MEMORANDUM

Date:
March 11, 2013

Subject:
Costs and Emission Reductions for the Proposed Wool Fiberglass Manufacturing NESHAP - Residual Risk and Technology Review (RTR) Amendments 
Wool Fiberglass Manufacturing RTR
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 re-proposed RTR amendments.

      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."  However, based on a review of the current permit status of all sources, there are 10 major source facilities with 8 gas-fired glass-melting furnaces and 31 manufacturing lines that will have to comply with the RTR amendments to the NESHAP (subpart NNN) requirements.  Industry comments on the proposed rule stated that several facilities have already switched all or most of their lines to non-HAP binders and submitted paperwork to be redesignated as area sources and no longer subject to subpart NNN.  Therefore, the following cost impacts are based on an estimated 10 facilities that were identified as major sources in the most recent industry information provided in December 2012. 

      II. GLASS-MELTING FURNACES
              
Based on emissions test data received, we estimate that there are currently three gas-fired furnaces located at two facilities that cannot meet the proposed chromium compounds emission limit.  We have estimated the cost impact for those facilities 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. The highest chromium compound emitting furnace was idled in December 2011 and the company indicated that it may be re-built prior to being brought back on-line.

      III. ROTARY SPIN AND FLAME ATTENUATION MANUFACTURING LINES  
            
As mentioned previously, several facilities have already switched all or most of their rotary spin (RS) manufacturing lines to non-PF binders.  Based on the most recent information provided by industry, we estimate that there will be 10 facilities subject to the final rule requirements with 18 RS manufacturing lines making bonded product.  Two of those facilities also have 13 bonded flame attenuation (FA) lines producing heavy density products and/or pipe insulation. Based on facility information collected in the survey responses, most facilities currently have thermal oxidizers and we assumed that the estimated 6 facilities currently not meeting the proposed emission limits have thermal oxidizers (or scrubbers) on their bonded product lines.  Therefore, there are no additional capital costs to comply with the new RS emission limits and we estimated operation and maintenance (O & M) costs for a thermal oxidizer at each facility to be $125,000 annually. All 10 major source facilities with bonded lines will incur additional testing costs to demonstrate compliance with the new phenol and methanol emission limits for forming and curing operations.  

The total industry cost to comply with the proposed amendments is estimated to be $1.21 million per year. Table 1 summarizes the above information and associated cost impacts.

      IV.  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 (in 2011 $)
                                  Test Freq-
                                     uency
                       Annualized Test Costs (in 2011 $)
                                    Comment

Gas-Fired Furnace

Chromium Compounds
                                       
                                      29
                                       
                                    $10,000
                                       
                                  Every year*
                                       
                                    $10,000
         *Reduced test frequency not included in this cost analysis. 

Collection/ Curing  (combined)
Phenol and Methanol (already testing formaldehyde)
                                       
                                       
                                      318
                                       
                   $15,000 (combined phenol & methanol)
                                       
                                 Every 5 years
                                       
                                       
                                    $3,000
             $12,000 for each additional test  ($2,400 annualized)
      
* The final rule will allow owners/operators to reduce testing frequency for chromium compounds from every year to once every three years if the initial and second compliance tests are each less than 75% of the chromium compounds emission limit in the proposed amendments.

      V. EMISSION REDUCTIONS
            
      A. Gas-Fired Glass-Melting Furnaces
      Based on the recent test data provided by the facilities, the eight gas-fired furnaces emit approximately 500 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 13, 15, and 442 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 455 pounds of chromium compounds would be reduced annually at major sources  -  which represents a 90 percent reduction compared to current baseline emissions.
      
      The annualized control costs for the gas-fired furnaces ($380,000) divided by the emission reduction (455 pounds of chromium compounds) results in a cost effectiveness of $835 per pound of chromium compounds reduced.
      B. Combined Collection/Curing Operations
      Based on the recent test data provided by the facilities, the 31 manufacturing lines located at the 10 major source facilities emit approximately 600 tons of organic HAP (i.e., formaldehyde, phenol, and methanol) annually. We identified eight manufacturing lines with emission rates above the proposed emission limits. With the assumption that additional controls on the eight rotary spin (RS) manufacturing lines will reduce organic HAP emissions to a level that would meet the proposed emission limits, approximately 123 tons of organic HAP would be reduced annually at major sources  -  which represents a 20 percent reduction compared to current baseline emissions.

      The annualized control costs for the RS manufacturing lines ($830,400) divided by the total emission reduction (123 tons of organic HAP) results in a cost effectiveness of $6,750 per ton of organic HAP reduced. On an individual facility basis, the cost effectiveness for the RS and FA manufacturing lines ranged from $1,153 to $14,755 per pound of organic HAP reduced.
Table 1.  Summary of Costs for Wool Fiberglass Mfg Facilities to Comply with Proposed RTR Amendments
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                  Source Type
                                       
                              Gas-Fired Furnaces
                                       
--------------------------------------------------------------------------------
Rotary Spin (RS) and Flame Attenuation (FA) Lines
--------------------------------------------------------------------------------

                                       
                                    Total 
                                   Facility 
                                   Cost    
                                      ($)
                                       
                                       
                                       
                                       
                                       
                                       
                          Annual-  ized Capital Cost*
                              Annual O&M Cost
                                     # Gas
                                Fired Furn-aces
                                Cr Testing Cost
               Cost Effec-       tiveness     ($ /lb Cr reduced)
                                      RS
                                  Mfg Bonded
                                     Lines
                                       
                                       
                   Addt'l RS Control (O & M) Costs***
                      Flame Atten. (FA) Mfg Bonded Lines
                        RS and FA Mfg Line Testing Cost
              Cost Effec-       tiveness     ($/ton HAP reduced)
                                       
                                       
                                    Company
                                   Facility 
                                   Location
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       1
CertainTeed
Kansas City, KS
                                     Major
                                    54,800
                                    145,200
                                       2
                                    20,000
                                      497
                                       1
                                       0
                                       0
                                     3,000
                                      NA
                                    223,000
                                       2
Guardian
Albion, MI
                                    Major 
                                       0
                                       0
                                       0
                                       0
                                       -
                                       2
                                       0
                                       0
                                     5,400
                                      NA
                                     5,400
                                       3
Guardian
Inwood, WV
                                    Major 
                                       0
                                       0
                                       0
                                       0
                                       -
                                       2
                                    125,000
                                       0
                                     5,400
                                     8,693
                                    130,400
                                       4
Guardian
Mineral Wells, MS
                                     Major
                                       0
                                       0
                                       0
                                       0
                                       -
                                       1
                                       0
                                       0
                                     3,000
                                      NA
                                     3,000
                                       5
Guardian
Winnsboro, SC
                                     Major
                                       0
                                       0
                                       0
                                       0
                                       -
                                       1
                                    125,000
                                       0
                                     3,000
                                     2,612
                                    128,000
                                       6
Johns Manville
Cleburne, TX
                                     Major
                                       0
                                       0
                                       1
                                    10,000
                                      NA 
                                       1
                                    125,000
                                       2
                                     7,800
                                    14,755
                                    142,800
                                       7
Johns Manville
Defiance, OH
                                     Major
                                       0
                                       0
                                       2
                                    20,000
                                      NA
                                       4
                                    125,000
                                      11
                                    36,600
                                     3,220
                                    181,600
                                       8
Knauf
Shelbyville, IN
                                     Major
                                       0
                                       0
                                       0
                                       0
                                       -
                                       4
                                       0
                                       0
                                    10,200
                                      NA
                                    10,200
                                       9
Owens-Corning
Newark, OH
                                     Major
                                    27,400
                                   72,600**
                                       2
                                    20,000
                                    10,000
                                       1
                                    125,000
                                       0
                                     3,000
                                     1,506
                                    248,000
                                      10
Owens-Corning
Waxahachie, TX
                                     Major
                                       
                                       0
                                       1
                                    10,000
                                      NA
                                       1
                                    125,000
                                       0
                                     3,000
                                     1,153
                                    138,000
                                       


                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                      11
Guardian
Kingman, AZ
                                    SynMnr
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       0
                                      12
CertainTeed
Chowchilla, CA
                                     Area
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       0
                                      13
CertainTeed
Athens, GA
                                     Area
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       0
                                      14
Johns Manville
McPherson, KS
                                     Area
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       0
                                      15
Johns Manville
Penbryn, NJ
                                     Area
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       0
                                      16
Johns Manville
Richmond, IN
                                     Area
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       0
                                      17
Johns Manville
Waterville, OH
                                     Area
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       0
                                      18
Johns Manville
Willows, CA
                                     Area 
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       0
                                      19
Johns Manville
Winder, GA
                                     Area
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       0
                                      20
Knauf
Lanett, AL
                                     Area
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       0
                                      21
Knauf
Shasta Lake, CA
                                     Area
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       0
                                      22
Owens-Corning
Delmar, NY
                                     Area
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       0
                                      23
Owens-Corning
Eloy, AZ
                                     Area
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       0
                                      24
Owens-Corning
Fairburn, GA
                                     Area
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       0
                                      25
Owens-Corning
Kansas City, KS
                                     Area 
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       0
                                      26
Owens-Corning
Mount Vernon, OH
                                     Area
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       0
                                      27
Owens-Corning
Salt Lake City, UT
                                    SynMnr
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       0
                                      28
Owens-Corning
Santa Clara, CA
                                     Area
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       0
                                      29
Owens-Corning
Nephi, UT
                                    SynMnr
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       0
                                      30
Owens-Corning 
Lakeland, FL
                                     Area
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       0
                                       

                                                                               
                                       
                                    $82,200
                                   $217,800
                                       8
                                    $80,000
                                     $835
                                      18
                                   $750,000
                                      13
                                    $80,400
                                    $6,750
                                  $1,210,400

Table 1 notes:	* Annualized capital cost is based on interest rate of 7% and 15 year equipment life.
      ** One (high-emitting) furnace already scheduled for replacement.
      *** There are no HF/HCl testing costs since the final rule requires work practice standards.
