no auxiliary equipment was added for the incinerators and only pumps and p acking were added for the

scrubbers.

Because of limited space close to the emission sour ces, the incinerators will be
located 300 ft from the emission sources for 3 of t he 4 projects, and 1,200 ft away for the Baytown Butyl front-end controls. Thi s results in a significant amount of ducting that was not included in the EPA estimate.

In addition to pumps and packing, the scrubbers wil l require a storage drum to hold a 1 hour supply of the scrubbing liquid and a heat exchanger to keep the scrubbing liquid cool. The storage drum and heat e xchanger add up to a significant cost that was not included in the EPA e stimate.

Total Capital Investment Factor

To estimate the Total Capital Investment, the EPA’s Cost Manual first generates a purchased equipment cost, PEC. The PEC is then m ultiplied by a total capital investment factor to generate the Total Capital Inv estment. According to the manual, these factors are 1.61 for incinerators and 2.20 for acid gas scrubbers. In the EPA’s estimate, a factor of 1.25 was used fo r the incinerators that were smaller than 20,000 scfm. The table below shows th e factors in use.

EPA Cost Estimate Total Investment Factors

Front-End Controls Back-End Controls

Baytown Butyl Baton

Rouge Halobutyl

and EPR Baytown

Butyl Baton

Rouge Halobutyl

Incinerator

Purchased Equipment
Cost 138,337 385,012 187,671 590,943

Factor x 1.25 x 1.25 x 1.25 x 1.61 Total Capital Cost 172,921 481,264 234,589 951,419

Scrubber

Purchased Equipment
Cost 225,636 290,516
Factor x 2.20 x 2.20 Total Capital Cost 496,400 639,13638

Compared to typical ExxonMobil projects, these fact ors are quite low. A typical ExxonMobil project would have a ratio of 4 or 5 rat her than 1.61 or 2.20. The
reason for this difference is the EPA method assume s small indirect costs, whereas ExxonMobil’s project experience indicates t hese costs are very significant.

According to the EPA Cost Manual, indirect costs sh ould be 31% of the purchased equipment cost for an incinerator, and 35 % for a scrubber. Indirect costs consist of engineering, construction supervis ion, scaffolding, construction equipment, and other field expenses. EPA also incl udes the estimate contingency in the indirect cost category. In a ty pical ExxonMobil project, the indirect costs, engineering, and contingency is 200 % to 300% of the purchased equipment cost.

ExxonMobil projects require a significant amount of engineering. Engineering for new construction in an operating plant containing h ydrocarbons is a tedious and complicated process. It is essential to design a s ystem that is low risk and very safe. Impact on existing facilities requires addit ional engineering.

The contingency for this estimate at this stage is relatively high because of uncertainties in scope. Small changes in design or execution strategy could have a very large impact on cost. At this early point i n the project, numerous assumptions are made and changes/developments in sc ope are expected. For example, if it is determined that another emission source will have to be added to the control device, it will impact the RTO size, du cting, and utility requirements. These small changes actually have a large impact on the cost, especially as the project gets closer to completion. A change late in a project has a large cost impact because it can result in a significant amoun t of rework.

In summary, the EPA estimate is inadequate for four reasons:

1. It does not include retrofit considerations.

2. It assumes that recuperative thermal oxidizers w ill be installed for back-end controls. ExxonMobil typically uses regenerative t hermal oxidizers for these controls because the additional investment is justi fied by the operating cost savings and the lower NOx emissions.

3. It does not include the significant costs for au xiliary equipment, such as ducting, storage drums, or heat exchangers.

4. The total capital investment factor used is much too low for a major retrofit project and does not produce enough cost for indire ct costs, engineering, or contingencies. It does not reflect the safety and other facility requirements necessary in an existing operating plant.39

VII. Compliance Time

A. EPA should provide 4 years to comply with emiss ion limits that require capital investment to install controls; the automat ic one year extension should be incorporated into the final rule.

EPA’s rulemakings related to the Boiler/Process Hea ter MACT, other air toxics rules, and utility air rules will trigger a signifi cant demand for combustion engineers, company resources, materials, and constr uction resources to meet those compliance deadlines. This proposal provides three years for compliance

where controls will have to be installed. As EPA h as assumed in its supporting analyses, these will be combustion controls. While three years is oftentimes reasonable for installing such controls, it is inad equate in this case due to the widespread demand for combustion-related resources. The Agency should provide, in the final rule, an additional one year of compliance time for any unit subject to an emission limit under this regulation. This additional one-year extension is pursuant to CAA § 112(i)(3)(B), and 40 CFR 63.6(i).

B. EPA should allow four years for compliance even when the back-end emission limit is set at the floor and no beyond-th e floor controls are required.

EPA proposes that for the Halobutyl Rubber subcate gory a back-end emission limit that would be based on the emissions data pro vided for a single year and no beyond-the floor controls would be required. Based on this, and an expectation that no capital investment would be required, EPA p roposes a compliance date one year from the date of the final rule. However, the no capital investment assumption is potentially in error, depending on th e final rule for the following

reasons:

1. The proposed emission limit for Halobutyl Rubber was based on one year of data with no allowance for variability. As we indi cate in our discussion of variability in section IV of these comments, the em ission factor derived from that year’s data must be increased by at least 43% to reflect the historic variability of emissions from that unit. Without t hat adjustment, in most years
the unit will exceed the floor limit and it will ta ke considerable time and potentially capital investment, to ensure the emiss ion limit can be met for all 12-month periods.

2. The removal of the existing startup and shutdown provisions and the failure to include reasonable replacements will force the deve lopment of new work practices and may require added capital investment for further controls given the obligation of compliance at all times.

3. In addition, the proposed rule does not currentl y consider the state permit
conditions available to the sites to allow for main tenance on the existing RTOs. This effectively tightens the standard appli cable to the Halobutyl unit and makes it likely that upgrades to the existing R TO or other capital investment will be required.40

C. EPA should clarify that, in the absence of allo wing four years as recommended above, for back-end emission limits not requiring controls the first compliance demonstration is two years (24 months) following the

date of the final rule.

For back-end process provisions that EPA anticipate s would not require controls, it is proposed that compliance with rule requiremen ts be required no later than one year from the date of publication of the final rule. The compliance determination in § 63.495(g)(5) says: “each month, divide the total mass of organic HAP emitted for the 12-month period by the total mass of elastomer produced during the 12-month period.” Thus, as com pliance is required beginning one year after rule publication, data col lection begins in the 13 th month. Since compliance is based on annual emissions (53 M g/yr for Halobutyl in the proposal) this requires data to be collected for 12 months after the compliance date before a compliance determination can be made, and then the determination is made every month thereafter. So i n effect, compliance can only
be demonstrated after 24 months from the date of th e final rule.

There has been some indication that EPA believes th at the first month’s data (13 th month from the date of the final rule) should be u sed to demonstrate compliance, and then, after two months, the two mon th emissions and production data should be used to determine compliance, etc. Such an interpretation would be patently inconsistent with the proposed rule lan guage and the emission limit, which is a rolling 12-month limit. Using performan ce from shorter time frames to compare against a 12-month emission limit effective ly increases the stringency of the standard by eliminating monthly variability. F or example, the first month could have higher than normal emissions due to grad e slate. The proposed rule emission limit did not factor in monthly variabilit y nor did the rule consider the potential added capital investment required to meet a more stringent limit. In the final rule EPA should clarify that, in the absence of allowing four years as recommended above, for emission limits that EPA bel ieves will not require controls, the first compliance demonstration is two years (24 months) following
the date of the final rule.

D. The timing of the backend compliance calculatio n needs to be corrected.

The regulatory language in § 63.495(g)(5) requires calculating the 12-month average emissions for Butyl and Halobutyl back-end process emissions. However, the proposed language requires that you do the calculation before the end of the 12th month. The rule language says: “ea ch month, divide the total mass of organic HAP emitted for the 12-month period by the total mass of elastomer produced during the 12-month period.” Th is is impractical since there is additional production and emissions occurring ri ght up until the end of the month. The regulatory language should be revised t o provide that each month you calculate the 12-month average emissions and pr oduction for the previous calendar 12-month period.

E. EPA should clarify that the compliance date rel ated to removal of the Startup/ Shutdown/ Malfunction provisions is also f our years.41

In the proposed rule EPA did not indicate the compl iance date related to the removal of the Startup/ Shutdown/ Malfunction provi sions. Given that potential emissions during startup and shutdown periods were not incorporated into the 1996 standard, facilities may have to invest capita l to improve or add controls and certainly will have to develop new work practices, test them and train personnel. As a result, they would need up to four years for p roject construction and implementation and to implement needed work practic e changes. Startups and shutdowns occur infrequently. In fact, there is li kely to be only one major unit turnaround in a four year period. Thus, even work practices will take an extended time to develop and test, since sources must wait f or planned startups and shutdowns to determine if a particular work practic e meets the newly imposed emission limits. This is a particular concern for the back-end emission limits, since those are 12-month averages. Therefore, it t akes up to 12 months to determine if a startup or shutdown has caused the e mission limit to be exceeded.

VIII. Startup/Shutdown/Malfunction (SSM) and Affirm ative Defense

A. EPA has misread Sierra Club v. EPA

EPA asserts that its treatment of excess emissions during SSM events in the proposed rule is consistent with the D.C. Circuit’s decision in Sierra Club v. EPA

, 551 F.3d 1019, which vacated the exemption for exce ss emissions during SSM
events contained in the 40 C.F.R. Part 63 General P rovisions for emission standards for hazardous air pollutants under § 112. EPA claims that the D.C. Circuit’s interpretation of the definition of “emis sion standards” requires EPA to apply MACT emission standards at all times, compell ing EPA to eliminate the SSM exemption from subpart U. 75 Fed. Reg. at 65074. While that statement may be literally accurate — “exempting” emissions entirely , so that they would not be subject to any emission standard, would not satisfy the requirement of the Sierra
Club panel — the opinion does not preclude EPA from app lying a different emissions standard during SSM events than applies d uring normal operations. In fact, the opinion acknowledges that CAA § 302(k)’s “inclusion of [the] broad phrase” “any requirement relating to the operation or maintenance of a source to
assure continuous emission reduction” in the defini tion of “emission standard” suggests that EPA need not “necessarily continuousl y apply a single standard.”
551 F.3d at 1027. See also id . at 1021 ("accepting that 'continuous' for purpose s of the definition of 'emission standards' under CAA section 302(k) does not mean unchanging"); id. (referring to "the CAA's requirement that some sec tion 112 standard apply continuously") (emphasis added).

Thus, EPA cannot hide behind the Sierra Club decision as a justification for ignoring the inability of even the “best performers ” to achieve the proposed emission standards during SSM events. If EPA sets the emission standards based on the “best performing 12% of units in the categor y,” those limitations must on average be “achieved” by the best performers. An e mission limitation that applies during SSM events has not been demonstrated to be “ achieved” by the bestperforming 12% of units in the category” unless EPA can show that those best performers actually meet that emission limitation d uring SSM events.42

The D.C. Circuit also has recognized that standards based on what sources
achieve must account for the limitations inherent i n the technology used to reduce emissions. For example, in a case reviewing NSPS u nder § 111 of the CAA,
Portland Cement Ass’n v. Ruckelshaus , 486 F.2d 375, 398 (D.C. Cir. 1973), the court acknowledged that “’startup’ and ‘upset’ cond itions due to plant or emission device malfunction, is an inescapable aspect of ind ustrial life and that allowance
must be made for such factors in the standards that are promulgated.” Id. at 399;

see National Lime Ass’n v. EPA , 627 F.2d 416, 431 n.46 (D.C. Cir. 1980) (noting that “a uniform standard must be capable of being m et under most adverse conditions which can reasonably be expected to recu r”). The D.C. Circuit acknowledged this same principle when reviewing emi ssion standards for new

sources in the medical waste incinerator rule under CAA § 129 in Sierra Club v.

EPA , 167 F.3d 658 (D.C. Cir. 1999). In that case, whi le the court did not find the record sufficient to support EPA’s approach for new sources, the D.C. Circuit did not object to a standard-setting approach which wou ld account for the performance of technology under the “worst reasonably foreseeab le circumstances.” See id. at 665. Furthermore, the D.C. Circuit reiterated the principle in National Lime that “where a statute requires that a standard be ‘achie vable,’ it must be achievable
‘under the most adverse circumstances which can rea sonably be expected to
recur.’” Id. at 665 (citing National Lime Ass’n v. EPA , 627 F.2d at 431 n.46). EPA’s MACT approach in the proposed P&R1 NESHAP ign ores these longstanding principles by applying the same set of standards at all times, including SSM.

Courts have reached a similar conclusion when consi dering analogous Clean Water Act requirements that EPA establish technolog y-based effluent limitations based on the best available control technology. Kn owing that there would be periods where a discharger, even with “exemplary us e of” the identified best technology, would exceed the effluent limitations b ecause of conditions “beyond the control of the permit holder,” EPA violated the Clean Water Act by failing to provide an “upset provision” to address those perio ds. Marathon Oil Co. v. EPA

, 564 F.2d 1253, 1273-74 (9th Cir. 1977). See also, e.g., NRDC v. EPA , 859 F.2d at 207 (distinguishing between technology-based efflue nt limitations, where some provision for “upsets” is required, and water-quali ty-based effluent limitations, which are tied to achieving water quality standards rather than based on available technology, and therefore need not include an upset provision). 5

As noted above, the Sierra Club panel did not prevent EPA from adopting emission standards that are different for SSM periods than f or normal operation. Nor did it conclude that EPA is barred from using a “requireme nt relating to the operation or
maintenance of a source to assure continuous emissi on reduction” as the emission standard that applies during such events. See 551 F.3d at 1027. All that decision

5 Weyerhaeuser Co. v. Costle , 590 F. 2d 1011 D.C. Cir. 1078), does not support EPA’s position. In that case, the court was discussing a “technology forcing” standar d, rather than one, like MACT and NSPS, that is to be based on what is already being “achieved” or has been demonstrated to be achievable. Also, the decision came long before NRDC v. EPA, 859 F.2d 156 (D.C. Cir. 1988) which, as noted above , affirmed the need for an upset provision to address circumstances where compliance with effluen t limitations is impossible through no fault of the permittee, and
which endorsed Marathon Oil

.43

rejected was EPA’s assertion that it had discretion to decide not to impose any emission standard whatsoever during SSM periods. See id . at 1027-28, 1030 (noting that EPA was not claiming that the General Provisions SSM exemption was either an emission standard under § 112(d) or a des ign, equipment, work practice, or operational standard under § 112(h)). 6

B. EPA should propose a separate emission limit or apply work practice standards during periods of SSM to appropriately re cognize the operating and emission differences during these periods.

EPA’s failure to provide specific standards applica ble to SSM periods in the proposed P&R1 NESHAP is contrary to the statute’s r equirement that the standards established under § 112(d) be “achievable .” Furthermore, EPA’s data analysis used in developing the proposed standard d oes not reflect the consideration of emissions during startup and shutd own periods. Although the proposed rule contains a discussion regarding EPA’s position with respect to considering malfunction emissions in developing § 1 12(d) standards, 75 Fed. Reg. at 65074, which these comments address below, EPA a ppears to presume that startup and shutdown emissions will comply with the existing and proposed standards for normal operations. While acknowledgi ng that “[p]eriods of startup ... and shutdown are all predictable and routine aspect s of a source’s operations,” id.

, EPA’s proposal provides no information that startup and shutdown data were considered in EPA’s floor-setting process.

EPA has two choices to address startup and shutdown emissions. First, EPA could promulgate numerical emission standards that apply to startup and shutdown emissions. To promulgate such a standard, EPA need s to have data to determine which facilities are the best performing sources du ring startup and shutdown periods. EPA either needs to identify or collect t his data and propose one or more standards applicable during startup and/or shutdown

.

Second, given the current lack of and difficulty in measuring and collecting data for startup and shutdown emissions, it would be appropr iate for EPA to set work practices for these events. Section 112(h) allows EPA to set work practice
standards for situations where “it is not feasible in the judgment of the Administrator to prescribe or enforce an emission s tandard,” defined as any situation where “the application of measurement met hodology to a particular class of sources is not practicable due to technological and economic limitations.” §§ 112(h)(1)-(2). Gathering data from startup and shu tdown periods would be challenging given the often brief and variable natu re of these periods, the lack of proven methodologies for measuring such emissions, as well as the need to define the exact time period for what is considered “start up” and/or “shutdown” and the extremely variable array of equipment that could be involved in startups and

6 The statement in the majority opinion that “Congre ss gave no indication that it intended the applicat ion of MACT standards to vary based on different time periods,” 551 F.3d at 1028: (1) is contradicted by other sta tements in the opinion, referenced above, that a MACT standard nee d not continuously apply a single emission limitati on, (2) is
dicta , because that was not the situation presented by t he challenge regulations and argued by EPA, (3) ign ores the extensive case law about technology-based limitatio ns referenced above, and (4) does not in any event say that the CAA precludes EPA from adopting different emission limitations that apply during SSM events.44

shutdowns. A work practice approach for these peri ods would satisfy both the statute’s requirement that MACT standards be “achie vable” and the requirement that there be a MACT standard applicable at all tim es.

A work practice approach for these periods also wou ld be consistent with EPA’s recently promulgated MACT standards for compression ignition reciprocating internal combustion engines (CI-RICE). See National Emission Standards for Hazardous Air Pollutants for Reciprocating Internal Combustion Engines, Final Rule, 75 Fed. Reg. 9648 (Mar. 3, 2010). EPA finali zed work practice standards for startup of such engines because the agency determin ed that it was “not feasible to finalize numerical emission standards that would ap ply during startup because the application of measurement methodology to this oper ation is not practicable due to technological and economic limitations.” Id. at 9656. According to EPA, applicable test methods that would be needed to measure during these events “do not respond adequately to the relatively short term and highly variable exhaust gas characteristics occurring during these periods.” Id. at 9665.

For similar reasons, EPA should set work practice s tandards to apply to malfunction periods. EPA argues in the preamble to the proposed rule that these periods should not be considered a “distinct operat ing mode” and uses this position to justify not factoring malfunction emissions into the proposed MACT standards. Considering that EPA’s proposed MACT standards are supposed to apply at all times, the implication is that periods of malfuncti on also are covered by the MACT standards that apply during normal operations. Thi s directly conflicts with the statutory requirement that the MACT standard be “ac hievable.”

Given that the data used to develop the P&R1 NESHAP proposal does not consider malfunctions despite the fact that EPA cla ims malfunctions are not a separate operating mode from normal operations and that the statute requires that the standard be “achievable,” EPA must either recon sider and re-propose the MACT standards considering malfunctions or set a se parate standard, such as a work practice standard to address periods of malfun ctions. Section 112(h) allows EPA to set work practice standards for situations w here “it is not feasible in the judgment of the Administrator to prescribe or enfor ce an emission standard . . . .” Similar to startup and shutdown, malfunctions fit w ith the situations described in the definition of “not feasible to prescribe or enf orce an emission standard” as any situation where “the application of measurement met hodology to a particular class of sources is not practicable due to technological and economic limitations.” Emission testing for malfunctions would be near imp ossible to conduct given the sporadic and unpredictable nature of the events. E PA acknowledges in the preamble to the proposed rule that it is “impractic able” to take periods of malfunctions into account when setting emissions st andards given the “myriad different types of malfunctions that can occur acro ss all sources in each source category” and that “malfunctions can also vary in f requency, degree, and duration, further complicating standard setting” 75 Fed. Reg . at 65074. Section 112(h) work practice standards, therefore, are well-suited to a ddress malfunction periods and the complexities and challenges surrounding collect ing data and establishing
numerical standards for those events.45

An example of an appropriate work practice for SSM periods is one that EPA has had in place for many years, development and use of SSM plans. These plans are carefully prepared, tied to the specific type of op eration, and identify the steps necessary to minimize emissions during SSM periods. If warranted, root cause analyses could be added to further strengthen the w ork practice requirement.

C. The proposed affirmative defense is not a subst itute for setting emission standards for SSM periods.

EPA acknowledges that regulated sources sometimes w ill be unable to comply with standards because of malfunctions, even if the ir equipment is properly designed and maintained, through no fault of the so urce. 75 Fed. Reg. at 65074. Rather than promulgate a separate emission standard that eliminates that situation during SSM, achievable with the identified best tec hnology, EPA offers instead an
“affirmative defense.” Inclusion of the affirmativ e defense would not cure EPA’s failure to meet the § 112(d) requirement to set emi ssion standards that are achievable during SSM events.

Even if the proposed affirmative defense were not u nreasonably restrictive, as discussed below, being able to assert a defense obv iously is not the same as complying with emission limitations in the first in stance, particularly in the case of an emission limitation that the CAA requires be ach ievable. Although a source qualifies for the affirmative defense, it may be co nsidered to have violated the standards—and may have to report violations, certif y noncompliance, etc. Assuming a source successfully demonstrates the aff irmative defense to penalties, the fact remains it has reported a violation of sta ndards and is legally vulnerable.

It is unclear how the affirmative defense would app ly to enforcement actions by state and local governments, or to private citizen enforcement actions under CAA
section 304. While we assume EPA intends the affir mative defense to be available in a citizen suit, still: (a) a lay judge, rather t han environmental experts at EPA, would be assessing the source’s entitlement to the affirmative defense, and (b) it appears that the source might be subject to injunct ive relief, and could be required to pay in the citizen-plaintiff’s attorneys fees, e ven if the source successfully demonstrated that it qualified for the affirmative defense. EPA has not addressed these and other apparent limitations and shortcomin gs of the affirmative defense, which make it an entirely inadequate substitute for setting standards that include provisions for SSM events.

Furthermore, there is no legal basis for outright p recluding application of an affirmative defense to injunctive relief. EPA appa rently believes it will encounter situations where a facility can qualify for the aff irmative defense to civil penalties but there will still be some preventive step EPA wi ll be able to require to avoid a future exceedance. However, in order to qualify fo r the affirmative defense in the first place, a facility must demonstrate, at a mini mum, that it could not have reasonably prevented the exceedance. In most if no t all cases where the affirmative defense applies, there will be no reaso nable injunctive relief available.46

At a minimum, EPA should state that the affirmative defense applies to civil penalties, administrative penalties, and injunctive relief. EPA also should reword the affirmative defense, so that it states a person who demonstrates entitlement to
the affirmative defense “will not be deemed in viol ation of” the subpart U standards. Cf. 40 C.F.R. § 80.613. (stating that persons demon strating specified defenses

“will not be deemed in violation” and are not “deem ed liable for a violation” of diesel fuel sulfur program regulations).

D. The proposed affirmative defense as written is unreasonable and impracticable.

If EPA refuses to set alternative emission standard s that apply during SSM periods and continues to rely instead on the proposed affir mative defense, the affirmative defense must be substantially modified for it to pr ovide any significant, practical value. First, as noted above, the affirmative defe nse needs to state clearly that a source that qualifies for the affirmative defense s hall not be deemed to have violated the applicable standards during that time.

Second, the affirmative defense should be available not only for malfunctions, but also for excess emissions during startup and shutdo wn. There is no logical reason why a source that experiences excess emissions duri ng startup or shutdown that were not reasonably preventable (either because it experienced conditions EPA did not anticipate in setting the standards, or bec ause EPA’s assumption about the achievability of those standards during startup and shutdown periods was wrong)
should be excluded from the affirmative defense.

Third, many aspects of the proposed affirmative def ense make it unavailable as a practical matter for many if not most malfunctions. As further detailed below, several of the conditions for establishing an affir mative defense use phrases that are subject to a wide range of interpretations, and that on their face do not recognize any need for reasonableness or cost-effec tiveness. How will the enforcement authority, or a judge, determine whethe r “proper design” or “better operation and maintenance practices” could have pre vented a malfunction (§ 63.480(j)(4)(i)(A)), whether a recurring malfunc tion is a result of “inadequate design” ( id. ), whether repairs were made “as expeditiously as p ossible” (§ 63.480(j)(4)(i)(B)), whether the source took “all p ossible steps” to minimize the impact of the excess emissions (§ 63.480(j)(4)(i)(E )), and whether emissions control systems were operated “if at all possible” (§ 63.480(j)(4)(i)(F))? In many if not most cases, it may have been possible to avoid the malfunction, or to do more to reduce the magnitude of the excess emissions, if the source had the benefit of hind-sight or if the source had spent unreasonable amounts of money or had imposed economically impracticable constraints on i ts operation. The affirmative defense, as proposed, leaves open the possibility t hat a source will be considered
to be in violation because the enforcement authorit y decides that in one or more respects it would have been “proper” or “possible” for the source to take further steps to prevent or minimize the malfunction.47

1. The proposed affirmative defense notification a nd timing requirements are unnecessary and unreasonable and thus arbitrarily l imit the potential use of the affirmative defense. They should be revised.

Proposed § 63.480(j)(4)(i) says in part, “To establ ish the affirmative defense in any action to enforce such a limit, the owners o r operators of facilities must timely meet the notification requirements of paragr aph (4)(ii) of this subsection, ...”

Proposed § 63.480(j)(4)(ii) provides:

(ii) Notification . The owner or operator of the facility experienci ng an exceedance of its emission limit(s) during a malfun ction shall notify the Administrator by telephone or facsimile (FAX) trans mission as soon as possible, but no later than 2 business days after t he initial occurrence of the malfunction, if it wishes to avail itself of an affirmative defense to civil penalties for that malfunction. The owner or operator seeking to
assert an affirmative defense shall also submit a w ritten report to the Administrator within 30 days of the initial occurre nce of the exceedance of the standard in this subpart to demon strate, with all necessary supporting documentation, that it has met the requirements set forth in paragraph (4)(i) of this subsection.

We believe the notification requirements are arbitr ary and unreasonable. Sites are required to decide within 2 days of the start o f any event whether they want to use the affirmative defense. There is no appare nt reason why EPA needs to know within 2 days of an event whether a facility i ntends to assert an affirmative defense. Depending on the circumstances of the eve nt, the first 2 days may be critical to responding to and resolving the event. This time period is when a facility will be taking actions that demonstrate th e facility is entitled to the affirmative defense, if necessary, but the facility will not necessarily know within 2 days whether it indeed will be able to make the r equired showing.

In particular, it is unreasonable to require source s to make such a decision before knowing whether the event results in an exce edance. Many compliance requirements have long averaging times. Daily aver ages are typical in subpart U for continuously monitored parameters. Thus, a s ource would never have more than a day to react to an indicated excursion and to decide if it was due to
a malfunction and then whether to invoke the affirm ative defense provision. If the event occurs over an extended period and is not a large change in the monitored parameter, there may be no excursion duri ng the first day of the
event and then the use of the affirmative defense i s unreasonably foreclosed. Monthly averages are the basis for determining comp liance with the stripper bottoms limits for EPR units. In the extreme, the proposed back-end process vent emission limits for Butyl and Halobutyl are 12 -month rolling averages. Thus, a subpart U source often will not know if a p articular event will cause a deviation from these standards for as long as one m onth and almost never within two days. The time period for meeting the affirmative defense48

requirements should start with the date the site de termined that there was an exceedance, rather than from the start of the event

.

Additionally, it may take time to investigate an ev ent and determine if all of the
criteria for a malfunction and the affirmative defe nse are met. In fact, as we discuss below, some of the criteria for using the a ffirmative defense (such as performing a root cause analysis) often cannot be c ompleted in 30 days, much less 2 days. Investigations to determine if an eve nt meets the malfunction criteria often cannot safely start until an event i s over, because operating personnel are reacting to the event, the equipment cannot be investigated until the situation is stable and technical expertise mus t be gathered.

There are already many mechanisms at the Federal an d State level to make

immediate notifications of excess emission events t o assure the public safety and health are protected. Thus, the proposed notif ication requirements in P&R1 are only important in providing adequate time for use of administrative proceedings and additional time for reporting impos es no public health or safety concern or serves any enforcement purpose. Current ly, excursions from subpart U requirements, including those due to malf unctions, are reported to EPA in the subpart U semi-annual report. In many ca ses, it would be obvious to the enforcement authority, based on the kind of mal function or deviation reports that sources already submit under many air programs , that an exceedance of the proposed standards resulted from an unforeseen and unavoidable equipment failure or process upset. It is extremel y inefficient and burdensome for both sources and regulators to require a comple te justification of the
affirmative defense before the enforcement authorit y has indicated any need for further investigation. The 2-day notification req uirement should be deleted.

The 30-day demonstration requirement also must be e xtended. Allowing only 30 days to provide the kind of extensive documentat ion required by the affirmative defense as currently written, including a completed root cause analysis (RCA), is arbitrary and unreasonable and f requently impossible. For major events, it can take weeks and sometimes month s to pull together a team of experts and complete a RCA. In order to provide adequate time for the more complicated malfunction situations and RCAs, the re quirement should be to submit a written report demonstrating entitlement t o the affirmative defense within 180 days of determining that there was an ex ceedance due to a malfunction. Alternatively, based on our experienc e, 90 days is the minimum time that should be required, but in that case, the rule must allow for an extension of up to 180 days for more complicated si tuations.

Finally, related to the RCA requirement, EPA should clarify that the requirement to perform a RCA “to determine, correct, and elimin ate the primary causes of the malfunction” does not require that identified c orrective actions be completed within the demonstration period. Long- term correc tive action can require facility modifications that can take years to desig n and execute or procedural changes that can take months to safely implement.49

For these reasons, we recommend EPA delete the 2-da y initial notification requirement as unnecessary, leaving in place only a 180-day written demonstration requirement. We believe the initial notification of the decision to
use the affirmative defense should be on the same s chedule as providing the supporting information, and that time should start when the source determines

that there was an exceedance and that that exceedan ce was due to a
malfunction.

We recommend that § 63.480(j)(4)(ii) be revised as follows.

(ii) Notification . The owner or operator of the fac ility experiencing an exceedance of its emission limit(s) during a malfun ction shall notify the Administrator by telephone or facsimile (FAX) trans mission as soon as possible, but no later than 2 business days after t he initial occurrence of

the malfunction, if it wishes to avail itself of an aff irmative defense to civil penalties for that malfunction. The owner or operator seeking to
assert an affirmative defense shall also submit a written report to the
Administrator within 45 180 days of the initial occ urrence of the exceedance of the standard in this subpart determining that an

exceedance has occurred to demonstrate, with all necessary supporting documentation, that it has met the requirements set forth in paragraph (4)(i) of this subsection.

2. Proposed § 63.480(j)(4)(i)(A) is arbitrary and unreasonably vague and can potentially never be met. Limiting the use of the affirmative defense to a subset of malfunctions is unjustified and unexplain ed and should be corrected.

Proposed § 63.480(j)(4)(i)(A) specifies what has to be proven to use the
affirmative defense. It states:

The excess emissions were caused by a sudden, short , infrequent, and unavoidable failure of air pollution control and mo nitoring equipment, or a process to operate in a normal and usual manner; an d could not have been prevented through careful planning, proper design, or better operation and maintenance practices; and did not stem from any ac tivity or event that could have been foreseen and avoided, or planned fo r; and were not part of a recurring pattern indicative of inadequate design , operation, or maintenance;

Under subpart U, the malfunction definition from 40 CFR § 63.2 applies. That

definition is:

Malfunction

means any sudden, infrequent, and not reasonably preventable failure of air pollution control and mo nitoring equipment, process equipment, or a process to operate in a nor mal or usual manner which causes, or has the potential to cause, the emission limitations in an applicable standard to be exceede d. Failures that are caused in part by poor maintenance or careless oper ation are not
malfunctions.50 Thus, the proposed first sentence of § 63.480(j)(4) (i)(A) only permits application of the affirmative defense to a subset of malfunctions, i.e., those that are “short” and those that are “unavoidable” ( as opposed to “not reasonably preventable.”) The criteria for using t he affirmative defense should
be identical to the criteria for a malfunction in t he malfunction definition. Any differences are arbitrary and capricious and not su pported by the record.

In addition to the criteria from the malfunction de finition, § 63.480(j)(4)(i)(A) also requires that a source demonstrate that the ma lfunction “could not have been prevented through careful planning, proper des ign, or better operation and maintenance practices; and did not stem from an y activity or event that could have been foreseen and avoided, or planned fo r; ...” That is a vague, subjective and potentially impossible criterion. O nce an event occurs, you may know enough that you “could” have prevented it. In fact, that is the very basis for the later requirement to do a root cause analysis – so a facility can identify the root cause and plan to prevent recurre nces. Even being hit by a meteor would fail this test, since one theoreticall y could have planned for it,
even if the chance of such an occurrence is infinit esimal. In short, these demonstration requirements are so vague and subject ive as to make the affirmative defense potentially unavailable.

We believe this paragraph must be limited to showin g that the malfunction definition criteria were reasonably met and that no expansion beyond that definition should be included. Certainly, the reco rd does not support a requirement to demonstrate anything more than that the malfunction definition was met. Thus, we recommend the following:

The excess emissions were caused by a sudden, short, infrequent,

and unavoidable not reasonably preventable failure of air pollution control and monitoring equipment, or a process to o perate in a normal and usual manner; and that the failure was not caused in part by poor maintenance or careless operation could not have been prevented through careful planning, proper design, or better operation and maintenance practices; and did not stem from any activity or event that could have been foreseen and avoided, or plann ed for; and were not part of a recurring pattern indicative of inade quate design, operation, or maintenance;

3. Proposed § 63.480(j)(4)(i)(B) imposes an unreas onable requirement and focuses on the wrong endpoint and should be clarifi ed.

Proposed § 63.480(j)(4)(i)(B) requires that “Repair s were made as expeditiously as possible when the applicable emiss ion limitations were being exceeded. Off-shift and overtime labor were used, to the extent practicable to make these repairs.”

The phrase “as expeditiously as possible” is ambigu ous and potentially impossible to meet. “Possible” is yet another subj ective and ill-defined51 concept. Furthermore, requiring the “repairs” to b e done rapidly is not the correct focus because excess emissions may have cea sed before repairs are complete. The correct focus should be on reducing the excess emissions as rapidly as practical, which is addressed in the pro posed (C) paragraph. Eliminating excess emissions may involve repairs, b ut may involve adjusting a control set point, bypassing a stuck control valve or other operator actions, shutting down the equipment or process, or routing the emissions to a an

alternate control.

The second sentence, regarding the use of off-shift and overtime labor, is based on a misperception that using additional labo r somehow indicates expediency or efficiency. As mentioned previously , often the excess emissions have ceased prior to repair work occurrin g. Even where repairs are the critical path to minimizing emissions, work may be managed adequately by rotational shift personnel. In any given case, the enforcement authority may choose to question whether appropriate steps were t aken to minimize
emissions. There is no sound reason for the rule t o contain a specific but illdefined criterion around overtime labor.

We recommend § 63.480(j)(4)(i)(B) not be finalized and proposed § 63.480(j)(4)(i)(C) remain as the basis for demonstr ating an appropriate response to the malfunction.

4. Proposed § 63.480(j)(4)(i)(D) should be protect ive of personal injury and property damage and EPA should not be suggesting th at they are only concerned with severe personal injury or property d amage.

Proposed § 63.480(j)(4)(i)(D) states “If the excess emissions resulted from a bypass of control equipment or a process, then th e bypass was unavoidable to prevent loss of life, severe persona l injury, or severe property damage.”

The word “severe” should be deleted from this propo sed language. This language presumes an operator could know the magnit ude of injury or damage before an incident necessitating a bypass oc curs. Any situation that presents a risk to people, property, or equipment c ould be more or less “severe” in the end but cannot be precisely foresee n. In addition, there can be substantial room for disagreement about what consti tutes “severe” property damage. And what degree of injury to employees mus t the bypass avoid in order to qualify as avoiding “severe” personal inju ry? The use of “severe” renders this requirement too subjective to be pract ically enforceable.

Moreover, potential “severity” is not the proper fo cus. Bypassing control equipment or the process in some cases might be an appropriate exercise of good air pollution control practices. For example, a bypass can be the appropriate response to an upset, e.g., in order to prevent fouling of pollution control equipment media that in turn would result i n reduced pollution control equipment efficiency or increased pollution control equipment downtime.52

5. Proposed § 63.480(j)(4)(i)(E) sets an impossible requirement that invalidates the possibility of using the affirmative defense an d so should be deleted.

Proposed § 63.480(j)(4)(i)(E) states “All possible steps were taken to minimize the impact of the excess emissions on ambient air q uality, the environment,

and human health.”

This provision is ambiguous at best and impossible to demonstrate at worst. A facility cannot necessarily know in real time what “impacts” or potential impacts emissions might have on air quality, the environmen t, and human health, nor can a facility do anything other than minimize emis sions to minimize a potential impact. In addition, it is impossible to demonstra te that “all possible steps” were taken to do anything. Paragraph (C) already r equires a source to

minimize the excess emissions. We do not know what other steps the Agency expects or how we could demonstrate that the impact s of those already
minimized emissions could be further minimized. Th is paragraph should be

deleted.

6. Proposed § 63.480(j)(4)(i)(G) should be revised to reflect the use of current recordkeeping technology.

Proposed § 63.480(j)(4)(i)(G) requires “Your action s in response to the excess emissions were documented by properly signed , contemporaneous operating logs.” The use of signed logs has declin ed with the use of various forms of electronic recordkeeping. Operators are d irected to focus on optimizing operations, and responding to malfunctio ns if necessary, not filling out paperwork. Generally, records are maintained o f the event characteristics (often electronically), the amount of excess emissi ons and the supporting calculation (generally done after the event ends an d kept in an engineering file), and the steps taken to deal with the event a nd the excess emissions (sometimes electronically, sometimes on paper).

Thus, we recommend that this requirement be rephras ed to require:

Your actions in response to the excess emissions were documented by properly signe d, contemporaneous operating logs. Records are maintained documenting the malfunction event, including actions
taken to minimize emissions and the calculation of the amount of

excess emissions.

7. Proposed § 63.480(j)(4)(i)(H) is duplicative of § 63.483(a)(1), applies more broadly than a particular malfunction event, and sh ould be deleted.

Proposed § 63.480(j)(4)(i)(H) requires “At all time s, the facility was operated in a manner consistent with good practices for mini mizing emissions.” This is a general requirement and included in proposed § 63 .483(a)(1). Since the affirmative defense provisions address emissions du ring a malfunction, where, by definition, there are excess emissions an d the affirmative defense already requires you to minimize emissions during t he malfunction, this53 paragraph is redundant and confusing. Furthermore, this paragraph deals with the entire facility not just the EPPU or the m alfunctioning equipment. It’s inclusion in the affirmative defense provisions wou ld suggest that you cannot defend yourself for a particular malfunction event if there was some issue anywhere else in the facility having nothing to do with the subpart U operation. Such a limitation would be unreasonable

.

E. Proposed § 63.480(j)(3) should be made consisten t with § 63.480(j)(4)(i)(D) and address the safety issues associated with malfu nctioning control

devices.

Proposed amended § 63.480(j)(3) specifies:

The owner or operator shall not shut down items of equipment that are required or utilized for compliance with this subpa rt during times when emissions (or, where applicable, wastewater streams or residuals) are being routed to such items of equipment if the shutdown w ould contravene requirements of this subpart applicable to such ite ms of equipment.

The existing § 63.480(j)(3) includes an exception t o this requirement for malfunctions. That exception is proposed for delet ion. Proposed § 63.480(j)(4)(i)(D), on the other hand, indicates th at it is excusable to shutdown malfunctioning equipment when “the bypass was unavo idable to prevent loss of life, severe personal injury, or severe property da mage.” While we discuss above
in our comments on the affirmative defense conditio ns that we believe any personal injury or property damage should qualify f or the defense, we believe these two paragraphs should be made consistent and thus the bypass exception for malfunctions in the current § 63.480(j)(3) shou ld be maintained.

F. Front-end control device maintenance should be addressed.

For continuous front-end process vents in Butyl, Ha lobutyl, and EPR units, the proposed halogen control requirements will require use of a thermal oxidizer/halogen scrubber in place of the flare and other combustion devices currently in use to meet the organic HAP requiremen ts of the current rule. Thermal oxidizer/halogen scrubber systems are likel y to have lower service factors than the process unit, flare or other combustion de vice, because of their increased susceptibility to halogen corrosion and to plugging problems. Since the flare would comply with the organic HAP removal requirement and the thermal oxidizer/halogen scrubber is a beyond the floor ste p, an allowance for some thermal oxidizer/halogen scrubber maintenance is al lowable as long as it is reasonable and considered in the beyond-the-floor e valuation. We, therefore suggest EPA allow up to 240 hours per year of therm al oxidizer/halogen scrubber outage, as long as the front-end process vents are routed to a flare or other combustion device during that outage. This represe nts a maximum decrease in post control HCl emissions from 125.6 Tons/year to 121.8 Tons/year for the Butyl and Halobutyl subcategories and EPR category combin ed and would save potentially significant production losses, costs an d emissions by avoiding unit
shutdowns to allow maintenance of these devices.54

IX. Other Comments and Edits

A. The proposed controls are inconsistent with the EPA Administrator’s key principles which include getting meaningful results with cost-effective

controls.

On the 40 th anniversary of the Clean Air Act (September 14, 20 10) Lisa Jackson outlined five principles to address concerns about overly expensive or burdensome rules. The principles included: promoting energy e fficiency and new technologies; using a multipollutant approach to rules; setting a chievable standards with flexibility to meet them; seeking input from all st akeholders -- the public, industry, states and others -- on rules; and setting cost-eff ective standards that get meaningful results. Her specific remarks included:

Finally, we will set the standards that make the mo st sense – focusing on getting the most meaningful results through the mos t cost-effective

measures (emphasis added). The Clean Air Act does not compe l regulations for all industry categories, and we want to ensure that we move forward without burdening small businesses, non-profits and other entities that don’t account for significant amounts of pollution in our skies.

Our goal is to use the tools in Clean Air Act to pr ovide flexibility for everyone, to work in sync with market principles and to encou rage investment in new technologies that provide cost-effective and effici ent methods for lowering pollution in the air we breathe. As Administrator and as an American consumer, I know we must be smart in the strategies we employ. Industry needs clarity and certainty to make the best invest ments. They are the key to the innovation that helps us reduce pollution, prot ect our health and preserve

our environment.

The proposed controls for the Butyl Rubber and EPR source categories are inconsistent with the stated principles of the Admi nistrator as they are not costeffective, add costs that have no substantive envir onmental benefit, and reduce competitiveness of U.S. manufacturing. Furthermore , the rule would result in the diversion of investment capital that could be used for more productive purposes (e.g. energy efficiency, process improvements) ther eby supporting economic growth and cost-competitiveness. Companies have ca pital budgets that necessitate difficult choices; capital funds are no t unlimited.

B. Since there is no deadline for finalizing any r ule related to the Butyl Rubber and EPR source categories, EPA should take the appr opriate amount of time to thoroughly review the comments submitted and re- assess their beyondthe-floor cost-effectiveness determination.

There is no legal deadline to finalize the rule for four source categories within the Group I Polymers and Resins category of sources, in cluding Butyl Rubber and Ethylene Propylene Rubber. This is recognized in t he revised consent decree that resolves a lawsuit filed by the Sierra Club in the United States District Court for the55

Northern District of California (Sierra Club v. Jac kson, No. 09-cv-00152 SBA). The revised consent decree was filed September 27, 2010 and now states:

On December 16, 2008, EPA published a final determi nation under sections 112(d)(6) and 112(f)(2) for the following four Grou p I Polymers and Resins categories: Polysulfide Rubber Production; Ethylene Propylene Rubber Production; Butyl Rubber Production; and Neoprene P roduction. See 73 Fed. Reg. 76,220. The allegations in plaintiff’s Compla int address only the five Group I Polymers and Resins categories not covered by the December 2008 action. [Sierra Club v. Jackson, No. 09-cv-00152 S BA, page 3, footnote 2]

Before the consent decree was modified EPA had a fi nal rule date of June 30, 2011. Based on the revised consent decree, EPA sho uld establish a rulemaking schedule for the four source categories referenced above that is more appropriate for a rule with such significant issues. Typically , EPA requires about one year from the date of a proposed rule to the date of a final rule. This time period allows for a thorough review of comments submitted and the revis ion of the proposed rule as appropriate.

C. Provisions are needed to address maintenance of surge control vessels
controlled with non-water condensers.

Condensers are commonly used to control storage ves sels and surge control vessel emissions in elastomer operations, because t hey recover the controlled material and are very cost-effective due to the ava ilability of high-level refrigeration (e.g., propane refrigeration). However, these cont rols become ineffective when the refrigeration system must be shut down for maintena nce. This has not been an issue under subpart U as a result of the shutdown e xemption and will not be a significant issue for storage vessels with removal of the shutdown exemption because of the storage vessel planned routine maint enance provisions.

However, the planned routine maintenance provisions in the storage vessel provisions do not apply to surge control vessels. Thus, sources will have to install combustion or other controls in place of the conden ser systems for surge control vessels controlled in this manner. This change wil l be costly and is not discussed in the record. Changing surge control vessel contr ols will result in loss of the vent material rather than its recovery and will generate combustion emissions, including NOx and greenhouse gas emissions. Furthermore, it cannot be accomplished by the promulgation date of the rule, which is the app arent effective date for the loss of the shutdown exemption. The emissions involved are relatively small and are currently emitted and thus it would not be justifie d to control them even if time permitted. Thus, we request that, as has been done in other rules (e.g., the MON rule) that subpart U allow use of the storage vesse l control provisions for surge control vessels. We suggest the following amendmen t to § 63.502(a) to accomplish this revision.

Equipment leak provisions. The owner or operator of each affected source, shall comply with the requirements of subpa rt H of this part, with the exceptions noted in paragraphs (b) through (m) of this section. Surge56 control vessels required to be controlled by subpar t H may, alternatively, comply with the Group 1 storage vessel provisions s pecified in § 63.484.

At our Baytown Butyl Rubber Unit, the refrigerated condensers are followed by a dual bed carbon adsorption system in order to compl y with State requirements. However, the carbon system does not achieve 95% rem oval if the condenser is out of service and so these surge control vessels canno t meet the normal NESHAP requirements (40 CFR 63.172) when the refrigeration system is shutdown. The Agency did not consider this situation in evaluatin g whether to extend the normal subpart U emission limits to startup and shutdown p eriods. In this case, the normal limits are met for a time, but the carbon sy stem can sometimes have breakthrough if the primary bed has become saturate d because the secondary bed can become saturated before the primary bed can be changed, since it can take up to 24 hours to change a carbon bed. If the Agency does not address startups and shutdowns in general, it should address this situat ion in particular by allowing up to 24 hours to change or replace a saturated carbon be d, where carbon beds are used as controls during startup and shutdown period s. Addressing this situation is appropriate because carbon adsorption is a typical temporary control that can be used to control startup and shutdown emissions when the primary control must be

shutdown.

D. The back-end emission limits and emission calcu lations for the Butyl and Halobutyl units should be based on total elastomer production.

Proposed § 63.494(a)(4)(i) establishes an emission limit based on Butyl Rubber production and § 63.494(a)(4)(iii) establishes an e mission limit based on Halobutyl Rubber production. However, the Baytown unit, for example, has flexible operations that produce Butyl Rubber some of the ti me and Halobutyl Rubber at other times. Thus, the divisor for the each of the se subcategories should be total rubber production, not just production of one type of rubber. The associated compliance provisions in proposed § 63.495(g)(4) al ready handle this concern by specifying the divisor as “total elastomer produced .” As we discussed in Section III, we also believe it needs to be clarified that this is the mass of elastomer leaving the stripper, not finished rubber production.

E. The first example at the end of the current § 6 3.480(j)(1) is useful and should not be deleted and the missing “the” in the propose d language should be

added.

§ 63.480(j)(1) is proposed to be modified as follow s:

The emission limitations set forth in this subpart and the emission limitations referred to in this subpart shall apply at all times except during periods of non-operation of the affected source (or specific portion thereof) resulting in cessation of the emissions to which th is subpart applies. The emission limitations of this subpart and the emissi on limitations referred to in this subpart shall not apply during periods of s tart

- up, shutdown, or malfunction, except as provided in paragraphs (j)(3) and (j)(4) of thi s section. However, if a period of startup, shutdown, malfunct ion or non-57

operation of one portion of an affected source does not affect the ability of a particular emission point to comply with the emis sion limitations to which it is subject, then that emission point shall still be required to comply with the applicable emission limitations of this subpart during the start

- up, shutdown, malfunction, or period of non-operation. For example, if there is

an overpressure in the reactor area, a storage vessel that is part of the affected source would still be required to be contr olled in accordance with the emission limitations in § 63.484. Similarly, the degassing of a storage

vessel would not affect the abili ty of a batch front

- end process vent to meet the emission limitations of §§ 63.486 through 63.492.

The word “the” should not be deleted in the phrase “comply with the applicable emission limitations of this subpart during the sta rt

- up, shutdown, malfunct ion,

or period of non-operation.” Additionally, the first example in the last two sentences of the existing language are helpful to u nderstanding the meaning of this paragraph and we suggest they be retained r ather than deleted. Removing the startup, shutdown and malfunction exem ptions has no impact on that example.

F. The introductory sentence of § 63.505(g) needs to be modified to limit the applicability of that section to match the rest of the changes.

Existing § 63.505(g) states:

Parameter monitoring excursion definitions. (1) Wit h respect to storage vessels (where the applicable monitoring plan speci fies continuous monitoring), continuous front-end process vents, ag gregate batch vent streams, back-end process operations complying through the use of control or recovery devices, and process wastewater streams, an excursion means any of the three cases listed in pa ragraphs (g)(1)(i) through (g)(1)(iii) of this section.

However, only the back-end process operations curre ntly regulated by subpart U have monitoring requirements and are subject to t he excursion definitions in (g). Excursions for the proposed new back-end requ irements for Butyl and Halobutyl subcategories are defined in proposed § 6 3.505(j) and not in this paragraph (g). Thus, as has been done elsewhere, t he current requirement needs to be limited to back-end operations subject to § 63.494(a)(1) through (3).

We suggest § 63.505(g) be revised as follows:

Parameter monitoring excursion definitions. (1) Wit h respect to storage vessels (where the applicable monitoring plan speci fies continuous monitoring), continuous front-end process vents, ag gregate batch vent streams, back-end process operations complying with § 63.494(a)(1) through (3) through the use of control or recovery devices, an d process wastewater streams, an excursion means any of the t hree cases listed in paragraphs (g)(1)(i) through (g)(1)(iii) of this se ction.58

G. EPA’s preamble claim that dioxins and furans ar e formed when chlorinated hydrocarbons are burned in a flare and, presumptive ly, that their combustion in a thermal oxidizer reduces the generation of the se compounds, is unsupported and should be rescinded in the final ru le preamble.

In Section V.B.6.b, of the proposal preamble, the A gency claims, relative to combusting chlorinated hydrocarbons in a flare, tha t:

When chlorinated organics are burned in a flare, th ere are variations in the combustion which likely results in the formation of combustion by-products. These combustion by-products could include trace ch lorinated compounds such as dioxins and furans. [75 Fed. Reg. 65108]

There is no data in the record to support this supp osition. Furthermore, there is no data to suggest that, even if this were the case, l ess dioxin or furan would be formed in the thermal oxidizer/scrubber system the Agency proposed to require instead of the flare. The basis for the beyond-the -floor proposal to control halogens in Group 1 continuous front-end process ve nts is HCl generation and there is no basis for suggesting that there is any benefit relative to dioxin/furans that results from the proposal. This preamble stat ement should be withdrawn in the final rule preamble.

H. Other Edits

1. The introductory paragraph to § 63.498(a) should reference (a)(1) through (a)(4), not (a)(1) through (a)(3).

2. The reference to Table 8 in the existing § 63.49 3 is proposed for deletion, but should be kept. Otherwise Table 8 should be delete d, since it is not otherwise
referenced.

X. Residual Risk and Technology Review: Butyl Rubbe r and EPR Source Categories

A. ExxonMobil supports EPA’s position that it was not necessary to revisit the residual risk review as part of this rulemaking.

In the proposed rule EPA notes, for the Butyl Rubbe r and EPR source categories, that these source categories were previously determ ined to be low-risk (maximum lifetime cancer risk less than 1-in-1 million). Co nsequently EPA does not believe it necessary to conduct a facility-wide or demographic risk analysis. EPA therefore

did not address the residual risk review in this ru lemaking.

CAA § 112(f)(2) requires EPA to promulgate standard s for each category or subcategory of sources:

if promulgation of such standards is required in or der to provide an ample margin of safety to protect public health... or to pr event, taking into59

consideration costs, energy, safety and other relev ant factors, an adverse environmental effect... If standards promulgated pur suant to subsection (d) and applicable to a category or subcategory of sour ces emitting a pollutant (or pollutants) classified as a known, probable, or pos sible human carcinogen do
not reduce lifetime excess cancer risks to the indi vidual most exposed to emissions from a source in the category or subcateg ory to less than one-in-one million, the Administrator shall promulgate standar ds under this subsection for such source category.

In the 2007 proposed residual risk rule for source categories that include Butyl

Rubber and EPR EPA notes:

... we estimate that the residual risk remaining fr om HAP emission from these eight source categories affected by today’s proposa l do not pose cancer risks equal to or greater than 1-in-1 million to the indi vidual most exposed, do not result in meaningful rates of cancer incidence, and do not result in a concern regarding either chronic or acute noncancer health effects for the individual most exposed. No chronic inhalation human health t hresholds were exceeded at ecological receptors for any of the eight source categories; therefore, we believe there is low potential for adverse environm ental effects due to direct airborne exposures. We also believe that there is no potential for an adverse effect on threatened or endangered species or on th eir critical habitat within the meaning of 50 CFR 402.13(a) because our screening a nalyses indicate no potential for any adverse ecological impacts. [72 Fed. Reg. 70552-3]

As EPA noted in the proposed rule, none of the haza rdous air pollutants in the Butyl Rubber and EPR source categories are carcinog enic hence there is no cancer risk. In addition, the maximum Hazard Index (HI) for any facility in the source categories impacting ExxonMobil is as follow s:

1. Butyl Rubber: Maximum HI = 0.2

2. Ethylene Propylene Rubber: Maximum HI = 0.5

Based on the risk assessment results EPA concluded that no further regulation was required because the existing MACT standards pr otect public health with an ample margin of safety and prevent an adverse envir onmental effect:

EPA is not required to promulgate standards for a s ource category under section 112(f) if public health is protected with a n ample margin of safety and adverse environmental effects are prevented.... In ma king this conclusion we determined that the source categories addressed in today’s proposal that emit one or more HAP which are known or potential carcin ogens pose cancer risks less than or equal to 1-in-1 million to the individ ual most exposed. In addition,
we also determined that emissions from these source categories result in chronic noncancer target organ-specific HI less tha n or equal to 1 for the individual most exposed, are unlikely to result in health effects under acute scenarios and are not anticipated to pose any signi ficant and widespread adverse environmental effects. [72 Fed. Reg. 70555 ]60

In the 2008 final rule EPA stated that the HAP emis sions:

... do not pose cancer risks equal to or greater than 1-in-1 million to the individual most exposed, do not result in meaningfu l rates of cancer incidence, and do not result in a concern regarding either chr onic or acute noncancer health effects for the individual most exposed. In addition, no chronic inhalation

human health thresholds were exceeded at environmen tal receptors... there is low potential for adverse environmental effects... there is no potential for an adverse effect on threatened or endangered species. [73 Fed. Reg. 76225]

ExxonMobil supports EPA’s conclusion that under the CAA no further regulation is required due to the very low risk associated with t he ExxonMobil and other facilities in the Butyl Rubber and EPR source categories. The post-MACT (implementation of Maximum Achievable Control Technology standards) emission risks addressed by EPA from these sources fall well within the acce ptable risk range established by the decision framework codified in § 112 (Benzene N ESHAP).

B. ExxonMobil supports EPA’s position that it was n ot necessary to revisit the technology review as part of this rulemaking and th at no additional controls are required based on the technology review.

In the 2007 proposed rule EPA concluded:

... there have been no significant developments in practices, processes, or control technologies since promulgation of the MACT standards. Because there have been no such significant developments an d because public health is protected with an ample margin of safety, we conclu de that no further revisions to the standards affected by today’s proposal are n eeded under section 112(d)(6) of the CAA. [72 Fed. Reg. 70555]

In conducting the technology review EPA relied on t he technology review conducted for the Hazardous Organic NESHAP (HON), w hich did not identify any significant developments in practices, processes, o r control technologies since promulgation of the original HON standards in 1994. This is an appropriate analysis since control devices applicable to the so urce categories included in this proposed rule are similar to the ones impacting HON facilities. In addition, EPA indicated a “development” for purposes of the techn ology review would be based

on:

1. Any add-on control technology or other equipment , and any work practice or operational procedure, and any process change or po llution prevention alternative that could be broadly applied that was not identified and considered during MACT development.

2. Any improvements in add-on control technology o r other equipment (that was identified and considered during MACT development) that could result in significant additional emission reduction.61

EPA also stated:

While we agree that no further controls are require d under the technology review, our view is that for facilities that have r isks below the level that triggers regulation (e.g., 1-in-1-million cancer ri sk) a technology review is not
needed. In these cases there is no likelihood of a dditional meaningful risk reductions. Conducting a technology review is sugg esting that reducing risk below 1-in-1 million should continue to be a policy objective even though Congress established this risk level as the level f or which source categories are eligible for delisting from the program. Conti nued focus on these low risk sources is contrary to the direct language of the A ct, creates significant regulatory uncertainty and would simply act to wast e both public and private sector resources. [Memo dated December 12, 2007; “ Developments in Practices, Processes, and Control Technologies for RTR Phase II, Group 1 Source Categories...;” in the EPA docket]

ExxonMobil supports EPA’s conclusion that no additi onal controls are required based on the §112(d)(6) technology review.

C. EPA should delist the Butyl and EPR source cate gories due to low risk.

1. EPA has the legal authority to delist source ca tegories.

Under CAA § 112(c)(9):

(B) The Administrator may delete any source categor y from the list under this subsection, on petition of any person or on th e Administrator’s own motion, whenever the Administrator makes the follow ing determination or determinations, as applicable:

(i) In the case of hazardous air pollutants emitted by sources in the category that may result in cancer in humans, a det ermination that no source in the category (or group of sources in the case of area sources) emits such hazardous air pollutant in quantities wh ich may cause a lifetime risk of cancer greater than one in one million to t he individual in the population who is most exposed to emissions of such pollutants from the source (or group of sources in the case of area sou rces). (ii) In the case of hazardous air pollutants that m ay result in adverse health
effects in humans other than cancer or adverse envi ronmental effects, a
determination that emissions from no source in the category or subcategory concerned (or group of sources in the case of area sources) exceed a level which is adequate to protect public health with an ample margin of safety
and no adverse environmental effect will result fro m emissions from any source (or from a group of sources in the case of a rea sources).

The Administrator shall grant or deny a petition un der this paragraph within 1 year after the petition is filed.62 An important point to note is that the Administrato r does not require a formal petition to delist a source category. EPA, on thei r own, can initiate the delisting based on the data available.

2. EPA has demonstrated low risk for the Butyl Rubb er and EPR source categories and should now take the steps to delist these source categories from the air toxics regulations.

EPA ran risk models for the sources in the Butyl Ru bber and EPR source categories for the 2007 proposed rulemaking and, ba sed on the data provided in 2010, found no reason to rerun the models. As n oted above:

(i) None of the HAPs in the Butyl Rubber and EPR so urce categories are carcinogenic hence there is no cancer risk

. (ii) For Butyl Rubber the maximum HI was = 0.2. (iii) For Ethylene Propylene Rubber the maximum HI was = 0.5.

Based on the extensive analysis for the Butyl Rubbe r and EPR source categories, EPA should initiate a process to delist these two source categories.

XI. EPA Policy on Residual Risk and Technology Revi ews

A. Continuing implementation of residual risk and technology reviews should
be consistent with the HON Court decision.

The June 6, 2008 “HON” court decision (No. 07-1053, NRDC and LEAN v. EPA ) supported several key EPA policy decisions. The co urt case related to challenges to the final residual risk and technology reviews f or the Hazardous Organic
National Emission Standards for Hazardous Air Pollu tants (HON), finalized December 21, 2006. 71 Fed. Reg. 76603.

The court decision addressed EPA decisions under bo th the residual risk (CAA § 112(f)(2)) and technology review (CAA § 112 (d)(6)) programs. Key elements of the court decision, from a policy perspective are s ummarized below:

1. EPA has the discretion to determine that a maxim um individual cancer risk level of approximately 100-in-1 million for a source category is acceptable; EPA is not obligated to revise industry standards to reduce
lifetime excess cancer risk to one-in-one-million.

From the court decision:

The cited item in the Federal Register is EPA’s emi ssion standard for benzene, which is a carcinogenic hazardous air poll utant. In the Benzene rulemaking, EPA set forth its interpretation of “am ple margin of safety,” as
that term was used in the 1970 version of the Clean Air Act. It said that the “ample margin” was met if as many people as possibl e faced excess lifetime63 cancer risks no greater than one-in-one million, an d that no person faced a risk greater than 100-in-one million (one-in-ten th ousand). 54 Fed. Reg. at 38,044-45. In other words, the Benzene standard established a maximum excess risk of 100-in-one million, while adopting t he one-in-one million standard as an aspirational goal. This standard, i ncorporated into the amended version of the Clean Air Act, undermines pe titioners’ assertion that

EPA must reduce residual risks to one-in-one million for all sources that emit carcinogenic hazardous air pollutants. [ NRDC v. EPA, 529 F.3d 1077, 1082 (D.C. Cir. 2008)]

In the Benzene NESHAP, EPA stated an overall object ive as follows:

... in protecting public health with an ample margin of safety, we strive to provide maximum feasible protection against risks t o health from hazardous air pollutants by (1) protecting the greatest numbe r of persons possible to an individual lifetime risk level no higher than ap proximately 1-in-1-million; and (2) limiting to no higher than approximately 1- in-10 thousand (i.e., 100- in-1 million ) the estimated risk that a person liv ing near a facility would have if he or she were exposed to the maximum pollutant concentrations for 70 years. [75 Fed. Reg. 65072]

2 . Cost is to be considered when determining the “a mple margin of safety”,
consistent with the Benzene NESHAP.

Finally, petitioners argue that EPA unlawfully cons idered cost while setting the “ample margin of safety” in the residual
risk standards. Petitioners are correct that the Su preme Court has “refused to find implicit in ambiguous sections of the [Clean Air Act] an authorization to consider costs that ha s elsewhere, and so often, been expressly granted.” Whitman v. Am. Trucking
Ass’n , 531 U.S. 457, 467 (2001). In this case, however, we believe the clear statement rule has been satisfied . As explained above, subsection 112(f)(2)(B) expressly incorporat es EPA’s interpretation of the Clean Air Act from the Benzene standard, complete with a citation to the Federal Register. I n that rulemaking, EPA set its standard for benzene “at a level that provides ‘an ample margin of safety’ in considerati on of all
health information . . . as well as other relevant factors including costs and economic impacts , technological feasibility, and other factors relevant to each particular decision.” 54 F ed. Reg. at 38,045 (emphasis added). EPA considered cost in Benzene , and subsection 112(f)(2)(B) makes clear that nothing in the amended version of the Clean Air Act shall “affect[]” the a gency’s interpretation of the statute from that rulemaking. [ NRDC, 529 F.3d at 1083]

3. The technology review does not require a recalc ulation of the MACT floor

standards.64

For the technology review, EPA has adopted the posi tion that they would evaluate developments in practices, processes, and control technologies and then revise a standard as necessary. A recalculati on of the floor is not required. Recalculating the floor every 8 years wo uld lead to a ratcheting down of the standards, a methodology not indicated in th e CAA and one that would lead to high costs and potentially impractical stan dards for many manufacturers
with little or no health benefit.

It is argued that EPA was obliged to completely rec alculate the maximum achievable control technology – in other words, to start from scratch. We do not think the words “review, and revise as necessar y” can be construed reasonably as imposing any such obligation. Even if the statute did impose such an obligation, petitioners have not identified any post-1994 technological innovations that EPA has overlooked. [ Id. at 1084]

B. The Residual Risk and Technology Reviews should be concurrent.

The CAA requires, after promulgation of each MACT, both a residual risk (within 8 years) analysis and a technology review (no less of ten than every 8 years). Since these assessments apply to the same sources, includ ing individual emission sources, and are interrelated, it is an efficient u se of Agency and industry

resources to conduct these reviews at the same time . This also avoids the potential for inconsistency in separate rulemakings . In addition, the results of the
residual risk assessment should be used to inform t he technology review determination. We support EPA’s efforts to conduct the reviews concurrently as they have done for the source categories evaluated to-date, and we encourage the Agency, despite the pressures of time and litig ation, to continue this approach.

C. Risk assessments should be based on source cate gory actual emissions.

The foundation for any regulatory decision-making s hould be a sound database that reflects actual emissions and appropriate/real istic modeling inputs and assumptions. It is appropriate to use actual emis sions data in determining risk. The Agency’s risk assessments are inherently conser vative. To the extent real data is used, the risk assessment becomes more real istic. Potential emissions
overstate emissions and risk because facilities do not operate at the level of their potential emissions (oftentimes the permit limit) i n order to maintain a compliance margin.

It is also appropriate to focus the risk assessment on the source category to be regulated. If there are other sources (e.g., mobil e sources, area sources) that are contributing to or driving the risk, these sources should be evaluated under separate rulemaking since further controls on P&RI sources do not address any issues with these other sources. In addition, the CAA is quite clear in § 112(f)(2)(A):

[T]he Administrator shall, within 8 years after pro mulgation of standards for each category or subcategory of sources pursuant to Subsection (d), promulgate standards for such category or subcatego ry if promulgation of such65

standards is required in order to provide an ample margin of safety to protect public health in accordance with this section...

D. Risk should be evaluated at the centroid of cen sus blocks.

It is also appropriate to use the centroid of censu s blocks in determining maximum individual risk. This is where people live and may potentially be impacted. Modeling to a fenceline is inappropriate in a risk assessment because people do not live on the fenceline and this approach oversta tes risk. This approach is consistent with EPA’s position stated in the final decision on the residual risk rule
for Gasoline Distribution Facilities.

In a national-scale assessment of lifetime inhalati on exposures and health risks from a category of facilities, it is appropriate to identify exposure locations where an individual may reasonably be expected to s pend a majority of his or her lifetime. Further, it is appropriate to use ce nsus block information on where people actually reside, rather than points on a fen celine, to locate the estimation of exposures and risks to individuals li ving near such facilities. [71 Fed. Reg. 17354]

E. EPA should not expand the health information me trics beyond those already evaluated; the three planned added measures do not provide needed
information on the cancer and non-cancer risk of th e regulated source category.

In the proposed rule preamble EPA outlines the plan ned approach to future residual risk rule reviews. The overall approach i s outlined in the Benzene NESHAP and is a two-step process. The first step i s the determination of acceptable risk; the second step provides for an am ple margin of safety while evaluating other relevant factors including costs, economic impacts and technological feasibility.

In the past the Agency has looked at several human health risk metrics associated with emissions from the category, including:

1. The MIR (maximum individual risk);

2. The numbers of persons in various risk ranges;

3. Cancer incidence;

4. Maximum non-cancer hazard index (HI); and

5. Maximum acute non-cancer hazard.

As part of the analysis EPA also considered source categories under review that are located near each other, assessed impact of max imum emissions allowed in addition to actual emissions, and considered risk e stimating uncertainties.66

In the revised future approach to residual risk rul es EPA is also planning to consider additional measures of health information, including:

1. Estimates of “total facility” cancer and non-ca ncer risk;

2. Demographic analyses (distribution of risks acro ss different social, demographic, and economic groups within the populat ions near the facilities where source categories are located); and

3. Additional estimates of the risks from emissions allowed by the MACT standard (i.e. maximum allowable emissions or permi t limits).

A concern with this expansion of health measures is that they dilute the more important health measures already in place which mo re directly, although conservatively, assess the risk from the regulated source category. Additional

concerns with the added measures include:

1. It is not clear how these additional measures wi ll actually be used to modify a standard. For example, what is the legal basis for these measures and what criteria will be applied in assessing these measure s and modifying an
emission standard?

2. Using “allowable emissions” overstates risk, as EPA has acknowledged. Use of actual emissions provides a more realistic estim ate of risk. Facilities always strive to maintain a compliance margin, which is th e margin between allowable and actual emissions, to ensure ongoing compliance. If actual risk is acceptable, would EPA, in the absence of data sugge sting there is a problem, really require additional controls just because max imum or allowable emissions could, theoretically, result in higher em issions?

In summary, EPA should not expand the health inform ation metrics beyond those already evaluated. The three planned added measure s do not provide needed
information on the cancer and non-cancer risk of th e regulated source category.

F. In calculating cost-effectiveness in residual r isk decisions, EPA should

evaluate cost on a risk reduction basis.

EPA traditionally evaluates cost-effectiveness in t erms of cost per ton of pollutant reduced. This is certainly an appropriate approach in evaluating MACT beyondthe-floor determinations. However, in a risk-drive n rule EPA should evaluate cost on a cost per unit of risk reduction basis. This a pproach ties better to the objective of the residual risk program. For example, for a c arcinogenic HAP, EPA should evaluate cost-effectiveness by determining the cost per cancer incidence reduced.

G. In addition to the health risk metrics already established, EPA should include central tendency or most expected risk assessments to better communicate
the conservative nature of EPA risk assessments.67

EPA’s risk assessments are inherently very conserva tive for a number of reasons, including:

1. Unit risk estimates for cancer used by the Agenc y are upper bound numbers, hence they overstate the true risks.

2. Exposure assumptions are conservative; they incl ude the assumption that an individual is exposed to the highest concentration for 70 years. The reality is that the movements of individuals results in a typi cal exposure period of significantly less than 70 years. As EPA has noted :

We acknowledge that the use of upper bound URE and 70-year exposure duration are sources of uncertainty in our analyses that tend to overestimate risk. [73 Fed. Reg. 76228]

To better communicate the conservative nature, and therefore the health protective aspect, of residual risk rules EPA should develop m ost expected (i.e. 50% probability of occurrence) or central tendency esti mates.

H. In the future, when EPA finalizes a residual ri sk rule with controls and work practices, the rule should not be applicable to low -risk sources.

In the March 1999 “Residual Risk Report to Congress ,” EPA indicated that after the implementation of the MACT technology standards “EPA will then evaluate the remaining risk and consider ample margin of safety as discussed below. In those cases where it is determined to be necessary, EPA w ill use CAA Section 112(f)(2) residual risk authority to set national standards b ut focus the applicability of standards only on those portions of the source cate gory.”

A low-risk exclusion should be included in future r ules based on a site-specific determination similar to applicability determinatio ns for other rules (e.g. NSPS, MACT). Anything beyond this is inconsistent with t he recognition that many sources are low-risk and don’t require additional r egulation.

I. The applicability determination approach for lo w-risk sources should not establish on-going permitting and reporting require ments when the rule is not applicable.

Our recommended approach for low-risk determination s in future rules is consistent with the approach taken in other air rul es, where a facility determines initial applicability and later reviews applicabili ty through a management-of-change process related to capital investments and operatio nal changes. For example, in NSPS rules certain site changes could trigger appli cability, but the initial permit would only indicate that a certain NSPS rule was no t applicable and would not include additional permit terms to demonstrate “non -applicability” such as requiring
additional emission limits at the “modification” th reshold level.

EPA does not currently require an onerous process w ith significant on-going requirements for “non-applicability” determinations for other federal rules, and68

should not take this approach under a residual risk program. Any demonstration

criteria to determine that a site is low risk shoul d not be more onerous or costly than complying with the control and work practice s tandards.

J. The applicability determination for low risk so urces should include elements that streamline the process while recognizing the l ow-risk nature of the

sources.

Some of the key elements of a low-risk applicabilit y determination, consistent with the low or negligible risk associated with faciliti es not requiring further controls,

include:

1. Facilities can use any scientifically accepted, peer-reviewed risk assessment methodology.

2. Set the rule applicability threshold at a risk level that reflects the ample margin of safety that results from the proposed controls a nd work practice standards, consistent with the findings of the risk assessment s for the source category. An alternate, very conservative approach is to base applicability on a threshold level that defines low-risk sources as having a ca ncer risk less than or equal

to 1-in-1 million and a hazard index less than or e qual to 1. Since EPA has already decided not to regulate source categories w ith risks higher than 1-in-1 million, and the Benzene NESHAP decision framework supports evaluating factors that will result in acceptable risk levels above 1-in-1 million, it would be within the Agency’s discretion to establish an appl icability threshold at a level

above 1-in-1 million.

3. Include a notation in a Title V application (or permit) that the residual risk standards are not applicable to the specific source . No other permit terms are appropriate (since the rule isn’t applicable). Tit le V provides an ongoing compliance certification obligation for sources and Responsible Officials.

4. Applicability determinations should not require a regulatory approval process. Applicability determinations would be available for review by regulatory authorities. In the HON proposal, EPA requested co mment on the possible means for “approving” such demonstrations (e.g., by EPA affirmative review, by the State permitting authority, by EPA audit, bythird-party, or by selfcertification plus EPA audit). The suggestion that some type of approval is necessary for non-applicability determinations for low-risk sources would set up a burdensome, unwarranted process. Needless to say, States will be concerned about a possible ongoing obligation to ap prove these determinations. Setting up a process of this natur e would discourage the lowrisk applicability approach and is inconsistent wit h the Agency’s past stated objective of not regulating low-risk sources.

5. Facilities would continue to have the on-going obligation, similar to the obligation for all federal/state/local air rules, t o reassess applicability when facility changes are judged to potentially impact r ule applicability.69

6. Applicability reassessments should be limited t o source changes (within the control of the company) and changes that go through a formal rulemaking process. This is the approach that has been taken with other air rules. Lowrisk sources should not have to review applicabilit y due to changes outside the control of the facility. Changes to health benchma rks, EPA risk assessment procedures, improvements and changes in dispersion models, and changes in human population and census track data should not a utomatically trigger a source obligation to reassess applicability. Issue s related to these type changes are broader than those of individual source s.

7. The analysis and modeling should be consistent with the health concerns in the source category. For example, if the concern i s chronic impacts then the modeling should be based on annual emissions and no hourly modeling for acute effects should be required.

8. If EPA determines for a source category that the re are no adverse environmental risks, then there should be no requir ements on individual
facilities to demonstrate no adverse environmental risk.

9. The applicability determination should be comple ted before the first major compliance date of the rule.

K. Application of CAA § 112(d)(6) should incorpora te the framework of § 112(f)(2).

CAA § 112(d)(6) requires the Agency to review, and revise emission standards as necessary, taking into account developments in prac tices, processes and control technologies. EPA should base any review and revis ion under § 112(d)(6) through the lens and the structure of the § 112(f) rulemaki ng framework:

We also believe that the periodic review should be of whatever Section 112 standard applies to the relevant source category, r egardless of whether the original Section 112(d) and/ or 112(h) NESHAP has, or has not, been revised pursuant to Section 112(f)(2). We recognize that o ne could read the Section 112(f)(2) language to authorize EPA's setting a sta ndard under Subsection (f)(2) separate from the NESHAP standard set under Subsections (d) and/or (h). Following this reading, one might argue that any review under (d)(6) should be only of the (d)(2), (d)(4), or (d)(5) NES HAP standard, as applicable. It is our position, however, that the better readin g of (f)(2) allows EPA to revise the relevant Subsection (d) standard if the agency determines residual risk so justifies under (f)(2); indeed, our practice has be en to follow this approach. [Coke Ovens; 70 Fed. Reg. 19993]

This approach would require the Administrator to we igh the potential for future risk reduction under § 112(d)(6) against the cost of tha t reduction in the same manner as set forth in the second step of the 1989 Benzene NESHAP rule. Under the 1989 Benzene NESHAP rule, the primary objective of § 112(f) is to assure that

emissions are controlled to a level that can be con sidered “acceptable” or “safe.”70

Reviews that focus solely on cost-per-ton formulati ons that do not consider the risk reduction potential of controls could result in the imposition of technology controls that yield very little if any reduction in risk. S ince Congress expressly rejected this approach in its codification of the decision framew ork in the 1989 Benzene NESHAP rule, it is difficult to believe that the EP A should adopt this approach in conducting reviews under § 112(d)(6). In the Benze ne NESHAP rule codified by Congress, EPA assessed the economic cost and feasib ility of requiring additional controls for five source categories. EPA considere d and then rejected more expensive control options because the costs of furt her controls in those options were large in comparison to the potential risk redu ction.

CAA § 112(d)(6) reviews must be considered an exten sion of the main purpose of § 112, to reduce the public’s risk from exposure to air toxics, not the imposition of new technology for technology’s sake. EPA also not es that:

[t]his approach results in clearer and more effect ive implementation because only one part 63 NESHAP would apply to the source c ategory, and is supported by the fact that Section 112(d)(6) refers to ‘emiss ion standards promulgated under this section’ (emphasis added), as opposed to ‘subsection,’ in defining the scope of EPA's authority to review and revise s tandards. [71 Fed. Reg. 34437]

EPA stated in the final rule affecting the Butyl Ru bber and EPR source categories that in the technology review EPA:

... is not precluded from considering additional rele vant factors, such as costs and risk.... For example, when a section 112(d)(2) MA CT standard alone obtains protection of public health with an ample m argin of safety and prevents adverse environmental effects, it is unlikely that it would be “necessary” to revise the standard further... [73 Fed. Reg. 76226]

L. EPA has the authority to limit the conditions u nder which EPA revises an emission standard under CAA § 112(d)(6) and to base that revision on the
residual risk decision framework.

As EPA correctly pointed out in the proposed HON ru le, § 112(d)(6) provides the

Administrator with the discretion to decide the fac tors to consider in determining whether a revision to a MACT standard is necessary.

Section 112(d)(6) of the CAA requires us to review and revise MACT standards, as necessary, every 8 years, taking into account developments in practices, processes, and control technologies that have occurred during that time. This authority provides us with broad discre tion to revise the MACT standards as we determine necessary, and to account for a wide range of
relevant factors.

We do not interpret § 112(d)(6) as requiring anothe r analysis of MACT floors for existing and new sources. Rather, we interpret the provision as essentially requiring us to consider developments in pollution control in the industry71

(“taking into account developments in practices, pr ocesses, and control technologies''), and assessing the costs of potenti ally stricter standards reflecting those developments (69 FR 48351). As th e U.S. Court of Appeals for the DC Circuit has found regarding similar statutor y provisions directing EPA to reach conclusions after considering various enumera ted factors, we read this provision as providing EPA with substantial latitud e in weighing these factors and arriving at an appropriate balance in revising our standards. This discretion also provides us with substantial flexibility in ch oosing how to apply modified standards, if necessary, to the affected industry.

71 Fed. Reg. 34436-7

Although the language of § 112(d)(6) is nondiscreti onary regarding periodic review, it grants EPA much discretion to revise the standar ds “as necessary.” Thus, although the specifically enumerated factors that E PA should consider all relate to technology (e.g., developments in practices, proces ses and control technologies), the instruction to revise “as necessary” indicates that EPA is to exercise its judgment in this regulatory decision, and is not pr ecluded from considering additional relevant factors, such as costs and risk . EPA has substantial discretion in weighing all of the relevant factors in arriving at the best balance of costs and emissions reduction and determining what further co ntrols, if any, are necessary. This interpretation is consistent with numerous rul ings by the U.S. Court of Appeals for the DC Circuit regarding EPA's approach to weig hing similar enumerated factors under statutory provisions directing the ag ency to issue technology-based
standards. See, e.g. Husqvarna AB, v. EPA , 254 F.3d 195 (DC Cir. 2001). 71 Fed. Reg. 34437.

Congress gave EPA discretion in revising MACT stand ards “as necessary,” so long as EPA takes into account technology changes. As E PA notes, it has the authority to balance relevant factors, giving greater weight to the goal of § 112. Moreover, Congress expressly provided for EPA to consider hea lth risks in establishing MACT standards. Section 112(d)(4) grants the Admin istrator the authority to consider health thresholds “with an ample margin of safety” when establishing emissions standards under § 112(d).

Further, Congress clearly sought to have § 112(f) i nform § 112(d). Nothing in § 112 indicates that Congress sought to establish two different sets of “emissions standards” for hazardous air pollutants. As EPA co rrectly notes, § 112(f)(2) would require revised emission standards under (d) “if th e agency determines residual risk so justifies under (f)(2).” 71 Fed. Reg. 34,4 37. As EPA indicated, this approach would result in clearer and more effective implementation because only one Part 63 NESHAP would apply to the source catego ry.

EPA has determined that § 112(f)(2) allows the Agen cy to revise the relevant
MACT standard if further controls are warranted to reduce residual risks. As a practical matter, if EPA concludes that there are n o major changes that would significantly alter EPA’s original estimates of ris k that were used as a basis for EPA’s determination of ample margin of safety, then EPA should conclude that a72

revision is unnecessary because the source category presents risks that are both acceptable and protective with an ample margin of s afety.

Congress’ overall objective in establishing § 112 w as to assure that residual HAP emissions from MACT regulated sources are controlle d to a level that is considered “safe” or “acceptable.” This means redu cing risks to levels EPA determined are “acceptable” in accordance with step one of the decision
framework included in the 1989 Benzene NESHAP rule. It does not mean eliminating all risk or even requiring that all sou rces reduce their risks to levels less

than one-in-a million.

The legislative history of the 1990 CAA Amendments shows that Congress repeatedly rejected imposing controls beyond levels considered safe and protective of public health because they would impo se regulatory costs without providing any public health benefit. Under § 112(d )(4), EPA has the authority to consider a “health threshold, with an ample margin of safety,” when establishing
MACT standards. See S. 101-228, Dec. 20, 1989, at 520. Congress explai ned that the purpose of the provision was to ensure tha t MACT standards are not more stringent than necessary to protect human health in order to avoid unnecessary expenditures:

To avoid expenditures by regulated entities which s ecure no public health or environmental benefit, the Administrator is given d iscretionary authority to consider the evidence for a health threshold higher than MACT at the time the standard is under review. [Id. at 171]

Congress recognized that once EPA determined an acc eptable level of risk— i.e., a health threshold with an ample margin of safety (in this instance without the consideration of costs)—it need not reassess contro l technology. This can be compared to the determination under § 112(f) to est ablish first an “acceptable” or
“safe” level of risk without consideration of costs , followed by an ample margin of safety determination.

[T]he Administrator has two options to use in assur ing that low priority regulation will not be required [under section 112( c)(5) and 112(d)(4)]. . . . Again, there is a means to avoid regulatory costs w hich would be without public health benefit. [S. Rep. No. 101-228, at 175-76]

Congress also clearly rejected provisions that woul d have required all sources to meet a 1-in-1 million standard. Any proposed inter pretation of § 112(d)(6) as requiring successive reviews unless sources achieve this risk level implies that sources must ultimately meet a 1-in-1 million risk standard in order to avoid further regulation. There is no legislative history from t he 1990 CAA Amendments that suggests Congress expected EPA to revise MACT stand ards after a residual risk determination has been made that the risks presente d are “acceptable” and protect the public health with an ample margin of safety (e ither as a result of residual risk determination or through promulgation of a residual risk standard). There is no
discussion as to the factors to be considered once an “acceptable” risk level or level deemed protective with an “ample margin of sa fety” has been reached.73

Congress, in fact, expressed a clear concern for th e opposite – the waste of

resources to reduce risks below levels considered s afe.

If Congress had intended a separate “technology-bas ed” ratchet, then there would have been no need for § 112(f). As EPA noted in th e Coke Oven Rule:

we reiterate that there is no indication that Congr ess intended for section 112(d)(6) to inexorably force existing source stand ards progressively lower and lower in each successive review cycle, the likely r esult of requiring successive floor determinations. [70 Fed. Reg. 20008]

Further controls would have the effect of requiring additional emission reductions from sources that EPA believes are already sufficie ntly controlled to protect the public health with an ample margin of safety. Requ iring further emission reductions from these sources would be a waste of p ublic and private resources, and have no appreciable impact on public health.

M. A review under CAA §112(d)(6) is not required i f the post-MACT emission levels result in risks that are deemed to be protec tive of public health with an ample margin of safety, making any revisions under § 112(d)(6) not

necessary.

EPA should exempt source categories for which the p ost-MACT emission levels are protective of public health with an ample margi n of safety:

For example, when a section 112(d)(2) MACT standard alone obtains protection of public health with an ample margin of safety and prevents adverse environmental effects, it is unlikely that it would be “necessary” to revise the standard further, regardless of possible developmen ts in control options. Thus, the Section 112(d)(6) review would not need to enta il a robust technology

assessment. Note that the circumstances discussed above presume that the facts surrounding the ample margin of safety and en vironmental analyses have not significantly changed. If there have been sign ificant changes to fundamental aspects of the risk assessment then sub sequent section 112(d)(6) reviews with robust technology assessments (and rel evant risk considerations) may be appropriate. [71 Fed. Reg. 34437]

Because some source categories have already been fo und to be protective of public health with an ample margin of safety, it is proper to create a presumption that these sources should not be subject to further review under § 112(d)(6). To reduce regulatory uncertainty, however, EPA should further clarify that the nature of the “significant changes to fundamental aspects of the risk assessment” that might trigger a review under § 112(d)(6) are change s that are likely to increase the estimates of risk by orders of magnitude.

N. If EPA does undergo a review under CAA § 112(d) (6), the review should be limited to evaluating significant changes in techno logy/work practices -- not changing applicability thresholds.74

CAA § 112 (d)(6) indicates the scope of the (d)(6) technology review:

Review and Revision - The Administrator shall revie w, and revise as necessary (taking into account developments in practices, pro cesses, and control technologies), emission standards promulgated under this section no less than every 8 years.

It is our view that the scope of the § 112(d)(6) re view should be to assess advances in work practices and control technologies to determine if there are fundamental technology changes that could result in a step-change reduction in costs relative to the currently employed technology . The Agency would then need to determine the appropriateness of applying new re quirements to new/reconstructed sources, or whether retrofits on existing sources are justifiable, which is a higher hurdle due to the cost and comple xity of retrofitting existing sources that are already controlled.

With most control technologies (e.g. thermal oxidat ion, flares, steam strippers) there continue to be only incremental improvements in efficiency, design and reliability (e.g. via metallurgy changes), none of which represent a significant change in work practices or control technologies. In these cases, no further controls via § 112(d)(6) should be prescribed.

We do not believe that the § 112(d)(6) review shoul d be based on changing applicability thresholds. For example, expanding r ule applicability by reducing tanks size or vapor pressure cutoffs in applicabili ty determinations, or increasing a TRE cutoff independent of technology advances shoul d not be considered. This approach has nothing to do with developments in pra ctices, processes, and control technologies and is not indicated in the CAA as a b asis for the technology review. EPA already made applicability determinations in th e original MACT rules by evaluating the floor and “beyond-the-floor” options . Again, nothing in the statute
warrants review of these determinations and EPA sho uld not use § 112(d)(6) to modify the original MACT floor analysis by changing applicability thresholds. Changes in applicability thresholds should only be considered in the § 112(f) risk standards if justified to reduce risk.

O. If a technology review is warranted, EPA’s appr oach to the scope of the technology review is appropriate

In this proposal EPA summarizes how a technology re view will be performed. The approach appears to be consistent with the approach used in prior § 112(d)(6) reviews. First, the Agency determines if there hav e been any “developments in practices, processes, and control technologies” by drawing on Agency experience, reviewing technology databases, and requesting info rmation from industry. If such developments are available, then the Agency will co nduct an analysis of the technical feasibility of requiring the implementati on of the developments along with the impacts in areas such as costs, emission reduct ions, and risk reduction. The Agency has defined a “development” as:75

1. Any add on control technology or other equipment that was not identified and considered during MACT development;

2. Any improvements in add-on control technology or other equipment (that was identified and considered during MACT development) that could result in significant additional emission reductions;

3. Any work practice or operational procedure that was not identified and considered during MACT development; and

4. Any process changes or pollution prevention alte rnative that could be broadly applied that was not identified and considered duri ng MACT development.

### December 6 , 2010

Comments Submitted Electronically

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- D ocket @epa.gov

Atten tion Docket ID Number EPA

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R e : Docket ID Number EPA

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- 0 600 ; Comments on Proposed National

Emission Standards for Marine Tank Ves sel Loading Operations and Pharmaceuticals

Production

Dear Sir/Madam:

The Dow Chemical Company (Dow) appreciates the opportunity to comment on EPA’s proposed rule revisions for the subject source categories.

Dow is a diversified chemical company that harnesses the power of innovation, science and technology to constantly improve what is essential to human progress. Dow owns and operates a number of sources across the United States that could be impacted by this proposal.

Dow is generally suppor tive o f o ngoing efforts to improve air quality in the United States and has made significant investments to reduce emissions of both criteria and hazardous air pollutants over the last two decades. We ha ve reviewed EPA’s October 21 , 2010 proposal and have prepared the attached comments for EPA's consideration. Dow is especially concerned about EPA's proposed regulatory text that would establish criteria for asserting an affirmative defense for excess emissions that are caused by malfunctions.

Our comment s on these provisions are contained under the Pharmaceuticals Production

MACT

- Subpart GGG comments

, but the same comments apply to the parallel affirmative defense language proposed under each subpart.

If you have questions concerning the attached , plea se contact me at (361) 553

- 2920 or email: wozniara@dow.com

.

Sincerely,

Russell A. Wozniak

EH&S Global Regulatory Affairs

The Dow Chemical Company

### Attachment

cc:

M r

. Steve Shedd

, Energy Strategies Group, Sector Polici es and Programs Division

, Office of Air Quality Planning and Standards, US Environmental Protection Age ncy

- email: shedd.steve@epa.gov

Mr. Randy McDonald

, Energy Strategies Group, Sector Policies and Programs Division

, Office of Air Quality Planning and Standards, US Environmental Protection Agency

- email: mcdonald.randy@epa.gov

# Comments on EPA’s Proposed Rule

National Emission Standards for Hazardous Air Pollutants

for Marine Tank Vessel Loading Operations and

Pharmaceuticals Production

7 5 FR 65068

, October 21 , 2010

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Submitted by The Dow Chemical Company

December 6 , 2010Dow Chemical Comments Page 1



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### Comments on Marine Tank Vessel Loading Operations

- 40 CFR 63 Subpart Y

1. A c orrection is n e e ded in the p roposed l anguage of Subp art Y to a dd § 63.560(f)

c oncerning the s ubmerged l oading re quirement and to r eference the n ew p rovisions

in § 63.562(f)(1) or (f)(2) for ma rine t erminals that l oad m ore than 1 m illion

b arrels/yr of g asoline.

Before publication of the October 21, 2010 prop osed rule, EPA indicated an intent to propose submerged fill as the floor level of control for two MTVLO subcategories ( i.e., those facilities emitting less than 10/25 TPY of HAP and those facilities located more

than 0.5 miles from shore ) , for which the c urrent NESHAP do es not include emission standards. However, par a graph (f) in §63.560 appears to have been inadvertently left out of the proposed rule

Based on correspondence with Mr. Steve Shedd of EPA

, it is our understanding that agreed that a new prop osed paragraph (f) is missing in section 63.560. EPA’s intent was to require not only submerged fill, but also the control of marine terminal s that load more than one million barrels of gasoline. The proposed rule text should read as follows:

(f) A sou rce referred to this paragraph by (a)(1) or (2) of this section, must meet (f)(1) and (2) of this section.

(1) The submerged fill standards of 46 CFR 153.282, and

(2) The provisions of §63.562(f)(1) or §63.562(f)(2), if the terminal loads

more than 1 m illion barrels (M barrels) of gasoline.

Note : The proposed rule does include submerged fill requirement for marine tank vessel loading operations at existing offshore loading terminals in proposed § 63.560(d)(6)(i).Dow Chemical Comments Page 2



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2. Instead of r eferencing 46 CFR § 15 3.282 in §§ 63.560(d)(6)(i) and 63.560(f)(1),

EPA s hould d irectly c ite the a ctual s pecification for the s ubmerged f ill l ine.

46 CFR § 153.282 specifies that for cargo filling lines, “The discharge point of a cargo tank filling line must be no higher above t he bottom of the cargo tank or sump than 10 cm (approx. 4 in.) or the radius of the filling line, whichever is greater.”

Although it is helpful to know the basis of this specification, the Marine MACT should directly specify the submerged filling standard within Subpart Y for the following

reasons:

1. Based on information from Kirby Inland Marine LP, 46 CFR § 153.282 is strictly a regulation governing tank ships and is not applicable to tank barges.

2. Referencing the Coast Guard rules could cause issues if t hat particular section (§153.282) is later revised. EH&S personnel responsible for tracking changes to the EPA regulations such as the Marine MACT are usually not the same people that track changes to the Coast Guard rules. Including the submerged fillin g line specifications directly in the Marine MACT simplifies compliance by eliminating

the need to reference the Coast Guard rules.

Based on the previous comment, when EPA adds paragraph (f) to sec tion 63.560, Dow

recommends the following language :

(f) A source referred to this paragraph by (a)(1) or (2) of this section, must meet (f)(1) and (2) of this section.

(1) The submerged fill standards of 46 CFR 153.282 The discharge point of a cargo tank filling line must be no higher above the bottom of the cargo tank or sump than 10 cm (approx. 4 in.) or the radius of the filling line, whichever is greater , and

(2) The provisions of §63.562(f)(1) or §63.562(f)(2), if the terminal loads more than 1 million barrels (M barrels) of gasoline.

Similar language should also be added to the proposed § 63.560(d)(6)(i) instead of

referenc ing 46 CFR § 153.282.Dow Chemical Comments Page 3



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3. EPA s hould c larify that Section 63.562(e) d oes n ot a pply to e xisting S ources with

em issions l ess than 10 and 25 tons (since the emission limits do not apply) and

that o nly Sections 63.560(f)(1) [new section], 63.567(j)(4) and 63.565(l) a pply as p er §63 .560(a)(3).

As proposed, Section 63.562(a)(2) state s that existing sources with emissions less than 10 and 25 tons are not subject to the emission standards in § 63.562(b) and (d), except as specified in paragraph (f) [submerged fill].

Section 63.562(a)(3) implies that only the recordkeeping requirements in § 63.567(j)(4) and the emission estimation requirements in § 63. 565(l) apply to these sources, except as specified in paragraph (f) [submerged fill]

.

§ 63.560 Applicability and designation of affected source.

(a) Maximum achievable control technology (MACT) standards.

(2) Existing sources with emissions less than 10 and 25 tons are not subject to the

e missions standards in §63.562(b) and (d), except as specified in paragraph (f) of

this section.

(3) The recordkeeping requirements of §63.567(j)(4) and the emission estimation requirements of §63.565(l) apply to existing sources with emi ssions less than 1 0 and 25 tons, except as specified in paragraph (f) of this section.

The way § 63.560(a)(2) is worded, one might conclude that §63 .562(e) applies to existing

sources with emissions less than 10 and 2 5 tons. However, §63 .560(a)(3) c ould again

lead one to conclude that only those citations mentioned are applicable to sources with

emissions less than 10 and 25 tons.

Section 63.562(e) pertains to operation and maintenance requirements for air pollution control equipment and monitoring equipment for affected sources. At all times, including periods of startup, shutdown, and malfunction, a facility is required to operate and maintain a source, including associated air pollution control equipment, in a manner consistent with safe and good air pollution control p ractices for minimizing emissions. This section requires development of a written operation and maintenance plan that describes in detail a program of corrective action for varying (i.e., exceeding baseline parameters) air pollution control equipment and monitoring equipment, based on monitoring requirements in §63.564, used to comply with these emissions standards. The plan shall also identify all routine or otherwise predictable continuous monitoring system ( e.g., thermocouples, pressure transducers, con tinuous emissions monitors (CEMS))

variances. Because the emission standards do not apply to existing sources with emissions less than 10 and 25 tons, one could conclude that the operation andDow Chemical Comments Page 4



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maintenance requirements for air pollution control equipment a nd monitoring equipment do not apply either

.

In addition, t he proposed changes to the Marine MACT include adding paragraph (7) to § 63.562(e) to address recordkeeping and reporting requirements during periods of

malfunction

. The rule also is proposing a n affirmative defense against civil penalties for exceedances of emission standards caused by malfunctions, as well as the criteria for establishing the affirmative defense. Because §63.560(a)(2) specifically states that the

emission standards in § 63.562( b) and (d) do not apply to existing sources with emissions less than 10 and 25 tons, then the affirmative defense requirements proposed in §63.562(e)(7) for exceedances of the emission standards caused by malfunctions should not apply either.

Dow recommen ds that the language in § 63.560(a)(3) be revised to state: (a)(3) Only the recordkeeping requirements in §63.567(j)(4) and the emission estimation requirements of §63.565(l) apply to existing sources with emissions less than 10 and 25 tons, except as spec ified in paragraph (f) of this section. No other requirements in this subpart apply to existing sources with emissions

less than 10 and 25 tons.Dow Chemical Comments Page 5



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4. In the e mission e stimation p rocedures U nder §63.565(l), Dow r equests that EPA

c larify that the e xclusio n for “ C ommodities E xempted by § 63.560(d)” was i ntended

to me an that a nnual HAP e missions d o n ot n eed to be e stimated from m arine t ank

v essel l oading o perations that m eet a ny of the e xemptions p rovided in § 63.560(d).

For existing sources with emissions le ss than 10 and 25 tons, Section 63.560(a)(3) requires complying with the recordkeeping requirements in § 63.567(j)(4) and the emission estimation requirements in § 63.565(l) (in addition to the proposed §63.560(f)).

Section 63.565 requires calculating an an nual estimate of HAP emissions from marine tank vessel loading operations, excluding “ commodities ” exempted by §63.560(d).

Section 63.560(d) provides several exemptions from the MACT and RACT standards and only uses the term “commodity” in the §63 .560(d)( 1) for emissions resulting from marine tank vessel loading operations of “commodities” with vapor pressures less than 10.3 kilopascals (kPa) (1.5 pounds per square inch, absolute) (psia) at standard conditions, 20 C and 760 millimeters Hg (mm Hg).

Other e xemptions provided in §63.560(d) that should be excluded from the annual emission estimation requirement include:

**•** Marine tank vessel loading operations where emissions are reduced by using a vapor balancing system [§63.560(d)(2)].

**•** Marine tank vessel load ing operations that are contiguous with refinery operations at sources subject to and complying with subpart CC of this part, National Emissions Standards for Organic Hazardous Air Pollutants from Petroleum Refineries [§63.560(d)(3)]

**•** Benzene emissions from marine tank vessel loading operations that are subject to and complying with 40 CFR part 61, subpart BB, National Emissions Standards for Benzene Emissions from Benzene Transfer Operations [§63.560(d)(4)]

**•** Marine tank vessel loading operations at loading b erths that only transfer liquids containing organic HAP as impurities [§63.560(d)(5)]

**•** Marine tank vessel loading operations at existing offshore loading terminals [§63.560(d)(6)]

**•** Ballasting operations [§63.560(d)(7)]

EPA could improve the language in §63

. 565(l) by rewording it as follows:

(l) Emission estimation procedures. For sources with emissions less than 10 or 25 tons and sources with emissions of 10 or 25 tons, the owner or operator shall calculate an annual estimate of HAP emissions, excluding com modities emissions from marine tank vessel loading operations exempted by §63.560(d), from marine tank vessel loading operations.Dow Chemical Comments Page 6



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Regulatory Language Associated with this Comment

§ 63.565 Test methods and procedures.

(l) Emission estimation procedure s. For sources with emissions less than 10 or 25 tons and sources with emissions of 10 or 25 tons, the owner or operator shall calculate an annual estimate of HAP emissions, excluding commodities exempted by §63.560(d), from marine tank vessel loading oper ations . Emission estimates and emission factors shall be based on test data, or if test data is not available, shall be based on measurement or estimating techniques generally accepted in industry practice for operating conditions

at the source.

§ 63.567 Recordkeeping and reporting requirements.

(j) Emission estimation reporting and recordkeeping procedures. The owner or operator of each source complying with the emission limits specified in §63.562(b)(2), (3), and (4) shall comply with the following pr ovisions:

(4) Owners or operators of marine tank vessel loading operations specified in §63.560(a)(3) shall retain records of the emissions estimates determined in §65.565(l) and records of their actual throughputs by commodity, for 5 years.

§ 63.560 A pplicability and designation of affected source.

(d) Exemptions from MACT and RACT standards.

(1) This subpart does not apply to emissions resulting from marine tank vessel loading operations, as that term is defined in §63.561, of commodities with vapo r pressures less than 10.3 kilopascals (kPa) (1.5 pounds per square inch, absolute) (psia) at standard conditions, 20 °C and 760 millimeters Hg (mm Hg).

(2) The provisions of this subpart pertaining to the MACT standards in §63.562(b)(2), (3) and (4) and to the RACT standards in §63.562(c)(3) and (4) do not apply to marine tank vessel loading operations where emissions are reduced by using a vapor balancing system, as that term is defined in §63.561. The provisions pertaining to the vapor collection system , ship

- to

- shore compatibility, and vapor tightness of marine tank vessels in §63.562(b)(1) and (c)(2) do apply.

(3) The provisions of this subpart pertaining to the MACT standards in §63.562(b)(2), (3), and (4) do not apply to marine tank vessel loading o perations that are contiguous with refinery operations at sources subject to and complying with subpart CC of this part, National Emissions Standards for Organic Hazardous Air Pollutants from Petroleum Refineries, except to the extent that any such provisi ons of this subpart are made applicable by subpart CC of this part.Dow Chemical Comments Page 7



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(4) The provisions of this subpart pertaining to the MACT standards in §63.562(b) and (d) do not apply to benzene emissions from marine tank vessel loading operations that are subject to and complying with 40 CFR part 61, subpart BB, National Emissions Standards for Benzene Emissions from Benzene Transfer Operations, except that benzene emissions or other HAP emissions (i.e., nonbenzene HAP emissions) from marine tank vessel loading operat ions that are not subject to subpart BB are subject to the provisions of this subpart.

(5) The provisions of this subpart pertaining to the MACT standards in §63.562(b) and (d) do not apply to marine tank vessel loading operations at loading berths that o nly transfer liquids containing organic HAP as impurities, as that term is defined in §63.561.

(6) The provisions of this subpart do not apply to marine tank vessel loading operations at existing offshore loading terminals, as that term is defined in §63. 561, except existing offshore loading terminals must meet paragraph (d)(6)(i) and (ii) of this section. (i) The submerged fill standards of 46 CFR § 153.282, and (ii) The provisions of § 63.562(f)(1) or § 63.562(f)92), if the terminal loads

more than 1 mil lion barrels (M barrels) of gasoline. [Proposed 10/21/2010]

(7) The provisions of this subpart do not apply to ballasting operations, as that term is defined in §63.561.Dow Chemical Comments Page 8



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### Comments on Pharmaceuticals Production

- 40 CFR 63 Subpart GGG

1. The d efinition of a m alfunction d oes n ot s pecify the d uration of the e vent as b eing

“short

. ” T herefore, the a f f

irmative d efense l anguage s hould be c onsistent

.

On p age 65146 of the October 21, 2010 proposed rule , EPA proposed changes to 40 CFR § 63.1250(g)(4) to include a ffirmative defense language. In § 63.1250(g)(4)(i)(A)

, EPA states that to establish the affirmative defense, the excess emissions were caused by a “sudden, short

§63 .1251 , infrequent, and unavoidable...” H owever, the definition of malfunction in § 63.1251 does not s pecify the du ration of the malfunction event

. T herefore, EPA should

not add this type of restriction to this definition in the context of the proposed a ffirmative defense requirements, but should maintain consistency with the definition of malfunction

in the Pharma MACT rule.

Malfunction means any sudden, infrequent, and not reasonably preventable failure of air pollution control equipment, emissions monitoring equipment, process equipment, or a process to operate in a normal or usual manner whi ch causes, or has the potential to cause, the emission limitations in an applicable standard to be exceeded. Failures that are caused all or in part by poor maintenance or careless operation are not malfunctions.

2. The a ffirmative d efense r equirements s pe cified are u nreasonable

, d i fficult to

p rove, and s ubject to i nterpretation . At a m inimum, EPA s hould m ake the r evisions

n oted b elow to t hese p rovisions.

On p age 65146 of the October 21, 2010 proposed rule , EPA proposes that nine requirements be met (no t including additional notification requirements) in order for a facility to claim an affirmative defense in a malfunction situation. Some of these requirements are unreasonable, difficult to prove, and subject to varying interpretation

. Dow suggests the following revisions to these paragraphs and others and provides supporting rationale for these revisions on the next page s :Dow Chemical Comments Page 9



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Suggested Revisions to 40 CFR §63 .1250 (g)(4)

(4) In response to an action to enforce the standards set forth in this subpart, you

may assert a civil defense to a claim for civil penalties for exceedances of such standards

that are caused by a malfunction, as defined in § 63.2. Appropriate penalties may be

assessed, however, if the respondent fails to meet its burden of p roving all the

requirements in the affirmative defense. The affirmative defense shall not be available

for claims for injunctive relief.

(i) To establish the affirmative defense in any action to enforce such a limit, the

owners or operators of facilities must timely meet the notification requirements of

paragraph ( 4 )(ii) of this subsection, and must prove by a preponderance of evidence that:

Comment

- See later comments on concerns with notification requirements especially for very small emissions associa ted with small malfunctions. Failure to notify simply should not negate the ability of the regulated entity t o assert an affirmative defense especially for very small excess emission events.

(A) The excess emissions were caused by a sudden, short, i nfrequent , and

unavoidable failure of air pollution control and monitoring equipment, or a process to

operate in a normal and usual manner; and could not have been prevented through careful

planning, proper design or better operation and maintenance practi ces; and did not stem

from any activity or event that could have been foreseen and avoided, or planned for; and

were not part of a recurring pattern indicative of inadequate design, operation, or

maintenance; and

Comment

- As previously noted in these comm ents, the duration of an excess emission event should not be an element for asserting the affirmative defense. Some excess emission events may last for a period of seconds while others may be longer

in duration such as a mechanical failure that results in the need to shutdown and purge process equipment.Dow Chemical Comments Page 10



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Comment

- The term "infrequent" is subject to different interpretations by regulatory agencies and should be evaluated on a case

- by

- case basis and removed from the regulat ion text

.

Comment

- The Affir mative Defense should also be available for a malfunction of required monitoring equipment or EPA should clarify in these rules that a malfunction of monitoring equipment that does not result in excess emissions

does not need to be treated as a malfunction

.

(B) Repairs were made as expeditiously as possible when the applicable emission

limitations were being exceeded. Off

- shift and overtime labor were used, to the extent

practicable to make these repairs; and

Comment

- The sentence regarding the use of "off

- shift and overtime labor" should be deleted from this paragraph and flexibility provided to allow a regulated entity to repair and respond to equipment malfunctions in an expeditious and appropriate manner. In some cases, a short period of engineeri ng/design work and/or planning must be part of the effort to repair equipment and the immediate

use of off

- shift and overtime labor may not always be appropriate. Responding to malfunctions is many times a case

- by

- case situation depending on the specifics of the malfunction and equipment to be repaired.

(C) The frequency, amount and duration of the excess emissions (including any

bypass) were minimized to the maximum extent practicable during periods of such

emissions; and

(D) If the excess emis sions resulted from a bypass of control equipment or a

process, then the bypass was unavoidable to prevent loss of life, severe personal injury,

or severe property damage; and

Comment

- EPA should exclude the word "severe" from paragraph (D) as evaluating severe vs. non

- severe property damage is highly subjective and open to a wide range of interpretations. In addition, the term "severe" personal injury is also highly subjective vs. "non

- severe" personal injury.Dow Chemical Comments Page 11



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(E) All possible steps were taken to minimize the impact of the excess emissions

on ambient air quality, the environment, and human health; and

(F) All emissions monitoring and control systems were kept in operation if at all

possible; and

(G) Your actions in response to the excess emissi ons were documented by

properly signed, contemporaneous operating logs; and

Comment

- A large number of Dow plants use some form of electronic media to document actions in response to excess emissions. Imposing a requirement to print and sign a record of such action is outdated if one can document the response

to actions in an electronic format.

(H) At all times, the facility was operated in a manner consistent with good

practices for minimizing emissions; and

Comment

- EPA needs to further define th e term "facility" in this context. For example, does the term cover the "affected facility" as defined in the Part 63 Rule or does the term cover the specific piece of equipment or a control device

where the malfunction occurs?

(I) The owner or oper ator has prepared a written root cause analysis to determine,

correct and eliminate the primary causes of the malfunction and the excess emissions

resulting from the malfunction event at issue. The analysis shall also specify, using the

best monitoring me thods and engineering judgment, the amount of excess emissions that

were the result of the malfunction.

Comment

- EPA should require a formal root cause analysis for larger excess emission events, but should provide some flexibility in these provisions fo r smaller malfunctions where a small amount of excess emissions occur. An example of a smaller event is the development of a pinhole leak in process piping that is not covered by a LDAR provision in the rule. The cause of the smaller events should be

det ermined, but perhaps a formal root cause analysis is not warranted for all

smaller events.Dow Chemical Comments Page 12



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3. The a ffirmative d efense n otification r equirements are u nreasonable

, r epetitive

and co ntradict other r egulatory r equirements

.

On p age 65146 of the October 21 , 2010 proposed rule , EPA proposes that notification requirements be met in order for a facility to claim the affirmative defense. These requirements include an immediate notification by telephone o r FAX no later than 2 business days after the initial occu rrence of the malfunction and a written report to the Administrator within 30 days. The 30 day report requires the facility to demonstrate that the requirements specified in (g)(4)(i) be met.

The immediate notification (within 2 business days) should be eliminated for at least the following reasons:

**•** It is burdensome and duplicative of e mergency response reporting procedures

under SARA/CERCLA /EPCRA

, as well as many State regulations for larger

excess emission events

.

**•** T his new requirement will contrad ict many existing reporting rules by requiring the reporting of emission quantities well below CERCLA/SARA/State Agency Reportable Quantities. Thus, the agency will be flooded with reports of very

small excess emissions.

**•** The rule structure encourages r eporting to the agency even if the owner/operator is not sure if an exceedance of an emission limit has occurred for fear of not being able to claim the affirmative defense. Thus, agency reporting systems will become "clogged" with insignificant reports f urther complicating the ability of all resources to respond to a larger event.

**•** The rule is not clear to whom the reports should be submitted (e.g., the EPA Regional Office, State or Local Agency, LEPC )

.

In addition, t he 30 day reporting requirement re quires information that is already required

to be submitted in the semi

- annual (periodic) report under the Pharma MACT as specified in §63 .1260(g)

. T herefore, by imposing this redundant requirement, EPA is requiring that the information be submitted twice . The periodic report requires

information be submitted for malfunction events in which excess emissions have occurred, including the natur e and cause of any malfunctions and the corrective actions

taken . Additionally, Title V reporting requirements includ e reporting of events in which emission limits have been exceeded. Therefore, this requirement is duplicative in nature

and should be eliminated.Dow Chemical Comments Page 13



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4. The p roposed c hanges to the p erformance t est l anguage in the Pharma MACT is

t oo v ague and s hould be c la rified.

The following proposed language on p age 65147 of the October 21, 2010 proposed rule related to performance testing is too vague : “Performance testing shall be conducted under such conditions as the Administrator specifies to the owner or operat or based on representative performance of the affected source for the period being tested. Upon request, the owner or operator shall make available to the A dministrator such records as may be necessary to determine conditions of performance tests.”

Based on this language, it would seem that EPA intends to write the test plan for the facility rather than allow the facility to develop emission profiles and identify worst case conditions for testing the control device as provided for in the rule . EPA (or the delegated authority) is already r equired to approve the facilities test plan

. T herefore, this language seems to add another layer of oversight that is redundant and not needed.

### I NTERNATIONAL 

### I NSTITUTE OF 

### S YNTHETIC 

### R UBBER 

### P RODUCERS



### , I NC



### .

December 6, 2010

Comments on EPA’s Proposed Rule: NESHAP Emissions for Group I Polymers and Resins; Residual Risk and Technology Review s, 75 Fed. Reg. 65068 (October 21, 2010)

Via Electronic Filing: a-and-r-docket@epa.gov

EPA Docket Center, EPA West (Air Docket) U.S. Environmental Protection Agency

Mailcode: 2822T 1200 Pennsylvania Ave., NW Washington, DC 20460

Attention: Docket ID No. EPA-HQ-OAR-2010-0600

Dear Sir or Madam:

The International Institute of Synthetic Rubber Producers Inc. (IISRP) welcomes the opportunity to provide comments on EPA’s proposed rule, “National Emission Standards for

Hazardous Air Pollutant Emissions: Hard a nd Decorative Chromium Electroplating and Chromium Anodizing Tanks; Group I Polymers and Resins; Marine Tank Vessel Loading Operations: Pharmaceuticals Production; The Pr inting and Publishing Industry; and Steel Pickling-HCl Process Facilities and Hydrochlor ic Acid Regeneration Plants.” 75 Fed. Reg. 65068 (October 21, 2010).

IISRP represents the global synthetic rubbe r industry including ni ne members located in the US. We have worked collaboratively with EPA for almost two decades beginning with the development of the initial MACT standards fo r our industry in the early 1990’s. IISRP has coordinated plant visits with the EPA and its contractor in an effo rt to facilitate the regulatory process. IISRP’s comments are in response to the proposed Group I Polymers and Resins (P&R1) source category requirements.

* * * *

The IISRP has three major concerns. Our firs t concern is with the proposed requirements modifying the startup, shutdown, a nd malfunction (SSM) provisions

The proposed SSM provisions represent a majo r departure from prior standard setting proposals. Under the proposed regulations, a single numerical emission limit would apply regardless of the status of the facility. The onl y relief from a penalty would be for a limited class of malfunctions, and then only if the owner or operator can demonstrate by a preponderance of

the evidence that the malfuncti on meets each of a series of nine (9) separate criteria. See proposed 40 CFR §§63.480(j)(4)(i)(A)-(I). (“Appropr iate penalties may be assessed, however, if the respondent fails to meet its burden of pr oving all the requirements in the affirmative defense.”) Further, the burden of proving that the malfunction meets all of the nine criteria rests on the owner or operator. Proposed 40 CFR §§63.482 (b). (“Affirmative defense means, in the context of an enforcement proceeding, a res ponse or a defense put forward by a defendant,

### 2 regarding which the defendant has the burde n of proof, and the merits of which are independently and objectively evaluated in a judicial or administrative proceeding.”).

* * * *

There is no legal requirement for a single, constant numerical emission standard applicable under all possible conditions.

As an initial legal matter, EPA is not required to establish a constant and inflexible

numerical emission standard that applies at all times to fac ilities regulated under the NESHAPs program. The proposed rule cites the D.C. Circ uit’s decision in Sierra Club v. EPA, 551 F.3d 1019 (D.C. Cir. 2008), cert. denied, 130 S. Ct. 1735 (2010), which vacated the exemption for excess emissions during SSM events contained in the 40 C.F.R. part 63, subpart A General

Provisions for NESHAPs under CAA section 112. Th e proposal states that the D.C. Circuit’s interpretation of the definition of “emission stan dards” means that the court decision “requires EPA to apply MACT emission standards on a con tinuous basis, thereby precluding exemptions applied for malfunctions or other singul ar events.” 75 Fed. Reg. at 63,282.

While the court decision may be read to re quire an emission standard during SSM events (“there must be continuous section 112-comp liant standards” (551 F.3d at 1027)), however, nowhere does the decision prohibi t EPA from issuing different emissions standards during SSM events as compared to normal operations. To the contrary, the opinion specifically acknowledges that the CAA’s broad definiti on of “emission standard” as including “any requirement relating to the opera tion or maintenance of a source to assure continuous emission reduction” suggests that EPA need not “necessarily continuously apply[] a single standard.” 551

F.3d at 1027.

Existing precedent also fails to support the Agency’s unilateral approach of ignoring the obvious and inescapable emission impacts which o ccur when a facility is operating under SSM conditions. The D.C. Circuit has recognized that standards based on what sources achieve must

account for the limitations inherent in the technol ogy used to reduce emissions. For example, in a case reviewing NSPS under sectio n 111 of the CAA, Portland Cement Ass’n v. Ruckelshaus, 486 F.2d 375, 398 (D.C. Cir. 1973), the court ac knowledged that “’startup’ and ‘upset’ conditions due to plant or emission device malfuncti on, is an inescapable aspe ct of industrial life

and that allowance must be made for such factors in the standards that are promulgated.” Id. at 399; see National Lime Ass’n v. EPA, 627 F.2d 416, 431 n.46 (D.C. Cir. 1980) (noting that “a uniform standard must be capable of being met under most adverse conditions which can reasonably be expected to recur”). The D.C. Circuit acknowledged this same principle when reviewing emission standards for ne w sources in the medical waste incinerator rule under section 129 in Sierra Club v. EPA, 167 F.3d 658 (D.C. Cir. 1999). In that case, while the court did not find the record sufficient to support EPA’s approa ch for new sources, the D.C. Circuit did not object to a standard-setting a pproach which would account for the performance of technology under the “worst reasonably fo reseeable circumstances.” See id . at 665. Furthermore, the D.C. Circuit reiterated the principle in National Lime that “where a statute requires that a standard be ‘achievable,’ it must be achievable ‘under the mo st adverse circumstance s which can reasonably be expected to recur.’” Id. at 665 (citing National Lime Ass’n v. EPA, 627 F.2d 416, 431 n.46

### 3 (D.C. Cir. 1980)). EPA’s approach in the propo sed Polymers and Resins I MACT ignores the existing legal principles by appl ying the standards at all times, including SSM conditions, but making no allowance in the emission standard ap plicable under these adverse and substantially differing conditions. Further, other than citing th e Sierra Club v. EPA opinion, the proposal fails to provide an explanation justifying the out right deletion of any malfunction provisions.

* * * *

The proposed criteria for determining if a malfunction will not result in penalties are ambiguous, technically unrealistic, and unworkable.

Rather than making appropria te allowance for malfunctions in the emission standards applicable to the source cat egories, EPA proposes minimal relief for a limited subset of malfunctions through an “affirmative defense” to civil penalties. The proposed criteria for determining if a malfunction qualifies for the affirm ative defense consist of a series of nine (9) tests that an unexpected malf unction condition must meet . 1 

### The proposed criteria include provisions that are inherently unattainable for exceedances that are a re sult of malfunctions.

The first criterion is flawed in several resp ects. The first sentence of proposed 40 CFR 63.480(j)(4)(i)(A) only permits use of the affirmativ e defense to a subset of malfunctions, those

that are “short” and those that are “unavoidable” (as opposed to “not reasonably preventable.”) The criteria for using the affirm ative defense should be identical to the criteria for a malfunction in the malfunction definition. Under subpart U, the definition of “malfunction” from 40 CFR§63.2 applies. That definition is: “Malf unction means any sudden, infrequent, and not

1 See proposed 40 CFR §63.480(j)(4) (“Appropriate penalties may be assessed, however, if the respondent fails to meet its burden of proving all the requirements in th e affirmative defense. The affirmative defense shall not be available for claims fo r injunctive relief. (i) To establish the affirmative defense in any action to enforce such a limit, the owners or operators of facilities must timely meet the notification requir ements of paragraph (j)(4)(ii) of this section, and must prove by a preponderance of evidenc e that: (A) The excess emissions were caus ed by a sudden, short, infrequent, and unavoidable failure of air pollution control and monitoring equipment, or a pr ocess to operate in a normal and usual ma nner; and could not have been prevented through careful planning, proper design, or better operation an d maintenance practices; and did not stem from any activity or event that could have been foreseen and avoided, or planned for; and were not part of a recurr ing pattern indicative of inadequ ate design, operation, or maintenance; and (B) Repairs were made as expeditiously as possibl e when the applicable emission limitations were being exceeded. Off-shift and overtime labor were used, to th e extent practicable to ma ke these repairs; and (C) The frequency, amount, and duration of the ex cess emissions (including an y bypass) were minimized to the maximum extent practicable dur ing periods of such emissions; and (D) If the excess emissions resulted from a bypass of control equipment or a process, then the bypass was unavoidable to prevent loss of life, severe pers onal injury, or severe property damage; and (E) All possible steps were taken to minimize the impact of the excess emissions on ambient air quality, the environment, and human health; and (F) All emissions monitoring and control systems were kept in operation if at all possible; and (G) Your actions in response to the excess emissions were documented by properly signed, contemporaneous operating logs; and (H) At all times, the facility was operated in a manner consis tent with good practi ces for minimizing emissions; and (I) The owner or operator has prepared a written root cause analysis to determine, correct, and eliminate the primary causes of the malfunction and th e excess emissions resulting from the malfunction event at issue. The analysis shall also specify, using the best monitoring methods and engi neering judgment, the amount of excess emissions that were the result of the malfunction.”)

### 4 reasonably preventable failure of air polluti on control and monitoring equipment, process equipment, or a process to opera te in a normal or usual manner which causes, or has the potential to cause, the emission limitations in an applicab le standard to be exceeded. Failures that are caused in part by poor maintenance or careless op eration are not malfunctions.” Any differences

between the affirmative defense and the definitio n of malfunction are arbi trary and capricious as the Agency has not cited any basis for a difference.

The first criterion also requi res that the excess emissions “c ould not have been prevented through careful planning, proper design, or better operation and maintena nce practices; and did not stem from any activity or event that could ha ve been foreseen and avoided, or planned for, and were not part of a recurring pattern i ndicative of inadequate design, operation, or maintenance.” Proposed 40 CFR §63.480(j)(4)(i)(A). In hindsight, after a malfunction occurs, it is usually possible to identify act ions that would have prevented a malfunction. After the fact, preventing the malfunction can appear as simple as simply replacing a particular component earlier, or slightly modifying a specific design to include a redundant feat ure, or modifying the manufacturing process.

The flaw in this approach is that an owner or operator must design, operate, and maintain a facility without the benefit of hindsight. Decisions regarding th e facility design, the maintenance schedules, and the manufacturing pro cess must be made on a daily basis without the knowledge that comes with the occurrence of the malfunction. Owners and operators have a strong financial incentive to mainta in a facility’s up-time and theref ore use their best engineering judgment to minimize facility downtime due to ma lfunctions. By their very nature the vast majority of malfunctions are sudden and unexpect ed. In advance of such a malfunction, an owner or operator cannot know wh ich design feature, component, or process parameters should be modified, replaced, or adjusted to preven t an unknown malfunction th at might occur in the

future.

As an illustration of the flaw in the proposed approach, consider a hypothetical exceedance caused by a valve failure. After the malfunction, it may be tempting to cite as the result of the exceedence a failure to replace th e valve, perhaps at a cost of $1000, and to

therefore conclude that the malf unction was preventable. However, before the malfunction it can be unclear whether particular components need to be replaced (example: valves, or tanks, or piping, or control equipment). Furt her, even if it appears based on the facility’s best engineering judgment that valves should be replaced first, it is also unclear which valve should be replaced. The cost to replace every valve in a large facility, at $1000 per va lve, could be prohibitive and not cost-effective given the minimal size of the exceedance.

Furthermore, as written, a facility owner a nd operator is subject to potential penalties through no fault of their own. Penalties ar e allowed if the malfunctions “stem from any activity

or event that could have been foreseen a nd avoided, or planned for.” Proposed 40 CFR §63.480(j)(4)(i)(A). (emphasis added) . For facilities in particul ar geographic regions natural disasters are readily foreseeable (e.g., hurricane s, earthquakes, tornadoes). Under the proposed regulation, emission exceedances that result fr om such events would not qualify for the affirmative defense. This is simply because with the expenditure of sufficient funds it is technically possible to avoid or design for these events. While the resources required to prepare

### 5 a facility for these types of events may be exorbita nt, there is no cost ceiling in the criteria. The

criterion is whether it is techni cally possible to have “foreseen and avoided, or planned for” the event and the resulting malfunc tion, not whether the cost of doing so is reasonable.

Therefore under subpart U, the definition of “malfunction” from 40 CFR §63.2 applies. That definition is: “Malfunction means any sudd en, infrequent, and not reasonably preventable failure of air pollution control and monitoring eq uipment, process equipment, or a process to operate in a normal or usual manner which causes, or has the potential to cause, the emission limitations in an applicable standard to be ex ceeded. Failures that are caused in part by poor maintenance or careless operation are not malfunctions.” The first sentence of proposed 40 CFR 63.480(j)(4)(i)(A) only permits use of the affirmativ e defense to a subset of malfunctions, those

that are “short” and those that are “unavoidable” (as opposed to “not reasonably preventable.”) The criteria for using the affirm ative defense should be identical to the criteria for a malfunction in the malfunction definition. Any differences are arbitrary and capricious as the Agency has not cited any basis for the change that is supported by the record.

Other proposed criteria that must be met to avoid penalties are unduly ambiguous. For example, an owner and opera tor must ensure that “ [a]ll possible steps were taken to minimize the impact of the excess emissions on ambient air qu ality, the environment, and human health.” Proposed 40 CFR §63.480(j)(4)(i)(E). It is unclear if this propos ed provision requires an owner or operator to undertake all t echnically possible mitigation, or all economically feasible mitigation, or some third measure that appropriate ly limits “all” actions to mitigate the release. Moreover, it is unclear what an owner or operator could do to minimize”impacts” beyond minimizing emissions, which is alre ady required under other criterion.

Similarly, the requirement that an exceedance resulting from a malfunction must be reported within two days to qualify is ambiguous . Proposed 40 CFR §63.480(j)(4)(ii). At the start of an event, particularly a malfuncti on, it is often not possibl e to know whether the emissions will eventually exceed the limits. This is particularly true for emission standards that have long averaging periods. It would also not serve the Agency nor the regulated community well if EPA were to receive reports for many even ts which were later found not to have resulted in an exceedance. For these same reasons, a tw o-day notification is arbitrary and unreasonable. This requirement should be modified to allow the report to be made within 180 days of the

exceedance.

It is arbitrary and unreasonable to require th at the root cause analysis be submitted and corrective actions completed, al ong with all other affirmative defense information, within 180 days of the start of the event. Proposed 40 CF R §63.480(j)(4)(ii). For si gnificant events, it can take weeks to pull together a team of experts and to complete a root cause analysis. Long term corrective actions can require signi ficant facility modifications that can take years to design and execute or procedural changes that can take m onths to safely implement. EPA should require that the root cause analysis be submitted as soon as practical after determining that there was an

exceedance due to a malfunction.

### 6 The unintended effects of the proposed treatmen t of malfunctions can be quite serious. For instance, in the case of an unexpected ma lfunction of the emission monitoring equipment an owner or operator may be unable to prove that an emission exceed ance did not occur. This could be the case even though all operational and proce ss-related parameters are within specification during the outage related to the monitors. In th e absence of monitoring da ta, an analysis of the emissions might have to rely on the theoretica l maximum rate that could be physically emitted

rather than the actual emission ra te. Further, if the higher assu med emission rate results in an exceedance being alleged by a regulatory agency it will likely not be possible to qualify under the nine point tests outlined for an affirmative defense. This is because criteria number six, an operator has to demonstrate that “[a]ll emissions monitoring and control systems were kept in operation if at all possible.” Yet, a malfuncti on to the monitoring equipment is precisely the reason that an emissions exceedance might be alleged. EPA should modify the SSM provision to explicitly preclude monitoring failures from resulting in assumed em ission exceedances, and also not subject such malfunctions to the requir ement of demonstrating the facility meet the criteria for an affirmative defense requirement.

* * * *

The proposal inappropriately favors reducin g emissions over preventing injuries or

fatalities.

Particularly disturbing are the limits placed on bypassing emissions equipment to prevent injuries to employees or other people. Pena lties can be avoided for bypassing the emissions equipment only when it is “unavoidable to prevent loss of life, severe personal injury, or severe property damage.” Proposed 40 CFR §63.480(j)(4)(i )(D). Limiting this allowance only when it

is “unavoidable to prevent loss of life, severe personal injury ” is an inappropriate tradeoff given the low residual risk values calculated for these facilities. As EPA notes in presenting the results from their analysis, the li fetime cancer risk to the people w ith the highest exposures to the facility’s emissions are in th e range of 1 in a million (10 -6 

### ). Allowing a temporary emissions

exceedance will therefore not result in a significantly higher health risk. Given the low residual risk levels, it should be acceptable to allow a temporary bypass of the emission equipment to avoid or prevent a significant possibility of injuries to workers and others. If a limitation is needed on what constitutes an “injury,” it is possible to utilize the OSHA classification for a “serious” versus “severe” injury. EPA should defi ne an appropriate (lower) level of injury and require that the injury be likely avoided, as oppos ed to requiring the inju ry be unavoidable, to qualify for the affirmative defense.

* * * *

The proposed approach does not properl y weigh costs as required under the CAA.

The preamble to the proposed MACT standards acknowledges that EPA has not evaluated the costs of complying with the MACT standard under malfunc tion conditions. “EPA

believes that a malfunction should not be viewed as a distinct operating mode, and, therefore, any emissions that occur during malfunctions do not need to be factored into development of

### 7 CAA section 112(d) standards, which, once promul gated, apply at all times.” 75 Fed. Reg. at 65074. Indeed, EPA flatly states, “it is reasona ble to interpret CAA section 112(d) as not requiring EPA to account for malfunctions in setti ng emissions standards.” Id. EPA also cites Weyerhaeuser v. Costle, 590 F.2d 1011, 1058 (DC Circu it 1978) as supporting EPA’s decision to avoid evaluating the effects of malfun ctions on the proposed MACT standards. 2



### There are several contradictions contained wi thin the Agency’s approach. First, EPA is neglecting to analyze the economic feasibil ity of meeting the MACT standards under malfunction conditions, but then requiring complia nce with those very same standards during malfunctions. This approach results in proposed standards that have not been analyzed to determine if the costs associated with complian ce are economically feasible. Without this cost and technical information, EPA cannot meet the clear statutory requirement in CAA section 112(d) that the MACT standard be set at a level that the Administrator “t aking into consideration the cost of achieving such emission reduction . . . determines is achievable.” Without the costs

and technical data under malfunc tion conditions it is not possible to determine if compliance with the proposed standard is achievable.

The reference to the Weyerhaeuser v. Cos tle opinion is also unavailing because the current SSM provisions exempt malfunction c onditions from the numerical MACT emission standard. Thus, at the time of the decision it wa s not necessary to address every malfunction or upset condition in the regulation. Indeed, the quote cited by the Agency, which states that “no general limit, individual permit, or even any upset provision can an ticipate all upset situations,” supports IISRP’s position that the proposed regu lations governing emissions during malfunctions are unworkable. The unanticipat ed and unpredictable nature of malfunctions, and the Agency’s cite to a D.C. Circuit opinion emphasizing that no regulation can addr ess the broad set of possible malfunctions, demonstrate that the cour ts and the Agency have long recognized the futility of attempting to issue such a regulation.

The costs associated with complying with th e proposed regulation are likely to be very high. This results from the need to meet the emission standards during the malfunction condition, or alternatively to meet the restrictive affirmative defe nses. Since the possible nature

and extent of a malfunction are not known in adva nce, the ability to re duce and eliminate the possibility of an emission exceedance depends on the ability to design, maintain, and operate a facility with multiple redundanc ies and virtually no defective co mponents. Such a condition can only be met through upgrades to the design and fr equent tests and replace ment of components, all of which add significant costs. Given th e low residual risks associated with the Group 1 Polymers and Resins standards after this most recent round of MACT standard reviews, these additional costs would be found to be economically infeasible using the crit eria and cost per ton figures developed by EPA.

2 “In the nature of things, no general limit, individual permit, or even any upset provision can anticipate all upset situations. After a certain point, the transgression of regulatory limits caused by ‘uncontrollable acts of third parties,’ such as strikes, sabotage, operator intoxication, or insanity, and a variety of other eventualities, must be a matter for the administrative exercise of case-by-case en forcement discretion, not for specification in advance by regulation.” Weyerhaeuser v. Costle, 590 F.2d 1011, 1058 (DC Circuit 1978).

### 8 In light of the high costs associated with th e malfunction provisions, it is disturbing that EPA would maintain a provision that allows the Agency to impose additional costs to prevent

malfunctions even when a malfunction meets the nine (9) separate tests to qualify under the affirmative defense provisions. Specificall y, 40 CFR §63.480(j)(4)(i) st ates in part, “The

affirmative defense shall not be available for clai ms for injunctive relief.” Thus, the Agency can dictate that additional costly measures (injunctive relief) be put in place to prevent malfunctions and the resulting emissions, even for malfuncti ons that “could not have been prevented through careful planning, proper design, or better operation and maintenance practices; and did not stem from any activity or event that could have been foreseen and avoided, or planned for.” It does not appear that this provision ha s any cost ceiling that prevents the Agency from demanding that changes be made to a facility to prevent all malf unctions that result in an emissions exceedance. Without a cost ceiling, the proposed provision will nullify and override the current cost analysis that EPA undertakes in setting the MACT standar d. This provision should be eliminated since under EPA’s own proposed criteria the malfunctions that are being disc ussed “could not have been prevented.” Therefore th ese are malfunctions that cannot not be efficiently addressed through injunctive relief.

In conclusion, the proposed approach for addressing emissions dur ing malfunctions is unworkable and technically unrealistic. As owne rs and operators attempt to comply, the net result will be an increase in compliance cost s far out of proportion to any environmental or human health benefits, costs that will be far in excess of the control costs deemed reasonable during this very same MACT standards review process. And should a facility suffer an unexpected malfunction, their regulatory status an d potential exposure to civil penalties will be subject to a set of arbitrar y criteria that are ambiguous and subject to “after-the-fact” interpretation. EPA should re-propose criteria for addressing emissions dur ing malfunctions that meet the requirements of Clean Air Act section 112(d) that such standards be “achievable” when “taking into consideration the cost of achieving such emission reductions.”

* * * *

Our next major concern is that no further rulemaking is required for the three source categories that apply to ou r industry (Butyl Rubber, Ethylene Propylene Rubber and Polychloroprene Rubber and therefore the June 3 0, 2011 final rule deadline is not applicable to these source categories. We have provided comments on this issue on EPA’s proposed consent decree with the Sierra Club ( EPA ID No. EPA-HQ-OGC-2010-058). ExxonMobil Chemical has provided extensive comments on two of thes e elastomers (Butyl and Ethylene Propylene)

and the IISRP is in full support of thei r position.

**** EPA published the proposed consent decree refere nced above in the Federal Register on July 14, 2010 (75 Fed. Reg. 40827). We submitted comments recommending that EPA modify the terms of the cons ent decree to exclude any further rulemaking for the Butyl Rubber and Ethylene Propylene Rubber source ca tegories that are incl uded in the current Group I Polymers and Resins rule. The basis for the request was as follows:

**** EPA, for four sources categories within th e Group I Polymers and Resins category of sources, including Butyl Rubber and Ethylen e Propylene Rubber, has already proposed and

### 9 finalized 112(d)(6) and 112(f) determinations. See 73 Fed. Reg. 76,220 (Dec. 16,2008). EPA acknowledged the merit of these comments by amending the proposed consent decree

when it moved to enter the decree on Se ptember 27, 2010. The proposed consent decree states that “the Group I Polymers and Resins NE SHAP addresses nine different categories . . . . [t]he obligations in this paragraph apply only to the following five Group I Polymers and Resins categories: Epicholorohydrin Elasto mers Production; Hypal onTM Production; Nitrile Butadiene Rubber Production; Polybutadien e Rubber Production; and Styrene Butadiene

Rubber and Latex Production.” Footnote 4 of the Proposed Consent Decree, Sierra Club v. Jackson, No. 09-cv-00152.

**** EPA’s proposal discussing these source categorie s states that “[t]th ese four categories were determined to be “low-risk,” as the ma ximum lifetime individual cancer risks were less than 1-in-1-million, and there were no other heal th concerns of significance. Therefore, we determined that conducting additional risk anal yses for these categories was not warranted. We are not re-opening the RTR [Residual Risk and Technology Review] in this notice for these four source categories.” 75 FR at 65075

**** Despite this recent finding less than two y ears ago, EPA nonetheless is embarking on yet another rulemaking despite acknowledging its re cently completed work found no significant residual risk. The purported basis for yet agai n conducting a new emissi on standard setting process is the Agency’s identification “of si gnificant emission sources for which MACT standards were not previously developed.” This seems unlikely because th e facilities at issue have not been modified in any significan t manner that would increase emissions.

Further, as noted in the ExxonMobil comments, EPA lacks the legal au thority to establish new limits. Specifically, EPA is without authority to impose new standards under §§ 112(d)(2) and (3) for the Polymers and Resins 1 source cate gories since a MACT sta ndard already has been promulgated – § 112(d)(6) provides the Agency’s only authority to adjust existing MACT

standards.

Once EPA establishes a MACT standard for a particular source category, the Agency has the authority under §112(d)(6) to “review and revise as necessary (taking into account developments in practices, processes, and control technologies), emissions standards promulgated under this section no less often than every 8 years.” In other words, EPA does not

have unfettered discretio n to revisit a prior MACT determination once that determination has been issued. Rather, EPA may revise a prior determination only “as necessary” according to explicit statutory criteria. Cf. New Jersey v. EPA , 517 F.3d 574, 582 (D.C. Cir. 2008) (“Thus, EPA can point to no persuasive evidence sugges ting that section 112(c )(9)’s plain text is ambiguous. It is therefore bound by section 112(c )(9) because “for EPA to avoid a literal interpretation at Chevron step one, it must show either th at, as a matter of historical fact, Congress did not mean what it appears to have sa id, or that, as a matter of logic and statutory structure, it almost surely could not have meant it,” Engine Mfrs. Ass’n v. EPA , 88 F.3d 1075, 1089 (D.C. Cir. 1996), showings EPA has failed to make.”).

In this proposal, EPA explains that, “For eight source categor ies subject to three of the MACT standards, we identified significant emission sources within the categories for which

### 10 standards were not previously developed” a nd that, “We are proposing MACT standards for these emission sources pursuant to CAA section 112(d)(2) and (3)." 75 Fed. Reg. at 65074. This explanation makes it clear that EPA is not in voking §112(d)(6) as the authority for the new proposed standards – indeed, the preamble provide s no analysis of “developments in practices, processes, and control technologies ” to justify the proposed standa rds, as would be required if EPA were relying on §112(d)(6). And, there is no mention of §112(d)(6 ) in relation to the proposed new standards. Instead, the Agency is invoking §§112(d)(2) and (3) directly, as if a

MACT standard for these sources cat egories does not already exist.

As explained above, once EPA makes a MACT determination for a particular category, §112(d)(6) provides the only authority for the Agen cy to later review and possibly revise the determination. Section 112(d)(6 ) expressly authorizes EPA to review existing determinations and provides specific criteria to guide and constrain th e review. The existence of this express authority forecloses the Agency ’s ability to directly invoke §§112(d)(2) and (3) for a given source category when a MACT determination has already been issued for the source category.

Notably, even if the Agency had invoked §112( d)(6) as authority for revising the existing P&R1 rule, it still would not ha ve authority to regulate emi ssions points for which standards were not established in the original rulemaki ng. The original MACT determinations may be revised only “as necessary (taking into account developments in practices, processes, and control technologies).” Perceived “gaps” in the orig inal MACT determinations are not “practices, processes, and control technologi es” that are properly within the scope of a §112(d)(6) review.

In any event, it is not a reasonable exercise of authority to establish new emissions limitations under an existing MACT standards when there is no significant risk associated with emissions from sources in the given source category.

EPA asserts in the proposed rule the propositi on that standards must be established for “significant emissions points” not currently regulated under exis ting MACT standards – even in circumstances where the Agency has determined that the existing MACT standard protects health and the environment with an ample margin of safety. Establishing new standards under these circumstances is patently unreasona ble and cannot be jus tified under §112(d)(6).

In the case of the P&R1 NESHAP, EPA expl ains that for the Ep ichlorohydrin source category and based on a detailed assessment of risk to health and the environment due to HAP emissions from these source categories, “we conti nue to propose that the current MACT standard provides an ample margin of safety to protect public health and the e nvironment, and we are proposing to re-adopt the existing MACT standard to satisfy section 112(f) of the CAA.” 75 Fed. Reg. at 65098. EPA previously had made this determination for both the Butyl Rubber and EPR source categories and yet in this rule making the Agency proposes new emission limitations/controls for Butyl Rubber and EPR fr ont-end process vents and Butyl Rubber backend process vents. 73 Fed. Reg. 76620.

As explained above, EPA has no direct aut hority under §§112(d)(2) a nd (3) to create new limits in source categories for which a MACT standa rd already has been promulgated. But, even if EPA had invoked §112(d)(6) as authority for a dopting the new standard for back end process

### 11 operations, such a standard would not be justifie d because EPA’s own analysis demonstrates that the existing MACT standard provides an ample margin of safety to health and the environment. In fact, EPA plainly admits for the Epichlorohyd rin source category that “the MACT standard, prior to the implementation of the proposed emission limitation to the back-end process operations discussed in this secti on, provides an ample margin of safe ty to protect public health.” 75 Fed. Reg. 65099.

In the case of the Butyl Rubber and EPR sour ce categories, EPA’s resi dual risk evaluation, 73 Fed. Reg 76220 (Dec. 16, 2008), not only found that the public is protected with an ample margin of safety, but that the risks are so low th at they would not meet EPA’s criteria for risk reduction (i.e., reducing the number of people ex posed to an above one in one million cancer risk). In fact, as EPA states in the residual risk no furthe r action notice, for these source categories “No HAP that are know n, probable, or possible huma n carcinogens are emitted from sources in the category.” Id. at 76225, Table 4, Note 6. A simila r finding is report ed relative to EPA hazard index of concern (HI 1.0). EPA concluded the maximum hazard index for the EPR source category is 0.5 (due to n-hexane) and 0.2 for the butyl source category (due to methyl chloride). Id. at 76225, Table 4. In these circumstances, it is patently unreasonable for EP A to regulate beyond the point

that the standard has been found to already provide an ample margin of safety. This is regulation for the sake of regulation and, as such, contradicts Congress’s clea r intent that an ample margin of safety is an appropriate stopping po int for emissions limitations under §112 .3



### We fully support the Exxonmobil position re garding beyond the floor controls. EPA already made the decision that beyond the floor controls for continuous front-end process vents were not cost-effective in the 1996 rulemaking. EPA has no authority and no grounds to perform a second section 112(d)(2) analys is for these emission points.

In the 1996 final rule, EPA was aware that haloge nated vent streams were vented to a flare or boiler at Butyl Rubber, Halobutyl Rubber, and EPR facilities. While the flare or boiler provided control for the organic HAP, methyl chloride, it was well-known that hydrogen chloride would be generated by the combustion pr ocess. After considering this information,

EPA determined that the floor for control of this organic HAP was co mbustion in a flare or boiler and that beyond-the-floor co ntrol of the HCl generated in the combustion was not costeffective and not justified. EPA explained: Only one existing facility was identified in each of the Halobutyl and the Butyl rubber subcategories. At both of these facilities, halogenated vent streams were vented to a

3 EPA also explains in the context of the proposed new limit for back-end process operations that, because the existing MACT standard already provides an ample margin of safety, “we do not believe it will be necessary to conduct another residual risk review under CAA section 112(f) for this source category 8 years following promulgation of new back-end process limitations, merely due to the addition of this new MACT requirement.” Implicit in this statement is the suggestion that a resi dual risk review under §112(f) may be needed for new emissions limits that are established for existing MACT st andards. As with setting MACT standards in the first instance, §112(f) provides a one-time opportunity for conducting a residual risk review of a MACT standard. There is no basis under the law for the suggestion that a revision to an existing MACT standard triggers the need for another §112(f) residual risk review. Indeed, the proposal provides no explanation whatsoever as to why such a subsequent review could be required under the law.

### 12 flare and/or boiler. Since both of thes e subcategories were single-facility subcategories, the MACT floor was determin ed to be the existi ng level of control. The EPA examined the impacts of requi ring halogenated vent streams at the Halobutyl and Butyl rubber facilities to comply with the proposed requirements for all other elastomer subcategories (i.e, th e HON-level of control). The EPA concluded

that the costs associated w ith this level of control we re not reasonable, given the

associated emission reduction. Therefor e, the proposed regulation allowed halogenated streams at Halobut yl and Butyl rubber facilities that were routed to a flare or boiler prior to pr oposal to continue to be c ontrolled with these combustion devices, without additional contro l for the resulting halides. ... ...[T]he EPA concluded that four of the fi ve EPR facilities have halogenated streams

that are routed to either a boiler or flare. For this reason, the EP A has determined that the floor for EPR is the existing level of cont rol for these halogenated vent streams. In addition, as with Halobutyl and Butyl rubber, the EPA does not believe that it would be cost-effective to require new incinerators and scrubbers to be installed at these facilities, when the only net emission reduction would be th e reduction of the hydrochloric acid, since the reduction of th e halogenated organic compound in the

incinerator would be th e same as was already being achie ved in the boiler or flare. However, as noted above, sufficient stream-s pecific information was not available to conduct this analysis. Theref ore, the final rule has be en changed to extend the exemption for existing halogenated stream s routed to a boiler or flare to EPR producers. Further, the final rule specifies that this exemption does not apply to new sources. 61 Fed. Reg. at 46919.

This passage from the 1996 rulemaking clea rly demonstrates that EPA has conducted a complete analysis under sections 112(d)(2) and (d)(3). Therefore, EPA met its obligation to set

an emissions standard for these HAPs in thes e categories and subcategories. EPA’s only remaining authority to revisit the rulemaking, in the absence of a timely le gal challenge to this particular standard in the P&R1 rule, which was not lodged, are the 8- year technology review

and the one-time residual risk re view. Those reviews, too, were completed and final action noticed at 73 Fed. Reg. 76220, again without challeng e. Even as part of a periodic technology review, EPA is not required, and we believe not allowed, to “start from scratch.” NRDC v. EPA, 529 F.3d 1077, 1084 (D.C. Cir. 2008).

The 1996 rulemaking also undercuts EPA’s claime d basis for revisiting the standard – the

“absence of a standard for a significant emissions source.” 75 Fed. Reg. at 65108-65109. EPA performed the required standard-setting analysis under section 112(d)(2) c onsistent with D.C. Circuit precedent. This is not a case of “no control floors” or source “exemptions,” which the

D.C. Circuit has held to be unlawful under section 112. Nat’l Lime Ass’n v. EPA, 233 F.3d 625 (D.C. Cir. 2000); Sierra Club v. EPA, 551 F.3d 1019 (D.C. Cir. 2008). In this case, EPA determined that the existing leve l of control for the halogenated compounds – a flare or boiler – was all that was required, and the further re duction in HCl was not cost-effective. The “exemption” in the 1996 rule is from “ HON-level” controls, not all control.

### 13 We are not aware of any prior MACT rule wh ere EPA, in the absence of a court decision, rule vacatur, or settlement agreement, revisi ted a beyond-the-floor analysis. EPA should not do

so in this rule.

* * * *

Our final concern is that. EPA must incl ude variability in th e floor calculation In establishing the emission limits EP A did not consider variability, wh ich is appropriate in setting emission standards. It is acceptable and expected for EPA to consider emi ssion levels associated with normally anticipated and r ecurring operating conditions, and d ecisions of the D.C. Circuit acknowledge that data from more adverse opera ting conditions can inform the basis of the standard. Thus, EPA should establish a standard that MACT floor units can meet if operating

“under the most adverse circumstances which can reasonably be expected to recur.” [ Sierra Club v. EPA, 167 F.3d 658, 665 (D.C. Cir. 1999), quoting National Lime Ass’n v. EPA, 627 F.2d 416, 431 n.46 (D.C. Cir. 1980)] Indeed, in that 1999 Sierra Club decision, the court emphasized:

EPA would be justified in setting the floors at a level that is a reasonable estimate of the performance of the ‘best cont rolled similar unit’ under the worst reasonably foreseeable

circumstances ....” [Sierra Club v. EPA, 167 F.3d at 665. Accord Cement Kiln Recycling Coalition v. EPA, 255 F.3d 855, 863 (D.C. Cir. 2001)]

In the Cement Kiln case, EPA argued that it is acceptable for it to consid er the range of emissions from the best performing sources and that test results at more adverse conditions “’are more helpful than normal operating data would be in estimating performance under a variety of conditions and thus in helping to assure that properly designed and opera ted sources can achieve the standard.’” [ Cement Kiln, 255 F.3d at 867 (quoting EPA)] The court affirmed this interpretation. [Id] Further, the D.C. Circuit in its 2004 decision in Mossville Environmental

Action Now v. EPA held that floors may legitimately account for variability because “each [source] must meet the [specified] standard ev ery day and under all operating conditions.” [F.3d 1232, 1242, as quoted in Sierra Club v. EPA, 479 F.3d 875, 882 (D.C. Cir. 2007) (Brick MACT)]

In this proposal, EPA only used one data poi nt, the annual emissions level and from one calendar year (2009) for units in the Butyl, N itrile and Epichlorohydrin subcategories, and did

not look at statistical variation over time. And if EPA revisits the subcategories then EPA should

also consider other factors such as the vari ability in source design and operation within a subcategory.

There are a number of factors th at contribute to the variabil ity of emissions on an annual emissions per unit of production basis. These factors include producti on itself as not all emissions (e.g. fugitives) are a function of producti on. Other factors include grade slate changes, operating conditions, process reliability and c ontrol device reliability/service factor.

### 14 Respectfully submitted,

sent via email

James L. McGraw Managing Director and CEO International Institute of Synthe tic Rubber Manufacturers (IISRP)

cc: Mr. Scott Throwe Compliance Assessment and Media Programs Division (Mail Code: 2223A) Office of Compliance U.S. Environmental Protection Agency 1200 Pennsylvania Avenue, N.W. Washington, DC 20460

Mr. Randy McDonald Sector Policies and Programs Division (E143-01) Office of Air Quality Planning and Standards U.S. Environmental Protection Agency Research Triangle Park, NC 27711

Attn: Desk Officer for EPA Office of Information and Regulatory Affairs Office of Management and Budget (OMB) 725 17th Street, NW. Washington, DC 20503