Monitoring Cost/Benefit Analysis Tool Case Study

I.	Introduction

	The Monitoring Cost/Benefit Analysis Tool was developed to assess the
costs and benefits associated with various approaches to monitoring
emission units included in new or revised EPA air regulations.  For
example, these approaches may range from periodic visible emission
inspections, continuous monitoring of the pressure drop on a baghouse,
or continuous particulate matter (PM) emissions monitoring from a stack.

	Currently, monitoring costs for a rule are typically calculated
together with reporting and recordkeeping costs.  The tool will be used
to calculate monitoring costs and benefits separately from reporting and
recordkeeping costs for a rule.  It allows users to compare periodic,
parametric, and continuous monitoring cost scenarios for selected
pollutant and control strategy combinations.  The tool can also
calculate benefits due to reduced ill health effects, improved
compliance rates, and improved information on the effectiveness of a
rule.

	This case study provides a cost/benefit analysis of implementing
continuous emissions monitoring as part of a proposed area source rule
for cement kilns.  For the purposes of this case study, we evaluated the
costs and benefits (reduction in excess emissions) of implementing
continuous emissions monitoring on particulate matter (PM), sulfur
dioxide (SO2), and nitrogen oxides (NOX).  The following sections
present the methodology, cost comparison, and benefits results.

II.	Methodology

	Emissions data were obtained from EPA for cement kilns.  Table 1
summarizes these emissions and other parameters of the case study.  We
assumed that PM2.5 comprised 45% of total PM emissions.  For the purpose
of this case study, it was assumed that an 83% reduction in total PM
emissions (and a 75% reduction in PM2.5 emissions) would be achieved by
installing either reverse-air fabric filters on affected emission units
(kilns and clinker coolers).  Likewise, a 95% reduction in SO2 would be
seen by installing a wet scrubber, and a 40% reduction in NOX would be
seen by installing Selective Non-Catalytic Reduction (SNCR) technology
on kilns.  

Table 1.  Parameters for Estimating Costs and Benefits of Continuous
Emissions Monitoring on Cement Kilns

Pollutant	No. Kilns	Control Technology	Uncontrolled Emissions per kiln
(tpy)	Emission Reductions per kiln (tpy)	Controlled Emissions per kiln
(tpy)	Emissions Monitoring Option

PM	20	Reverse Air FF	300	249	52	Bag Leak Detector (1 sensor)

	20	Reverse Air FF	300	249	52	Bag Leak Detector (1 sensor)

PM2.5	20	Reverse Air FF	135	112	23	Bag Leak Detector (1 sensor)

	20	Reverse Air FF	135	112	23	Bag Leak Detector (1 sensor)

NOX	20	SNCR	1500	600	900	NOX CEMS

SO2	4	Wet Scrubber	7800	7410	390	SO2 CEMS



Cost Analysis

	 The cost function of the tool was used to evaluate costs for a model
plant to install and operate continuous emissions monitoring technology
on cement kiln controls.  All costs for continuous emissions monitoring
of PM, SO2, and NOX were obtained from the CEMS Revised Cost Model
(2007).  Costs for the model plant were applied to the facilities
expected to be controlled.  Costs may be over- or under-estimated due to
variability in plant size, modifications required to install control
equipment on emission units, or whether other controls already exist.   

Benefits Analysis

	Benefits were calculated using the emissions reductions expected from
continuous emissions monitoring.  The methodology developed to calculate
benefits for the CAM Regulatory Impacts Analysis was also used in the
model.  Table 2 presents the parameters and equations used to calculate
benefits.  



 

Equations

	Em = Ec / (T * 60)

	Eu = (T * Te * 60) * Em * Ee

	Eu(CAM) = (T * Te(CAM) * 60) * Em * Ee

	ER = Eu - Eu(CAM)

	Ba = ER / CE

	Note: 60 is to convert hours to minutes



III.	Results

Tables 3 and 4 present a summary of the parameters, costs, and benefits
calculated for all applicable sources.  Table 5 presents a cost
breakdown of CEMS for an individual cement kiln.  Using the assumptions
in Table 2, the emissions reduction benefits are 5.52 tpy for PM2.5
reductions, 12.38 tpy for PM reductions, 9.36 tpy for SO2 reductions,
and 108 tpy for NOX reductions.  Cumulative annualized costs are
$203,000 for PM and PM2.5 monitoring, $200,000 for SO2 monitoring, and
$990,000 for NOX monitoring.  Note that while costs are borne by the
facilities, benefits are realized by a larger population.  Any cost
savings realized by individual facilities have not been calculated as
part of this case study.Table 3.  Industry-wide Costs of Continuous
Emissions Monitoring on Cement Kilns















Pollutant	Control Technology	Source Type	Monitoring	Number of Sources
Total Initial Costs	Total Annualized Costs





PM	Reverse Air FF	Kiln	BLD CEMS (1 sensor)	20	$490,004	$203,265





 	Reverse Air FF	Clinker Cooler	BLD CEMS (1 sensor)	20	$490,004
$203,265





PM2.5	Reverse Air FF	Kiln	BLD CEMS (1 sensor)	20	$490,004	$203,265





 	Reverse Air FF	Kiln	BLD CEMS (1 sensor)	20	$490,004	$203,265





NOX	SNCR	Kiln	NOX CEMS	20	$2,969,912	$989,873





SO2	Wet Scrubber	Kiln	SO2 CEMS	4	$602,634	$200,031































Table 4.  Health & Environmental Benefits of Continuous Emissions
Monitoring on Cement Kilns













	Individual Kiln



Pollutant	Control Technology	Monitoring	Controlled Emissions	Emission
Reductions Due to Improved Monitoring	Number of Sources	Type Source
Total Controlled Emissions	Emission Reductions Due to Improved
Monitoring



PM	Reverse Air FF	BLD CEMS (1 sensor)	52	0.31	20	Kilns	1040	6.24



 	Reverse Air FF	BLD CEMS (1 sensor)	52	0.31	20	Clinker Coolers	1040
6.24



PM2.5	Reverse Air FF	BLD CEMS (1 sensor)	23.4	0.14	20	Kilns	468	2.76



 	Reverse Air FF	BLD CEMS (1 sensor)	23.4	0.14	20	Kilns	468	2.76



NOX	SNCR	NOX CEMS	900	2.34	20	Kilns	18000	108



SO2	Wet Scrubber	SO2 CEMS	390	5.4	20	Kilns	7800	9.36



.



Table 5.  Continuous Emission Monitoring Costs (1 facility)









	Parameter 	Description	NOX	BLD w/ 1 sensor	SO2

Planning	Engineering and managerial labor for reviewing the regulations,
resolving questions, reviewing engineering drawings, and inspecting the
source	$2,936.02	$753.31	$2,936.02

Equipment Selection and Purchase	Cost of equipment and labor associated
with its purchase	$95,046.37	$18,415.59	$97,209.37

Install and Calibrate	Travel costs, fees, and labor to install and
calibrate equipment	$18,076.14	$4,535.68	$18,076.14

Performance Test Audits	Performance test of the monitor conducted once
every five years.	$10,104.60	$0.00	$10,104.60

QA/QC Plan	Labor associated with developing a QA/QC Plan	$22,332.45
$795.64	$22,332.45

 	Total Capital CEMS	$148,495.58	$24,500.22	$150,658.58

 	 	 	 	 

Operation and Maintenance	Labor costs associated with daily activities
$9,132.75	$4,148.93	$9,132.75

RATA	Relative Accuracy Test Audit conducted annually	$8,143.80	$0.00
$8,143.80

Cylinder Gas Audits	EPA testing procedure to ensure the accuracy of CEMS
data. Known concentrations of specified gases are passed through the
CEMS unit and measurements over a period of time are taken and averaged.
	$2,718.55	$0.00	$2,718.55

Recordkeeping and reporting	Annual costs of recordkeeping and reporting 
$4,441.05	$235.77	$4,441.05

Annual QA Reviews and Update	Labor associated with annual quality
assurance reviews	$3,911.74	$2,289.71	$4,117.74

Capital Recovery	Equipment and calibration costs calculated at a set
interest rate over five years.  Factor is .09 for Continuous Monitoring
and .24 for Periodic Monitoring	$21,145.77	$3,488.83	$21,453.78

 	CEMS Total Annual	$49,493.66	$10,163.24	$50,007.68



 Email communication with Jeffrey Cole, April 21, 2008.

 DRAFT Regulatory Impact Analysis For Revisions To Part 64 Compliance
Assurance Monitoring Regulation.  September 6, 2007.  

	May 30, 2008

 PAGE   

 PAGE   7 

	May 30, 2008

DRAFT	April 25, 2008

		May 30, 2008

