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---------- ------------------------------------------------ | |Charlotte Bertrand/DC/USEPA/US@EPA, Steven Silverman/DC/USEPA/US@EPA, Walton.Tom@epamail.epa.gov , Amy Lamson/RTP/USEPA/US@EPA |

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---------------------------------------------------------- | |08/03/2010 08:10 PM |

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---------------------------------------------------------- | |Responses to first set of RIA comments |

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---------------------------------------------------------- |Dear Courtney:

Here are the responses to the RIA comments. We are still working on the others

(See attached file: Interagency working comments cement

- EPA responses.doc) Keith W. Barnett USEPA/OAQPS/SPPD/MMG Mail Code D243

- 02 Research Triangle Park, NC 27711
919

- 541

- 5605 barnett.keith@epa.govInteragency Working Comments on Draft Rule under EO 12866

Page 1 of 9 Below are working comments from the interagency review of the draft rule titled,

“Portland Cement NESHAP and NSPS.”

Comments:

1) On page 12 (and throughout in other places, page 15, etc.) reference is made to the number of comments made on either the NESHA P or NSPS proposed rule. It might be more helpful not to present the number of comments, but rather, explain the types of commenters there were. If the number of comments is presented, please elaborate if a mass email campaign resulted in a large number of comments.

EPA Response:

2) On page 14, rather than saying “These standards were intended to be based on the performance of MACT pursuant to CAA sections 112 (d)(2) and (3),” it might be better to describe factually what the agency did, e.g. “We set these standards subject to the MACT requirements of CAA sections 112 (d)(2) and (3).”

EPA Response:

3) On page 14, is the following statement attributed to the Court a quote: The Court also stated that EPA is obligated to consider other pollution

– reducing meas ures such as process changes and material substitution? If a quote, please clarify, otherwise, consider providing a quote. The next sentence begins “Later cases ...” but only one citation is provided (Brick MACT). Could you include citations to the other cas es?

EPA Response:

4) On page 15, could you move footnote 8 (begins “In the remainder of the opinion, the Court..”) into the main body? It seems like information that warrants inclusion in the main body.

EPA Response:

5) On page 16, for clarity, please co nsider restructuring the last two sentences before Section D “Reconsideration of EPA Final Action ...”) to read as follows: Under CAA section 112(d)(4), EPA did not set a standard for HCl, determining that HCl was a pollutant for which a threshold had been e stablished, and that no cement kiln, even under worst case operating conditions and exposure assumptions, would emit HCl at levels that would exceed that threshold level, allowing for an ample margin of safety.

EPA Response:

6) Page 17 (and throughout), w hen referencing a document that is in the docket, if a docket ID number is available (e.g. it is already in the docket), please provide that number.Interagency Working Comments on Draft Rule under EO 12866

Page 2 of 9 EPA Response:

7) If possible, when providing detailed information about the Brick MACT decision, could you provide quotes? For example, can the bulleted list from page 19 be a set of quotations from the decision?

EPA Response:

8) Page 27, can you include in paretheses the number of observations in the THC data set? This information might also make it more cle ar to the reader why the UPL was not used for the THC limit.

EPA Response:

9) It is noted the revised UPL formula was used to recalculate the MACT floor limits for mercury, HCl and PM and that in the case of mercury, mercury emission estimates were revise d using additional data on raw material usage. However, THC emissions are influenced by the content of organic materials in the raw materials, particularly the limestone. It does not appear EPA has captured all aspects of the variability for THC, particula rly since no UPL is calculated for THC. THC emission estimates should include statistical approaches which capture raw material usage.

EPA Response:

10) At the end of Section A.1.b, could you include information on how many sources are expected to install controls to meet the set of emission standards? Or, conversely, what percentage of the existing facilities are currently able to meet all of the emissions standards? It seems that 0% of facilities are currently able to meet all of the standards.

EPA Respo nse:
11) Page 36 (and throughout) the statement (or something similar) is made: “No commenter challenged this analysis.” In these cases, did anyone comment on it (e.g. offering support)? It might be more helpful to be neutral about the comments and say “N o comment was received,” or “We received comments supporting this analysis.”

EPA Response:

12) On page 37, the following statement is made: “This type of volitional activity does not seem to be within the ambit of normal variability of process inputs.” Pl ease consider rewriting this sentence to use plain English, such as “EPA believes that this voluntary change should not be considered when determining variability.”

EPA Response:Interagency Working Comments on Draft Rule under EO 12866

Page 3 of 9 13) In Section A.1.c.ii., has EPA considered establishing a high mercury coa l subcategory based on a statistical test that would show the two high mercury facilities are outliers, that is, the lowe mercury coal subcategory would be based on the average mercury concentration in limestone plus 3 standard deviations, and anything abo ve that would be considered a “high mercury” limestone?

EPA Response:

14) Comments submitted indicate that some plants believe they will not be able to achieve the mercury standard even with control technology. EPA states it is interested in working with plants to consider mechanisms that could assure early reductions, but does not provide further details. How does EPA expect the higher mercury emitting plants to make significant reductions when there is a general sense that the control technology to achie ve such reductions is not available? Can EPA be more explicit on how they would work with those facilities?

EPA Response:

15) Since the HCl standard is based on the detection limit for Method 321 and CEMS will be the compliance method for kilns without we t scrubbers, an indication of how Method 321 compares to those used for CEMs would be beneficial. In other words, how does the analytical detection limit for Method 321 compare with those for CEMs? Can EPA provide any further information to explain why the CEMs should be used given what the standard was based on? Furthermore, could EPA consider a compliance alternative for monitoring in lieu of installing a CEMs?

EPA Response:

16) EPA does not provide solid rationale for why stack testing for HCl complianc e for all kilns is not allowed. We would appreciate knowing more about the use of HCl CEMS in the industry and the feasibility of HCl CEMs per EPA’s interactions with stakeholders. Furthermore, could EPA consider a compliance alternative for monitoring in lieu of installing a CEMs?

EPA Response:

17) In the discussion of using CAA 112(d)(4) for an HCl emissions limit, there is a great deal of discussion of the 2006 PCA study and analysis of the risks from HCl. However, the docket for the rulemaking also con tains an EPA memo titled “Derivations of a Health

- Based Stack Gas Concentration Limit for HCL in Support of the National Emissions Standards for Hazardous Air Pollutants from the Portland Cement Industry” (April 10, 2009), which seems to include a similar finding that an HCl stack gas emissions limit of 23 ppmv would not exceed the RfC for HCl. Is there a reason this memo is not discussed?

EPA Response:Interagency Working Comments on Draft Rule under EO 12866

Page 4 of 9 18) Can EPA explain the use of 1,000 feet threshold for the two sets of requirements for Open Clinker Pi les standards?

EPA Response:

19) Page 114 contains the following sentence: “Kilns with low sulfur raw materials can meet the 0.4 lb/ton clinker level with no add

- on controls. We consider these to be reasonable costs, comparable with other costs for SO 2 co ntrol EPA has deemed reasonable such as those in the Clean Air Transport Rule. See 70 FR at 25583 (May 12, 2005).” Please check this citation, as I think you mean to refer to the Clean Air Interstate Rule, and this is for a different rule. Furthermore, are there other NSPS rules that EPA could refer to with similar control costs for SO2? If not, why not?

EPA Response:

20) Some benefits are either not quantified, or the benefits that are quantified are poorly described. For example, it is stated that NOx an d SO2 benefits are not quantified, but these are precursors to PM and ozone (which appear to be quantified at least for PM). It should be made more explicit that the health benefits for NOx and SO2 are in fact quantified in this way, unless there is anothe r explanation, i.e., exposure to direct emissions, that EPA is referring to. We would like more information on why EPA did not quantify benefits from reducing selected air pollutants, particularly for reducing 4,400 tons of NOx.

EPA Response: Some benefits are not quantified due to data, resource, and methodological limitations. Due to the method used to estimate air quality changes, we were unable to capture the 0.002% reduction in NOx emissions (6,600 tpy minus 2,200 tpy in energy disbenefits) as it cont ributes to PM2.5 formation. In addition, we were unable to estimate the benefits of reduced direct NO2 and SO2 exposure, which is clearly identified in the net benefits table in the EO 12866 section of the preamble. The PM benefits reflect reduced exposu re to PM2.5 from reductions in SO2 and direct PM emissions.

21) Does EPA include benefits of any ancillary GHG reductions using the social cost of carbon metric? If not, please explain.

EPA Response: EPA anticipates an increase in indirect GHG from addi tional electricity consumption as a result of these rules. These GHG disbenefits are estimated in section 6.4.2 of the RIA using the social cost of carbon. The energy disbenefits cited in the preamble section 10 include these GHG effects.

RIA:

1. Plea se insert the bulleted list of uncertainties associated with the analysis, both for costs and benefits. The section describing key uncertainties in the estimates is missing in the draft circulated for review.Interagency Working Comments on Draft Rule under EO 12866

Page 5 of 9 EPA Response: Key uncertainties are clearly ide ntified in the relevant chapters. See Section X for cost uncertainties [ Tom please add ], Section 5.6 for air quality uncertainties (new), and Section 6.6 for benefits uncertainties.

2. The RIA should outline how estimates of compliance costs were developed
, including what emissions controls (or other activities) would be required, by what sources, at what cost, as well as key assumptions and uncertainties.

EPA Response:

3. The air quality modeling section of the RIA should explain what options were analyze d, and how the results differed, as well as how those results were used to estimate the costs and benefits associated with each option.

EPA Response: We have added text to section 5.4 that describes the options modeled.

4. The air quality modeling section of the RIA should outline key uncertainties associated with the modeling.

EPA Response: We have added Section 5.6 that outlines key uncertainties in the air quality modeling.

5. P 1

- 1 This bullet should be edited to list the four analyzed options

– not jus t three

-- for clarity. Currently, it reads as if EPA has framed the analysis as three options: NSPS only, NESHAP only, and Both NSPS and Final NESHAP with more Stringent NSPS . The bullets should clarify that EPA analyzed four options: Final NSPS and NESH AP, NSPS only, NESHAP only, and both NSPS and Stringent NESHAP. This framing should be retained throughout the document to provide the reader with clear description of what is discussed.

EPA Response:

6. P 1

- 1 second bullet continuing to the end of the se ction

– please clarify that the Analysis described refers to the option that is not listed in the first bullet.

EPA Response:

7. P. 3

- 8, p. 3

- 11. Market output and market production. Comparing tables 3

- 5 and 3

- 7, changes in market output and market produc tion relative to the baseline differ. Please explain these differences (such as inventory effects, etc.).

EPA Response:

8. p. 3

- 11, Idled plants. Please expand the explanation of how idled plants were treated in the model. Please clarify whether the $135 million drop in net operating profits is included in the $239 million drop for modeled plants or is modeled separately and what level of production, if any, is included for these idled firms in the model. Also, please explain how EPA determined the additio nal price and quantityInteragency Working Comments on Draft Rule under EO 12866

Page 6 of 9 effects if these plants do shut down. The price elasticity for the overall market model appears to be approximately .88 while it appears to be approximately 1.428 for the idled firms. Finally, please correct compliance costs on page 3

- 11 text to read “close to $8 per ton” (currently reads $5 per ton).

EPA Response:

9. Input costs. If available, please provide additional explanation or data on input costs, including and cost data for substitute inputs such as lower Hg limestone.

EPA Response:

10. P. 3

- 14, Job Effects. Do the job losses include losses if the 15 idled plants and Durkee and Tehachapi plants shut down? If not, does EPA have an estimate of job effects for those plants?

EPA Response:

11. When the RIA describes benefits, c osts or parameters that are not quantified or not estimated, a brief explanation should be provided. Example: p 6

- 1, explain why HAP benefits are not estimated in this chapter: Why?

EPA Response: [ Tom, please add for costs ] We have clarified in a footnote to each net

benefits table that several categories of benefits were not monetized due to data, resource, and methodological limitations.

12. P 1

- 2 Please explain in this paragraph why, under baseline conditions without regulation, existing domestic cement plants are assumed to choose a suboptimal production level.

EPA Response:

13. P 6

- 2 Figure 6

- 1, as well as other bar charts on pages 6

- 18, 6

- 47, and 6

- 48, should break out benefits to represent categories (PM and ?)

EPA Response: All of the graphics repr esent the PM

- related benefits, reflecting reductions of directly

- emitted PM and PM precursors (i.e., SO2). With the data available, it is not possible to estimate the fraction of benefits attributable to the precursor emission reductions.

14. Can’t find d etails on value used for benefits per ton? What is the source of that number?

EPA Response: With the exception of the energy disbenefits, we did not use benefit

per

- ton estimates for this analysis. The source of the benefit

- per

- ton estimates used for the energy disbenefits are cited in the RIA (Fann, Fulcher, and Hubbell, 2009). For the benefits estimate, we used air quality modeling in conjunction with BenMAP,Interagency Working Comments on Draft Rule under EO 12866

Page 7 of 9 not benefit

- per

- ton estimates. The underlying health and valuation functions are incorporated by reference from the recent Transport Rule RIA.

15. Is there description somewhere that can help the reader navigate how EPA modeled or measured PM from precursors? Throughout, it is difficult to identify how EPA separately analyzed emitted PM, PM formed from precursors, and gaseous SOx or NOx.

EPA Response: EPA modeled directly emitted PM and PM precursors together in the photochemical model CAMx. Due to the method used to estimate air quality changes, we were unable to capture the 0.002% reduction in NO x emissions as it contributes to PM2.5 formation. EPA considers it extremely unlikely that a reduction this small reduction in NOX will translate into appreciable air quality changes in ambient concentrations of particulate matter or ozone

.

16. P 6

- 3 bulle t 3: EPA describes the previous threshold as arbitrary, however isn’t it in fact the lowest observed value in one of the studies used to measure the magnitude of health effects? Is there some way we could describe this other than “arbitrary”?

EPA Response: While the LML of the Laden et al. (2006) study is 10 ug/m3, it is arbitrary to assume that there are no health effects below this concentration as other studies have shown health effects below this concentration.

17. P 6

- 3 bullet 4: Please insert explanat ion of data, resource, and methodological limitations, or refer to the section where are they discussed in detail.

EPA Response: A description of these limitations has been added to Section 6.6.

18. P 6

- 8: it would be helpful to clarify how EPA is using th e term C

- R function (including alternative specifications) as separate from coefficient

– which can also vary depending on the underlying function.

EPA Response: Although we use the terms somewhat interchangeably in the RIA, the coefficient is the slope of the concentration

- response function (CRF)

. The PM mortality benefits calculated using Pope et al. (2002) and Laden et al. (2006) are based on a log

- linear CRF. The experts specified alternate functional forms, including log

- linear and piece

- wise

.
19. P 6

- 9: Again, it would be helpful to identify a phrase or term other than “arbitrary” to describe the threshold.

EPA Response: The threshold language in the RIA reflects previous agreements between EPA and OMB.

20. P 6

- 16: EPA should provide explanation of how the pie chart differ above and below the LML. If the values differ, should EPA present both to more clearly represent the uncertainty below LML?Interagency Working Comments on Draft Rule under EO 12866

Page 8 of 9 EPA Response: EPA does not consider the LML to be a threshold, and we continue to estimate mortality effec ts through the entire range of modeled concentrations. Therefore, it is inappropriate to provide the suggested graphic. However, over 94% of the mortality effects are above the LML, so the suggested graphic would be substantially similar to the one alrea dy in the RIA.

21. P 6

- 19 Title should provide some information on LML and what it represents, somehow convey that the purpose of this bar chart is to represent uncertainty in PM mortality at low concentrations.

EPA Response: The purpose of the LML graph ic is to illustrate the fraction of mortalities estimated at each air quality level, and to identify the percentage of mortalities estimated to occur above the LML of the two cohort studies. The LML is described in detail in the preceding section. We bel ieve the title and footnote are appropriate to convey the information in the graphic.

22. P 6

- 21: Table 6

- 5 seems to require some clarification; please edit.

o The table seems to duplicate benefits

– or are the emissions reductions label “Direct PM” all carbon?

o The totals are correct

– unless the intent was to round to the nearest $10 million. Recommend that we do not round more coarsely than the nearest $million.
EPA Response: Table 6

- 5 shows the disbenefits associated with the increased electricity d emand, not duplicate benefits. In accordance with advice from the National Research Council, it is our policy to always round the monetized benefits to two significant figures.

23. It would be helpful to describe what is represented in Table 6

- 7. P 6

- 24: What is represented in Table 6

- 7 that is not represented in Table 6

- 6? The text seems only to present SCC? Is it the PM disbenefits?

EPA Response: We have clarified the column heading in Table 6

- 7 to clarify that those results reflect the total CO2 disbene fits (in millions of dollars) derived from the SCC estimates (per ton of CO2) provided in Table 6

- 6.

24. P 6

- 25: EPA should clarified that effects such as bronchoconstriction occur at certain (higher) levels, not low levels, or alternatively present the st udies showing response measured at exposure to very low levels, to support the sentence “The immediate effect of SO2 on the respiratory system in humans in bronchoconstriction.” In the science referenced by EPA rules, this is true for higher levels, but no t low, background levels.

EPA Response: We have provided the citation for this language (Risk Assessment for SO2, U.S. EPA, 2009) and provided the direct quote.Interagency Working Comments on Draft Rule under EO 12866

Page 9 of 9 25. P 6

- 26: Please provide reference for the statement “A clear c oncentration response relation ship has been demonstrated in laboratory studies following exposures to SO2 at concentrations between 20 and 100 ppb, both in terms of increasing severity of effect and percentage of asthmatics adversely affected.” Aren’t the clinical studies at levels of 400 ppb (statistically significant) and 200 ppb (not statistically significant)?

EPA Response: We have provided the citation for this language (Risk Assessment for SO2, U.S. EPA, 2009) and provided the direct quote.

26. P 6

- 28 Figure 6

- 8 Please clarify wha t is represented

– all HAPs, or HAPs from Portland Cement Kilns.

EPA Response: We have clarified the figure title.

27. How is the Greenstone (2002) used in the chapter? Henderson (1996)? They are listed among references, but can’t find reference to them i n the text of the chapter.

EPA Response: These references are mentioned in the text of Section 3.2.3.3