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R Incorporated Providing Environmental Technical Support Since 1989

6330 Quadrangle Drive, Suite 325 y Chapel Hill, North Carolina 27517 Telephone: (919)484-0222 y Fax: (919) 484-0122 MEMORANDUM

DATE: February 17, 2010

SUBJECT: Impacts Associated with NESH AP for Existing Stationary CI RICE

FROM: Bradley Nelson, EC/R, Inc.

TO: Melanie King, EPA OAQPS/SPPD/ESG

1.0 PURPOSE

The purpose of this memorandum is to provide an estimate of the cost impacts and the

emission reductions of the National Emission Standards for Hazardous Air Pollutants (NESHAP) for existing compression ignition (CI) stationary reciprocating intern al combustion engines (RICE). The regulation applies to existing stationary CI RICE lo cated at major and area sources of hazardous air pollutants (HAP) emissions. It is estimated that 40 percent of stationary CI RICE are located at major sources and 60 percen t of stationary CI RICE are located at area sources. Impacts discussed in this memorandum include emissions reductions and total costs associated with regulatory requirements. Costs as sociated with the rule include the capital and annual cost of purchasing and operating air po llution control equipmen t, recordkeeping, and performance testing.

The total capital cost associated with the NESHAP for existing stationary CI RICE is estimated to be $744 million in the year 2013. The total annual cost of th e NESHAP is estimated to be $373 million in the year 2013. The NESHAP for existing stationary RICE is estimated to reduce HAP emissions in the year 2013 by 1,014 tons per year (TPY).

2.0 ENGINE POPULATION

The existing population of CI engines in the U.S. was estimated using information obtained from the Power System Research’s (PSR ) North American Engine PartsLink Database provided by the U.S. EPA Office of Transporta tion and Air Quality. The CI RICE population was estimated using the baseline engine populat ion and engine sales information from PSR. 1 A summary of the total number of affected en gines is presented in Tables 1 and 2.

1 Memorandum from Tanya Parise, Alpha-Gamma Technologies, Inc. to Jaime Pagán, EPA Energy Strategies Group, Existing Population of Stationary RICE, June 26, 2008.2 Table 1. Number of Affected Engines – Major Sources

Size Range (HP) Affected CI Engines 1

25-50 0

50-100 92,734

100-175 121,507

175-300 92,144

300-500 48,481

500-600 4,298

600-750 2,200

>750 4,853

Total 366,217

1 Number of affected engines are estimated based on the following applicability dates: i. > 500 HP non-emergency CI engines at ma jor sources constructed before 12/19/2002. ii. < 500 HP engines at major s ources constructed before 6/12/2006.

Table 2. Number of Affected Engines – Area Sources

Size Range (HP) Affected CI Engines 1

25-50 0

50-100 127,973

100-175 167,679

175-300 127,159

300-600 100,355

600-750 16,822

>750 29,802

Total 569,790

1 Number of affected engines are estimated ba sed on all engines at area sources constructed

before 6/12/2006.

The population of affected CI engines located at area sources is less than the population of existing areas source engines presented in the population memorandum. The final rule does not apply to area source emergency CI engines that are residential, commercial, or institutional; therefore these CI engines were removed from th e affected source inventory for area sources. The number of area source emergency CI engine s that are residential, commercial, or

institutional was calculated assumi ng that 10 percent of the area s ource engines are residential, commercial, or institutional. That 10 percent value was thendivided into emergency and nonemergency using the assumed 80/20 percentage (e.g., 80% emergency/20% non-emergency) that was used for all CI engines. The totals in Tabl e 2 include only those engines that are subject to the regulation.3 3.0 COST IMPACTS

3.1 Introduction

The cost impacts associated with the final ru le consist of different types of costs, which include the annual and capital co sts of controls, costs associat ed with keeping records of information necessary to demonstrate compliance, costs associated with reporting requirements under the General Provisions of 40 CFR part 63, s ubpart A, costs of purchasing and operating equipment associated with continuous parame tric monitoring, and the cost of conducting performance testing to demonstrate compliance with the emission standards. The following

sections describe how the various cost elements were estimated.

Control Costs

For engines that will need to add control t echnology to meet the em ission standards, the following equations were used to esti mate capital and annual control costs:

Technology Capital Cost ($2008) Annual Cost ($2008)

Diesel oxidation ca talyst (DOC) $27.4 x HP - $939 $4.99 x HP + $480 Open crankcase ventilation (O CV) $0.26 x HP + $997 $0.065 x HP + $254

The control costs for DOC were calculated usi ng cost data obtained from a California Air Resources Board (CARB) study. 2 The study provided cost ranges for diesel engines ranging from 40 HP to 1400 HP. The average cost from the range was selected and was adjusted to 2008 dollars. The capital and annual cost were calcu lated using maintenance data from the CARB study and cost assumptions from the EPA Control Cost Manual. The control costs for the OCV system were calculated using 2008 cost data obtai ned from a diesel engine equipment vendor. An equipment life of 10 years was used to calc ulate the capital recovery factor (CRF) for developing the annual cost for each of the cont rol devices. A linear regression equation was developed for the capital cost of the DOC and OC V using the capital cost data and the engine size in HP. This approach was us ed to develop a linear regression e quation for annual cost.

Recordkeeping

No recordkeeping costs were attributed to the requirement of following the

manufacturer’s emission-related operation and maintenance (O&M ) requirements or the owner or operator’s own maintenance plan. It is expected that the majority of owners and operators are already following some type of O&M requirements and minimal to no additional burden is expected. Labor costs associated with recordi ng the hours of operation of emergency engines are based on a technical labor rate of $68 per hour which was obtained from the Department of

Labor Statistics web site. 3 The final total wage rate was based on the 2005 compensation rates for professional staff and adjusted by an overhead and profit rate of 167 percent. The year 2005

2 Diesel PM Control Technologies, Appendix IX, California Air Resource Board, October 2000. http://www.arb.ca.gov/diesel/documents/rrpapp9.pdf

3 U.S. Department of Labor, Employer Costs for Employee Compensation, http://www.bls.gov/news .release/ecec.toc.htm4 was used for consistency in order to have the sa me basis for all costs. All costs were later converted to 2008 dollars for purposes of presenting costs associated with th e rule in present day terms. One hour per year is expected to be su fficient to record hours of operation for stationary emergency engines. No cost is attributed to purchasing and installing an hour-meter since the majority of stationary engines already come equi pped with such equipment. For owner/operators of non-emergency CI engines, EPA assumed that one hour per year was sufficient for recordkeeping for these engines.

Reporting

Most engines affected by this rule will be subject to reporting requirements such as reading instructions, training personnel, submitting an initial no tification, submitting a notification of performance test(s), and submitti ng a compliance report. However, owners and operators of engines less than 100 HP, existing stationary emergency engines, and existing stationary engines less than 300 HP located at area sources are not subject to any specific reporting requirements. For stationary non-emer gency limited use CI engines that operate less than 100 hours per year, EPA is finalizing less burdensome reporting requirements by requiring these engines to submit compliance reports on an annual basis, as opposed to semiannually as is required for other engines subjec t to numerical emission limitati ons. The reporting requirements are based on $68 per hour for technical labor to co mply with the reporting requirements. It is

estimated that a total of 14 hours will be n eeded for non-limited use engines, and 13 hours for limited use engines.

Monitoring

The cost of monitoring includes the purchas e of a continuous parametric monitoring system (CPMS). Non-emergency engines greate r than 500 HP that have add-on controls are required to use a CPMS to monitor the catalyst inlet temperature and pressure drop across the catalyst to ensure those parameters do not exceed the operating limita tions. The cost of purchasing and operating a CPMS was obtaine d from vendor quotes received for previous rulemaking and adjusted to 2008 dollars. 4 The capital cost of a CPMS for a large engine facility is $531. It is estimated that 30 hours per year is necessary to operate and maintain the CPMS and that 6 hours per year (or 0.5 hours per month) is needed to record information from the CPMS. It is assumed that all engines subject to continuous monitoring woul d be located at large engine facilities.

Performance Testing

Initial performance testing is required for non-emergency en gines greater than 100 HP at major sources and non-emergency engines greater th an 300 HP located at area sources. The cost of conducting a performance test on a CI engine is based on cost information gathered for previous rulemakings. 5 The performance testing cost is ba sed the use of a portable analyzer and

4 Part A of the Supporting Statement for Standard Form 83 Stationary Reciprocating Internal Combustion Engines, November 17, 2003.

5 Memorandum from Bradley Nelson, Alpha-Gamma Technologies, Inc. to Sims Roy, EPA/OAQPS/ESD/Combustion Group, Portable Emissions Analyzer Cost Information, August 31, 2005.5 was estimated to cost $1,000 per day of testing. Th is daily performance test cost was adjusted to 2008 dollars and was estimated to be $1,165. Because the regulation requires three-1 hour runs, EPA assumed that two engines could be tested at each facility in one day. Therefore, the estimated impacts performance testing cost will be assumed to be $583 per engine (or half of the $1,165 daily cost) using a portable analyzer.

Work Practices

The costs for performing work practices for CI engines less than 100 HP located at a major source was assumed to be negligible and we re not included in these impact calculations. The work practices are based on engine mainte nance procedures that the owner/operators perform regardless of the regulati on. These work practices include:

• Changing the oil and filter;

• Inspecting the air cleaner;

• Inspecting all hoses and belts , and replacing as necessary.

EPA believes that these work pr actices will limit HAP emissions from these engines, because these work practices ensure that the engine is operating efficiently. Own er/operators of these engines regularly perform these wo rk practices as part of the preventive maintenance schedule for the engine. Therefore, EPA believes that it is appropriate to not incl ude these work practice costs in the impacts determination.

Management Practices

The costs for performing management practic es for non-emergency CI engines less than or equal to 300 HP located at area sources and all emergency engi nes located at area sources was assumed to be negligible and were not included in these impact calculations. The management practices are based on engine maintenance pr ocedures that the owner/operators perform regardless of the regulation. Thes e management practices include:

• Changing the oil and filter;

• Inspecting the air cleaner; and

• Inspecting all hoses and belts , and replacing as necessary.

EPA believes that these work pr actices will limit HAP emissions from these engines, because these work practices ensure that the engine is operating efficiently. Own er/operators of these engines regularly perform these wo rk practices as part of the preventive maintenance schedule for the engine. Therefore, EPA believes that it is appropriate to not incl ude these work practice costs in the impacts determination.6 3.2 Major Sources

The cost impacts for stationary RICE vary depe nding on the engine type and size. The following sections describe the specific co sts that apply to each subcategory of CI engines located at major

sources.

All CI Engines HP < 100

The costs associated with CI engines less th an 100 HP include minimal requirements. Owners and operators of engines less than 100 HP are required to follow the manufacturer’s emission-related O&M requirements or must deve lop their own maintenance plan to follow. Emergency engines must record the hours of opera tion, which is estimated at one hour per year at $72 per hour.

Non-emergency CI Engines 100 ≤ HP ≤ 300 HP

The costs associated with non-emergency CI engines greater than or equal to 100 HP and less than or equal to 300 HP incl ude the cost of an initial test, recordkeeping, and reporting. In addition, EPA assumes that some of these engines w ill be required to install a control device to

meet the emissions standard. To estimate the num ber of CI engines that would be required to install control technology, EPA compared the emissi on rate of the test that was used to determine

the MACT floor with the CI nonroad emission factors. 6 EPA found that only the emission factors for Tier 0 CI engines were greater than the 1.2 g/HP-hr value that was used to set the MACT floor. Therefore, it was assumed that Tier 1 engines and greater would be able to meet the final emission standard. The model year fo r Tier 1 engines begins in 1997 for 100 to 175 CI engines, and 1996 for 175 to 300 HP CI engines. Using the model year da ta in the population memorandum, EPA estimated that 35 percent of the existing CI engines grea ter than or equal to 100 HP and less than or equal to 300 HP are Tier 0 engines and would n eed to install control technology to meet the emission standard. The cost estimates for this subcategory of engines do not account for possible fuel price increases that may result from using ultra-low sulfur diesel (ULSD). EPA estimated the cost of lubricity add itives to ULSD would increase the cost of the fuel by 0.2 cents per gallon, 7 which EPA believes is negligible . In addition, there are no additional maintenance requirements for owner/operato rs using ULSD in exis ting diesel engines. Many owner/operators have found that time betw een oil changes can be extended for engines using ULSD fuel, which would decrease the overa ll cost of switching to UL SD fuel. Therefore, EPA believes that it is appropriate to not include any costs for switching to ULSD in the impacts

for this NESHAP.

6 Exhaust and Crankcase Emission Factors for Nonroad E ngine Modeling--Compression-Ignition, U.S. EPA, Office of Transportation and Air Quality, Assessment and Standa rds Division, EPA420-P-04-009, Revised April 2004. http://www.epa.gov/oms/models/nonrdmdl/nonrdmdl2004/420p04009.pdf

7 Memorandum from Melanie Taylor and Brad Nelson, AGTI to Sims Roy, EPA OAQPS ESD Combustion Group, Lubricity of Ultra Low Sulfur Diesel Fuel, June 2, 2004.7 Non-emergency CI Engines > 300 HP

The costs associated with non-emergency CI engines above 300 HP include the cost of installing and operating an oxidation catalyst for reducing HAP, as well as the cost of installing an open crankcase ventilation system. Non-emer gency CI engines greater than 500 HP are also subject to continuous monitoring requirements. In addition, owners and operators must conduct an initial performance test to demonstrate comp liance with the emission limitation. Owners and operators of engines above 500 HP must conduc t subsequent performance testing every 8,760 hours or 3 years, whichever comes first to demonstrate compliance. The cost estimates for this subcategory of engines do not account for possibl e fuel price increases that may result from using ultra-low sulfur diesel (ULSD). EPA estim ated the cost of lubric ity additives to ULSD

would increase the cost of the fuel by 0.2 cents per gallon, 8 which EPA believes is negligible. In addition, there are no additional maintenance requ irements for owner/operators using ULSD in existing diesel engines. Many ow ner/operators have found that time between oil changes can be extended for engines using ULSD fuel, which w ould decrease the overall co st of switching to ULSD fuel. Therefore, EPA belie ves that it is appropriate to not include any costs for switching to ULSD in the impacts for this NESHAP.

Emergency CI Engines 100 ≤ HP ≤ 500

The costs associated with emergency CI e ngines greater than 300 HP and less than or equal to 500 HP (emergency CI engines above 500 HP were subject to an earlier rule and are not subject to further regulation in this rule) in clude minimal recordkeeping requirements. The owners and operators must follow the manu facturer’s emission-related operating and maintenance (O&M) requirements or must develo p their own maintenance plan to follow and must also keep records of the hour s of operation. It is estimated th at one hour per year at $68 per hour would be sufficient to record the hours of ope ration. No costs were included in the impacts for following the manufacturer’s emission-relate d O&M plan, because it is expected that owner/operators will follow this pl an regardless of the regulation.

3.3 Area Sources

All Emergency CI Engines

The costs associated with emergency CI e ngines include recordk eeping requirements for tracking the hours of operation, but these engines are not subject to any performance testing. The owners and operators must follow the manu facturer’s emission-related O&M requirements or must develop their own maintena nce plan to follow. It is estim ated that one hour per year at $68 per hour would be sufficient to record the hours of operation. Emergency CI engines at areas sources will be subject to management pr actices, rather numerical emission limits. The management practices do not requ ire aftertreatment controls. Th erefore, no control costs have been estimated for these engines. These engines will be subject to management practices which are not included in the costs, because it is assumed that these management practices are performed regardless of the regulation.

8 Memorandum from Melanie Taylor and Brad Nelson, AGTI to Sims Roy, EPA OAQPS ESD Combustion Group, Lubricity of Ultra Low Sulfur Diesel Fuel, June 2, 2004.8 Non-Emergency CI Engines ≤ 300 HP

The costs associated with non-emergency CI engines less than or equal to 300 HP are minimal and only include following the manufact urer’s emission-related O&M requirements or the owner or operator’s own maintenance plan. These engines are not subject to any numerical emission limitations, therefore no control costs apply and no perf ormance testing is required. These engines will be subject to management pr actices which are not included in the costs, because it is assumed that these management prac tices are done regardless of the regulation.

Non-Emergency CI Engines > 300 HP

The costs associated with non-emergency CI engines above 300 HP include the cost of installing and operating an oxidation catalyst for reducing HAP, as well as the cost of installing an open crankcase ventilation system. Non-emer gency CI engines greater than 500 HP are also subject to continuous monitoring requirements. In addition, owners and operators must conduct an initial performance test to demonstrate comp liance with the emission limitation and engines above 500 HP must conduct subsequent perfor mance testing every 8,760 hours or 3 years,

whichever comes first. The cost estimates fo r this subcategory of engines do not account for possible fuel price increases that may result fr om using ultra-low sulf ur diesel. The cost estimates for this subcategory of engines do not account for possible fuel price increases that may result from using ultra-low sulfur diesel (ULSD). EPA estimated the cost of lubricity

additives to ULSD would increase the cost of the fuel by 0.2 cents per gallon, which EPA believes is negligible. In addition, there are no additional maintenance requirements for owner/operators using ULSD in existing diesel en gines. Many owner/operators have found that time between oil changes can be extended for en gines using ULSD fuel, which would decrease the overall cost of switching to ULSD fuel. Theref ore, EPA believes that it is appropriate to not include any costs for switching to UL SD in the impacts for this NESHAP.

A summary of the total costs a ssociated with the rule and a breakdown of the costs by NAICS codes are presented in Tables 4 through 7. For estimating the number of engines located at major and area sources, we used our best engineering judgment, and we recognize that it may

lead to an overestimate or underest imate of impacts for certain sectors.9Table 4. Summary of Major Source and Area Source Costs for the CI RICE NESHAP1SizeRange(HP)Non-Emergency CIInitial Test Recordkeeping ReportingMonitoring- CapitalCostMonitoring -Annual CostTotal AnnualCostsTotal CapitalCostsCapitalControl CostAnnualControl CostMajor Sources50-100 $0 $0 $0 $6,654,888 $0 $0 $0 $6,654,888 $0100-175 $24,057,778 $9,918,465 $14,150,269 $8,719,731 $5,973,016 $0 $0 $38,761,480 $24,057,778175-300 $35,917,270 $10,740,189 $10,730,759 $6,612,548 $4,529,595 $0 $0 $32,613,092 $35,917,270300-500 $107,841,136 $26,722,727 $5,645,923 $3,479,152 $2,383,219 $0 $0 $38,231,021 $107,841,136500-600 $13,126,952 $3,020,849 $500,530 $61,688 $211,280 $481,765 $2,220,755 $6,015,102 $13,608,716600-750 $8,240,540 $1,824,295 $256,204 $31,576 $108,147 $246,599 $1,136,729 $3,356,951 $8,487,139>750 $26,903,091 $5,618,803 $565,163 $69,653$238,563 $543,975 $2,507,521 $8,999,703 $27,447,066Total $216,086,768 $57,845,329 $31,848,848 $25,629,236 $13,443,820 $1,272,338 $5,865,005 $134,632,238 $217,359,106Area Sources50-100 $0 $0 $0 $9,183,746 $0 $0 $0 $9,183,746 $0100-175 $0 $0 $0 $12,033,196 $5,231,824 $0 $0 $17,265,020 $0175-300 $0 $0 $0 $9,125,316 $3,967,529 $0 $0 $13,092,845 $0300-600 $272,814,082 $65,640,094 $12,703,298 $7,201,827 $5,362,230 $4,075,682 $18,787,376 $109,694,825 $276,889,764600-750 $68,490,125 $15,162,379 $2,129,405 $1,207,215$898,850 $683,191 $8,952,336 $28,350,186 $69,173,315>750 $179,573,835 $37,504,615 $3,772,372 $2,138,655 $1,592,368 $1,210,315 $15,859,613 $60,867,624 $180,784,150Total $520,878,041 $118,307,088 $18,605,076 $40,889,956 $17,052,802 $5,969,187 $43,599,324 $238,454,245 $526,847,229Total$736,964,809 $176,152,417 $50,453,924 $66,519,191 $30,496,622 $7,241,526 $49,464,330 $373,086,483 $744,206,3351Costs are presented in 2008 dollars.10Table 5. Summary of Major Source and Area Source NAICS Costs for the CI RICE NESHAP1NAICSMajor Source Area Source Total (Major + Area)Capital Cost Annual Cost Capital CostAnnual Cost Capital Cost Annual CostElectric Power Generation (2211) $161,766,376 $90,982,105 $471,230,478 $203,529,267 $632,996,854 $294,511,373Hospitals (622110) $20,220,797 $11,372,763 $0 $0 $20,220,797 $11,372,763Crude Petroleum & NG Production (211111) $2,374,401 $3,807,478 $1,611,601 $2,599,033 $3,986,003 $6,406,510Natural Gas Liquid Producers (211112) $2,374,401 $3,807,478 $1,611,601 $2,599,033 $3,986,003 $6,406,510National Security (92811) $20,220,797 $11,372,763 $52,358,942 $22,614,363 $72,579,739 $33,987,126Hydro Power Units (335312) $0 $16,637 $0 $22,959 $0 $39,597Irrigation Sets (335312) $10,294,073 $11,791,567 $34,606 $5,208,210 $10,328,679 $16,999,777Welders (333992) $108,260 $1,481,447 $0 $1,881,380 $108,260 $3,362,827Total $217,359,106 $134,632,238 $526,847,229 $238,454,245 $744,206,335 $373,086,4831Costs are presented in 2008 dollars.11Table 6. Summary of Major Source and Area Source NAICS Costs for the CI RICE NESHAP – by Size1NAICSMajor Source Area Source Total (Major + Area)Capital Cost Annual Cost Capital CostAnnual Cost Capital Cost Annual CostElectric Power Generation (2211)50-100 hp $0 $3,396,123 $0 $5,272,480 $0 $8,668,603100-175 hp $13,406,919 $21,600,998 $0$10,824,132 $13,406,919 $32,425,129175-300 hp $23,012,914 $20,895,861 $0$9,437,454 $23,012,914 $30,333,314300-600 hp $96,907,266 $35,304,866 $248,552,865 $98,468,656 $345,460,132 $133,773,522600-750 hp $6,789,032 $2,685,292 $62,249,758 $25,512,616 $69,038,790 $28,197,908>750 hp $21,650,245 $7,098,966 $160,427,854 $54,013,930 $182,078,100 $61,112,896Total Electric Power Generation 2211 $161,766,376 $90,982,105 $471,230,478 $203,529,267 $632,996,854 $294,511,373Hospitals (622110)50-100 hp $0 $424,515 $0 $0 $0 $424,515100-175 hp $1,675,865 $2,700,125 $0 $0 $1,675,865 $2,700,125175-300 hp $2,876,614 $2,611,983 $0 $0 $2,876,614 $2,611,983300-600 hp $12,113,408 $4,413,108 $0 $0 $12,113,408 $4,413,108600-750 hp $848,629 $335,662 $0 $0 $848,629 $335,662>750 hp $2,706,281 $887,371 $0 $0 $2,706,281 $887,371Total Hospitals (622110) $20,220,797 $11,372,763 $0 $0 $20,220,797 $11,372,763Crude Petroleum & NG Production (211111)50-100 hp $0 $420,256 $0 $579,954 $0 $1,000,210100-175 hp $2,026,868 $3,265,655 $0$1,454,578 $2,026,868 $4,720,233175-300 hp $3,592 $3,261 $0 $1,309 $3,592 $4,571300-600 hp $151,812 $55,308 $346,112 $137,119 $497,925 $192,426600-750 hp $0 $0 $0 0 $0 $0>750 hp $192,129 $62,998 $1,265,489 $426,073 $1,457,619 $489,071Total Crude Petroleum & NG Production (211111) $2,374,401 $3,807,478 $1,611,601 $2,599,033 $3,986,003 $6,406,510Natural Gas Liquid Producers (211112)50-100 hp $0 $420,256 $0 $579,954 $0 $1,000,210100-175 hp $2,026,868 $3,265,655 $0$1,454,578 $2,026,868 $4,720,233175-300 hp $3,592 $3,261 $0 $1,309 $3,592 $4,57112NAICSMajor Source Area Source Total (Major + Area)Capital Cost Annual Cost Capital CostAnnual Cost Capital Cost Annual Cost300-600 hp $151,812 $55,308 $346,112 $137,119 $497,925 $192,426600-750 hp 0 0 0 0 $0 $0>750 hp $192,129 $62,998 $1,265,489 $426,073 $1,457,619 $489,071Total Natural Gas Liquid Producers (211112) $2,374,401 $3,807,478 $1,611,601 $2,599,033 $3,986,003 $6,406,510National Security (92811)50-100 hp $0 $424,515 $0 $585,831 $0 $1,010,346100-175 hp $1,675,865 $2,700,125 $0$1,202,681 $1,675,865 $3,902,806175-300 hp $2,876,614 $2,611,983 $0$1,048,606 $2,876,614 $3,660,589300-600 hp $12,113,408 $4,413,108 $27,616,985 $10,940,962 $39,730,393 $15,354,070600-750 hp $848,629 $335,662 $6,916,640 $2,834,735 $7,765,269 $3,170,397>750 hp $2,706,281 $887,371 $17,825,317 $6,001,548 $20,531,598 $6,888,919Total National Security (92811) $20,220,797 $11,372,763 $52,358,942 $22,614,363 $72,579,739 $33,987,126Hydro Power Units (335312)50-100 hp $0 $16,637 $0 $22,959 $0 $39,597100-175 hp $0 $0 $0 $0 $0 $0175-300 hp $0 $0 $0 $0 $0 $0300-600 hp $0 $0 $0 $0 $0 $0600-750 hp $0 $0 $0 $0 $0 $0>750 hp $0 $0 $0 $0 $0 $0Total Hydro Power Units (335312) $0 $16,637 $0 $22,959 $0 $39,597Irrigation Sets (335312)50-100 hp $0 $245,565 $0 $338,880 $0 $584,446100-175 hp $3,137,134 $5,054,497 $0$2,251,359 $3,137,134 $7,305,856175-300 hp $7,143,945 $6,486,744 $0$2,604,167 $7,143,945 $9,090,911300-600 hp $12,145 $4,425 $27,689 $10,969 $39,834 $15,394600-750 hp $849 $336 $6,917 $2,835 $7,766 $3,171>750 hp $0 $0 $0 $0 $0 $0Total Irrigation Sets (335312) $10,294,073 $11,791,567 $34,606 $5,208,210 $10,328,679 $16,999,777Welders (333992)50-100 hp $0 $1,307,020 $0 $1,803,688 $0 $3,110,70813NAICSMajor Source Area Source Total (Major + Area)Capital Cost Annual Cost Capital CostAnnual Cost Capital Cost Annual Cost100-175 hp $108,260 $174,427 $0 $77,693 $108,260 $252,119175-300 hp $0 $0 $0 $0 $0 $0300-600 hp $0 $0 $0 $0 $0 $0600-750 hp $0 $0 $0 $0 $0 $0>750 hp $0 $0 $0 $0 $0 $0Total Welders (333992) $108,260 $1,481,447 $0 $1,881,380 $108,260 $3,362,827Total $217,359,106 $134,632,238 $526,847,229 $238,454,245 $744,206,335 $373,086,4831Costs are presented in 2008 dollars.14Table 7. Summary of Major Source and Area Source NAICS Costs for the CI RICE NESHAP – by Number of Engines1NAICSNumber of Engines Total (Major + Area)Major Area Total Capital Cost Annual CostElectric Power Generation (2211)50-100 hp 47,324 79,859 127,183 $0 $8,668,603100-175 hp 67,713 114,266 181,980 $13,406,919 $32,425,129175-300 hp 59,039 99,627 158,666 $23,012,914 $30,333,314300-600 hp 42,113 97,919 140,032 $345,460,132 $133,773,522600-750 hp 1,760 16,455 18,215 $69,038,790 $28,197,908>750 hp 3,828 28,746 32,574 $182,078,100 $61,112,896Total Electric Power Generation 2211 221,777 436,872 658,649 $632,996,854 $294,511,373Hospitals (622110)50-100 hp 5,916 0 5,916 $0 $424,515100-175 hp 8,464 0 8,464 $1,675,865 $2,700,125175-300 hp 7,380 0 7,380 $2,876,614 $2,611,983300-600 hp 5,264 0 5,264 $12,113,408 $4,413,108600-750 hp 220 0 220 $848,629 $335,662>750 hp 479 0 479 $2,706,281 $887,371Total Hospitals (622110) 27,722 0 27,722 $20,220,797 $11,372,763Crude Petroleum & NG Production (211111)50-100 hp 5,856 8,784 14,640 $0 $1,000,210100-175 hp 10,237 15,355 25,592 $2,026,868 $4,720,233175-300 hp 9 14 23 $3,592 $4,571300-600 hp 66 136 202 $497,925 $192,426600-750 hp 0 0 0 $0 $0>750 hp 34 227 261 $1,457,619 $489,071Total Crude Petroleum & NG Production(211111)16,202 24,517 40,719 $3,986,003 $6,406,510Natural Gas Liquid Producers (211112)50-100 hp 5,856 8,784 14,640 $0 $1,000,210100-175 hp 10,237 15,355 25,592 $2,026,868 $4,720,23315NAICSNumber of Engines Total (Major + Area)Major Area Total Capital Cost Annual Cost175-300 hp 9 14 23 $3,592 $4,571300-600 hp 66 136 202 $497,925 $192,426600-750 hp 0 0 0 $0 $0>750 hp 34 227 261 $1,457,619 $489,071Total Natural Gas Liquid Producers (211112)16,202 24,517 40,719 $3,986,003 $6,406,510National Security (92811)50-100 hp 5,916 8,873 14,789 $0 $1,010,346100-175 hp 8,464 12,696 21,160 $1,675,865 $3,902,806175-300 hp 7,380 11,070 18,450 $2,876,614 $3,660,589300-600 hp 5,264 10,880 16,144 $39,730,393 $15,354,070600-750 hp 220 1,828 2,048 $7,765,269 $3,170,397>750 hp 479 3,194 3,672 $20,531,598 $6,888,919Total National Security (92811) 27,722 48,541 76,263 $72,579,739 $33,987,126Hydro Power Units (335312)50-100 hp 232 348 580 $0 $39,597100-175 hp 0 0 0 $0 $0175-300 hp 0 0 0 $0 $0300-600 hp 0 0 0 $0 $0600-750 hp 0 0 0 $0 $0>750 hp 0 0 0 $0 $0Total Hydro Power Units (335312) 232 348 580 $0 $39,597Irrigation Sets (335312)50-100 hp 3,422 5,133 8,555 $0 $584,446100-175 hp 15,845 23,767 39,611 $3,137,134 $7,305,856175-300 hp 18,327 27,491 45,819 $7,143,945 $9,090,911300-600 hp 5 11 16 $39,834 $15,394600-750 hp 0 2 2 $7,766 $3,171>750 hp 0 0 0 $0 $0Total Irrigation Sets (335312) 37,599 56,403 94,003 $10,328,679 $16,999,777Welders (333992)16NAICSNumber of Engines Total (Major + Area)Major Area Total Capital Cost Annual Cost50-100 hp 18,213 27,319 45,532 $0 $3,110,708100-175 hp 547 820 1,367 $108,260 $252,119175-300 hp 0 0 0 $0 $0300-600 hp 0 0 0 $0 $0600-750 hp 0 0 0 $0 $0>750 hp 0 0 0 $0 $0Total Welders (333992) 18,760 28,140 46,899 $108,260 $3,362,827Total 366,217 619,337 957,832 $744,206,335 $373,086,4831Costs are presented in 2008 dollars.17 4.0 EMISSION IMPACTS

The emissions reductions associated with th e final rule are based on requiring emission standards that are based on appl ying add-on controls to non-emerge ncy CI engines greater than 300 HP. Baseline emissions from the current populat ion of stationary RICE less than or equal to 500 HP at major sources and exis ting stationary RICE at area sources were calculated based on non-emergency CI engines operating 1,000 hrs/yr , and emergency CI engines operating 50 hrs/yr. The following additional assumptions were used:

Emission Factors:

Engine HAP (lb/hp-hr) CO (lb/hr) PM (lb/hp-hr)

CI 1.07x10 -4 6.96x10 -1 7.00x10 -4

*Obtained from AP-42, section 3.4 where S 1 is sulfur content.

Control Efficiencies: Technology HAP CO PM Oxidation catalyst 70% 70% 30%

Based on the above assumptions and the existin g population of engines shown in Tables 1 through 3 of this memorandum, the HAP, CO, and PM baseline emissions and reductions were

calculated. In addition to the fi nal rule reducing HAP, CO, and PM , the rule will also lead to reductions in sulfur dioxide (SO 2 ) emissions by requiring existing non-emergency CI engines greater than 300 HP that use diesel fuel to use diesel fuel containing no more than 15 parts per million (ppm) of sulfur. However, EPA has not quantified the SO 2 emission reductions that would occur as a result of these engines switchi ng to ULSD. Although EPA is confident that

some SO 2 reductions would occur as a result of this rule, EPA is unable to estimate the percentage of engines that may switch to UL SD in the absence of this rule. As a PM 2.5 precursor, these SO 2 emission reductions would lead to fewer PM 2.5 -related health effects. Because of uncertainty in the magnitude of the attributable SO 2 reductions and to avoid the appearance of double-counting, EPA has chosen to not include SO 2 reduction estimates in Table 8 of this memorandum. In addition, it is expected that additional PM reductions will be achieved by the requirement to use ULSD for CI engines that install a DOC. The use of ULSD reduces the formation of sulfates in the exhaust gas, th erefore reducing the emissi on of these sulfate PM

emissions from the exhaust. EPA has estimated that the use of ULSD can reduce PM emissions by 5-30 percent depending on the sulf ur concentration of the diesel fuel that is being replaced. Because EPA has no information on the type of fuel that CI engines are currently using, the PM reductions from switching to ULSD were not quantified and included in this summary.

The work practice requirement of using an open crankcase ventilation system to control metallic HAP emissions is expected to achieve additional HAP reductions from CI engines. However, the metallic HAP emission reduction cannot be quantified because of the difficulty of measuring metallic HAP from the crankcase exhaust. Therefore, the metallic HAP reductions

are not included in the total emission reductions.18 Table 8. Summary of Major Source and A rea Source Emissions Reductions for the

CI RICE NESHAP

Size Range (HP) Emission Reductions (TPY)

HAP CO PM VOC

Major Sources

50-100 0 0 0 0

100-175 44 2,072 123 1,183

175-300 57 1,571 161 1,549

300-500 145 2,362 407 3,923

500-600 18 209 50 478

600-750 11 107 31 300

>750 36 236 102 982

Total 312 6,558 874 8,416

Area Sources

50-100 0 0 0 0

100-175 0 0 0 0

175-300 0 0 0 0

300-600 368 5,314 1,031 9,930

600-750 92 891 259 2,497

>750 243 1,578 680 6,553

Total 703 7,784 1,970 18,980

Grand Total 1,014 14,342 2,844 27,395