Eastman Chemical Company

P.O. Box 511 Kingsport, Tennessee 37662-5075

May 18, 2015

VIA CERTIFIED MAIL/RETURN RECEIPT REQUESTED The Honorable Gina McCarthy

Office of the Administrator

U.S. Environmental Protection Agency WJC West Building 1200 Pennsylvania Avenue, NW

Room 3000 Washington, DC 20460

Re: Eastman Chemical Company and American Chemistry Council Joint Petition for Reconsideration, Amendm ent and Administrative Stay of

National Emission Standards For Ha zardous Air Pollutants: Off-Site Waste and Recovery Operations; Final Rule (80 Fed. Reg. 1428; March 18, 2015); Docket Number: EPA-HQ-OAR-2012-0360

Dear Administrator McCarthy:

Eastman Chemical Company (Eastman) and the American Chemistry Council (ACC) jointly petition the U. S. Environmental Protection Agency (EPA) to reconsider, amend, and administratively stay the effective date of certain provisions in EPA’s final rule dated March 18, 2015 entitled “Nationa l Emission Standards For Hazardous Air Pollutants: Off-Site Waste and Recovery O perations,” 80 Fed. Reg. 14,248 (the OSWRO Rule). The OSWRO Rule consists of the risk and technology review (RTR) amendments to the original OSWRO final rule that was promulgated on July 1, 1996 (61 Fed. Reg. 34,140). This petition is pres ented pursuant to Clean Air Act (CAA) Section 307(d)(7)(B) (42 U.S.C. § 7607(d)(7)(B)).

Background

Eastman is a major manufacturer of c hemicals, fibers, and plastics with over 10,000 employees worldwide. Eastman, and its subsidiaries, own and operate manufacturing facilities in the st ates of Alabama, California, Florida, Illinois, Louisiana, Maryland, Massachusetts, Michigan, New York, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and Wisconsin, as well as in Asia, Europe and Latin America. Eastman operates mu ltiple process units that are directly affected by the

OSWRO Rule.

ACC is a trade association representing the leading compani es engaged in the business of chemistry, and ACC members oper ate facilities subject to the OSWRO

Rule.Eastman/ACC Joint Petition for Reconsideration
EPA-HQ-OAR-2012-0360 May 18, 2015 Page 2

Eastman and ACC have acti vely participated in the development of the OSWRO

Rule. Eastman submitted wr itten comments on the proposed rule and also contributed to comments submitted by ACC.

In this petition, we present two issues fo r reconsideration. First, we hereby raise an objection regarding the equi pment leak detection and repa ir (LDAR) provisions for connectors in the OSWRO Rule. Second, we hereby raise an objection regarding the new monitoring requirements for pressure relief devices (PRDs) on portable containers

in the OSWRO Rule.

As explained in detail below, it was impr acticable for Eastman or ACC to raise these objections during the co mment period for the OSWRO Rule, the grounds for the objections arose after the end of the public comment period for the rule, and the issues

raised here are of central relevance to the outcome of the OSWRO Rule. Therefore, Eastman and ACC are submitting this Petiti on for Reconsideration pursuant to CAA Section 307(d)(7)(B) and the crit eria set forth therein.

Issue 1: Equipment Leak Pr ovisions for Connectors

In the OSWRO Rule, EPA adopted mandator y instrument-based leak detection requirements for connectors in gas/vapor and light liquid service. Before the 2015 OSWRO final rule was promulgated, source s could comply with the LDAR requirements of 40 CFR Part 61, Subpart V, or 40 CFR Part 63, Subpar t H. Subpart V requires sensory-based monitoring of connectors, while Subpart H requires Method 21 instrument-based monitoring. In the OSWR O proposed rule, EPA presented two LDAR program options. Option 1 consisted of swit ching from the Subpart V LDAR program to the Subpart H LDAR progr am without the Subpart H connector monitoring requirements. Option 2 consisted of adopt ion of the Subpart H LDAR program, including instrument-based mo nitoring for connectors. In the final rule, EPA adopted Option 2. Subpart H instrument-based monitoring for connectors under Option 2 is unnecessary and unlawful becaus e there would be minimal em ission reductions and the connector LDAR program is not cost effective.

A. Method 21 Monitoring Will Not R esult in a Statistically Significant

Decrease in Emission Rates

Eastman’s experience is t hat sensory-based monitori ng leads to the prompt repair of leaks and reduction of fugitive emissions. For example, Eastman personnel routinely inspect their operati ng areas and if there is evidenc e of a leak near a flange (such as liquid on the ground beneath t he flange), the leak will be immediatelyEastman/ACC Joint Petition for Reconsideration
EPA-HQ-OAR-2012-0360 May 18, 2015 Page 3

investigated and repaired. Co mments submitted by ACC confi rm this is consistent with general industry practice:

ACC believes that the lo w initial leak rates f ound when HON compliance commenced is representative of the actual leak rate s that result from the combination of connector design, physi cal properties of the chemicals in service, and the normal housekeeping practices that our member companies employ to repair leaks found through sensory means (sight, sound, smell). Member companies do no t wait a fixed period of time to repair leaks. They are normally repai red as they are discovered through sensory methods. Member company operators are trained to recognize

the hazards associated with leaks and they are expected to take prompt

action when leaks occur.

See Comments of American Chemistry C ouncil at 19 (EPA-HQ-O AR-2012-0360-0061) (ACC Comments). Therefore, under the current OSWRO program, implementation of Subpart V sensory-based monitoring is an effe ctive LDAR method for connectors. And the cost of the sensory program is mini mal because facility personnel conduct sensory monitoring during the regular course of their work.

The ACC comments further demonstrate that Method 21 monitoring of connectors results in no apprec iable emission reduction benefit when substituted for an existing sensory monitoring program. A CC submitted a report summarizing average connector leak rates at multiple synthetic organic chemical manufacturing industry (SOCMI) facilities under the HON LDAR program. The repor t shows that there is no

statistical difference in leak rates between the initial Method 21 inspections and the subsequent inspections at SOCMI facilities. See ACC Comments, Attachment 1 at 10- 12. In other words, instituting a Method 21 monitoring program for connectors will result in no statistically significant decrease in emission rates over the currently-required sensory monitoring at SOCMI facilities.

The ACC report also shows that the equipment leak emission factor for

connectors at chemical facilitie s is much lower than those hist orically reported by EPA.
The mean value of the ACC study was 0.00005 kg/hr/source , whereas the EPA value of 0.00183 kg/hr/source is over 30 times higher. ACC Comments, Attach ment 1 at 12-14.
The ACC data indicate that when connectors leak, the actual emissions are extremely

low.

EPA asserts that no emission reductions occur with sensory-based connector monitoring. In particular, EPA’s cost analysi s for the OSWRO Rule shows no emissionEastman/ACC Joint Petition for Reconsideration
EPA-HQ-OAR-2012-0360 May 18, 2015 Page 4

reductions under the base line scenario (Subpart V sensory monitoring). See Table 5 of Memorandum from L. Stobert, EC/R, Inc. to P. Hirtz, EPA. February 9, 2015, Revised Technology Review for the Off-Site Wast e and Recovery Operations Equipment Leaks (EPA-HQ-OAR-2012-0360-0110) (Revised Tec hnology Review). However, this assumption ignores evidence in the record fo r chemical facilities showing that a sensory based monitoring program leads to emissi on reductions through timely detection and repair of leaking connectors.

Further, EPA concludes that Method 21 monitoring of connectors under Subpart

H would result in emission reductions over the baseline scenario (sensory monitoring). Specifically, in the preamble to the fi nal rule, EPA responded to ACC comments by explaining that emission r eductions would occur even though the initial leak frequency

would be at the low level of 0.36 percent as repor ted by the chemical industry and the subsequent leak frequency (i.e. after instit uting Method 21 monitoring) would be the same as the initial leak frequency:

We note that the initial leak frequen cy of 0.36 percent used in the OSWRO analysis is the same as that r eported by the commenter’s member companies for the HON in itial monitoring, and we made the conservative assumption that the subsequent l eak frequency after implementation of Method 21 monitoring of connectors w ould be the same as the initial leak frequency. However, we also assumed, as we have in other rulemakings, that these leaking connec tors would be fixed so that the average leak frequency over each monitoring cycle would be equal to one-half of the subsequent leak frequen cy (i.e., 0.18 percent).

See 80 Fed. Reg. 14248, 14257. Thus, EPA has adopted the position of Eastman and ACC that there is no change from the initial leak frequency to the subsequent frequency. Yet, in asserting that the aver age leak frequency would be 0.18 percent, or one-half of the subsequent leak frequency, EPA attempts to take credit for emission

reductions that do not exist. 1 EPA incorrectly assumes that leaking connectors would

1 EPA adoption of a steady state leak frequency followed the approach it adopted in the rulemaking for 40 CFR Part 60, Subpart VVa. See Standards for Performance for Equipment Leaks of VOC in the Synthetic Organic Chemicals Manufacturing Industry;

Standards of Performance for Equipment Leaks of VOC in Petroleum Refineries; Final

Rule , 72 Fed. Reg. 64860 (November 16, 2007); Memorandum from K. Parrish and D. Randall, RTI International, to K. Rackley, USEPA. October 30, 2007. Final Impacts Analysis for Regulatory Options for Equipment Leaks of VOC in the SOCMI(EPA-HQOAR-2012-0360-0097). However, the connector LDAR provisions in that rule haveEastman/ACC Joint Petition for Reconsideration
EPA-HQ-OAR-2012-0360 May 18, 2015 Page 5

only be detected and repaired at the time of scheduled monitoring events (which can be between one and four year s apart). This assumption is dire ctly contrary to evidence in

the record that shows that companies look for and repair k nown leaks promptly, without waiting for the next cycle of monitoring.

EPA’s selection of 0.36 percent as t he initial and subsequent leak frequency for connectors is also indicative of the very low li kelihood that connectors wi ll leak at all. At a threshold of 0.5 percent leak frequency, the Subpart H LDAR program for connectors allows for a reduced monitoring frequency (f rom one year to up to four years). See 40 CFR § 63.174(b)(3). This is undoubtedly bec ause EPA recognizes that 0.5 percent is a very low leak frequency. The framework of the OSWRO Rule, with an initial leak frequency that is below the de minimis level, shows that a Subpart H Method 21 instrument-based monitoring program for connectors is not appropriate.

With respect to emission factors for SOCM I facilities, EPA provided the following response to the ACC comments:

We disagree with the commenter’s clai m that the estimated emissions per connector used in the EPA’s analysis are too high. The leak rates used were based on those reported in the Protocol for Equipment Leak Emissions Estimates (EPA–453/R–95–017, November 1995), which

determined these leak rates based on screening data from 33 chemical production units and bagging data from 22 chemical production units. We

consider this to be relevant and robust data, and the resulting average leak emissions rates are appropriate to use in our analyses.

See 80 Fed. Reg. at 14257.

Eastman and ACC believe that EPA’s citati on to leak rates in the Protocol for Equipment Leak Emissions Estimates (EPA Pr otocol Document) is misplaced. The

document identifies an initia l leak frequency of 3.9 per cent prior to Method 21 monitoring, followed by a reduction to a s ubsequent leak frequency of 0.5 percent. EPA Protocol Document (EPA- HQ-OAR-2012-0360-0080), Tabl e G-1. This model (consisting of an 87 percent reduction in the initial leak frequency) is far different from

been stayed for nearly seven years. See Footnote 5 and accompanying text. Therefore, EPA’s assumption has not been verified by any actual experience with implementation of an instrument- based LDAR program for connectors.Eastman/ACC Joint Petition for Reconsideration
EPA-HQ-OAR-2012-0360 May 18, 2015 Page 6

the framework of the current rule, which is based on a steady state leak frequency of 0.36 percent. And the value of 0.36 percent is below the in itial leak freq uency and the subsequent leak frequency in the EPA pr otocol document. The EPA Protocol Document should have no bearing on the OSWR O Rule. Therefore, Eastman and ACC believe Method 21 monitoring of connectors will not result in appreciable emission

reductions.

B. The Method 21 Monitoring for Connectors Is Not Cost Effective

At various stages throughout the OSWR O rulemaking, EPA prepared cost analyses for the pro posed LDAR programs. 2 At the proposed rule stage, EPA estimated the costs of implementing an inst rument based LDAR pr ogram for connectors at an OSWRO model facility with 1,350 connectors (the median value among the OSWRO facilities surveyed in the ICR). EPA’s cost analysis was based on an estimated monitoring cost of $2.50 per c onnector. EPA also estimated the annual
administrative costs for the model OSWRO fa cility would be $4,646, based on 50 hours of work at an hourly labor rate of $92.92. Based on these and other assumptions, EPA

estimated that the incremental cost effe ctiveness of adopting Option 2 (instrument monitoring) over Option 1 (sensory moni toring) would be $6,715 per ton. EPA concluded that the Method 21 monitoring program for connectors would be cost

effective.

In its comments, ACC submitted a su mmary of Subpart H LDAR costs for connectors. The summary was based on Eastman’s experienc e with Method 21 monitoring under other NESHAP rules. See ACC Comments, Attachment 2. For example, the implementation of a Subpar t H instrument-based monitoring program requires management of change ac tivities associated with detec ted leaks. Unlike EPA, which assumed that regulated sources would hire outside co nsultants to address LDAR tasks, Eastman based its LDAR costs on st affing by its own lower-cost engineering technicians and process unit technologists. T hese projections reflect Eastman’s actual experience with implementation of instrument-based monito ring of connectors. Eastman

estimated that the annual administrative costs would be $27,000 wh ich equates to 781 hours of work at an average hourly labor rate of $34.56. In addition, Eastman demonstrated that the average monitoring cost is approx imately $6.50 per connector

2 In its cost analyses for the OSWRO Rule, E PA followed the approach it adopted in the proposed Uniform Standards rulemaking. Revi sed Technology Review at 5. Eastman
and ACC note that EPA never developed a final rule for the Uniform Standards. See Footnote 6 and accompanying text.Eastman/ACC Joint Petition for Reconsideration
EPA-HQ-OAR-2012-0360 May 18, 2015 Page 7

because of the typical quantity of connectors and the difficulty in locating and accessing them as compared to other LDAR compo nents such as pumps and valves. Eastman

determined the incremental cost effectiveness of inst rument-based monitoring of connectors would be $18,139 per ton. 3 Based on the real-w orld data presented and submitted to EPA by Eastman, adoption of Option 2 is clearly not cost effective. 4

In response to the Eastman data, EPA adjust ed its cost estimate by incorporating the Eastman monitoring co st of $6.50 per component. EPA also selectively incorporated some administrative cost data from Eastman. EPA in creased its projected administrative workload to only 100 hours but reduced the hourly labor rate to make it equivalent to Eastman’s ($34.56) . As a result, EPA’s estima te of administrative costs decreased to $3,456. Based on these two changes, the increm ental cost effectiveness was $6,825 per ton, or nearly e quivalent to EPA’s estimate at the proposed rule stage ($6,715 per ton).

EPA’s response simply ignores the level of effort that is necessary to implement a Subpart H LDAR program. In the face of real world dat a showing the actual time required to implement an administrative pr ogram is nearly 800 hours per year, EPA’s doubling of its estimate of 50 hours to 100 h ours makes EPA’s assumption of the time it takes to actually implement a connector m onitoring program no less arbitrary and out of touch with chemical industry experience. Thus, EPA’s decision to exclude most of

Eastman’s real world cost data from its analysis is arbitrary and capricious.

C. EPA Should Reconsider the Connector LDAR Provisions

EPA’s cost justification for the connector LD AR provisions is flawed for multiple reasons. First, EPA selectively incorporat ed only some of the real world LDAR emissions and cost data supplied by industry and ignored the rest of the data. These

3 Eastman used EPA’s value for estimated emissions reduction for the limited purpose of demonstrating how Eastman’ s cost data affected cost effectiveness. However,

Eastman and ACC do not consider EPA’s es timates of emissions reductions valid.

4 Eastman and ACC disagree with several other assumptions that EPA made in its cost analysis. For example, EPA applied an escala tion factor of 1.7 to the initial and subsequent leak fraction (0.36 percent) at OSWRO facilities due to observations made at refinery LDAR programs w here EPA applied an escalation factor of 2.6. 80 Fed. Reg. at 14257. There is no basis for applying any esca lation factor to chemical

facilities.Eastman/ACC Joint Petition for Reconsideration
EPA-HQ-OAR-2012-0360 May 18, 2015 Page 8

data starkly show lower emission reduction s and higher costs than EPA’s assumptions. They also show that sensory monitoring of connectors is a highly effective low cost method for detecting and repairi ng leaks. Second, in devel oping the framework for the connector LDAR program in t he OSWRO rule and conducting the related cost analysis, EPA relied extensively on data and methodol ogies used to support two previous rulemakings. In one of thos e rulemakings, provisions rela ting to the monitoring of connectors have been stayed pending EPA’s gr ant of reconsideration to ACC and

others that filed both a petition for review and a peti tion for Agency reconsideration. 5 In the other rulemaking, EPA has never re sponded to comments and data submitted by ACC and others in opposition to its propos ed connector monitoring and it appears that

EPA does not intend to finaliz e that proposed rulemaking. 6 Thus, neither of the rules upon which the OSWRO connector monitoring progr am is based is in effect now and they offer no insight on the r eal world application of Met hod 21 monitoring. Because of these flaws in the rule, EPA should reconsi der the connector LDAR provisions in the
OSWRO Rule.

Issue 2: Requirement to Monitor PRDs on Portable Containers

In the proposed OSWRO Rule, EPA proposed to require specific PRD monitoring provisions found in 40 CFR § 63.691(c) to the OSWRO affected source. The affected source is defined as the entire group of off- site material management units associated with OSWRO. An off-site material management unit is defined in 40 CFR § 63.680(c) as a tank, container, surface impoundment, oil wa ter separator, organi c-water separator, or transfer system used to manage the off-site material. The PRD monitoring provisions apply therefore to both fixed so urces, e.g., tanks, and non- fixed or portable sources, e.g., containers. In comments submitted on this proposal, ACC member company, Dow, specifically addressed the im practicability, if not impo ssibility, of requiring PRD monitoring provisions for containers, whic h typically are portable, because they are moved frequently and are received from a number of off-site locations. Dow requested that EPA clarify in the final rule that t he PRD monitoring provisions do not apply to

containers.

5 Standards of Performance for Equipment Leaks of VOC in the Synthetic Organic Chemicals Manufacturing Industry; Standards of Performance for Equipment Leaks of VOC in Petroleum Refineries; Final Rule, 72 Fed. Reg. 64860 (Nov. 16, 2007).

6 National Uniform Emissi on Standards for Storage Vessel and Transfer Operations, Equipment Leaks, and Closed Ve nt Systems and Control Devices; and Revisions to the

National Uniform Standards General Provisi ons, Proposed Rule, 77 Fed. Reg. 17898 (March 26, 2012).Eastman/ACC Joint Petition for Reconsideration
EPA-HQ-OAR-2012-0360 May 18, 2015 Page 9

EPA finalized its proposed r equirements for PRD monitoring and management as proposed. In response to Dow’s concerns about these requirements applying to containers, EPA responded as follows:

We believe the PRD monitoring requirements are necessary for all PRDs to enable operators to identify and minimize em issions from pressure relief events. We note that many OSWRO containers do not have PRDs and that, by definition, devices that are actuated either by pressu re of less than or equal to 2.5 pounds per square inch gauge (psig) or by a vacuum are not PRDs. 7

This response clearly belies knowledge of waste recovery operations and fails to

consider the fact that numerous containers of various sizes, with PRDs that release at a higher pressure than 2.5 psig, are frequently f ound and used at facilities subject to the OSWRO Rule. It is extremely challenging, if not impossible for these facilities to design and implement a monitoring syst em for portable containers. Given that Eastman and ACC only discovered EPA’s erroneous assump tions about containers subject to the OSWRO Rule after the final rule was pu blished and the Response to Comments made available, EPA should reconsider it s position on making the PRD monitoring requirements in 40 CFR § 63.691(c) apply to c ontainers, especially portable containers.

Conclusion

For the foregoing reasons, Eastman and ACC respectfully request that EPA initiate the process for reconsideration of the OSWRO Rule to addre ss the issues raised herein. Furthermore, Eastman and ACC request that EPA issue an immediate administrative stay of the equ ipment leak provisions fo r connectors and the standards for PRDs on portable containers pending reconsideration of this matter. A stay is necessary to prevent the hardship that Eastman and other ACC member companies will face if the rule remains app licable in its current status.

Thank you for your consideration of this request. If you have any questions regarding this matter, please contact the undersigned using the contact information provided below.

7 Summary of Public Comments and Respons es on Proposed Rule (79 Fed. Reg. 37850, July 2, 2014), see Response 5.2.1.