Date:
December
17,
2003
Subject:
Cost
Impacts
of
the
Final
Plywood
and
Composite
Wood
Products
NESHAP
EPA
Contract
No.
68­
D­
1­
079;
EPA
Work
Assignment
No.
2­
12
RTI
Project
No.
08550.002.012
From:
Katie
Hanks
To:
Mary
Tom
Kissell,
ESD/
WCPG
(
C439­
03)
U.
S.
Environmental
Protection
Agency
Research
Triangle
Park,
NC
27711
National
emission
standards
for
hazardous
air
pollutants
(
NESHAP)
were
proposed
for
the
plywood
and
composite
wood
products
(
PCWP)
industry
on
January
9,
2003.1
Nationwide
cost
impacts
were
estimated
prior
to
proposal
of
the
PCWP
NESHAP
using
the
methodology
described
in
the
Background
Information
Document.
2
Compliance
costs
associated
with
the
PCWP
NESHAP
include
the
costs
of
installing
and
operating
air
pollution
control
equipment
and
the
costs
associated
with
demonstrating
ongoing
compliance
(
i.
e.,
emissions
testing,
monitoring,
reporting,
and
recordkeeping
costs).

The
cost
impacts
estimated
prior
to
proposal
of
the
PCWP
NESHAP
represented
a
high­
end
estimate
of
costs.
These
estimates
were
based
on
the
use
of
regenerative
thermal
oxidizers
(
RTOs)
at
all
of
the
impacted
facilities
because:
(
1)
RTOs
can
be
used
to
reduce
emissions
from
all
types
of
PCWP
process
units;
and
(
2)
there
was
no
way
to
accurately
predict
which
facilities
would
use
less­
costly
compliance
options
(
i.
e.,
emissions
averaging
and
the
production­
based
compliance
options)
or
install
add­
on
control
devices
that
are
less
costly
to
operate,
such
as
regenerative
catalytic
oxidizers
(
RCOs)
and
biofilters.
The
capital
costs
estimated
prior
to
proposal
included
the
costs
to
purchase
and
install
both
the
RTO
equipment
(
and
in
some
cases,
including
a
wet
electrostatic
precipitator
upstream
of
the
RTO)
and
the
monitoring
equipment,
and
the
costs
of
performance
tests.
Capital
costs
for
enclosures
were
also
included
for
reconstituted
wood
products
presses.
The
annualized
costs
account
for
the
annualized
capital
costs
of
the
control
and
monitoring
equipment,
operation
and
maintenance
expenses,
and
recordkeeping
and
reporting
costs.

The
cost
estimates
developed
prior
to
proposal
were
based
on
the
population
of
PCWP
facilities
and
process
units
(
and
their
associated
control
devices)
as
of
April
2000.
The
population
of
PCWP
facilities
has
changed
since
April
2000,
with
11
facilities
beginning
operation
(
i.
e.,
three
agriboard,
one
hardwood
veneer,
one
laminated
veneer
lumber
[
LVL],
two
medium
density
fiberboard
[
MDF],
three
oriented
strandboard
[
OSB],
and
one
particleboard
facility
began
operation)
and
29
facilities
closing
down
(
i.
e.,
one
agriboard,
one
glu­
lam,
three
hardboard,
one
hardwood
plywood,
one
LVL,
three
MDF,
one
OSB,
three
particleboard,
13
softwood
plywood
facilities
closed
down).
Many
of
the
facilities
beginning
operation
already
have
the
necessary
MACT
controls.
In
addition,
many
facilities
have
installed
control
devices
since
April
2000.3
Thus,
fewer
APCD
will
need
to
be
installed
following
promulgation
of
the
PCWP
NESHAP.
The
effect
of
these
changes
to
the
population
of
PCWP
facilities
and
process
units
in
need
of
controls
would
be
to
lower
the
nationwide
cost
estimates
attributable
to
the
PCWP
NESHAP.

Very
few
changes
that
would
effect
the
nationwide
cost
estimates
have
been
made
to
the
PCWP
NESHAP
following
proposal.
One
change
made
to
the
proposed
PCWP
rule
(
the
addition
of
a
work
practice
requirement
that
non­
HAP
coatings
be
used
for
"
group
1
miscellaneous
coating
operations")
was
investigated
further
to
determine
if
compliance
costs
would
increase
as
a
result
of
existing
facilities
switching
coating
types.
It
was
determined
that
the
change
in
costs
for
existing
sources
associated
with
the
new
work
practice
is
negligible
because:
(
1)
very
few
facilities
would
be
required
to
change
coatings
as
shown
in
Table
1
below,
and
(
2)
the
cost
of
switching
to
a
non­
HAP
water­
based
coating
is
minimal.
4,5
The
change
in
costs
for
new
facilities
to
use
non­
HAP
coatings
is
also
expected
to
be
negligible
because
water­
based
coatings
are
widely
used
for
most
of
the
group
1
miscellaneous
coatings,
and
because
the
costs
associated
with
water­
based
coatings
are
comparable
to
those
associated
with
solvent­
based
coatings.
5
Generally,
the
PCWP
rule
requirements
have
become
less
stringent
(
if
changed
at
all),
and
the
changes
to
the
rule
requirements
would
affect
only
the
MRR
costs
associated
with
the
PCWP
rule.
The
MRR
costs
were
revised
as
part
of
the
effort
to
update
the
OMB
83I
form
and
supporting
statement
required
by
the
Paperwork
Reduction
Act.
The
MRR
costs
are
small
in
comparison
to
the
control
equipment
costs.
Although
these
MRR
costs
have
changed
slightly,
they
have
little
or
no
effect
on
the
nationwide
cost
estimates.
Table
2
summarizes
the
nationwide
control
equipment
and
MRR
costs.
The
nationwide
capital
cost
estimate
is
unchanged
from
the
estimate
at
proposal,
and
the
nationwide
annualized
costs
increase
by
only
0.7
percent
as
a
result
of
the
revised
MRR
costs.

Because
there
have
been
no
significant
increases
in
costs
associated
with
the
PCWP
rule,
it
is
recommended
that
the
cost
estimates
developed
prior
to
proposal
be
used
to
represent
the
costs
associated
with
the
final
PCWP
NESHAP.
It
is
expected
that
the
pre­
proposal
costs
significantly
over­
estimate
the
nationwide
costs
associated
with
the
NESHAP
for
the
following
reasons:
(
1)
there
has
been
a
net
reduction
in
the
number
of
PCWP
facilities
affected
by
the
NESHAP;
(
2)
many
controls
have
been
installed
following
completion
of
the
pre­
proposal
cost
analyses;
and
(
3)
there
remains
no
way
to
account
for
cost
savings
associated
with
use
of
emissions
averaging
or
the
production­
based
compliance
option
in
the
final
PCWP
rule.
TABLE
1.
NUMBER
OF
EXISTING
FACILITIES
REQUIRED
TO
CHANGE
COATING
TYPES
DUE
TO
REVISED
MACT
DETERMINATION
FOR
MISCELLANEOUS
COATING
OPERATIONS
Miscellaneous
coating
type
MACT
for
new
and
existing
sources
Number
of
existing
facilities
required
to
change
coatings
Edge
seals
non­
HAP
coating
None
apparent
from
survey
responses
Nail
lines
non­
HAP
coating
Possibly
1
facility
using
solvent­
based
nail
lines;
however,
it
is
not
known
if
there
is
HAP
in
the
nail
line
coating
used
by
this
facility
Logo
paint
non­
HAP
coating
Up
to
5
facilities
(
2
clearly
reporting
HAP
emissions,
and
3
reporting
use
of
solventbased
products
which
may
or
may
not
contain
HAP)

Shelving
edge
fillers
non­
HAP
coating
None
apparent
from
survey
responses
Trademark/
gradestamp
inks
non­
HAP
coating
Possibly
9
(
6
of
these
specifically
mention
HAP
and
3
mention
use
of
solvent­
based
coatings
which
may
or
may
not
contain
HAP).
No
others
apparent.

Wood
putty
patches
non­
HAP
coating
Up
to
3
facilities
reporting
solvent­
based
patches;
however
it
is
not
known
if
these
patches
contain
HAP.

Synthetic
patches
Existing:
no
emission
reduction
New:
non­
HAP
coating
None
because
existing
source
floor
is
no
emission
reduction
TABLE
2.
SUMMARY
OF
CONTROL
EQUIPMENT
AND
MRR
COSTS
AT
PROPOSAL
AND
UPDATED
FOR
THE
FINAL
PCWP
RULE
Time
of
cost
estimate
Capital
costs
Annualized
costs
Control
equipment
costs:

At
proposal
$
473
million
$
136
million
MRR
costs:

At
proposal
$
5.8
million
$
5.6
million
Updated
for
final
rule
$
5.8
million
$
6.6
million
Total
costs:

At
proposal
$
478.8
million
$
141.6
million
Updated
for
final
rule
$
478.8
million
$
142.6
million
Percent
change
in
total
costs
no
change
0.7
percent
References:

1.
U.
S.
Environmental
Protection
Agency.
National
Emission
Standards
for
Hazardous
Air
Pollutants:
Plywood
and
Composite
Wood
Products;
Proposed
Rule.
68
FR1276.
Washington,
DC.
U.
S.
Government
Printing
Office.
January
9,
2003.

2.
U.
S.
EPA.
Background
Information
Document
for
Plywood
and
Composite
Wood
Products
NESHAP.
Office
of
Air
Quality
Planning
and
Standards,
Research
Triangle
Park,
NC
27711.
September,
2000.

3.
Memorandum
from
K.
Hanks
and
K.
Parrish,
RTI,
to
Project
Files.
December
16,
2003.
Changes
in
the
population
of
existing
plywood
and
composite
wood
products
plants
and
equipment
between
April
2000
and
November
2003.

4.
Memorandum
from
D.
Bullock,
K.
Hanks,
and
B.
Nicholson,
MRI
to
M.
Kissell,
EPA/
ESD.
April
28,
1999.
Summary
of
Responses
to
the
1998
EPA
Information
Collection
Request
(
MACT
Survey)
­­
General
Survey.

5.
Telephone
contact
report:
K.
Hanks,
RTI,
with
P.
Silva,
Associated
Chemists,
Incorporated.
November
11,
2003.
Discussion
of
miscellaneous
coatings
HAP
content
and
costs.
