Document ID: EPA-HQ-OAR-2011-0344-0155
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2012-01-05T05:00Z

MEMORANDUM

To:		Nathan Topham, U.S. Environmental Protection Agency, OAQPS

From:		Donna Lazzari and Mike Burr, ERG  

Date:		December 16, 2011

Subject:	Cost Impacts of the Revised NESHAP for the Secondary Lead Smelting Source Category 
--------------------------------------------------------------------------------

The purpose of this memorandum is to describe the methodology used to estimate the costs, emissions reductions, and secondary impacts of the final revisions to the National Emissions Standards for Hazardous Air Pollutants (NESHAP) for the Secondary Lead Smelting source category. These impacts were calculated for existing units and new units projected to be operational by the year 2014, two years after the rule is expected to be promulgated and the anticipated year of implementation of the revised NESHAP. The results of the impacts analyses are presented for the most stringent regulatory options considered in addition to the regulatory options that were ultimately chosen for promulgation. The development of the baseline emissions estimates and the maximum achievable control technology (MACT) floors for this source category are discussed in other memoranda[,]. The organization of this document is as follows:
      1.0 Summary of Cost Estimates and Emissions Reductions for the Regulatory Options Chosen for Proposal   
      2.0 Regulatory Options Considered for Proposal
      3.0 Methodology for Estimating Control Costs
      4.0 Methodology for Estimating Emissions Reductions
      5.0 Testing and Monitoring Cost Impacts
      6.0 Summary  of Cost by Facility
 A list of secondary lead smelters currently in operation or under construction in the United States and Puerto Rico that were considered in this analysis is presented in the table below.
Secondary Lead Smelters in the U.S. and Puerto Rico
                                 FACILITY NAME
                                PARENT COMPANY
                                     CITY
                                     STATE
                             Facility Abbreviation
                       East Penn Manufacturing Co., Inc.
                       East Penn Manufacturing Co., Inc.
                                 Lyon Station
                                 Pennsylvania
                                   East Penn
                         EnviroFocus Technologies, LLC
                             Gopher Resources, LLC
                                     Tampa
                                    Florida
                                  EnviroFocus
                             Gopher Resources, LLC
                             Gopher Resources, LLC
                                     Eagan
                                   Minnesota
                                 Gopher Eagan
                     Quemetco, Inc., City of Industry, Ca
                Eco-Bat Technologies, LTD (Quemetco West, LLC)
                               City of Industry
                                  California
                                  Quemetco CA
                       Quemetco, Inc., Indianapolis, In
               Eco-Bat Technologies, LTD (Eco-Bat Indiana, LLC)
                                 Indianapolis
                                    Indiana
                                  Quemetco IN
                Revere Smelting and Refining Corporation (RSR)
               Eco-Bat Technologies, LTD (Eco-Bat New York, LLC)
                                  Middletown
                                   New York
                                      RSR
                             Sanders Lead Company
                             Sanders Lead Company
                                     Troy
                                    Alabama
                                 Sanders Lead
                      Exide Technologies, Baton Rouge, La
                           Exide Technologies, Inc.
                                  Baton Rouge
                                   Louisiana
                               Exide Baton Rouge
             Exide Technologies, Cannon Hollow Recycling Facility
                           Exide Technologies, Inc.
                                  Forest City
                                   Missouri
                               Exide Forest City
                        Exide Technologies, Frisco, Tx
                           Exide Technologies, Inc.
                                    Frisco
                                     Texas
                                 Exide Frisco
                        Exide Technologies, Muncie, In
                           Exide Technologies, Inc.
                                    Muncie
                                    Indiana
                                 Exide Muncie
                   Exide Technologies  -  Reading Recycling
                           Exide Technologies, Inc.
                                    Reading
                                 Pennsylvania
                                 Exide Reading
                        Exide Technologies, Vernon, Ca
                           Exide Technologies, Inc.
                                    Vernon
                                  California
                                 Exide Vernon
                    Buick Resource Recycling Facility, LLC
                       The Doe Run Resources Corporation
                                     Boss
                                   Missouri
                                   Buick RRF
                         The Battery Recycling Company
                         The Battery Recycling Company
                                    Arecibo
                                  Puerto Rico
                               Battery Recycling
                     Johnson Controls Battery Group, Inc. 
                        Johnson Controls International
                                   Florence
                                South Carolina
                                      JCI

Summary of Cost Estimates and Emissions Reductions for the 	Regulatory Options Chosen for Proposal
Regulatory options were considered for control of emissions of metal hazardous air pollutants (HAP), organic HAP, and dioxins and furans (D/F) from stacks and metal HAP from fugitive sources. For all options, total hydrocarbons (THC) are considered a surrogate for organic HAP (other than dioxins and furans) and lead a surrogate for metal HAP. A brief description of the options selected for the revisions to the NESHAP and the associated costs and emissions reductions are summarized in Table 1-1. The most stringent options considered in this analysis are summarized in Table 1-2. A more detailed description of all the regulatory options considered for proposal and their associated cost and emissions reductions estimates are presented in section 2.0 of this memorandum.
Table 1-1: Summary of the Estimated Costs and Emissions Reductions of Regulatory Options Selected for Final Rule
                                    Option
                                  Description
                       COST IN $ MILLIONS (2009 DOLLARS)
                Total HAP Emissions Reductions (tons per year)
                       Cost per ton HAP reduction ($MM)
                                 CAPITAL COST
                            Annualized Capital Cost
                     Annual Operation and Maintenance Cost
                             Total Annualized Cost
                                      3S
Stack lead concentration limit of 1.0 mg/dscm any stack, and 0.2 mg/dscm facility average
                                    $11.5 
                                     $1.1
                                     $1.7
                                     $2.7 
                                     8.2 
                                    $0.33 
                                      1D
                         D/F Concentration based limit
                                      $0 
                                      $0 
                                    $0.26 
                                    $0.26 
                                      30
                                     $0.01
                                      3F
                      Fugitive enclosure + work practice
                                     $38 
                                     $3.6 
                                     $5.8 
                                     $9.4 
                                     7.1 
                                     $1.3 
                             Test, Monitor, Report
                        Additional Testing, Monitoring
                                    $0.10 
                                    $0.01 
                                    $0.79 
                                    $0.80 
                                       
                                       
                                     Total
                                       
                                    $49.7 
                                     $4.7 
                                     $8.5 
                                     $13.2
                                     45.0 
                                     $0.29
*Tons of total organic HAP (3 grams/yr D/F reduction)
Table 1-2: Summary of the Estimated Costs and Reductions for the Most Stringent Options Considered
                                    Option
                                  Description
                       COST IN $ MILLIONS (2009 DOLLARS)
                Total HAP Emissions Reductions (tons per year)
                       Cost per ton HAP reduction ($MM)
                                 CAPITAL COST
                            Annualized Capital Cost
                     Annual Operation and Maintenance Cost
                             Total Annualized Cost
                                      4S
                Stack lead concentration <0.01 mg/dscm (WESP)
                                       
                                     $365
                                      $34
                                      $12
                                      $46
                                     19.5
                                     $2.37
                                      2D
                Beyond the floor D/F limits for blast furnaces
                                       
                                     $5.9
                                     $0.6
                                     $2.4
                                     $2.9
                                      303
                                     $0.01
                                   1F and 2F
                    Enclosures, work practices, monitoring
                                      $38
                                     $3.6
                                     $6.2
                                     $9.8
                                      7.1
                                     $1.37
                             Test, monitor, report
                       Additional testing and monitoring
                                     $0.10
                                     $0.0
                                     $0.8
                                     $0.8
                                       
                                       
                                     Total
                                       
                                     $409
                                     $38.6
                                     $21.1
                                     $18.8
                                      330
                                     $0.06

Regulatory Options Considered for Promulgation
This section provides a detailed description of all regulatory options that were considered for the revisions to the Secondary Lead Smelting NESHAP and their associated costs and secondary impacts.
Stack Emissions  -  Metal HAP
The four regulatory options considered for control of metal HAP emissions from stacks are presented in the following sections.
            a.       Option 1S
Regulatory option 1S represents a scenario of reducing the existing lead emissions concentration limit from 2.0 milligrams per dry standard cubic meter (mg/dscm) to 0.5 mg/dscm. In order to estimate costs and emission reductions for this option, we assumed that individual stacks with concentrations more than half the standard of 0.5 mg/dscm would replace baghouses or improve the maintenance and change the filtration media. Based on emissions data received in an information collection request (ICR) sent to the industry, twenty emissions points at six facilities reported concentrations above 0.25 mg/dscm; estimates of cost and emissions reductions were made for 15 of these stacks. Three facilities are currently undergoing an upgrade to their emissions control equipment with plans to replace existing baghouses or add additional filtration capacity, and thus, we assumed this would reduce the lead concentration at these five  stacks  below 0.25 mg/dscm. For 12 of the stacks reporting concentrations above 0.25 mg/dscm, we assumed that a replacement baghouse would be installed. For three stacks that were near the evaluated limit of 0.25 mg/dscm we assumed that lead concentrations below 0.25 mg/dscm could be achieved through replacement bags and performance of additional maintenance on the unit. The total estimated capital cost for the 12 new baghouses that would likely be necessary to achieve concentrations below 0.25 mg/dscm is $14.8 million, resulting in an annualized capital cost of $1.4  million. Additional annual operational and maintenance costs, including more frequent bag changes for the 15 baghouses, are estimated at $2.0 million above the costs of operating the current air pollution control devices. The total estimated annualized cost above current cost for the 15 baghouses is $3.4 million (2009 dollars). The estimated emissions reductions of Option 1S are 7.1 tons per year of lead and 9.0 tons per year of total metal HAP.  
            b.       Option 2S
Option 2S considers a production-based lead emissions limit. A limit of 0.009 pounds of lead emissions per ton of lead production (lbs/ton Pb) was calculated as a facility-wide emissions limit using a methodology similar to a MACT floor analysis. We estimate that new or improved baghouses would likely be necessary at 18 emissions points at six facilities to meet the limit considered in this option. For facilities that were estimated to be above the limit considered in this option, we sequentially selected stacks for a baghouse replacement or upgrade (based on reported concentration) until the facility was estimated to have emissions below 0.009 lbs/ton Pb. Two of the stacks selected had relatively newer baghouses, and thus, we estimated the cost of changing all the existing bags to a new upgraded filter media and performing additional maintenance for these units. One selected stack had a baghouse that was less than 10 years old; we estimated 25 percent of the cost of a new unit to represent additional filtration media or substantial upgrade to this unit. For the remainder of the selected stacks, we assumed replacement baghouses would be needed. The total estimated capital cost for this regulatory option is $21.5 million, resulting in an annualized capital cost of $2.0 million. Additional annual operational and maintenance costs, including more frequent bag changes for the baghouses, are estimated at $2.5 million above current costs. The total annualized cost above current air pollution control device operating costs for the 18 baghouses is $4.5 million (2009 dollars). Total anticipated emissions reductions of lead and other metal HAP in this option are estimated at 9.6 tons per year.
            c. Option 3S
Option 3S is the regulatory option that was selected by the EPA for promulgation in the Secondary Lead Smelting NESHAP. This option represents an overall facility-wide flow-weighted average lead concentration limit of 0.2 mg/dscm and a limit of 1.0 mg/dscm for any individual stack. In order to estimate costs and emission reductions for this option, we assumed that individual stacks with concentrations more than half the standard of 1.0 mg/dscm would replace baghouses or improve the maintenance and change the filtration media. We then reviewed the facility-wide flow-weighted average concentration from all the stacks after these improvements to determine if additional reductions were necessary. We determined that all the secondary lead facilities would be in compliance with the flow-weighted average after the upgrades described.  In order to estimate costs and emission reductions for this option, we assumed that individual stacks with concentrations more than half the standard of 1.0 mg/dscm would replace baghouses or improve the maintenance and change the filtration media.  Eleven emissions points at six facilities reported concentrations above 0.5 mg/dscm; estimates of cost and emissions reductions were made for ten of these stacks.  A baghouse at one facility is currently undergoing an upgrade, and we assumed this would reduce the lead concentration below 0.5 mg/dscm. Three stacks had outlet concentrations near the evaluated limit, and we assumed an outlet concentration of less than 0.5 mg/dscm could be achieved through replacement bags and performance of additional maintenance on the unit. The total estimated capital cost for this regulatory option is $11.5 million, resulting in an annualized capital cost of $1.1 million. Additional annual operational and maintenance costs, including more frequent bag changes for the baghouses, are estimated at $1.7 million above current costs. The total annualized cost above current air pollution control device operating costs for the 11 baghouses is $2.7 million (2009 dollars). Total anticipated emissions reductions of lead and other metal HAP in this option are estimated at 8.2 tons per year.
            d. Option 4S
Option 4S is a regulatory option that considers requiring installation of a wet electrostatic precipitator (WESP) or equivalent technology at each facility to control stack emissions of metal HAP. One facility in this source category currently utilizes a WESP to control metal HAP emissions from stacks (i.e., Quemetco CA). Based on emissions data received in the ICR, this facility is the lowest emitting facility in terms of stack emissions of metal HAP. In this option, the other 15 facilities in the source category would be required to install technology with equivalent performance to a WESP. Based on the configuration of the existing WESP reported in the ICR, we assumed that facilities that would need to install a WESP under this option would use the WESP to control metal HAP emissions from process and process fugitive emissions sources only. Additionally, we assumed that the process fugitive vents would be optimized to minimize the airflow from these sources. We also assumed that baghouses installed on building vents would not be routed to the WESP. The total estimated capital cost for installation of a WESP at 15 facilities is $365 million, resulting in an annualized capital cost of $34 million.  Operating costs were estimated at $12 million. The total annualized cost above current cost is estimated at $46 million. Lead emissions reductions for this option are estimated at 15.4 tons per year with total estimated metal HAP emissions reductions of 19.5 tons per year. The cost of installation and projected emissions reductions from a facility currently under construction were included in this estimate. 
            e. Option 5S
Option 5S is a regulatory option that was considered after proposal of the revised secondary lead NESHAP. This option was considered based on comments received that the emission controls proposed would not require a significant amount of emissions reduction, and the limits proposed did not represent advances in control technology.  
Regulatory option 5S represents a scenario of reducing the existing lead emissions concentration limit from 2.0 milligrams per dry standard cubic meter (mg/dscm) to 0.2 mg/dscm for all stacks. Based on emissions data received in an information collection request ( ICR) sent to the industry, 80 percent of the stacks in this source category reported concentrations below 0.2 mg/dscm. In order to estimate costs and emission reductions for this option, we assumed that individual stacks with concentrations more than half the standard of 0.2 mg/dscm would replace baghouses or improve the maintenance and change the filtration media.  There are 30 emissions points at six facilities that reported concentrations above 0.1 mg/dscm; estimates of cost and emissions reductions were made for 29 of these stacks. One facility is currently undergoing an upgrade with plans to replace an existing baghouse, and thus, we assumed this action would reduce the lead concentration in three stacks at this facility to below 0.1 mg/dscm.  
For 29 of the stacks reporting concentrations above 0.1 mg/dscm, we assumed that a replacement baghouse with an additional HEPA filter would be installed. The total estimated capital cost that would likely be necessary to achieve concentrations below 0.1 mg/dscm is $36 million, resulting in an annualized capital cost of $3.1 million. Additional annual operational and maintenance costs, including more frequent bag changes for the baghouses, are estimated at $4.1 million above the costs of operating the current air pollution control devices. The total estimated annualized cost above current cost for the 29 baghouses is $7.5 million (2009 dollars). The estimated emissions reductions of Option 5S are 9.8 tons per year of lead and 12.4 tons per year of total metal HAP.  
            f. Summary
A summary of the costs and emissions reductions associated with the five regulatory options described above for stack emissions are summarized in Table 2-1.
Table 2-1: Estimated Costs and Emissions Reductions for the Regulatory Options Considered for Stack Emissions of Metal HAP.
                                       
                                    Option
                                  Description
                       COST IN $ MILLIONS (2009 DOLLARS)
                Total HAP Emissions Reductions (tons per year)
                       Cost per ton HAP reduction ($MM)
                                 CAPITAL COST
                            Annualized Capital Cost
                     Annual Operation and Maintenance Cost
                             Total Annualized Cost
                                      1S
                      Concentration limit of 0.5 mg/dscm
                                    $14.2 
                                     $1.3 
                                     $2.0
                                     $3.4 
                                      9.0
                                    $0..38 
                                      2S
                         0.009 lb Pb / Ton Pb produced
                                       
                                     $21.5
                                     $2.0
                                     $2.5
                                     $4.5
                                      9.6
                                     $0.52
                                      3S
Concentration limit of 1.0 mg/dscm any stack, and 0.2 mg/dscm facility average
                                    $11.5 
                                     $1.1 
                                     $1.7 
                                    $2.70 
                                      8.2
                                    $0.33 
                                      4S
                   Concentration limit <0.01 mg/dscm WESP
                                     $365
                                      $34
                                      $12
                                      $46
                                     19.5
                                     $2.37
                                      5S
                      Concentration limit of 0.2 mg/dscm
                                      $36
                                     $3.4
                                     $4.1
                                     $7.5
                                     12.4
                                       
                                    0.0.60
                                       

Stack Emissions  -  Organic HAP and D/F
The two regulatory options considered for control of stack emissions of organic HAP and D/F are presented in the following sections.
   a. Option 1D
Option 1D is the regulatory option that EPA chose for the revised NESHAP for the Secondary Lead Smelting source category. This option represents calculating a MACT floor for D/F emissions from various furnace groupings that were formed based on similar operating characteristics. In addition to the D/F MACT floors, new MACT floors for THC were calculated for furnace types that are not regulated in the existing NESHAP. These include reverberatory furnaces not collocated with blast furnaces, and electric arc furnaces. Sufficient data was not available to calculate MACT floors for the rotary furnace category. The THC MACT limits for blast furnaces and collocated blast and reverberatory furnaces in the existing NESHAP would remain unchanged under the proposed revisions. We do not anticipate that this regulatory option will require installation of additional controls at any facilities. We do anticipate, however, that four facilities operating blast furnaces will likely increase the temperature of their afterburners to ensure continuous compliance with the new MACT floors for D/F. The cost of the natural gas required to raise the temperature 100 degrees Fahrenheit (°F) at afterburners was estimated at $260,000 per year (2009 dollars). Under this regulatory option, we estimate D/F emissions reductions of about 2.9 grams per year and organic HAP emissions reductions of about 30 tons per year.
   b. Option 2D
Option 2D represents a beyond-the-floor option for D/F emissions from blast furnaces that are not collocated with reverberatory furnaces. This option was considered because based on emissions data submitted in the ICR, blast furnaces that are not collocated with reverberatory furnaces contribute approximately 78 percent of the total D/F emissions from the source category. In this option, a Toxic Equivalency Quotient (TEQ) based concentration limit of 17 nanograms per dry standard cubic meter (ng/dscm) (corrected to 7 percent oxygen (O2)) was considered for blast furnaces. This concentration represents an approximate 90 percent reduction in total D/F emissions from blast furnaces in this source category.  
For this option, we assumed that additional afterburner capacity would be needed at five blast furnaces. Two of the blast furnaces have afterburners currently installed that meet the requirements of this considered regulatory option. The total estimated capital cost for installation of the additional afterburners is $5.9 million, which results in an estimated annualized capital cost of $0.56 million. Annual operational and maintenance costs increases, including additional natural gas fuel, are estimated at $2.4 million above current control device operating costs. The total annualized cost above current cost for the afterburners is estimated to be $2.9 million (2009 dollars). Under this scenario, we anticipate D/F emissions reductions of 31 grams per year, with a co-reduction of 200 tons per year of all other organic HAP. We also estimate that this option would result in a significant increase in fuel use along with increased emissions of carbon dioxide (CO2) and oxides of nitrogen (NOx) associated with operation of the additional afterburners.
   c. Summary
A summary of the costs and emissions reductions associated with the two regulatory described above for D/F and organic HAP emissions are summarized in Table 1-4.
Table 2-2: Cost Estimates and Emissions Reductions for Regulatory Options Considered for Stack Emissions of D/F and Organic HAP.
                                    Option
                                  Description
                       COST IN $ MILLIONS (2009 DOLLARS)
                Total HAP Emissions Reductions (tons per year)
                       Cost per ton HAP reduction ($MM)
                                 CAPITAL COST
                            Annualized Capital Cost
                     Annual Operation and Maintenance Cost
                             Total Annualized Cost
                                      1D
                        Concentration based MACT limit
                                      $0
                                      $0
                                     $0.26
                                     $0.26
                                     30[a]
                                        
                                    $0.009
                                      2D
                      Beyond the floor for Blast furnaces
                                       
                                     $5.9
                                     $0.56
                                     $2.4
                                     $2.9
                                    200[a]
                                     $0.01
[a] based on total organic HAP

Fugitive Emissions  -  Metal HAP
Three regulatory options were considered for control of fugitive metal HAP emissions. Because these emissions cannot be directly measured, a numerical emissions limit was not calculated. Instead, regulatory options were considered that prescribed specific controls or lead compliance monitoring at the property boundary as a means of demonstrating compliance. The three options considered are as follows:
   1. Option 1F: This option requires facilities to conduct ambient lead monitoring at or near the property boundary to demonstrate compliance with the National Ambient Air Quality Standard (NAAQS) for lead. 
   2. Option 2F: This option requires facilities to keep all lead-bearing materials and processes enclosed in permanent total enclosures that are vented to a control device. Additional fugitive control work practices would also be required. Compliance with this regulatory option would be demonstrated by ensuring full enclosure plus work practices and ambient lead monitoring at or near the property boundary.  
   3. Option 3F: This is the regulatory option selected by EPA for the revised NESHAP for the Secondary Lead Smelting source category. This option is identical to option 2F with the exception that ambient lead monitoring at or near the boundaries of the facilities would not be required. Instead, compliance would be demonstrated through construction of total enclosures and operation according to a standard operating procedures (SOP) manual detailing how the required fugitive control work practices will be implemented. 
In options 2F and 3F, facilities would be required to have all lead manufacturing processes within total enclosures under negative pressure with conveyance to a control device. Although option 1F requires only monitoring at the property boundary, and does not explicitly require total enclosures, we assumed for cost purposes that facilities would need to operate all lead-bearing processes under negative pressure enclosures in order to comply with this option. Based on information submitted in the ICR, the facilities that are currently achieving ambient lead concentrations near the lead NAAQS at or near their property's boundaries are facilities that already have their processes totally enclosed. Therefore, we assumed facilities that do not have all of their lead manufacturing processes in total enclosures will construct the appropriate enclosures and reconfigure their facilities to reduce their overall footprint as described in section 3.3 of this memorandum. 
Costs were estimated for enclosures and associated control devices at 7 facilities. One of these facilities is currently under construction (JCI), but an examination of the permit for the facility indicated that the battery breaking area enclosure was not vented to a control device; costs were estimated at the facility for this one process. One additional facility (Exide Frisco) does not currently have enclosures for their secondary lead processes, but is under an agreed order with the state to install enclosures; this rule will not trigger additional costs. Another facility (EnviroFocus) is in the process of enclosing all of their process areas as a permit requirement for expansion. No costs for additional enclosures were estimated for these two facilities. 
The total estimated capital cost for the total enclosures, ventilation systems, and associated control devices is $38 million, which results in an annualized capital cost of $3.6 million. The total annual operation and maintenance cost, which includes building and baghouse maintenance, is estimated at $2.8 million above current cost. The total annualized cost of new enclosures and associated control devices for seven facilities is $6.4 million. Costs associated with the additional work practices are estimated at $250,000 per facility for 12 facilities at a total cost of $3 million. The total estimated annualized cost of reducing fugitive emissions for the primary regulatory option selected by the EPA (Option 3F) is $9.4 million (2009 dollars). For option 1F and 2F, the cost of operating two compliance monitors at or near the property boundary of each facility is estimated at $23,000 per facility for a total additional annualized cost of $347,000. We estimate reductions in fugitive emissions of 6.4 tons per year of lead and 7.2 tons per year of metal HAP. 
The estimated costs and emissions reductions associated with the regulatory options considered for fugitive emissions of metal HAP are summarized in Table 1-5.
 Table 2-3: The Estimated Costs and Metal HAP Reductions for Fugitive Sources
                                    Option
                                  Description
                       COST IN $ MILLIONS (2009 DOLLARS)
                Total HAP Emissions Reductions (tons per year)
                       Cost per ton HAP reduction ($MM)
                                 CAPITAL COST
                            Annualized Capital Cost
                     Annual Operation and Maintenance Cost
                             Total Annualized Cost
                                   1F AND 2F
                     Enclosure, work practice, monitoring
                                      $38
                                     $3.6
                                     $6.2
                                     $9.8
                                      7.2
                                    $1.37 
                                      3 F
                           Enclosure, work practice
                                      $38
                                     $3.6
                                     $5.8
                                     $9.4
                                      7.2
                                    $1.32 

Methodology for Estimating Control Costs
The following sections present the methodologies used to estimate the costs associated with the regulatory options considered for the revised NESHAP for the Secondary Lead Smelting source category.
Stack Emissions  -  Metal HAP
The primary technologies used to control stack emissions of metal HAP in the Secondary Lead Smelting source category are filtration devices such as baghouses or cartridge collectors, some of which have high performance particulate air (HEPA) filters as a secondary filtration device. One facility uses a wet electrostatic precipitator (WESP) downstream of a baghouse as a polishing step to further reduce metal HAP emissions. Data collected in the ICR indicate that baghouses that are properly designed, installed, maintained and operated can meet all of the metal HAP stack emissions limits considered in this analysis except those under option 4S (which included a WESP).
In order to estimate the capital cost associated with a particular option, we first determined which stacks would be required to reduce emissions. For the concentration-based limits, we assumed that the baghouses at any stacks reporting concentrations in the ICR above the considered emissions limit would need to be repaired, improved, or replaced. If the reported concentration was more than 10 percent over the considered limit, we assumed the baghouse would need to be replaced. If the reported concentration was within 10 percent of the considered limit or the unit in question was relatively new (installed after the year 2000), we assumed that replacement bags or additional baghouse maintenance could sufficiently reduce the concentration. For options that included a flow-weighted average concentration limit or a production based emissions limit, control devices were chosen for replacement or upgrade one at a time, beginning with the highest reported lead concentration, until the facility's emissions were below the considered limit.
In the ICR, the EPA requested information on costs of emissions control devices that have been installed in the last five years. Several facilities submitted cost information that was used as a basis for estimating the cost associated with installation of a new baghouse. We compared estimates submitted by all of the facilities and chose the highest of the estimates as the cost model for baghouse installations. We compared estimates using this methodology to estimates derived using techniques described in the sixth edition of the EPA Air Pollution Control Cost Manual (http://www.epa.gov/oaqps001/lead/pdfs/2002_01_cost_control_%20manual.pdf). While the estimates derived using the EPA's manual were higher, we believe using data submitted directly by the industry is likely more representative of actual costs incurred by this source category.
Our cost model included installation of the baghouse and any necessary fans, ductwork, screw conveyors, and site work for each scenario, as appropriate. All costs are based on 2009 dollars. We did not consider the associated downtime for the unit in our costs. We estimated capital costs on the basis of dollars per unit of air flow (i.e., cubic foot per minute) into the device and assumed linearity of cost within the range of air flows considered in our analysis. The total installed capital cost of a typical baghouse designed for a flow-rate of 80,000 actual cubic feet per minute (acfm) was estimated at $1.4 million. This cost assumes a 20 year life expectancy for the unit and, to be consistent with OMB Guidance in Circular A-4, a seven percent cost of capital as an estimate of the annualized capital cost. The design flow-rate for a baghouse was taken from information submitted in the survey, or the flow rate during a performance test if this flow was higher than design. If design information was not available, the flow was assumed to be 20 percent higher than the flow-rate measured during a compliance test.   
The major operating cost of a baghouse is associated with routine replacements of the filter media (bags). The number of compartments in the baghouse and the number of bags per compartment were estimated using either data submitted in the ICR for the particular unit or data submitted for a similar sized unit if the former data were not available. The estimated number of bags was used to calculate the ongoing maintenance cost of replacing bags. We assumed that facilities would be required to replace bags every two years for the devices that reported emissions above the considered limit. The cost of a replacement bag was estimated at $200 based on information submitted in the ICR. Other operating and maintenance costs were developed using information submitted in the ICR.
For the WESP option, we used information submitted by Quemetco, Inc. in the ICR as a basis for estimating cost. We assumed that the configuration of the new WESP installations would be similar to that of Quemetco CA. More specifically, we assumed that facilities would use the WESP to control process and process fugitive emissions sources, but not general building ventilation sources. Additionally, we assumed that facilities would optimize the flow from process fugitive ventilation devices in order to reduce the overall airflow to the WESP. We used the rapid estimation exponential method described in Perry's Chemical Engineers' Handbook to derive an equation representing the expected flow-rate into the WESP at each facility. Our estimate of annualized costs primarily includes electricity to operate the WESP and capital recovery.
Stack Emissions  -  Organic HAP and D/F
The formation of D/F occurs in the smelting furnaces and is highly dependent on the operating temperature of the furnace. Very small amounts of D/F were detected in the emissions streams of reverberatory furnaces; higher amounts were detected in the emissions streams of blast furnaces that were not collocated with reverberatory furnaces. Emissions data submitted in the ICR indicate that D/F emissions from collocated blast and reverberatory furnaces are lower than those from blast furnaces not collocated with reverberatory furnaces, indicating that comingling the flue gas streams of a blast furnace with the hotter stream of the reverberatory furnace is an effective D/F control option. Based on information submitted in the ICR, temperatures of the reverberatory stream are typically around 2200°F, likely high enough to raise the overall temperature of the combined blast and reverberatory furnace stream to that typically achieved by an afterburner.  Studies of D/F destruction indicate that properly designed and operated afterburners with a sufficient residence time can achieve high destruction efficiency. The majority of the blast furnaces in this source category that are not collocated with reverberatory furnaces use afterburners as a means of controlling organic HAP emissions. However, based on information submitted in the ICR, the majority of these afterburners are not operated at temperatures necessary for efficient destruction of D/F. We estimated that an afterburner operating at 1600°F with a residence time of 2.5 seconds or longer would achieve a 90 percent reduction in D/F emissions.
In order to estimate the capital cost of 90 percent control efficiency for D/F from blast furnaces, information contained in the ICR responses was used to determine the current furnace and afterburner temperature and residence time. We assumed that an existing afterburner would have the capability to increase the operating temperature 100°F without a major modification. Based on information submitted in the ICR, we determined that 5 of the 6 afterburners controlling blast furnaces (not collocated with reverberatory furnaces) in this source category were not capable of achieving a temperature of 1600°F. Therefore, we estimated the capital and operating costs associated with installation of a new afterburner for these sources. Three facilities submitted cost data in the ICR for afterburner installations; the highest of the three estimates was chosen as the basis for our cost estimate. For the capital cost estimate, we assumed that the existing afterburner would remain in place and a new afterburner capable of increasing the temperature of the stream leaving the existing afterburner to a temperature of 1600°F would be installed. We used an equation modeled after equation 2.32 in the EPA Air Pollution Control Cost Manual to scale the size and cost of a thermal incinerator based on the reported flow-rates for each of the blast furnaces. The typical cost for an installed afterburner with a design flow-rate of 17,000 acfm was estimated at $1.2 million.  
The annual cost of operating an afterburner was estimated using the approach described in the EPA Air Pollution Control Cost Manual. The cost of additional fuel required to increase the operating temperature of the afterburners was estimated based on the estimated amount of required natural gas. Other operating and maintenance costs were estimated using an approach described in the EPA Air Pollution Control Cost Manual. The annual capital cost was estimated using a 20 year equipment life and a 7 percent interest rate.
Fugitive Emissions  -  Metal HAP
There are two general categories of fugitive emissions of metal HAP at a secondary lead smelting facility: process fugitive emissions and fugitive dust emissions from material handling operations and re-entrainment of deposited dust. Process fugitive emissions result from furnace leaks and incomplete capture of emissions during tapping and charging of smelting furnaces. Charge materials contain fine lead-bearing particles that can be liberated during charging operations. Furnace upsets, particularly those caused by wet feed material, can result in overpressure of the smelting furnace. This may cause release of emissions that would normally be contained by negative pressure occurring inside the smelting furnaces. Process fugitive emissions can also result from incomplete capture of emissions at battery breakers, dryers, and refining and casting operations. Fugitive dust emissions can be generated during material handling operations. Lead bearing materials are transported throughout the plant in areas that may be open to the atmosphere. During transport, the material can spill or leak from the transport vehicles and settle on the floors and yards of the facilities. Wind, vehicle traffic, and other forces can then re-entrain the deposited dust as fine airborne particles. Stack emissions containing lead and other metal HAP can also settle onto surfaces near the facility and can be subsequently re-entrained as fine airborne particles.
The current MACT standard for control of fugitive emissions of metal HAP from secondary lead smelters requires process fugitive emissions sources to be captured by negative pressure enclosure hoods and vented to a control device. There is a minimum face velocity requirement for the enclosure hoods that varies based on the emissions source. As an alternative to an enclosure hood requirement, the facility may operate the process fugitive emissions source in a building that is maintained at a lower than ambient pressure. The building ventilation air is required to be conveyed to a control device. Additional fugitive control work practice requirements in the current MACT standard include wetting of storage piles, cleaning of roadways, and washing of vehicles prior to leaving any areas where lead-bearing materials are handled.  
The EPA requested information in the ICR regarding the fugitive control techniques employed at each facility. Based on that information, we assessed the relative effectiveness of the controls implemented by each facility and estimated fugitive emissions at each facility based on that assessment (see Development of the RTR Emissions Dataset for the Secondary Lead Smelting Source Category for more details). The facilities achieving low ambient lead concentrations at nearby monitors were facilities that had total enclosures for their processes. Many implemented work practices that are more than that required by the 1997 NESHAP. We assumed that facilities that were not currently enclosed would install permanent total enclosures with ventilation to a control device and implement additional work practices to prevent the formation of fugitive dust in other areas of their facilities. For each facility, we estimated the area that is currently under a total enclosure ventilated to a control device. We then estimated the additional enclosure area necessary fully enclose the entire process. We assumed facilities that required a substantial area of new enclosures would re-configure their facility in a manner that reduces the overall footprint of the facility.  
Enclosure costs were estimated using the EPA Air Pollution Control Cost Manual. We used the 2008 version of the Air Compliance Advisor (ACA) program, a program developed by the EPA to facilitate the calculations required in the EPA Air Pollution Control Cost Manual, to estimate the cost of the building. The costs were then adjusted to 2009 dollars. The costs considered sheet metal walls, 30 feet high interior, automatic roll-up doors, louvers, make up air fans, ductwork, pressure monitors, and smoke detectors. We ran the ACA program for two model buildings. The average building capital cost based on these two runs was estimated at $40 per square foot. This factor was used to the estimate the cost of the additional enclosure area required for all other facilities.  
The capital cost of the control devices required to control the enclosure ventilation air was estimated based on the flow-rate required to maintain the building under sufficient negative pressure. Based on information submitted in the ICR, we estimated a flow-rate that would result in an air turnover rate of five per hour in a building maintained under sufficient negative pressure. We estimated the cost of the baghouse using the methodology described in section 3.1 of this memorandum.
Annualized costs for the enclosures and associated baghouses were based on a 20 year life expectancy and 7 percent cost of capital. Annual operating costs for the baghouse were estimated based on data obtained in the ICR. We chose this methodology because we believed it to be more representative of actual operation and maintenance costs for this situation. Additional operating and maintenance costs were estimated for the enclosures using guidelines supplied in the EPA Air Pollution Control Cost Manual.  
We calculated annual costs for required installation of two compliance monitors at the property boundary for each facility under regulatory options 1F and 2F. The monitoring costs were obtained from estimates made for similar monitors in the proposed revisions to the Primary Lead Smelting NESHAP, published February 17, 2011 (76 FR 94106).  
We anticipate that the work practices specified in the existing Secondary Lead Smelting NESHAP will not be adequate to maintain fugitive emissions from this source category at an acceptable level. We estimated that an additional three employees per facility at an annualized cost of $250,000 will be needed to implement the following additional fugitive control work practices: maintenance of negative pressure monitors in enclosures, weekly cleaning of all areas where waste generated by housekeeping activities are stored or disposed of, immediate cleaning after accidental releases, inspections of enclosures once per month, twice per week inspection of battery storage area and immediate processing of cracked batteries, and thorough cleaning and inspection of any vehicles leaving the process area.
Methodology for Estimating Emissions Reductions
This section discusses the methodology used to estimate emissions reductions associated with the control options presented in sections 1.0 and 2.0 of this memorandum.
Stack Emissions  -  Metal HAP

      a. Option 1S	
For Option 1S, the outlet lead concentration reported for each stack in the ICR was compared to the limit considered in this regulatory option (i.e., 0.5 mg/dscm ). If the reported concentration was significantly above one half the limit, we assumed that the facility would need to install a new baghouse at that emissions point. For stacks that were less than twenty percent above the limit, we assumed that additional maintenance and change out of filtration media would reduce the concentration to half the current concentration. We assumed that the outlet lead concentration from the newly installed baghouse would be equivalent to the average of all outlet lead concentrations reported in the ICR; we calculated this average to be 0.159 mg/dscm. We estimated the expected reduction in emissions as the difference between current stack emissions and the emissions that would occur after maintenance or replacement of the baghouse. Equation 1 is an example calculation assuming an outlet lead concentration of 0.159 mg/dscm (see Equation 1).
	Emissions Reduction=CixF-(0.159xF)xHxT	(Eq. 1)
Where: 
      Ci = outlet lead concentration reported in the ICR (mg/dscm),
      F = flow rate (dscm/hr),
      0.159 = expected outlet lead concentration of new baghouse (mg/dscm),
      H = annual hours of operation, and
      T = conversion factor for milligrams to tons (1.1 x 10[-9]).
      b. Option 2S 
For option 2S, the stack lead emissions reported by each facility in the ICR were summed and divided by the annual lead production (average of 2008 and 2009) reported in the ICR. A statistical equation that considered variability in emissions was used to calculate a production based emissions limit of 0.009 lb/ton Pb. Based on emissions data received in the ICR, six facilities' emissions were above 0.009 lb/ton Pb. We assumed that these six facilities would sequentially replace or improve their existing baghouses one-by-one, starting with the units reporting the highest lead concentrations, until the facility's emissions were below 0.009 lb/ton Pb. Similar to option 1S, we assumed that a new baghouse could achieve an outlet lead concentration of 0.159 mg/dscm. We estimated that a total of 18 emissions points at six facilities would require reductions in lead emissions in this option. Total emissions reductions were calculated using Equation 1. We assumed emissions of other metal HAP would be reduced proportionally to lead emissions.
      c. Option 3S
For Option 3S, we considered a facility-wide flow-weighted average lead concentration limit of 0.2 mg/dscm as well as a maximum lead concentration limit of 1.0 mg/dscm applicable to any individual stack. We calculated emissions reductions associated with the maximum concentration limit of 1.0 mg/dscm using a modified form of Equation 1. If the reported concentration was significantly above 0.5 mg/dscm, we assumed that the facility would need to install a new baghouse at that emissions point. For stacks that were less than twenty percent above 0.5 mg/dscm, we assumed that additional maintenance and change out of filtration media would reduce the concentration to half the current concentration. We assumed that the outlet lead concentration from the newly installed baghouse would be equivalent to the average of all outlet lead concentrations reported in the ICR; we calculated this to be 0.159 mg/dscm. We estimated the expected reduction in emissions as the difference between current stack emissions and the emissions that would occur after maintenance or replacement of the baghouse using Equation 1. Based on this analysis, we estimated that seven stacks would need replacement baghouses, and three baghouses needed additional maintenance.   
Additionally, each facility's flow-weighted average lead concentration was calculated based on emissions data submitted in the ICR. We then compared that value to facility-wide flow-weighted average limit of 0.2 mg/dscm considered in this option. We estimate that five facilities currently have a flow-weighted average lead concentration above the considered limit. We also considered the impacts of the proposed fugitive control standards presented in section 2.3 of this memorandum on the flow-weighted average concentration of each facility. Because we assumed that each facility will be required to have all processes under total enclosures with negative pressure and ventilation to a control device, we assumed that facilities needing additional enclosures would install one additional corresponding hygiene baghouse. Based on the average outlet lead concentration reported in the ICR for similar sources, we assumed that the outlet lead concentration from these hygiene baghouses would be 0.044 mg/dscm; the average of all building ventilation stacks. We estimated that three of the five facilities initially identified as having emissions above the limit considered in this option would meet the considered limit after installation of the additional enclosures required in the fugitive control options. Furthermore, we estimate that replacing or performing maintenance on all baghouses reporting concentrations above 0.5 mg/dscm in combination with the installation of additional enclosures will result in all facilities being in compliance with the limits considered in this option. The total emissions reductions for this option were calculated using Equation 1. 
      d. Option 4S
For option 4S, we estimated emissions reductions of lead and other metal HAP using information submitted by Quemetco, Inc. regarding the efficiency of the WESP at their California facility. Based on this information, we assumed that emissions of lead and other metal HAP from any source expected to be controlled by the WESP would be reduced by 99.98 percent.
      e. Option 5S
For Option 5S, the outlet lead concentration reported for each stack in the ICR was compared to the limit considered in this regulatory option (i.e., 0.2 mg/dscm ). If the reported concentration was above one half the limit, we assumed that the facility would need to install a new baghouse at that emissions point.  We assumed that a unit with a HEPA filter would be installed in order to reduce the concentration to below 0.1 mg/dscm. The emission reduction was estimated as the difference between current stack emissions and an outlet concentration of 0.1 mg/dscm..
Stack Emissions  -  Organic HAP and D/F

   a. Option 1D
Option 1D considers MACT floor emissions limits for D/F (TEQ) based on furnace type. This option also includes setting MACT floor emissions limits for THC for furnace types that are not regulated in the existing NESHAP (i.e., reverberatory furnaces not collocated with a blast furnace, rotary furnaces, and electric furnaces). Based on our MACT floor calculation (see MACT Floor Analysis for the Secondary Lead Smelting Source Category), we do not anticipate significant D/F or organic HAP emissions reductions associated with this option. However, we assume that facilities operating afterburners will likely increase the operating temperatures to ensure continuous compliance with the considered D/F limit. We believe reduction in D/F and other organic HAP on the order of 10 percent are possible using this assumption.  
   b. Option 2D
Option 2D is a beyond-the-floor option for D/F that establishes a TEQ concentration limit of 17 ng/dscm for blast furnaces not collocated with a reverberatory furnace. Based on the study referenced in section 3.2 of this memorandum, the D/F destruction efficiency of an afterburner operating at 1600°F with a residence time of 2.0  -  2.5 seconds is between 90 and 94 percent.  For the purposes of calculating emissions reductions associated with this option, we assumed a 90 percent destruction efficiency of D/F and organic HAP for newly installed afterburners in this source category.
Fugitive Emissions  -  Metal HAP
For all the fugitive emissions control options considered, we assumed that all facilities would need to reduce their fugitive emissions to a level that would reduce ambient lead concentrations near their property boundary to levels below the lead NAAQS.  
We derived factors to estimate the reductions in fugitive emissions that are likely to occur as a result of enclosing all manufacturing processes material handling operations. Reductions in fugitive emissions of 77 percent from baseline levels were estimated if new total enclosures were installed at a facility where only partial enclosures currently exist. Additional reductions of 80 percent (total reductions of 95 percent) were estimated as a result of implementation of the additional work practices described in section 3.3 of this memorandum. This methodology is described in detail in the Development of the RTR Emissions Dataset for the Secondary Lead Smelting Source Category.
Testing and Monitoring Cost Impacts
The existing NESHAP requires annual stack testing for lead and allows for reducing stack testing to every two years if the measured lead concentrations are below 1.0 mg/dscm. The regulatory options chosen for the final rule in the revised NESHAP allows these same provisions for reduced testing if the emissions are half of the regulatory limit. The final rule also requires annual stack testing for THC, with a reduced testing frequency if emissions are half of the regulatory limit. Stack testing is required once every six years for D/F. The additional costs associated with the stack testing requirements above current costs are anticipated to be $383,000 per year (an average of $24,000 per facility).
The capital cost associated with additional differential pressure monitors for total enclosures is $97,000.    
The total estimated annualized cost for additional testing, monitoring, recordkeeping, and reporting considering the first three years after the proposed revisions are implemented is $790,000. A detailed burden estimate is available in the docket for this rulemaking (Supporting Statement, National Emission Standards for Secondary Lead Smelting).  
SUMMARY OF COST BY FACILITY
Table 6-1 is a summary of estimated costs for each of the facilities in the secondary lead smelting source category.  
Table 6-1  Summary Cost Estimates by Facility
Facility
                              Total Capital Cost 
                               Total Annual Cost
Buick RRF
                                                                     18,490,000
                                                                      3,600,000
East Penn
                                                                              0
                                                                        300,000
EnviroFocus
                                                                              0
                                                                        300,000
Exide Baton Rouge
                                                                      7,250,000
                                                                      1,930,000
Exide Forest City
                                                                      2,560,000
                                                                        720,000
Exide Frisco
                                                                              0
                                                                        460,000
Exide Muncie
                                                                              0
                                                                        300,000
Exide Reading
                                                                      7,020,000
                                                                      1,460,000
Exide Vernon
                                                                              0
                                                                         50,000
Gopher Eagan
                                                                              0
                                                                        300,000
Quemetco CA
                                                                              0
                                                                         50,000
Quemetco IN
                                                                              0
                                                                         50,000
RSR
                                                                              0
                                                                         50,000
Sanders Lead
                                                                     11,690,000
                                                                      2,490,000
TBR
                                                                      1,990,000
                                                                        700,000
JCI
                                                                        610,000
                                                                        420,000
 Total 
                                                                     50,230,000
                                                                     13,180,000