### energ-Jti=li MatthewTodd Rogulotory and SctentlficAffairs 1220 LStreet, NW Washington, DC 20005-4070 USA Telephone: 202-682-8319 Fax: 202-682-8031 Email: ToddM@aoi.om www.aoi.om CokerVent Potential Release Limit Preliminary Emission. Costand Cost Effectiveness Estimates

Ms. Brenda Shine US EPA Office ofAirQuality Planning and Standards Sector Policies and Programs Division (E143-01) Research Triangle Park, NC27711 shine.brenda@epa.gov

Dear Brenda, In November, theAmerican Petroleum Institute (API) indicated thatwe were gathering investment cost information relative to the impact ofa potential delayed coker vent atmospheric release criterion. While not complete, we have gathered a significant amount ofinformation and are providing a summary herein. Using this information, we have also calculated preliminary cost effectiveness valuesforthe potential release criteria. Ouranalyses are summarized below. 

### I. Cost Effectiveness Table 1 shows the cost effectiveness using the mid-point investmentcost estimates. Following EPA practice, investmentcosts were annualized at 7% interest and a 20 year life (CRF

# = 0.094393). Following the SCAQMD precedent, annual operating costswere taken as 7% ofinvestment cost (4% operating cost and 3% utilities). A .recovered fuel gas credit was taken as 150%ofthe amount ofmethane predicted to be recovered by the model. This accounts forother recovered gases besides methane. Recovered gases are valued ata natural gas value of$0.094/lb.API Delayed Coker Investment Cost Information Page 2

Table 1: Calculated Cost Effectiveness $/Ton 5 psig Regulatory Limit VOC (as propane} 

### 76,000 Total HAPs 

### 378,000 2 psig Regulatory Limit VOC las orooane} 

### 126,000 Total HAPs 

### 629,000 2 v 5 Increment VOC (as propane) 

### 202,000 Total HAPs 

### 1,011 000 

### II. Cost Information In November2013, API surveyed the nation's delayed coking units (DCUs) to determine each unit's best estimate ofthe investments they would need to make to meet not-toexceed and average release limits of 5 psig and 2 psig. 1 To date, cost estimates (typically ranges) have been obtained for 40 DCUs and estimatesfor additional DCUs are expected. Five ofthe 40 estimates were historical (i.e., previous investments made to achieve a not-to-exceed 2 psig capability} and one was mostly historical investment, butalso includes an estimate offuture investment thatwill be needed to meet a not-toexceed limitof5 or2 psig, because both criteria are still sometimes exceeded. These six values ranged from $1M to $12M. The cost magnitudes and distribution forthese 40 DCUs was used to estimate the costs thatwould be incurred bythe 80 operating DCUs ifa Sector Rule criterion is imposed. Based on the EPA Refining Industry Information Collection Request (ICR) results, updated based on industry information, we estimate thatthere are 80 DCUs with a total of254 coke drums currently operating in the U.S. The numberofdrums was rounded to 

### 260 coke drumsforthe emission, cost, and cost effectiveness estimates presented in the tables. Please note that this is a change from the 75 DCU and 240 drum estimates we provided to you when we met. Based on existing state, permit, and consent decree requirements, we estimate that 15 DCUs are already subject to a do-not-exceed 2 psig federally enforceable requirement, though compliance may not be required until as late as 2017, and thus no investmentoremission impactfrom those units has been ascribed to the Sector Rule in ourcalculations.

1 This survey included inputfrom members ofAmerican Fuel and Petrochemical Manufacturers (AFPM)API Delayed Coker Investment Cost Information Page3 Table 2 summarizes the national investment cost ranges, based on the data collected forthe do-not-exceed limits. Estimates were also requested for meeting an average 5 psig or2 psig release pressure. There was generally consensus that investment costs would be reduced for an average versus a not-to-exceed value, but only a few DCUs provided specific cost estimates. Essentially, itappears that where a DCU already operates close to a do-notexceed limit, an investmentof$1-3M might be totally avoided ifthe limitwere expressed as an average. Table 2: Nationwide DCU Investment Estimate 5 psig Limit 2 psig Limit Low Mid High Low Mid Numberof DCUs 65 65 Number requiring no Investment 47 15

Number requiring Investment 

## 18 50 Number requiring Investment of <$5M 7 28 Number requiring Investments between $5M and $10M 8 13 Number requiring Investments of> $10M 3 10 Average Investmentfor DCU's Requiring Investment (M$) 6.3 8.4 10.6 6.8 8.2 Total Nationwide Cost (M$) 

### 112 151 189 345 413 Ill. Emission Estimates Since the methodologythat EPA will use to estimate DCU emissions forthe Refinery Sector rulemaking is notyet public, the emission estimates generated bythe model used bythe South CoastAirQuality Management District (SCAQMD)fortheir recent Rule 1114development has been used as the basisforthe cost effectiveness calculations presented here2• There are significant issues with this model that we believe result in a large overstatement ofthe emissionsfrom these vents and wewill comment on those items in ourcomments on the Sector Rule proposal, 

### ifthey are appropriate to the emissions model EPA uses.

2 Final Staff Report, Proposed Rule 1114 - Petroleum Refinery Coking Operations, May2013, available at http://www.aqmd.gov/hb/atlachments/2011-2015/2013May/2013-May3-Q30.pdf, Attachment F. High

9.6 

### 482API Delayed Coker Investment Cost Information Page4

Based on the information collected from the industryand the information provided in the non-confidential ICR database, we used the following (Table 3) distribution ofaverage release pressures to calculate the base case emission levels. We believe this distribution conservatively represents the typical average release pressures currently occurring orto which DCUs are already committed to achieving due to state, permitor consent decree requirements, ifthat is lowerthan current release pressures. Table 3: Estimated Base CaseAtmospheric Release Pressure Distribution for Currently Operating Coke Drums o/o of

### 260 Base Case Release Pressure Drums 

### 1 psig average release pressure 

### 18:75 2 psig average release pressure 

### 16.25 3 psig average release pressure 

### 12.50 5 psig average release pressure 

### 31.25 13 psig average release pressure3 

### 21.25 Table 4 summarizes the emissions estimates used as the basis forthe cost effectiveness calculations presented in Section I above. The base case estimate assumes the Table 3 release pressure distribution; the do-not-exceed 5 psig limit estimate assumes the DCUs that average 5 psig orhigher in the base case achieve an average release pressure of3 psig afterthe Sector Rule compliance date; and the donot-exceed 2 psig limit estimate assumes all DCUs have an average of 1 psig release pressure afterthe Sector Rule compliance date. These are the average release pressures our surveys have indicated are typical for coke drums subject to these donot-exceed limits.

3 13 psig is thetop ofthe typical release pressure range Identified in theAPI surveys, though many DCU's average less than 13 psig. This value is used for conservatism inestimating the basecase emissions.API Delayed Coker Investment Cost Information PageS

Table 4: Coke Vent National Emission Estimates using SCAQMD model. Base 5psig 2psig Case Limit Limit VOC (as propane), Tons/year 

### 689 366 154 Total HAPs, Tons/year 4 

### 138 73 31
Again, we appreciate the dialoguethatwe continue to have with you on this and other refinery sector issues. Please contact me ifyou would liketo discuss anyofthis information further.

Cc: Ms. Penny Lassiter US EPA Sincerely, 

### Is/ MatthewTodd

Office ofAir Quality Planning and Standards Sector Policies and Programs Division (E143-01) Research Triangle Park, NC 27711 Lassiter.Penny@epamail.epa.gov

4 The SCAQMD model assumes 20% ofVOC is HAP.