Document ID: EPA-HQ-OAR-2007-0225-0038
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2007-08-02T04:00Z

Appendix- Chapter 5										

5a.1 Cost Information for Non-EGU and area sources

(Full details on controls can be found in Appendix 3)

Low Emission Combustion (LEC)

The average cost effectiveness for large IC engines using LEC technology
was estimated to be $532/ton (ozone season).  The EC/R report on IC
engines (Ec/R, September 1, 2000) estimates the average cost
effectiveness for IC engines using LEC technology to range from
$420-840/ton (ozone season) for engines in the 2,000-8,000 bhp range. 
The key variables in determining average cost effectiveness for LEC
technology are the average uncontrolled emissions at the existing
source, the projected level of controlled emissions, annualized costs of
the controls, and number of hours of operation in the ozone season.  The
ACT document uses an average uncontrolled level of 16.8 g/bhp-hr, a
controlled level of 2.0 g/bhp-hr (87% decrease), and nearly continuous
operation in the ozone season.  The EPA believes the ACT document
provides a reasonable approach to calculating cost effectiveness for LEC
technology.

Leak Detection and Repair (LDAR) for Fugitive Leaks

The control efficiency is 80 percent reduction of VOC at an annualized
cost of $4,800 per ton.  We do not include the costs of this control
measure in our analyses in the Houston nonattainment area since these
controls are already included in the 8-hour Ozone SIP for this area. 

Enhanced LDAR for Fugitive Leaks

The control efficiency of this measure is estimated at 50 percent at a
cost of $3,050/ton of VOC reduced. 

Flare Gas Recovery

The control efficiency of this measure is 98 percent reduction of VOC
emissions at a cost of $2,700/ton. Costs may become negligible as the
size of the flare increases due to recovery credit.

Cooling Towers

There is not a general estimate of control efficiency for this measure;
one is to apply a continuous flow monitor until VOC emissions have
reached a level of 1.7 tons/year for a given cooling tower.  The
annualized cost for a continuous flow monitor is $63,000 – this is
constant over a variety of cooling tower sizes.  

Wastewater Drains and Separators

The control efficiency is 65 percent reduction of VOC emissions at a
cost of $3,050/ton.  This is based on actual sampling and cost data for
5 refineries in the Bay Area Air Quality Management District (BAAQMD).

5a.2 Cost Information for EGU sources

(Full details on controls can be found in Appendix 3)

Cost of Controls as a Result of Lower Sub-regional Caps within the MWRPO
and OTC and other Local Controls outside of these Regions within CAIR 

As previously discussed, the power sector will achieve significant
emission reductions under the Clean Air Interstate Rule (CAIR) over the
next 10 to 15 years.  When fully implemented, CAIR (in conjunction with
NOx SIP Call) will reduce ozone season NOx emissions by over 60 percent
from 2003 levels within the CAIR states. These reductions will greatly
improve air quality and will lessen the challenges that some areas face
when solving nonattainment issues significantly.  

Power sector impacts analyzed in detail in the Final PM NAAQS RIA 15/35
(  HYPERLINK "http://www.epa.gov/ttn/ecas/ria.html" 
http://www.epa.gov/ttn/ecas/ria.html  ) provides the baseline for this
RIA. The analysis and projections in this section attempt to show the
potential impacts of the additional controls applied (see section 3.3.3
of this RIA) to facilitate attainment of the more stringent 8-hr ozone
standard of 0.070 ppm. Generally, the incremental impacts of these
controls on the power sector are marginal.

Projected Costs. EPA projects that the annual incremental cost of the
proposed new ozone standard approach is $0.2billion in 2020.  The
additional annual costs reflect additional retrofits (SCR and SNCR) and
generation shifts,. Annualized cost of CAIR is projected to be $6.17
billion in 2020. The proposed approach applied in this RIA would add
$0.2 billion incremental to this cost.

Projected Generation Mix. Coal-fired generation and natural
gas/oil-fired generation are projected to remain almost unchanged. 
Installation of approximately 3.7 GWs of SCR and 1.1 GWs of SNCR
incremental to the base case are projected as a result of the lower
sub-regional caps. There are very small changes in the generation mix.
Coal-fired generation increases about 12 GWh (an increase of
approximately 0.25% of the total generation) and gas-fired generation
decreases a similar amount.  Hydo, nuclear, other, and renewable based
generation projected to remain the same. Projected retirements of coal
units is marginal, accounting to about 0.4 GWs compared to the base case
approach.

Projected Nationwide Retail Electricity Prices. Retail electricity
prices are projected to change marginally, only about 1%. The extension
of the cap-and-trade approach in the form of lower sub-regional caps
allows industry to meet the requirements of CAIR in the most
cost-effective manner, thereby minimizing the costs passed on to
consumers. Retail electricity prices are projected to increase less than
1% within the MWRPO and OTC regions, and decrease about 1% in the rest
of the CAIR region. 

5a.3 Cost information for Onroad and Nonroad Mobile Sources

(Full details on controls can be found in Appendix 3)

Diesel Retrofits and Vehicle Replacement 

To calculate costs for the use of selective catalytic reduction as a
retrofit technology, the assumption was made that all relevant vehicles
would be affected by the control. Therefore, all on-road heavy duty
diesel vehicles that received a retrofit were assumed to employ
selective catalytic reduction as a retrofit technology. The average cost
of a selective catalytic reduction system ranges from $10,000 to $20,000
per vehicle depending on the size of the engine, the sales volume, and
other factors (Pechan, 2003). For AirControlNET analysis, the average
estimated cost of this system is $15,000 per heavy duty diesel vehicle.
(Source: AirControlNET Documentation, III-160).  OTAQ conducted an
additional assessment of current SCR costs and calculated that for the
year 2020, the cost of SCRs will be approximately $13,000 per unit.  
This estimate reflects an economy of scale cost reduction of 33%, which
is consistent with trends in other mobile source control technologies
that enter large scale production.

The rebuild/upgrade kit is applied to nonroad equipment.  OTAQ estimates
the cost of this kit to be $2,000 to $4,000 per vehicle.  For this
analysis, the average estimated cost is $3,000 per vehicle. 

Table 5a.1: Summary of Cost Effectiveness for Rebuild/Upgrade Kit for
Various Nonroad Vehicles

Nonroad Vehicle	Retrofit Technology	Range of $/ton NOx Emission Reduced
Range of $/ton HC Emission Reduced

Tractors/Loaders/Backhoes	Rebuild/  Upgrade kit	$1,300	$2,200	$9,600
$18,900

Excavators

$1,100	$4,200	$8,100	$43,400

Crawler Tractor/Dozers

$1,100	$4,200	$8,300	$43,500

Skid Steer Loaders

$1,000	$1,600	$7,400	$14,800

Agricultural Tractors

$1,200	$4,900	$9,300	$34,300

Table 5a.2: Summary of Cost Effectiveness for SCR for Various Nonroad
Vehicles

Nonroad Vehicle	Retrofit Technology	Range of $/ton NOx Emission Reduced
Range of $/ton HC Emission Reduced

Tractors/Loaders/Backhoes	SCR	$2,900	$5,300	$32,200	$63,700

Excavators

$2,700	$10,400	$27,400	$146,200

Crawler Tractor/Dozers

$2,800	$10,400	$27,900	$146,700

Skid Steer Loaders

$2,600	$4,000	$24,900	$52,100

Agricultural Tractors

$3,000	$7,600	$31,200	$115,500

Table 5a.3: Summary of Cost Effectiveness for SCR for Various Highway
Vehicles 

Highway Vehicle	Retrofit Technology	Range of $/ton NOx Emission Reduced
Range of $/ton HC Emission Reduced

Class 6&7 Truck	SCR	$5,600	$14,100	$46,900	$126,200

Class 8b Truck

$1,100	$2,500	$14,900	$44,600

Implement Continuous Inspection and Maintenance Using Remote Onboard
Diagnostics (OBD)

Continuous I/M can significantly lower test costs and “convenience”
costs of I/M programs.  Using radio frequency transmission, there is a
one-time cost for the Continuous I/M device and its installation.  In
the case of Oregon, this cost is $50.  The unit is then good for the
life of the vehicle.  Annual or biennial test fees are not required
beyond this initial fee to operate the system but there may be
additional operational costs to cover data processing, reporting, and
oversight.  For the proposal RIA, we present estimated cost savings of
the Continuous I/M program, but do not include the cost savings in the
overall cost estimates.  For the final RIA, we plan to include the
Continuous I/M cost savings in the overall costs.  This will result in a
significant reduction of overall cost.

We can compare the costs of periodic testing to Continuous I/M.  The
cost of data processing, reporting and oversight is estimated to be $2
per vehicle per year in the typical I/M area.  If we assume an average
vehicle life span of 14 years, with the first test at 4 years of age,
vehicles will get 5 inspections in a biennial program and 10 in an
annual program (not including additional change of ownership
inspections, which are required in some areas).  Thus, in a Continuous
I/M program, an additional cost of $10-$20 will be incurred for each
vehicle over its life, assuming the same costs apply in a Continuous I/M
program as in a tailpipe test program.  

In addition to test costs, Continuous I/M avoids most of the convenience
costs associated with I/M – the time and fuel it takes to drive to the
station, get a test, and return home.   The one-time installation of the
transmitter requires a visit to the test station, but no further visits
are required after that.  So, if we assume, conservatively, that the
typical test cycle requires a total of two hours of time at $20 per hour
and a half-gallon of gas (10 miles round trip with an average fuel
economy of 20 mpg) at $3 per gallon gives us a cost of $41.50.  Over the
life of the vehicle that works out to $207.50 in a biennial program or
$415 in an annual program.  Compare this to the one time trip for
Continuous I/M OBD at a cost of $41.50 and substantial savings are
realized.  Application of Continuous I/M resulted in NOx reductions of
4.2 to 6.5 percent, depending on the geographic area, vehicle class, and
type of existing I/M program.  Some areas have no I/M, some I/M programs
require annual testing, some require biennial testing, and some areas
are piloting continuous I/M.  We applied continuous I/M reductions only
to those areas that currently have annual or biennial programs.

Putting it all together, the table below shows the lifetime inspection
and convenience costs of Continuous I/M versus periodic I/M  (assuming
the current mix of annual and biennial testing and current test costs). 
Periodic I/M testing costs about $20 billion over a 10 year lifecycle
with an additional $25 billion in convenience costs for a total of $45
billion.  By contrast, Remote OBD has a test and installation cost of
$4.3 billion dollars over the same 10 year period, and a convenience
cost of $2.5 billion for a total of $6.8 billion.  Thus, nationwide
installation of Remote OBD would save the nation’s motorists about $38
billion in inspection and convenience costs over a 10 year period.

Table 5a.4 Lifetime Inspection and Convenience Costs of I/M

	Test/Install Cost	Convenience Cost	Total

Cost

Continuous I/M	$20 billion	$25 billion	$45 billion

Remote I/M 	$4.3 billion	$2.5 billion	$6.8 billion

Savings	$15.7 billion	$22.5 billion	$38.2 billion

Given that Continuous I/M will actually reduce the cost of I/M,
implementation of this measure is highly cost-effective..   More
information on I/M can be found at   HYPERLINK
"http://www.epa.gov/otaq/regs/im/im-tsd.pdf" 
http://www.epa.gov/otaq/regs/im/im-tsd.pdf  and
www.epa.gov/obd/regtech/inspection.htm

Eliminating Long Duration Truck Idling

For purposes of this RIA, we identified this measure as a no cost
strategy i.e. $0/ton NOx.  Both TSEs and MIRTs have upfront capital
costs, but these costs can be fully recovered by the fuel savings.  The
examples below illustrate the potential rate of return on investments in
idle reduction strategies.

TSE

The average price of TSE technology is $11,500 per parking space.  The
average service life of this technology is 15 years.  Truck engines at
idle consume approximately 1 gallon per hour of idle.  Current TSE
projects are operating in environments where trucks are idling, on
average, for 8 hours per day per space for 365 days per year (or about
2,920 hours per year).  Since TSE technology can completely eliminate
long duration idling at truck spaces (i.e. a 100% fuel savings), this
translates into 2,920 gallons of fuel saved per year per space. At
current diesel prices ($2.90/gallon), this fuel savings translates into
$8,468.  Therefore, an $11,500 capital investment should be recovered
within about 17 months.  In this scenario, TSE investments offer over a
70% annual rate of return over the life of the technology. 

While it is technically feasible to electrify all parking spaces that
support long duration idling trucks, we should note that TSE technology
is generally deployed at a minimum of 25-50 parking spaces per location
to maximize economies of scale.  The financial attractiveness of
installing TSE technology will depend on the demonstrated truck idling
behavior – the greater the rates of idling, the greater the potential
emissions reductions and associated fuel and cost savings.  

MIRTs

The price of MIRT technologies ranges from $1,000-$10,000.  The most
popular of these technologies is the auxiliary power unit (APU) because
it provides air conditioning, heat, and electrical power to operate
appliances.  The average price of an APU is $7,000.  The average service
life of an APU is 10 years.  An APU consumes two-tenths of a gallon per
hour, so the net fuel savings is 0.80 gallons per hour.  EPA estimates
that trucks idle for 7 hours per rest period, on average, and about 300
days per year (or 2,100 hours per year).  Since idling trucks consume 1
gallon of fuel per hour of idle, APUs can reduce fuel consumption for
truck drivers/owners by approximately 1,680 gallons per year.  At
current diesel prices ($2.90/gallon), truck drivers/owners would save
$4,872 on fuel if they used an APU.  Therefore, a $7,000 capital
investment should be recovered within about 18 months.  In this
scenario, APU investments offer almost a 70% annual rate of return over
the life of the technology.

Cost-Effectiveness of Measure: $0/ton NOx 

Commuter Programs

We used the Transportation Research Board’s (TRB) cost-effectiveness
analysis of Congestion Mitigation and Air Quality Improvement Program
(CMAQ) projects to estimate the cost-effectiveness of this measure.  TRB
conducted an extensive literature review and then synthesized the data
to develop comparable estimates of cost-effectiveness of a wide range of
CMAQ-funded measures.  We took the average of the median
cost-effectiveness of a sampling of CMAQ-funded measures and then
applied this number to the overarching commuter reduction measure.  The
CMAQ-funded measures we selected were:

regional rideshares 

vanpool programs

park-and-ride lots

regional transportation demand management

employer trip reduction programs  

We felt that these measures were a representative sampling of commuter
reduction incentive programs.  There is a great deal of variability,
however, in the type of programs and the level of incentives that
employers offer which can impact both the amount of emissions reductions
and the cost of commuter reduction incentive programs.

We chose to apply the resulting average cost-effectiveness estimate to
one pollutant – NOx – in order to be able to compare commuter
reduction programs to other NOx reduction strategies. TRB reported the
cost-effectiveness of each measure, however, as a $/ton reduction of
both VOC and NOx by applying the total cost of the program to a 1:4
weighted sum of VOC and NOx [[total emissions reduction = (VOC * 1) +
(NOx * 4)).  There was not enough information in the TRB study to
isolate the $/ton cost-effectiveness for just NOx reductions, so we used
the combined NOx and VOC estimate.  The results are presented in Table
5a.5.

Table 5a.5 Cost-Effectiveness of Best Workplaces for Commuters Type
Measures from the 2002 TRB Study, 

$/ton (2000$) 1:4 VOC:NOx (reported in the RIA as $/ton NOx)

	 	Low	High	Median

Regional Rideshare	$1,200 	$16,000 	$7,400 

Vanpool Programs	$5,200 	$89,000 	$10,500 

Park-and-ride lots	$8,600 	$70,700 	$43,000 

Regional TDM	$2,300 	$33,200 	$12,500 

Employer trip reduction programs	$5,800 	$175,500 	$22,700 

Average of All Measures	$4,620 	$76,900 	$19,200 

Cost-Effectiveness of Measure: $19,200/ton NOx

Reduce Gasoline RVP from 7.8 to 7.0 in Remaining Nonattainment Areas

Cost-Effectiveness of Measure: Cost per ton will be $5,700 to $36,000 /
ton VOC

For more information on RVP:

Michigan Department of Environmental Quality and Southeast Michigan
Council 	of Governments. Proposed Revision to State of Michigan State
Implementation Plan for 7.0 Low Vapor Pressure Gasoline Vapor Request
for Southeast Michigan.  May 24, 2006.

U.S. EPA. Guide on Federal and State Summer RVP Standards for
Conventional Gasoline Only. EPA420-B-05-012. November 2005

 “NOx Emissions Control Costs for Stationary Reciprocating Internal
Combustion Engines in the NOx SIP Call States,”  E.H. Pechan and
Associates, Inc., Springfield, VA, August 11, 2000.  Available on the
Internet at   HYPERLINK
"http://www.epa.gov/ttn/ecas/regdata/cost/pechan8-11.pdf" 
http://www.epa.gov/ttn/ecas/regdata/cost/pechan8-11.pdf 

 “Suggested Short List and Evaluation of Point and Area Source
Emission Control Measures for the Houston-Galveston-Brazoria 8-Hour
Ozone Nonattainment Area,” Texas Council on Environmental Quality,”
Prepared by ENVIRON International Corp. for Lamar Univ.   June 15, 2006.
 Available on the Internet at    HYPERLINK
"http://www.h-gac.com/NR/rdonlyres/e4cgpdlu4wd3tiguvvxkg5ziefqy36adm2o5c
z5jpm36c67ksxbtfurvvwvgdquy362skyhnsel5uh4rdkfz2rusphd/Final+Short+List+
%26+Evaluations.pdf" 
http://www.h-gac.com/NR/rdonlyres/e4cgpdlu4wd3tiguvvxkg5ziefqy36adm2o5cz
5jpm36c67ksxbtfurvvwvgdquy362skyhnsel5uh4rdkfz2rusphd/Final+Short+List+%
26+Evaluations.pdf .

 MARAMA Multipollutant Rule Basis for Flares, part of “Assessment of
Control Technology Options for Petroleum Refineries in the mid-Atlantic
Region.”  February 19, 2007.  Found on the Internet at   HYPERLINK
"http://www.marama.org/reports/021907_Refinery_Control_Options_TSD_Final
.pdf" 
http://www.marama.org/reports/021907_Refinery_Control_Options_TSD_Final.
pdf .    

 Bay Area Air Quality Management District (BAAQMD).  Proposed Revision
of Regulation 8, Rule 8: Wastewater Collection Systems.  Staff Report,
March 17, 2004.   

 Bay Area Air Quality Management District (BAAQMD).  Proposed Revision
of Regulation 8, Rule 8: Wastewater Collection Systems.  Staff Report,
March 17, 2004.   

 Transportation Research Board, National Research Council, 2002. The
Congestion Mitigation and Air Quality Improvement Program: assessing 10
years of experience, Committee for the Evaluation of the Congestion
Mitigation and Air Quality Improvement Program.

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