




TECHNICAL MEMORANDUM

TO:	Bill Schrock, U.S. EPA/OAQPS/SPPD  -  Natural Resources Group

FROM:	Eastern Research Group, Inc.

DATE:	March 31, 2019

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SUBJECT:	Costs for the Solvent Extraction for Vegetable Oil Production Source Category Risk and Technology Review  -  Proposed Amendments
INTRODUCTION
      This memorandum describes the methodologies for estimating costs to comply with the amendments to the National Emission Standards for Hazardous Air Pollutants (NESHAP): Solvent Extraction for Vegetable Oil Production (40 CFR part 63, subpart GGGG) Risk and Technology Review. In this regulatory action, the EPA proposes to eliminate the startup, shutdown, and malfunction (SSM) exemption included in the 2004 NESHAP, consistent with the United States Court of Appeals decision in Sierra Club v. EPA 551 F.3d 1019 (D.C. Cir. 2008). Eliminating the SSM exemption will remove the requirements and associated burden for SSM plans and periodic SSM reports. The EPA is proposing work practice standards for periods of initial startup for new facilities, and associated recordkeeping and reporting to document compliance with the work practice standards during these periods. We estimate that there will be a one-time burden for reviewing requirements of the amended rule, and one-time burden associated with the recordkeeping and reporting for initial startup periods for new facilities. The adjustments, for the 89 affected facilities, are expected to result in a total industry-wide annual cost of $9,874 and are discussed in section 2.0.  
TOTAL COSTS
      To estimate the costs associated with these changes to recordkeeping and reporting requirements, information previously developed as part of the Information Collection Request (ICR) process was consulted.
      The proposed removal of the SSM exemption would result in the emissions standards in the rule applying at all times. The rule amendments include adding work practice standards for initial startup periods and associated recordkeeping and reporting.
      Based on discussions with affected entities, we believe all existing and new facilities are: 1) already operating control technologies during all periods of that solvent is extracted for vegetable oil production and 2) currently performing the proposed work practice standards for initial startup periods as best industry standard practices. Additionally, any new facilities constructed in the next three years would be anticipated to adopt these work practice standards. Therefore, no costs associated with additional operation of controls and work practice standards would be incurred. We estimate that the burden associated with the records and reporting for initial startup periods and associated work practice standards to be less than the burden associated separate recordkeeping and reporting requirements for periods of SSM that are being removed. For example, although we are proposing to require the submittal of an initial startup report, the proposed report would be a one-time submittal at the end of the initial startup period; currently, facilities must submit a periodic SSM report at the end of each calendar month within the initial startup period. 
      We also proposed to eliminate the requirement for the development of a SSM plan as required under 40 CFR 63.2852. The 2004 NESHAP required this plan to be developed by the compliance date of May 26, 2003, for existing sources and May 26, 2000 or startup, for new or reconstructed sources, with no requirement for updates to the plan. Because there is no requirement for updates, no cost savings are estimated for the proposed removal of this provision. All affected facilities are anticipated to experience a small cost savings associated with the proposed removal of recordkeeping and reporting requirements specific to SSM events. Currently, facilities are required to report on SSM events, as outlined under 40 CFR 63.2861(c) and (d).
      The proposed amendments add a requirement for electronic reporting of initial notifications, annual compliance certifications, and performance test reports. We assume the costs to prepare electronic reports is equivalent to paper reports, therefore, there is no burden associated with these proposed revisions. 
      Four hours have been estimated for all affected facilities to read and understand the requirements of the amended rule. Four hours have been estimated for the submittal of the initial startup report and 96 hours have been estimated for recordkeeping for initial startup periods from one new, modified, or reconstructed facility each year. The total national costs to comply with the rule are $9,874 (see "Solvent Extraction for Vegetable Oil Production RTR Cost Memo Workbook - Proposed Amendments," available in Docket ID No. EPA-HQ-OAR-2004-0006). We estimate that, in the first year following promulgation of these final amendments, each of the 89 affected facilities will spend 4 technical labor hours, 0.4 clerical labor hours, and 0.2 managerial labor hours to review the revised rule. New facilities who choose to operate under an initial startup period will spend 100 technical labor hours, 10 clerical labor hours, and 5 managerial labor hours for the submittal of the initial startup report and recordkeeping for initial startup periods. United States Department of Labor rates of $51.19, $19.05, and $57.63 (labor rates are in May 2017 dollars) were used for the technical, clerical, and managerial labor categories, respectively. For the purposes of this cost analysis, these rates were increased by 110 percent to account for the benefit packages available to those employed by private industry.  Due to the cost savings associated with the proposed removal of recordkeeping and reporting requirements specific to SSM events, the costs associated with the proposed amendments are minimal.
REFERENCES
 United States Department of Labor, Bureau of Labor Statistics, table titled "May 2017 National Industry-Specific Occupational Employment and Wage Estimates NAICS 311200 - Grain and Oilseed Milling," available at: https://www.bls.gov/oes/current/naics4_311200.htm.  


Table 1.  "Costs for the Solvent Extraction for Vegetable Oil Production Operations Source Category Risk and Technology Review 
- Proposed Amendments,"
 
                                New Requirement
             (A)
Respondent Hours per Occurrence (Technical hours)
                      (B) 
Non-Labor Costs Per Occurrence
              (C) 
Number of Occurrences Per Respondent Per Year
             (D)
Technical Hours per Respondent Per Year
 (A X C)
                      (E)
Number of Respondents Per Year
                     (F)
Technical Hours per Year
(D X E)
                    (G) 
Clerical Hours per Year
(F X 0.1)
                    (H)
Management Hours per Year
(F X .05)
                     (I)
Total Hours per Year
(F + G + H)
                        (J)
Total Labor Costs Per Year
                (K)
Total Non-Labor Costs Per Year 
(B x C x E)
                (L)
Total Number of Responses per Year
(C X E)
                                   Footnotes
Familiarization with Regulatory Requirements
                                       4
                                      $0
                                       1
                                       4
                                      89
                                      356
                                      36
                                      18
                                      409
                                    $41,848
                                      $0
                                       0
                                     a, b
Develop SSM plan
                                     100 
                                     ($0)
                                      (1)
                                     (100)
                                      1 
                                     (100)
                                     (10)
                                      (5)
                                     (115)
                                   ($11,755)
                                     ($0)
                                       0
                                       c
Periodic startup, shutdown, malfunction report
                                      24 
                                     ($0)
                                      (1)
                                     (24)
                                      5 
                                     (120)
                                     (12)
                                      (6)
                                     (138)
                                   ($14,106)
                                     ($0)
                                       0
                                       d
Immediate startup, shutdown malfunction report
                                      8 
                                     ($0)
                                      (1)
                                      (8)
                                      1 
                                      (8)
                                      (1)
                                      (0)
                                      (9)
                                    ($940)
                                     ($0)
                                       0
                                       d
Initial Startup Report
                                      4 
                                      $0
                                      1 
                                      4 
                                      1 
                                      4 
                                      0 
                                      0 
                                      5 
                                     $470
                                      $0
                                       0
                                       e
Records of initial startup periods
                                      8 
                                      $0
                                      12 
                                      96 
                                      1 
                                      96
                                      10 
                                      5 
                                     110 
                                   $11,285 
                                      $0
                                       0
                                      f 
Records of startup, shutdown, malfunction activities
                                      12 
                                     ($0)
                                      (1)
                                     (12)
                                      1 
                                     (144)
                                     (14)
                                      (7)
                                     (22)
                                   ($16,927)
                                     ($0)
                                      (0)
                                     c, g
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                     Total
                                    $9,874
                                       
                                       
                                       
Footnotes:













(a) Facilities must read the revised requirements to Subpart GGGG, first year only.




(b) We have assumed that there are 89 sources that are currently subject to the standard.




(c) The proposed amendments remove requirements for a SSM plan. The previous ICR assumed that 1 new source per year would submit an SSM report.
(d) The proposed amendments remove requirements for periodic or immediate startup, shutdown, or malfunction reports; The previous ICR assumed 5% of facilities would submit a periodic report and one source would submit an intermediate SSM report.
(e) The proposed amendments require a one-time submittal of an initial start-up report for new, modified, or reconstructed sources at the end of the initial startup period.
(f) The proposed amendments require records for initial startup periods for new, modified, or reconstructed sources each month. We estimate that the burden associated with the records for initial startup periods to be less than the burden associated separate recordkeeping for periods of SSM that are being removed and therefore, reflect a reduced burden.
(g) The proposed amendments remove requirements for keeping records of SSM events for the SSM plan; therefore, 0 facilities would be subject to these requirements.










