 

                                       
                                       
                                       
        ASSESSMENT OF THE POTENTIAL COSTS, BENEFITS,
AND OTHER IMPACTS
                                    FOR THE
                                 PROPOSED RULE
CATEGORICAL NON-WASTE DETERMINATION FOR SELECTED NON HAZARDOUS SECONDARY MATERIALS (NHSMs): 
                          OTHER-TREATED RAILROAD TIES
                                       
                                       
                                       
Economics and Risk Analysis Staff
Office of Resource Conservation and Recovery
U. S. Environmental Protection Agency
1200 Pennsylvania Ave., N. W.
Washington, DC 20460
                                       
                                       

                                       
                                       
                               September 7, 2016
                                                                               
                                       
                                                                               
                                       
                                       
                                  INTRODUCTION
 
 Background:

	Section 129 of the Clean Air Act (CAA) directs EPA to promulgate regulations to control emissions of nine specified pollutants from "solid waste incineration units." EPA did so in December 2000 with the publication of the final Standards of Performance for New Stationary Sources and Emission Guidelines for Existing Sources: Commercial and Industrial Solid Waste Incineration Units (the "CISWI Rule").  In September 2004, under section 112(d) of the CAA, the Agency promulgated the National Emissions Standards for Hazardous Air Pollutants for Industrial, Commercial, and Institutional Boilers and Process Heaters (the "Boilers Rule").  This rule established Maximum Achievable Control Technology (MACT) standards for this source category.  Units regulated under section 129 cannot be subject to any rule promulgated under section 112.

	Responding to a petition for reconsideration, EPA amended the CISWI Rule in September 2005 with a rule that revised definitions for "solid waste," "commercial or industrial waste," and "commercial and industrial solid waste incineration unit" (the "CISWI Definitions Rule").  As part of the CISWI Definitions Rule, EPA made a distinction between solid waste incinerators and boilers, characterizing the former as units that are designed and operated to discard materials through high temperature combustion. However, EPA excluded from the definition of a solid waste incinerator those units designed to recover energy for "useful purposes such as steam generation or process heating."

In July 2007, the Court of Appeals for the District of Columbia Circuit vacated and remanded to EPA both the CISWI Definitions Rule and the Boilers Rule. In vacating the Definitions Rule, the Court noted that, despite the potential reasonableness of the functional distinction between boilers and incinerators, the CAA is unambiguous in its requirement that EPA regulate as a solid waste incineration unit any commercial or industrial incinerator that combusts any solid waste material, regardless of whether the waste is burned as a "fuel."  The Court also concluded that EPA erred in excluding from the CISWI Definitions Rule units that combust solid waste for the purposes of energy recovery and including these units in the Boilers Rule.  

In partial response to the Court's decision, EPA published the Non-Hazardous Secondary Materials (NHSM) Rule on March 21, 2011.  Amendments to this rule were published in the Federal Register on February 7, 2013.  These amendments provided clarification on certain issues on which EPA received new information, as well as specific targeted revisions.  In addition, these amendments listed several NHSMs as categorical non-wastes when used as fuels.  The Agency also indicated that we would consider adding additional materials to the categorical listings as more information became available.  

Today's action adds one material to the list of categorical non-waste fuels: other-treated railroad ties (OTRTs). This material is described more fully below.
Need for Regulatory Action:

Today's categorical non-waste determination for selected NHSMs is an ongoing response to the Court's decision that required a clear determination of the status of these materials when combusted.  

Purpose of this Document:

Because the regulatory action is definitional only, any indirectly associated costs or benefits would not occur without the corresponding implementation of the relevant CAA rules. However, in an effort to ensure rulemaking transparency, this assessment has been prepared that examines the potential scope and direction of these indirect impacts, for both costs and benefits.  


                 SUMMARY OF THE PROPOSED RULE AND ALTERNATIVES

Proposed rule:
	
	The March 2011 NHSM proposed rule, as amended in February 2013, established standards and procedures to be used to identify whether non-hazardous secondary materials are solid wastes when used as fuels or ingredients in combustion units.  This rule also listed various materials that are not solid wastes provided certain conditions are met.  These materials are known as "categorical" non-waste fuels.  Today's action adds one additional material to the list of categorical non-waste fuels: other-treated railroad ties that are processed and then combusted in units designed to burn both biomass and fuel oil.  
Regulatory Alternatives:

Consistent with Executive Order 12866 requirements and Agency guidance, this assessment briefly considers two regulatory alternatives, identified below as Option 1 and Option 2.  These options are examined for comparative purposes only and should not be considered part of the proposed rule.

  

	Option 1: Selected NHSMs Defined as RCRA Solid Waste:

Under this Option, OTRTs would be defined as RCRA solid wastes, while allowing for non-waste consideration using the previously established petition process. Under this option, without a successful petition, these materials, when burned, would be required to be managed under CAA section 129 standards, or disposed of in an appropriate landfill. 

	Option 2: Expanded RCRA Management Requirements:

	Rather than listing the selected NHSMs as categorical non-wastes (subject to identified management requirements), another alternative regulatory option may be to finalize expanded management requirements for, or associated with, the fuel use of these materials.  These requirements would be incorporated into the contingencies and best management practices for non-waste determinations for specific non-hazardous secondary materials when used as a fuel. Such requirements may include one or more of the following:  transportation restrictions/requirements, storage limitations/controls, specific container or material labeling, enhanced materials processing, expanded training, material sampling and analysis, and comprehensive recordkeeping and reporting. These requirements would, where applicable, be incremental to any current baseline management requirements for the material, whether currently burned as a solid waste or non-waste. 

Non-Regulatory Alternatives:
	
	Non-regulatory alternatives to this final action may include the following:  no action, expanded voluntary training and educational programs, and working with the states to implement targeted generation and use fees/taxes at the state level that are designed to modify behavior. 

	The purpose of this action is to establish a categorical non-waste determination for the selected material (OTRTs), and to provide for greater regulatory clarity and certainty. In addition, this rule seeks to help remove or reduce cost and liability issues potentially associated with the combustion of this material for energy recovery, while maintaining appropriate emission standards to ensure effective protection of human health and the environment.  Thus, non-regulatory alternatives would not adequately serve the purpose of this action.

                  SUMMARY OF THE AFFECTED SECONDARY MATERIALS

   As noted above, the Agency is listing one additional non-hazardous secondary material as a "categorical" non-waste fuel provided certain conditions are met.  Categorical non-waste fuels do not need to be evaluated under the general standards and procedures that would otherwise apply to such materials used in combustion units.  The additional material is other-treated railroad ties that are processed and then combusted in units designed to burn both biomass and fuel oil.  


This section provides summary information concerning the non-hazardous secondary material.

Other Treated Railroad Ties (OTRTs):
      
	Railroad crossties that have been removed from service and are processed for fuel are the primary source of OTRTs.  These crossties are overwhelmingly comprised of North American hardwoods that have been treated with a wood preservative.  With respect to this proposal, the wood preservatives included in the category of OTRTs include only the following treatments: creosote-borate, copper naphthenate, copper naphthenate-borate.  These wood preservative formulations are increasingly being used as alternatives to creosote, due, in part, to lower overall contaminant levels and that the ability to reuse the ties is an important consideration rail tie purchasing decisions.  Depending upon railroad maintenance operations, anywhere from 13 million to as many as 20 million crossties may be removed from service each year (Appendix B).  About one third of these crossties are used for landscaping, while the majority of the rest are used for energy recovery. Only a small percentage of crossties are landfilled each year. While these data apply to CTRTs, the industry has indicated that current production trends show an ever-increasing shift to creosote-borate, copper naphthenate, and copper naphthenate-borate wood treatments, as these treatments, in addition to the benefits listed above, have proven to increase decay resistance for ties in severe decay environments and for species that are difficult to treat with creosote alone.  
      
	Because of their high energy content, processed OTRTs are beneficially used as an alternative to traditional fuels for heat and energy recovery in a wide variety of different unit types and industrial sectors. These may include units designed specifically to burn crossties, industrial wood fired boilers, utility boilers, or cement kilns. The beneficial use of the wood in crossties as a fuel substitute is considered to be carbon neutral.  As a result, for each tie burned for energy recovery, only the creosote portion of the tie is considered to be a fossil fuel.  Thus, burning of the tie results in the addition of approximately 39 pounds of carbon dioxide into the atmosphere, compared to approximately 288 pounds which would result from burning a quantity of coal of equal energy.  While these analyses were performed on CTRTs, we are unaware of similar analyses pertaining to the OTRTs in this proposal.  However, as one class of OTRTs involve creosote-borate ties, we have included the data presented for CTRTs as a point of reference. 

       The energy recovery market for crossties is dominated by third party energy producers who generally collect and process the ties prior to selling the material for fuel. This processing of crossties meets the definition of processing in 40 CFR 241.2.  Finally, OTRTs were found to mostly contain contaminants at levels comparable to or lower than those in traditional fuel(s) used in equivalent units.   
                                         
                                         
   	GENERAL APPROACH	
   
Introduction

This assessment evaluates the general scope and direction of impacts potentially associated with this rule.  The assessment first considers the regulatory baseline, followed by an examination of the potential indirect incremental cost impacts (positive or negative) to burners.  We also briefly discuss indirect market adjustments potentially stimulated by this action.  Finally, we present a qualitative consideration of benefits. The approach and key options are considered. 

As previously discussed, all impacts associated with this action, aside from minor costs of reading and understanding the rule, are not realized until regulated entities apply the definitions established in this rule to the management of these materials for fuel under regulatory requirements established under sections 112 and/or 129 of the CAA.    

The findings discussed in this assessment should be used only to inform the reader as to the potential magnitude and direction of the indirect impacts that may occur in response to the implementation of the categorical non waste determinations established in this rule. The evaluation of social costs and net welfare potentially resulting from this action is beyond the scope of this assessment.

Baseline Determination 

Impacts Assessment Methodology

	This assessment considers two alternative approaches to assessing the indirect impacts potentially associated with the proposed rule.  We first examine the potential impacts using a simple engineering combustion cost comparison between CAA section 112 and section 129 units.  This difference represents the cost savings from potentially avoided incremental upgrade costs required to move from CAA section 112 to section 129 standards.  Alternatively, this difference may roughly represent the potential incremental cost savings of modifying a unit to burn under CAA section 112 standards rather than CAA section 129 standards. Appendix A presents more details on data used for this burner comparative cost assessment.  

	Our second approach is presented as a simple assessment of the market adjustments potentially associated with increased fuel use of the selected materials.  These market adjustments may occur in response to reduced waste determination needs, plus the enhanced regulatory clarity and certainty provided by the rule, as proposed.   Appendix B presents full details on data and assumptions that are applied for the market adjustment assessment.

                                   FINDINGS

Cost and Economic Impacts:

Introduction:

	This section presents estimated cost impacts on a combustion unit basis for burners operating under CAA section 112 versus section 129 requirements.  We also briefly examine the potential adjustments that may occur in the selected materials markets in response to the rule.  Potential burner impacts are examined under the final approach and two alternative regulatory options: Option 1 - Selected NHSMs Defined as RCRA Solid Waste, and Option 2 - Expanded RCRA Management Requirements. These options are more fully described above under "Regulatory Alternatives." 

As previously discussed, this assessment is presented for general informational purposes only, reflecting the potential indirect impacts of this action as part of the Agency's larger rulemaking system that encompasses this rule plus the associated final rules promulgated under sections 112 and 129 of the CAA.  

Estimated Impacts to Burners:

This section examines the representative average per unit cost differential for combustors operating under CAA section 112 requirements versus CAA section 129 requirements.  Without the proposed rule, this cost differential would roughly reflect the average per unit cost impact for burners currently operating under section 112 requirements to upgrade to meet the required section 129 standards, depending upon facility baseline status and material(s) burned (and planned to be burned).  With this rule, the differential may reflect the avoidance of these anticipated costs.  For current section 129 burners, this difference may roughly reflect the potential annual per unit cost savings associated with O&M and design modifications necessary to meet the (less stringent) section 112 standards.  Once again, this would be dependent upon many baseline conditions, including which NHSMs are currently burned, and future fuel use plans or needs.  This section only considers potential cost impacts on a per unit level.  Impacts at the facility level and aggregate nationwide impacts are not assessed.

	Proposed rule

Facilities currently burning only OTRTs in CAA section 129 units, who had planned to continue burning these materials in the same unit(s), may experience cost savings should they choose to modify affected combustion unit(s) to meet the CAA section 112 standards.  In this case, the unit-level cost savings are estimated, on average, to be approximately $266,000 per year (Appendix A).  This would reflect an avoided upgrade cost if affected units are currently operating under CAA section 112 standards.  Facilities currently burning OTRTs as a non-waste may also experience some cost savings associated with avoided case-by-case waste determinations, documentation, and recordkeeping.       

 Regulatory Options

Option 1: Selected NHSMs Defined as RCRA Solid Waste:

Under this option, OTRTs would be RCRA solid wastes, while allowing for a non-waste determination using the previously established petition process.  In this case, $266,000 would be the average annual per unit cost increase for CAA section 112 boilers currently burning these materials who wish to pursue the necessary upgrades to meet CAA section 129 standards.  If these facilities would present a petition to establish the material as a non waste, and this petition was successful, the total cost is estimated at just over $10,000 per submission.  Based on the materials burned, a successful petition would allow a facility to avoid the $266,000 per unit upgrade cost.    

	Option 2: Expanded RCRA Management Requirements:

	Contingent upon regulatory authority and legal feasibility, additional RCRA contingent requirements above and beyond the contingencies could be considered as a regulatory option.  These may include manifesting, transportation restrictions, storage limitations/controls, specific container or material labeling, enhanced material management and handling training, material sampling and analysis, and comprehensive recordkeeping and reporting.  A regulatory alternative that required one or more of these material-specific requirements would likely result in increased costs to the regulated community. Under this alternative, such costs would be weighed against benefits to human health and the environment expected to result from such requirement(s).  Under this option, the handlers of the affected material(s) could be expected to compare the costs of alternative management methods (e.g., MSW disposal, CAA section 129 incineration upgrade needs) to the increased costs associated with the new fuel source requirements.  Should the regulated community decide that alternative material management methods are less expensive than the new fuel-source requirements, some or all of this material may be diverted away from boilers and the supplementary fuel value would be lost.

Potential Market Adjustments:

	This rule, implemented in conjunction with the existing boiler and CISWI final rules, will provide increased regulatory certainty and management clarity for the selected materials.  This increased certainty may stimulate increased energy recovery use for one or more of these materials. The potential extent of this increase cannot be determined.  However, we have developed generalized preliminary estimates of the quantities of the selected materials potentially available for fuel based on our estimates of maximum annual generation of these materials.
 
	Based upon information collected during the CTRT rulemaking, we estimate that anywhere from 13 million to 20 million CTRTs are generated (removed from service) each year.  Approximately 62 percent of this total is currently burned for energy recovery.  Based on comments from the Association of American Railroads, approximately 67 percent of all creosote-treated railroad ties removed from service each year are suitable for energy recovery in today's market.  Converting the five percentage point incremental increase in the number of ties to tons of CTRTs, we estimate there may be about 59,150 tons to 91,000 U.S. tons equivalent of additional railroad ties available for energy recovery each year.  Applying this to OTRT, industry estimates current production of railroad ties to be approximately 56% creosote and 44% other preservatives, and with time this distribution would likely be 25% creosote and 75% other preservative treatments.  Assuming that, eventually, 75% of railroad ties used for energy recovery are OTRT, this would result in about 44,360 to 68,250 U.S. tons equivalent of additional railroad ties available for energy recovery each year. Appendix B presents detailed information on all inputs, calculations, assumptions, and sources used in the development of these estimates.

The above estimates clearly demonstrate the market potential for increased fuel-use of the material addressed in this proposal.  However, the extent of any potential market adjustment is undetermined, and would depend upon a multitude of economic, regulatory (state and local), and engineering factors.  In addition to market-adjustments, there would be increased upstream environmental benefits resulting from reduced extraction of traditional fuels. 

Under regulatory Option 1, where OTRT would be clearly defined as RCRA solid wastes, facilities who do not present a successful petition, may decide to cease burning the selected material(s) in an effort to avoid potential unit upgrade costs.  As a result, the generators of these materials would need to seek alternative management methods.  In some cases, this may be the same facility that burns the material, while in other cases this may be another facility.  When a combustion unit stops burning a secondary material, the ultimate destination of that material is uncertain.  Under this option, the quantities of NHSMs potentially diverted away from fuel use to alternative management are not estimated, but could be significant.     

Other Potential Impacts

	In addition to potential materials diversion and alternative management impacts, this action may also indirectly foster market-related secondary impacts.  These may include changes in material transportation patterns, changes in material collection and consolidation patterns, and changes in material processing patterns.  There may also be minor incremental changes in consumer prices and employment patterns related to the potential change in management associated with these materials.  The actual occurrence, or extent of any such impacts, has not been assessed.  Finally, all affected entities would face the direct RCRA associated cost of reading and understanding the rule, estimated at approximately $102 per entity.


	 

Human Health, Environmental, and Economic Benefits/Disbenefits:

      Together with the corresponding CAA rules, this proposed rule will likely result in various changes in materials management practices that may yield a variety of human health, environmental, and economic benefits or disbenefits. To the extent that the proposed rule affects the CAA regulatory status of individual combustion units burning the selected material(s), the proposed rule may affect criteria pollutant and air toxics emissions. In addition, any increased quantities of these NHSMs burned as a non-waste fuel would result in upstream life cycle benefits associated with reduced extraction of traditional fuel(s).  Finally, to the extent that the rule may influence market dynamics within affected industries, economic benefits or disbenefits may occur.  
      

Human Health and Environmental Benefits/Disbenefits:
      
      Our research finds that the NHSM fuels selected in the current proposal are generally comparable to fuels that the combustors would otherwise burn.  Therefore, the overall level of emissions, or the emissions mix from boilers is not expected to change significantly under this proposal. However, we cannot confirm that there would be no cases of an incremental increase in exposure (negative impacts) as an indirect result of this rule if the affected facilities accept more, or a different combination of non-hazardous secondary materials.  
      
	 This rule may stimulate the increased use of the selected NHSMs for use as a fuel in CAA section 112 boilers. The increased use of these NHSMs would likely result in the displacement of selected traditional fuels, or other non-waste fuels, depending upon availability, prices, and unit design.  A net displacement of coal or other fossil fuels could result in various environmental benefits, including reduced upstream emissions of particulate matter, criteria pollutants, and toxic emissions. There may also be reduced water and energy usage.  Any reduced emissions or activities at virgin fuel mining or processing facilities may result in reduced environmental impacts to citizens living near or around the affected operations.

	The net human health and environmental impacts from the potential changes discussed above have not been assessed.  This net impact could be either positive or negative.  


Economic Benefits/Disbenefits:

	Increased beneficial fuel use of the selected materials could lead to increased market valuations of these materials, and potentially reduced valuations of substitutes.  These changes in market valuations, and corresponding supply and demand, could disrupt the market equilibrium and alter the economics of the affected materials and industries.  This could potentially lead to incremental changes in employment, revenues, and profitability for certain industrial sectors, subsectors, or individual companies.  Liability and goodwill considerations may also be factors.  Facilities burning the materials as a non-waste fuel may receive economic value from the avoided stigma of burning a solid waste, and the corresponding liability concerns.


                    EQUITY CONSIDERATIONS AND OTHER IMPACTS
      
      As required by applicable statutes and executive orders, this section summarizes our analysis of equity considerations and other regulatory concerns associated with the proposed rule. This chapter assesses potential impacts, with respect to the following issues: 

       Regulatory planning and review: discusses determination of regulatory significance under Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review the Agency.  These Orders are also the basis for this analysis.
   
       Regulatory flexibility: focuses on the potential effects of the proposed rule on small entities; 
   
       Unfunded mandates: examines the implications of the proposed rule with respect to unfunded mandates; 
   
       Federalism: considers potential issues related to state sovereignty; 
   
       Tribal governments: extends the discussion of federal unfunded mandates to include impacts on Native American tribal governments and their communities; 
   
       Children's health protection: examines the potential impact of the proposed rule on the health of children; 
   
       Energy Impacts: examines the impacts of the proposed rule on energy use, supply, and distribution; 
   
       Environmental justice: considers potential issues for minority and low-income populations. 

Regulatory Planning and Review:

   Under Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review, the Agency, in conjunction with the Office of Management and Budget's (OMB's) Office of Information and Regulatory Affairs (OIRA) must determine whether a regulatory action is "significant" and therefore subject to OMB review. The Order defines a "significant regulatory action" as one that is likely to result in a rule that may: 

      (1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; 
      (2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; 
      (3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or 
      (4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order. 
      
Pursuant to the terms of Executive Order 12866, this action is "substantive nonsignificant" and will not undergo OMB review.  
Regulatory Flexibility:

The Regulatory Flexibility Act (RFA) as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 USC 601 et seq., generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act, or any other statute.  This analysis must be completed unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities.  Small entities include small businesses, small organizations, and small governmental jurisdictions.

For purposes of assessing the impacts of this rule on small entities, small entity is defined as: (1) a small business as defined by the Small Business Administration's (SBA) regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

      In determining whether a rule has a significant economic impact on a substantial number of small entities, the impact of concern is any significant adverse economic impact on small entities, since the primary purpose of the regulatory flexibility analysis is to identify and address regulatory alternatives "which minimize any significant economic impact of the rule on small entities" (5 USC 603 and 604). Thus, an agency may certify that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, or otherwise has a positive economic effect on all of the small entities subject to the rule.  
      
      The addition of the NHSM to the list of categorical non-waste fuels is expected to indirectly reduce materials management costs.  In addition, this action will provide greater clarity and reduce regulatory uncertainty associated with this material and help increase management efficiency.  We have therefore determined that today's rule will not have a significant economic impact on a substantial number of small entities.

Unfunded Mandates:

The Unfunded Mandates Reform Act (UMRA) of March 22, 1995, calls on all federal agencies to provide a statement supporting the need to issue any regulation containing an unfunded federal mandate, and to describe prior consultation with representatives of affected state, local, and tribal governments.  

The proposed rule is not subject to the requirements of sections 202, 204 and 205 of UMRA.  In general, a rule is subject to the requirements of these sections if it contains "Federal mandates" that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year.  The proposed rule does not result in $100 million or more in expenditures for any of these groups. 
Federalism:
	
Executive Order 13132, entitled "Federalism" (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure "meaningful and timely input by state and local officials in the development of regulatory policies that have federalism implications."  "Policies that have federalism implications" is defined in the Executive Order to include regulations that have "substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government."  Internal EPA guidance indicates that a policy has federalism implications if it results in the expenditure by State and/or local governments in the aggregate of $25 million or more in any one year.

Under Executive Order 13132, EPA may not issue a regulation that has federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or EPA consults with State and local officials early in the process of developing the regulation.

      This action does not have federalism implications.  It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in the Order.  This rule will not impose direct compliance costs on state or local governments and will not preempt state law.  Thus, Executive Order 13132 does not apply to this action. 
      
Consultation and Coordination with Indian Tribal Governments:

Executive Order 13175, entitled "Consultation and Coordination with Indian Tribal Governments" (65 FR 67249, November 9, 2000), requires EPA to develop an accountable process to ensure "meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications." 

EPA has concluded that this action may have tribal implications.  However, it will neither impose substantial direct compliance costs on tribal governments, nor preempt Tribal law.  Potential aspects associated with the categorical non-waste fuel determinations under this proposed rule may invoke minor indirect tribal implications to the extent that entities generating or consolidating this NHSM on tribal lands could be affected.  However, any impacts are expected to be negligible.

Children's Health Protection:

Executive Order 13045, entitled "Protection of Children from Environmental Health Risks and Safety Risks" (62 FR. 19885, April 23, 1997) applies to any rule that: (1) is determined to be "economically significant" as defined under E.O. 12866, and (2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency.  

	This action is not subject to E.O. 13045 (62 FR 19885, April 23, 1997) because it is not economically significant as defined in E.O. 12866, and because the Agency does not believe the environmental health or safety risks addressed by this action present a disproportionate risk to children.  Based on the discussion below, the Agency found that the populations of children near potentially affected boilers are either not significantly greater than national averages, or in the case of landfills, may potentially result in reduced discharges near such populations.

	The proposed rule may indirectly stimulate the increased fuel use the NHSM by providing enhanced regulatory clarity and certainty.  This increased fuel use may also result in the diversion of a certain quantity of the NHSM away from current baseline management practices.  Any corresponding disproportionate impacts among children would depend upon: (1) any potential change in emissions from combustion units subject to the CAA section 112 standards, relative to baseline management patterns, and (2) whether children make up a disproportionate share of the population near the affected combustion units.  Therefore, to assess the potential for the proposed rule to result in an indirect disproportionate effect on children, we conducted a demographic analysis for this population group surrounding CAA section 112 major source boilers, municipal solid waste (MSW) landfills, and construction and demolition (C&D) landfills.  We assessed the share of the population under the age of 18 living within a three-mile (approximately five kilometers) radius of these facilities.  

  	For major source boilers, our findings indicate that the percentage of the population in these areas under age 18 years of age is generally the same as the national average.  While the fuel source and corresponding emission mix for some of these boilers may change as an indirect response to this rule, emissions from these sources remain subject to the CAA section 112 standards.  For MSW and C&D landfills, we do not have demographic results specific to children.  However, using the population below the poverty level as a rough surrogate for children, we found that within three miles of facilities that may experience diversions of the NHSM, low-income populations, as a percent of the total population, are disproportionately high relative to the national average.  Thus, to the extent that the NHSM are diverted away from MSW or C&D landfills, any landfill-related emissions, discharges, or other negative activity potentially impacting low-income (children) populations living near these units are likely to be reduced. Transportation emissions associated with the diversion of some of this material away from landfills to boilers are likely to be generally unchanged.   
Energy Impact:

Executive Order 13211, "Actions Concerning Regulations that Affect Energy Supply, Distribution, or Use" (66 FR 28355, May 22, 2001), addresses the need for regulators to more fully consider the potential energy impacts of regulatory action. Under Executive Order 13211, agencies are required to prepare a Statement of Energy Effects when a regulatory action may have significant adverse effects on energy supply, distribution, or use, including impacts on price and foreign supplies.  Additionally, the requirements obligate agencies to consider reasonable alternatives to regulatory actions with adverse effects and the impacts that such alternatives might have on energy supply, distribution, or use.

      This action is not a "significant energy action" as defined under the Order because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy.  The selected NHSM affected by this proposed action is not generated in quantities sufficient to significantly (adversely or positively) impact the supply, distribution, or use of energy at the national level. 
Environmental Justice:

      Executive Order (EO) 12898 (59 FR 7629, Feb. 16, 1994) establishes federal executive policy on environmental justice.  Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the United States.  
      
	The overall level of emissions, or the emissions mix from affected boilers are not expected to change significantly as a result of this rule.  The NHSM categorically listed as non-waste fuels is generally comparable to the types of fuels that the combustors would otherwise burn.  Therefore, while we cannot definitively determine that there would be no cases of an incremental increase in exposure (negative impacts) if the affected facilities accept more, or a different combination of non-hazardous secondary materials, the boilers indirectly affected by this action would remain subject to the same CAA section 112 standards.  

	Our environmental justice assessment reviewed the distributions of minority and low-income groups that might be impacted by the sources indirectly affected by this proposal.  We focused on census blocks within three miles (approximately five kilometers) of these facilities.  We then determined the demographic composition (e.g., race, income, etc.) of these census blocks and compared them to the corresponding national compositions.  Our findings indicate that populations living within three miles of major source boilers represent areas with minority and low-income populations that are higher than the national averages.  In these areas, the minority share of the population was found to be 33 percent, compared to the national average of 25 percent.  For these same areas, the percent of the population below the poverty line (16 percent) is also higher than the national average (13 percent).  
	
	We also considered the potential for non-combustion environmental justice concerns related to the potential incremental increase in NHSM diversions from current baseline management practices.  These may include the following: 

 Reduced upstream emissions resulting from the reduced production of virgin fuel: Any reduced upstream emissions that may indirectly occur in response to reduced virgin fuel mining or extraction may result in a human health and/or environmental benefit to minority and low-income populations living near these projects. 
            
 Alternative materials transport patterns: Transportation emissions associated with NHSM diverted from landfills to boilers are likely to be similar.
            
 Change in emissions from baseline management units:  The diversion of some of the NHSM away from disposal in landfills may result in a marginal decrease in activity at these facilities.  This may include non-adverse impacts, such as marginally reduced emissions, odors, groundwater and surface water impacts, noise pollution, and reduced maintenance cost to local infrastructure.  Because MSW and C&D landfills were found to be located in areas where minority and low-income populations are disproportionately high relative to the national average, any reduction in activity and emissions around these facilities is likely to  benefit (even if only marginally) the citizens living near these facilities.
            
	This rule, in conjunction with the corresponding CAA rules, may also help accelerate the abatement of any existing stockpiles of the selected NHSMs.  To the extent that these stockpiles may represent negative human health or environmental implications, minority and/or low-income populations that live near such stockpiles may experience marginal health or environmental improvements.  Aesthetics may also be improved in such areas.

Joint Impacts of Rules:

The proposed rule has applicability to the universe of facilities subject to CAA sections 112 or 129, as well as other rules and agency regulatory programs.  In fact, the proposed rule, with the exception of certain administrative requirements, only engenders economic effects by its actual application in the context of these other regulatory regimes.  Thus, the proposed rule shares joint impacts with existing, and prospective regulatory initiatives.  

Examples of other rules or regulatory initiatives with which the proposed rule may have joint impacts include: the Portland Cement MACT, the Commercial, Industrial Solid Waste Incinerators (CISWI) rules, the Boiler MACT rules (Major Source and Area Source), and the Other Solid Waste Incinerators (OSWI) rule.

















                                  APPENDIX A
ESTIMATING SECTION 129 COMPLIANCE COSTS COMPARED TO SECTION 112 COMPLIANCE COSTS

	This Appendix details our assessment of the derivation of representative unit and average CAA section 129 and section 112 compliance costs for model units. Table A-1 presents the following information for each of the 30 representative units:  (1) unit and facility identification data, (2) the estimated annual costs of section 129 compliance, (3) the estimated annual costs of section 112 compliance, and (4) the annual costs of section 129 incremental to section 112 (i.e., the difference between (2) and (3) for each unit).  Averaging the incremental section 129 costs for the 30 representative units, we find that the cost of upgrading to section 129 standards (incremental to Section 112), is nearly $266,000 per unit.  



                                   Table A-1

Facility Name
City
State
Unit Number
Section 129 Unit Costs
(year 2008$)
Section 112 Unit Costs 
(year 2008$)
Incremental Costs of Section 129 
(year 2008$)
OFS Fitel, LLC Norcross Facility
Norcross
GA
Unit 1
325,382
111,194
214,188
OFS Fitel, LLC Norcross Facility
Norcross
GA
Unit 2
325,382
152,643
172,739
J.R. Simplot Company
Pocatello
ID
Unit 1
325,382
0
325,382
J.R. Simplot Company
Pocatello
ID
Unit 2
325,382
0
325,382
Thermafiber, Inc
Wabash
IN
Unit 1
325,382
0
325,382
3M Alexandria
Alexandria
MN
Unit 1
325,382
0
325,382
3M Alexandria
Alexandria
MN
Unit 2
325,382
0
325,382
PPG Industries, Inc. (Lexington, NC)
Lexington
NC
Unit 1
325,382
152,643
172,739
PPG Industries, Inc. (Lexington, NC)
Lexington
NC
Unit 2
325,382
152,643
172,739
PPG Industries, Inc. (Lexington, NC)
Lexington
NC
Unit 3
325,382
152,643
172,739
PPG Industries, Inc. (Lexington, NC)
Lexington
NC
Unit 4
325,382
152,643
172,739
PPG Industries, Inc. (Shelby, NC)
Shelby
NC
Unit 1
325,382
152,643
172,739
PPG Industries, Inc. (Shelby, NC)
Shelby
NC
Unit 2
325,382
152,643
172,739
AGY Huntingdon, LLC
Huntingdon
PA
Unit 1
325,382
0
325,382
AGY Huntingdon, LLC
Huntingdon
PA
Unit 2
325,382
0
325,382
McAvoy Vitrified Brick Co.
Phoenixville
PA
Unit 1
325,382
0
325,382
AGY Aiken LLC
Aiken
SC
Unit 1
325,382
0
325,382
AGY Aiken LLC
Aiken
SC
Unit 2
325,382
0
325,382
AGY Aiken LLC
Aiken
SC
Unit 3
325,382
0
325,382
Kohler Co.
Spartanburg
SC
Unit 1
325,382
0
325,382
Kohler Co.
Spartanburg
SC
Unit 2
325,382
0
325,382
Owens Corning Insulating Systems, LLC  Waxahachie Plant
Waxahachie
TX
Unit 1
325,382
0
325,382
Owens Corning Insulating Systems, LLC  Waxahachie Plant
Waxahachie
TX
Unit 2
325,382
0
325,382
Corning Incorporated
Danville
VA
Unit 1
325,382
0
325,382
Corning Incorporated
Danville
VA
Unit 2
325,382
0
325,382
3M Prairie du Chien
Prairie du Chien
WI
Unit 1
325,382
152,643
172,739
3M Prairie du Chien
Prairie du Chien
WI
Unit 2
325,382
152,643
172,739
3M Prairie du Chien
Prairie du Chien
WI
Unit 3
325,382
152,643
172,739
3M Wausau - Downtown
Wausau
WI
Unit 1
325,382
152,643
172,739
Guardian Fiberglass, Inc
Inwood
WV
Unit 1
325,382
0
325,382
AVERAGE PER UNIT INCREMENTAL COST OF SECTION 129 OVER SECITON 112

$265,706



















                                  APPENDIX  B




























            Estimated NHSM Quantities Generated and Burned for Fuel

                                 Input Factor
                                    Value/
                                   Quantity
                                     Units
                                     Year
                                Source/Comments
                                       
Low-End: Maximum Potential Quantity of Paper Recycling Residuals (including OCC) that Could Possibly Be Burned as Fuel
                                    405,000
                              short tons per year
                                     2012
                                       
* Generation, Management, and Processing of Paper Processing Residuals.  Industrial Economics Corporation, October 26, 2012.

                                       
                                       
                                       
* Maximum Reported Quantity: 450,000 tons/yr.   Estimate assumes 10 percent will be used for land applications (see statement on page 2 of reference.

                                       


* Assumes 100% generated on-site.  
High-End: Maximum Potential Quantity of Paper Recycling Residuals (including OCC) that Could Possibly Be Burned as Fuel
                                    540,000
                              short tons per year
                                     2012
* Generation, Management, and Processing of Paper Processing Residuals.  Industrial Economics Corporation, October 26, 2012.

                                       
                                       
                                       
* Maximum Reported Quantity: 600,000 tons/yr.   Estimate assumes 10 percent will be used for land applications (see statement on page 2 of reference.

                                       
                                       
                                       
* Assumes 100% generated on-site.  
Low-End Estimate: Paper Recycling Residuals (including OCC) Currently Burned for Fuel
                                    135,000
                                short tons/year
                                     2012
* Generation, Management, and Processing of Paper Processing Residuals.  Industrial Economics Corporation, October 26, 2012.

                                       


* Assumes 100% generated on-site.  

                                       
                                       
                                       
                                       
High-End Estimate: Paper Recycling Residuals (including OCC) Currently Burned for Fuel
                                    180,000
                                short tons/year
                                     2012
* Generation, Management, and Processing of Paper Processing Residuals.  Industrial Economics Corporation, October 26, 2012.

                                       
                                       
                                       
* Assumes 100% generated on-site. 

                                       
                                       
                                       

Estimated Maximum Quantity of Construction and Demolition (C&D) Wood that May be Available for Energy Recovery
                                  20,280,000
                                short tons/year
                                     2002
* U.S. EPA.  Materials Characterization Paper in Support of the Final Rulemaking: Identification of Nonhazardous Secondary Materials That are Solid Waste - Construction and Demolition Materials - Building Related C&D Materials. February 3, 2011
Low-End Estimate: C&D  Wood Currently Burned for Fuel
                                   4,700,000
                                short tons/year
                                     2009
* U.S. EPA.  Materials Characterization Paper in Support of the Final Rulemaking: Identification of Nonhazardous Secondary Materials That are Solid Waste - Construction and Demolition Materials - Building Related C&D Materials. February 3, 2011
 
High-End Estimate: C&D  Wood Currently Burned for Fuel
                                  11,200,000
                                short tons/year
                                     2009
* U.S. EPA.  Materials Characterization Paper in Support of the Final Rulemaking: Identification of Nonhazardous Secondary Materials That are Solid Waste - Construction and Demolition Materials - Building Related C&D Materials. February 3, 2011
                                       
                                       
                                       
                                       
* Note:  4.7 million ton estimate and 6.5 million ton estimate added together. (See paper)
                                       
                                       
                                       
                                       
* Note:  The high-end estimate may include an undetermined portion of non C&D building material wood (e.g., land clearing wood, disaster debris)
                                       
                                       
                                       
                                       

Low-End Estimate of Creosote-Treated Rail Road CrossTies Removed Annually

                                  13,000,000
                        actual  number of  8 foot ties
                                     1995
* Waste Age, Sep 1, 1995.  Recycling Keeps Railroad Ties Off The Landfill Track  

                                       
                                       
                                       
* Lowest estimate identified

                                       
                                       
                                       

High-End Estimate of Creosote-Treated Rail Road CrossTies Removed Annually

                                  20,000,000
                        actual  number of  8 foot ties
                                     2010
* Smith, Stephen and Chris Bolin.  Feb. 18, 2010.  Creosote-Treated Ties End-of-Life Evaluation.

                                       
                                       
                                       
* Highest estimate identified

                                       
                                       
                                       

Estimated Percent of RailRoad CrossTies Removed Annually that are Currently Burned for Fuel
                                      62%
                                    percent
                                     2012
* Comments of  the Association of American Railroads (EPA-HQ-RCRA-2008-0329)
                                       
                                       
                                       
                                       

Estimated Maximum Percent of RailRoad CrossTies Removed Annually that Might be Burned for Fuel
                                      67%
                                    percent
                                     2012
* Comments of  the Association of American Railroads (EPA-HQ-RCRA-2008-0329)
                                       
                                       
                                       
                                       
* Note:  Assumed that the 5 percent of total that is currently going to legacy or unused on RR land would be diverted to fuel.  Low quality landscaping quantities may also be affected, based on market conditions.  
                                       
                                       
                                       
                                       
* Note:  Crossties no longer going to burning assumed to be used as legacy ties or for landscaping at no incremental cost or cost savings to generator or burner.
Estimated Average End of Life Weight  per Standard Treated Wood Tie

                                      182
                                      LBS
                                     2010
* Smith, Stephen and Chris Bolin.  Feb. 18, 2010.  Creosote-Treated Ties End-of-Life Evaluation.

                                       
                                       
                                       
* Note:  Estimates ranged from about 130 to 200.  However, the Smith paper (referenced above) appeared to be the most carefully researched.

