October 11, 2011 American Public Power Association Timothy Hunt

Boiler MACT, CISWI and Definition of Non-Hazardous Secondary Materials

October 11, 2011American Public Power Association

Timothy Hunt

Overview

Boiler MACT concernsNon Hazardous Secondary Material importantCost implicationsReview three part strategy –EPA, Hill and courts

2

Recent Actions

Rules published March 21 – effective May 20th EPA reconsidering portions of rule – proposal Oct 31st May 2011 stay of Boiler MACT and CISWI now in jeopardyFull court press with EPA, White House, and Hill

Connecting billions in costs to thousands of jobs at riskLegislation in House and SenateEPA changes for all rules ???

3

Improvements from Boiler MACT Proposal

Combination Boilers – coal and biomass subcategories merged for fuel based HAPs (PM, Hg, and HCl)

higher limits for mercury and HCl, only modestly better PM

Work practices for area sources (GACT)Work practices for startups and shutdownsExpanded gas fired work practices to other clean gases

4

Boiler MACT Capital Costs for Forest Products for Final Rules – if most materials are fuels

5

HAP or Surrogat

e

PM/ metals

Acid gases

Carbon Monoxide (CO)

Mercury/ Dioxin*

NOx Total

Boiler MACT

(proposal cost)

$ 1.9B($2.4B)

$ 1B($2.9B)

$ 944M($502M)

$ 494M($497M)

NA $4.3B ($6.3B)

CISWI Boilers

$208M($140M)

$237M($160M)

$29M($40M)

$17M($20M)

$0M($80M)

$491M($440M

)GACT Boilers – tune-ups and energy audits only, no control costs

$0

Total Boiler Rules Cost for Forest Products $4.8B

Boiler MACT Capital Costs for Forest Products for Final Rules – if most materials are waste

6

HAP or Surrogate

PM/ metals

Acid gases

Carbon Monoxide (CO)

Mercury/ Dioxin*

NOx Total

Boiler MACT

$ 1.6B($2.4B)

$ 949M($2.9B)

$ 407M($502M)

$ 789M($497M)

NA $3.7B ($6.3B)

CISWI Boilers

$496M($140M)

$484M($160M

)

$79M($40M)

$113M($20M)

$131M($80M)

$1.3B($440M

)Add GACT Boilers burning NHSM to CISWI $1.3B

Add WP dryers burning NHSM to CISWI $663M

Total Boiler Rules Cost for Forest Products $7B

Jobs Impacts for Paper Mills

Fisher International Study mill by mill assessment using URS cost estimates for Boiler MACT and other air rules where mill costs assigned~20,000 direct jobs at risk at mills (Boiler MACT only)~85,000 total jobs in communities and in value chain

Rural communities especially hard hit

7

Boiler MACT: UnachievableUnachievable biomass limits for Carbon Monoxide

Problem: Many biomass boilers cannot consistently meet CO limitSolution: set feasible short term limits and alternative longer-term limits that reflect data variability; allow time for boiler testing

Unachievable New Source LimitsProblem: non-gas boilers can’t reliability meet Hg, HCl, and PM; discourages replacement of older boilers/modernizationSolution: test methods can’t measure at these levels so adjust limits

Unachievable limits for DioxinProblem: Data is below where methods can accurately measure, results are meaningless at extremely low levels (less than one ounce nationwide); limits are more stringent than any MACT; see tableSolution: Adopt work practice as law allows OR set much higher emission limits (>0.3 ng/dscm)

8

Other Boiler IssuesHealth-based alternative for HCl and PM-TSM - off table at EPASource-based vs. HAP by HAP

Good issue in principle but not very helpful for limits

Energy Audits - Annoyance but livableBack pedaling from proposal - no third party, no benchmarks, no obligation to implement projects

Monitoring feasibility – PM CEMS

9

NHSM: Major ConcernsLegitimacy criteria – contaminant level must be comparable to “traditional fuel” (clean biomass and fossil fuel)

Many biomass residuals would flunk; construction debris?

Implications:Comply with CISWI – 3 times more expensiveLandfill material and replace fuel - $660 million/year

Path forward – guidance or modify ruleGreater flexibility in applying legitimacy test – “Benchmark Framework” from July Concept PaperList of non-waste fuels?Petition process to qualify as “fuel” 10

Administration appreciating impact of excessive regulation?Lessens of Ozone NAAQS deferral – jobs and costs

Boiler-CISWIMeetings to press top issues – details unclear until 10/31 NPRM OMB outreachAF&PA and AWC conducting CO testing – $100Ks, time limited

NHSM – press for regulatory solutionPrepare for comments – broaden list of non-waste fuelsDevil in the details – legal scrutiny

Executive Branch Strategy

11

Bipartisan and bicameral is keyHR 2250 (“EPA Regulatory Relief Act of 2011”) introduced 6/21 – expected to pass week of 10/10; White House veto threatS. 1392 introduced on July 17 – very similar to House; 32 cosponsors; get more co-sponsors

Key provisionsTiming: Legislative stay, 15 months to revise; 5 years to complyBoiler directives – achievable, source-based/real world boilerNHSM directives – list of materials or discard approach

Legislative Branch Strategy

12

Boiler-CISWICourt holding in abeyance while reconsideration is ongoingSierra Club challenging stay in District Court – same Judge that rejected EPA extension request asserting jurisdiction; decision very soon

NHSMBriefing schedule not set but case proceeding slowlyIf EPA modifies rule then hold in abeyance?

Judicial Branch Strategy

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Boiler MACT Legislation Trade Group Supporters (79)

American Architectural Manufacturers AssociationAmerican Chemistry CouncilAmerican Coatings AssociationAmerican Coke & Coal Chemicals InstituteAmerican Composites Manufacturers AssociationAmerican Fiber Manufacturers AssociationAmerican Forest & Paper AssociationAmerican Foundry SocietyAmerican Frozen Food Institute

American Home Furnishings AllianceAmerican Loggers CouncilAmerican Municipal PowerAmerican Petroleum InstituteAmerican Sugar Cane LeagueAmerican Wood CouncilAPA - The Engineered Wood AssociationAssociation of American RailroadsAssociation of Independent Corrugated Converters

Beet Sugar

Development FoundationBiomass Power AssociationBrick Industry AssociationBusiness RoundtableCement Kiln Recycling CoalitionComposite Panel AssociationConstruction Materials Recycling AssociationCorn Refiners AssociationCouncil of Industrial Boiler OwnersCreosote Council

14

Forest Landowners AssociationForest Resources Association Inc.Forging Industry AssociationHardwood FederationHardwood Manufacturers AssociationHardwood Plywood and Veneer AssociationIndustrial Energy Consumers of AmericaIndustrial Fasteners InstituteIndustrial Minerals Association - North America

Kitchen Cabinet Manufacturers AssociationMaple Flooring Manufacturers AssociationMetal Treating InstituteMetals Service Center InstituteMotor & Equipment Manufacturers AssociationNational Association for Surface FinishingNational Association of ManufacturersNational Association of Trailer ManufacturersNational Concrete

Masonry AssociationNational Council of Farmer CooperativesNational Council of Textile OrganizationsNational Federation of Independent BusinessNational Lumber and Building Material Dealers AssociationNational Oilseed Processors AssociationNational Solid Wastes Management AssociationNational Spinning CompanyNORA, National Oil Recyclers Association

15

Boiler MACT Trade Group Supporters (Cont’d)

North American Die Casting AssociationNorth American Wholesale Lumber AssociationPartnership for Affordable Clean EnergyPellet Fuels InstitutePile Driving Contractors AssociationPortland Cement AssociationPrecision Machined Products AssociationRailway Tie AssociationRubber Manufactures Association

Society of Chemical Manufacturers and AffiliatesSoutheastern Lumber Manufacturers AssociationSouthern Forest Products AssociationSouthern Pressure Treaters' AssociationSteel Manufacturers AssociationTextile Rental Services AssociationThe Association for Hose & Accessories Distribution (NAHAD)The Carpet and Rug Inst.

The International Association of Machinists and Aerospace WorkersThe United Brotherhood of Carpenters and Joiners of AmericaTreated Wood CouncilU.S. Beet Sugar AssociationU.S. Chamber of CommerceUSA Rice FederationWindow and Door Manufacturers AssociationWood Machinery Manufacturers of America

16

Boiler MACT Trade Group Supporters (Cont’d)

Wrap-up

Tens of billions of dollars will translate into tens and probably hundreds of thousands of jobs – labor unions engagedNo other country is forcing these controls on such a wide swath of industries – harm competitivenessPushes energy policy towards natural gas which will drive up prices for everyoneAlternative rule could reduce costs and maintain benefits

17

Questions

Tim HuntAF&PA and American Wood [email protected]@awc.org

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More Time is Critical for Testing

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

CO

ppm

Day/Time

Biomass Boiler CO - 30 Day Data vs. 3-run Test Data

CO (ppm@3%O2) 30-day avg CO 3-run test CO

0.001

0.01

0.1

1

10

100

1000 Comparison of Dioxin Emission Limits in Various U.S. Regulations

Dio

xin

Lim

it, n

g/ds

cm @

7%

O2

Category 2000 Emissions, g/yr TEQBackyard barrel burning 498.5HMIWI 378MWI 83.8Coal Utility Boilers69.5Metal Smelting/Refining 43.92011 Boiler MACT data37.2Cement kilns 36Residential wood/oil comb.15.8SSI 9.6EDC/VC/PVC mfg 5.5HazWaste Incinerators 3.2

0.3 ng/dscm D/F TEQ quantitation limit

21

0 20 40 60 80 100

1

Concentration in Relative Units

Method Sensitivity Decision Points

LQLDLC

Cannot differentiatefrom background

LCLDLQ

Critical Level

Limit of Detection

Limit of Quantitation

Can differentiatefrom background. Low confidence in detection.

Analyte is detectable.Low confidence in quantity.

The analyte is quantifiable with aknown level of precision and bias

Analyte Concentration

Test Method Sensitivity and Achievable Limits

(All dioxin detections are here -- below the level of confidence that the number is accurate)