OFFICE MOSCOW NEW YORK PAlO ALTO RIYADH WASHINGTON THE WARNER ABU DHABI 1299 PENNSYLVANIA AVE., NW AUSTIN WASHINGTON, D.C. BEUING 20004-2400 DALLAS DUBAI TEL +1 202.639.7700 HONG KONG FA( +1 202.639.7890 HOUSTON www.bakerbotts.com LONDON

William M. Bumpers TEL +1 202.639.7718 FAX +1 202.585.1008 william. bumpers@bakerbotts.com 

### The Honorable Lisa P. Jackson Administrator U.S. Environmental Protection Agency Room 3000, Ariel Rios Building Washington, DC 20004

Re: Petition for Reconsideration and Stay of the Portland Cement NESHAP Rule Submitted on Behalf of Holcim (US) Inc.

Dear Administrator Jackson:

Enclosed please find a Petition for Reconsideration and Stay of the "National Emissions Standards for Hazardous Air Pollutants from the Portland Cement Manufacturing Industry," 75 Fed. Reg. 54,970 

### (Sept. 9, 2010). We submit this Petition on behalf of Holcim (US) Inc., a leading manufacturer and distributor of cement and cementitious materials.
Holcim (US) Inc. would welcome the opportunity to discuss the issues raised in the Petition with your staff. Please feel free to contact me at the address and phone number listed above.
Sincerely,

William M. Bumpers

N.)



### cc: Kevin McLean, Acting Associate General Counsel for the Air and Radiation Law Office

(via messenger); Keith Barnett, Office of Air Quality Planning and Standards (via email and FedEx); Steven Silverman, U.S. EPA (via email).

## BEFORE THE ADMINISTRATOR OF THE

UNiTED STATES ENVIRONMENTAL PROTECTION AGENCY

WASHINGTON, DC



## In Re: National Emissions Standards for Hazardous Air Pollutants from

the Portland Cement Manufacturing industry



# ***

EPA—HQ—OAR-2002-005 1



## PETITION FOR RECONSiDERATION AND STAY

SUBMITTED BY HOLCIM (US) INC.

November 15, 2011

William M. Bumpers Michael B. Schon

BAKER BOTTS L.L.P. 

### 1299 Pennsylvania Ave., NW Washington. 1)C 20004 'Fe!.: 202-639-7700

Co uns'e/tor Iloicim (US

. ) Inc.

### I. Introduction

Holcim (US) Inc. ('Holcim") respectfully requests that the United States Environmental Protection Agency ('EPA" or "Agency") grant reconsideration and immediately stay the compliance deadline and effective data of the final Rule entitled National Emissions Standards
/r Hazardous Air Pollutants froin the Portland Cement Manuflicturing Industry, Docket Number EPA41QOAR20020051, 75 Fed, Reg. 54,970 (Sept. 9, 2010) ("the PC NESHAP" or "the Rule"). Holcim also asks EPA to stay the Rule pending reconsideration and judicial rev jew.

The comments and objections set forth in this petition are of central relevance to the outcome of the Rule and Ilolcim could not have raised them during the comment period because they are based on newly available data. Specifically, Holcim has collected data from the operation of continuous emissions monitoring systems ("CEMS") installed after the Rule wasfinalized. The data demonstrate that the formula EPA used to predict variability and rollingaverage emissions for the particulate matter ('PM") standards in the Rule dramatically underestimates variability and results in inaccurate predictions. As a result, the PM standards established in the Rule fail to reflect the emissions performance actually achieved by the best performing sources. The PM standards, thus, are inconsistent with the Act and the goals EPA described when creating the Rule. Holcim was unable to provide these comments during the comment period because data from PM CEMS was not yet available. Given the significance of the flaws demonstrated by these comments, the short compliance schedule, and the long-term investment and planning required to comply fully with the PC NESHAP, a stay pending the Agency's reconsideration is appropriate and required by justice. At a minimum, EPA should stay the effectiveness of the PM standards to allow lime for the Agency to consider this data, seek additional data as necessary, and set achievable PM standards.


### IL Background
1-lolcim is a leader in the US cement industry, producing and supplying more than 13.5 million tons of cement and cenientilious products annually to 44 states. More than 2,500 Holcim employees generate over $1 .5 billion in annual revenue. Over the last five years, Holcim has invested in excess of $2 billion to upgrade and expand its U.S. facilities.

1-lolcim's parent company, Holcim Ltd, is a global leader in the building materials sector, supplying over 150 million tons of cement and almost 200 million tons of aggregates annually in more than 70 countries. Holcirn is considered a leader in sustainable development and has been a member of the I)ow Jones Sustainability Index for the building materials sector for nine years. I lolcirn seeks to minimize the environmental impact of its operations, and views its commitment to sustainable development as instrumental to its future prosperity. Specifically, 1-lolcim is keenly aware of the challenges connected to climate change and environmental protection. Proof ol' that is the ongoing voluntary investments to upgrade plant equipment as well as regular maintenance and training required by 1-lolcim's emissions monitoring and reporting ("EMR")
program.
EPA promulgated the final PC NESHAP on August 6, 2010. The Rule establishes emissions standards for mercury, total hydrocarbons ("THC"), and particulate matter ("PM") from new and existing cement kilns located at major and area sources, and for hydrochloric acid

### (IlCl") from new and existing kilns located at major sources, pursuant to Clean Air Act

(CAA") Section 112, 42 U.S.C. § 7412. Section 112 requires EPA to establish emission standards that reflect "the maximum degree of reduction in emissions of hazardous air pollutants that the Administrator, taking into consideration the cost of achieving such emission reduction, and any non-air quality health and environmental impacts and energy requirements, determines is achievable." 42 U.S.C. § 74l2(d)(2). These standards are referred to as maximum achievable control technology" or MACT standards. The CAA sets forth minimum stringency requirements for MACT standards, known as "floors." For new sources, the floor cannot be less stringent than 'the emission control that is achieved in practice by the best controlled similar source." Id. 

### § 7412(d)(3). For existing sources in a category or subcategory with 30 or more sources, like the portland cement industry, the floor cannot be less stringent than "the average emission limitation achieved by the best performing 12 percent of existing sources (for which the Administrator has emissions information)." 1 Id. § 

### 7412(d)(3)(A).
EPA elected to establish 30-day rolling average PM emissions limitations in the Rule. I lowever, EPA did not have continuous PM monitoring data upon which to base the 30-day rolling average. Instead, EPA used emissions data obtained through stack tests at the kilns identified by the Agency as the best performing 12 percent. The stack test data from those six (6) kilns represented only very short-term PM performance - typically three, one-hour tests. Because the EPA lacked data depicting the 30-day rolling average emissions of the best performing cement kilns, it used the Upper Prediction Limit Formula, or "UPL," to estimate what the 30-day rolling average would be based on the stack test data and some flawed assumptions. In particular, EPA assumed that each one-hour data set represented a separate day, even though the data set was part of a single, continuous three-hour test. EPA asserted that the tJPL predicted what the 30-day rolling average emissions achieved by the best performing sources would be 99% of the time.

Flolcim now has continuous emissions data with which to test the robustness of the UPL. Applying the UPL to actual 30-day rolling average emissions data from 1-lolcim's kilns demonstrates that the UPL significantly underestimates the 99th percentile by more than half Accordingly, the standards do not reflect what the best performers actually achieve and are arbitrary, capricious, and contrary to the law.
I lolcim submitted comments regarding various portions of the Rule and is among the petitioners in the consolidated petition for review before the United States Court of Appeals for the 1).C. Circuit, For/land Cement Association v. EJA, No. 

### 10-1959 (and consolidated cases). This separate petition for reconsideration is necessary because newly available data demonstrate a fundamental flaw in the methodology EPA used to develop the rule. Holcim respectfully requests that the Administrator reconsider and stay the relevant portions of the Rule until regulations that accurately reflect the PM emissions achieved from the best performing sources in the MACT pool can be promulgated.

The process for revising MAC1 standards is set forth in CAA Section 112(f), 42 U.S.C. § 7412(f), which authorizes EPA to "review any residual health risks that had not been eliminated by the initial technology-based standards." NRDC v. EPA, 529 F.3d 1077, 1080 (I).C. Cir. 2008). 1-lolcirn has raised issues regarding EPA's decision to revise the PM standards using Section 112(d) rather than Section 112(f), as required by the CAA, in its petition for review to the D.C. Circuit. Holcim does not revisit that issue here, but in no way intends to waive the argument or support EPA's improper use of Section 112(d) to revise the PM standards.

### III. Request for Reconsideration and Stay

For the reasons set forth below, 1-lolcim urges EPA to withdraw the PM standards in the Rule and develop new standards based on the emissions limitations actually achieved by the best performing sources. The calculation that EPA used to convert stack test data, from single points in time, to 30-day rolling averages when determining the MACI floor is grossly inaccurate, resulting in standards that are not actually achieved by the best performing sources. The result is that Holcim and the portland cement industry will face the expenditure of millions of dollars in equipment and production loss in an attempt to comply with an unlawful and unachievable emissions standard.

A. CAA Section 397(d)(B) requires EPA to reconsider the PC NESHAP.

Section 307(d)(7)(B) of the CAA provides for EPA's reconsideration of a CAA rule upon objection by a petitioner. See 42 U.S.C. § 7607(d)(7)(13). EPA must grant reconsideration when the petitioner:

[ c l an demonstrate to the Administrator that it was impracticable to raise [an] objection [during the period for public commenti or if the grounds for such objection arose after the period for public comment ... and if such objection is of central relevance to the outcome of the rule.

Id. In such a situation, reconsideration is mandatory, as the CAA commands that EPA "shall convene a proceeding for reconsideration of the rule and provide the same procedural rights as would have been afforded had the information been available at the time the rule was proposed." Id. (emphasis added). The reconsideration provision of Section 307(d)(7)(B) is applicable to the PC NES1IAP rulemaking because the Administrator expressly determined that the PC NESHAP is subject to the procedural provisions of CAA § 307(d). 75 Fed. Reg. at 54,971.

The CAA authorizes EPA to stay the effectiveness of the Rule for up to three months during reconsideration. See 42 U.S.C. § 7607(d)(7)(B). The Administrative Procedure Act ("APA") further authorizes EPA to stay the effectiveness of a rule indefinitely during reconsideration. tinder the APA, "[wihen an agency finds that justice so requires, it may postpone the effective date of action taken by it, pending judicial review." 5 U.S.C. § 705. EPA has applied this standard to CAA actions. See, e.g., Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NSR): Aggregation, 75 Fed. Reg. 27,643 (May 1 8, 2010). The standard for such an administrative stay is different from the standard for a stay used by the courts because a judicial stay requires a demonstration of irreparable harm. This is clear from the text of the APA:

When an agency finds that justice so requires, it may postpone the effective date of action taken by it, pending judicial review. On such conditions as may be required and to the extent necessary to prevent irreparable injury, the reviewing court ... may issue all necessary and appropriate process to postpone the effective date of an agency action or to preserve status or rights pending conclusion of the review proceedings.Thus, the APA deliberately contrasts what is required for an administrative stay

"justice so requires" - and a judicial stay - "conditions as may be required" and "irreparable harm." Similarly, CAA Section 307(d)(7)(B) authorizes an administrative stay, but does not premise that stay on a finding of irreparable injury. Such differences must be given effect - there is no irreparable harm requirement for an administrative stay. Given the substantial impact of these regulations on Holcim and the portland cement industry, "justice so requires" that EPA stay the new provisions of the final rule and take other necessary and appropriate steps to defer the compliance deadlines and other provisions of the Rule until the outcome of the reconsideration process.

B. Newly available emissions data demonstrates that the UPL formula EPA used to set the standards for PM emissions was fatally flawed, resulting in an arbitrary, capricious and unachievable standard that is contrary to the CAA.

"EPA may not deviate from Section 7412(d)(3)'s requirement that floors reflect what the best performers actually achieve ...." 

### Cement Kiln Recycling Coalition v. EPA, 255 F.2d 855, 861 (D.C. Cir. 2001). EPA set the floors by identifying the best performing 12% of the 45 kilns for which it had data. Development of the MACT Floors for the Final NESHAP for Portland Cement 16, 40-41 (Aug. 6, 2010), EPA Dkt. No. EPA-HQ-OAR-2002-0051-3403 (hereafter, "Development of the MACT Floors"). Ilowever, the data that EPA had from those six kilns was limited to only 29 stack tests, which generally consisted of 3-hour test runs each, for a total of 87 hours of emissions data. Id. EPA recognized that the data from these stack tests alone does not reflect the degree of emissions reductions actually achieved from the sources because it only represented the emissions levels achieved at the point in time that the test runs were made and fails to account for variability. 

### See id. at 5, 16-17; Proposed Rule, 74 Fed. Reg. 21,136, 21,143, 21,155 (May 6, 2009). PM emissions from cement kilns are variable under both long and short periods of time because of, among other things, variations in the performance of PM emissions controls. 

### See, e.g., 75 Fed. Reg. at 54,974. EPA was required to account for this variability to determine what the best performers actually achieved. Id.

After proposing the rule, EPA elected to require compliance monitoring through PM CEMS, not stack tests, and to set PM standards based on 30-day rolling average emissions levels. Id. at 54,988. The 87 hours of stack test data that EPA had from the best performing sources failed to reflect the 30-day rolling average emissions from those sources because the stack test data represents emissions during a very brief, fixed point in time, which cannot reflect the inherent emissions variability from the kilns over multiple days or weeks. EPA attempted to address this shortcoming by using the UPL. 

### See, e.g., Development of' the MACT Floors at 5,16- 17, 40-41. The UPI. is supposed to predict the average friture emissions values (i.e., the results of a future emissions tests) within a 99% level of confidence ("the 99th percentile"). Id. at 2; 75 Fed. Reg. at 54,975-976. "In other words, if we were to randomly select a future test condition from any of these sources ... we can be 99 percent confident that the reported level will fall at or below the UPL value." 

### Id. at 54,975.

An application of the UPI. to actual data from PM CEMS from four (4) cement plants equipped with state-of-the-art PM controls demonstrates that the UPL not only fails to predict the 99th percentile, it predicts emissions levels that are less than one half of actual levels. 1--lolcim tested the UPL by applying it to data from PM CF.MS and comparing it to actual 30-day averages. Since January 2011, Uolcim collected approximately 10,000 hours of PM CEMS

### emissions data. Holcim took the daily average emissions from the CEMS data for 756 days and

applied the UPL formula. The UPL predicted that the 99th percentile of the 30-day rolling average of liolcirn's data would be 0.03 lb/ton of clinker. The actual 99th percentile is 0.064 lb/ton of clinker - 2m% higher than the UPL predicted. See Table 1, below. The data supporting Holcirn's analysis is enclosed as Attachment A.

Parameter EPA FloorData Holci*iPM CEMs Data**

Number of daily averages 87* 756

Mean 0.0242 0.020

Variance 0.0008 0.00043
PM Floor (predicted 99th Percentile as calculated by UPL) (lb/t of cli) 0.04 0.03

Actual 99th Percentile of 30d Rolling Average (Lb/t of clinker)

-- 0.064

* These were individual one hour runs and EPA assumed that each one-hour run was equivalent o a daily average.
** Applying EPA methodology to l-Tolcim PM CEM data

The average PM emissions of the best perftrrning kilns in the MACT pool would be expected to be significantly higher than the 0.04 lb/ton of clinker average emissions level predicted by the UPL because the VPL clearly underestimates the actual 99th percentile. For this reason, the LJPL cannot be considered an accurate measure of the emissions limitations actually achieved by the best performing sources.
Holcim could not have provided these comments earlier. Holcim had previously provided comments criticizing the accuracy of the EJPL and has asserted arguments about how it was used to the D.C. Circuit. 1-lowever, actual data regarding 30-day average emissions from CEMS was unavailable until I lolcim installed the equipment and began compiling data in preparation for compliance with the PC NESHAP.

### For the reasons discussed above, Holcim urges EPA to reconsider and stay the PM

standards set forth in the PC NESHAP. The newly acquired emissions data demonstrates that reconsideration is necessary because EPA's application of the UPL renders the Rule arbitrary capricious, and contrary to the law, at least with regard to the PM standards. EPA must set standards that reflect what the best performers actually achieve, but has instead set standards based on a formula that inaccurately predicts emissions far below acceptable levels of confidence. The UPL simply fails to depict what the best performing sources actually achieve. EPA should revisit the MACT floors after correcting the UPL formula to reflect accurately the 99th percentile or after collecting data on actual 30-day emissions levels.

Dated: November 15, 2011

On behalf of Holcim (US) Inc.THE WARNER 1299 PENNSYLVANIA AVE., NW WASHINGTON, DC 20004-2400



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