MEMORANDUM

Date:
March 12, 2013

Subject:
Costs and Emission Reductions for the Proposed Wool Fiberglass Manufacturing NESHAP - Area Sources 
RTI Project No. 0213199.001.007
From:
Dave Reeves, RTI International

To:
Susan Fairchild
OAQPS/SPPD/NRG (D243-02)
U.S. Environmental Protection Agency
Research Triangle Park, NC  27711

      The purpose of this memorandum is to present the estimated costs for the wool fiberglass manufacturing industry to comply with the proposed area source rule requirements. Major sources are regulated under Part 63 Subpart NNN; area sources will be proposed to be regulated under Part 63, Subpart NN. 

      I. BACKGROUND 

Based on the information provided by the wool fiberglass manufacturing industry and their primary trade association, North American Insulation Manufacturers Association (NAIMA), there are currently 30 facilities in the U.S. producing wool fiberglass. A letter from NAIMA dated June 8, 2011, stated "non-formaldehyde binder products represent the vast majority of the industry" and "all major sources have already converted or have announced plans to convert to non-phenol formaldehyde binders."  Based on a review of the current permit status of all sources and recent information provided by industry, there are 10 facilities that are major sources (subject to the existing MACT rule, subpart NNN) and 20 area source facilities (with a total of 54 glass-melting furnaces). However, five of the area source facilities with a total of eight furnaces meet the proposed applicability requirements in the proposed area source NESHAP (subpart NN); two of those facilities with a total of three furnaces will need to install control equipment to comply with the proposed standards.  

Industry comments on the proposed major source rule amendments (76 FR 72770) stated that some of the major source facilities have already switched some or most of their lines to non-HAP binders and are working towards being redesignated as area sources and no longer subject to subpart NNN.  While industry sources also predicted before proposal of the RTR amendments to NNN that no major sources would exist by the end of 2012, we now find this to be an overstatement. Table 1 provides further information on wool fiberglass furnaces by furnace type and whether furnaces would currently be subject to the proposed area source rule under subpart NN. The following cost impacts are based on the estimated five facilities and eight gas-fired furnaces that would be subject to the proposed area source rule requirements. 

      II. GAS-FIRED GLASS-MELTING FURNACES
              
Based on emissions test data received, we estimate that there are currently eight gas-fired furnaces located at five facilities that do not meet the proposed chromium compounds emission limit. We have estimated the add-on control cost impact for those facilities (three furnaces) based on the installation of a sodium hydroxide (NaOH) scrubber to remove chromium compounds from the furnace exhaust stream(s). The initial capital equipment cost was estimated to be $250,000 for each unit (scrubber) with a calculated annualized capital cost of $27,400 based on a 15-year equipment life and 7% interest rate. The annual operation and maintenance (O&M) costs were estimated to be $72,600 per unit. The combined annualized cost is $100,000 per scrubber. Some of the highest chromium compound emitting furnaces are located at major source facilities and those cost impacts will be attributed to subpart NNN.

The total cost for the five facilities to comply with the proposed area source rule is estimated to be $380,000 per year. Table 1 summarizes the above information and associated cost impacts.

      III.  COMPLIANCE TESTING COSTS  
      Mr. Steffan Johnson of EPA's Measurement Policy Group provided the following cost estimates for compliance testing based on the test methods included in the final RTR amendments:

                                Emission Source
                                       
                                      HAP
                                     Test 
                                    Method
                              Test Costs (2011 $)
                                  Test Freq-
                                     uency
                        Annualized Test Costs (2011 $)
                                    Comment


Glass- Melting Furnace


                         PM (surrogate for HAP metals)
                                       
                                       5
                                       
                                      and
                                       
                                      29
                                  (combined)
                                       
                                       
                                    $10,000
                                       
                                       
                                       
                                       
                                  Every year*
                                       
                                       
                                    $10,000
                                       
         *Reduced test frequency not included in this cost analysis. 

                                       
                              Chromium Compounds
                                       
                                       
                                       
                                       
                                       
      
* The proposed rule allows owners/operators to reduce testing frequency for PM and chromium compounds from every year to once every three years if the initial and second compliance tests are each less than 75% of the proposed PM and chromium compounds emission limits. 

      IV. EMISSION REDUCTIONS
Based on the recent test data provided by all of the facilities, the eight gas-fired furnaces emit approximately 65 pounds of chromium compounds annually. We identified three gas-fired furnaces with emission rates above the proposed emission limit and their associated annual emissions of 5, 25, and 35 pounds of chromium compounds, respectively. With the assumption that additional controls on the three furnaces will reduce chromium compound emissions to a level that would meet the proposed emission limit, approximately 53 pounds of chromium compounds would be reduced annually at area sources. These reductions come from the three gas fired furnaces at area sources currently emitting above the proposed emission limit of 6 x 10[-5] pounds chromium per ton glass pulled.  When these meet the proposed limit, we estimate an 80 percent reduction in chromium compounds would be achieved compared to current baseline emissions.
 
Table 1.  Summary of Costs for Wool Fiberglass Manufacturing Facilities to Comply with Proposed Area Source Rule
                                       
                                       
                                       
                                       
                            Glass-Melting Furnaces
                                       
                              Total Facility Cost
                                       
                                       
                                       
                                       
                                       
                                       
                             Annual O&M Costs
                                Cr Testing Cost
                                       
                                       
                     Cost Effectivnss ($ / lb Cr  reduced)
                                       
                                    Company
                                   Facility 
                                   Location
                                 Source Type*
                                  Steel Shell
                               Electric Cold Top
                                    Air Gas
                                   Oxy Fuel
                                   Total #  
                            # subject to area rule
                           Annual-ized Capital Cost*
                                       
                                       
                            Cr Redu-ctions (lb/yr)
                          Total Annual Facility Cost
                                       
                                       1
CertainTeed
Athens, GA
                                     Area
                                       
                                       1
                                       
                                       1
                                       2
                                       1
                                       0
                                       0
                                    10,000
                                       
                                    10,000
                                      NA
                                       2
CertainTeed
Chowchilla, CA
                                     Area
                                       
                                       
                                       
                                       1
                                       1
                                       1
                                       0
                                       0
                                    10,000
                                       
                                    10,000
                                      NA
                                       3
Guardian
Kingman, AZ
                                    SynMnr
                                       1
                                       
                                       
                                       
                                       1
                                       0
                                       0
                                       0
                                       0
                                       
                                       0
                                       -
                                       4
Johns Manville
McPherson, KS
                                     Area
                                       5
                                       
                                       
                                       
                                       5
                                       0
                                       0
                                       0
                                       0
                                       
                                       0
                                       -
                                       5
Johns Manville
Penbryn, NJ
                                     Area
                                       3
                                       
                                       
                                       
                                       3
                                       0
                                       0
                                       0
                                       0
                                       
                                       0
                                       -
                                       6
Johns Manville
Richmond, IN
                                     Area
                                       
                                       1
                                       
                                       
                                       1
                                       0
                                       0
                                       0
                                       0
                                       
                                       0
                                       -
                                       7
Johns Manville
Waterville, OH
                                     Area
                                       
                                       6
                                       
                                       
                                       6
                                       0
                                       0
                                       0
                                       0
                                       
                                       0
                                       -
                                       8
Johns Manville
Willows, CA
                                     Area 
                                       6
                                       
                                       
                                       
                                       6
                                       0
                                       0
                                       0
                                       0
                                       
                                       0
                                       -
                                       9
Johns Manville
Winder, GA
                                     Area
                                       5
                                       
                                       
                                       
                                       5
                                       0
                                       0
                                       0
                                       0
                                       
                                       0
                                       -
                                      10
Knauf
Lanett, AL
                                     Area
                                       
                                       
                                       
                                       2
                                       2
                                       2
                                    54,800
                                    145,200
                                    20,000
                                      22
                                    220,000
                                    10,000
                                      11
Knauf
Shasta Lake, CA
                                     Area
                                       
                                       1
                                       
                                       
                                       1
                                       0
                                       0
                                       0
                                       0
                                       
                                       0
                                       -
                                      12
Owens-Corning
Delmar, NY
                                     Area
                                       
                                       
                                       
                                       2
                                       2
                                       2
                                    27,400
                                    72,600
                                    20,000
                                      31
                                    120,000
                                     3,800
                                      13
Owens-Corning
Eloy, AZ
                                     Area
                                       2
                                       
                                       
                                       
                                       2
                                       0
                                       0
                                       0
                                       0
                                       
                                       0
                                       -
                                      14
Owens-Corning
Fairburn, GA
                                     Area
                                       
                                       3
                                       
                                       
                                       3
                                       0
                                       0
                                       0
                                       0
                                       
                                       0
                                       -
                                      15
Owens-Corning
Kansas City, KS
                                     Area 
                                       
                                       1
                                       
                                       2
                                       3
                                       2
                                       0
                                       0
                                    20,000
                                       
                                    20,000
                                      NA
                                      16
Owens-Corning
Mount Vernon, OH
                                     Area
                                       3
                                       
                                       
                                       
                                       3
                                       0
                                       0
                                       0
                                       0
                                       
                                       0
                                       -
                                      17
Owens-Corning
Salt Lake City, UT
                                    SynMnr
                                       2
                                       
                                       
                                       
                                       2
                                       0
                                       0
                                       0
                                       0
                                       
                                       0
                                       -
                                      18
Owens-Corning
Santa Clara, CA
                                     Area
                                       
                                       2
                                       
                                       
                                       2
                                       0
                                       0
                                       0
                                       0
                                       
                                       0
                                       -
                                      19
Owens-Corning
Nephi, UT
                                    SynMnr
                                       2
                                       
                                       
                                       
                                       2
                                       0
                                       0
                                       0
                                       0
                                       
                                       0
                                       -
                                      20
Owens-Corning
Lakeland, FL
                                     Area
                                       2
                                       
                                       
                                       
                                       2
                                       0
                                       0
                                       0
                                       0
                                       
                                       0
                                       -
                                       


                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                      21
CertainTeed
Kansas City, KS
                                     Major
                                       
                                       
                                       
                                       2
                                       2
                                       0
                                       0
                                       0
                                       0
                                       
                                       0
                                       
                                      22
Guardian
Albion, MI
                                    Major 
                                       4
                                       
                                       
                                       
                                       4
                                       0
                                       0
                                       0
                                       0
                                       
                                       0
                                       
                                      23
Guardian
Inwood, WV
                                    Major 
                                       2
                                       
                                       
                                       
                                       2
                                       0
                                       0
                                       0
                                       0
                                       
                                       0
                                       
                                      24
Guardian
Mineral Wells, MS
                                     Major
                                       2
                                       
                                       
                                       
                                       2
                                       0
                                       0
                                       0
                                       0
                                       
                                       0
                                       
                                      25
Guardian
Winnsboro, SC
                                     Major
                                       
                                       1
                                       
                                       
                                       1
                                       0
                                       0
                                       0
                                       0
                                       
                                       0
                                       
                                      26
Johns Manville
Cleburne, TX
                                     Major
                                       2
                                       
                                       
                                       1
                                       3
                                       0
                                       0
                                       0
                                       0
                                       
                                       0
                                       
                                      27
Johns Manville
Defiance, OH
                                     Major
                                       1
                                       3
                                       2
                                       
                                       6
                                       0
                                       0
                                       0
                                       0
                                       
                                       0
                                       
                                      28
Knauf
Shelbyville, IN
                                     Major
                                       
                                       2
                                       
                                       
                                       2
                                       0
                                       0
                                       0
                                       0
                                       
                                       0
                                       
                                      29
Owens-Corning
Newark, OH
                                     Major
                                       
                                       2
                                       2
                                       
                                       4
                                       0
                                       0
                                       0
                                       0
                                       
                                       0
                                       
                                      30
Owens-Corning
Waxahachie, TX
                                     Major
                                       
                                       2
                                       
                                       1
                                       3
                                       0
                                       0
                                       0
                                       0
                                       
                                       0
                                       
                                       

                                                                               
                                    Totals
                                      42
                                      25
                                       4
                                      12
                                      83
                                       8
                                    $82,200
                                   $217,800
                                    $80,000
                                      23
                                   $380,000
                                    $7,200


Table 1 notes: - Major sources will not be subject to the area source rule requirements and any associated control/compliance costs are not included.
      .        - JM Waterville, OH facility also has 40 pot & marble furnaces which are not included in this analysis. 
               -  Annualized capital cost is based on interest rate of 7% and 15 year equipment life. 
               -  Emissions reductions for Knauf Lanett are estimated to be 1 lb Cr/yr for furnace 1 and 21 lbs Cr/yr for furnace 2. 
