1
MEMORANDUM
SUBJECT:
Summary
of
Environmental
and
Cost
Impacts
of
Proposed
Revisions
to
Portland
Cement
NESHAP
FROM:
Mike
Laney,
RTI
David
Green,
RTI
Keith
Barnett,
EPA
TO:
Docket
Number
OAR­
2002­
0051
DATE:
August
19,
2005,
revised
October
11,
2005
A.
Affected
Industry
The
portland
cement
manufacturing
industry
is
comprised
of
an
estimated
118
cement
plants
operating
a
total
of
210
nonhazardous
waste
burning
kilns.
It
is
estimated
that
one
brownfield
kiln
per
year
will
come
online
following
promulgation
of
the
amendments.

B.
Air
Quality
Impacts
Hydrocarbon
Emissions
The
variation
in
hydrocarbon
emissions
from
kilns
makes
it
difficult
to
quantify
impacts
on
a
national
basis
with
any
accuracy.
Reported
total
hydrocarbon
emission
(
THC)
test
results
range
from
less
than
1
ppmvd
(
at
7%
O2)
to
over
140
ppmvd
(
Docket
item
II­
D­
195,
Docket
A­
92­
53).

A
model
kiln,
with
no
bypass,
producing
650,000
tons
of
clinker
per
year
will
be
used
to
illustrate
the
difficulty
of
accurately
assessing
the
impacts
of
the
proposed
amendments
on
hydrocarbon
emissions.
For
52
kilns
tested
for
hydrocarbon
emissions
(
Docket
item
II­
D­
195,
Docket
A­
92­
53),
approximately
25
percent
had
emissions
of
hydrocarbons
that
exceeded
the
proposed
THC
limit
for
existing
kilns
with
no
bypass
of
20
ppm.
The
average
hydrocarbon
emissions
for
the
kilns
exceeding
20
ppm
was
62.5
ppm.
Based
on
a
new
preheater/
precalciner
kiln
operating
at
650,000
tons
of
clinker
per
year,
emission
reductions
as
a
result
of
the
standard
would
vary
depending
on
the
combustion
practices
in
use.
Kilns
operating
at
or
just
above
the
20
ppm
limit
would
experience
little
or
no
emission
reductions
as
a
result
of
the
standard.
For
an
existing
kiln
exceeding
the
proposed
limit
and
currently
emitting
near
the
average
hydrocarbon
level
of
62.5
ppm,
improvements
in
combustion
practices
would
result
in
a
reduction
of
140.5
tons/
yr
for
a
650,000
ton/
yr
kiln.
Thus,
if
75%
of
the
210
kilns
achieved
emissions
reductions
of
this
2
magnitude,
annual
THC
emissions
would
be
decreased
by
an
estimated
22,000
tons/
year.
[
A
kiln
with
poor
combustion
practices
and
emitting
at
the
highest
reported
hydrocarbon
level
of
142
ppm
would
experience
an
emission
reduction
of
403.3
tons/
yr].

Hydrogen
Chloride
(
HCl)
Emissions
Based
on
the
use
of
alkaline
scrubbers
on
kilns
at
some
portland
cement
plants
and
their
ability
to
reduce
HCl
emissions,
emission
limits
for
HCl
are
being
proposed
for
new
kilns.
Based
on
an
assessment
of
HCl
scrubbers
used
in
municipal
waste
combustor
and
medical
waste
incinerator
applications
and
transfer
of
similar
technology
to
the
cement
industry
and
on
vendor
design
information,
EPA
determined
that
an
alkaline
scrubber
can
achieve
15
ppmv
HCl
outlet
concentration
at
low
inlet
HCl
loadings
or
at
least
90
percent
removal
with
an
inlet
HCl
level
of
100
ppmv
or
greater
(
63
FR
14182,
March
24,
1998).

Emissions
reductions
of
HCl
from
new
kilns
are
calculated
from
a
baseline
of
54
ppmv
HCl
for
a
kiln
uncontrolled
for
HCl,
i.
e.,
without
a
wet
scrubber,
and
assuming
emissions
of
15
ppmv
for
a
controlled
kiln
(
II­
B­
67,
Docket
No.
A­
92­
53).
For
a
new
preheater/
precalciner
kiln
operating
at
650,000
tons
of
clinker
per
year,
the
reduction
in
emissions
of
HCl
is
estimated
at
106.9
tons/
yr
(
II­
B­
67,
Docket
No.
A­
92­
53).
Based
on
one
new
kiln
per
year,
HCl
emissions
will
be
reduced
by
534.5
tons/
yr
in
the
fifth
year
following
promulgation.

Sulfur
Dioxide
(
SO2)
and
Particulate
Matter
(
PM)
Emissions
Installation
of
alkaline
scrubbers
will
also
reduce
emissions
of
SO2.
Reductions
in
SO2
emissions
are
based
on
emissions
of
0.8
lb
SO2/
ton
of
feed
with
75
percent
removal
(
II­
A­
4
and
II­
B­
67,
Docket
No.
A­
92­
53).
The
reduction
in
SO2
emissions
for
a
new
preheater/
precalciner
kiln
operating
at
650,000
tons
of
clinker
per
year,
is
estimated
at
321.8
tons/
yr
(
Docket
item
II­
B­
67,
Docket
No.
A­
92­
53).
At
a
rate
of
one
new
kiln
per
year,
SO2
emissions
will
be
reduced
by
1,609
tons/
yr
in
the
fifth
year
following
promulgation.
Note
that
we
have
determined
that
reducing
SO2
emissions
also
results
in
a
reduction
in
fine
particle
emissions
because
some
SO2
is
converted
to
sulfates
in
the
atmosphere.
Therefore,
the
proposed
HCl
standards
will
also
result
in
a
reduction
in
emissions
of
fine
PM.

Secondary
Impacts
Secondary
air
quality
impacts
will
result
from
the
increased
electrical
demand
associated
with
the
operation
of
the
scrubber
added
to
new
cement
kilns
to
comply
with
the
HCl
emission
limit.
The
additional
electricity
usage
of
an
added
alkaline
scrubber
3
for
a
new
650,000
ton/
yr
kiln
is
estimated
at
984,863
kWhr/
yr
(
Docket
item
II­
B­
67,
Docket
No.
A­
92­
53).
Emission
factors
used
to
estimate
increased
emissions
of
NOx,
CO,
SO2,
and
PM10
are
as
follows
(
Docket
item
IV­
B­
25,
Docket
No.
A­
94­
52):

NOx
­
0.00446
lb/
kWhr
CO
­
0.00231
lb/
kWhr
SO2
­
0.00765
lb/
kWhr
PM10
­
2.25(
10­
4)
lb/
kWhr
Annual
emissions
resulting
from
the
increased
electrical
demand
of
an
alkaline
scrubber
at
a
new
650,000
ton/
yr
kiln
would
be
as
follows:

NOx
­
2.2
tons/
yr
CO
­
1.1
tons/
yr
SO2
­
3.8
tons/
yr
PM10
­
0.11
tons/
yr
C.
Water
Quality
Impacts
The
use
of
alkaline
scrubbers
to
control
HCl
emissions
will
result
in
an
increased
consumption
of
water
(
for
makeup
water
and
production
of
the
scrubber
slurry).
For
a
new
650,000
ton/
yr
kiln,
the
additional
water
requirement
is
estimated
at
40,556,723
gallons
per
year
(
II­
B­
67,
Docket
No.
A­
92­
53).
Assuming
one
new
kiln
per
year,
total
water
requirements
at
the
end
of
the
fifth
year
after
promulgation
will
be
approximately
202.8
million
gallons.

D.
Solid
Waste
Impacts
Additional
solid
waste
will
result
from
the
disposal
of
the
scrubber
slurry.
For
a
new
650,000
ton/
yr
kiln,
the
additional
solid
waste
generated
as
a
result
of
the
addition
of
the
scrubber
is
estimated
at
45,555
tons
per
year
(
II­
B­
67,
Docket
No.
A­
92­
53).
Assuming
one
new
kiln
per
year,
the
total
additional
solid
waste
generated
at
the
end
of
the
fifth
year
following
promulgation
of
the
amendments
will
be
about
227,800
tons.

E.
Energy
Impacts
The
use
of
alkaline
scrubbers
to
control
HCl
will
increase
the
demand
for
electricity.
The
additional
electricity
for
an
added
alkaline
scrubber
for
a
new
650,000
ton/
yr
kiln
is
estimated
at
984,863
kWhr/
yr
(
II­
B­
67,
Docket
No.
A­
92­
53).
Assuming
one
new
kiln
per
year,
the
total
electrical
demand
in
the
fifth
year
after
promulgation
will
be
4.9
million
kWhr.
4
F.
Cost
Impacts
Existing
Kilns
Under
the
proposed
rule,
existing
sources
could
install
either
THC
CEMs
or
CO
CEMS
to
demonstrate
continuous
compliance
with
the
kiln
(
or
kiln
bypass)
THC
limits.
CO
CEMS
are
less
expensive
than
THC
CEMS,
so
it
is
assumed
that
sources
will
install
CO
CEMS.
EPA's
Continuous
Emission
Monitoring
System
Cost
Model,
Version
3.0
was
used
to
estimate
capital
and
operating
costs
of
these
systems.
A
range
of
annualized
capital
costs
were
estimated
based
on
social
discount
factors
of
3
percent
and
7
percent.

Total
installed
capital
costs
("
first
costs")
for
extractive
CO
CEMS
at
existing
cement
kilns,
include
the
cost
of
the
monitor,
sampling
system,
data
acquisition
system,
and
shelter
(
including
fabrication).
In
addition,
labor
costs
for
planning,
equipment
selection,
installation,
performance
specification
testing
and
preparation
of
a
QA/
QC
plan
are
included.
These
costs
are
estimated
at
$
138,900
per
kiln,
including
a
cost
escalation
from
1998
to
2003.
At
a
3%
and
7%
capital
amortization,
annual
capital
costs
range
from
$
11,644
to
$
15,261/
year/
kiln.
Installations
at
new
plants
are
slightly
less
expensive
($
137,800
per
kiln
or,
amortized
capital
cost
of
$
11,556
to
15,152/
year/
kiln),
reflecting
simpler
installation.

A
THC
performance
test
will
also
be
required
for
each
kiln.
EPA
estimates
that
a
Method
25A
test
will
require
280
hours
of
technician
labor,
supported
by
14
hours
of
management
labor
and
28
hours
of
clerical
labor.
The
most
recent
labor
rates
from
the
U.
S.
Department
of
Labor,
Bureau
of
Labor
Statistics,
inflated
by
110%,
for
technical,
management
and
clerical
labor
are
$
64.60,
$
95.32
and
$
40.09
per
hour,
respectively.
Estimated
costs
are
$
20,545/
test.
Testing
costs
amortized
over
a
5
year
period
at
3%
and
7%
will
result
in
an
additional
$
4486/
year/
kiln
and
$
5010/
year/
kiln,
respectively.

Operation
and
maintenance
(
O&
M)
of
the
CEMS,
plus
an
annual
RATA,
quarterly
audits,
record
keeping
and
updates
is
estimated
at
$
21,400
per
kiln
(
including
a
cost
escalation
to
2003).

Total
capital
costs
for
existing
kilns,
consisting
of
CEM
and
performance
test
are
$
159,545/
year/
kiln.
The
annual
capital
costs
at
3%
and
7%
amortization
range
from
$
16,130
to
$
20,272/
kiln/
yr.
Total
annual
costs
per
kiln,
comprised
of
capital
recovery
plus
O&
M
are
estimated
at
$
37,530
and
$
41,672
for
existing
kilns.
Nationwide,
total
annual
cost
for
existing
kilns
is
estimated
at
$
7,881,300
to
$
8,751,120.
5
During
the
development
of
the
promulgated
rule
for
portland
cement
manufacturing
(
63
FR
14182,
March
24,
1998),
activated
carbon
injection
(
ACI)
was
investigated
as
a
potential
beyondthe
floor
alternative
for
mercury
for
existing
as
well
as
new
cement
kilns.
Capital
costs
for
ACI
ranged
from
$
680,000
to
$
4.9
million
per
kiln
with
annual
costs
ranging
from
$
426,000
to
$
3.3
million
(
Docket
item
II­
B­
67,
Docket
No.
A­
92­
53).
These
costs
are
1993
costs.
Costs
were
updated
to
2003
using
plant
cost
indices
published
in
Chemical
Engineering
(
Chemical
Engineering,
September
1999
and
November
2004).
Thus,
ACI
costs
for
2003
are
calculated
as
follows:

Capital
cost
=
$
680,000
×
(
402.0/
359.2)
$
760,920/
kiln
Capital
cost
=
$
4,900,000
×
(
402.0/
359.2)
$
5,483,853/
kiln
Annual
costs
for
2003
are:

Annual
cost
=
$
426,000
×
(
402.0/
359.2)
$
476,694/
kiln
Annual
cost
=
$
3,300,000
×
(
402.0/
359.2)
$
3,693,207/
kiln
For
210
kilns,
nationwide
annual
costs
for
an
ACI
system
would
range
from
$
100.1
million/
year
to
$
775.5
million/
year.
Applying
the
same
cost
escalator
(
402.0/
359.2)
to
the
1993
cost
effectiveness
estimates
of
$
20
million
and
$
50
million
per
ton
of
mercury
removed
(
63
FR
14182,
March
24,
1998),
2003
cost
effectiveness
would
be
an
estimated
$
22.4
million
to
$
56.0
million
per
ton
of
mercury
removed.

Another
beyond­
the­
floor
option
considered
during
the
original
rulemaking
(
63
FR
14182,
March
24,
1998)
was
the
use
of
alkaline
scrubbers
for
HCl
control
on
existing
kilns.
Applying
the
same
cost
escalator
(
402.0/
359.2),
2003
capital
costs
for
this
control
option
ranged
from
$
1.1
million
to
$
5.1
million/
kiln;
annual
costs
ranged
from
$
336,000
to
$
1.7
million/
kiln.

New
Kilns
The
costs
for
new
sources
will
include
the
cost
of
alkaline
wet
scrubbers,
CO
monitors,
and
THC
performance
tests.
(
Note
that
we
are
assuming
that
these
will
be
located
at
brownfield
sites
to
avoid
understating
costs.)
Costs
for
scrubbers
were
estimated
during
the
development
of
the
promulgated
rules
for
portland
6
cement
manufacturing
(
63
FR
14182,
March
24,
1998).
Total
capital
cost
of
installing
an
alkaline
scrubber
on
a
new
preheater/
precalciner
kiln
with
a
production
rate
of
650,000
tons
of
clinker
per
year
was
estimated
at
$
1.9
million
(
Docket
item
II­
B­
67,
Docket
No.
A­
92­
53).
These
costs
are
1993
costs.
Costs
were
updated
to
2003
using
plant
cost
indices
published
in
Chemical
Engineering
(
Chemical
Engineering,
September
1999
and
November
2004).
Thus,
scrubber
costs
for
2003
are
calculated
as
follows:

Capital
cost
=
$
1,902,625
×
(
402.0/
359.2)
$
2,129,330/
kiln
The
capital
cost
for
CO
CEM
at
new
kilns
are
estimated
at
$
137,800/
kiln
and
a
THC
performance
test
is
estimated
at
$
20,545/
kiln.
Thus,
the
total
capital
cost
for
a
new
kiln
under
the
proposed
amendment
is
$
2,287,675.

Amortized
at
3%
and
7%
over
15
years,
annualized
capital
costs
for
a
scrubber
is
$
178,368
and
$
233,790/
year/
kiln.
Total
annualized
capital
costs
per
new
kiln
include
costs
for
the
scrubber,
CO
CEM,
and
performance
tests
and
range
from
$
194,410
to
$
253,952.
Annual
O&
M
costs
for
the
scrubber
are
estimated
at
$
525,489/
year/
kiln.
Thus,
total
annual
cost
per
kiln,
including
O&
M,
range
from
$
741,299
to
$
800,841.
At
one
new
kiln
per
year,
the
total
annual
cost
in
the
fifth
year
would
be
$
3.7
million
to
$
4.0
million.

Limitations
on
Cost
Estimates
The
capital
cost
estimates
developed
in
this
memo
may
be
biased
high,
as
considerable
cost
savings
can
be
expected
where
an
existing
data
acquisition
system
(
such
as
one
used
with
an
existing
continuous
opacity
monitor,
or,
at
new
greenfield
kilns,
the
system
used
for
the
THC
CEM)
can
be
shared
with
the
CO
CEMS.
Similarly,
costs
for
the
monitor
shelter
may
be
overestimated
in
cases
where
another
CEM
is
already
installed.

Some
kilns
may
already
have
CO
monitors
installed,
either
as
a
permit
requirement
for
operation
in
CO
nonattainment
areas
or
ozone
nonattainment
areas.
Some
kilns
may
already
operate
CO
CEMS
for
combustion
control.

The
labor
costs
for
operating
and
maintaining
monitors
in
the
CEMS
Cost
Model
Version
3.0
(
when
escalated),
are
realistic,
however
they
do
not
reflect
the
excessive
benefit
inflators
used
in
OMB
Supporting
Statements.
7
The
operation
of
a
CO
monitor
to
control
combustion
conditions,
may
result
in
substantial
cost
savings
due
to
improvements
in
energy
efficiency.
These
credits
can
not
be
estimated.

Due
to
characteristics
of
feed
materials
as
well
as
the
inherently
alkaline
environment
of
kiln
gases,
it
may
be
possible
for
some
new
kilns
to
meet
the
proposed
HCl
limits
without
the
addition
of
scrubbers.

F.
Economic
Impacts
The
economic
impacts
of
the
proposed
changes
to
the
NESHAP
which
have
cost
implications,
namely
the
requirement
to
test
and
monitor
THC
and
CO,
and,
for
new
kilns
or
in­
line
raw
mill/
kilns,
the
cost
to
install
and
operate
a
wet
scrubbing
system,
are
negligible.
The
assessment
of
the
earlier
Portland
cement
regulations
with
greater
per
source
costs
did
not
have
a
significant
effect
on
the
cost
of
goods
produced.
Since
we
expect
the
conditions
that
produced
those
conclusions
still
exist
today,
these
new
regulations
will
not
have
a
discernible
impact
on
the
Portland
cement
market.

We
note
that
the
highest
cost
per
kiln
resulting
from
the
proposed
amendments
will
be
the
cost
of
alkaline
scrubbers
for
new
kilns.
This
additional
requirement
represents
less
than
1.5
percent
of
the
expected
revenue
stream
for
a
typical
new
kiln.
We
do
not
consider
this
to
be
economically
significant.

We
also
examined
the
small
business
impacts
of
the
proposed
amendments.
At
the
time
of
promulgation
of
the
final
NESHAP
in
1999,
there
were
6­
7
small
businesses
that
operated
approximately
13
kilns
that
would
potentially
be
affected
by
the
NESHAP.
We
believe
this
estimate
is
still
reasonable.
The
total
revenues
of
the
small
business
sector
were
$
194.1
million
in
1995
dollars
based
on
a
portland
cement
price
of
$
61.64
per
ton.
These
revenues
were
expected
to
be
reduced
by
$
9.5
million
by
the
effects
of
the
NESHAP,
so
the
total
revenues
for
the
small
business
sector
based
on
1995
prices
would
now
be
$
184.6
million.
Using
an
updated
price
for
portland
cement
of
$
86.52
per
ton,
the
total
revenue
of
the
small
business
sector
is
now
estimated
to
be
approximately
$
259
million.
The
total
estimated
cost
of
these
proposed
amendments
for
the
13
existing
kilns
is
$
542,000
(
based
on
the
7
percent
discount
factor).
Therefore,
the
total
estimated
costs
for
the
small
business
sector
represent
0.209
percent
of
revenues.
We
do
not
see
this
cost
as
economically
significant.
8
G.
Summary
of
Impacts
Environmental
impacts
and
secondary
impacts
are
summarized
in
Tables
1
and
2.
Cost
impacts
of
the
proposed
amendments
are
summarized
in
Tables
3
and
4.

Table
1.
Environmental
Impacts
of
New
Scrubber­
controlled
Kiln
Model
New
Preheater/
Precalciner
Kiln
Emission
Reduction
(
tons/
yr)

650,000
tons
clinker/
yr
HCl
SO2
106.9
321.8
Table
2.
Secondary
Impacts
of
New
Scrubber­
controlled
Kiln
Model
New
Preheater/
Precalciner
Kiln
Increased
emissions
(
tpy)
due
to
additional
electricity
usage
Addt'l
water
usage
(
gals/
yr)
Addt'l
solid
waste
(
tpy)
Addt'l
electri
city
usage
(
kWhr)
NOx
CO
SO2
PM10
650,000
tons
clinker/
yr
2.2
1.1
3.8
0.11
40,556,723
45,555
984,863
Table
3.
Cost
Impacts
for
Existing
Kilns
Total
Capital
Cost
($)
Annualized
Capital
Cost
($)*

3%
Discount
7%
Discount
Capital
Costs
CO
Monitor
139,000
11,644
15,261
THC
Performance
Test
20,545
4,486
5,011
159,545
9
Total
Annualized
Capital
Cost
16,130
20,272
Operating
Costs
CO
monitor
O&
M
21,400
21,400
Total
Annual
Cost
37,530
41,672
*
Discount
period.
CO
monitor:
15
yr;
THC
performance
test:
5
Yr
Note:
vertical
centering
of
cells
in
table
above.

Table
4.
Cost
Impacts
for
New
Kilns
Total
Capital
Cost
($)
Annualized
Capital
Cost
($)*

3%
Discount
7%
Discount
Capital
Costs
Scrubber
2,129,330
178,368
233,790
CO
monitor
137,800
11,556
15,152
THC
performance
test
20,454
4,486
5,010
2,287,875
Total
Annualized
Capital
Costs
194,410
253,952
Operating
Costs
Scrubber
O&
M
525,489
525,489
CO
Monitor
O&
M
21,400
21,400
Total
Annual
Costs
741,299
800,841
*
Discount
period.
Scrubber:
15
yr;
CO
monitor:
15
yr;
THC
performance
test:
5
Yr.
