### Final Report of the Small Business Advocacy Review Panel on EPA’s Planned Proposed Rule Risk and Technology Review (RTR) Amendments
to the National Emission Standard for Hazardous Air Pollutants (NESHAP) for Mineral Wool Production (Mineral Wool RTR)

October 20112 

### Table of Contents

1. Introduction

2. Background

2.1 Regulatory History

2.2 Description and Scope of Existing Rule

2.3 Related Federal Rules

3. Overview of Revisions under Consideration

4. Applicable Small Entity Definitions

5. Small Entities That May Be Subject to the Proposed Regulation

6. Summary of Small Entity Outreach

7. List of Small Entity Represe ntatives

8. Summary of SER Comments and EPA Responses to SER Comments

8.1 Number and Types of Entities Affected

8.2 Potential Reporting, Recordkeeping, and Compliance

8.3 Related Federal Rules

8.4 Regulatory Flexibility Alternatives

8.4.1 Curing Ovens

8.4.2 Collection

8.4.3 Carbonyl Sulfide (COS) Emissions from Cupolas

8.4.4. Hydrogen Fluoride and Hydrochloric Acid Emissions from Cupolas

8.4.5 Start

- up, Shutdown, Malfunction

8.5 EPA Responses to SER Comments

8.5.1 Curing Ovens3 8.5.2 Collection

8.5.3 Carbonyl Sulfide (COS) Emissions from Cupolas

8.5.4 Hydrogen Fluoride and Hydrochloric Acid Emissions from Cupolas

8.5.5 Start

- up, Shutdown, Malfunction

9. Panel Findings and Discussions

9.1 Number and Types of Entities Affected

9.2 Potential Reporting, Recordkeeping, and Compliance

9.3 Related Federal Rules

9.4 Regulatory Flexibility Alternatives

Appendix A: Materials Shared with Small Entity Representatives
Appendix B: Written Comments Submitted by Small Entity Representatives4 1. INTRODUCTION
This report is presented by the Small Business Advocacy Review Panel (SBAR Panel or Panel) convened for the proposed rulemaking on the Risk and Technology Review (RTR) Amendments to the National Emission Standard for Hazardous Air Pollutants (NESHAP) for Mineral Wool Production (Mineral Wool RTR) that is currently being developed by the U.S. Environmental Protection Agency (EPA or Agency)

. Under section 609(b) of the Regulatory Flexibility Act (RFA) as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), a Panel is required to be convened prior to publication of the initial regulatory flexibility analysis (I RFA) that an agency may be required to prepare under the RFA. In addition to EPA’s Small Business Advocacy (SBA) Chairperson, the Panel consists of the Director of the project lead at the Sector Strategies and Programs Division of the EPA Office of Air Qu ality Planning and Standards , the Administrator of the Office of Information and Regulatory Affairs within the Office of Management and Budget, and the Chief Counsel for Advocacy of the Small Business Administration.
This report includes the following:

• Bac kground information on the proposed rule being developed;

• Information on the types of small entities that would be subject to the proposed rule;

• A description of efforts made to obtain the advice and recommendations of representatives of those small entiti es; and

• A summary of the comments that have been received to date from those representatives.
Section 609(b) of the RFA directs the Panel to report on the comments of small entity representatives and make findings on issues related to certain elements of a n IRFA under section 603 of the RFA. Those elements of an IRFA are:

• A description of, and where feasible, an estimate of the number of small entities to which the proposed rule will apply;

• A description of projected reporting, record keeping, and other compliance requirements of the proposed rule, including an estimate of the classes of small entities which will be subject to the requirement and the type of professional skills necessary for preparation of the report or record;

• An identification, to the extent practicable, of all relevant Federal rules which may duplicate, overlap, or conflict with the proposed rule;

• A description of any significant alternatives to the proposed rule which accomplish the stated objectives of appl icable statutes and which minimize any significant economic impact of the proposed rule on small entities. This analysis shall discuss any significant alternatives such as:5 o the establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities;

o the clarification, consolidation, or simplification of compliance and reporting requirements under the rule for such small entities;

o the use of performance rather than design standards; and

o an exemption from coverage of the rule, or any part thereof, for such small entities.
Once completed, the Panel Report is provided to the agency issuing the proposed rule and is included in the rulemaking record. The agency is to consider the Panel’s find ings when completing the draft of the proposed rule. In light of the Panel Report, and where appropriate, the agency is also to consider whether changes are needed to the IRFA for the proposed rule or the decision on whether an IRFA is required.

The Pan el’s findings and discussion will be based on the information available at the time the final Panel Report is drafted. EPA will continue to conduct analyses relevant to the proposed rule, and additional information may be developed or obtained during the remainder of the rule development process.
Any options identified by the Panel for reducing the rule’s regulatory impact on small entities may require further analysis and/or data collection to ensure that the options are practicable, enforceable, enviro nmentally sound, and consistent with the Clean Air Act and its amendments.

2. BACKGROUND

2.1 Regulatory History of the National Emission Standard for Hazardous Air Pollutants (NESHAP) for Mineral Wool Production

Section 112 requires EPA to set maximum achievable control technology (MACT) standards for source categories listed for regulation of hazardous air pollutants (HAP). The Risk and Technology Review (RTR) is a combined effort to evaluate both risk and technology as required by the Clean A ir Act (CAA) after the application of the MACT standards. Section 112(f) of the CAA requires EPA to complete a Report to Congress that includes a discussion of methods the EPA would u se to evaluate the risks remaining (‘residual’ risk) after the application of MACT standards. EPA published the Residual Risk Report to Congress in March 1999 (EPA

- 453/R

- 99

- 001)

. Section 112(f)(2) directs EPA to conduct risk assessments on each source category subject to MACT standards, and to determine if additional standards are needed to reduce residual risks. Section 112(d)(6) of the CAA requires EPA to review and revise the MACT stan dards, as necessary, taking into account developments in practices, processes and control technologies. The methodology for conducting these reviews is described in: Risk and Technology Review (RTR) Risk Assessment Methodologies: For Review by the EPA’s Science Advisory Board with Case Studies

– MACT I Petroleum Refining Sources and Portland Cement Manufacturing (EPA

-6 452/R

- 09

- 006)

. The Science Advisory Board (SAB) RTR Methods Review Pane l held a meeting on July 28

- 29, 2009 to review this document, and a final report of their review is available at the SAB website

.
B ackground on Regulated Community : The Mineral Wool production source category includes those f acilities that manufacture rock and slag wool (mineral wool). Mineral wool is a fibrous, glassy substance made from natural rock, blast furnace slag, or other similar materials and consists of silicate fibers typically 4 to 7 micrometers in diameter. Products made from mineral wool are used for thermal or acoustical insulation, sound control and absorbency, and fire protection.
The Mineral Wool MACT applies to owners or operators of any existing, new, or reconstructed mineral wool production facility that is located at a plant site that is a major source of HAP emissions (emit or have the potential to emit at least 10 tons per year of any one HAP, or 25 tons pe r year of any combination of HAP)

. Subpart DDD established the following emission limits from mineral wool sources:

Table 1. Mineral Wool Production Processes and Emission Limits.

Cupola Existing Sources 0.10 lb PM per ton of melt

New Sources 0.10 lb PM per ton of melt
0.10 lb CO per ton of melt, or

Reduce uncontrolled CO emissions ≥ 99%

Curing

Oven Existing and New Sources 0.06 lb formaldehyde per ton of melt, or
Reduce uncontrolled formaldehyde emissions ≥ 80%

Six companies produce mineral wool; five of these are small businesses. All the known mineral wool production plants are major sources of HAP. Thus, they are all subject to the Mineral Wool MACT.
The MACT rule for this source category was promulgated on June 1, 1999. There fore, the statutory deadlines for promulgating both the residual risk rule and the technology review for the mineral wool source category was June 1, 2007. These deadlines run concurrently for each MACT standard , and EPA is conducting the risk and technol ogy reviews (RTR) together in one rulemaking.7 As indicated in Table 1, only particulate matter (PM), as a surrogate for HAP metals at existing and new cupolas; carbon monoxide (CO), as a surrogate for carbonyl sulfide (COS) at new cupolas; and formaldehy de, as a surrogate for phenol and methanol from curing ovens are regulated under the MACT standard. Other pollutants of interest for the mineral wool industry (and which are not currently regulated) include PM 2.5 , hydrogen fluoride (HF), hydrogen chlorid e (HCl), COS, phenol and methanol. 1 The MACT standard does not have emission limits for COS, HCl, or HF from existing cupolas; limits for phenol or methanol from curing; or emission limits for any pollutants from collection , a process unregulated under the MACT standard.

Court

- Ordered Deadline and Litigation Background:
In 2007, the D.C. Circuit ( court ) found that EPA erred in determining the floors for processes in the Brick MACT standard, and consequently vacated the rule. 2 In response to this vacat ure, the Sierra Club filed a rulemaking petition to compel EPA to take action to address alleged similar deficiencies in 26 separate MACT standards ( referred to as ‘Brick MACT ’ issues). As a result, EPA is reviewing the Mineral Wool MACT to address the following Brick MACT issues:

• Improper methodology used to calculate the MACT floor for formaldehyde from curing

ovens ;

• Use of unproven surrogates (CO for COS and formaldehyde for phenol and methanol) ;

• P rocesses that ar e unregulated and ye t emit HAP ; and

• Unregulated pollutants from MACT

- regulated processes

. In separate litigation , t he court vacated portions of two provisions in EPA’s CAA section 112 regulations that govern emissions of HAPs during periods of startup, shu tdown and malfunction (SSM). 3 Specifically, the Court vacated the SSM exemption contained in 40 CFR §§ 63.6(f)(1) and 63.6(h)(1) that are part of regulations commonly referred to as the General Provisions (GP) rule. When incorporated into section 112(d) regulations for specific sou rce categories, these two provisions exempt sources from the requirement to comply with otherwise applicable MACT standards during periods of SSM. Because the Mineral Wool MACT relied on the GP for startup and shutdown provisions (40 CFR 63.§ 1194), EPA plan s to also review, and revise as necessary, the SSM provisions for the Mineral Wool source category in the proposed rule. Finally, on January 14, 2009, Sierra Club filed an action to compel EPA to perform its obligations under sections 112(d)(6) and (f )(2) for 28 source categories, which includes the Mineral Wool source category. 4 EPA negotiated a consent decree and, as a result, is under a court

- ordered deadline to propose rulemaking for the Mineral Wool source category by October 31, 2011.

1 The HAP metals emitted from mineral wool cupolas include antimony, arsenic, beryllium, cadmium, chromium, cobalt, mercury, manganese, nickel, lead, and selenium. 2 Sierra Club v. EPA , 479 F. 3d 875 (D.C. Cir. March 13, 2007) 3 Sierra Club v. EPA , 551 F. 3 d 1019 (D.C. Cir. 2008), cert. denied , 130 S. Ct 1735 (2010) 4 Sierra Club v. Jackson (N.D. Cal. January 14, 2009), No. 09

- 1528 The upcoming proposed rule is a reproposal of the Mineral Wool RTR, which EPA proposed in 2008. 5 However, that proposal was based upon one source test data point from the National Emissions Inventory ( NEI). EPA learned after proposal that the one plant for which EPA had test data closed down during the development of the proposed rule, and EPA did not receive additional data during the comment period on which to support a no

- risk conclusion. Moreover, the Brick MACT issues , the petition, and the General Provisions vacature were not addressed by the 2008 proposal. Therefore, EPA decided to collect new data from operating facilities on which to assess risk, and repropose the Mineral Wool RTR along with the other M ACT amendments identifi ed by recent litigation.

EPA is making all these revisions (i.e., risk and technology review, Brick MACT issues, and startup / shutdown provisions) at one time to both conserve resources and to avoid making one change to the MACT f ollowed closely by a second change that would likely impose additional controls. Such an approach would be costlier to both industry and taxpayers than if all amendments are done together in one rulemaking.

2.2 Description and Scope of Existing Rule

To co nduct the RTR for Mineral Wool Production, EPA will review the test data submitted by the mineral wool companies and evaluate the risk that remains (‘residual risk’) to determine whether the existing MACT standard is sufficiently protective of human health and the environment. EPA will also conduct a technology review that will be based on new or developing control technologies, work practices, or pollution prevention alternatives (including formulation changes) that result in lower HAP emissions from regu lated processes. The risk review may not consider cost impacts

. For uncontrolled pollutants and sources, MACT floors must be established independent of cost, but the technology review under an existing MACT standard can take costs and other impacts into consideration.
In lieu of establishing MACT floors for uncontrolled pollutants and sources, EPA has limited discretion under section 112(d)(4) (Health

- Based Emission Limits) and section 112(h). However, EPA cannot use 112(d)(4) for those HAP for which the risk data are inadequate to establish a scientifically defensible chronic health threshold , and t here is inadequate health data to establish a chronic health threshold for COS. Further, the development of health

- based emission limits which provide pub lic health protection with an ample margin of safety requires accurate and comprehensive emissions data for the sources being regulated as well as appropriate consideration of potential simultaneous exposures from other nearby sources of the same HAPs or H APs with similar health effects, neither of which typically have robust data available.

In addition , EPA cannot use 112(d)(4) for carcinogens like formaldehyde

. In order for EPA to exercise its discretion to establish a health

- based emission standard for a particular HAP using CAA section 112(d)(4) authority, EPA must first establish that a scientifically

- accepted health threshold has been established for that HAP . The characterization of this health threshold is

5 73 FR 60432 (October 10, 2008)9 that exposures at or below this threshold (which is a concentration of the HAP in air) are considered to be without appreciable risk of causing adverse health effects. As a general matter, for those HAPs which are considered to be known, probable, or possible carcinogens, there is no scientifically

- accepted threshold below which exposures are considered to carry no appreciable risk. As a result, carcinogenic HAPs are generally not considered to be eligib le for use with the section 112(d)(4) provision. The exception to this would be carcinogenic HAP s that are known to act carcinogenic only above a specific exposure concentration threshold

-- there are very few of these, and EPA does not currently consider formaldehyde to be one.

2.3 Related Federal Rules

The primary federal rule that is related to the proposed RTR rule under consideration is the NESHAP for Mineral Wool Production, also k nown as the Mineral Wool MACT. Some facilities may currently be subj ect to SO 2 reductions under the revised SO 2 National Ambient Air Quality Standards ( NAAQS ) . The NAAQS standards are Federal rules that are implemented by States in the State Implementation Plans (SIPs). Some emission limits under consideration in the Min eral Wool RTR have implications for SO 2 impacts which could be then subject to the SIP plans for SO 2 NAAQS implementation.

3. OVERVIEW OF REVISIONS UNDER CONSIDERATION

At the P anel outreach meeting on June 16, 2011, the SERs were presented with information regarding the panel process and potential emission limits based on emissions test data and information available to EPA at the time of that meeting (see Appendix A).

Prior to the outreac h meeting, EPA provided to the P anel and SERs draft and predecisional

e mission limits for various pollutants from mineral wool production processes, and EPA did not at that time have information available on some potential regulatory flexibilit y alternatives , such as subcategorization of collection processes . Since then, development of the standard has moved forward , and EPA is considering a broader range of possible revisions to the MACT.
As discussed previously, EPA is reviewing the Mineral Wool NESHAP for risk remaining (residual risk) after compliance with the standard in 2002; technology developments since promulgation of the rule in 1999; and requirements of the rule , including those that may be incomplete or def icient as to HAPs such as regulated processes, inappropriate surrogacy relationships, and startup and shutdown requirements. The following sections present an overview of revisions under consideration in the Mineral Wool Production RTR.

3.1 Risk Assessmen t Results

Table 2 summarizes the emissions for the Mineral Wool Production source category. Based on these data, the HAP emitted in largest quantities in total from these facilities are carbonyl sulfide, formaldehyde, phenol, hydrochloric acid, and hydrog en fluoride; emissions of these 510 pollutants account for 99.8 percent of the total HAP emissions by mass from the data set. Carbonyl sulfide, hydrochloric acid, and hydrogen fluoride were reported as an emission for all of the facilities. Formaldehyde an d phenol are also emitted in large quantities, but from fewer facilities; no more than three facilities report emissions of any one of these HAP. Formaldehyde and phenol are emitted only from bonded mineral wool fiber manufacturing, which includes emissio ns from the application of the binder, curing, and cooling. Raw material feed rates in mineral wool processes are essentially constant with minimal fluctuation (approximately ± 10 percent). Consequently, emissions also have minimal fluctuation 6 . In refi ning the acute risk assessment, a short

- term emissions multiplier of 3 was used to estimate the maximum hazard from acute exposures. Emissions of persistent bioaccumulative ( PB ) HAP reported in the data set for the mineral wool manufacturing source categ ory include lead, cadmium, and mercury compounds.

Table 2. Summary of Emissions from the Mineral Wool Production Category and Availability of Dose

- Response Values

HAP Emissions (tpy) Number of Facilities Reporting

HAP (7 facilities in

data set) Prioritized Inhalation Dose

- Response Value Identified by OAQPS a

PB

HAP? Unit Risk Estimate for Cancer? Reference Concentration for Noncancer? Health Benchmark Values for

Acute Noncancer? Carbonyl Sulfide 224 7 Y Phenol 177 3 Y Y Hydrochloric acid 23 7 Y Y Formaldehyde 20 3 Y Y Y Hydrogen Fluoride 17 7 Selenium 0.28 7 Y Methanol 0.16 3 Y Y Manganese 0.14 7 Y Chromium III 0.04 7 Lead 0.03 7 Y Y
Arsenic 0.03 7 Y Y Y Nickel 0.024 7 Y Y Antimony 0.002 7 Cadmium 0.002 7 Y Y Y Cobalt 0.0013 7 Y Elemental Gaseous Mercury 0.0005 6 Y Y Y

6 Angus E. Crane, Vice President and General Counsel, North American Insulation Manufacturers Association, to United States Environmental Protection Agency, Air and Radiation Docket. Comments on the Risk and Technology Review, Phase II, Group 2; Advanced Notice of Proposed Rulemaking. June 29, 2007.11 HAP Emissions (tpy) Number of Facilities Reporting

HAP (7 facilities in

data set) Prioritized Inhalation Dose

- Response Value Identified by OAQPS a

PB

HAP? Unit Risk Estimate for Cancer? Reference Concentration for Noncancer? Health Benchmark Values for

Acute Noncancer? Chromium (VI) 0.0003 7 Y Y Berylium 0.0002 7 Y Y Y Gaseous Divalent Mercury 0.0001 6 Y

Particulate Divalent Mercury 0.0001 6 Y

a Specific dose

- response values for each chemical are identified on EPA’s Technology Transfer Network website for air toxics at http://www.epa.gov/ttn/atw/toxsource/summary.html

. 3.2 Risk Char acterization
This section presents the results of the risk assessment for the Mineral Wool Production source category. The basic chronic inhalation risk estimates presented here are the maximum individual lifetime cancer risk, the maximum chronic hazard i ndex, and the cancer incidence. This section also present s results from EPA’s acute inhalation impact screening in the form of maximum hazard quotients, as well as the results of EPA’s preliminary screen for potential non

inhalation risks from PB HAP. Also presented are the HAP “drivers,” which are the HAP s that collectively contribute 90 percent of the maximum cancer risk or maximum hazard index at the highest exposure location.

Tables 3 and 4 summarize the chronic and acute inhalation risk results for this source category. The results for the Mineral Wool Production source category indicate that maximum lifetime individual cancer risks could be as high as 4 in a million. The major contributor to this risk is formaldehyde. Approximately 1,650 people were estimated to have cancer risks above 1 in a million as a result of the emissions from 1 facility. The maximum chronic non

- cancer Target

organ
- specific hazard index ( TOSHI ) value for the source category could be up to 0.04 with emissions of formaldehy de dominating those impacts, indicating no significant potential for chronic noncancer impacts.

Worst

- case screening acute hazard quotients (HQs) were calculated for every HAP shown in Table 2 that has an acute benchmark, and the highest acute HQ (REL of 8 for formaldehyde) is shown in Table 3 . A refined emissions multiplier of 3 was used to estimate the peak hourly emission rates from the average rates. Table 4 provides more information on the acute risk estimates for formaldehyde, the only HAP that ha d a worst

- case screening acute HQ greater than 1 for any benchmark.
Chronic noncancer target organ specific hazard indices (HIs) were calculated for every HAP shown in Table 2 that has a chronic benchmark, and the highest target organ specific HI (0.0412 f or formaldehyde) is shown in Table 3 . There were no HIs greater than 1 for this source category.

EPA conducted a screening

- level evaluation of the potential human health risks associated with emissions of PB HAP. Reported emissions of PB HAP were com pared to de minimis emission thresholds established by EPA for the purposes of the RTR risk assessments. 7 The PB HAPs emitted by facilities in this category are lead, cadmium, and mercury. All lead, cadmium, and mercury emissions were below the de minimi s threshold levels, indicating no potential for significant multi

- pathway risks from these facilities.

Table 3. Summary of Source Category Level Inhalation Risks for Mineral Wool Production

Result HAP “Drivers”
Facilities in Source Category

Number of Facilities Estimated to be in Source Category 7 n/a
Number of Facilities Identified in the NEI and Modeled in Preliminary Risk Assessment 7 n/a

Cancer Risks
Maximum Individual Lifetime Cancer Risk (in 1 million) 4 formaldehyde
Number of Facilities with Maximum Individual Lifetime Cancer Risk:
Greater than or equal to 100 in 1 million 0 n/a
Greater than or equal to 10 in 1 million 0 n/a
Greater than or equal to 1 in 1 million 1 formaldehyde

Chronic Noncancer Risks

Maximum Hazard Index 0.04 formaldehyde
Number of Facilities with Maximum Respiratory Hazard Index:

Greater than 1 0 n/a
Acute Noncancer Screening Results

Maximum Acute Hazard Quotient [using scaling factor of 3] 8
0.4 formaldehyde (REL) formaldehyde (AEGL

- 1, ERPG

1))

Number of Facilities With Potential for Acute Effects 1 formaldehyde

7 ICF International. TRIM

- Based Multipathway Screening Scenario . Prepared for U.S. Environmental Protection Agency, Research Triangle Park, NC. October 2008.13 Result HAP “Drivers”

Refined Acute Noncancer Results

Maximum Acute Hazard Quotient [using scaling factor of 3] 8
0.4 formaldehyde (REL) formaldehyde (AEGL

- 1, ERPG

1))
Population Exposure
Number of People Living Within 50 Kilometers of Facilities Modeled 3,700,000 n/a
Number of People Exposed to Cancer Risk:
Greater than or equal to 100 in 1 million 0 n/a
Greater than or equal to 10 in 1 million 0 n/a
Greater than or equal to 1 in 1 million 1,650 n/a
Number of People Exposed to Noncancer Respiratory Hazard Index:

Greater than 1 0 n/a
Estimated Cancer Incidence (excess cancer cases per year) 0.0004 n/a
Contribution of HAP to Cancer Incidence:
Formaldehyde
Arsenic compounds 64%

33% n/a14 Table 4. Summary of Refined Acute Results for Mineral Wool Production Facilities

Screening Results MAXIMUM ACUTE HAZARD QUOTIENTS ACUTE DOSE

- RESPONSE VALUES

Based on REL Based
on AEGL

1/ ERPG

- 1 Based
on AEGL

- 2/ ERPG

- 2 REL (mg/m 3 ) AEGL

- 1 (1

- hr) (mg/m 3 ) ERPG

- 1 (mg/m 3 ) AEGL

- 2 (1

- hr) (mg/m 3 ) ERPG

2 (mg/m 3 )
HAP Max. 1

- hr. Air Conc.

(mg/m 3 )
Formal

dehyde 0.47 8 0.4 0.027 0.055 1.1 1.1 17 17

Notes on the p rocess used to r efine the acute results presented in Table 4 : 1) The screening was performed for all emitted HAP with available acute dose

- response values. Only those pollutants whose screening HQs were greater than 1 for at least one acute threshold value are shown in the table. 2) HAP with available acute dose

- response values that are no t in the table do not carry any potential for posing acute health risks, based on an analysis of currently available emissions data.
Notes o n Acute Dose

- Response Values:
REL

– California EPA reference exposure level for no adverse effects. Most, but not all, RELs are for 1

- hour exposures. AEGL

– Acute exposure guideline levels represent emergency exposure (1

- hour) limits for the general public.
AEGL

- 1 is the exposure level above which it is predicted that the general population, including susceptible indi viduals, could experience effects that are notable discomfort, but which are transient and reversible upon cessation of exposure.
AEGL

- 2 is the exposure level above which it is predicted that the general population, including susceptible individuals, could experience irreversible or other serious, long

- lasting adverse health effects of an impaired ability to escape.
EPRG

– Emergency Removal Program guidelines represent emergency exposure (1

- hour) limits for the general public.
ERPG

- 1 is the maximum level be low which it is believed that nearly all individuals could be exposed for up to 1 hour without experiencing other than mild, transient adverse health effects.
ERPG

- 2 is the maximum exposure below which it is believed that nearly all individuals could be ex posed for up to 1 hour without experiencing or developing irreversible or other serious health effects or symptoms which could impair an individual’s ability to take protective action.

3 .3 Potential Amendments Based On Review of the NESHAP Requirements
Startup and Shutdown Requirements : EPA plans to address startup and shutdown requirements for mineral wool production in the rule due to the vacature of these requirements from the General Provisions. The voluntary ICR,15 which included questions related to startup and shutdown, indicates that all companies operate the air pollution control devices during the entire production campaign, including periods of startup and shutdown. Therefore, the Agency plans to require compliance with the rule at all times.

R isk Review : The Agency conducted the risk review using the emissions test results in the voluntary ICR conducted by mineral wool producers. Because the risk assessment is a conservative estimate of risk, and because the results of the risk assessment indi cate risks are within acceptable levels, the Agency does not plan to lower emission limits of the Mineral Wool MACT based upon the risk assessment results.
Technology Review : The technology review indicates that in the time since promulgation of the MACT in 1999, new processes and technologies are in place on cupolas in the mineral wool production industry. Regenerative thermal oxidizers (RTOs) have been installed at more than half the industry’s cupolas to reclaim energy and recycle that energy in the form of combustion air back into the cupola. This practice reduces the cupola’s consumption of coke. Because coke is the single most expensive ingredient in mineral wool produc tion, the use of RTO’s provide a long

- term cost and energy saving option for the mineral wool industry. However, the formation of SO 2 from the combustion of COS in the RTO is a health and environmental disincentive for their use.
Oxygen injection is us ed at one plant to reduce COS emissions from the cupola. In this technology, oxygen is injected into the cupola ports during the melting operation. The injected oxygen drives the chemical reaction of COS to CO 2 and SO 2 so that COS emissions are greatly

r educed from the cupola stack.

The formation and emissions of SO 2 from the cupola makes it hard to consider either oxygen injection or thermal oxidation as improvements in control technology. To the contrary, these technologies contribute to adverse heal th effects as a result of increases in ambient levels of SO 2 . The use of low

- sulfur slag, reduced amount of slag, or no slag is a potential improvement used by at least one mineral wool producer. Because both coke and slag contribute to the levels of sulfur charged to the cupola, any reduction in the sulfur content of raw materials will result in a proportionate reduction in the emissions of the sulfur compounds COS and SO 2 .
Re view of the Mineral Wool MACT Standard :

EPA is considering amendments to t he Mineral Wool MACT to address any HAP that are emitted by mineral wool producers but are not regulated under the MACT, any processes that emit HAP but are not regulated under the MACT and any surrogacy relationships that the Agency failed to prove were v alid in all instances and using any control technology. Because16 there are fewer than 30 cupolas, MACT standards for this industry would be based on the average of the best 5 performing cupolas for which the Administrator has information. EPA has the dis cretion to use the most appropriate averaging method (i.e., mean, median or mode) in calculating the emission limit identified by the MACT level of control so long as there is a rational basis and EPA provides an explanation of such basis

. Emission limit s for the 3 facilities operating a bond ed line are under consideration, as described in a separate section below.
These amendments could include emission limits for COS, HF and HCl from existing and new cupolas, emission limits for phenol and methanol from existing and new curing ovens, and new emission limits for formaldehyde, phenol and methanol from collection (a process that was not regulated under the MACT and yet is a source of HAP emissions). EPA is also considering lowering the emission limits for formaldehyde from existing and new curing ovens to the levels achieved in practice at mineral wool production facilities operating a bonded line. All new emission limits for regulated sources would be set at the MACT floor level, would account for variabi lity and would be based upon emissions testing conducted by mineral wool producers in response to the voluntary ICR.

EPA also considers MACT emission limits achieved by ‘beyond the MACT floor’ controls, and considers the cost of these controls, the toxicity of the pollutants reduced by these controls and other factors in ‘ beyond the MACT floor ’ determinations. The EPA did not identify any beyond the MACT floor controls for this industry during the technology review of the standard, and ‘beyond the MACT floor’ control technologies are not under consideration at this time.
Emission limits for formaldehyde, phenol and methanol are being considered for collection processes on a bonded line.
Subcategorization of Collections

– Vertical, Horizontal a nd Drum : EPA collected information from the mineral wool companies that operate a bonded line to understand the different equipment designs and whether all collection processes are the same, or whether design and manufacturing process differences warranted consideration of subcategories for the collection process. This process led to the identification of three distinct subcategories: vertical, horizontal, and drum. Because collection processes are only regulated under the rule if they occur on a bonded line, one approach may be the ‘bundling’ of collection and curing emission limits on bonded lines. Therefore, the revisions under c onsideration for collection and curing include emission limits for phenol, formaldehyde and methanol at vertical collection/curing bonded lines, horizontal collection/curing lines, and drum collection/curing lines.

The V ertical C ollection D esign: The molten rock/slag mixture is poured from the cupola spout onto a group of stainless steel drums spinning in opposite directions. The spinning drums form fine fibers of the mineral mixture. High air volume directs the fibers off the fiberization spin ners toward a fast

- moving porous vertical conveyor belt. A strong vacuum is drawn on the opposite side of the belt causing the fibers to lay against the vertical belt as it moves upward. At the top of the conveyance, the belt travels around a curve, the vacuum is released and the17 fibers are removed onto a second belt that will convey the layer of binder

- sprayed mineral wool fibers into the curing oven. Because the conveyor belt is vertical, the air volume drawn through the belt and fiber layer must be ve ry high and the fiber layer that can be collected upon the belt is thin . In this design, ‘shot’

- BB

- sized black granules that are high in iron (a result of using slag from the iron and steel industry)

- falls out of the fiber layer . The vertical design is used to produce a specific type of m ineral wool that is low in ‘shot’ and may be used in the hydroponic gardening market as well as in a specialized market of insulation products in which shot is undesirable

. The Horizontal Collection Design: Horizontal c ollection is similar to vertical collection, but because the conveyor belt is horizontal it works with gravitational forces and the layer of mineral wool collected upon a horizontal belt is thinker and ‘shot’ is not selectively removed

. The air volume tha t is drawn through the fiber layer is a much lower air volume tha n in the vertical design, and this air stream is conducive to thermal oxidation at the hottest part of the cupola exhaust stack or the existing thermal oxidizer on the curing oven

. The Drum Collection Design : In the drum collection design, fibers are drawn using a very high volume air flow into the center of a rotating drum. The sides of the rotating drum have small holes through which the air flow may exit but the fibers are caught. The a ngle of the drum, a vacuum, and centrifugal force pull the fibers against the inside wall of the drum and out the end. The entire drum is enclosed and the air flow may be vented to the hottest part of the cupola exhaust stack or to the existing thermal ox idizer on the curing oven.
Compliance Schedule : Section 112 allows up to 3 years for compliance with the technology standards that are developed as a result of the 112(d)(3) standard promulgated in 1999 or technology review under 112(d)(6) ; but allows 90 days for compliance with amendments to the MACT due to the risk review conducted under 112( f )( 2).
Through Agency review and stakeholder input, a broad range of program improvements have been suggested. From these EPA identified those which could only be a ddressed through regulation change, and further limited to those which would provide the most protective impact. The Agency plans to base all emission limits upon the industry supplied test data as collected under the voluntary industry ICR.

4. APPLICA BLE SMALL ENTITY DEFINITIONS
The Regulatory Flexibility Act (RFA) defines small entities as including “small businesses,” “small governments,” and “small organizations” (5 USC 601). The regulatory revisions being considered by EPA for this rulemakings are expected to affect a variety of small businesses, but would not affect any small governments or small organizations. The RFA references the definition of “small business” found in the Small Business Act, which authorizes the Small18 Business Administration to further define “small business” by regulation. The SBA definitions of small business by size standards using the North American Industry Classification System (NAICS) can be found at 13 CFR 121.201.
The detailed listing of SBA definitions of small b usiness for affected industries or sectors, by NA ICS code, is included in Table 5 , below.

5. SMALL ENTITIES THAT MAY BE SUBJECT TO THE PROPOSED REGULATION The following table lists industries/sectors potentially affected by the regulation. The estimated number of small firms within each NAICS code and the number of employees in those small firms is shown.
Before beginning the formal SBREFA process, EPA actively engaged in outreach with entities that would potentially be affected by the upcoming rulemaking. EPA held phone conferences and meetings with many of these companies and their trade association , the North American Insulation Manufacturers Association (NAIMA) to discuss the data collection effort that will support the proposed rulemaking. EPA provided these contacts wi th an early opportunity to ask questions and discuss their concerns with the upcoming rulemaking.

Table 5 . Small Business Industry Sector

The Mineral Wool production source category includes those facilities that manufacture rock and slag wool (mineral wool). Mineral wool is a fibrous, glassy substance made from natural rock, blast furnace slag, or other similar materials and consists of silicate fibers typically 4 to 7 micrometers in diameter. Products made from mineral wool are used for thermal or acoustical insulation, sound control and absorbency, and fire pr otection.
All the known mineral wool production plants are major sources of HAP (none are area sources). The Mineral Wool NESHAP applies to owners or operators of any existing, new, or reconstructed mineral wool production facility that is located at a pl ant site that is a major source of HAP emissions. Name of Industry/Sector 2002 NAICS Code SBA Size Standard for Small Business Small Firms

Number Average Number of Employees

Mineral Wool 327993 500 5 10819 EPA has identified seven operating major source mineral wool manufacturing facilities with ten different cupolas, three curing ovens, three cooling operations, and three collection sources. Five of the seven facilities are small businesses. One large company oper ates two of the seven facilities.

6. SUMMARY OF SMALL ENTITY OUTREACH EPA conducted a meeting/teleconference with potential SERs on April 27, 2011. To help them prepare for the meeting/teleco nference, on April 14, 2011 , EPA sent materials to each of the potential SERs via email. A list of the materials shared with the potential SERs during the pre

Panel outreach meeting is contained in Appendix A. For the April 27, 2011 , pre
- Panel outreach

m eeting with the potential SERs, EPA also invited representatives from the Office of Advocacy of the Small Business Administration and the Office of Information and Regulatory Affairs within the Office of Management and Budget. A total of four of five of t he potential SERs participated in the meeting. EPA presented an overview of the SBREFA process, an explanation of the planned rulemaking, and technical background on the rule.
Following the presentations, the remaining time during the p re
- Panel meeting included discussions of:

- the timeline for the SBAR process;

- the procedures for handling and sharing confidential business information (CBI);

- SER requests for the availability of risk and other data, including the actual emissions limit for formaldehyde;

- whether EPA has identified any new technology since initially setting the MACT standards (the only technology EPA identified was incinerators on cupolas);

- the potential start

- up/shut

- down/malfunction (SSM) requirements . T he court vacated the startup, shut down, and malfunction (SSM) exemption contained in section 63.6(f)(1) and (h)(1) of the part 63 General Provisions, which were cited to in the Mineral Wool MACT ; and

- the process of calculating MACT floors.
EPA asked the potential SERs to provide written co mments by May 11, 2011

. These written comments are included in A ppendix A

. EPA conducted two site visits on May 12, 2011 to understand the processes and to meet with company representatives to discuss the upcoming rule proposal. EPA visited Thermafiber and Isolatek facilities, and NAIMA representatives attended both site visits along with EPA. EPA conducted a meeting/teleconference with SERs on June 16, 2011. To help them prepare for the meeting/teleconference, on June 2, 2011, E P A sent ma terials to ea ch of the SERs via email. A list of the materials shared with th e SERs during the Panel outreach meeting is contained in Appendix A. All six SERs (see Table 6 ) participated in the meeting. EPA presented20 a brief overview of the SBREFA process and updated information on the planned rulemaking

. The industry trade association, NAIMA, presented alternatives to the proposed emission limits and potential changes to the MACT standards that they feel would enable EPA to address the risk and Brick MACT issues without threatening the viability of the mineral wool industry (see Appendix A for NAIMA’s presentation) . The SERs were given an opportunity to comment on the preliminary proposed emission limits and discuss questio ns and recommendations associated with the risk and technology reviews.

The Panel asked the SERs to provide written comments by June 30, 2011

. Comments made during the P anel outreach meeting and written comments submitted by the SERS are summarized in sec tion 8 of this document.

7. LIST OF SMALL ENTITY REPRESENTATIVES

Table 6 : List of Small Entity Representatives

Name Affiliation

Lee Houlditch Amerrock Products

John Dolin Industrial Insulation Group

Tom Lund Isolatek Int’l

Christopher Bullock Rock Wool Mfg

Steve Edris Thermafiber, Inc.

Angus Crane North American Insulation Manufacturers Association (NAIMA)

8. SUMMARY OF SER COMME NTS AND EPA RESPONSE S TO SER COMMENTS

8.1 Number and Types of Entities Affected21 Section 5 of this report, which presents the information on the entities potentially affected by this rule, was provided to the SERs in the pre

- Panel Outreach presentation (see A ppendix A ). The Panel believes that the SERs are in agreement with EPA on this matte r.

8.2 Potential Reporting, Recordkeeping, and Compliance Requirements
While the Panel did not receive specific comments on reporting and recordkeeping, NAIMA suggested that given the expense and complexity of possible technology installation, a 7

- year compliance deadline is requested

.
8.3 Related Federal Rules

The Panel receive d verbal comments from SERs on potential SO 2 NAAQS compliance issues. Specifically, if facilities add on incinerators to the existing cupolas for COS control, SO 2 emissions will increase and may subject facilities to SO 2 reduction requirements from the State.

8.4 Regulatory Flexibility Alternatives

8.4.1 Curing Ovens
NAIMA discussed the relationship among Formaldehyde, P he n ol and Methanol. They stated that EPA’s recommended ranges for Phenol and Methanol are out of sync for Formaldehyde and would fundamentally force a lower Formaldehyde limit. To prevent this outcome, they proposed two alternative regulatory options:

Alterna tive 1

T hree separate limits could be set at the following levels:

• f ormaldehyde

– 0.06 lbs. per ton of melt

• p henol

– 0.04 lbs. per ton of melt

• m ethanol 0.04 lbs. per ton of melt

Alternative 2

Use f ormaldehyde as a surrogate for p henol and m ethanol and set the limit for f ormaldehyde at 0 .06 lbs. per ton of melt
Discussion of the Curing Oven Alternatives :

EPA staff asked about the re lationship between formaldehyde, phenol and methanol : where the 0.04 lbs/ton melt emission limit came from because the test data supplied to the EPA shows different numbers. The SERs responded that the 0.04 lb/ton melt emission limit is based on the relationship between (or percentage) of formaldehyde to ph enol and methanol in a particular binder formula. The SERs stated that the phenol and methanol emission limits have to be consistent with the ratio of formaldehyde to phenol and methanol in the binder used. The SERs said they would include the data used to obtain the 0.04 lb/ton melt emission limit in their22 formal written comments to the Panel. The SERs stated that the EPA’s initial proposed limits are so low for phenol and methanol that , because of the ratio between formaldehyde, phenol, and methanol , t he floor for formaldehyde would be created no matter what industry did. If industry operated within the 0.06 lb/ton melt emission limit for formaldehyde, industry would be above the limit for phenol and methanol due to the specific ratio in every resin ba tch.

EPA staff asked if the inability to meet the proposed emission limits for all three pollutants was a function of the product used or a function of formaldehyde degrading in heat. The SERs responded no , and further elaborated that it was a function of the resin in the batch formula used. The SERs agreed with EPA staff that this was a reflection of the existing technology. NAIMA offered to organize a meeting with the binder supplier and the EPA to discuss how the ratio of formaldehyde to phenol and met hanol are inextricably linked.

SBA staff asked if there was a difference between the ratio information presented under alternative 1 for the curing oven (slide 6) and the test data the EPA ha d received to date under the ICR. EPA staff suspected that this was the case and explained that the preliminary emission limits are based on the testing results from industry and seem to be 2 orders of magnitude different from the emission limits under alternative 1.

SBA staff pointed out that alternative 1 for curin g ovens is not setting a new MACT ; i nstead of setting a new MACT based on the top 2 performers, industry wants to retain formaldehyde as a surrogate for phenol and methanol; and it sounds like the EPA is presenting a MACT calculation (top 12% or top perfor mer calculation) rather than a translation of what the industry is doing. SBA staff went on to say that breaking the surrogacy by establishing equivalent emission limits is very different from setting a new MACT. SBA staff want ed to make sure everyone understand s that alternative 1 is not setting a new MACT standard, but is breaking surrogacy by using the proportions in the existing technology. The SERs replied that alternative 1 is a compromise while alternative 2 is their preferred method. The SER b ottom line was that industry cannot meet the proposed emission levels because they are too low.

EPA staff stated that the proposed emission levels for phenol and methanol are UPL derived limits based on test data supplied by the industry

. EPA staff also stated that t here are 3 curing lines and so asked if industry wa s saying that 1 or 2 plants op erate outside of the proposed ranges. EPA staff elaborated that t he test data supplied by industry showed emission levels well within the EPA’s proposed ranges a nd so questioned how actual emission levels can be 1 to 2 orders of magnitude greater. The SERs replied that there was one firm that incinerated from the curing oven , and it is the lowest performer on formaldehyde industry

- wide.

SBA staff in terjected tha t there seems to be disconnect between the EPA and the SERs regarding how the test data is being interpreted. The SERs are saying that the test results available to NAIMA do no t justify EPA’s proposed limits, but EPA is using test data supplied by the industry to calculate the limits. It was agreed by EPA staff, the other Panel members, and the SERs that another meeting was needed as soon as possible to review the test data together and resolve the matter.23 8.4.2 Collection
NAIMA argued that using co ntrol technology on the collection chamber is cost

- prohibitive and proposed two alternatives:

Alternative 1
4 lbs. per ton of melt for formaldehyde and use formaldehyde as surrogate for phenol and methanol

Alternative 2
4 lbs. per ton of melt for formaldehyde, 2.7 lbs. per ton of melt for phenol, and 2.7 lbs. per ton of melt for methanol

Discussion of the Collection Alternatives :
The SERs stated that the emission limits on collection chamber s would be a completely new control technology not included in previous MACT standard. The SERs and the fiberglass industry (also represented by NAIMA) as a whole voiced a number of concerns: installing a control technology on the collection chamber (an incinerator ) is cost

- prohib itive; and that the high cost will force companies to go out o f business for relatively little benefit (referring to the $600,000 per ton reduction on slide 8 of the NAIMA presentation). EPA staff clarified that the incinerator is not cont rolling SO 2 and that everyone needs to understand that different pollutants and control technologies have different cost

- effectiveness values . The SERs asked if the $600,000 estimate for installing an incinerator was within the rang e of cost benefit ratio establishe d by BACT. EPA staff said no that seems high, but they wanted everyone to recognize that making the comparison to SO 2 cannot be made in this situation.
Regarding slide 9 of the NAIMA presentation , EPA staff asked if the 4 lbs/ton melt was base d on a MACT calculation or test data

. NAIMA answered that it was derived by looking at the data and talking with members about wh at is feasible for them to achieve. EPA staff reiterated that the UPL range is 0.3 to 1 for form aldehyde and industry has cla imed between 4 to 10 times higher than th at

- what is asserted as possible disagrees with the test data. The SERs responded that the test data are very limited, but what is important is that the addition of the collection chamber is an introduction of a new source.

NAIMA asked SERs to speak about the difficulties with installing a control technology in such a narrow space. A SER stated that the previous MACT required industry to install an incinerator that is not designed to handle the c urrently required air volume

- t o install an incinerator to handle a large amount of air for such a small amount of contam inants isn’t feasible and is cost

prohibitive. Another SER stated that a sister compa ny in Finland has no control in this area

- it’s impractical and would take an incinerator 10 times the size currently installed and would be more costly.24 SBA staff state d that it sounds like there is a c omplete mismatch of test data

- t here is no middle ground between what the SERs are saying and the test data so there is a problem with the information that has been provided to the EPA at this point. EPA staff stated th at a lot of the information is CBI and spec ifics cannot be discussed. EPA staff asked if some information could be declared as non

- CBI so that they could discuss it at the next meeting. NAIMA suggested they would follow

- up with the individual companies a bout what they are willing to share. SBA staff added that if this is an issue of interpreting the test data incorrectly, everyone can sit together in a room to discuss the test data

- if EPA staff speaks with each company alone, the CBI designation d oes n ot need to be broken. EPA staff state d that the actual test data cannot be held as confiden tial, but process design can be

- u nder the CAA, the EPA cannot set an emission limit outside of the range that the test data show.
The SERs stressed that they are concerned with the addition of collection chamber limits to the MACT. EPA staff said that uncontrolled sources that emit HAP must be regulated under Section 112, however, alternatives to satisfy Section 112 are welcome from the SERs. SBA staff mentioned that the EPA could set a health

- based emission limit that could adequately protect publ ic health and that alternative for curing and collection ovens should not be forgotten

- f or collection in particular, if the formaldehyde, phenol and methanol coming off of a new or uncovered source does not present a health hazard, then a health

- based emission limit incorporating that practice might be feasible using information gleaned from the RTR. EPA staff asked the SERs to include this information in their wri tt en comments. NAIMA asked that EPA consider a health based emission limit for formaldehyde collection chamber emissions, but acknowledged that formaldehyde is a carcinogen

.
8.4.3 Carbonyl Sulfide (COS) Emissions from Cupolas
NAIMA questioned whether the Brick MACT decision requires the imposition of new requirements, stating that t he cost of each incineration system could be quite expensive, between $3 and $6 million. Additionally, NAIMA expressed concern about whether all companies with incinerators can meet the proposed limit of 0.05. Finally, NAIMA argued that there is insufficient scientific support for risk associated with COS. As a result they proposed that EPA adopt one of the following alternatives:

Alternative 1

A n emission limit for carbonyl s ulfide of 5 lbs. per ton of melt

Alternative 2

Pursuant to 42 U.S.C. § 11 2(b)(3)(c) , “delete” carbonyl sulfide from the Clean Air Act Section 112 list of regulated hazardous air pollutants (HAP)

Alternative 3
Subcategorization of the industry based on melt rate s :25 • Greater than 9 tons per hour

• 6 to 9 tons per hour

• Less than 6 tons per hour

Alternative 4

T hreshold limits that limit the scope of applica bility

- 250 tons of COS per year

Alternative 5
Pursuant to 42 U.S.C. § 7412(d)(4), consider a health threshold when establishing a COS emission limit

Alternative 6

S ubcategorize the industry to reflect the diversity of the industry and the products it manufactures

Alternative 7

U se the combined statistical

- technical procedure in establi shing the COS emission limit, which considers all the emissions data and eliminates outliers and questionable data to come up with an industry average

Alternative 8

P rovide for exemptions, specifically a ny unit not posing a greater than one in a million

ma ximum individual lifetime cancer risk from COS be exempted

Alternative 9

C upolas installed prior to the 1999 implementation of the Mineral Wool MACT Standard not be required to meet the newly proposed COS emission limits

Alternative 10

C reate a health

- based risk standard for carbonyl sulfide using the World Health Organization (WHO ) framework or other alternative

. Alternative 11

Because insulation products increase energy efficie ncy, create an Offset/Cred it program. T he COS emissions limit coul d be established based on accurate data of the best performing 5 sources, but allow mineral wool companies to offset those emissions based on pounds of product produced.26 Discussion of the COS Alternatives : The SERs stated that companies with no incinerato r will be put out of business by the proposed COS limits , while those with incinerators definitely cann ot meet the limit. The SERs felt that COS is not correctly designated as a HAP; it is a byproduct of the manufacturing process. The SERs stated that the majority of COS in the atmosphere is produced by natural sources ( volcanoes, marshes, etc.) and the mineral wool industry contributes an amount nowhere near the amount occurring from nature. Incineration creates SO 2 at much great er levels than COS , and the SERs would like the EPA to consider alternatives such as not regulating COS or alternatives to proposing a limit that cannot be met. The P anel staff members agreed that the extent of COS emissions from natural sources was high and that other companies have had conversations about this. EPA staff stated that about half of the cupolas in the mineral wool industry incinerate their COS for energy recovery

- s uch facilities reduce their use of coke and, in the long term, conserve re sources using this technology. EPA staff stated that a ll options will be costly , and EPA is looking for regulatory flexibility alternatives that will be feasible for industry.

The SERs stated they prefer alternative 2, the delisting of COS, better than a ny other option. They asked that the EPA look at the possibility of deleting COS from the list of HAPs pursuant to 42 U.S.C. § 112 (b)(3)(c ).
Regarding alternatives 3 and 6 (slides 12

- 13 of the NAIMA presentation ), the Panel staff asked if the SERs would be able to provide a specific emission limit once the SERs and the EPA come to a conclusion on the test data. The SERs responded affirmatively and also that they would be able to determine which companies fall into what category.

The Panel staff was concerned about whether alternatives 8 and 9 could answer the Brick issues defined by the EPA (i.e. , how do they link back to S ection 112)

- t hese alternatives are blurring the line of MACT setting with the residual risk review done on the MACT already set . The Panel staff said it could see how it could be a health

- based limit, but not standing on its own. The SERs respon ded that they can elaborate and would make that connection in their written comments.

SBA staff , who was not familiar with the WHO frame work referenced by alternative 10, asked if the SERs could send more detailed information. The SERs said the WHO framework they were thinking of is related to the el ectromagnetic industry and they would look for other examples and share this with the Pane l.
Regarding alternative 11, the Panel staff asked for more substance from the SERs. The SERs responded that they are in a formal process to get recognized for offsets and that they have a framework that could be used.

The SERs stated that the Administr ator could also remove COS from the HAP li st in as little as 90 days. Panel staff asked the SERs if they have signed a formal position. The SERs stated they have not done so and asked if it was more work for the EPA if they did so and whether or not27 there was a downside. Panel staff stated that the EPA is on a deadline to propose and that this opportunity may have to wait until after the proposal since the SERs just brought up this up.

Additional SER Comments :
After P anel outreach, NAIMA expounded on several of the above alternatives (3, 4, 5, 6, and 9) and provided some new alternatives w hich came about as a result of P anel discussions. NAIMA provided the following alternatives in a letter to the Agency on June 30, 2011.

Alternative 1

Given the limited risk data and the fact that over 80 percent of atmospheric COS comes from nature, NAIMA recommends an emission limit for carbonyl sulfide of 5 lbs. per ton of melt.

Alternative 2
Pursuant to 42 U.S.C. § 112 (b) (3)(c), either the EPA Administrator or NAIMA should petition to delete carbonyl sulfide from “the list” of hazardous air pollutants.
Alternative 3 (revised to provide more detail)
NAIMA urges EPA to subcategorize the industry based on permitted maximum melt rate:

• Greater than 9 tons per hour

- USG

– Red Wing

- USG

– Walworth

• 6 to 9 tons per hour

- Industrial Insulation Group

- Rock Wool Manufacturing

- Thermafiber

• Less than 6 tons per hour

- Amerrock

- Isolatek International
The CAA grants the Administrator authority to “distinguish among classes, types, a nd sizes of sources within a category or sub

- category.” Obviously, melt rate has important relevance to the size of the source and the economic feasibility of imposing additional costly controls. Therefore, melt rate provides a useful indication of the r equired difference among plants to justify subcategorization. The melt rate can effectively predict the level of emissions. In fact, the current Mineral Wool MACT Standard uses the hourly melt rate to determine compliance with the MACT standard. 8 Theref ore, NAIMA urges EPA to subcategorize the industry based on melt rate as indicated above.

8 64 FR 31 695 (June 14, 1999)28 Alternative 4
NAIMA urges EPA to subcategorize the industry based on bonded and unbonded.
During promulgation of the original MACT, the mineral wool industry was subcategorized into two groups: bonded and unbonded. Since the bonded and unbonded subcategories are already established by EPA, NAIMA does not go into detailed analysis of the differ ence between bonded and unbonded. NAIMA requests that these subcategories be retained. Although the differences between bonded and unbonded lines apply principally to the non

- cupola portions of the line, EPA usually subcategorizes two or more sources wit hin a category at the level of the entire source even though the sources may have some emission points in common. There is precedent for different subcategories for various production processes that have some emission points in common but are different wi th respect to other emission points. 9 Therefore, subcategorizing the entire mineral wool industry into bonded and unbonded subcategories is totally appropriate. The subcategories would be the following:

• Bonded

- Industrial Insulation Group

- Rock Wool Manufacturing

- Thermafiber

• Unbonded

- Amerrock

- Isolatek International

- USG

– Red Wing

- USG

– Walworth
Alternative 5 (Alternative 10 in panel outreach; expanded here)
NAIMA urges EPA to subcategorize the industry to reflect the diversity of the industry and the primary products it manufactures:

• Residential Loose

- Fill

- Amerrock

• Ceiling Tiles

- USG

– Red Wing

- USG

– Walworth

• Fireproofing

- Isolatek International

• Commercial and Industrial

- Industrial Insulation Group

- Rock Wool Manufacturing

- Thermafiber

9 EPA subdivided the source category for a crylonitrile butadiene styrene (“ABS”) into 5 subcategories based on different processes even though all had common emission points ( 60 FR 16090

- 16111 (March 29, 1995)).29 The CAA allows grouping of facilities based on such broad terms as “class” and “type.” EPA specifically created different subcategories in the leather industry based on “types of leather products produced.” 10
As suggested above, the subcategories based on product types a lso display a variety of differences. For example, the residential blowing wool produced by Amerrock uses no binder. Therefore, there are no formaldehyde emissions. Amerrock products are produced for the residential building market. Similarly, USG’s tw o plants are making unbonded products to produce ceiling tiles. While this product is ultimately bonded with non

- phenolic binders, the binder is not applied at the manufacturing site. Ceiling tiles are produced largely for the commercial market.

Isolatek produces mineral wool for fire proofing products. The mineral wool is combined with other ingredients to create a spray applied for fire proofing of commercial and industrial facilities. Again, Isolatek uses no formaldehyde binders.

Commercial and indus trial insulation is produced by Thermafiber, Industrial Insulation Group, and Rock Wool Manufacturing using formaldehyde binders.

Alternative 6
NAIMA urges EPA to subcategorize the industry based on raw material. This subcategorization would be based on predominant use of rock or slag. More than fifty percent use of rock or slag material would place the manufacturer in a particular subcategory. This subcategory could also be characterized as recycled (slag) and non

- recycled (rock) plants. There are imp ortant differences between recycled and non

- recycled plants with respect to raw materials, emissions, and products. The distinction between rock and slag plants is well recognized within the industry and in the scientific and technical literature, and the refore, subcategorization of rock and slag (recycled or non

- recycled) plants would not be breaking new ground. The subcategorization would be as follows:

• Rock (Non

- Recycled)

- Amerrock

- Industrial Insulation Group

• Slag (Recycled)

- Isolatek International

- Rock Wool Manufacturing

- Thermafiber

- USG

– Red Wing

- USG

– Walworth

10 J. Michael Geers and Claudia M. O’Brien, “Basis and Rationale for Potential Subcategorization of Coal

- fired Electric Utility Steam Generating Units,” March 8, 2002, p. 10 ( http://www.epa.gov/ttn/atw/combust/utiltox/ 9brh04.pdf ).30 Alternative 7
NAIMA urges EPA to subcategorize the industry based on use of air pollution control differences, specifically, use of an incinerator. EPA’s criteria for subcategorization includes “air pollution control differences, process operation . . ., emissions characteristics, control device applicability and costs, safety, and opportunities for pollution prevention.” 11 Subcategorization based on existence of cupola incinerator controls and non
- incinerator controls would be as follows:

• With Incinerator

- Industrial Insulation Group

- Thermafiber

- USG

– Red Wing

- USG

– Walworth

• Without Incinerator

- Amerrock

- Isolatek International

- Rock Wool Manufacturing

Alternative 8
NAIMA urges EPA to subcategorize the industry based on the age of the facility/cupola. The subcategories would be as follows:

• Prior to 1950

- Isolatek International

- Thermafiber

• 1951

– 1975

- Rock Wool Manufacturing

- USG

– Walworth

• 1976

– Present

- Amerrock

- Industrial Insulation Group

- USG

– Red Wing

Alternative 9
NAIMA urges EPA to subcategorize the industry based on cupola stack heights. The subcategories would be as follows:

• 150 feet and above

- Amerrock

- Industrial Insulation Group

- USG

– Red Wing

• 100 to 150 feet

- Rock Wool Manufacturing

11 59 FR 26429

- 26444 (May 20, 1994)31 - USG

– Walworth

• Below 100 Feet

- Isolatek International

- Thermafiber

Alternative 10 (Alternative 5 at panel outreach; expanded here)
NAIMA advocates use of an alternative health based limit under § 112 (d)(4) of the Clean Air Act for the collection chamber. As note d above and affirmed by EPA, emissions are low and the risk is low. Therefore, to avoid unnecessarily stringent emission limits, NAIMA urges EPA to create health based limits. 12
Section 112 (d)(4) is designed to prevent the promulgation of unduly stringent emission limits simply for the sake of regulation. Section 112 (d)(4) allows EPA to set health based limits for certain HAPs based on established health thresholds as an alternative to promulgating specific limits. Human exposures to a HAP at levels bel ow its reference concentrations (“RfC”) or reference dose are considered safe.
NAIMA strongly urges EPA to set health based standards under § 112 (d)(4) when facts support its use, such as carbonyl sulfide which is created in abundance by nature itself.

Al ternative 11
EPA could establish a threshold limit that would narrow the scope of applicability to only those facilities exceeding a specified threshold amount. NAIMA recommends a threshold of 250 tons of COS per year.

Alternative 12 (Alternative 9 at pan el outreach)
EPA could establish a grandfather clause and exempt those cupolas installed prior to the 1999 implementation of the Mineral Wool MACT Standard.

Alternative 13

Use the combined statistical

- technical procedure in establishing the COS emission li mit, which considers all the emissions data and eliminates outliers and questionable data to come up with an industry average.

Alternative 14
Offset/Credit

– EPA recognizes that improved energy efficiency reduces pollutants. Insulation products increase e nergy efficiency. EPA could establish the COS emissions limit based on accurate data of the best performing five sources, but allow mineral wool companies to offset those emissions based on pounds of products produced.

12 Section 112 (d)(4) applies to non

- carcinogenic HAPs; carbonyl sulfide is not a carcinogen.32 8.4.4 Hydrogen Fluoride and Hydrochloric Acid Emissions From Cupolas

The SERs disagree that the Brick MACT should require limits for HF and HCl because the previous Mineral Wool MACT did not include these pollutants and because industry

- wide emissions are “ low ” . Additionally, the SERs argued that the proposed limits are so low that they essentially require the installation of control technology. The most effective technology, wet scrubbing, is cost prohibit ive . Because of the disagreement of the achievability of the proposed stan dards, SBA staff stated that there may be a disagreement between the industry and th e EPA about the test data. EPA staff stated that the HF and HCl limits are UPL derived limits based on test data provided by the industry. NAIMA made four recommendations for alternative regulatory options:

Alternative 1

Do not set HF and HCl limits for the Mineral Wool MACT because the Brick MACT decision does not require it

. Alternative 2
Establish threshold limits that reduce the scope of applicability

• For example, 1, 000 tons of HF per year

• For example, 1,000 tons of HCl per year

Alternative 3
Establish an HF or HCl limit based on actual mineral wool emissions data averages

– establish a feasible and achievable limit. Mineral wool emission data is limited and based only on BTEC data collected last year

. Alternative 4
Adopt the following emission limits for Mineral Wool MACT:

• Hydrogen Chloride

– 25 tons per year

• Hydrogen Fluoride

– 25 tons per year
The SERs discussed the alternatives to the EPA proposed limits for HF and HCl, stating that alternative 1 would be the ea siest for them to achieve. Panel staff asked where the 25 tons/yr limit is coming from in alternative 4 (slide 18). The SERs responded that it is a number based on what industry can meet across the bo ard similar to the 25 ton s/yr limit for other HAPs. Panel staff stated that the threshold for major and area sources is 10 tons and 25 tons for overall pollutants.

Panel staff asked the SERs if they intended to establish a limit of 25 tons/yr from this o peration instead of having an emission limit of tons/lb melt. The SERs confirme d that was their intention. Panel staff asked if in the long

- term this would be prohibitive to industry production and their ability to operate, or if the emissions are so low that industry would never exceed 2533 tons/yr. The SERs responded that yes, emissions a re much lower than 25 tons/yr

- t he emissions data industry has on HF and HCl are limited since they previously never had to test for these pollutants.

Panel staff asked what the drivers of these acid gases are and whether it is a function of production process or inputs. The SERs responded that it is a function of inputs and fuel that have residual fluor ides and chlorides in them. Panel staff asked if, outside of switching fuels and inputs, if there was a process change that could reduce emissions or if the emissions could only be reduced by taking them out of the process. The SERs stated that the issue is how and where to put all of these controls and still be a ble to manufacture a product.

Additional SER Comments :
After the P anel outreach meeting , NAIMA consolidated two of the above alternatives (2 and 4) and provided two new alternatives w hich came about as a result of P anel discussions, as follows:

Alterna tive 2 ( a consolidation of Alternatives 2 and 4 from panel outreach)
NAIMA urges EPA to establish a threshold limit to narrow the scope of applicability to the emission limits proposed for HF and HCl. For example, any facility emitting 100 or more tons o f HF per year would be subject to EPA’s proposed emission limits. Similarly, any facility emitting 100 or more tons of HCl per year would be subject to EPA’s proposed emission limits. Threshold limits for HF and HCL would lessen the regulatory burdens of an amended Mineral Wool MACT.

Alternative 3
If the first two alternatives are not implemented, NAIMA urges EPA to establish a feasible and achievable limit based on actual mineral wool emissions data. Because mineral wool emissions data is limited and based solely on BTEC data collected last year, NAIMA recommends the following emissions limits for the Mineral Wool MACT Standard:

• Hydrogen Fluoride

– 1.0 lbs. per ton of melt

• Hydrochloric Acid

– 1.0 lbs. per ton of melt

Alternative 4
NAIMA has recommended a variety of subcategorization options, including application of the existing bonded and unbonded subcategories to the entire source. If EPA sets a HF and HCl limit, NAIMA urges EPA to extend the bonded and unbonded subcategorization to the regulation of HF and HCl. Similarly, if any other subcategorizations are established for the mineral wool industry, NAIMA urges EPA to apply the subcategorization to the entire source, which would include the regulation of HF and HCl emissions.

8. 4.5 Start

- up, Shutdown, Malfunction34 The SERs stated that they feel the EPA is suggesting that SSM is a Brick MACT issue, and they wanted to know if they satisfied the EPA’s questions in their previous letter (date d 5/16/11 to S. Fairchild). EPA staff sta ted that SSM is not a brick MACT issue, but they are connected through litigation: the Mineral Wool MACT referred to the General Provisions for SSM requirements, and those requirements have been vacated by the court

. As a result, all regulated entities m ust comply with the MACT at all times, regardless of whether it is in startup or shutdown (malfunction will be addressed under a separate rule). EPA staff asked the SERs what type of emissions occur as a result of regular operational conditions and what a dditional emissions occur as part of startup and shutdown. EPA staff asked if emissions are greater during the startup process and if so, how much greater? A re there additional emissions during shutdown? How often do s tartup and shutdown occur? EPA staf f mentioned that because a separate rule is being developed for malfunction , the EPA cannot look at any special considerations.

Panel staff stated that for other rules, if startup and shutdown are included in the test data, the EPA may be able to set a numerical limit based on that. If the test data does not include startup and shutdown, the SERs need to communicate to the EPA what the start up and shutdown emissions are and how they are different from normal operations. The EPA cannot simply say that startup and shutdown are not includ ed in the emission levels. Panel staff asked the SERs if the test data includes startup and shutdown as par t of normal operations. If not, the SERs need to make that claim quickly and determine whether or not there are substantial differences from normal operations. If they look like normal operations, then it’s ok.
The SERs stated that they would like to d i scuss startup and shutdown during the next meeting. EPA staff stated that there are 3 ways the test data are expressed: concentratio n, lbs/hr and lbs/ton melt. Because emissions are measured in lbs. per ton of melt, it is impossible to measure emissions during s tart

- up or shut

- down because no melt is being produced dur ing start

- up or shut

- down. SBA staff mentioned that that almost begs for a total emission limit. EPA staff and the SERs agreed that previous limits were written in lbs/ton of melt and they bot h want to keep it that way. EPA staff indicated that they can simply create an emission limit based on concentration for startup and that they will run it by other project leads to see what has been done.

8.5 EPA RESPONSES TO SER COMMENTS

8.5.1 Curi ng Ovens

The c ourt found that EPA erred in its development of surrogates under the MACT standards, and failed to establish the facts of surrogacy relationships. In a separate case, the court agreed with EPA that nothing in the Clean Air Act suggests that it is prohibited from resetting the MACT floor s in order to correct its own errors. They also agreed that the approach petitioners labeled “MACT

- on
- MACT would be more accurately described as “MACT

- on
- Unsupportable

- Standards

Erroneously

- Labeled

- as
- MACT” 13

. The Agency therefore must use only valid and supportable

13 Medical Waste Institute and Energy Recovery Council v. EPA , # 09

- 1297 (D.C. Cir. 2011).35 surrogacy relationships such as exist between P M and HAP metals . This relationship does not exist between formaldehyde and phenol/methanol because formaldehyde can decrease in a binder formulation independent of phenol and/or methanol. Moreo ver, the use of formaldehyde as a t racer compound in RCRA rules to indicate complete combustion of a high concentration organic waste stream in a hazardous waste incinerator is very different from using it as a surrogate for organic compounds in low concen tration for an industrial exhaust application

. Because the incinerator, the waste stream and the media are all different, the relationship cannot be extended without supportable data showing the surrogacy relationship is valid. Rather, industry has comme nted elsewhere that the binder ingredients and formulation can vary from one mineral wool producer to the next, and that the test data from one is not necessarily relevant for another company. Therefore, EPA finds that the surrogacy developed for the MACT rule is not valid, and emission limits must be added for both phenol and methanol to the formaldehyde standard. These emission limits will be based on industry

supplied data collected by source

- specific testing under the voluntary ICR.

For several process emission limits, including those for curing ovens , t he SERs commented that the emission limits developed by EPA for the industry are too low and facilities can not currently meet these limits. However, EPA based the emission limits on industry’s o wn testing conducted under their voluntary ICR. Under this approach, the industry approached EPA and requested that they be allowed to develop an internal response rather than receive a formal testing order under CAA S ection 114. Industry also agreed tha t any test results submitted would be representative of emissions from sources subject to the MACT standard. The project lead agreed to this approach as long as the information needed by EPA to conduct the risk, technology and regulatory reviews was obtai ned and that the collected information was valid. EPA must base all decisions upon a complete and valid set of data. The data set is the set of data developed on industry source testing and ICR responses under the voluntary ICR undertaken specifically fo r these Agency reviews. Moreover, emissions testing was to be conducted according to EPA test methods ; a responsible official of each company had to sign the ICR and emission testing responses as valid and true; and the testing contractor had to sign that the emission testing was conducted ac cording to the requirements of EPA’s test methods. Therefore, EPA believes the industry should stand behind the testing as valid and accurate.
After determining (using the test data) that the risks from this industry are low, the Agency is also using the same data to review the MACT standard to correct deficiencies in the rule. Only formaldehyde limits (as a surrogate for phenol and methanol) at the curing process were established under the 1999 MACT standard. EPA is correcting that deficiency by adding phenol and methanol limits to the curing oven limits in the 1999 MACT.

8.5.2 Collection
After determining (using the test data) that the risks from this industry are low, EPA is also using the same data to review th e MACT standard to correct deficiencies in the rule. Emission limits for collection were not established under the 1999 MACT standard, and this process is responsible for nearly all the risk to the public from this source category. However, during36 conver sations with industry, EPA learned it is may be appropriate to subcategorize collection processes according to the orientation and design of the collection process. As a result, EPA intend s to propose to subcategorize according to vertical, horizontal, an d drum collection. Each type of collection process w ould be required to meet emission limits for formaldehyde, phenol, and methanol, as expressed on a lb (pollutant) /ton (production) basis.

8.5.3 Carbonyl Sulfide (COS) Emissions From Cupolas
In the Brick MACT decision and vacature, the court found that EPA erred in its development of surrogates under the MACT standards and failed to establish the facts of surrogacy relationships. Only carbon monoxide (CO) limits (as a surrogate for carbonyl s ulfide ) at the cupola was established under the 1999 MACT standard. As with other corrections for inappropriate surrogacy in the rule, EPA is correcting that deficiency by replacing CO limits in the 1999 MACT with COS limits.
Technology Review : In addition to addressing rule deficiencies identified by the courts in the proposed amendments to the rule, EPA is conducting both a risk and technology review

. The Clean Air Act Section 112 technology review requires EPA to review new technological deve lopments within the industry. EPA may consider the costs of such new technologies, as well as other considerations in this review. EPA has established that of the 11 cupolas operating in the mineral wool industry, six have installed incinerators to burn COS and reclaim that energy for use back in the cupola. This industry practice is widespread because it reduces consumption of coke, which is the most expensive of all the raw materials used in the mineral wool industry. SERs informed EPA that the cost o f coke has increased 8

- fold since promulgation of the MACT, so industry is seeking cost savings on this expensive raw material

. In addition, one SER noted that fuel switching is a more cost effective option over the long run than incineration because it d oes not require the use of coke. Melter replacement and fuel switching is under consideration across industry, but because it involves discontinuance and replacement of the cupola with an entirely different melting technology, no small business has undert aken fuel switching at this time.

EPA concedes that in recent months the economic downturn in the US and worldwide has had a tremendous impact on all American industry, none more key than in the construction industry. EPA has considered these factors in evaluating the cost effectiveness during the technology review process

. As described in Section 3, new processes and technologies (RTOs) are in place on cupolas in the mineral wool production industry since promulgation of the MACT in 1999. These techno logy developments can be divided into two classes: those that form and discharge SO 2 as a result of oxidizing COS, and those that decrease levels of sulfur in the raw materials, thereby reducing the potential for formation of the sulfur compounds COS and SO 2 . COS Oxidation Technologies:37 Thermal Oxidation : Because coke is the single most expensive ingredient in mineral wool production, RTOs were developed in response to industry’s interest in reducing the consumption of coke. The use of RTOs provide a l ong
- term cost and energy saving option for the mineral wool industry. The initial cost of RTO purchas e and installation (about $0.4 million) is recouped over a period of 5

- 7 years due to the decreased coke expense. One facility found it economically adva ntageous to install the RTO in spite of the State requirement to also install SO 2 controls to avoid Prevention of Significant Deterioration (PSD) Permit violations that would have resulted from the increase in SO 2 output as a secondary pollutant from COS o xidation.
Oxygen Injection: Oxygen injection is used at one plant to reduce COS emissions from the cupola. In this technology, oxygen is injected into the cupola ports during the melting operation. The injected oxygen drives the chemical reaction of C OS to CO 2 and SO 2 so that COS emissions are greatly reduced from the cupola stack.

The formation and emissions of SO 2 from the cupola makes it hard to consider either oxygen injection or thermal oxidation as improvements in control technology. To the contrary, these technologies contribute to adverse health effects as a result of increases in ambient levels of SO 2 .
L ow Sulfur Raw Materials:
Low Sulfur Slag: At least one mineral wool producer uses low sulfur slag to produce mineral wool while decreasing the potential to form sulfur compounds in the exhaust stack. Low sulfur slag may be purchased at iron and steel pla nts operating electric arc furnaces that are fueled with a low sulfur coal and are melting low sulfur content steel scrap. Because the source of slag is iron and steel scrap melted in an EAF, the slag by definition is produced from at least the second mel ting of the iron and steel. Therefore, most of the sulfur associated with iron ore has been liberated from the metal by the time it is returned as scrap to the EAF. In addition, regulations restricting the levels of SO 2 that can be discharged into the am bient air have become increasingly restrictive and are driving the secondary iron and steel markets to lower sulfur raw materials as well. It is reasonable to conclude that t his effort to purge sulfur from industrial inputs results in waste products that are similarly low in sulfur.
Low Sulfur Coke: Some industries choose to purchase low sulfur coke to reduce the level of sulfur compounds in their emissions. Coke containing no more than 2% sulfur is available outside the U .S., but at this time is not available for import . Coke containing no more than 3% sulfur is available at high cost within the US . The primary aluminum industry purchases this grade of coke. It is reasonable to conclude, however, that the small business es that comprise the mineral wool industry cannot easily afford low sulfur coke.
Equipment and Fuel Switching: One SER noted that fuel switching is a more cost effective option over the long run than incineration because it does not involve the use of cok e, which has become cost prohibitive. Melter replacement and fuel switching is under consideration across industry, but because it involves discontinuance and replacement of the cupola with an entirely different melting technology, no small business has u ndertaken fuel switching at this38 time. At least one facility is currently considering switching out the cupola and replacing it with a different mineral melting technology (such as a furnace) fueled by natural gas. This is being considered a viable alter native because the cost of an RTO to reclaim energy for the cupola is not as cost effective in the long run as is the equipment and fuel switching option. This option would involve a substantial period of time (no less than 1 year) to replace the cupola a nd associated equipment with a furnace or similar melting equipment. The replacement of coke with natural gas would greatly reduce the sulfur content of the raw materials and the resulting emissions of the sulfur compounds COS and SO 2 .
SO 2 NAAQS Considerations : In addition, EPA is keenly aware of the secondary pollutant issues associated with incineration of COS. Sulfur dioxide (SO 2 ) emissions are expected to increase on a pound per pound basis with the incineration of COS. That is, for e very pound of COS, a little more than one pound of SO 2 is released into the ambient air. In recognition of the health effects of SO 2 , in 2010 EPA amended the SO 2 NAAQS by lowering the 1

- hour, 24

- hour, and annual ambient air concentration limits of SO 2 . S tates have located and installed monitoring stations to collect data on SO 2 levels in areas thought to be most appropriate for this type of pollutant. Monitoring stations have been receiving data for several years, and EPA will propose designations of nonattainment based upon the States 2008 through 2010 monitoring data and any applicable modeling data submitted. Designation of nonattainment areas have not been completed as of the writing of this document. Designations were recommended by the States in June 2011 and are expected to be finalized by EPA in 2012. Therefore, it is unclear at this time whether any of the mineral wool companies are currently situated in areas that will be designated as nonattainment based on SO 2 monitoring.
As with the other emission limits in the proposed rule, the MACT floor emission limits for COS are based upon industry test data provided to EPA under industry’s voluntary ICR. Any mineral wool facility that is unable to meet the emission lim its in the rule will have a number of COS reduction technologies that are used currently in the industry; these include:

Table 7 . COS Reduction Technologies in the Mineral Wool Industry

Technology Relative Cost

Oxygen injection Least expensive

Use of low

- sulfur slag in the cupola V

Use of low

- sulfur coke in the cupola V39 Thermal Oxidizer V

Melter changeout and f uel switching Most expensive

8.5.4 Hydrogen Fluoride and Hydrochloric Acid Emissions From Cupolas
As with other amendments to the Mineral Wool MACT, emission limits for HF and HCl are being added to the rule to correct Brick MACT deficiencies. HF and HCl are emitted from mineral wool production cupolas. HF and HCl are HAP and under Section 112 EPA mu st establish emission limits for them. Therefore, u sing industry’s test data, EPA calculated the MACT floor for HF and HCl from existing cupolas; these data show cupolas achieve the following emission limits, considering variability:

Table 8 . Existing an d New Cupola Emission Limits

HAP Emission Limit, lb/ton

HF 0.014

HCl 0.01

8.5.5 Start

- up, Shutdown, Malfunction
Industry responses to the ICR indicate that cupolas are the process that could be affected by startup and shutdown requirements; industry responses also indicate that control equipment is functioning during process startup and shutdown events. Emissions d uring startup and shutdown are no greater than during normal processing of the cupola. Therefore, from an engineering perspective, there should not be excess emissions during startup and shutdown events.

9. PANEL FINDINGS AND DISCUSSIONS

9.1 Number and Types of Entities Affected40 Six companies exist in this industry; five of the six companies are small businesses. All small businesses in the mineral wool production industry operate under NAICS code 327993.

9.2 Potential Reporting, Recordkeeping, and Compliance
The proposed rule under consideration potentially impacts small businesses by requiring new emission limits on processes that were not regulated under the MACT standard promulgated in 1999, by requiring emission limits for pollutants that were not regulated under the MACT, or both processes and pollutants not regulated under the MACT. All companies are subject to Title V operating permits requirements, and as such will be required to add the newly regulated processes to their operating permits along with compliance demonstrations that the processes meet each pollutant emission limit in the rule. Compliance testing will be required to be conducted using EPA methods for each pollutant. Reporting and recordkeeping requirements are not expected to change from the MACT, with the exception of additional pollutants and processes included in such reports.

9.3 Related Federal Rules
National Ambient Air Quality Standards for Sulfur Dioxide: The most prevalent technology for reducing COS emissions will increase emissions of SO2. Under the current NAAQS, none of the small entities are in nonattainment areas, so installation of emissions control equipment should not subject them to additional permitting requirements under the SO2 NAAQS. However, EPA
can not make such assurances about future NAAQS or future nonattainment zones, so there is a risk that future compliance with this rule could trigger additional emissions control requirements through the Title V/PSD permit program.

Greenhouse Gases: Most emissions control strategie s identified by EPA during the P anel would increase the energy intensity of mineral wool production. Although the P anel does not have specific information about the GHG emissions of individual facilities in this industry, these facilities could be subject to GHG permitting as that program is phased in under the Tailoring Rule.

9.4 Regulatory Flexibility Alternatives

The P anel agrees that EPA does not have discretion in a number of areas that SERs commented upon. Specifically, the EPA does not have the discretion to set the MACT floor emission limits at levels suggested by the SERs

. EPA must base emission limits upon information available and, in response to a coordinated voluntary ICR, emissions testing was conducted at minera l wool facilities in support of the development of this standard.

The P anel also recognizes that EPA seeks to comply with the specific requ irements for the development of emission standards under Section 112 , including those requirements now generally identified as ‘Brick MACT’ issues . All processes that emit HAP and all HAP emitted must be appropriately identified for regulation and emission limits under this section. This includes the removal of inappropriate or invalid surrogate pollutant emission limits in favor of41 HAP

- specific emission limits. In addition, EPA does not have discretion to extend the compliance date of the standards beyond 3 years, but States may grant an additional year if petitioned by a compa ny to do so. In summary, the P anel r ecognizes that EPA has the authority to review the MACT standard for completeness, risk, and technology improvements, and that the Agency is currently under court order to conduct the risk and technology review for the mineral wool source category and prop ose amendments to the standard by October 31, 2011 and promulgate the amendments by October 31, 2012.
However, whenever opportunities for regulatory flexibility arise, and when that regulatory flexibility can work to lessen im pacts to small businesses, the P anel recommends that EPA propose amendments to the mineral wool MACT that offer such regulatory flexibility to the maximum extent possible. Specifically, these opportunities arise in the following situations:

• Selection of the averaging method in calcula ting the MACT floor for COS from cupolas and phenol, formaldehyde, and methanol emissions from c ollection and curing processes; and

• Subcategorization of regulated processes, when appropriate.
The results of the technology review show that new t echnolog y has been implemented in the mineral wool production industry, which includes the installation of RTOs on cupolas for the reclamation of energy from the combustion of COS and use of that reclaimed energy back into the cupola as a measure to reduce the consumption of coke. However, it is unclear whether this new technology can be co nsidered to control air pollution as it simply converts the HAP COS into the criteria pollutant SO 2 . The P anel agrees that, in this case, add

- on technology does not necessarily contribute to a reduction in harmful pollution. However, the Panel recognizes that there are other control options, and t herefore, the P anel recommends EPA select an averaging method for use in development of the MACT floor emission limits that would not require the installation of RTOs for compliance.

The Panel recommends that EPA not require beyond the floor (BTF) emission limits for the mineral wool industry. Such limits are likely to have additional cost impacts to industry. In addition, EPA did not identify BTF measures for consideration and has found that the results of the risk assessment show acceptable risks from this source category.

The P anel recommends subcategorization of collection along the lines described in Section 3 of this document , s pecifically, subcategorization for vertical collection and curing, horizontal collection and curing, and drum collection and curing. Based on available information, the P anel believes that emission standards based on the average emission limits across both collection and curing proces ses at each of the three subcategories would minimize the burden on small entities while fully complying with EPA’s obligations under section 112. The P anel also recommends set ting MACT limits for new sources equal to MACT limits for existing sources.
Timing:
In its comment, NAIMA suggests a 7

- year compliance deadline. The P anel agrees that a longer compliance deadline would minimize the burden on small entities, but agrees with EPA that its42 discretion is limited under section 112. Therefore, the P anel recommends that EPA allow the maximum amount of time within its discretion (3 years) and work with state permitting authorities to provide for the additional year permitted by the statute.
Startup, shutdown and malfunctions : Sources may not be able to comply with emission limits that are based on a production process (e.g., pounds per ton of melt) when that production process is not occurring, such as during periods of startup and shutdown. The Panel notes that SERs did not report emissions data to inc lude periods of startup or shutdown. However, the panel believes that SERs do operate emissions control equipment during startup and shutdown. Therefore the P anel recommends that EPA provide a detail ed discussion in the preamble to the proposed rule tha t outlines the manner in which small entities may demonstrate compliance with the rule , when finalized, during start

- up and shutdown. The Panel also recommends that EPA propose allowing an affirmative defense against compliance actions for malfunction eve nts, consistent with other section 112 rules recently promulgated.

### APPENDICES

Appendix A: Materials Shared with Small Entity Representatives

Appendix B: Written Comments Submitted by Small Entity RepresentativesAppendix A: Materials Shared during Outreach with Small Entity Representatives

Materials shared prior to or at April 27, 2011 Pre

- Panel Outreach Meeting
Materials shared prior to or at June 16, 2011 Panel Outreach MeetingMaterials shared prior to or at April 27, 2011 Pre

- Panel Outreach Meeting

• Agenda

• SER fact sheet

• List of potential SERs

• SBAR Panel process presentation

• Mineral Wool rulemaking presentation

### EPA’s Pre

- Panel Outreach Meeting with Potential Small Entity Representatives Risk and Technology Review for Mineral Wool Production Wednesday, April 27, 2011 10 :00 a.m. – noon , Eastern

10:00 Welcome and Introductions

10:15 RFA/SBREFA Overview
10:30 Background Presentation

11:15 Discussion
11:50 Summary and Closing

**********************************************

Teleconference dial

- in number: (866) 299-3188 Conference code: 202 566 2372

Dial the toll

- free teleconference number listed above. At the prompt, enter the conference code followed by the pound [#] sign. Note: You will hear music until the leader dials into the call.

Attending the meeting in person:
This meeting will be held at EPA Headquarters in Ariel Rios North, Room 7530 at 1200 Pennsylvania Ave. NW, Washington DC. Any invited Small Entity Representative may attend in person if desired.
We are unable to pay for travel expenses to Washington, DC for the meeting. If you would like to attend in person, you must RSVP with Madeline Barch at (202) 564-0234 or barch.madeline@epa.gov for directions and building access information.

# FACT SHEET

WHAT POTENTIAL SMALL ENTITY REPRESENTATIVES SHOULD KNOW ABOUT THE SMALL BUSINESS ADVOCACY REVIEW PANEL PROCESS

## What is an EPA Small Entity Representative? The Small Business Advocacy Review (SBAR) Panel will ask a selected group of Small Entity Representatives (SERs) to provide comments on behalf of their company, community, or organization to advise the Panel regarding a particular proposed rule. SERs’ participation in the rulemaking process will ensure that EPA hears small entity concerns.
A SER is a person appointed by the Small Business Advocacy Chair (SBAC) as a participating representative of small entities likely to be subject to the requirements of a specific proposed rule under development. The Regulatory Flexibility Act (RFA) defines smallentities as small businesses, small governments, and small nonprofit organizations. 

## Why does EPA need Small Entity Representatives? EPA has an ongoing commitment to minimize the burden of its regulations on small entities to the extent feasible, while still meeting its statutory requirements. The Small Business Regulatory Enforcement Fairness Act (SBREFA), enacted in March 1996, amended the RFA to provide small entities with an expanded opportunity to participate in the dev elopment of certain regulations. In particular, EPA must convene a SBAR Panel for certain proposed rules under development, unless the Agency determines the rule will not impose a significant economic impact on a substantial number of small entities. Each Panel is led by the SBAC and includes federal representatives from the Small Business Administration (SBA), the Office of Management and Budget (OMB), and EPA. The Panel meets with SERs likely to be subject to the rule to hear their views on the potential impacts of the rule and on ways to reduce them. 

## Who is eligible to be a Small Entity Representative? A small entity stakeholder is eligible to be a SER if he or she is directly subject to the particular proposed regulation that is under development and meets one of the following definitions of small entity listed below. Please note, however, EPA has the authority to use an alternative definition after notice and comment, and for small businesses, consulting with SBA.

• Small Business : Defined under Section 3 of the Small Business Act. SBA defines “small business” variably, based on each firm’s category in the North American Industry Classification System.

• Small Organization : Any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

• Small Governmental Jurisdiction : Governments of cities, counties, towns, townships, villages, school districts, or special districts, with population of less than 50,000.Typically, EPA prefers the actual owners or operators of small businesses, community officials, and non-profit organizations for this purpose. However, a person from a trade association that exclusively or primarily represents potentially regulated small entities, may also serve as a SER. 

## Who chooses Small Entity Representatives? For each rule that may have a significant economic impact on a substantial number of small entities, EPA identifies what types of small entities are likely to be subject to the rule and works in partnership with other Agency offices in developing a list of potential SERs. EPA also consults with the SBA’s Chief Counsel for Advocacy to identify individuals to serve as SERs. The SBAC considers these recommendations and appoints a group of official SERs. 

## At what stage in the rulemaking does the Panel process occur? Prior to proposing a rule, EPA engages its small entity stakeholders in a dialog to learn more about their concerns and ideas regarding the rule under development. If the Agency believes that the rule may have a significant economic impact on a substantial number of small entities, EPA will begin the SBAR Panel process. This process is intended to provide a special opportunity for small entities to participate in the rulemaking. 

## What will being a Small Entity Representative entail? Generally, SERs will be asked to review background information, listen to informational briefings and provide oral and written comments to the Agency and later to the Panel. Typically, prior to convening a Panel, EPA will provide the SERs with some background information on the rule and ask for their initial feedback. The Agency may also arrange a meeting with small entities potentially subject to a particular rule to hear their initial concerns and suggestions. Representatives of OMB and SBA are also invited to this meeting. After the SBAR Panel is convened by the SBAC, the Panel will provide the SERs with some additional information, followed by a teleconference and/or a face-to-face meeting to give them the opportunity to communicate directly with the Panel members. The Panel also generally requests SERs’ comments in writing. The goal of this consultation is to provide a forum for the SERs to raise issues of concern and to provide the Panel with insight into technical issues and potential ways of approaching them. 

## What will be done with my small entity input? Each SBAR Panel has 60 days to consider SER comments in addition to other rule-related materials prepared by EPA and prepare a report to the Administrator of EPA on the potential small entity impacts of the rule and on possible ways to reduce those impacts. The Panel report is considered by the Agency as it makes decisions on the proposed rule and is made part of the official rulemaking record with all written small entity comments appended. SERs may also submit comments during the standard public comment period after the publication of the proposed rule in the Federal Register

.

### Potential Small Entity Representatives Rulemaking for Mineral Wool Risk and Technology Review

Name Company City

Lee Houlditch Amerrock Products Nolanville, TX

John Dolin Industrial Insulation Group Phenix City, AL

Tom Lund Isolatek Int’l Huntington, IN

Christopher Bullock Rock Wool Mfg Leeds, AL

Steve Edris Thermafiber, Inc. Wabash, IN



### Non

‐ SER Participant, Helper to the SERs

Name Company City

Angus Crane NAIMA (trade assn) Alexandria, VAOffice of the Administrator Office of Policy Office of Regulatory Policy and Management

http:// www.epa.gov/op/orpm.html 

# An Overview of the Small Business Advocacy Review Panel Process

Alexander Cristofaro, Small Business Advocacy Review Chair (SBAC) Pre
- Panel Outreach Meeting, April 27, 2011



# Today, I’ll answer these questions...

• What is a Small Business Advocacy Review (SBAR) Panel?

• How does a Panel fit into the rulemaking process?

• How do Small Entity Representatives (SERs) participate in the Panel process?

• What is the difference between this Pre

- Panel meeting and the future Panel meeting?

• What does the Panel do with SER recommendations?

2

# What is an SBAR Panel?

• A Panel consists of representatives from the:

 agency authoring the regulation (i.e., EPA),

 Office of Management and Budget (OMB), and

 Small Business Administration (SBA).

Title 5, section 609(b)(3), of the United States Code (USC). This is also known as section 609(b)(3) of the RFA.

3



# What is an SBAR Panel? (cont’d.)



## • SBREFA amended the 1980 Regulatory Flexibility Act (RFA), which requires agencies to: “assure that small entities have been given an opportunity to participate in the rulemaking process” 1 for any rule “which will have a significant economic impact on a substantial number of small entities.” 2

1 5 USC 609(a)
2 5 USC 602(a)(1)

4

# Panel within the rulemaking process?

“the panel shall review any material the agency has prepared ..., including any draft proposed rule, collect advice and recommendations of each individual small entity representative identified by the agency after consultation with the Chief Counsel [for Advocacy of the Small Business Administration], on issues related to” 1 the following:

 Who are the small entities to which the proposed rule will apply? 2

 What are the anticipated compliance requirements of the upcoming proposed rule? 3

 Are there any existing federal rules that may overlap or conflict with the regulation? 4

 Are there any significant regulatory alternatives that could minimize the impact on small entities? 5

5 1 5 USC 609(b)(4) 2 5 USC 603(b)(3) 3 5 USC 603(b)(4) 4 5 USC 603(b)(5) 5 5 USC 603(c)



# Panel within the rulemaking process? (cont’d.)



### Let’s focus on “ any material the agency has prepared ”

 For this Panel, EPA will not provide a proposed rule, though we expect to discuss regulatory alternatives in as great a detail as we can.

 It is EPA’s policy to host SBAR Panels like this one well before a proposed rule is written so we have adequate time to incorporate your advice and recommendations into senior management decision

- making about the proposed rule.

 Participation in the Panel outreach meeting does not preclude or take the place of participation in the normal public comment period at the time the rule is proposed.

6

# How do SERs participate?

...Let’s focus on “ collect advice and recommendations ”

 This is how SERs help the Panel members.

• You’re expected to provide advice and recommendations on the materials shared today and at the future Panel outreach meeting.

• You will have an opportunity to submit written comments as well as the verbal comments you provide in the meetings.

 Those of you joining this meeting to assist the potential SERs are asked not to speak to allow the potential SERs ample time to talk.

7



# How do SERs participate? (cont’d.)



## • As potential SERS, you are in a unique position during the Pre

- Panel outreach and Panel outreach meetings

• You have the opportunity, because of your status as a small entity expected to be regulated by this rule, to influence the decisions senior EPA officials make about 

## the forthcoming regulation

8

# Pre

- Panel vs. Panel Outreach Mtg.?

• Pre

- Panel Outreach Meeting

 Conducted by EPA with SBA and OMB as invitees

 Overview of the RFA, how the Panel process works, and the role of SERs

 Background and overview of proposed rulemaking



## • Panel Outreach Meeting

 Chaired by SBAC, but all Panel members have active role

 Bulk of meeting spent discussing regulatory alternatives and input of SERs

9



# What does the Panel do with your recommendations?

• EPA, OMB, and SBA prepare a joint Panel report:

 Submitted to the EPA Administrator

 Considered during senior

- management decision

making prior to the issuance of the proposed rule

 Placed in the rule’s docket when the proposed rule is published

10

# Contact Information

• Contact my staff:

 Madeline Barch, RFA/SBREFA staff contact EPA Office of Policy 202

- 564

- 0234 Barch.Madeline@epa.gov

 Lanelle Wiggins, RFA/SBREFA Team Leader EPA Office of Policy 202

- 566

- 2372 Wiggins.Lanelle@epa.gov

11Internal Draft EPA document. Do not quote or cite.



# SBAR Panel Briefing: Risk and Technology Review (RTR)

for Mineral Wool Production

April 2011 Susan Fairchild US EPA/OAQPS/SPPD

Internal Draft EPA document. Do not quote or cite. 

## Purpose & Overview

• Purpose:

– To explain your role as a Small Entity Representative (SER) in providing feedback

– To provide an overview of potential changes to the MACT standards for Mineral Wool as a result of the statutorily

- required reviews.

• Agenda:

– SER Guidance

– Introduction to Mineral Wool

– Existing MACT standards

– Overview of the required reviews (both RTR and court

- ordered)

– Potential changes due to these reviews

– Approaches Considered

– Impacts of Potential Options

– Regulatory Flexibility Options for Small Entities

– SER Questions

 /2011 2Internal Draft EPA document. Do not quote or cite. 

### What is a Small Entity Representative (SER)?

• A SER is a representative of a small entity who may be subject to the requirements of a proposed rule that EPA has under development.

• SE Rs‟ participation in the rulemaking process helps to ensure that EPA hears the concerns and suggestions of small entities.

• The Panel (EPA, SBA, & OMB) uses your input to prepare a report that includes the Pane l‟ s recommendations on minimizing the burden on small entities. The report is part of the rulemaking record and is considered by Agency decisionmakers.

 /  7/2011 3

Internal Draft EPA document. Do not quote or cite. 

# What is Mineral Wool ?

• Mineral wool is a fibrous, glassy substance made from natural rock, blast furnace slag, or other similar materials and consists of silicate fibers typically 4 to 7 micrometers in diameter

• Products made from mineral wool are used for thermal or acoustical insulation, sound control and absorbency, and fire protection

• 6 companies, 7 facilities, 18 production lines

– 3 bonded product lines

– 15 non

- bonded product lines

• 5 of the 6 companies are Small Businesses

• All facilities are major sources of HAP emissions

 /  7/2011 4Internal Draft EPA document. Do not quote or cite. What are the existing MACT Standards for Mineral Wool?

• The MACT regulates some of the processes that emit hazardous air pollutants (HAP)

• It was promulgated on 6/01/1999, with 3

- year compliance deadline (6/01/2002)

– CO, PM, and formaldehyde were used as surrogates for HAP emitted from regulated processes

• It reduced HAPs by 51 tons per year, and PM by 205 tpy

• MACT established at floor level of control

Cupola Existing Sources 0.10 lb PM per ton of melt

New Sources 0.10 lb PM per ton of melt
0.10 lb CO per ton of melt, or

Reduce uncontrolled CO emissions ≥ 99% Curing Oven Existing and New Sources 0.06 lb formaldehyde per ton of melt, or
Reduce uncontrolled formaldehyde emissions ≥ 80%

 /  7/2011 5

Internal Draft EPA document. Do not quote or cite. Why reevaluate the existing MACT Standards?

1. Petition for Rulemaking (Jan. 14, 2009) requests the standard to be reviewed.

– The court vacated the Brick MACT based on a number of factors, including the methodology used to calculate the MACT floors, unregulated pollutants and processes, and unproven surrogacy relationships.

– We call these „Brick MAC T‟ issues, and we are required to address them.

– The petition identified the Mineral Wool MACT as having similar issues. 2. Risk and Technology Review Required by the Clean Air Act and compelled by a court ordered deadline. 3. We are making all these revisions at one time to 1. Conserve resources 2. Avoid making two consecutive changes to the MACT. That could impose additional controls under a second amendment that would cost industry more than if all amendments are done together in one rulemaking

 /  7/2011 6Internal Draft EPA document. Do not quote or cite. 

## What is an RTR?

• The Clean Air Act requires EPA to evaluate the risk remaining within 8 years after implementation of the MACT standards. We call this a risk review

.

• The act also requires us to review the industry for new technological developments that may reduce HAP beyond MACT. We call this the technology review

.

• EPA is conducting these 2 reviews together under the Risk and Technology Review, or RTR program.

– We consider costs in both the risk and the technology reviews.

• The RTR will be reflected as amendments to the MACT standard.

• W e‟ re late on these reviews, and are under a court ordered deadline to repropose the Mineral Wool RTR by October 31, 2011.

 /  7/2011 7

Internal Draft EPA document. Do not quote or cite. 

### Why Repropose the Mineral Wool RTR?

• The RTR for Mineral Wool was proposed in 2008, but ...

– It was based on insufficient data (NEI) to support a conclusion of no risk

– The one (test) data point that was used to estimate industry emissions came from a facility that closed down during development of the proposed rule

– We received no comment after proposal that provided additional data on which to support a no risk conclusion

– It did not address either “Brick MACT” issues or the startup, shutdown, or malfunction vacature.

• We made the decision to repropose using emission test data

• The industry collected their data and conducted emission tests to support the reproposal in lieu of a formal Section 114

 /  7/2011 8Internal Draft EPA document. Do not quote or cite. 

### What is Involved in the Technology Review?

• The Act requires that we review the MACT standard every 8 years to consider advances in practices, processes and control technologies

• This allows us to tighten existing MACT standards with cost

- effective controls

• As we conduct the Technology Review, we also assess MACT to:

– Address unregulated emission points

– Require consistent monitoring and add electronic compliance reporting

– Fix administrative requirements that are duplicative or inconsistent

 /  7/2011 9

Internal Draft EPA document. Do not quote or cite. What is involved in the additional reviews required by the courts?

Two Court decisions obligate EPA to review MACT standards to: 1) Determine if EPA set deficient MACT standards (Brick MACT issues)

a. Review MACT floor calculations b. Review surrogacy relationships

c. Set emission limits for all HAP

- emitting processes

2) Set Startup and Shutdown requirements because the applicable provisions were in the vacated General Provisions.

 /  7/2011 10Internal Draft EPA document. Do not quote or cite. How do the Risk, Technology and MACT Reviews Interact?

• For both residual risk and technology reviews, we evaluate control options

– Risk is evaluated by both the toxicity of pollutants and the proximity of the facility to the nearest person.

– Technology is evaluated by new controls and systems in the industry

• In most cases, we have flexibility in how we revise MACT standards

• An example: Actual vs. Allowable Emissions

– Actual emissions levels being achieved by the facilities and are measured. Allowable emissions are the amount allowed to be emitted in the company ‟ s Title V permit.

– If „actuals ‟ are much less than „allowables ‟ , EPA could reduce the level allowed down to the level being achieved by the facilities

• This typically is a low cost way to reduce potential risks

• After evaluating control options for both reviews (often the same options), we choose options that are cost

- effective and reduce risks the most.

 /  7/2011 11

Internal Draft EPA document. Do not quote or cite. 

# For example....

• There is no existing source emission limit in the MACT for COS. This is a „Brick MACT ‟ issue and w e‟ re required to fix it.

– We have reviewed the ICR data to see what controls exist now for COS reduction

• The risk of exposure to COS emissions from the mineral wool industry will also be assessed.

• These reviews inform one another because the control technologies that reduce COS emissions also reduce risk from exposure to COS

• Most of the industry currently incinerates COS from the cupola emissions even though that is not required under the MACT rule.

– This is sufficient to develop a MACT floor for COS

– Because most facilities already do this, it is not an additional cost for these

– The cost to control COS under this rule would be incurred at 4 cupolas

– If one of these 4 cupolas also feeds into a bonded product line, the incinerator at the curing oven could be used for COS incineration as well

 /  7/2011 12Internal Draft EPA document. Do not quote or cite. Brick MACT Issue: MACT Floor for Formaldehyde

• We must determine if the MACT floor emission limit was calculated correctly for formaldehyde, and amend MACT if needed.

– Because formaldehyde is only emitted from bonded product lines, any changes to the MACT would only affect the 3 product lines that use a curing oven to cure their bonded products

 7/2011 13

Internal Draft EPA document. Do not quote or cite. Brick MACT Issue: Surrogacy Relationships

• We were petitioned on the use of unproven surrogates for certain HAPs. We have 3 options to address this issue 1. We can establish surrogacy relationships:

a. CO as a surrogate for COS b. Formaldehyde as a surrogate for phenol

c. Formaldehyde as a surrogate for methanol 2. Or we could use a different surrogate as long as we validate the relationship

– THC could be used as a surrogate for all organic HAPs 3. Or we can establish HAP

- specific emission limits.

• We can address this issue using a combination of the above options

• Method 318 was developed for Mineral Wool MACT and tests for phenol, methanol, formaldehyde and COS. A new test method may not be needed.

 /  7/2011 14Internal Draft EPA document. Do not quote or cite. Brick MACT Issue: MACT Floor for Unregulated Processes

• Fiber Collection and Cooling were not regulated under MACT, and we must set the MACT for these processes

• Although collection and cooling occur at all mineral wool lines, only the 3 lines with a curing oven incur a brick MACT issue (because these are the only lines with formaldehyde)

• Cooling of the bonded product after it is cured in the oven emits organic HAP

– The emission limit for these HAP will be based on the MACT floor control

– One of the three bonded lines control collection and cooling using the curing oven incinerator

• Routing organic HAP emissions from these processes through the incinerator controlling the curing oven may be a low

- cost option for the remaining 2 uncontrolled collection and cooling lines

 /  7/2011 15

Internal Draft EPA document. Do not quote or cite. Brick MACT Issue: MACT for Unregulated Pollutants

• Only new cupolas have a COS emission limit under the MACT standard

• Existing cupolas are unregulated for COS, even though we know they emit COS

• Therefore, we are required to determine the MACT floor emission limit for COS for existing sources

 /  7/2011 16Internal Draft EPA document. Do not quote or cite.



## Other Potential Changes to the MACT

• Startup and Shutdown requirements may change due to GP vacature

• Performance test requirements could change to reflect any new pollutant emission limits and any increase in the frequency of performance testing

• Reporting and recordkeeping requirements could change to reflect any new requirements

 /  7/2011 17

Internal Draft EPA document. Do not quote or cite. 

# Impacts of Potential Options

IF... THEN... POTENTIAL IMPACTS...
We require COS emission limit at cupolas at the level achieved by incineration. 4 uncontrolled cupolas will have to either duct cupola exhaust through an existing incinerator, or install a new incinerator COS will be reduced further SO2 emissions will increase Costs: Existing incinerator

- new ductwork design and pressure balance of the system New incinerator

- design and installation We require control of organic HAP from collection and / or cooling. The 2 existing uncontrolled bonded lines will have to reduce organic HAP to meet the MACT floor
Companies may change their formulation of binder to exclude organic HAP Cost: new ductwork design and pressure balance of the system

R & D costs for reformulation of binder

Research Question: The formaldehyde /phenol

methanol surrogacy is invalid Our first choice is to establish THC as a surrogate for all organic HAP

Emissions limits that are specific to each HAP could be established (2 nd choice) Parameter monitoring would likely still be required

- not a change from MACT

Parameter monitoring would likely still be required. Research Question: We validate the CO/COS surrogacy relationship The monitoring requirements for new cupolas will apply to existing cupolas Parameter (incinerator) monitoring required at incinerators

Research Question: We can not validate the CO/COS surrogacy We will remove the CO limit from the MACT rule and insert instead a COS emission limit for existing cupolas Parameter monitoring will likely still be used. MACT will reflect the COS level achieved by an incinerator

 /  7/2011 18Internal Draft EPA document. Do not quote or cite.



### Pros and Cons of Potential MACT Floor Changes

Change Pros Cons

T he floor for COS at existing cupolas is the average of the best performing 5 cupolas. 1

- Sources may be able to use existing incinerators to comply 1

- when COS is incinerated, it forms SO 2 . 2

- So a solution to a toxics problem creates a potential criteria program problem 1

. MACT for organics from collection at bonded product lines is added to the rule. 1

- Sec 112 does not define how the MACT is calculated for fewer than 5
sources 1

- New incinerator is likely to be costly

MACT for organics from cooling at bonded product lines is added to the rule 1

- Sec 112 does not define how the MACT is calculated for fewer than 5 sources 2

- Emission limit can be based on current level achieved 3

- All bonded product lines have low organic emissions because most are driven off at curing stage. 1

- Does not reduce risk

The MACT floor for formaldehyde is tightened to lower limits 1

- Facilities can likely meet lower emission limits now (actual formaldehyde emissions are much lower than the level allowed under MACT) 2

- A lower emission limit can also be met by higher temp of incineration 1

- Cost of fuel if incinerator temp is increased to meet limit

 /  7/2011 19 1 We are concerned about the potential health impact of this issue and are working toward a resolution.

Internal Draft EPA document. Do not quote or cite. What are some critical factors in the Mineral Wool RTR?

• Timing of Risk Review

– We expect risk modeling to be complete this month.

– The results of the risk modeling will show us what exposures to pollutants MUST be reduced to reduce risks.

• Risk Review Results

– Risk is a factor of the both the toxicity of a substance AND the exposure potential

• Technology Review

– Under 112(d), we must review new technology within the industry within 8 years of MACT, regardless of the rulemaking petition. Because we ‟ re late on this review, we are under a court

- ordered deadline.

– The MACT amendments will be based on the new industry information

 /  7/2011 20Internal Draft EPA document. Do not quote or cite. How can EPA ease impacts to industry?

• Depending on whether the changes are a result of the risk review or technology review, there are different compliance schedules

.

• Subcategorization of sources may be appropriate, based on new data.

• If additional emission reductions are needed to reduce risk, that doesn ‟t necessarily mean additional add

- on controls will be required

• These opportunities, when present, will be considered when we develop the RTR rules.

 /  7/2011 21

Internal Draft EPA document. Do not quote or cite. 

### How can EPA ease impacts to industry? Compliance schedules

• Under section 112(f) standards developed (i.e., to address Residual Risks, high risks, etc..), facilities have 90 days to comply with the standard

– This can be extended by the permit writer up to 2 years for existing sources to comply with 112(f) standards if that extra time is needed to install controls, etc....

• On the other hand, if we promulgate standards under a technology review 112(d)(3) (i.e., MACT), 112(d)(6) or under 112(h) (i.e., Work Practice standards) , we can provide up to 3 years for existing facilities to comply.

• Therefore, if a rule revision is clearly "risk" based, the max time we can allow for compliance is up to 2 years, but

• If we can justify that a revision is based on Control Technologies, we can provide up to 3 years, which may be preferable in some cases (e.g., sources need more than 2 years to install the controls, etc.).

• We consider these differences as we develop the RTR rules.

 /  7/2011 22Internal Draft EPA document. Do not quote or cite. 

### How can EPA ease impacts to industry?

Subcategorization

• We may “distinguish among classes, types and sizes of sources within a category or subcategory in establishing” MACT standards (112(d)(1))

• So if there are fundamental differences among processes in an industry, we can subcategorize among them.

• Some examples of subcategorization w e‟ ve used in other rules:

– Reverberatory furnace vs. electric arc furnace

– Clay refractory vs. non

- clay refractory

• We may also subcategorize according to

– Raw material source (although industry could choose different raw materials to reduce their emissions)

 /  7/2011 23

Internal Draft EPA document. Do not quote or cite. 

### How can EPA ease impacts to industry?

to Reduce Risk

• Because some good routine business practices conserve resources and limit loss of material, EPA can use them in the rule as a low or no

- cost option as HAP reduction measures to reduce risk.

• Examples include:

– Mist spraying of dry toxic raw materials at piles, storage, or inlet of melting processes (glass plants). These measures are already used at various industries to prevent emissions of toxics and loss of raw material.

– Covers, spill guards, curved tank walls to prevent release of toxic fumes (from electroplating baths)

 /  7/2011 24Internal Draft EPA document. Do not quote or cite. 

# Appendix

• Questions for SERs

• Mineral Wool Project Schedule

• List of Affected Entities

 /  7/2011 25

Internal Draft EPA document. Do not quote or cite. 

### Questions for SERs

• What do you spend in MACT compliance costs ?

– Some cupolas are controlled with an incinerator following the baghouse (only PM control was required for existing cupolas under the MACT.) What do you spend annually to operate the incinerator?

– Some cupolas also have flue gas desulfurization following the incinerator to remove the SO2 tha t‟ s formed by the combustion of COS. What are your costs to operate desulfurization?

– What are the costs you incur as a result of MACT recordkeeping?

• What opportunities for flexibility do you have in MACT compliance?

• What aspects of your process limit the amount of formaldehyde that can be sprayed at the collection and binder application stage?

 /  7/2011 26Internal Draft EPA document. Do not quote or cite. 

### Questions for SERs (cont ‟d)

• EPA must review the MACT floor for the Mineral Wool industry and determine whether it was set at the correct level (i.e., that MACT for formaldehyde from curing ovens does not need to change).

• To help us do this:

– How did the emissions of formaldehyde change from pre

- MACT levels to after the MACT was promulgated in 1999?

– Do you have any test reports for curing ovens from the pre

MACT time period that show those levels?

• To what extent are production processes customized to achieve a marketable product?

 /  7/2011 27

Internal Draft EPA document. Do not quote or cite. 

### Questions for SERs (cont ‟d)

• Carbonyl sulfide (COS) is highly flammable and is released at very high levels (avg. 70 tpy) from the cupola. We are looking at measures that would be effective in reducing COS. Has anyone considered rerouting the exhaust gases back through the cupola to reclaim waste energy and to destroy COS?

• Are any cupolas enclosed, with fumes vented to the control device(s)?

• The constituents of the raw materials fed into cupolas factor into the cupola emissions. We are trying to understand the stoichiometry of the COS and SO2 relationship from the cupola, and how that can be resolved. To that end:

– From what industries are your slags purchased?

– Is testing of the slag performed prior to sale to determine metals or sulfur content?

– Do you choose your coke supplier according to the coke preparation or i t‟ s sulfur content?

• Have you changed your raw materials to change the cupola emissions, and what were the results of those changes?

– Please include changes even if they did not yield the result you wanted.

 /  7/2011 28Internal Draft EPA document. Do not quote or cite. 

### Questions for SERs (c ont‟d)

• Are there other Federal rules that overlap with the Mineral Wool MACT?

– If so, do any of the associated compliance requirements overlap or contradict one another? For instance, do you have to report the same information in different units of measurement, or on different reporting frequencies?

– If so, what reporting frequency, units, or other requirements of the reporting do you suggest to align overlapping Federal rules?

– Does your manufacturing and operating equipment produce an electronic report or similar output that could be used to replace existing Federal reporting requirements?

• Are you aware of other means of easing / streamlining existing Federal rule requirements ?

 /  7/2011 29

Internal Draft EPA document. Do not quote or cite. 

### Mineral Wool Production Project Schedule

• Voluntary ICR sent out (May 2010)

• ICR & test data still coming in (Feb 2011)

• Complete data entry and QA review (Feb 2011)

• Pre

- Panel Outreach Meeting (April 2011)

• Convene SBAR Panel (May 2011)

• Panel Outreach Meeting (June 2011)

• Panel Concludes (July 2011)

• Administrator signature (October 2011)

 /  7/2011 30Internal Draft EPA document. Do not quote or cite.



## Mineral Wool Production Stakeholders

Name Company City # Employees

Angus Crane NAIMA (trade assn) Alexandria, VA

--

Lee Houlditch Amerrock Products Nolanville , TX 33

Christopher Bullock Industrial Insulation Group Phenix City, AL 130

Tom Lund Isolatek In t‟l Huntington, IN ~200

Tim Scott Rock Wool Mfg Leeds, AL 47

Steve Edris Thermafiber, Inc. Wabash, IN 130

John Bolden USG Interiors* Chicago, IL >1,000

 /  7/2011 31 * USG is the only company in the industry that is not a small business. They operate 2 plants in Walworth, WI ,and in Redwing, MN

.Materials shared prior to or at June 16, 2011 Panel Outreach Meeting

• Agenda

• SBAR Panel process refresher presentation

• Mineral Wool rulemaking information update presentation

• North American Insulation Manufacturers Association presentationPanel Outreach Meeting with Potential Small Entity Representatives (SERs) for the rulemaking Risk and Technology Review for Mineral Wool Production

Date: Thursday, 06/16/2011

Time: 10:00 a.m. – 12:00 p.m. (Eastern)

RSVP: Please RSVP by 06/14/2011 with Madeline Barch at Barch.Madeline@epa.gov or (202) 564.0234. Note whether you’re attending by conference call or in person.

Location: For those people attending in person:

 Room 1426, EPA West 1301 Constitution Ave NW Washington, DC 20004

 Non-EPA attendees:

o Any invited SER may attend in person if desired.

o If you would like to attend in pers on, you must RSVP for directions and building access information.

OR For those people joining by conference call:

 1-866-299-3188, access code 2025662372

 At the prompt, enter the conference co de followed by the pound [#] sign. Note: You will hear music until the leader dials into the call.



### Agenda

10:00 Welcome and Introductions 10:20 Presentation on the Rulemaking - Susan Fairchild, EPA.

10:50 Discussion - Angus Crane, NAIMA, will begin the discussion. 11:50 Summary and ClosingOffice of the Administrator Office of Policy Office of Regulatory Policy and Management

http:// www.epa.gov/op/orpm.html 

# A Refresher on the Small Business Advocacy Review Panel Process

Alexander Cristofaro, Small Business Advocacy Review Chair (SBAC) Panel Outreach Meeting, June 16, 2011



# Today’s Topics

• What is a Small Business Advocacy Review (SBAR) Panel?

• Your role as a Small Entity Representative (SER)

• The difference between an SBAR Panel and a proposed regulation

2

# What is an SBAR Panel?

• A Panel consists of representatives from the:

 Agency authoring the regulation (i.e., EPA)

 OMB’s Office of Information and Regulatory Affairs (OIRA)

 SBA’s Office of Advocacy

• The Regulatory Flexibility Act (RFA) instructs the Panel to:

 Review “any material the agency has prepared” related to the development of the regulation

 Collect advice and recommendations from SERs

 Prepare a report within 60 days of the Panel convening

See Title 5, section 609(b)(3)

- (5), of the United States Code (USC). This is also known as section 609(b)(3)

- (5) of the Regulatory Flexibility Act (RFA).

3



# What is an SBAR Panel? (cont’d.)

• The types of materials the Panel will review and on which you, the SERs, will provide advice and recommendations are specified by law

• Section 609(b)(4) of the RFA states that “the panel shall review any material the agency has prepared...on issues related to”:

 “a description of and, where feasible, an estimate of the number of small entities to which the proposed rule will apply” (Sec. 603(b)(3))

 “a description of the projected reporting, recordkeeping and other compliance requirements of the proposed rule, including an estimate of the classes of small entities which will be subject to the requirement and the type of professional skills necessary for preparation of the report or record” (Sec. 603(b)(4))

 “an identification, to the extent practicable, of all relevant Federal rules which may duplicate, overlap or conflict with the proposed rule” (Sec. 603(b)(5))

 “a description of any significant alternatives to the proposed rule which accomplish the stated objective of applicable statutes and which minimize any significant economic impact ...on small entities” (Sec. 603(c))

4

# Your role as a SER

• EPA values this SBAR Panel process because it provides us with important small entity perspectives and information

• Your verbal and written input is considered and valued by the Panel as the Panel develops the Panel report

• Copies of your written comments will be appended to the Panel Report and a chapter in the Panel report will summarize them.

• The Panel will consider the comments you provide to us, but the findings that ultimately appear in the report are those of the Panel members: EPA, OMB, and SBA

• The Administrator will carefully consider the input we gather from the SERs and the Panel members, but is not legally bound to adopt the recommendations of the Panel

5



## The difference between an SBAR Panel and a proposed regulation

• SBAR Panel

 Reviews materials related to:

• the impacts of the regulation on small entities

• Federal rules which may intersect with this proposed regulation

• Alternatives to the regulation that may minimize small entity impacts

 EPA uses the Panel report to inform our decision

- making about the forthcoming proposed regulation

• Proposed regulation

 Fully formed regulatory proposal or set of regulatory alternatives

 You will have an opportunity to comment on the proposal, just like any other public citizen

6

# Thank You

• Participation is voluntary and we appreciate the time and energy you put towards this rulemaking.

• Thank you

- we know it is, and has been, an intense resource commitment.

• Contact my staff:

 Madeline Barch, RFA/SBREFA staff contact EPA Office of Policy 202

- 564

- 0234 Barch.Madeline@epa.gov

 Lanelle Wiggins, RFA/SBREFA Team Leader EPA Office of Policy 202

- 566

- 2372 Wiggins.Lanelle@epa.gov

7

# Mineral Wool Information Update

Addendum to the April 2011 SBAR Panel Briefing

May 2011



# Review

• 13 Production Lines fed by 11 cupolas

– Cupolas are regulated for PM as a surrogate for metals

– They also emit COS and acid gases, for which there is no MACT standard



### • 3 of the 13 production lines also operate a curing 

## oven

– Curing ovens are currently regulated for formaldehyde. That limit is used as a surrogate for phenol and methanol.

– The collection process emits HAP but is not currently regulated under MACT

/ϭς /2011 DELIBERATIVE Internal Draft EPA document. Do not quote or cite. 2

### Preliminary Risk Assessment Resultsςͬϭς /2011 Result HAP Drivers

Number of Facilities Estimated to be in Source Category 7 N/A

Maximum Individual Lifetime Cancer Risk (in 1 million) 4 formaldehyde

Maximum Hazard Index 0.04 formaldehyde

Maximum Acute Hazard Quotient [scaling factor = 3] 9 0.6 formaldehyde (REL)

formaldehyde (AEGL

- 1, ERPG

- 1))
Number of Facilities With Potential for Acute Effects 1 formaldehyde Number of People Living Within 50 Kilometers of Facilities Modeled 3,700,000 n/a

Greater than or equal to 1 in 1 million 1,650 n/a
Estimated Cancer Incidence (excess cancer cases per year) 0.0004 n/a
Formaldehyde Contribution to Cancer Incidence: 64% Arsenic compounds Contribution to Cancer Incidence: 33% n/a

DELIBERATIVE Internal Draft EPA document. Do not quote or cite. 3



# Preliminary Risk Conclusions

• The risks due to the mineral wool industry are low, and do not compel us to amend the MACT based on risk alone

• The default acute factor is 10X; the acute factor we used here is 3, and is based on industry supplied data.

• The risk review included all processes and emissions from testing results

• The risk (4 in one million) is due to emissions of arsenic and formaldehyde at cupolas and collection, respectively.

• One facility is driving the risk (formaldehyde from collection).

• Collection is a Brick MACT issue and will be addressed under those revisions.

• After the risk from collection is addressed, our risk review on the mineral wool industry will be concludedςͬϭς /2011 DELIBERATIVE Internal Draft EPA document. Do not quote or cite. 4

# Amendments Driver

• Brick MACT issues are driving the changes to the standard

– Missing floors for pollutants and / or processes

– Surrogacy changes



### – Startup and Shutdown provisionsςͬϭς /2011 DELIBERATIVE Internal Draft EPA document. Do not quote or cite. 5



# Status of MACT Floor Development

• The emission limit work is PRELIMINARY and the numbers are DRAFT

• All information is pre

- decisional. EPA has NOT made conclusions or decisions on the emission limits, and have expressed some as ranges.

• The creation of SO 2 from COS incineration is a major issue.

– Prolonged exposure to SO 2 has potential severe health effects.

– PSD and NSR programs would have impactsςͬϭς /2011 DELIBERATIVE Internal Draft EPA document. Do not quote or cite. 6

## Plans to Determine Validity of the MACT Floor

– We plan to review the docket, the preamble to the proposal, supplementary proposal, final rule and industry data to determine the validity of the MACT floor as promulgated in 1999.

– From materials we’ve reviewed so far, we have not found reason to believe the MACT floors were invalid for the processes and pollutants it covered; nevertheless we must satisfy the court on this pointςͬϭς /2011 DELIBERATIVE Internal Draft EPA document. Do not quote or cite. 7



## Summary of Potential Changes and Impactsςͬϭς /2011 DELIBERATIVE Internal Draft EPA document. Do not quote or cite. 8 All numerical standards are expressed in units of lbs. pollutant per ton melt

### Plans for Emission Limit Reviews

• We do not anticipate changes to be made to the existing and new cupola PM emission limits

• We plan to keep the PM limit as a surrogate for metals

• Changes will likely be made to the MACT floors to reflect changes in surrogacy

• CO: COS

• Formaldehyde: phenol

• Formaldehyde: methanol

• These changes are unlikely to result in a more stringent standard because we intend to use existing data to establish the HAP

- specific emission limits currently reflected by compliance with the MACT

• MACT floor for phenol and methanol can be established based on testing and the compliant formaldehyde limits

• We plan to determine the floor levels for each pollutant at MACT compliant levels based on the emissions testing conducted under the ICR

• Emission Limits will be added for pollutants and processes that were not regulated under MACT. We will use the UPL approach as appropriate:

• Emission limits will be added to the standard for COS from existing cupolas

• Emission limits may be for the first time added to the standard for HF and HCl from existing and new cupolasςͬϭς /2011 DELIBERATIVE Internal Draft EPA document. Do not quote or cite. 9



## UPL Can be Used to Develop Emission Limitsςͬϭς /2011 DELIBERATIVE Internal Draft EPA document. Do not quote or cite. 

## • UPL = X T 

## +t( p,df

) x S 2 

## (1/ n + 1/ m )

• X T = the average of the best performing existing sources;



### • t( p,df ) = the t statistic for a confidence level p , and df degrees of freedom;



### • S 2 = the pooled variance;



### • n = the number of test runs (all sources) USED IN THE ANALYSIS; AND



### • m = the number of (future) compliance test runs (for run

- by

- run data m=3)

10

# MACT Floor Using the UPL

• Using the UPL to determine a MACT floor:

– If the UPL is used to determine the new MACT floors, the 99% confidence level UPL represents the value below which the average value from a compliance test would fall 99 % of the time

– Depending on the data, we elaborate on this equation in order to account for number of runs, skewness , variability, etc.

– The equation takes into account many factors (including variability) and adds a ‘cushion’ in order to account for these factors. The amount of ‘cushion’ it adds depends upon the data itself. In general, the fewer data points and/or the broader the range of the data points, the more ‘variability’ that is reflected in the UPL.

– However, few data points may not show extreme variability if the data are close

• The UPL may not be the best approach if...

– ...the data are few, and if some are unreliable, the variability may not be dependable within a reasonable confidence level

– ...the calculated UPL is much higher or much lower than an existing MACT for sources shown to be in compliance with the MACT

– ...the data show an abnormal distribution which can not be normalizedςͬϭς /2011 DELIBERATIVE Internal Draft EPA document. Do not quote or cite. 11



# Preliminary Emission Limit Work *

• We may establish a COS emission limit for existing cupolas

– Based on the best 5 controlled sources, which incinerate COS

– Testing shows these achieve 0.02 lb COS /ton melt emission limit

– UPL calculates 0.05, considering variability

– This level corresponds to 0.35 lb CO /ton melt

• This approach is not without it’s problems: incineration of COS creates SO 2 .

• We are evaluating the secondary pollutant issues as well as the data • We may establish MACT for new and existing collection processes

• The DRAFT limit takes variability and normality into account

• Because of the limited data and uncertainties associated with the data, a potential formaldehyde limit could be in the range between 0.5

- 1.01 lb/ton melt

• Limits outside this range are possible

* Different approaches to developing the MACT floor for fewer than 5 sources are possible. These data reflect one approach only.ςͬϭς /2011 DELIBERATIVE Internal Draft EPA document. Do not quote or cite. 12

# Relative Cost of Potential Changes

Changes Expected

No / Low Cost

• HAP

- specific Emission limits (COS, Phenol, Methanol, Formaldehyde) replacing surrogacy

• New Emission limits for HF, HCl from existing and new cupolas Changes Expected

–

Cost

• MACT floor for COS from existing cupolas (5 affected sources)

• MACT floor for organics from collection (1 affected source) No Changes Expected

• PM limit as a surrogate for metal HAPςͬϭς /2011 DELIBERATIVE Internal Draft EPA document. Do not quote or cite. 13



# What are the Cost Drivers?

• Testing Costs

• Ducting newly regulated emissions to existing control devices • Cost of control for COS from existing cupolas



### • Cost of control for formaldehyde, phenol, methanol from collection LOWER COSTS HIGHER (DRIVER) COSTSςͬϭς /2011 DELIBERATIVE Internal Draft EPA document. Do not quote or cite. 14

## Measurement and Monitoring Plans

• Formaldehyde, methanol, phenol and COS will be measured using M318, the method in the rule that was developed specifically for this industry.

• HF and HCl would be measured using FTIR (also M316).

• Alternative methods to measure pollutants can be used if they are valid, submitted to EPA for review, and approved by EPA for this purpose.

• We plan to continue parameter monitoring of processes and controls to show compliance with the standard.ςͬϭς /2011 DELIBERATIVE Internal Draft EPA document. Do not quote or cite. 15



# Compliance Deadlines

• Because the amendments will be made under 112(d)(3) (MACT standards for new and existing sources) the compliance deadlines can be up to 3 years from promulgation, with a possible extension of 1 additional year for installation of air pollution control equipment

• This is approximately 5 years from nowςͬϭς /2011 DELIBERATIVE Internal Draft EPA document. Do not quote or cite. 16Appendix B : Written Comments Submitted by Small Entity Representatives

Comments R eceived from potential SERs following the April 27, 2011 Pre

- Panel Outreach Meeting

Comments R eceived from SERs following the June 16, 2011 Panel Outreach MeetingComments R eceived from potential SERs following the April 27, 2011 Pre

- Panel Outreach Meeting

• Angus Crane, North American Insulation Manufacturers Association (NAIMA)Comments R eceived from SERs following the June 16, 2011 Panel Outreach Meeting

• Lee Houlditch, Amer r ock Products

• Tom Lund, Isolatek International

• Angus Crane, NAIMA

• Timothy Scott, Rock Wool Manufacturing

• Steve Edris, Thermafiber, Inc.PRODUCING PRODUCTS WITH THE ENVIRONMENT IN MIND...

June 30,2011

Sent Via Email

Ms Madeline Barch Office of Policy Regulatory Management Division U.S. Environmental Protection Asencv Washington, D.C .20460

Re: Mineral Wool SBAR Panel - Proposed Environmental Regulation Changes

Dear Ms. Barch:

I am writing this letter to make additional comments to those I made in the June 15,201 1 SBAR Panel meeting regarding the potential effects the proposed

changes in environmental regulations will have on the Amerrock plant located in Nolanville, Texas. I am also doing this to provide some of the history and additional information regarding the plant and the plant operations and the severe economic conditions we have been and are

currently

facing.

I have been

involved with the mineral wool industry for over 30 years. During my career

I have worked for several

of the mineral wool companies. While I was President of Sloss Industries, the company

had two mineral wool plants. both of which are now shut down and decommissioned.

While President of Thermafiber, the company operated four mineral wool plants and owned another that had been shut down before

I joined the company.While I was with Thermafiber the company shut down two of the plants. With flnancing help from Thermafiber,
some personal funds, and some significant bank financing I was able to acquire the other plant located in Nolanville,

Texas tn2006, which now operates as Amerrock Products, LP.

One of the main reasons Iwanted to acquire

the plant in Texas was the fact that I know from many years

in the industry

that mineral wool is a unique product with a combination of superior thermal, acoustical,

and fire proofing qualities that are not available

from any other insulation material.

Also, having been involved in NAIMA I am very aware of the significant health studies that the industry

sponsored

through NAIMA over many years to ensure

that the product

does not impose adverse

health effects for plant workers or those installing

the products.

Amerrock Products 440 Jackrabbit

Rd. Nolanville. l'X 76559
(205) 5 t6-9164 lhou lditch(@amerrock. com \\'ww. amerrock.com

## Another

rason r rert :::?:::#':::;:,::;{:{:'ffif#ii:W:ff#^Jffli; ,n. tsseMACr

had been promulgated

and knowing that the plant operations are efficient,

the plant performs

stack testing every

year, the plant has

an emission

stack that is 195 feet high, and the plant produces only loose

fiber so there are no binders involved, I believed that the residual risk review

would result with a finding of minimal risk and no additional controls would be necessary.

The Amerrock plant is the only plant in the United States producing

loose rock wool for the residential insulation market. When I acquired the plant in January 2006 the home construction market was robust and the plant operated 5-6 days per week. At the time I acquired the plant I anticipated that there

would be a downturn in housing starts due to the long upward cycle the market had experienced. I factored in a 20% downturn where in actuality we have experienced an almostT0% downturn. The plant has operated at a loss for 3 Yzyears with the loss in 2010 exceeding

$ i million. The company has been placed in the special assets division of the bank carrying the note and the company credit line has been frozen leaving

the company with no ability to borrow any funds.
And as I mentioned in my comments at the SBAR meeting, if an incinerator were required there is not a natural

gas line in the vicinity of the pant and I don't know that there are other viable options for incineration. In actuality this is merely academic because if new regulations require a capital investment

of any magnitude the company will have to close resulting in the loss of 33 jobs and

the possibility

that there

will no longer

be an insulation

product that brings

to the market the superior

attributes of rock wool.
I respectfully

plead that you consider the impact that new regulations will have on the mineral wool industry and this company in particular.

Sincerelv:
,(-- Lee Hou
Additional copies sent Cristofaro;

Ms. Susan via email

Fairchild to: Mr. David Rostker; Ms. Cortney Higgins; Mr. Alex

Amerrock

Products 440 .lackrabbit

Rd. Nolanville.

l'X 76559 (20s) s t 6 - 9 t 6 4 lhoulditch@amerrock.

co m www.amerrock.com3711 Mill Street, Wabash, IN, USA 46992- 7778

Phone: 260- 563

- 2111 • Fax: 260

- 563

- 8979 www.thermafiber.com VIA EMAIL
June 30, 2011

Ms. Madeline Barch Office of Policy Regulatory Management Division U.S. Environmental Protection Agency Ariel Rios Building, Mail Code: 1806A 1200 Pennsylvania Avenue, N.W. Washington, D.C. 20460

RE: SBAR Panel

–

Economic Impact of Draft Proposed Regulation Changes to Thermafiber

Dear Ms. Barch: Thank you again for allowing me to speak at the June 16, 2011 SBAR Panel meeting and to convey my concern regarding the draft proposed regulation changes recently presented to us by EPA. This letter expands upon my presentation and provides more details specific to Thermafiber with regards to the financial burden that will increase as we attempt to meet the proposed emission limits. Thermafiber, the company, was formed in 1996 when the assets of three mineral wool plants (i.e. Wabash, IN; Birmingham, AL; and Tacoma, WA) were sold from USG Interiors, Inc. to private investors. This was done in advance of the original MACT promulgation in 1999. The Birmingham plant closed in 2000 an d the Tacoma plant closed in 2002. Only the Wabash plant remains in operation and has been since its original start date in 1935. Four private equity groups have owned Thermafiber within the last 15 years. From 1998 until 2002, Thermafiber operated in conjunction with American Rockwool, Inc., a privately held company with mineral wool plants in Spring Hope, NC and Nolanville, TX. The Spring Hope plant was closed in 2002 and eventually the property was sold in 2009. The Nolanville plant was sold in 2005 and became Amerrock Products. Needless to say, navigating these changes and downsizings has been challenging. In 2009 and 2010, gross sales for Thermafiber were $38.6 and $39.4 million. After 5 months 2011, gross sales sit at $18.6 million for an annualized projection of $46.1 million. The gain in sales can be largely attributed to two mineral wool competitors ceasing operations. Walter Fiber (formerly Sloss of Birmingham, AL) closed in 2009. Fibrex Insulations of Sarnia, Ontario closed in January 2011. Once freight and sales adjustments have been factored out, net sales for the prior two years were $$33.5 and $34.4 million. Net sales are projected to be $39.8 million for 2011. Profitability has been dramatically impacted with the drastic decline in insulation demand and the steep increases in raw materials and fuel. As a percent of net sales, gross margin for the company declined from 27.8% to 20.5% from 2009 to 2010 and currently sits at 17.9%. Net income declined from 1.9% to3711 Mill Street, Wabash, IN, USA 46992- 7778

Phone: 260- 563

- 2111 • Fax: 260

- 563

- 8979 www.thermafiber.com (1.4%) from 2009 to 2010 and currently sits at (3.2%). This means the projected net income for 2011 will be ($1.25 million). Steps continue to be made to regain profitability in a down economy with material costs trending upward and fierce competition vying for any available business. Over the last 10 years, Thermafiber has invested more than $10 million to comply with new regulations and to curb emissions. Several thousand tons of pollutants each year have been reduced as a result of these improvements. Most recently in 2009, Thermafiber invested over $5 million to install incinerators on each of the two cupolas. Special waivers from our existing lenders to spend more than 5 times the annual capital investment li mit for the whole company as spelled out in loan documents had to be secured. Also, additional equity investment from current shareholders had to be raised to help fund the project. This single investment was the largest seen for the company since the la te 1970’s. Duplicating that effort for any further control equipment will be a challenge. We have digested EPA’s proposal and obtained budgetary capital and operating funds required to meet the emission reductions.

 Curing Oven

–

Thermafiber installed an incinerator (Recuperative Thermal Oxidizer or RTO) as part of the original MACT and got it running in 2003. No changes to Formaldehyde emission limits have been proposed and Thermafiber currently meets that limit. For Phenol, Thermafiber needs to reduce between 0.86

– 0.87 tons per year to achieve the proposed limits. Thermafiber has very limited stack test data for Phenol as it has never been a pollutant on the radar. To put the reduction another way, EPA is proposing that Thermafiber reduce emissions to 5.67

– 29.78 pounds per year assuming full melt rate and a maximum of 8,760 hours per year. These are exceptionally low levels to even measure. I suspect one upset condition could ruin compliance for the year. For Methanol, again Thermafiber has very limited stack test data. Based upon that data, Thermafiber needs to reduce between 0.26

– 0.27 tons per year to achieve the proposed limits. To put the reduction another way, EPA is proposing that Thermafiber reduce emissions to 11.69

– 35.29 pounds per year assuming full melt rate and a maximum of 8,760 hours per year. Again this is an exceptionally low amount. It is unsure whether additional temperature within the oxidizer is enough to achieve these reductions. Even so, operating costs would increase as natural gas feed increases. The capability of existing equipment and the associated operating cost increases have not been quantified.

 Collection Chamber

– Thermafiber presently controls particulate emissions from the chamber by use of a mechanical filter (screen house). Based upon limited stack testing, Thermafiber would have to reduce up to 7.59 tons per year of Formaldehyde to meet the proposed lower limit. For Phenol, Thermafiber would have to reduce 17.24

– 22.57 tons per year. For Methanol, Thermafiber would have to reduce 16.32

– 16.97 tons per year to achieve the proposed limits. Collectively, this means between 33.56 and 47.14 tons per year must be reduced. A budgetary quotation obtained last month from a company skilled in pollution control devices for a large enough incinerator to handle the high volume of exhaust air was $1.772 million. This was strictly for the incinerator. An additional $0.400 million is estimated for a pre-filter and exhaust stack. Annual operating and maintenance expenses were estimated at $1.043 - $1.084 million. The equipment costs equate to $37,585 - $52,794 per ton reduced. Funding the capital will be challenging and the annual impact to the financials will further drive profitability in the red.3711 Mill Street, Wabash, IN, USA 46992- 7778

Phone: 260- 563

- 2111 • Fax: 260

- 563

- 8979 www.thermafiber.com  Cupola

–

Thermafiber installed bag houses for particulate control as part of the original MACT. As previously mentioned, Thermafiber voluntarily installed two incinerators in 2009 to further reduce emissions and cut operating costs. Based upon the proposed emission limits for COS, Thermafiber would have to cut emissions on one cupola by 4.10 tons per year and on the other by 4.58 tons per year assuming full melt rates and maximum operating hours per year of 8,760. Whether or not the incinerators have the capability to further destroy this pollutant is unknown. EPA is also proposing that Hydrogen Fluoride emissions be reduced. Based upon limited stack testing, Thermafiber would have to reduce 5.63

– 5.95 tons per year of HF. EPA is also proposing that Hydrochloric Acid emissions be reduced. To meet the proposed levels Thermafiber would have to reduce 9.97

– 10.27 tons per year of HCl. On EPA’s website, they list the optimum control technology for HF and HCl as a wet scrubber. To add a wet scrubber on the current pollution control train if incinerators, flue gas desulfurization systems, and bag houses is estimated to cost $1.0 - $4.0 million. Annual operating expenses are anticipated to be $0.5 - $2.0 million. The equipment costs equate to $64,103 - $246,609 per combined ton reduced. Funding the capital will be challenging and the annual impact to the financials will further drive profitability in the red. On behalf of the 140 employees of Thermafiber, the shareholders, the customers, and the community, I urge you to reconsider the stringency of these regulations. Should you want to speak with me, I can be reached at (260)563-2111 extension 214 or via email at sedris@thermafiber.com

.

Best regards,

Steve Edris President & CEO

Cc: Mr. David Rostker Office of Interagency Affairs Office of Advocacy U.S. Small Business Administration 409 Third Street, S.W., 7 th Floor Washington, D.C. 204163711 Mill Street, Wabash, IN, USA 46992- 7778

Phone: 260- 563

- 2111 • Fax: 260

- 563

- 8979 www.thermafiber.com Ms. Cortney Higgins Office of Information and Regulatory Affairs Office of Management and Budget 725 17 th

Street, N.W. Washington, D.C. 20503

Mr. Alex Cristofaro Director Office of Regulatory Policy and Management U.S. Environmental Protection Agency Ariel Rios Building, Mail Code: 1803A 1200 Pennsylvania Avenue, N.W. Washington, D.C. 20460

Ms. Susan Fairchild Sector Policies and Programs Division Metals and Minerals Group (D243-02) Office of Air Quality Planning and Standards U.S. Environmental Protection Agency 109 T.W. Alexander Drive Research Triangle Park, NC 27711