                                                                              	
DRAFT MEMORANDUM 
TO: 	Korbin Smith, U.S. EPA/OAQPS/SPPD  -  EPA Office of Air Quality Planning and Standards 
FROM: 	SC&A, Incorporated 
DATE: 	October 2020
SUBJECT: 	Cost Estimates for Carbon Black Production National Emission Standards for Hazardous Air Pollutants (NESHAP) Risk and Technology Review (RTR)  -  Proposed Rule
1.0 INTRODUCTION 
This memorandum documents the estimated costs associated with the proposed amendments to the Carbon Black Production NESHAP as a result of the EPA's RTR pursuant to CAA section 112(d) and (3) and "other actions".
Specifically, the following estimated costs are included: 
 Process vent emissions control  -  associated costs (Section 2.0) 
 Boiler/Process Heater Tune-up Requirements (Section 3.0)
All costs presented in this memorandum are in 2019 dollars. 
2.0 PROCESS VENT EMISSIONS CONTROL  -  ASSOCIATED COSTS
Emissions limits in the 2002 NESHAP for the Carbon Black Production source category were set for process vents associated with the main unit filter (MUF). Process vents at the MUF that have a HAP concentration of the emission stream equal or great than 260 parts per million by volume (ppmv) must reduce emissions of HAP by using a flare meeting the requirements of subpart SS, or reduce emissions of total HAP by 98 weight-percent or to a concentration of 20 parts per million by volume (ppmv), whichever is less stringent. 
In this proposal, pursuant to CAA section 112(d)(2) and (3), the EPA is proposing to expand the existing emission limit for carbon black production process vents associated with the MUF, to include all carbon black production process vents. The estimated costs associated with the EPA's proposed expansion of the rule to apply to all production process vents are presented in section 2.1.
The EPA is also proposing that owners and operator of carbon black production process vents subject to the rule conduct performance tests every 5 years to demonstrate continued compliance with the NESHAP. Currently, the NESHAP only requires an initial performance test to determine compliance with standards. The estimated costs associated with this proposal are presented in section 2.2.
2.1 Process Vents After the MUF Costs  -  Initial Applicability Performance Test
The estimated costs associated with the EPA's proposed expansion of the rule to apply to all process vents includes the estimated cost of initial applicability performance tests to determine applicability of requirements to process vents after the MUF. This requirement is a one-time cost that would not be incurred again unless facilities exceeded the 260 ppmv applicability threshold.
To estimate these costs, the EPA assumes that a facility would hire an outside contractor to conduct testing. Testing costs assume that there are three production lines per facility, and two process vents per production line that would need to be tested to determine applicability of requirements (6 tests over 3 days). These process vents include the first process vent after the production line MUF and the first process vent after the dryer. The estimated initial performance test cost per facility is presented in Table 2.
Table 2. Initial Applicability Performance Test Unit Cost Per Facility[a]
Labor Cost Elements
                                 Cost Element
                            Labor Category[c][,][d]

                              Project Management
                               Senior Scientist
                                   Mid-Level
                                   Scientist
                                    Junior
                                   Scientist
                                     Total
Person-Hours
                                      28
                                      40
                                      48
                                      40
                                      156
Rate[b]
                                     $110 
                                      $84 
                                      $49 
                                      $28 
                                       
Labor Costs
                                    $3,087 
                                    $3,342 
                                    $2,329 
                                    $1,112 
                                    $9,870 
Other Non-Labor Cost Elements
Other Direct Costs (ODCs)
                                       

	
Travel 

                                    $3,380
Equipment Supplies

                                    $8,100
Total

                                    $21,350
[a] Costs reflect the labor and nonlabor costs to conduct a performance test for three production lines for two process vents per production line per facility. Labor hours assume one hour per process vent to conduct test for two process vents using EPA Method 25A (with moisture correction). It is assumed that testing would require an on-site crew of three/day with two tests being conducted per day (6 tests over 3 days). 
[b] Labor costs assume employer compensation/overhead equal to 30 percent of employee wages, based on 2019 Bureau of Labor Statistic wages. https://www.bls.gov/news.release/pdf/ecec.pdf 
c Labor category Bureau of Labor Statistic wages: https://www.bls.gov/oes/current/oes_nat.htm#11-0000; https://www.bls.gov/ooh/life-physical-and-social-science/chemists-and-materials-scientists.htm#tab-5. 
[d] For Senior, Mid-Level and Junior Scientist wages, the 2019 Bureau of Labor Statistics annual salaries for a Chemist were used. The top 10 percent annual salary divided by 2,080 hours was used for the Senior Scientist wage; the average annual salary divided by 2,080 hours was used for the Mid-Level Scientist wage, and the bottom 10 percent annual salary divided by 2,080 hours was used for the Junior Scientist wage.  
For purposes of control costs, the EPA assumes that the process vent hazardous air pollutant (HAP) concentration of vent streams after the MUF will fall under the HAP applicability concentration threshold (260 ppmv) and will not be subject to control or other compliance requirements under the carbon black production NESHAP.
2.2 Main Unit Filter Process Vent Costs  -  Performance Test Costs
The estimated cost for owners and operator of carbon black production process vents subject to the rule to conduct performance tests every 5 years to demonstrate continued compliance with the NESHAP assumes that each of the existing facilities will need to conduct a performance test for the main unit filter process vent for three production lines per facility. It is assumed that all but one facility complies with the carbon black production process vent affected source requirements by routing emissions to an incinerator. The remaining facility is assumed to comply with the carbon black production process vent affected source requirements by routing emissions to a flare.
To estimate these costs, the EPA assumes that a facility would hire an outside contractor to conduct testing. Testing costs assume that there are three production lines per facility, and one process vent per production line that would need to be tested to determine applicability of requirements (3 tests over 3 days). The estimated main unit filter process vent affected source compliance cost per facility associated with the requirement to conduct three performance tests per facility is presented in Table 3. 
Table 3. Main Unit Filter Process Vent Performance Test Costs Per Facility[a]
Labor Cost Elements
                                 Cost Element
                             Labor Category[c][,d]

                              Project Management
                               Senior Scientist
                                    Junior
                                   Scientist
                                     Total
Person-Hours
                                      28
                                      40
                                      40
                                      108
Rate[b]
                                     $110 
                                      $84 
                                      $28 
                                       
Labor Costs
                                    $3,087 
                                    $3,342 
                                    $1,112 
                                    $7,541 
Other Non-Labor Cost Elements
Other Direct Costs (ODCs)
                                       
Travel

                                    $2,500
Equipment Supplies

                                    $5,200
Total

                                    $15,241
[a] Costs reflect the labor and nonlabor costs to conduct a performance test for three production lines for one process vent per production line per facility. Labor hours assume one hour per process vent to conduct test for one process vent using EPA Method 25A (with moisture correction). It is assumed that testing would require an on-site crew of three/day with one test being conducted per day (3 tests over 3 days). 
[b] Labor costs assume employer compensation/overhead equal to 30 percent of employee wages, based on 2019 Bureau of Labor Statistic wages. https://www.bls.gov/news.release/pdf/ecec.pdf 
[c] Labor category Bureau of Labor Statistic wages: https://www.bls.gov/oes/current/oes_nat.htm#11-0000; https://www.bls.gov/ooh/life-physical-and-social-science/chemists-and-materials-scientists.htm#tab-5. 
[d] For Senior, Mid-Level and Junior Scientist wages, the 2019 Bureau of Labor Statistics annual salaries for a Chemist were used. The top 10 percent annual salary divided by 2,080 hours was used for the Senior Scientist wage; the average annual salary divided by 2,080 hours was used for the Mid-Level Scientist wage, and the bottom 10 percent annual salary divided by 2,080 hours was used for the Junior Scientist wage.  
3.0 BOILER/PROCESS HEATER TUNE-UP REQUIREMENTS
As a result of the EPA's assessment of NESHAP requirements that currently apply to the carbon black production source category under 40 CFR part 63, subpart YY, the EPA was made aware that there may be instances where carbon black production process vent affected sources that route emissions to a boiler/process heater for use as fuel gas may not be subject to any requirements. In order to address such instances, the EPA is proposing that applicable process vents that route emissions to a boiler/process heater for use as fuel gas must conduct annual tune up requirements specified in §63.1103(f)(3)(iii) of the proposed rule. The proposed annual boiler/process heater tune-up requirements are similar to what is included for gas 1 units under the Boiler MACT. A gas 1 unit under the Boiler MACT is a unit that uses natural gas, refinery gas, or "other" similar gases, i.e. landfill gas.
The estimated cost to conduct an annual tune-up on a carbon black production boiler used when estimating costs of similar provisions under the Industrial, Commercial, Institutional Boilers and Process Heaters National Emissions Standards for Hazardous Air Pollutants (Boiler MACT) is based on the cost estimate provided by Dr. H.M. Eckerlin and E.W. Soderberg of the Industrial Extension Service USI Boiler Efficiency Program.[,] Their report indicates in their 2004 report that the initial set-up for a boiler tune-up ranges from $3,000 to $7,000 per boiler, and thereafter, an annual tune-up costs $1,000 per boiler per year. For the Boiler MACT analysis, an average of $5,000 per boiler initial set-up cost was annualized over five years for an annualized cost of $1,580 per boiler. For this analysis, we assumed that the initial set-up for a boiler tune-up is $6,750 (in $2019) per boiler per year, and thereafter, an annual tune up cost of $1,350 (in $2019) per boiler per year. 
The USI study and other literature suggest that annual boiler tune-ups can improve combustion efficiency between 1 and 5 percent, and often the fuel savings cover the cost of conducting a tune-up. The cost estimate for the tune-up in this analysis includes inspection of the burner, cleaning and repairs to the burner as necessary, inspection and adjustment of the flame pattern, inspection and calibration of the air-to-fuel ratio controls, minimizing total emissions of CO consistent with the manufacturer's specifications, and measurement of CO emissions before and after the tune-up. 


