Road to Boiler MACT Takes Sharp Turns

Already, in the first two months of this year, the unpredictable and winding road of the so-called Boiler MACT, has taken yet another set of hair-pinned curves. Now industry groups are pushing even harder for an act of Congress that would put on the brakes and allow more time for the regulations to be reshaped. At stake, says Robert Bessette, president of the Council of Industrial Boiler Owners (CIBO; www.cibo.org; Warrenton, Va.), are over 220,000 jobs and over $14 billion in capital costs that would be required for over 1,700 major-source units.

The regulation in question involves new emissions standards for hazardous air pollutants (HAPs) emitted by industrial boilers, process heaters and commercial and industrial solid-waste incinerators (CISWI), based on the performance of the maximum-achievable control technology (MACT). In March 2011, the U.S. Environmental Protection Agency (EPA; Washington, D.C.; www.epa.gov) issued the final rule, but then in May pulled back with an administrative “stay” of the regulation pending reconsideration. The stay was called for by CIBO, the American Chemistry Council (ACC; Washington, D.C.; www.americanchemistry.com) and a host of other influential industry groups because of concerns that parts of the rule were not achievable and did not give industry enough time to identify, budget for and implement the necessary changes to their facilities.

While the stay provided a brief, fleeting sigh of relief to industry and gave EPA over six months to reconsider the rule, it kicked up the dust in terms of uncertainty. In fact, the confusion came to a head in January 2012, when the U.S. District Court for the District of Columbia issued a decision that overturned the U.S. EPA’s stay of the March 2011 rules.

The court decision left many in the regulated community scrambling. As Leslie Hulse, assistant general counsel for ACC explains, “With the loss of the stay, the rule became effective on May 20, 2011. This means that existing sources are [technically] out of compliance with at least one administrative requirement: submittal of initial notifications.” Acknowledging the ambiguity of the situation, EPA issued a letter on February 7 to ACC and seven other industry groups [1], informing them that the agency will not enforce the submittal deadlines for certain notification requirements in the March 2011 rule (see box, below).

EPA explained that letter in a statement to CE on February 10, 2012:

The letter applies to new and existing sources under the boiler rule and to new sources under the incinerator rule. This action clarifies how EPA expects [emission] sources to act in light of a recent court decision, and will ensure that no unnecessary steps will need to be taken to implement certain requirements that the agency will replace later this year.

The court’s decision does not impact the agency’s reconsideration proposals issued in December 2011 [see box,EPA’s Proposed Changes To Final Rule, below] . EPA is currently receiving public comments on the proposed reconsidered rules, and EPA will finalize them later this year, after reviewing and responding to stakeholder comments.

The final rules will address the compliance dates for existing sources, as well as the initial notification requirements addressed by the No Action Assurance letter. It is EPA’s current intention to work toward final rules that give entities the full compliance period as allowed by the Clean Air Act with a possibility of an additional year to install control technology, as allowed on a case-by-case basis under the Clean Air Act. The CISWI rule does not contain notification requirements for existing sources that cause a need for enforcement discretion.

 

Costs of proposed rule

Whenever the rule is enforced, the Boiler MACT will require emissions controls for particulate matter (PM), hydrogen chloride, mercury and carbon monoxide. According to a January 2012 update, which applies to the EPA’s December 2012 proposed modifications to the rule, CIBO estimates that the total capital cost to comply will be $14.3 billion and will threaten over 220,000 jobs [3, 4], which is more than double EPA’s $5.4 billion estimate [5].

CIBO’s estimate was developed with URS Corp. (San Francisco, Calif.; www.urscorp.com) and covers the technologies that EPA has identified as necessary to comply with the Boiler MACT: a fabric filter for PM control, carbon injection for control of Hg, a scrubber for control of HCl and combustion improvements or an oxidation catalyst for control of CO. Estimated costs (Table 1) are based in large part on information in EPA’s December 2011 survey and emissions databases, CIBO says.

In CIBO’s estimates, information from various sources was used to determine a base capital cost for a 250 million Btu/h boiler for each PM, CO and HCl control technology option and then scaled based on the size of each boiler in the inventory. For example, the report says, the capital cost of a wet scrubber on a 100 million Btu/h boiler is calculated as the base cost times (100/250)^0.6. A fixed cost of $1 million was assumed for installation of a carbon adsorption system for Hg control, since these systems do not vary much in cost by boiler size. Base cost assumptions are presented in Table 2 (ESP is electrostatic precipitator).

Table 1. Estimated Capital Cost To Upgrade All Affected Sources (by Emission Type)
PM	$5 billion
HCl	$6 billion
Hg	$468 million
CO	$2.8 billion
Total	$14.3 billion

Table 2. Base Cost Assumptions for a 250 million Btu/h boiler
Fabric filter (FF)	$7 million
Scrubber	$8 million
Scrubber/FF/ESP upgrade	$4 million
Carbon injection for Hg	$1 million
Combustion, fuel feed improvements or catalyst for CO	$3 million

CIBO maintains that in some cases the emission limits will be very difficult to achieve over all operating conditions using the technologies EPA has identified, but the CIBO cost analysis does not factor in additional costs that would be associated with alternate technologies. With that in mind, the CIBO analysis explains that it differs from the EPA analysis as follows:

• EPA has used the outdated Control Cost Manual, while CIBO has based its cost estimates on more recent information, including actual vendor cost estimates, actual project costs, best available control technology (BACT) and best available retrofit technology (BART) analyses, industry control cost studies, and so on

• CIBO used a higher CO-abatement catalyst cost than EPA’s. The CIBO cost is based on a recent quote from BASF, while EPA’s is based on the 1998 Control Cost Manual section on catalytic oxidizers for VOC (volatile organic compound) control

• EPA has estimated that a tune-up or burner replacement will be adequate for many units to achieve the CO limits. CIBO does not agree with this assumption because some of the CO limits are fairly low and must be met over all operating conditions except startup and shutdown. So, CIBO estimated higher costs to implement new combustion controls, burner replacements, fuel-feed system improvements, or CO-abatement catalyst

• CIBO’s CO-control capital costs are higher than EPA’s, mostly because EPA assumed that tune-ups and replacement burners will be adequate for the vast majority of boilers to comply, and CIBO disagrees with that assumption

• EPA has estimated that activated-carbon injection will be required on only 35 existing units because installation of a fabric filter is expected to achieve the mercury emission limits, except in cases where a unit already has a fabric filter and does not meet the limits. CIBO does not agree that fabric filters will be sufficient to reduce mercury emissions to some of the ultra-low levels in this rule. “There is a flaw in the logic that fabric filters are expected to achieve mercury emission limits when there are many boilers in the database that are equipped with fabric filters and have measured mercury emissions higher than the applicable limit. EPA’s estimated industry-wide capital cost for activated carbon injection [5] is extremely low, at only $115,000 per unit”

• EPA has estimated costs to install packed-bed scrubbers for HCl control. CIBO notes, however, that “industrial boilers do not use packed-bed scrubbers for acid-gas control, as the limitations of these devices make them impractical for use on applications with high flowrates, high PM loading, and high inlet-pollutant concentration. EPA’s own fact sheet on these devices lists the limitations of these devices and indicates that they are only used in applications up to 75,000 scfm, which limits their use to small units only.” Facilities will instead install wet scrubbers, dry scrubbers, or semi-dry scrubbers to control acid-gas emissions from industrial boilers, CIBO says

 

Calling for regulatory relief

Given the delicate state of the U.S. economy, the significant costs at stake and the uncertainty that still looms, industry groups like CIBO and ACC have stepped up lobbying efforts. “Without legislation specifically interpreting the act or telling EPA and the courts how to do it, the uncertainty is increased regarding ENGO [environmental, non-governmental organizations] and the DC Circuits ruling on certain litigation to follow,” says CIBO’s Bessette. “Any of the good things EPA has done, like work practices, could be lost, which could result in gas-fired boilers needing controls — and that could be another $50 billion in capital costs for industry.”

At this point, their hopes are pinned on the EPA Regulatory Relief Act. The House of Representatives introduced its version of the bill (H.R. 2250) in June 2011 and passed it in October 2011. The Senate’s version of the legislation, S. 1392, currently has 41 bipartisan cosponsors. “We are and will be trying to make sure H.R. 2250 language or something like it is included in whatever vehicle is available to move it,” says CIBO’s Bessette.

Legislative vehicles come in unexpected forms, and at CE press time, consideration to include the act as part of the conference agreement on payroll tax-cut extension legislation (H.R. 3630) appeared to have been discarded. (For more on the status as it develops, check the online version of this story at www.chemengonline.com.)*

The reasons for passing the Relief Act, as detailed in a multi-association letter to members of Congress [6], are that serious challenges still remain:
 

Jobs are in jeopardy.In the re-proposed rules, some standards became more stringent, and some limits may not be achievable, especially in the current three-year compliance timeframe.

Serious legal uncertainty.The court decision overturning EPA’s stay of the March 2011 rules is yet another example of the continuing morass of uncertainty surrounding the rules — a problem legislation would solve.

Important biomass materials are still not listed as fuels.This means that the boilers burning these materials could be regulated under the onerous and stigmatizing incinerator standards, or the material would be land filled.

Inadequate capital planning time. The rules do not provide enough time for capital planning and compliance, given their complexity and competition for a limited pool of qualified domestic vendors and installers. Businesses need five years to fully comply with the rules, not the two or three years in the current rules.

Inadequate time to finalize rules.EPA’s current rulemaking schedule is so accelerated that it is unlikely all the comments and data that will be received during the current comment period can be fully analyzed and utilized. Moving too fast increases the likelihood that the final rules will be overturned again.

EPA declined to comment on the act that is being considered in Congress.

* Resources referenced by a number in brackets within this story, are available for download in the Online Extras tab at the top of this story.