1

MEMORANDUM

Date: December 3, 2013

Subject: Cost Impacts of Pressure Relief Device Monitoring for Acrylic and Modacrylic

Fibers Production, Polycarbonate Production, and Amino/P henolic Resins Production Source Categories

From: Tanya Parise and Lesley Stobert, EC/R Incorporated

To: Nick Parsons, EPA/OAQPS/SPPD

______________________________________________________________________________

The purpose of this memorandum is to present the estimated cost impacts of the proposed requirements for pressure relief device (PRD) monitoring for the Polycarbonate (PC) Production, Acrylic and Modacrylic Fibers (AMF) Production, and Amino/Phenolic Resins (APR) Production source categories . The requirements for PC and AMF facilities are being proposed in 40 CFR part 63, subpart YY, and the requirements for APR are being proposed in 40 CFR part 63, subpart OOO. The requirements apply to major sources of hazardous air pollutants (HAP)

emissio ns at existing and new facilities under the national emission standards for hazardous air pollutants (NESHAP). The addition of PRD monitoring to the NESHAP for these source categories is being proposed along with proposed changes evaluated under EPA’s Risk and Technology Review (RTR) program, which is addressing statutory requirements under section 112(d)(6) and 112(f)(2) of the Clean Air Act (CAA). Section 1 provides background information, followed by the estimated costs of the impacts of the PRD monitor ing program for each source category in section 2.

1.0 BACKGROUND

Section 112 of the CAA establishes a comprehensive regulatory process to address emissions of HAP from stationary sources. In accordance with CAA section 112(c), the EPA

identifies ca tegories and subcategories of major sources that emit one or more of the HAP listed in CAA section 112(b). Section 112(d)(2) of the CAA then calls for the EPA to promulgate national technology

- based emission standards for each listed category or subcategor y of sources. For “major sources” that emit or have the potential to emit any single HAP at a rate of 10 tons or more per year or any combination of HAP at a rate of 25 tons or more per year, these technology

- based standards must reflect the maximum reduc tions of HAP achievable (after considering cost, energy requirements, and non

- air health and environmental impacts) and are commonly referred to as maximum achievable control technology (MACT) standards.

Section 112(d)(6) then requires EPA to review the C AA section 112(d) technology

- based standards and to revise them “as necessary, taking into account developments in practices, processes, and control technologies,” no less frequently than every 8 years. The residual risk review is described in section 112( f) of the CAA. Section 112(f)(2) of the CAA requires the EPA to promulgate standards for each category or subcategory of CAA section 112(d) sources “if promulgation of such standards is required in order to provide an ample margin of safety to2

protect publ ic health . . . or to prevent, taking into consideration costs, energy, safety, and other relevant factors, an adverse environmental effect.

In addition to the residual risk and technology reviews performed regarding the NESHAP, the EPA also reviews the existing provisions of the NESHAP during the RTR process. In 2008, the United States Court of Appeals for the District of Columbia Circuit vacated portions of two provisions in the EPA’s CAA section 112 regulations governing the emissions of HAP during per iods of startup, shutdown and malfunction (SSM). Sierra Club v. EPA , 551 F.3d 1019 (D.C. Cir. 2008), cert. denied , 130 S. Ct. 1735 (U.S. 2010). Specifically, the Court vacated the SSM exemption contained in 40 CFR 63.6(f)(1) and 40 CFR 63.6(h)(1), that are part of a regulation, commonly referred to as the “General Provisions Rule,” that the EPA promulgated under section 112 of the CAA. When incorporated into CAA section 112(d) regulations for specific source categories, these two provisions exempt sources f rom the requirement to comply with the otherwise applicable CAA section 112(d) emission standard during periods of SSM. In light of and consistent with Sierra Club v. EPA , the EPA is proposing to eliminate the SSM exemption for all three source categories (AMF, PC, and APR) and require that they apply at all times, including during periods of SSM.

As part of the proposed elimination of the SSM exemption in these NESHAP, the EPA is proposing to require monitoring of PRDs in organic HAP service that release to the atmosphere

and that a pressure release from such a PRD is a violation . The PRD monitoring system must be able to identify and record the time and duration of each pressure release and notify operators that a pressure release has occurred. Owners or operators would be required to report any pressure release and an estimate of the amount of organic HAP released to the atmosphere with the next periodic report. These provisions are being proposed due to concerns that PRD releases may emit large quantiti es of HAP, may not be identified and controlled in a timely manner and may be due to repeat problems that have not been corrected. The proposed provisions clarify that

such release events would be violations of the emissions standards of these rules.

2.0 COST IMPACTS

In order to estimate the costs associated with requiring monitoring of PRDs for AMF, PC, and APR production facilities, it was assumed that operators would install electronic indicators on each PRD in organic HAP service that vents to the a tmosphere to identify and record the time and duration of each pressure release. However, owners or operators could use a range of methods to satisfy these requirements, including the use of a parameter monitoring system that may already have been in place on the process operating pressure that is sufficient to notify operators immediately that a pressure release is occurring, as well as recording the time and duration of that release. To estimate the cost of electronic indicators, analyses performed by the South Coast Air Quality Management District (SCAQMD) of California were referred to, which requires continuous monitoring of a percentage of PRDs at refineries by installing a monitoring device capable of recording the duration of each release and quantif ying emissions. Wireless technology allows continuous monitoring of PRDs and makes it easier for operators to identify3

releases and leaks. 1 There are several monitoring devices that can be used, including acoustic sensors and pressure/differential pressure sensors. These sensor units communicate with a base radio that interfaces with the existing control system. The costs for PRD wireless monitoring are summarized in Table 1. These costs are based on an analysis documented by the SCAQMD for

electronic monit oring devices for PRDs.

The monitoring device cost provided by the SCAQMD was based on vendor costs and ranged from $5,000 to $10,000, with an average of $7,500, and includes device parts, installation, and maintenance, as well as a data retrieval system . According to SCAQMD, annual operating costs are minimal because they include periodic replacement of inexpensive batteries. It was assumed that, for this analysis, these costs were presented in 2007 dollars and were therefore escalated to

2012 dollars. A ccording to the SCAQMD document, the cost of electronic monitoring systems is not linear, and facilities requiring a larger number of monitors are expected to benefit from economies of scale. Therefore, the sixth

- tenths rule was applied to calculate initia l costs.

For PC, it was determined that of available model chemical manufacturing plants, the “simple” model plant would be most representative of the PC source category, which contains 2 PRDs. As a result, the total capital investment was determined to b e $12,649 per facility and $1,801 annually per facility. There are four facilities in the PC source category each assumed to have two PRDs. Therefore, the total capital cost associated with the requirement to monitor PRDs is $51,000 with an annualized cost of $7,000 for the PC source category.

For AMF, a single facility in the U.S. produces AMF and is subject to the AMF MACT standards: Cytec Carbon Fibers, LLC, in Greenville, SC. According to information provided by Cytec, there are 12 PRDs at the facility . Therefore, the total capital investment was estimated at $37,063 with an annualized cost of $5,277. Since there is only one facility in the AMF source category, the total capital cost and annualized cost for the source category are the same as the per

fa cility cost.

For APR, it was assumed that the “average” model plant would be most representative of the APR source category, which contains 5 PRDs. As such, the total capital investment estimated is $21,919 and $3,121 annually per APR facility. There are 18 facilities in the APR source category each with five PRDs. Therefore, the total capital cost associated with the requirement to monitor PRDs is $395,000 with an annualized cost of $56,000 for the APR source category.

1 Ellis, Kennard, SCAQMD. Final Staff Report for Proposed Amended Rule 1173

- Control of Vola tile Organic Compound Leaks and Releases from Components at Petroleum Facilities and Chemical Plants. May 15, 2007.

Docket No. EPA

- HQ

- OAR

- 2010

- 0869

- 0024.4

Table 1. Total Capital Investmen t and Annualized Cost of PRD Monitoring for the

PC, AMF, and APR Source Categories

Cost Parameter PC AMF APR

Number of PRDs at Model Plant 2 12 5

Unit Device Installation Cost $7,500 (2007 Dollars) $8,345 (2012 Dollars) a Plant Site Total Capital Investment b $12,649 $37,063 $21,919 Capital Recovery Factor c 0.142 b

Plant Site Total Annualized Cost $1,801 $5,277 $3,121

Number of Plants in Source Category 4 1 18
Source Category Total Capital Cost $51,000 $37,000 $395,000
Source Category Total Annualized Cost $7,000 $5,000 $56,000

a Chemical Engineering Index for 2007 is 525.4 and 584.6 for 2012.

b Calculated using sixth

- tenths rule. Plant site Cost ($) = PRD Unit Cost ($) * (No. of PRDs)^0.6

c Capital recovery factor calculated based on 7 percent interest and 10 year equipment life.