Administrator Jackson December 6, 2012 Page 2

mission includes advancing the interests of it s member companies in regulatory and judicial arenas. AF&PA members currently us e a variety of secondary materials as fuel

in combustion units at their facilities. At approximately 12 mills, these secondary

materials include railroad ties that are treat ed with creosote. 1 A major supplier of railroad ties to the forest products industr y estimates that in 2005, approximately 550,000 tons of railroad ties were sold to forest products mills for use as fuel. In 2010, more than 300,000 tons were bur ned at forest product mills and more mills are actively considering its use so they remain an impo rtant source of fuel for AF&PA members.

We estimate that it would cost the 12 mill s that combust railroad ties around $50 million a year to replace the fuel value of the railroad ties.

AWC is the voice of North American traditional and engi neered wood products, representing over 60% of the industry. Fr om a renewable resource that absorbs and sequesters carbon, the wood products industr y makes products that are essential to everyday life and employs 360,000 men and wo men in well-paying jobs. AWC's engineers, technologists, scientists, and build ing code experts develop state-of-the-art engineering data, technology, and standards on structural wood products for use by design professionals, building officials, and w ood products manufacturers to assure the safe and efficient design and use of wood stru ctural components. AWC also provides technical, legal, and economic informati on on wood design, green building, and manufacturing environmental regulations advocating for balanced government policies that sustain the wood products industry. Th e types of biomass boilers AWC members operate could burn railroad ties and some com panies are considering their use in the

near future.

3. Proposed Action.

Please add the following langu age to 40 C.F.R. 241.4(a):

“(3) Railroad ties treated with creos ote or creosote and borate.”

4. Need and Justificati on for Proposed Action.

The proposed action is needed to correct an erroneous conclusion reached in the
March 2011 final NHSM Rule that combustion of railroad ties is combustion of a waste

and to allow continued combustion of this fuel by any facility, irrespective of how railroad ties are processed or what feed mechanism is attached to a boiler that combusts

railroad ties.

1 Newer railroad ties may also be treated with borate before the creosote is applied. See comment submitted by the Association of American Rail roads, Document ID: EPA- HQ-RCRA-2008- 0329-1920, Feb. 21, 2012, at 2-3 (AAR 2012 comments).Administrator Jackson December 6, 2012 Page 3

a. Railroad tie markets

In the preamble to the final NHSM Rule, EPA asserted that:

[F]ew markets are available for creosot e-treated wood due to concerns about the contaminants. This strongly suggests that burning this material is a waste treatment activity. 76 Fed. Reg. 15456, 15483 (Mar. 21, 2011).

Contrary to EPA’s belief, ther e is a robust market for creos ote-treated wood, specifically

railroad ties that have been removed from serv ice. As noted above, 12 forest products industry mills purchased approximately 550,000 t ons of railroad ties a year for use as fuel in 2005 and over 300,000 tons as recently as 2010.

According to the Association of Americ an Railroads, approximately 17 million railroad ties are removed from service each year. 2 Railroads typically co ntract with a railroad tie reclamation company to remove these ties. These contracts transfer ownership of the

railroad ties to the reclamation company. 3 The reclamation com pany sorts the railroad ties for use in landscaping (about one third) and for use in co-generation facilities (the majority). According to the Association of American Railroads, only approximately 5%

of railroad ties that are removed from service are disposed of in landfills. 4 Some reclamation companies sell railr oad ties to processors who remove metal contaminants (typically nails and spikes) and grind the ties into chipped wood. 5 Other reclamation companies have their own grinders, do thei r own contaminant removal, and can sell directly to the co-generation facilities. According to a 10-K filed by Banyan Rail Services, Inc., there are approximately 15 railroad tie recovery companies in North America with an industry-wide revenue of $65-75 million. AF&PA members report paying approximately $20 to $30 per ton for railroad tie fuel which is sometimes a premium price compared to cert ain hog fuels.

The fact that railroad ties are valuable co mmodities also is demonstrated by the management of these materials. Sale of railroad ties is in tegral to the contracts for railroad tie removal and is integral to the bus iness of railroad tie reclamation companies.

These ties are valuable commodities and are treated as such. Combustors, such as AF&PA member companies, also manage these materials as valuable commodities. At

2 Comment submitted by the Association of Am erican Railroads, Document ID: EPA-HQ-RCRA-2008- 0329-0875, Aug. 3, 2010, at 2 (AAR 2010 comments).

3 This arrangement, which takes into account the value of the removed ties, allows removal of railroad ties to be “close to a break-even proposition fo r the railroad.” AAR 2010 comments at 3.

4 AAR 2012 comments, at 1. This disposal decision is made after the railroad ties are sorted so the ties that are used for energy recovery are never discarded.

5 There may be some combustors that can combust w hole railroad ties, but forest products industry boilers require chipped ties that have been pr ocessed to remove metal contaminants.Administrator Jackson December 6, 2012 Page 4

a mill, the chipped railroad ties are managed in the same manner as other biomass fuel

materials and are fed to the combus tion unit in the same way.

It is clear from the above description that there are robust markets for railroad ties and there are companies that exist entirely to se rve those markets. It also is clear that combustors pay for the railroad ties that they use as fuel. These facts demonstrate that

railroad ties are valuable fuel commodities. T hus, there is no basis for EPA’s conclusion that burning railroad ties is a waste treatment activity.

b. Legitimacy criteria as applied to railroad ties.

Railroad ties easily meet all of the legiti macy criteria under 40 C. F.R. 241.3(d), except possibly the contaminant comparison criter ion depending on what tr aditional fuels are considered in comparison. However, upon eval uating all the relevant factors relating to the use of railroad ties as a commodity fuel , EPA should conclude that railroad ties are non-waste fuels for all boilers, notwithstandi ng a contaminant comparison to wood or

coal.

i. Railroad ties are managed as a valuable commodity. 40 C.F.R. 241.3(d)(1)(i).

As described above, railroad ties are removed from service for railroads by companies

whose business model is based on the reclamati on value of the railro ad ties. These ties

are the commodities that railroad tie reclamat ion companies sell in the marketplace. Thus, these companies manage railroad ties to retain their va lue as commodities. Typically reclamation companies receive railroad ties by rail. They inspect and sort the ties and remove metal of any kind (spikes, if any, nails, tags, etc). The resulting railroad tie fuel (RTF) is then chipped and delivered to combustors, typically by rail or truck. 6 At a forest products facility, RTF is stock piled in the wood yard in the same manner as bark fuel obtained from processi ng log feedstock for the pulping process. This generally amounts to a pile adjacent to the bark pile that is recl aimed via a front-end loader. Many hog fuel/RTF systems hammer and screen the combined bark/RTF one more time on route to combustion. Chip size typi cally is on the order of 1 to 2 inches. The contracts for the purchase of RTF include fuel specifications limit ing contaminants such as metal and precluding the receipt of wood treated with preservatives other than

creosote.

ii. Railroad ties have meaningful heating value and are used as a fuel to generate energy. 40 C.F.R. 241.3(d)(1)(ii).

6 We are aware of one situation where the combustion facility is close to the reclamation facility and RTF is transported on a conveyor.Administrator Jackson December 6, 2012 Page 5

EPA reports that creosote-tr eated wood has a heating value of about 6000 Btu/lb. 7 The Treated Wood Council reports that the Btu value of creosote-treated wood is approximately 8000 Btu/lb. 8 Either level demonstrates meani ngful heating value. These fuels are used to generate energy at AF&PA me mber facilities as well as other cogeneration facilities that buy ra ilroad ties from reclamation companies. In fact, when bark is very wet, forest products facilities often increase the use of RTF in proportion to bark because it has higher fuel value and improves combustion.

iii. Railroad ties contain contaminants that are comparable to or

lower than those found in tradit ional fuels that boilers are designed to burn. 40 C. F.R. 241.3(d)(1)(iii).

In the NHSM final rule preamble, EPA expr essed the concern t hat creosote-treated

wood contains contaminants at levels that ar e not comparable to those found in coal or wood. “Accordingly, creosote treated w ood, when burned, seem s more like a waste than a commodity and does not meet the legitimacy criterion for contaminants and

therefore should be consider ed a waste when burned as a f uel.” 76 Fed. Reg. at

15483.

This analysis is based in part on an assumption that railroad ties are combusted for disposal and are not valuable fuel commoditi es. This assumption is contradicted by the

above discussion of the robust markets for RTF. Thus, the only remaining basis for this analysis is the comparison of contaminants in railroad ties to contaminants in coal or

fuel.

EPA has data provided by the Association of American Railroads t hat demonstrates that

creosote treated railroad ties cont ain contaminant levels that are comparable to fuel oils,

which are traditional fuels. 9 Under 40 C.F.R. 241.3, creoso te-treated railroad ties would

be considered a non-waste fuel if combusted in a unit that also could combust numbers

1-6 fuel oils.

EPA also has data that demonstrate that cont aminants in borate preservatives are at levels that are significantly bel ow levels found in untreated wood. 10 Accordingly, EPA

7 Materials Characterization Paper In Support of the Final Rulemaking: Identification of Nonhazardous Secondary Materials That Are Solid Waste - Construction and Demolition Materials – Building-Related C&D Materials, Feb 3, 2011, EPA-HQ-RCRA-2 008-0329-1811, at 3.

8 Comment submitted by Jeffrey T. Miller, President and Executiv e Director, Treated Wood Council (TWC), EPA-HQ-RCRA-20 08-0329-0772, at 11.

9 EPA’s traditional fuels data show that fuel oils have PAH levels as high as 54,700 ppm. Contaminant

Concentrations in Traditional F uels: Tables for Comparison, No vember 29, 2011 (EPA-HQ-RCRA-2008- 0329-1877). The American Association of Railroads data for creosote-treated railroad ties show total PAH levels of 21,237 ppm.

10 See comment submitted by KRK Consul ting. EPA-HQ-RCRA-2 008-0329-1569.Administrator Jackson December 6, 2012 Page 6

has already concluded that borate treated wood “meets the l egitimacy criterion on the level of contaminants and comparability to tradition al fuels.” 76 Fed. R eg. at 15484.

iv. Other relevant criteria

An overall balancing of the legitimacy criter ia with other relevant factors should lead

EPA to the conclusion that the combustion of railroad ties is not a waste management activity and that railroad ties should be consid ered a commodity fuel even if contaminant levels are not comparable to coal or virg in wood. If EPA does not do so, then the same

railroad tie from the same recl amation company could be considered a fuel if sold to a combustor that has a liquid fuel delivery syst em for its boiler and a waste if sold to a combustor has only a system for feeding solid fuel to its boiler. Given the overall management of these materials as valuabl e fuel commodities by market-place participants, in this case the fuel de livery system does not provide a meaningful distinction and is not an appropria te method of distinguishing between wastes and fuels.

In balancing the legitimacy criteria, EPA should gi ve great weight to the fact that railroad ties are commodities that are bought and sold in the market-place. This fact alone should be dispositive support for an EPA dete rmination that the combustors who buy this fuel are burning it for legitimate energy recovery and are not burning it with the intent to discard it. As EPA knows, the legi timacy criteria are fact ors used to ascertain

the intent of a combustor to det ermine if discard is taking plac e. In the case of railroad ties, the fact that co mbustors buy this fuel is evidenc e that their intent is energy recovery. Combustors do not buy material for the purpose of discarding it.

EPA also should balance the environmental benefits of allowing continued combustion of railroad ties as fuel against the adverse consequences of increased disposal of

railroad ties in landfills. As noted in co mments filed by the Am erican Association of Railroads, the use of railroad ties as fuels displaces fossil fuels that emit greenhouse gases that, unlike wood, are not currently part of the carbon cycle. Thus, if 9 million ties are disposed of in landfills instead of being used as fuels, 12.9 trillion Btus will have to be replaced with other fuels. If replaced with fossil f uels, “the GHG penalty will be approximately 3.3 billion CO2eq.” 11 The disposal of greenhouse gas in landfills also could result in the anaerobic degradation of the ties over long periods of time, producing methane, which is a pot ent greenhouse gas.

In balancing environmental benefits, EPA shoul d consider the solid waste management benefits of using railroad ties as fuel, instead of discarding t hem in landfills. According to the Association of American Railroads, t he landfill space that would be required to dispose of the 17 million railroad ties that are used as fuel each year would be the

11 AAR 2010 comments, at 3.Administrator Jackson December 6, 2012 Page 7

space equivalent to a football fi eld that is 70 stories high. That landfill capacity would be needed each year. 12

EPA also should consider the fact that, for th e facilities that use railroad ties as fuel, those ties are as integral to the production proc ess as any other fuel used by the facility. Further, railroad ties are functionally superior to other biomass fuels used in the boilers due to lower moisture content and higher BTU value compared with other biomass

fuels. Use of railroad tie fuel is particularly important for industry boilers that are load following boilers where significant swings in steam demand require rapid ramping up and down of the boiler, and where the superior f uel characteristics of railroad tie fuel, as noted above, delivers, dry, consistent, hi gh-BTU combustion benefits. Railroad ties improve mixed biomass combustion by provid ing a more even energy source especially during rainy seasons of the year.

Finally, EPA should embrace the combustion of railroad ties as a practice that supports EPA’s sustainability objective s. In June 2009, EPA issued its “2020 Vision Report: Sustainable Materials Management: The R oad Ahead.” The “2020 Vision Report”

includes the follo wing statement:

In a system that recognizes the true value of materials, and accounts for all the environmental impacts associated with mate rials use, the concept of waste is significantly changed. Products and material s presently viewed as acceptable to throw away will increasingly be recognized as valuable. Materials that used to “go to waste” will be reused or bec ome feedstocks for new products and processes. 2020 Vision Report, at 13

Consistent with that vision and a consistent history of use, EPA should recognize the

value of railroad ties and allow their contin ued use as a fuel. To do otherwise would compel the disposal of this valuable fuel in l andfills. That resu lt undermines EPA’s sustainable materials managem ent objectives, reduces the ability of the U.S. to

decrease the use of fossil f uels, and increases the pressu re on solid waste landfill capacity. To avoid these adverse environm ental outcomes, EPA should recognize that

railroad ties are a valuable fuel and not a wa ste, when combusted for energy recovery.

These considerations provide ample support for a rulemaking to designate all railroad

ties as a non-waste fuel in all combustion units.

12 AAR 2010 comments, at 2.Administrator Jackson December 6, 2012 Page 8

Request for a letter confirming that proce ssed railroad ties combusted in boilers combust or could be modified to combust liquid fuel are non-waste fuels.

Pending a national rulemaking to designate railroad ties as a non-waste fuel, AF&PA is requesting a letter from EPA that confirms that railroad ties that are processed and are

combusted in units that combust or could be modified to combust liquid fuel are nonwaste fuels under 40 C.F.R. 241.3(b)(4). 13 40 C.F.R. 241.3(b)(4) provides that the following are not solid wastes when combusted: “Fuel or ingredi ent products that are used in a combustion unit, and are produced from the pr ocessing of discarded nonhazardous secondary materials and that meet the legitimacy criteria specified in paragraph (d)(1) of this section with respect to fuels....” While we do not believe that railroad ties used for energy recovery are discarded, absent listing under 40 C.F.R. 241.4, EPA’s regulations consid er these materials to be wastes when combusted by third parties, unless the criteria of 40 C.F. R. 241.3(b)(4) are met. Section 241.3(b)(4) requires that a fuel be both processed and meet the legitimacy criteria.

1. Most railroad ties are processed

According to EPA’s regulations:

Processing means any operations t hat transform discarded non-hazardous secondary material into a non-waste fuel or non-waste ingredient product. Processing includes, but is not limited to , operations necessary to: Remove or destroy contaminants; signi ficantly improve the fuel characteristics of the material, e.g., sizing or drying the material in combination with other operations; chemically improve the as -fired energy content; or improve the ingredient characteristics. Minimal operations that re sult only in modifying the size of the material by shredding do not constitute processing for the purposes of this

definition.

40 C.F.R. 241.2.

While some combustors may be able to co mbust whole railroad ties, it is a common practice for railroad tire reclamation companie s to process ties for use by combustors. Processing involves sorting by quality for other potential uses (e.g., landscaping) and by preservative type to meet fuel contract spec ifications required by individual combustors.

Process also involves both the removal of metal contaminants and shredding RTF to an

13 This request should not be viewed as an alternat ive to the request for listing under 40 C.F.R. 241.4. Rather, it should be viewed as a stop-gap measure to allow facilities to plan pending such listing.Administrator Jackson December 6, 2012 Page 9

appropriate size for the combustor. In fac t, contracts for RTF typically specify fuel requirements such as size of material, moisture limits, and dirt and metal contamination

limits. Please confirm that railroad ties th at are processed in this manner meet EPA’s processing definition.

2. Railroad ties meet the legitimacy crit eria when combusted in most boilers.

As discussed above, railroad ties meet EPA’s legitimacy criteria relating to management practices, meaningful heating val ue, and use as a fuel, irrespec tive of the type of boiler that is used for combustion. However, und er EPA’s regulations, railroad ties would not meet the contaminant legitima cy criterion (as EPA has laid it out) unless the RTF can be compared to fuel oils. Even under this framework, RTF would meet the legitimacy

criteria because boilers c apable of firing RTF also are capable of firing fuel oil. In fact most boilers are designed in a manner t hat fuel oil firing can be accommodated. 14 For example, one forest products company has at le ast 12 boilers that burn RTF. All 12 of these boilers either currently combust fuel oil, or could be readied to combust fuel oil.

Please confirm that a boiler t hat has sufficient combustion conditions for oil (with or

without the addition of additiona l equipment) and that could be modified to add a liquid fuel delivery system, is “des igned to burn” fuel oil, w hether or not such boiler modifications are actually made.

3. Demonstration by combustors that the legitimacy criteria and processing requirements are met.

Both the CISWI and the Boiler MACT rules require a combustor that combusts nonhazardous secondary materials to keep reco rds showing that t he fuel meets the legitimacy criteria of Part 241. See 40 C.F.R. 60.2740 (u) (C ISIWI) and 40 C.F.R. 60.7555(d)(2) (Boiler MACT).

We believe that individual combustors can meet their obligations under the CISWI and

Boiler MACT Rules to show that railroad ti es are not solid wastes by keeping the following records:

a. A copy of an EPA letter confirming t hat railroad ties that are processed and combusted in boilers with liquid fuel delivery systems are not wastes.

b. A copy of a contract, purchase order, or other document that requires a supplier of railroad ties to process the railroad ties consistent with the practices described

in this letter or a certification from the supplier that the practices described in this

letter were followed.

14 This is uniformly true of stoker bo ilers and fluidized bed combustors.Administrator Jackson December 6, 2012 Page 10

Allowing combustors to rely on these records to demonstrate that railroad ties are not wastes is consistent with how EPA proposes to implement its non-waste determination for tires from established tire collection progr ams. Units that combust tires are allowed to rely on certifications that the tires t hat are combusted are fr om established tire collection programs and were not discar ded. 40 C.F.R. 60.2740( v). EPA recognizes

that such a certification can be based on a contractual arrangement and is proposing to define established tire collection program to include “a contractual arrangement that ensures that scrap tires are not discar ded and are handled as valuable commodities through arrival at the combustion facilit y.” 76 Fed. Reg. at 80484 and proposed 40
C.F.R. 241.2. Once that certification is made, EPA does not intend to require the combustor to have perfect knowledge of t he source of a secondary fuel and does not require the combustor to test that fuel. “Rather, it is suffi cient that the ultimate user verify that it is obtaining tires from an es tablished tire collection program, which program can provide the user with reasonable assurance that it manages tires carefully from point of collection to point of burning and wh ich does not receive tires which have been

abandoned in landfills or ot herwise.” 76 Fed. Reg. 2831 8, 28322 (May 17, 2011).

Please confirm that the record s identified above are suffici ent to meet any burden of proof a combustor may have to show that a fuel is not a waste and that these records meeting the requirements of 40 C.F.R. 60.2740 (u) and 40 C.F.R. 60.7555(d)(2).

Conclusion

For the forgoing reasons, AF&PA and AWC respectfully request EPA to determine by

rule that all railroad ties treated with creosote or creosote and borate are non-waste fuels in all boilers and confirm by letter t hat processed railroad ti es are non-waste fuels

when combusted in a boiler t hat that has sufficient combustion conditions for oil combustion (with or without the addi tion of additional equipment).

Sincerely,

Paul Noe Robert Glowinski Vice President for Public Policy President American Forest & Paper Association American Wood Council

Enclosure: Banyan Rail Services Inc.

cc: Mathy Stanislaus

Suzanne Rudzinski

Jim Berlow David Cozzie, OAR