SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

FINAL DRAFT STAFF REPORT

August 19, 2010

Proposed Amendments to Rule 4354 (Glass Melting Fur naces)

Prepared by: Joven R. Nazareno, Senior Air Quality Engineer

Sandra Lowe-Leseth, Air Quality Engineer

Reviewed by: George Heinen, Supervising Air Quality Engineer

Errol Villegas, Manager, Strategy and Incentives Samir Sheikh, Director, Strategy and Incentives

I. SUMMARY

A. Reasons for Rule Development and Implementation

The District Governing Board adopted amendments to Rule 4354 at the October 2008 Public Hearing that established more stringent emis sions limitations for glass melting furnaces. During that hearing, there was significa nt discussion regarding concerns raised by affected sources about the information us ed by the District to evaluate the potential cost impacts and cost-effectiveness of th e proposed rule amendments. As a result, the Governing Board provided additional dir ection to staff to re-evaluate the impact of the rule amendments and report back to th e Board within 18 months of adoption to accommodate additional cost information provided by affected businesses.

Based on staff’s re-evaluation of the adopted rule amendments and recommendations made at the April 15, 2010 Public Hearing, the Boar d directed staff to develop and propose future rule amendments to Rule 4354 incorporating short-term emission limitation flexibility for flat glass manufacturing facilities committed to achieving more stringent long-term emissions limitations earlier t han would otherwise be required by the

rule. This direction was based on new information submitted by Pilkington North America with regard to meeting the interim Tier 3 oxides of nitrogen (NOx) emissio n limits for flat glass manufacturers by the January 2011 compliance date in the rule.

The Tier 3 and the Tier 4 NOx emission limits will require installation of advanced and expensive emission control systems and would necess itate major changes to existing furnaces. District staff agrees with the glass man ufacturers that the most appropriate time to make changes to the furnace in order to ins tall emission control equipment is when the furnace is down for periodic repairs to th e furnace’s insulating refractory. This periodic maintenance is commonly known in the indus try as “cold repair” or “rebuild”. Flat glass furnaces can operate for 15 years or mor e between rebuilds and operateSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Final Draft Staff Report: Rule 4354 (Glass Melting Furnaces) August 19, 2010

2 Final Draft Staff Report with Appendices

for Proposed Amendments to Rule 4354 continuously between rebuilds. Therefore, the wind ow of opportunity for cost-effective installation of emission control equipment is very narrow. Installing emission control systems prior to the scheduled furnace rebuild woul d incur additional significant costs due to lost revenue because the furnace is not prod ucing any glass products during the installation of the required controls and subsequen t start-up periods which normally take

several months.

As an additional factor for consideration, no one c ould have anticipated the depth or the length of the current economic recession. Generall y, the two main consumers of flat glass are the building trades (windows for homes an d buildings) and the automotive market (windows and windshields for cars and trucks ). Both of these market sectors have been particularly hard-hit by the recession an d the slowdown in these markets has affected their suppliers, including flat glass manu facturers.

Since October 2008 when the last amendments were ad opted for the rule, Pilkington has experienced a significant economic downturn tha t forced a delay in their planned

furnace rebuild and the associated installation of emission controls. As a result, Pilkington’s current facility cannot meet the Tier 3 NOx limit by the 2011 deadline

without installation of additional emission control equipment in conjunction with a furnace rebuild. The Tier 3 NOx limit provides no real transition period because there is no intermediate technology that will allow Pilkingt on’s furnace to achieve the Tier 3 NOx limit, other than the technology required to achiev e the lower Tier 4 limit.

To address this concern, the District proposes to i ncorporate short-term emission limitation flexibility for flat glass manufacturing facilities committed to achieving more stringent long-term emissions limitations earlier t han would otherwise be required by the rule. This ”Tier 4 early enhanced” option would ac hieve additional early reductions by complying with "Tier 4 enhanced" emissions limitati ons four years earlier than would otherwise be required by the rule in return for fle xibility in meeting the interim Tier 3

emissions limitation.

There are three flat glass manufacturers in the Val ley. Besides Pilkington, the other two facilities are currently meeting the Tier 3 NOx emi ssion limit and have permit conditions that would prevent them from increasing their NOx e missions above the Tier 3 limit if it

were to be removed from the October 2008 version of the rule.

Staff finds that removing the Tier 3 limit and requ iring the lowest NOx limit four years earlier for a single flat glass furnace will not af fect the District's attainment date. In order to be considered in attainment of an air quality st andard, the District must have no

violations of the standard at its official monitori ng site for three years. In the Tier 4 early enhanced option, the lower emissions from this faci lity come just ahead of the PM2.5 attainment year of 2014 rather than afterwards, as would be expected if Pilkington opted for the Tier 4 enhanced option. By implementing th e Tier 4 early enhanced option at Pilkington, Valley residents would reap the benefit s of nearly 33 tons per year ofSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Final Draft Staff Report: Rule 4354 (Glass Melting Furnaces) August 19, 2010

3 Final Draft Staff Report with Appendices

for Proposed Amendments to Rule 4354 additional NOx reductions beginning in 2014, rather than in 2018, and the emission reductions would continue for the length of the fur nace campaign.

B. Description of the Project

District staff would amend Rule 4354 in order provi de flexibility for flat glass manufacturers to defer meeting the Tier 3 emission limitation in January 1, 2011 provided they meet the “Tier 4 enhanced” emission l imits four year earlier than otherwise required, namely by January 2014 rather t han by January 2018. The proposed compliance option would achieve additional long-term emission reduction by complying with “Tier 4 enhanced” emissions limitati ons four years earlier than would otherwise be required by the rule in return for eli minating the Tier 3 emissions limitation. The proposed amendments would not change or affect the existing emission limits and requirements for container glass manufacturing and fiberglass manufacturing facilities.

C. Rule Development Process

District staff conducted a public workshop in June 2010 in order to present and receive

comments on draft amendments to Rule 4354. Comment s received from affected source operators, consultants, vendors and manufact urers of control technologies, the California Air Resources Board (ARB) and the United States Environmental Protection Agency (EPA) have been evaluated and, if appropriat e, incorporated into proposed rule provisions.

The proposed rule and final draft staff report will be published and mailed to affected sources and interested parties prior to a public he aring to consider the adoption of proposed amendments to Rule 4354 by the District Go verning Board in September

2010.

II. CLIMATE CHANGE

The California Global Warming Solutions Act of 2006 (AB 32) created a comprehensive, multi-year program to reduce greenhouse gas (GHG) e missions in California, with the goal of restoring emissions to 1990 levels by 2020. In the coming years, the ARB and the Legislature will be developing policies and pro grams to implement Assembly Bill 32 (AB 32). There are many win-win strategies that ca n reduce both GHG and criteria/toxic pollutant emissions. However, the D istrict’s primary mission remains to achieve attainment with air quality standards to pr otect public health. Therefore, when

situations that involve tradeoffs between GHG and c riteria or toxic pollutants arise, the District will give precedence to reducing criteria or toxic pollutant emissions due to the more immediate public health concerns associated wi th such pollutants.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Final Draft Staff Report: Rule 4354 (Glass Melting Furnaces) August 19, 2010

4 Final Draft Staff Report with Appendices

for Proposed Amendments to Rule 4354 III. BACKGROUND

Since the proposed amendments only affect the emiss ion limits and requirements for flat glass furnaces, District staff will not discus s the existing Rule 4354 requirements for container glass furnaces and fiberglass furnaces.

Prior to the October 2008 Rule 4354 amendments, gla ss melting furnaces were required to meet Tier 2 oxides of nitrogen (NOx) li mits. Under the 2008 amended rule, flat glass furnaces are required to meet an interim Tier 3 NOx limit by January 2011 as well as stringent sulfur oxides (SOx) and particula te matter (PM) limits. The Tier 4 NOx limit for flat glass furnaces has a compliance date as soon as January 2014 for the standard option and as late as January 2018 for the enhanced option. Table 1 summarizes the NOx limits and compliance dates for flat glass.

Table 1 – Flat Glass NOx Limits of Existing Rule 43 54 NOx limit Lb/ton glass produced
Tier 2 limit – prior to Jan 2011 7.0 Tier 3 limit – beginning Jan 2011 5.0 Select one of the following: Tier 4 standard option by Jan 2014 3.2 Tier 4 enhanced option by Jan 2018 2.9

The Tier 3 and the Tier 4 NOx emission limits will require installation of advanced and expensive emission control systems and would necess itate major changes to existing furnaces. District staff agrees with the glass man ufacturers that the most appropriate time to make changes to the furnace in order to ins tall emission control equipment is when the furnace is down for periodic repairs to th e furnace’s insulating refractory. This periodic maintenance is commonly known in the indus try as “cold repair” or “rebuild”. Flat glass furnaces can operate for 15 years or mor e between rebuilds and operate continuously between rebuilds. Therefore, the wind ow of opportunity for cost-effective installation of emission control equipment is very narrow. Installing emission control systems prior to the scheduled furnace rebuild woul d incur additional significant costs due to lost revenue because the furnace is not prod ucing any glass products during the installation of the required controls and subsequen t start-up periods which normally take

several months.

As an additional factor for consideration, no one c ould have anticipated the depth or the length of the current economic recession. Generall y, the two main consumers of flat glass are the building trades (windows for homes an d buildings) and the automotive market (windows and windshields for cars and trucks ). Both of these market sectors have been particularly hard hit by the recession an d the slowdown in these markets has affected their suppliers, including flat glass manu facturers.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Final Draft Staff Report: Rule 4354 (Glass Melting Furnaces) August 19, 2010

5 Final Draft Staff Report with Appendices

for Proposed Amendments to Rule 4354 Since October 2008, Pilkington has experienced a si gnificant economic downturn that forced a delay in their planned furnace rebuild and the associated installation of emission controls. As a result, Pilkington’s curre nt facility cannot meet the Tier 3 emission standards by the 2011 deadline without ins tallation of additional emission control equipment in conjunction with a furnace reb uild. The interim Tier 3 NOx limit provides no real transition period because there is no intermediate technology that will allow Pilkington’s furnace to achieve the Tier 3 li mit, other than the technology required to achieve the lower Tier 4 limit. As previously s tated, Pilkington requested an adjustment to the compliance schedule in order to a llow continued operation of the Lathrop facility with the 100 associated jobs.

IV. CURRENT RULE 4354 AND PROPOSED AMENDMENTS

A. Current Rule 4354

Rule 4354 was adopted in September 1994, and it was amended in April 1998, February 2002, August 2006, and October 2008. The rule appl ies to any glass melting furnace. The rule exempts electric glass furnaces, glass fur naces that are located at a stationary source with a total potential to emit, for all proc esses, of at less than ten tons per year of NOx or less than ten tons per year of volatile orga nic compounds (VOC). The current rule limits emission of NOx, VOC, carbon monoxide ( CO), and SOx. The emission limits depend on type of glass produced, furnace fi ring technology and emission averaging period. The current Tier 2 NOx emission limits range from 4.0 to 9.2 pounds NOx per ton of glass pulled (lb/ton glass); CO limi ts are 300 ppmv or 0.9 to 1.0 lbs/ton glass; and VOC emission limits are 20 ppmv or range from 0.1 to 0.25 lbs/ton glass. Operators meet current emission limits through a se lection of furnace firing technology and glass raw materials. The future emission limit s that will take effect beginning 2011 through 2018 range from 1.5 to 3.2 lbs NOx/ton glas s, depending on the type of glass furnace and the compliance option chosen by the ope rator. The PM10 limit which will take effect in 2011 is 0.5 lb/ton glass for all typ es of glass furnaces. The SOx limits that will take effect in 2011 range from 0.9 to 1.7 lb/t on glass, depending on the type of glass furnace and firing technology. For detailed requir ements, please refer to current Rule 4354, which is available on the District’s website at www.valleyair.org.

B. Proposed Amendments to Rule 4354

The main objective of this rule project is allow fl at glass manufacturers to eliminate the Tier 3 NOx emission limits provided they meet the e arly enhanced emission limits by January 2014. The current rule also requires that the flat glass manufacturers would meet low SOx and PM2.5 limits by January 2011. For flat glass manufacturers that choose the Tier 4 early enhanced option, compliance with the SOx and PM limits would be deferred until January 2014, which is the same d ate as the Tier 4 early enhanced option compliance date. Revisions were made throug hout the rule to accommodate the inclusion of the flat glass early enhanced complian ce option. These changes includeSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Final Draft Staff Report: Rule 4354 (Glass Melting Furnaces) August 19, 2010

6 Final Draft Staff Report with Appendices

for Proposed Amendments to Rule 4354 language modifications in the monitoring and record keeping sections to match the Tier 4 early enhanced option compliance date.

1. Section 5.1 NOx Emission Limits

The table in Section 5.1 of the rule would be revis ed to include the flat glass Tier 4 “early enhanced” NOx limits as shown below.

Table 2 - NOx Emission Limits in pounds NOx per ton glass produced

Type of Glass

Produced Tier 2 NOx

limit Tier 3 NOx limit Tier 4 NOx limit Standard Option Tier 4 NOx limit

Enhanced Option

Container Glass 4.0 A 1.5 B not available not available

Fiberglass 4.0 A 1.3 A, C

3.0 A, D not available not available

Flat Glass Standard Option 9.2 A

7.0 B 5.5 A

5.0 B 3.7 A

3.2 B 3.4 A

2.9 B

Flat Glass Enhanced Option 9.2 A

7.0 B 5.5 A

5.0 B 3.4 A

2.9 B

Flat Glass Early Enhanced Option 9.2 A

7.0 B not available 3.4 A

2.9 B

A Block 24-hour average

B Rolling 30-day average

C Not subject to California Public Resources Code S ection 19511

D Subject to California Public Resources Code Secti on 19511

2. New Section 5.1.4

This new provision would require a flat glass opera tor who commits to meet the Tier 4 early enhanced option NOx limits to demonstrate com pliance with the limits according to the deadlines specified in new Section 7.2.2 (i.e., by January 1, 2014). After January 1, 2011, an operator who commits to meet the flat glas s early enhanced NOx limits schedule is not eligible to choose a different comp liance option and applicable

deadlines.

3. Section 5.3.2 (SOx Requirements)

The existing language in Section 5.3.2 pertaining t o SOx emission requirements would

be reworded to make them consistent with the existi ng language on NOx requirements

in current Section 5.1.1. Because this section wou ld also indicate that the SOx limit compliance deadlines are specified in Section 7.0, Table 3 (SOx emission Limits) would be modified to remove the compliance date in the ta ble.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Final Draft Staff Report: Rule 4354 (Glass Melting Furnaces) August 19, 2010

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for Proposed Amendments to Rule 4354 4. Section 5.4.1 (PM10 Requirements)

The existing language in Section 5.4.1 pertaining t o PM10 emission requirements would

be reworded to make them consistent with the existi ng language on NOx requirements

in current Section 5.1.1. Because this section wou ld also indicate that the SOx limit compliance deadlines are specified in Section 7.0, Table 4 (PM10 Emission Limits) would be modified to remove the compliance date in the table.

5. Section 5.9.3 (SOx Monitoring) and Section 5.9.4 (PM Monitoring)

Language would be added so that flat glass manufact urers that opt for the Tier 4 early enhanced option would not be subject to monitoring for SOx and PM until they become subject to the specific emission limits.

6. Section 6.1 (Permitted Glass Production Capacity and Fuel Use Capacity)

Section 6.1 would have an outdated provision and co mpliance date removed. The provision to allow fuel-use capacity as a permit co ndition was retired in 2009 and fuel use capacity was removed from the section title.

7 New Section 7.2.1

This new section would indicate that a flat glass o perator, who does not commit to the Tier 4 early enhanced option in Section 5.1 Table 1 would need to comply with the existing compliance deadlines specified in renumber ed Sections 7.2.1.1 through 7.2.1.6 to meet flat glass Table 1 Tier 3, Tier 4 standard option, and Tier 4 enhanced option

NOx limits.

8. New Section 7.2.2

This new section would specify the following requir ements and compliance schedules for a flat glass operator who commits to the meet Secti on 5.1 Table 1 Tier 4 early enhanced option limits.

• By November 1, 2010, operators would need to submi t a letter signed by a responsible official, which contains specific infor mation specified in Sections 7.2.2.1.1 through 7.2.2.1.4 of the proposed rule.

• By June 1, 2012, operators would need to submit a completed application for Authority-to-Construct for any flat glass furnace m odifications to comply with the applicable NOx, SOx and PM10 emission limits.

• Full compliance with the Tier 4 early enhanced NOx limit, SOx limit; and PM10 limit by January 1, 2014 or by the next furnace reb uild, whichever is earlier.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Final Draft Staff Report: Rule 4354 (Glass Melting Furnaces) August 19, 2010

8 Final Draft Staff Report with Appendices

for Proposed Amendments to Rule 4354 VI. BASELINE EMISSIONS AND ESTIMATED EMISSION REDUC TIONS

District staff has considered the potential effects on other flat glass manufacturers as well as whether the proposal affects the District’s ability to meet the attainment dates committed to by the Board in the 2007 8-Hour Ozone Plan and the 2008 PM2.5 Plan. Additionally, whether the proposal has a net benefi t to Valley residents would also be a part of the assessment.

A. Baseline Emissions and Estimated Emission Reduct ions

Although the rule was amended in 2008, as directed by the District’s Governing Board,

the rule was not submitted to EPA for inclusion int o the California State Implementation Plan (SIP). Because the amended rule was not submi tted into the SIP, the reductions associated with the 2008 rule project have not been claimed for attainment demonstration purposes. Since this version of the rule will be submitted to EPA, the

District will claim the reductions from the 2008 ru le amendments as part of this rule project. Table 3 below summarizes the estimated em issions and the estimated emission reductions associated with the 2008 rule p roject. Details of the emission calculations are included in Appendix B of the staf f report.

Table 3 – Estimated Emissions and Emission Reductio ns from 2008 Final Staff Report

Pollutant Claimed 2008 Baseline Emissions, tpd Claimed Emission Reduction, tpd

NOx

Container 2.66 1.16
Fiberglass 0.53 0.01

Flat Glass 4.80 2.11

Total NOx 7.99 3.28

SOx

Container 1.54 0.38
Fiberglass 0.02 0.00

Flat Glass 1.57 0.74

Total SOx 3.13 1.12

PM10

Container 0.38 0.02
Fiberglass 0.007 0.002

Flat Glass 0.59 0.08

Total PM10 0.98 0.11SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Final Draft Staff Report: Rule 4354 (Glass Melting Furnaces) August 19, 2010

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for Proposed Amendments to Rule 4354 B. Impact of Proposed Amendments on Emissions from Other Flat Glass

Manufacturers

District staff considered the impact of the propose d amendments on flat glass manufacturers other than Pilkington, including any potential competitive disadvantage caused by the proposed amendments. There are two f lat glass manufacturers besides Pilkington located in the District. One plant alre ady meets the Tier 4 NOx, SOx and

PM10 limits because of a rebuild in 2008. The seco nd facility is already meeting the

Tier 3 NOx and the 2011 SOx and PM10 limits. It is not know at this time whether the second facility’s management will choose the Tier 4 standard or the Tier 4 enhanced option, however, at the time of the 2008 rule devel opment project, they were leaning toward the Tier 4 enhanced option due to the furnac e refractory being in good shape at mid-campaign. For these reasons, the other flat gl ass manufacturers are not expected to be affected by the proposed amendments to Rule 4 354.

C. Impact of Proposed Amendments on District Attain ment Strategies

NOx emission reductions are part of the control str ategy for attaining the 8-hour ozone standard and the PM2.5 standard. The following par agraphs describe the impact of changing the flat glass compliance dates from 2011 to 2014.

1. 2007 8-hour Ozone Attainment Plan

Computer modeling of the San Joaquin Air Basin for ozone ambient air quality standard

violations has determined that NOx emission reducti ons are far better at reducing ambient ozone levels than any other ozone precursor . Because glass melting furnaces operate 24 hours per day everyday of the year and c ombust a lot of fuel while the furnace operates at very high temperatures, they ar e a significant portion of the District’s stationary source NOx emission inventory . The expected emission reductions from the ozone plan’s Rule 4354 control measure rep resent the second largest source of NOx reductions for the plan, behind open burning . The glass furnace control measure estimated that beginning in 2008, 1.2 tons per day of NOx would be reduced, climbing to 1.6 tons per day in 2012 and growing to 2.0 tons per day in 2023. Based on the information gathered during the 2008 Rule 4354 amendments project, the estimated NOx emission reductions would be 1.2 tons per day b eginning in 2008, which includes a flat glass plant and one furnace of a container gla ss plant that underwent cold repair and came back into production mode in 2008.

Pilkington has pledged to rebuild in late 2013 and early 2014 to meet the Tier 4 early enhanced NOx limit, rather than waiting until 2018. In accommodating Pilkington’s request, it is estimated that the NOx reductions fr om their furnace would be about 1.2 tons per day. This compares to the ozone plan cont rol measure which estimates an additional 0.4 tons per day beginning in 2012.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Final Draft Staff Report: Rule 4354 (Glass Melting Furnaces) August 19, 2010

10 Final Draft Staff Report with Appendices

for Proposed Amendments to Rule 4354 In the 2008 amendments to Rule 4354, District staff estimated that there will be a reduction of 0.4 tons per day from a container glas s facility in addition to the Pilkington reductions. The 0.4 tons per day of reductions are in addition to the estimated 1.2 tons per day of reductions associated with a Pilkington rebuild.

The 2007 Ozone Plan predicts attainment in 2023, if the District implements all of its

control measures and finds additional NOx reduction s. Amending Rule 4354 to accommodate Pilkington’s request would not change t he District’s attainment date for

the 8-hour ozone standard.

2. 2008 PM2.5 Attainment Plan

For attainment of the PM2.5 standard, reductions in directly-emitted PM2.5 as well as the PM2.5 precursors of NOx and SOx are needed for the District to reach attainment. The plan did not estimate PM2.5 or SOx reductions f rom the glass melting furnaces control measure. However, the NOx reductions and t iming were similar to the 8-hour ozone plan control measure. For comparing the NOx reductions for the PM2.5 control measure and the rule amendment project, the discuss ion from the PM2.5 plan is the same as outlined in the 8-hour ozone plan above.

In addition to the NOx reductions, District staff a nalyzed whether there were benefits associated with the timing of the Pilkington’s redu ctions. Table 4 shows the estimated emissions from the Pilkington facility if it were t o be operated at 80% of its maximum glass-producing capacity under three scenarios: th e current rule (Tier 4 standard and Tier 4 enhanced) and as proposed by Pilkington (Tie r 4 early enhanced). Computer modeling for the 2008 PM2.5 Attainment Plan predict s that attainment can be demonstrated by 2014. In order to demonstrate atta inment, the District’s official air quality monitors must show no violations for three years prior to the attainment date. The added NOx reductions from the proposed Tier 4 e arly enhanced occur just ahead of the PM2.5 attainment year of 2014 rather than af terwards, as would be expected if Pilkington opted for the Tier 4 enhanced option.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Final Draft Staff Report: Rule 4354 (Glass Melting Furnaces) August 19, 2010

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for Proposed Amendments to Rule 4354 Table 4 – Pilkington Annual NOx Emissions at 80% of Maximum Glass Capacity

Current Rule Pilkington
Calendar Year Tier 3 plus

Tier 4 standard Tier 3 plus

Tier 4 enhanced No Tier 3 plus

Tier 4 early enhanced

2010 (Tier 2 – base) 766.5 766.5 766.5

2011 547.5 547.5 766.5

2012 547.5 547.5 766.5

2013 547.5 547.5 766.5

2014 350.4 547.5 317.6

2015 350.4 547.5 317.6

2016 350.4 547.5 317.6

2017 350.4 547.5 317.6

2018 350.4 317.6 317.6

Total NOx Emissions (2011 – 2018), tpy 3,394.5 4,150.1 3,887.3

During the 2008 rule amendment project, District st aff estimated that the bulk of the

SOx emission reductions would be from a furnace tha t had undergone rebuild during the rule project and that those reductions would be about 0.63 tons per day. Pilkington and container glass furnaces would contribute anoth er 0.28 tons per day of SOx reductions. If the compliance date for meeting the SOx and PM2.5 limits were revised for flat glass furnace, moving the date from 2011 t o 2014, the calculated attainment date

for the PM2.5 standard would not be affected. The expected 0.4 tons per day of NOx

emission reductions is less than 0.3% of the total cumulative emissions for the 2012 milestone year. Based on the small fraction of add itional NOx reductions from glass furnaces of the total emission reductions, it is no t expected that the PM2.5 air quality

standard attainment date would be affected.

3. Reasonable Further Progress Demonstration of the 2008 PM2.5 Plan

The federal Clean Air Act (Act) requires that attai nment plans meet reasonable further progress (RFP) by achieving incremental emission re ductions to ensure attainment of the National Ambient Air Quality Standards by the a ttainment date. The Act does not identify specific emission reduction benchmarks tha t must be met for PM attainment plans. EPA has interpreted the Act’s RFP requireme nt using the concept of achieving (generally) linear progress toward the standard. T he District’s 2008 PM2.5 Plan

contains an RFP demonstration. For the PM2.5 attai nment strategy, glass melting furnace emission reductions from SOx and directly-e mitted PM2.5 were not quantified and therefore not part of the reductions in the RFP . The proposed delay in implementing the SOx and directly-emitted PM2.5 fro m glass melting furnaces will have no effect on the RFP. However, the rule amendments will increase the cumulativeSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Final Draft Staff Report: Rule 4354 (Glass Melting Furnaces) August 19, 2010

12 Final Draft Staff Report with Appendices

for Proposed Amendments to Rule 4354 emission reductions achieved in the milestone years by including emission reductions beyond what was estimated at the time of the 2008 P M2.5 plan’s adoption.

The flat glass Tier 3 NOx implementation date for t he current rule is January 2011 with Tier 4 NOx standard option having a January 2014 co mpliance date and Tier 4 enhanced option having a January 2018 compliance da te. Removing the Tier 3 NOx reductions from the Pilkington furnace would affect only the milestone year of 2012 because the Tier 4 early enhanced option would requ ire that the furnace be in compliance by January 1, 2014 and as a result, the emission reductions would occur the milestone year of 2014. The control measure fo r glass melting furnaces in the PM2.5 Plan states that about 0.4 tons per day of NO x would come from furnaces that are not at the lowest applicable NOx limit and that the lowest limit would be implemented starting in 2012. The expected 0.4 ton s per day of NOx emission

reductions is less than 0.3% of the total cumulativ e emissions for the 2012 milestone year. Based on the small fraction of the total emi ssion reductions from glass furnaces, it is not expected that the RFP would be affected.

4. Impact of Proposed Amendments on Attainment of A mbient Air Quality

Standards

Based on the analysis above, District staff finds t hat the change in compliance dates for a single flat glass furnace will not affect the Dis trict’s attainment date of either the ozone standard or the PM2.5 standard. As a benefit, the initial Tier 4 early enhanced reductions would take place during key years of dem onstrating attainment.

VII. EMISSION CONTROL TECHNIQUES

Operators can control air emissions either by contr olling inputs to the process or by treating the exhaust from the process. Process inp uts for glass melting furnaces include raw materials, fuel, and combustion air. P ost-combustion control techniques depend on the pollutant to be controlled. The foll owing paragraphs outline potential ways that operators of glass melting furnaces can r educe furnace exhaust emissions of NOx, SOx, and PM.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Final Draft Staff Report: Rule 4354 (Glass Melting Furnaces) August 19, 2010

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for Proposed Amendments to Rule 4354 A. NOx Emission Control Techniques

On the inlet side of the glass furnace, NOx is gene rated from nitrogen-containing materials entering the furnace. The nitrogen (N 2 ) and oxygen (O 2 ) in ambient air can combine to form NOx at the high temperature. This phenomenon is called “thermal NOx.” Since high temperatures are required to melt raw materials to form glass, thermal NOx in the exhaust of glass melting furnace s is expected. There are several combustion practices that form less thermal NOx. O perators may also choose to control NOx on the outlet side of the process, i.e. , run the glass furnace to optimize the product, and then deal with the generated NOx in th e furnace’s exhaust stream.

1. Raw Materials

One of the ingredients in glass is a refining agent . The purpose of a refining agent is to remove bubbles of gas, known as seeds, from the gla ss melt. Niter (sodium nitrate,

chemical formula Na 2 NO 3 ) is a commonly used refining agent. A little over half of niter

converts to NOx and leaves the furnace in the exhau st gas. Therefore, the use of niter as a refining agent is balanced against the melting furnace’s total NOx emissions allowed by permit. Operators may substitute a diff erent refining agent, called saltcake (sodium sulfate, chemical formula Na 2 SO 4 ), to reduce NOx emissions. The replacement is not without its own set of challenge s. The operator may not be able to exchange saltcake for niter without substantially c hanging the glass recipe. Adding to

the consideration is the fact that at least some of the saltcake leaves the molten glass to

become SOx emissions.

2. Control of the Combustion Process

Commercial natural gas is very low in nitrogen-cont aining material and all active furnaces in the District are firing on commercial n atural gas as a primary fuel. This means that nitrogen contained in the fuel is not a significant source for NOx.

Operators can modify the combustion process either by changing the configuration of the burner to reduce peak flame temperature or chan ge the composition of the combustion air to reduce the amount of nitrogen gas (N 2 ) available for conversion to NOx. Thermal NOx formation increases exponentially as a function of a burner’s peak flame temperature. Therefore, lowering the peak fl ame temperature can significantly

reduce NOx formation. Burner manufacturers have de signed low-NOx burners that increase the zone where combustion takes place, the reby lowering the temperature of the flame at any given point. Lower flame temperat ures means less thermal NOx created per unit of fuel burned. Besides low-NOx b urners, operators can use electrodes submerged in the molten glass to “boost” the amount of heat added to the materials. The electric boosters generate no additional NOx, s ince they do not come in contact with air. However, District operators consider hea t from electricity expensive relative to heat generated by burning fossil fuels, so the use of electrodes within the District is perceived as cost-prohibitive.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Final Draft Staff Report: Rule 4354 (Glass Melting Furnaces) August 19, 2010

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for Proposed Amendments to Rule 4354 Ambient air (the air around us) is about 79% nitrog en (N 2 ) and 21% oxygen (O 2 ). If the operator changes the proportion of N 2 in the air used for fuel burning (combustion air) by increasing the concentration of O 2 , the amount of NOx that could form would be

reduced because there is less N 2 available to react. A partial replacement of N 2 with O 2 is called “oxygen-assisted” firing – total replacem ent is “oxy-fuel” firing. Replacing some

or all of the N 2 in combustion air with O 2 is not without cost. Most operators who convert to their furnaces to oxy-fuel or oxygen-enh anced firing have an O 2 -generating gas plant built on their property to support the ne eds of the glass-melting furnace. On the other hand, oxy-fuel furnaces don’t heat the in ert nitrogen found in ambient air, and therefore, the process uses somewhat less fuel to m elt the same amount of glass as airfuel furnaces. This means that operators can parti ally offset the cost of O 2 -generation through more efficient fuel usage.

3. Post-Combustion Techniques

Post-combustion control is the final place where op erators can reduce NOx emissions. Add-on controls increase the complexity of the proc ess by virtue of being another system that the operator must monitor and maintain. Glass manufacturers face challenges with post-combustion controls. Since th e furnace exhaust temperature is high, special care must be taken to design an appro priate control system.

Controlling NOx through add-on controls offers one important advantage to operators. With add-on controls, the operator can choose the r aw materials and furnace firing technology that make the most sense for the operati ons yet still meet low emission limits. Post-combustion control, however, does car ry one main disadvantage – extra costs. These costs are significant one-time capita l costs and on-going additional operating expenses. Since add-on controls are a se parate system from the glassmaking portion of the process, maintenance of the e mission control system can add complexity to overall manufacturing operations. Al so, add-on controls may have some indirect effects on the glass-making process. Some examples of these indirect effects are that the furnace exhaust temperature or certain raw materials may have to be

different in order to run the add-on control effici ently.

Selective catalytic reduction (SCR) is one type of post-combustion emission control

used in other industries to control NOx emissions o n combustion exhaust streams. SCR works by passing the post-combustion exhaust st ream through a catalyst bed. The catalyst promotes the reaction of NOx back to N 2 and O 2 . The catalyst is effective only in a narrow temperature range, and the exhaust stream must be relatively free from particulates and sulfur-containing compounds before the stream passes through the catalyst. To date, the use of SCR has been establi shed at glass-making facilities in Europe and Asia, but it has not been used here in t he United States. One District facility has recently installed a SCR on its glass- melting furnace, but has operated the unit only a few months.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Final Draft Staff Report: Rule 4354 (Glass Melting Furnaces) August 19, 2010

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for Proposed Amendments to Rule 4354 Selective non-catalytic reduction (SNCR) is a secon d type of post-combustion emission

control used in other industries. The use of SNCR is not a widely adopted practice in the glass industry and it is not expected that oper ators within the District would use this technology to control NOx emissions.

The 3R process, developed by Pilkington Glass Limit ed, is a proprietary, low-NOx firing technology. The process injects various hydrocarbo n fuels into the furnace waste gas stream as the agent to reduce NOx to nitrogen and w ater vapor. Since the control of NOx occurs within the furnace’s regenerators (check er packs), the 3R process can be considered a hybrid between combustion control and add-on control. The treatment is after combustion, since the fuel is injected into t he furnace exhaust. However, the reaction does not take place in a separate unit, so the 3R process is not, technically speaking, an add-on control. While flat glass furn ace operators can expect to rebuild checker packs at the same rate as the glass melting furnace (every 15 years or so), some facilities utilizing the 3R process have exper ienced early failure of the refractory (insulation) within the checker packs, forcing rebu ilds of the checker pack much sooner than the melting furnace.

B. SOx Emission Control Techniques

Within the glass-making process, there are three so urces of SOx. The sources are fuel, raw material, especially a refining agent called sa ltcake (sodium sulfate, chemical

formula Na 2 SO 4 ), and gaseous SO 2 used in the annealing oven (lehr). As noted below

, the sulfur that becomes SOx emissions enters a glas s-melting furnace with either the

fuel or the raw materials.

1. Fuel and Raw Materials

Natural gas is a low-sulfur fuel, therefore fuel is not a significant source of sulfur in the furnace exhaust. For furnaces fired on natural gas , controlling sulfur emissions on the input side of the process means controlling the use of saltcake. Replacing all or part of saltcake with alternative refining agent can create as many challenges as it solves. Arsenic trioxide is, by far, the best refining agen t. However, it is seldom used in largescale glass making because of the inherent toxicity of compounds containing arsenic. Sodium nitrate (niter) is another commonly used ref ining agent. Niter must be stored and handled appropriately for safety considerations ; niter is not as good as saltcake at stabilizing colorant ions for certain glass chemist ries; and, at glass melting temperatures, niter dissociates to form NOx. All t hese facts, taken as a whole, mean that replacing saltcake as a raw material is not a straightforward substitution.

2. Annealing Oven (Lehr)

A third source of SOx emissions is within the annealing section of the fl at-glass production. Sulfur dioxide gas (SO 2 , one form of SOx) may be pumped into the annealing oven (lehr), either to prevent surface st aining of the glass or to form aSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

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for Proposed Amendments to Rule 4354 protective coat on the rollers that pull the glass through the process. The portion of SO 2 that does not adhere to the glass surface or roller surface exits the process with the lehr’s exhaust gas. The lehr does not melt materia ls to make glass, and, therefore, is not directly subject to Rule 4354. However, the de sign of the glass manufacturing line may be such that the lehr exhaust gases go through the glass-melting furnace and exit the process with the furnace exhaust. If the lehr in a glass-making process for flat glass is designed to exhaust into the glass-melting furna ce, the lehr exhaust becomes a source of SOx to the glass-melting furnace. To red uce SOx emissions in the furnace by controlling the SO 2 level in the lehr can be problematic. The SO 2 concentration in the lehr is optimized for best glass processing, and ma king large changes in the SO 2 concentration to meet emission limits may be detrim ental to maintaining glass quality and processing efficiency.

3. Post Combustion Control

If an operator determines that inlet-side control t echnique is not feasible or that the changes are not practical, there are control device s for removing SOx from the exhaust side of the process such as scrubbers. Scrubbers a re air pollution control devices that use an absorbent to remove aerosol and gaseous poll utants from an air stream. The gases are removed either by absorption or chemical reaction. There are two types of scrubbing suitable for glass manufacturers: dry an d semi-dry (in other industries, this type of scrubber is sometimes called semi-wet). Th e reaction principles are the same for both types of scrubbers. A reactive material ( the absorbent) is introduced to and dispersed in the exhaust stream. The absorbent rea cts with the SOx species to form a solid, which has to be removed from the exhaust str eam by a bag filter system or an electrostatic precipitator (EP). It makes economic sense for some glass manufacturers to reuse a portion the collected dust as a raw mate rial, rather than disposing of it. The collected EP dust is high in sulfates, so the recyc led dust may replace at least some of the purchased saltcake in the glass recipe.

C. Particulate Matter (PM) Emission Control Techniq ues

The airflow through a glass melting furnace can be on the order of 30,000 standard cubic feet per minute. With airflow this high, un- melted raw material in the furnace can be lifted off the surface of the molten glass to go directly into the furnace’s exhaust stream. Operators can influence the rate at which raw materials become directly emitted PM through raw materials specification, con trol of the raw material moisture at the point the material is delivered to the furnace, and design of the furnace’s material charging system. There are also end-of-pipe partic ulate control techniques.

1. Material Selection and Moisture Control

In selecting raw materials, operators take into acc ount the particle size of glass raw materials. Small particles are more easily lifted by airflow than larger particles, but are more easily melted. Material moisture also plays i nto how much material bypasses theSAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

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for Proposed Amendments to Rule 4354 melting process. It is best if material contains “ enough” moisture to keep the material from being airborne, but not so wet as to affect gl ass production. In addition, the amount of recycled glass (cullet) in the recipe pla ys a role. Cullet generally melts at a lower temperature than glass raw material and is mo re likely to have a larger particle size. The use of cullet may be limited by the end- use quality requirements for the glass. For container glass and certain types of fiberglass , minimum cullet use is specified in the California Public Resources Code. Operators wo uld balance all three elements to minimize directly emitted particulate through raw m aterial selection.

2. Furnace Material Charging System

Given that most glass melting furnaces are designed to produce hundreds of tons of glass per day, making sure that enough raw material s are fed into the furnace is an important consideration in furnace design. Particu late control through raw material

selection and moisture content could be moot if the furnace’s material charging system facilitates the material becoming airborne. The de sign of the material charging system is constrained by engineering principles and produc tion requirements.

3. Raw Material Volatilization

Raw materials can be made gaseous at the high tempe ratures associated with glass melting furnaces. These volatilized materials can condense on surfaces or form particulate and exit the furnace with the exhaust g ases. Operators can control raw material volatilization by covering the molten glas s with un-melted raw material and by minimizing the furnace temperature.

4. Post Combustion Control

Post-combustion particulate control is of two types : filters and electrostatic precipitators (EPs). Filters used for high airflow situations ar e grouped together into what is called a baghouse. In most cases, glass melting furnace ope rators opt for EPs, since the temperature of the furnace exhaust is too high for most filter materials.

VIII. COSTS AND COST EFFECTIVENESS ANALYSIS

The California Health and Safety Code 40920.6(a) re quires District staff to conduct a cost effectiveness analysis of available emission c ontrol options prior to adopting each Best Available Retrofit Control Technology (BARCT) rule. Since the proposed rule modifies certain compliance dates and does not chan ge existing emission limits, the requirement to perform a cost effectiveness analysi s does not apply.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

Final Draft Staff Report: Rule 4354 (Glass Melting Furnaces) August 19, 2010

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for Proposed Amendments to Rule 4354 IX. SOCIOECONOMIC IMPACT ANALYSIS

Pursuant to state law, District staff is required t o perform a socioeconomic impact analysis prior to adoption, amendment, or repeal of a rule that has significant impacts on air quality or that will strengthen emission lim itations. The proposed amendments to Rule 4354 are only intended to provide flat glass m anufacturers with an option to defer compliance with the Tier 3 emission limits provided they comply with the early enhanced emission limits four years sooner than would have b een required to comply with the enhanced option emission limits. Because of this, the requirement to perform a socioeconomic impact analysis does not apply.

X. ENVIRONMENTAL IMPACTS

Global Climate Change (GCC), which is now generally accepted by the scientific community to be caused by GHGs, is a widely discuss ed scientific, economic, and political issue in the United States. Briefly stat ed, GCC is the cumulative change in the average weather of the earth that may be measured b y changes in temperature, precipitation, storms, and wind. Gases that trap h eat in the atmosphere are called greenhouse gases; they act in the atmosphere in a m anner analogous to the way a greenhouse retains heat. Common GHG include water vapor, carbon dioxide, methane, nitrous oxides, chlorofluorocarbons, hydrofluorocar bons, perfluorocarbons, sulfur hexafluoride, ozone, and aerosols. Some greenhouse gases such as water vapor occur naturally and are emitted to the atmosphere through natural processes as well as through human activities, such as electricity produ ction, vehicle use, etc. The most common GHG that results from human activity is carb on dioxide, followed by methane

and nitrous oxide.

The proposed amendments to Rule 4354 only move the compliance date of final implementation for one facility. The proposed rule amendments will not affect the meaning, scope of, or prohibitions contained in cur rent rule language. The District’s analysis demonstrates that implementing the propose d amendments would not affect the existing emission limits that have been in plac e since 2008. Furthermore the analysis demonstrates that the project has the pote ntial to reduce criteria pollutant emissions, thus having a positive impact on air qua lity. There is no evidence before the District that indicates that the project would resu lt in increased greenhouse gas emissions. Thus, the District concludes that the p roject would not have a cumulatively significant impact on global climate change.

Based on the lack of evidence to the contrary, Dist rict staff has concluded that the proposed amendments to the rules will not have any significant adverse effects on the environment. The proposed amendments to Rule 4354 have undergone environmental review in accordance with the requirements CEQA. A proposed negative declaration has been issued by the District and made available for public review and comment. Upon approval of this project, a Negative Declarati on will be filed.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

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for Proposed Amendments to Rule 4354 XI. RULE CONSISTENCY ANALYSIS

Prior to adopting, amending, or repealing a rule or regulation, California Health and Safety Code Section 40727.2 requires a written anal ysis that identifies and compares requirements of the proposed rule with correspondin g, existing and proposed District rules and corresponding United States Environmental Protection Agency (EPA) rules, regulations, and guidelines. Based on the analysis , District staff concludes that the proposed amendments to Rule 4354 are consistent wit h other District rules and are not in conflict with these rules. Further, the proposed r ule amendments are consistent with EPA rules, regulations, and guidelines that apply to th e same source category. The analysis is presented in Appendix C of the Final Draft Staff Re port.

XII. REASONABLY AVAILABLE CONTROL TECHNIQUES (RACT) ANALYSIS

The Clean Air Act (CAA) Section 182(b)(2) states th at ozone attainment plans shall assure that RACT for volatile organic compounds (VO C) is applied at certain sources. Section 182(f) extends federal RACT requirements to NOx rules and major NOx

sources. NOx emission reductions are included in th e District’s 2007 Ozone Plan for

Rule 4354 and were included in the 2008 version of the rule. The 2008 NOx emission limits are among the most stringent limits for this source category. As such, they constitute a level above “reasonably available” con trol technology.

XIII. REFERENCES

1. Final Draft Staff Report, “Re-evaluation of the October 2008 Amendments to Rule 4354”, April 15, 2008.

2. Governing Board Memorandum, “Review Report on Re -Evaluation of October 2008 Amendments to Rule 4354 (Glass Meting Furnaces ) and Authorize the APCO to Develop Future Rule Amendments”, April 15, 2010

3. SJVUAPCD Rule 4354 (Glass Melting Furnaces), Ame nded October 16, 2008.

4. Pilkington North America’s Comment Letter on SJV UAPCD Rule 4354 ReEvaluation, January 7, 2010.

5. District Project No. CEQA 20080357 (Initial Stud y and Negative Declaration for Draft Amendments to Rule 4354), August 18, 2008.SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DI STRICT

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