FROM: Jeff Coburn, RTI International 

TO: Brenda Shine, EPA/OAQPS 

FOR: EPA Docket No. EPA-HQ-OAR-2003-0146 

DATE: July 13, 2011 

SUBJECT: Revised Impacts for Heat Exchange Systems at Petroleum Refineries 

1. Purpose

This memorandum documents the costs and environmental impacts for regulatory alternatives 

considered for heat exchange systems at petroleum refineries. 

2. Background

On October 28, 2009, EPA promulgated national emissions standards for hazardous air 

pollutants (NESHAP) for heat exchange systems at petroleum refineries as part of EPA’s review 

of promulgated NESHAP. These standards required monthly monitoring of heat exchange 

systems using the modified El Paso method (TCEQ, 2003), which is a dynamic or flow-through 

system for air stripping a sample of the water and analyzing the resultant off-gases for VOCs 

using a common flame ionization detector (FID) analyzer. For existing source heat exchange 

systems, the leak threshold that required repair was defined as an air concentration in the 

stripping column of 6.2 parts per million by volume (ppmv) as methane or greater. For new 

source heat exchange systems, the leak threshold that required repair was defined as an air 

concentration in the stripping column of 3.1 ppmv as methane or greater. The monthly 

monitoring frequency and these leak threshold levels were determined to be the maximum 

achievable control technology (MACT) “floor” based on a review of state permit requirements 

(see Lucas, 2008). 

In reviewing these heat exchange system monitoring requirements and considering their 

applicability to a wider range of industrial source categories, EPA evaluated a wider range of 

monitoring alternatives (Coburn, 2011). An unexpected result of this analysis was that quarterly 

monitoring with a leak threshold of 3.1 ppmv as methane in the stripping air (equivalent to 40 

parts per billion by weight (ppbw) volatile hydrocarbons in the water) achieved equivalent 

emission reductions to monthly monitoring at a leak threshold of 6.2 ppmv as methane in the 

stripping air (or 80 ppbw volatile hydrocarbons in the water). Additionally, new information was 

obtained from vendors regarding cost of purchasing a modified El Paso stripping column as well 

as costs for outsourcing this monitoring activity. EPA is, therefore, reassessing the cost and 

environmental impacts of the heat exchange monitoring requirements for petroleum refineries in 

light of this new information. 
Technical Memorandum – Revised Impacts for Heat Exchange Systems at Petroleum Refineries 

July 13, 2011 

2 

3. Approach

The impacts model developed for heat exchange system during the technology review was used 

to estimate the cost and environmental impacts for petroleum refineries. The model was tailored 

to the petroleum refinery industry by updating the labor costs used in the model to labor costs 

specific to the petroleum industry (May 2009 dollars for NAICS code 324100) as presented in 

Table 1. 

Table 1. Summary of 2009 Hourly Labor Rates for Petroleum Industry 

Labor Class 

(A) 

Mean 

hourly 

labor 

rate1

($/hr) 

(B) 

Fringe 

benefit 

loading 

rate 

I 

Overhead 

and profit 

rate 

(D = A x B x C)

Loaded wage 

rate 

($/hr) 

1. Environmental Engineering 

(SOC Code: 17-2081) 40.45 1.5 1.4 84.95 

2. Executive, administrative and managerial 

(SOC Code: 11-9041) 62.03 1.5 1.4 130.26 

3. Administrative support, including clerical 

(SOC Code: 43-0000) 19.61 1.5 1.4 41.18 

4. Installation, Maintenance, and Repair 

(SOC Code: 49-0000) 26.48 1.5 1.4 55.61 

5. Refinery Operators 

(SOC Code: 51-8093) 28.96 1.5 1.4 60.82 

1

 Labor rates as reported by U.S. Department of Labor, Bureau of Labor Statistics (U.S. DOL, 2010). Labor rates 

for May 2009 for petroleum industry sector: 4-digit NAICS code 324100 

(http://stats.bls.gov/oes/current/oessrci.htm accessed in March 2011). 

Based on previous analyses (Lucas, 2008), there are approximately 520 heat exchange systems at 

the roughly 150 U.S. petroleum refineries. Based on the size distribution of heat exchange 

systems presented by Lucas (2008) and the estimate of 520 heat exchange systems, there would 

be: 

• 202 (38.85 percent) heat exchange systems represented by the 5,000 gpm model unit; 

• 150 (28.85 percent) heat exchange systems represented by the 15,000 gpm model unit; 

• 150 (28.85 percent) heat exchange systems represented by the 40,000 gpm model unit; 

and 

• 18 (3.45 percent) heat exchange systems represented by the 100,000 gpm model unit. 

In the previous refinery analysis, two heat exchange systems were assumed to be in HAP service 

at refineries with crude capacity less than 75,000 barrels per calendar day (bbl/cd); four heat 

exchange systems were assumed to be in HAP service at refineries with crude capacity of 75,000 

to 200,000 bbl/cd; and six heat exchange systems were assumed to be in HAP service at 

refineries with crude capacity greater than 200,000 bbl/cd. Based on these assumptions, 
Technical Memorandum – Revised Impacts for Heat Exchange Systems at Petroleum Refineries 

July 13, 2011 

3 

48 percent of the refineries are expected to have two affected heat exchange systems, 

30.7 percent of the refineries will have four affected heat exchange systems, and 21.3 percent of 

the refineries will have six affected heat exchange systems. Therefore, costs were developed 

separately for these three different model facilities (i.e., facilities with two, four, or six affected 

heat exchange systems). As in the previous refinery analysis, we used $560/ton of VOC reduced 

as the VOC recovery credit. 

The baseline leak distribution was adjusted within the heat exchange impacts model so that the 

model’s projected emission reductions for the monthly monitoring alternatives matched those 

projected previously for petroleum refineries. The baseline leak distribution used for the 

estimating impacts for petroleum refineries is provided in Table 2. 

Table 2. Model Leak Concentration Values and Initial Leak Distribution 

Description of Representative Leak Interval 

Model Leak 

Concentration in 

Cooling Water (ppbw) 

Initial Leak 

Frequency 

Distribution 

No detectable leaks (0 to 5 ppbw) 1 0.45 

 Leaks from >5 to 25 ppbw 10 0.24 

 Leaks from >25 to 125 ppbw 50 0.15 

 Leaks from >125 to 600 ppbw 250 0.10 

 Leaks from >625 to 3,000 ppbw 1,200 0.042 

 Leaks greater than 3,000 ppbw 6,000 0.018 

Table 3 summarizes the other key modeling parameters used in the analysis. 

Table 3. Model Input Parameters used to Estimate Impacts for Petroleum Refinery Heat 

Exchange System 

Model Input Parameter Value and Units 

Number of heat exchange systems at the facility 2, 4, or 6 

Monitoring frequency / Leak repair threshold Option 1: Monthly / 80 ppbw 

Option 2: Quarterly / 40 ppbw 

Option 3: Monthly / 40 ppbw 

Option 4: Continuously / 40 ppbw 

Delay of repair threshold 800 ppbw 

Leak reduction factor 0.3 

Repair time for normal leak events 45 days 

Repair time for delayed repairs 120 days 

Fraction of detected leaks less than the delay of 

repair threshold that are delayed 

0.50 

Organic recovery credit $560/ton 
Technical Memorandum – Revised Impacts for Heat Exchange Systems at Petroleum Refineries 

July 13, 2011 

4 

4. Results

The heat exchange impact model evaluates costs and environmental impacts on a per heat 

exchange system basis. The environmental impacts per heat exchanger are dependent on the size 

of the heat exchange system, while the costs are a function of the number of affected heat 

exchange systems per facility (referred to as cost scenarios). The projected costs and 

environmental impacts for each model heat exchange system in terms of system size and cost 

scenario were multiplied by the number of heat exchange systems expected for that size/cost 

scenario combination, and these results were summed to get a total estimate of the costs and 

emissions reduction for the 520 heat exchange systems at the 150 petroleum refineries. The 

cumulative nationwide costs and emission reductions calculated for the petroleum refining 

industry for each of the control options are summarized in Table 4. Based on the parameters 

used in the impacts model, a monitoring program using monthly monitoring at a leak threshold 

of 6.2 ppmv (as methane) in the stripping air (or 80 ppbw in the water) is expected to yield 

identical emission reductions to a monitoring program using quarterly monitoring at a leak 

threshold of 3.1 ppmv (as methane) in the stripping air (or 40 ppbw in the water). Most existing 

source petroleum refineries are expected to elect the quarterly monitoring option, but existing 

source petroleum refineries that are already required to monitor monthly (or more frequently) 

due to state permit requirements are likely to use the monthly monitoring alternative for existing 

sources. 

As seen in Table 4, the overall cost-effectiveness of any of the monitoring options appears 

reasonable. However, the incremental cost-effectiveness is the key indicator for comparing 

between similar options. Since Options 1 and 2 yield the same emission reductions, the 

incremental cost-effectiveness is undefined between these options. The incremental cost 

effectiveness for Option 3, which can be considered a “beyond-the-floor” option for existing 

sources, is approximately $6,000 per ton volatile hydrocarbon reduced. The incremental cost 

effectiveness for Option 4, which is the “beyond-the-floor” option for new sources, is 

approximately $78,000 per ton volatile hydrocarbon reduced. 
Technical Memorandum – Revised Impacts for Heat Exchange Systems at Petroleum Refineries 

July 13, 2011 

5 

Table 4. Impacts for Petroleum Refinery Heat Exchange System Monitoring Options

Control Option 

Description 

Total Capital 

Costs 

($) 

Total 

Annualized 

Costs with 

Recovery 

Credits 

($/yr) 

Nationwide 

Emissions 

Reductions 

(tons volatile 

hydrocarbons 

/yr) 

CostEffectiveness 

($/ton volatile 

hydrocarbons 

reduced) 

Incremental 

CostEffectiveness 

($/ton volatile 

hydrocarbons 

reduced) 

Nationwide 

Emissions 

Reductions 

(tons HAP 

/yr) 

Ef

nes

re

Option 1. Monthly monitoring; leak at 6.2 ppmv in stripping gas [Existing source MACT floor] 

$ 2,550,000 $ 96,900 4,140 $ 23 $ 23 621 $ 

Option 2. Quarterly monitoring; leak at 3.1 ppmv in stripping gas [Equivalent option to the existing source MACT floor] 

$ 1,550,000 ($ 518,000) 4,140 ($ 125) Undefined 621 ($ 

Option 3. Monthly monitoring; leak at 3.1 ppmv in stripping gas [New source MACT floor] 

$ 2,550,000 $ 525,000 4,310 $ 120 $ 6,050 647 $ 

Option 4. Continuous monitoring; leak at 3.1 ppmv in stripping gas [“Beyond-the-floor” option for new sources] 

$ 12,900,000 $ 7,270,000 4,400 $ 1,650 $ 78,200 660 $ 

Note: 6.2 ppmv (as methane) in El Paso stripping gas is equal to 80 ppbw volatile hydrocarbons in the water; 3.1 ppmv (as methane) in 

equal to 40 ppbw volatile hydrocarbons in the water. All estimates based on 520 heat exchange systems nationwide; delay of repair allowed for limited cases for leaks under 62 ppmv (800 pof leaks under delay limit qualify for delay of repair; used VOC recovery credit of $560/ton VOC; HAP emission estimates uses 15 weighhydrocarbons based on light hydrocarbon refinery process stream data (API, 2002). 
Technical Memorandum – Revised Impacts for Heat Exchange Systems at Petroleum Refineries 

July 13, 2011 

6 

5. References

API (American Petroleum Institute). 2002. Refinery Stream Speciation. API Publication 

No. 4723. November 1, 2002. 

Coburn, J. 2011. Memorandum from J. Coburn, RTI International, to B. Shine, EPA/OAQPS, 

for Project Docket File (EPA Docket No. EPA-HQ-OAR-2011-0002). Technology Review 

for Heat Exchange Systems. July 12, 2011. 

Lucas, B. 2008. Memorandum from B. Lucas, EPA/SPPD, to Project Docket File (EPA Docket 

No. EPA-HQ-OAR-2003-0146). Cooling Towers: Control Alternatives and Impact 

Estimates. October 30, 2008. 

Texas Commission on Environmental Quality (TCEQ). 2003. Sampling Procedures Manual, 

Appendix P: Air Stripping Method (Modified El Paso Method) for Determination of Volatile 

Organic Compound Emissions from Water Sources. 

U.S. Department of Labor (DOL), Bureau of Labor Statistics. 2010. Occupational Employment 

Statistics: May 2009 Employment and Wage Estimates. 

http://stats.bls.gov/oes/current/oessrci.htm; Last accessed in March 2011.