Browse: Departments   Dates   Agencies  

CFR Citation: 40 CFR Part 63

RIN ID: RIN 2060-AJ02

OAR ID: [OAR 2002-0039; FRL-7551-2]

NOTICE: Part II

DOCUMENT ACTION: Final rule.

SUBJECT CATEGORY: National Emission Standards for Hazardous Air Pollutants: Taconite Iron Ore Processing

EFFECTIVE DATES: October 30, 2003.

DOCUMENT SUMMARY: This action promulgates national emission standards for hazardous air pollutants (NESHAP) for taconite iron ore processing facilities. The final standards establish emission limitations for hazardous air pollutants (HAP) emitted from new and existing ore crushing and handling operations, ore dryers, indurating furnaces, and finished pellet handling operations. The final standards will implement section 112(d) of the Clean Air Act (CAA) by requiring all major sources to meet HAP emission standards reflecting application of the maximum achievable control technology (MACT).

The HAP emitted by taconite iron ore processing facilities include metal compounds (such as manganese, arsenic, lead, nickel, chromium, and mercury), products of incomplete combustion (including formaldehyde), and the acid gases hydrogen chloride (HCl) and hydrogen fluoride (HF). Exposure to these substances has been demonstrated to cause adverse health effects, including chronic and acute disorders of the blood, heart, kidneys, reproductive system, respiratory system and central nervous system. Some of these substances are considered carcinogens. However, it should be noted that the extent and degree to which the health effects may be experienced depend on:

Pollutantspecific characteristics (e.g., toxicity, halflife in the environment, bioaccumulation, and persistence); The ambient concentrations observed in the area (e.g., as influenced by emission rates, meteorological conditions, and terrain); The frequency and duration of exposures; and Characteristics of exposed individuals (e.g., genetics, age, preexisting health conditions, and lifestyle), which vary significantly within the general population.

SUMMARY: Environmental Protection Agency,

SUPPLEMENTAL INFORMATION

Regulated Entities. Categories and entities potentially regulated by this action include:
NAICS code Category \1\ Example of regulated entities Industry.................................................. 21221 Taconite Iron Ore Processing Facilities [taconite ore crushing and handling operations, indurating furnaces, finished pellet handling operations, and ore dryers]. Federal government........................................ ............ Not affected. State/local/tribal government............................. ............ Not affected. \1\ North American Industry Classification System.

This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated by this action. To determine whether your facility is regulated by this action, you should examine the applicability criteria in Sec. 63.9581 of the final rule. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed in the preceding FOR FURTHER INFORMATION CONTACT section.

Docket. The EPA has established an official public docket for this action including both Docket ID No. OAR20020039 and Docket ID No. A 200114. The official public docket consists of the documents specifically referenced in this action, any public comments received, and other information related to this action. All items may not be listed under both docket numbers, so interested parties should inspect both docket numbers to ensure that they have received all materials relevant to the final rule. Although a part of the official docket, the public docket does not include Confidential Business Information or other information whose disclosure is restricted by statute. The official public docket is available for public viewing at the EPA Docket Center (Air Docket), EPA West, Room B102, 1301 Constitution Ave., NW., Washington, DC. The EPA Docket Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Reading Room is (202) 566 1744, and the telephone number for the Air Docket is (202) 5661742.

Electronic Docket Access. You may access the final rule electronically through the EPA Internet under the ``Federal Register'' listings at http://www.epa.gov/fedrgstr/.

An electronic version of the public docket is available through EPA's electronic public docket and comment system, EPA Dockets. You may use EPA Dockets at http://www.epa.gov/edocket/ to view public comments, access the index listing of the contents of the official public docket, and to access those documents in the public docket that are available electronically. Once in the system, select ``search,'' then key in the appropriate docket identification number. Although not all docket materials may be available electronically, you may still access any of the publicly available docket materials through the docket facility in the above paragraph entitled ``Docket.''

Worldwide Web (WWW). In addition to being available in the docket, an electronic copy of the final rule will also be available on the WWW through the Technology Transfer Network (TTN). Following signature, a copy of the final rule will be placed on the TTN's policy and guidance page for newly proposed or promulgated rules at http://www.epa.gov/ttn/oarpg. The TTN provides information and technology exchange in various areas of air pollution control. If more information regarding the TTN is needed, call the TTN HELP line at (919) 5415384.

Judicial Review. This action constitutes final administrative action on the proposed NESHAP for taconite iron ore processing facilities (67 FR 77562, December 18, 2002). Under CAA section 307(b)(1), judicial review of the final rule is available only by filing a petition for review in the U.S. Court of Appeals for the District of Columbia Circuit by December 29, 2003. Under
[[Page 61869]]
CAA section 307(b)(2), the requirements that are the subject of this document may not be challenged later in civil or criminal proceedings brought by the EPA to enforce these requirements.

Outline. The information presented in this preamble is organized as follows:
I. Background
II. Summary of Final Rule

A. Who must comply with the final rule?

B. What are the affected sources and emission points?

C. What are the emission limitations?

D. What are the operation and maintenance requirements?

E. What are the general compliance requirements?

F. What are the initial compliance requirements?

G. What are the continuous compliance requirements?

H. What are the notification, recordkeeping, and reporting requirements?

I. What are the compliance deadlines?

III. Summary of Responses to Major Comments

A. How did we revise the cost estimates and economic analysis?

B. How did we revise the performance testing requirements?

C. How did we revise the emission limitations?

D. How did we revise the continuous compliance requirements?

E. How did we revise the baseline emissions?

F. How did we select the pollutants?
IV. Summary of Environmental, Energy, and Economic Impacts

A. What are the air emission impacts?

B. What are the cost impacts?

C. What are the economic impacts?

D. What are the nonair health, environmental and energy impacts?

V. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

B. Paperwork Reduction Act

C. Regulatory Flexibility Act

D. Unfunded Mandates Reform Act

E. Executive Order 13132: Federalism

F. Executive Order 13175: Consultation and Coordination with Indian Tribal Governments

G. Executive Order 13045: Protection of Children from Environmental Health & Safety Risks

H. Executive Order 13211: Actions that Significantly Affect Energy Supply, Distribution, or Use

I. National Technology Transfer Advancement Act

J. Congressional Review Act

I. Background

Section 112(d) of the CAA requires us (the EPA) to establish national emission standards for all categories and subcategories of major sources of HAP and for area sources listed for regulation under section 112(c). Major sources are those that emit or have the potential to emit at least 10 tons per year (tpy) of any single HAP or at least 25 tpy of any combination of HAP. Area sources are stationary sources of HAP that are not major sources. Additional information on the NESHAP development process can be found in the preamble to the proposed rule (67 FR 77562).

We received a total of 29 comment letters on the proposed NESHAP from industry, State agencies, Federal agencies, environmental groups, and private citizens. We offered to provide interested individuals the opportunity for oral presentations of data, views, or arguments concerning the proposed rule, but a public hearing was not requested.

Today's final rule reflects our full consideration of all the comments we received. Major public comments on the proposed rule along with our responses to these comments are summarized in section III of this document. A detailed response to all the comments is included in the Background Information Document (BID) for the promulgated standards (Docket ID No. OAR20020039).
II. Summary of Final Rule

A. Who Must Comply With the Final Rule?

Each owner or operator of an affected source at a taconite iron ore processing plant that is (or is part of) a major source of HAP emissions must comply with the final rule. A taconite iron ore processing plant is a major source of HAP if it emits or has the potential to emit any single HAP at a rate of 10 tons or more per year or any combination of HAP at a rate of 25 tons or more per year. B. What Are the Affected Sources and Emission Points?

The affected sources are each new or existing ore crushing and handling operation, ore dryer, indurating furnace, and finished pellet handling operation at a taconite iron ore processing facility that is (or is part of) a major source of HAP emissions. Emission limitations apply to each ore crushing and handling operation, each ore dryer, each indurating furnace, and each finished pellet handling operation. These processes, as well as their emissions and controls, are described in the preamble to the proposed rule (67 FR 7756477566).

C. What Are the Emission Limitations?

The final rule includes particulate matter (PM) emission limits, operating limits for control devices, and work practice standards. Particulate matter emissions serve as a surrogate measure of HAP emissions.

Ore Crushing and Handling

The PM emissions limits for ore crushing and handling are 0.008 grains per dry standard cubic foot (gr/dscf) for existing sources and 0.005 gr/dscf for new sources. Compliance with the PM emissions limits for ore crushing and handling is determined based on the flowweighted mean concentration of emissions for all ore crushing and handling units at the plant.

Ore Dryers

The PM emission limits for each individual ore dryer are 0.052 gr/ dscf for existing dryers and 0.025 gr/dscf for new dryers. Ore dryers with multiple stacks calculate their PM emissions as a flowweighted mean concentration of PM emissions from all stacks.

Indurating Furnaces

For each straight grate indurating furnace processing magnetite, the PM emissions limits are 0.01 gr/dscf for existing straight grate furnaces and 0.006 gr/dscf for new straight grate furnaces. For each grate kiln indurating furnace processing magnetite, the PM emissions limits are 0.01 gr/dscf for existing grate kiln furnaces and 0.006 gr/ dscf for new grate kiln furnaces. For each grate kiln indurating furnace processing hematite, the PM emissions limits are 0.03 gr/dscf for existing grate kiln furnaces and 0.018 gr/dscf for new grate kiln furnaces. Indurating furnaces with multiple stacks calculate their PM emissions as a flowweighted mean concentration of PM emissions from all stacks.

Finished Pellet Handling

The PM emissions limits for finished pellet handling operations are 0.008 gr/dscf for existing sources and 0.005 gr/dscf for new sources. Compliance with the PM emissions limits for finished pellet handling is determined based on the flowweighted mean concentration of PM emissions for all pellet handling units at the plant.

Operating Limits

For bag leak detection systems, we require that corrective actions be initiated within 1 hour of a bag leak detection system alarm. For dynamic wet scrubbers, the daily average scrubber water flow rate and either the daily average fan amperage or the daily average pressure drop must remain at or above the minimum levels established during the initial performance test. For all other wet scrubbers, the daily average pressure drop and daily average scrubber water flow rate must remain at or above the level established during the initial performance test. Plants using a
[[Page 61870]]
dry electrostatic precipitator (ESP) must either install and operate a continuous opacity monitoring system (COMS) or maintain the daily average secondary voltage and daily average secondary current for each field at or above the minimum levels established during the initial performance test. If demonstrating compliance using COMS, the average opacity for each 6minute period must remain at or below the level established during the initial performance test. Plants using a wet ESP must maintain the daily average secondary voltage for each field at or above the minimum levels established during the initial performance test; maintain the daily average stack outlet temperature at or below the maximum levels established during the initial performance test; and maintain the daily average water flow rate at or above the minimum levels established during the initial performance test.

You must submit information on monitoring parameters if another type of control device is used or if alternative monitoring parameters are desired.

Work Practices

All plants subject to the final rule are required to prepare and implement a written fugitive dust emissions control plan. The plan describes in detail the measures that will be put in place to control fugitive dust emissions from the following sources at a plant, as applicable: stockpiles, material transfer points, plant roadways, tailings basin, pellet loading areas, and yard areas. Existing fugitive dust emission control plans that describe current measures to control fugitive dust emission sources that have been approved as part of a State implementation plan or title V permit would be acceptable, provided they address the priorlisted fugitive dust emission sources. D. What Are the Operation and Maintenance Requirements?

All plants subject to the final rule must prepare and implement a written startup, shutdown, and malfunction plan according to the requirements in 40 CFR 63.6(e). A written operation and maintenance plan is also required for control devices subject to an operating limit and indurating furnaces subject to good combustion practices (GCP). This plan must describe the following: procedures for preventative maintenance requirements for control devices, corrective action requirements for baghouses and continuous parameter monitoring systems (CPMS), and GCP for indurating furnaces. In the event of a bag leak detection system alarm, the plan must include specific requirements for initiating corrective action to determine the cause of the problem within 1 hour, initiating corrective action to fix the problem within 24 hours, and completing all corrective actions needed to fix the problem as soon as practicable. In the event you exceed an established operating limit for an air pollution control device other than a baghouse, you must initiate corrective action to determine the cause of the operating limit exceedance and complete the corrective action within 10 calendar days. Corrective action procedures you take must be consistent with the installation, operation, and maintenance procedures listed in your sitespecific CPMS monitoring plan. For indurating furnaces, you must maintain a proper and efficient combustion process through the implementation of GCP.

E. What Are the General Compliance Requirements?

The final rule requires compliance with the emission limitations, work practice standards, and operation and maintenance requirements at all times, except during periods of startup, shutdown, and malfunction as defined in 40 CFR 63.2. The owner or operator must develop and implement a written startup, shutdown, and malfunction plan according to the requirements in 40 CFR 63.6(e)(3).

The final rule also requires keeping a log detailing the operation and maintenance of the process and emission control equipment. This requirement applies during the period between the compliance date and the date that continuous monitoring systems are installed and any operating limits set.

F. What Are the Initial Compliance Requirements?

The final rule requires performance tests to demonstrate that each affected source meets all applicable PM emission limits. The PM concentration (fronthalf filterable catch only) is to be measured using EPA Method 5, 5D, or 17 in 40 CFR part 60, appendix A. All initial compliance tests must be completed no later than 180 days following the compliance date.

To demonstrate initial compliance with the PM emission limit for the ore crushing and handling affected source, the flowweighted mean concentration of PM emissions of all units within the affected source must not exceed the applicable PM emission limit. Similarly, for the finished pellet handling affected source, the flowweighted mean concentration of PM emissions of all units within the affected source must not exceed the applicable PM emission limit. In lieu of conducting performance tests for all ore crushing and handling and finished pellet handling emission units, the plant may elect to form groups of up to six similar emission units and conduct initial performance tests on a representative unit within each group. Each plant must submit a testing plan to the permitting authority for approval. The testing plan must identify the emission units that will be grouped as similar, identify the representative unit that will be tested for each group, and present the proposed schedule for testing.

To demonstrate initial compliance with the PM emission limit for each indurating furnace and each ore dryer, the flowweighted mean concentration of PM emissions of all stacks associated with each furnace or each ore dryer must not exceed the applicable PM emission limit.

The final rule also includes procedures for establishing site specific operating limits for control devices during the initial performance test. To demonstrate initial compliance with the work practice standards, plants must prepare, submit, and implement a fugitive dust emission control plan on or before the compliance date. To demonstrate initial compliance with the operation and maintenance requirements, plants must prepare the operation and maintenance plan and certify in their notification of compliance status that they have prepared the written plans and will operate control devices and indurating furnaces according to the procedures in the plan. G. What Are the Continuous Compliance Requirements?

For ore crushing and handling, ore dryers, and finished pellet handling units, you must conduct subsequent performance tests to demonstrate continued compliance with the PM emission limits following the schedule established in the title V permit for each plant. If a title V permit has not been issued, you must submit a testing plan and schedule to the permitting authority for approval.

For each indurating furnace, you must conduct subsequent performance testing of all stacks based on the schedule established in each plant's title V operating permit, but no less frequently than twice per 5year permit term. If a title V permit has not been issued, then you must submit a testing plan and schedule to the permitting authority for approval. The testing frequency in the testing plan must provide for tests to be
[[Page 61871]]

conducted at least twice per 5year period.

You are required to monitor operating parameters for control devices subject to operating limits and carry out the procedures in their fugitive dust emissions control plan and their operation and maintenance plan. To demonstrate continuous compliance, you must keep records documenting compliance with the rule requirements for monitoring, the fugitive dust emissions control plan, the operation and maintenance plan, and installation, operation, and maintenance of a CPMS.

For baghouses, owners or operators are required to monitor the relative change in PM loading using a bag leak detection system and to make inspections at specified intervals. The bag leak detection system must be installed and operated according to the EPA guidance document ``Fabric Filter Bag Leak Detection Guidance,'' EPA 454/R98015, September 1997. The document is available on the TTN at http://www.epa.gov/ttnemc01/cem/tribo.pdf. If the system does not work based
on the triboelectric effect, it must be installed and operated consistent with the manufacturer's written specifications and recommendations. The basic inspection requirements include daily, weekly, monthly, or quarterly inspections of specified parameters or mechanisms with monitoring of bag cleaning cycles by an appropriate method. To demonstrate continuous compliance, the final rule requires records documenting conformance with the operation and maintenance plan, as well as the inspection and maintenance procedures.

For dynamic wet scrubbers, you must use CPMS to measure and record the daily average scrubber water flow rate and either the daily average fan amperage or the daily average pressure drop. For all other wet scrubbers, you must use CPMS to measure and record the daily average pressure drop and daily average scrubber water flow rate.

For dry ESP, you must either use a COMS to measure and record the average opacity of emissions exiting each stack of the control device for each 6minute period, or use CPMS to measure and record the daily average secondary voltage and daily average secondary current for each field. You must operate and maintain the COMS according to the requirements in 40 CFR 63.8 and Performance Specification 1 in 40 CFR part 60, appendix B. These requirements include a quality control program including a daily calibration drift assessment, quarterly performance audit, and annual zero alignment.

For wet ESP, you must use CPMS to measure and record the daily average secondary voltage for each field, the daily average stack outlet temperature, and the daily average water flow rate.

The final rule requires you to prepare a sitespecific monitoring plan for CPMS that addresses installation, performance, operation and maintenance, quality assurance, and recordkeeping and reporting procedures. These requirements replace the more detailed performance specifications contained in the proposed rule.

To demonstrate continuous compliance, you must keep records documenting compliance with the monitoring requirements (including installation, operation, and maintenance requirements for monitoring systems) and the operation and maintenance plan.
H. What Are the Notification, Recordkeeping, and Reporting Requirements?

The notification, recordkeeping, and reporting requirements are based on the NESHAP General Provisions in 40 CFR part 63, subpart A. Table 2 to subpart RRRRR of 40 CFR part 63 lists each of the requirements in the General Provisions (Sec. Sec. 63.2 through 63.15) with an indication of whether they apply.

You are required to submit each initial notification required in the NESHAP General Provisions that applies to your plant. These include an initial notification of applicability with general information about the plant and notifications of performance tests and compliance status.

You are required to maintain the records required by the NESHAP General Provisions that are necessary to document compliance, such as performance test results; copies of startup, shutdown, and malfunction plans and associated corrective action records; monitoring data; and inspection records. Except for the operation and maintenance plan, the fugitive dust emissions control plan, and the testing plan, all records must be kept for a total of 5 years, with the records from the most recent 2 years kept onsite. The final rule requires that the operation and maintenance plan, the fugitive dust emissions control plan, and the testing plan, be kept onsite and available for inspection upon request for the life of the affected source or until the affected source is no longer subject to the final rule requirements.

Semiannual reports are required for any deviation from an emission limitation (including an operating limit), or operation and maintenance requirement. Each report is due no later than 30 days after the end of the reporting period. If no deviation occurred, only a summary report is required. If a deviation did occur, more detailed information is required.

An immediate report is required if actions taken during a startup, shutdown, or malfunction are not consistent with the startup, shutdown, and malfunction plan. Deviations that occur during a period of startup, shutdown, or malfunction are not violations if you demonstrate to the authority with delegation for enforcement that the source was operating in accordance with the startup, shutdown, and malfunction plan.

An immediate report is required after the third consecutive and unsuccessful attempt at corrective action for determining the cause of exceedance of an operating limit for an air pollution control device except for baghouses. The report must be submitted within 5 calendar days after the third unsuccessful attempt at corrective action. This report must notify the Administrator that a deviation has occurred and document the types of corrective measures taken to address the problem that resulted in the deviation of established operating parameters and the resulting operating limits.

You must also submit the fugitive dust emissions control plan, testing plan, and all operation and maintenance plans to the Administrator on or before the applicable compliance date.

I. What Are the Compliance Deadlines?

The owner or operator of an existing affected source must comply by October 30, 2006. An existing affected source is one constructed or reconstructed before December 18, 2002. New or reconstructed sources that startup on or before October 30, 2003 must comply by October 30, 2003. New or reconstructed sources that startup after October 30, 2003 must comply upon initial startup.
III. Summary of Responses to Major Comments
A. How Did We Revise the Cost Estimates and Economic Analysis?

Comment: Three commenters stated that the estimated total capital cost impact of $47.3 million underestimates the cost to the industry. One of the commenters stated that the costs for their plant were underestimated.

Response: The capital equipment costs used in the cost analysis conducted prior to proposal were based largely on historical industry costs provided by industry and vendor estimates obtained by the EPA. All of
[[Page 61872]]
the indurating furnace capital equipment replacement costs were based on equipment and installation costs incurred by Minntac in 1991 to install two new venturi scrubbers for furnace lines 4 and 5. For ore crushing and handling and pellet handling units, the capital equipment replacement costs were based on equipment costs obtained from two wet scrubber vendors.

In followup discussions with the industry, industry representatives indicated that the costs of purchasing and installing a new wet scrubber were underestimated. For example, based on the cost estimates provided by one plant, the installation of two new wet scrubbers on their furnace would cost $18 million, not the $9.4 million estimated by EPA. We asked each plant to provide an estimate of the cost impact the limits in the final rule will have on their plant. Overall, industry estimated a capital equipment and installation cost of $57 million. The costs provided by industry are based on a combination of costs estimated by plant engineers, previous equipment replacement costs, and vendor cost estimates.

The EPA asserts that the impact estimate of $57 million provided by the industry is a conservatively high estimate based on the fact that some plants did not account for the averaging of the emissions for those units within the ore crushing and handling and finished pellet handling affected sources. However, in order to ensure that we fully account for the cost impact to the industry, we used the conservatively high estimates provided by the industry. Therefore, the capital cost impact of the emission limits in the final rule was estimated to be approximately $57 million, including emission control capital costs and monitoring, recordkeeping, and reporting (MRR) capital costs. The annual costs of the final rule are estimated to be $9 million per year, including annualized capital and annual operational and MRR costs. For more information on the industry provided costs and the revised cost analysis, see the revised cost analysis memorandum in the docket.

Comment: Two commenters stated that the costs of the rule as proposed are disproportionate to the reduction in HAP.

Response: The revised estimate of annual compliance costs for the final rule is $9 million per year, and this expenditure is estimated to result in the reduction of 270 tpy of HAP and 10,538 tpy of PM. The corresponding cost per ton of HAP reduced is $33,333; the corresponding cost per ton of PM reduced is $854. These values are similar to or lower than those in other MACT standards. In addition, the emission limits in the final rule are based on the MACT floor level of control. The CAA does not give the EPA the discretion to consider costs for the MACT floor level of control.

Comment: One commenter stated that the costs and resources associated with the administrative requirements (e.g., continuous monitoring, stack testing) of the final rule will pose a significant additional burden on their operations. The commenter cited estimated costs of $515,000 for the installation of additional instrumentation and monitoring equipment, an additional cost of $100,000 for dust collector monitoring maintenance, and an additional cost of $45,000 for stack testing. The commenter stated that their plant is already operating under a title V permit and already has a wellcontrolled dust control system in place. The commenter asserted that the increased continuous monitoring and increased stack testing is not necessary to protect human health or the environment and adds unnecessary costs.

Response: In the proposed rule, we included only those monitoring and testing requirements that were necessary to ensure the continued compliance with the PM emission limits. However, following a review of the public comments and followup discussions with the industry and States, we have written the final rule to reduce the monitoring and testing burden:
[sbull] To reduce the monitoring burden, we have deleted the requirements to conduct monthly transducer checks, quarterly gauge calibration checks, semiannual flow sensor calibration checks, daily pressure tap pluggage checks, and monthly electrical connection continuity checks.
[sbull] We have reduced the indurating furnace stack testing burden by removing the requirement to conduct simultaneous tests of all the stacks on one furnace. The final rule allows plants to conduct sequential testing of the stacks for a furnace, provided the tests are completed ``within a reasonable period of time, such that the indurating furnace operating characteristics remain representative for the duration of the stack tests.''
[sbull] We have removed the volumetric flow rate and process throughput rate criteria for grouping similar ore crushing and handling and pellet handling emission units. This will allow more of these emission units to be grouped together, and thus, will result in fewer initial compliance tests being required for them.
[sbull] For dry ESP, we have allowed plants to monitor daily average secondary voltage and daily average secondary current in lieu of using a COMS.

Comment: According to one commenter, it is confusing that in one section of the Economic Impact Assessment (EIA), the Agency concludes that the final rule alone is unlikely to lead to mine closure, but clearly states that it's possible that two or three firms may close or sell some or all of their operations. The only consistent statement in the EIA, according to the commenter, is that the proposed rule will add to existing financial stresses in the industry.

Response: The empirical literature on steel mill capacity and closure suggests that import and minimill competition are more important explanatory variables for capacity and closure decisions than are pollution abatement cost expenditures. The EPA's market and facility impact analysis did not explicitly model mine closure decisions because of limited minelevel data and because the costs of compliance are relatively small. The EPA's data indicate that the compliance costs alone are generally too low to result in facility closure. However, we recognized that several companies that owned taconite mines in 2000 were already under significant financial hardship; four firms experienced operating losses in 2000, and several were also operating under Chapter 11 protection. As a result, EPA collected financial data and considered several criteria to determine whether companies would be able to obtain financing for capital investments associated with compliance, or might have to close or sell individual mine operations. The EPA examined the following company financial data:
[sbull] Change in profits projected by the economic model; [sbull] Altman Zscores;
[sbull] Current ratios; and

[sbull] Recent environmental compliance expenditures.

Based on our review, EPA concluded that two or three companies may close or sell operations. A review of recent data from the U.S. Geological Survey (USGS) and company financial reports confirms this pattern. In 2001, financiallystrapped steel companies sold assets. ClevelandCliffs raised its total ownership of Tilden mine to 85 percent by acquiring an additional 45 percent share from Algoma Steel Inc. ClevelandCliffs and Minnesota Power purchased LTV Steel Co. in late 2001. ClevelandCliffs then acquired all the mining and processing facilities, including 25 percent share of the
[[Page 61873]]
Empire mine. In the face of continuing financial pressures from mini mills and imports, steel companies may close or sell taconite facilities if they cannot obtain financing for compliance. A USGS iron ore expert contacted by EPA, however, stated that 2002 financial and market conditions were somewhat better than 2001. This was confirmed by reviewing financial statements for these firms; while still experiencing difficult conditions, in 2002 conditions improved somewhat compared to 2001.

Comment: One commenter from National Steel stated that it will likely be forced to shut down because it will be unable to make the upgrades necessary to comply with the rule as proposed. National currently employs nearly 500 people. The rule as proposed is anticipated to put these people out of work for a reduction of less than 5 tons of HAP. In addition to the anticipated closure of National's operations, the EPA analysis concluded that another one or two taconite ore processing plants may also close.

Response: As noted in the previous response, EPA's analysis suggests that the costs of achieving compliance are not sufficient alone to result in taconite plants becoming unprofitable. However, EPA recognizes that there are longstanding trends in the industry, such as increased imports of iron and steel and increasing use of minimill technology, that have resulted in decreasing demand for U.S.produced taconite pellets over time. Due to these trends, four companies owning taconite facilities were unprofitable in 2000, and three of them (including National Steel) were operating under the protection of Chapter 11 of the bankruptcy code. The EPA's analysis recognizes that firms that are unprofitable or in bankruptcy may have difficulty obtaining financing for the capital investments needed to comply. Such firms may choose to sell or shut down their taconite plants. The EPA does not feel that such a decision should be entirely attributed to the final rule. However, note that recent industry data seem to show that in 2002, prices and profits improved somewhat due in part to the decrease in taconite supply (due in part to LTV's closing of the Hoyt Lakes facility) and in part due to tariff protection of several steel products.

Comment: According to one commenter, the statement in the EIA that two or three mines may close implies that Minnesota would see an additional loss of approximately 900 direct employees and $20 million in local taxes. The loss of 900 jobs equates to $67.5 million in wages and benefits. These figures represent a realistic social impact and create a different scenario than the one represented by the EPA in the EIA. These economic impacts will be ``devastating'' to an area heavily dependent on the mining industry.

Response: Chapter 4 of the EIA contains a regional impact analysis carried out by EPA. The analysis is carried out using IMPLAN, a regionallevel inputoutput model. The total direct impact on each region (a State in this analysis) is defined in the EIA as the change in local expenditures resulting from final rule implementation. The direct impact of the final rule is estimated based on the results of the market model, and includes expenditures for compliance (in this case, positive) and adjustments in outputs in response to price changes (in this case, negative or positive). Generally, the direct impact includes the net effect of reduction in local spending because of output declines and the increase in local spending to implement the controls. For the State of Minnesota, the EIA shows a net reduction in local spending of $2.7 million. This is due to a loss of government revenues since a portion of state revenues comes from taxes on the total production from taconite iron ore. With the value of changes in total output included, the total impact to Minnesota is a reduction of $3.9 million in local spending.

Minnesota is estimated to experience a reduction of 30 fulltime employees as a result of the reduction in taconite production. Thus, EPA estimates do show a reduction in local spending and employment in Minnesota from final rule implementation, but not anywhere close to the amounts asserted by the commenter.

A separate financial assessment examined the financial condition of companies that own taconite facilities. Because of longstanding trends in the iron and steel industry (including increasing use of electric arc furnace minimill technology and increasing imports of iron and steel), several of the owner companies have experienced financial stress, and three are operating under Chapter 11 protection. For these reasons, EPA concluded that at least those three firms may have some difficulty obtaining the financing needed to make capital equipment investments at their plants, including investments associated with environmental compliance. The EPA stated that as many as two or three additional taconite facilities were in danger of closing or selling their taconite plants at the time of the analysis, due mainly to factors unrelated to the rule as proposed. However, the additional costs associated with the final rule will put additional stress on these already stressed companies. Recent USGS data indicate that in 2001, financiallystrapped taconite firms did sell assets to Cleveland Cliffs. Since the original EIA, however, conditions have improved somewhat in the industry. The reduced output due to the closure of Hoyt Lakes, and the tariff, which has increased the effective price of imported iron and steel commodities, have resulted in increased prices and profits for iron and steel companies over the past year. Thus, the companies are somewhat less vulnerable than they were at the time of EPA's earlier analysis.

B. How Did We Revise the Performance Testing Requirements?

Comment: Two commenters stated that language should be included in the final rule either authorizing some discretion on behalf of State agencies or otherwise allowing testing completed between the promulgation date and the compliance date to be counted as initial compliance testing. The commenters stated that this will allow additional time to spread out the compliance testing requirements.

Response: At proposal, plants were given 2 years after the compliance date to conduct their initial compliance tests for ore crushing and handling and pellet handling units, and 180 days after the compliance date to conduct their initial compliance tests for indurating furnaces. However, since the time of proposal, EPA has determined that allowing more than 180 days for initial compliance is not consistent with the 40 CFR part 63 General Provisions. Therefore, we have written the initial compliance testing deadline for ore crushing and handling and pellet handling units at 180 days after the compliance date.

More than 180 days are needed to conduct compliance testing and to reduce the burden of the final rule on the industry. Therefore, the EPA has written the final rule to allow source tests conducted between the promulgation date and the compliance date to be used for compliance demonstration, as long as the tests are performed in accordance with the requirements of the final rule. Since the compliance period is 3 years, plants will have a total of 3\1/2\ years to conduct the initial compliance tests for all of their units.

Comment: Two commenters supported the part of the proposed standard that allows plants to conduct initial performance tests by testing a representative sample of units within a group of similar units. However, in a
[[Page 61874]]
redline/strikeout version of the proposed rule submitted by the commenters, they removed the specific criteria defining similar units in Sec. 63.9620(f) and the criteria indicating the number of units that must be tested per similar group in Sec. 63.9620(g). In the place of these specific criteria, the commenters inserted a statement that refers to criteria established by the State agency or in the title V permit.

Response: In followup discussions with the commenters, EPA asked the commenters to clarify their specific concerns regarding the criteria for the testing of representative units. The commenters indicated that their primary concern was with the criteria in paragraphs (3) and (4) of Sec. 63.9620(f), which require the volumetric flow rates of the emission units to be within plus or minus 10 percent of the representative emission unit, and the actual process throughput rate to be within plus or minus 10 percent of the representative emission unit. The commenters stated that these criteria were so restrictive that they would not be able to group very many units.

The EPA also conducted followup discussions with the Minnesota Pollution Control Agency (MPCA) regarding the criteria they use for grouping similar units. The MPCA staff indicated that the primary reason they group emission units is to reduce the number of permitted emission units, although the same groupings are used for testing purposes. The grouping of emission units by MPCA was conducted primarily on the basis of control type, installation date, and, to a certain degree, process type. However, in some cases they do group emission units from different processes. They do not group emission units on the basis of flow rate or process throughput.

Based on these discussions with the commenter and MPCA, EPA has determined that the criteria in Sec. 63.9620(f)(3) and (4) are too restrictive and, therefore, do not achieve EPA's true intentthe reduction of the initial compliance test burden for ore crushing and handling and pellet handling emission units. As a result, EPA has not included the criteria in Sec. 63.9620(f)(3) and (4) as proposed. The criteria in Sec. 63.9620(f)(1) and (2) as proposed have been retained in the final rule. In addition, we have included the following new criteria: The representative unit must have parametric monitoring values that encompass the characteristics of all the emission units within the group.

Comment: Three commenters stated that the simultaneous testing of multiple indurating furnace stacks is costly. Two of the commenters stated that simultaneous testing is also impractical and possibly not even feasible.

Response: In followup discussions with the commenters, they stressed that some furnaces have as many as five stacks. In order to test these stacks simultaneously, they would need to have five source testing teams on site at the same time. The commenters stated that this would be very expensive. The commenters stated that for their current title V permits, they are not required to conduct simultaneous tests of all stacks for a furnace. In our discussions with MPCA, they confirmed that, although they require all plants with permits to test all furnace stacks, they do not require that the plants test all the stacks on a furnace simultaneously. Also, in these discussions, it was noted that the operating conditions are consistent enough that emissions should not vary significantly over a short period of time. Based on these discussions, EPA agrees that the simultaneous testing of indurating furnace stacks would be costly and would provide no additional compliance assurance. Therefore, in order to reduce the source testing burden of the final rule on the industry and to maintain consistency with current testing requirements, EPA has not included the requirement for simultaneous testing in the final rule.

Comment: Two commenters stated that any requirements for sample volume or sample time should be removed from the initial and continuous compliance testing requirements. The commenters stated that the final rule should not include provisions that are different from already established EPA test methods.

Response: In the proposed rule, we specified a minimum sample volume of 60 dscf for EPA Method 5 (40 CFR part 60, Appendix A) tests to ensure that enough PM is collected to provide accurate results. The EPA Method 5 does not contain specifications for sample volume or sample time (i.e., sampling duration). Therefore, it is not uncommon for the EPA to specify a minimum sample volume or sample time corresponding to emission characteristics of an industry for EPA Method 5 tests. For example, the Integrated Iron and Steel NESHAP specifies a minimum sample volume (60 dscf) for EPA Method 5 tests.

Based on historical Method 5 tests from taconite plants, most 1 hour tests sampled about 30 to 50 dscf and obtained a dry catch of 2 to 20 milligrams (mg). The EPA's Emissions Measurement and Assessment Division recommends a dry particulate catch of approximately 20 mg for an accurate Method 5 test. At the same historical particulate concentrations, a sample volume of 60 dscf or a test of 2 hours in duration will obtain a dry catch of approximately 20 to 30 mg. In the proposed rule, we specified a minimum sample volume of at least 60 dscf for each run of a Method 5 test to ensure that an adequate amount of dry catch is obtained. However, since proposal we have determined that specifying a 2hour sampling time will provide a greater assurance that an adequate catch is obtained. For example, with a sample volume of 60 dscf, a 20mg dry catch is obtained for units with emissions of 0.005 gr/dscf or greater. By comparison, given the typical sampling rates of 0.75 to 1 dscf per minute from the historical tests, specifying a 2 hour test provides a 20mg dry catch for units with emissions as low as 0.003 gr/dscf. In addition, specifying the sampling time is consistent with other recently published rules, such as the Portland Cement NESHAP. Therefore, we have modified the testing requirements in the final rule by removing the requirement for a sample volume of 60 dscf and adding the requirement that the duration of each test run be at least 2 hours.

C. How Did We Revise the Emission Limitations?

Comment: Two commenters stated that the emission limits should be set at two significant figures and not three significant figures. The commenters asserted that using three significant figures implies more precision than exists in reality and establishes limits that are unrealistically stringent and that do not allow for natural variations.

Response: In the proposed rule, we numerically expressed the emission limits for all affected sources, new and existing, to three digits (e.g., 0.011 gr/dscf, 0.025 gr/dscf, and 0.008 gr/dscf). Thus, the proposed emission limits were already expressed as one or two significant figures. However, the intent of the commenters is for the EPA to consider rounding the proposed emission limits to two digits to account for normal variability in the taconite iron ore processing operations, performance of air pollution control equipment, and source testing procedures.

We have reevaluated how natural variations were accounted for in the proposed emission limits for existing sources. The PM emission limits for existing sources in the ore crushing and handling affected source and the finished pellet handling affected source remain at 0.008 gr/dscf. In the final rule, you have the option to determine an [[Page 61875]]
overall, flowweighted average PM concentration for all emission units within each of these two affected sources. One purpose for the flow weighted average PM concentration procedure is to account for natural variability in the various types of emission units within each affected source, the processing operations, the performance of air pollution control equipment, and source testing procedures.

The PM emission limits for existing sources in the indurating furnace affected source will be rounded to two digits. For both existing straight grate and grate kiln indurating furnaces processing magnetite, the PM emission limit is 0.01 gr/dscf. For existing grate kiln indurating furnaces processing hematite, the PM emission limit is 0.03 gr/dscf. After we considered the amount of PM source test data available in establishing the MACT floor, observed variability in measured PM concentrations from the furnace exhaust stacks, and noted fluctuations in the taconite iron ore process, we determined that it is appropriate to round the PM emission limits for existing indurating furnaces to two decimal places in order to fully account for natural variability. Even after rounding the PM emission limits for existing indurating furnaces, we will still achieve nearly the same level of emission reduction, while offering increased flexibility to the industry to comply with the emission standards of the final rule.

The PM emission limit for existing ore dryers was determined to be the level of control indicated by the existing State limit of 0.052 gr/ dscf. Therefore, it is not appropriate to round the PM emission limit for existing ore dryers. The PM emission limit for existing ore dryers is 0.052 gr/dscf in the final rule.

The PM emission limits for all new affected sources represent an actual performance level achieved by the best performing source in each affected source. Thus, the new source emission limits can be achieved through the proper design and construction/reconstruction of a new affected source.

Comment: Three commenters stated that the final rule should more clearly describe how to calculate the flowweighted mean PM emissions concentration for the material handling operations.

Response: We agree with the commenters and have written Sec. Sec. 63.9621 and 63.9622 to provide additional clarification for calculating the flowweighted mean PM emissions concentration for ore crushing and handling and finished pellet handling. Specifically, the final rule clarifies that when calculating the flowweighted mean PM emissions for ore crushing and handling and finished pellet handling, the ``average'' PM concentration corresponding to each emission unit in an affected source is multiplied by the maximum design volumetric flow rate of the corresponding emission unit. The ``average'' PM concentration from an emission unit is derived as the arithmetic mean of a PM source test comprised of three valid sampling runs on the emission unit. If the affected source elects to conduct representative compliance testing for a group of similar emission units, the PM concentration determined for the tested emission unit will be assigned to the other emission units identified as similar within the group.
D. How Did We Revise the Continuous Compliance Requirements? Operating Limits

Comment: Two commenters objected to using operating limits established during the performance test to determine continuous compliance. The commenters stated that a performance test is only a snapshot of an operation at a point in time and may not encompass the full operational variability that occurs. The commenters stated that this approach effectively sets a new more stringent NESHAP emission limit at the emissions level actually emitted during the performance test. Therefore, the commenters stated that any operation outside of the operating parameter range should not be classified as a deviation. The commenters stated that the D.C. Circuit Court has made it clear that MACT standards are to represent the best performing source on its worst day (see National Lime v. EPA, 233 F.3d 625, 51 ERC 1737 (D.C. Cir. 2000), and Cement Kiln Recycling Coalition v. EPA, 255 F.3d 855, 52 ERC 1865 (D.C. Cir 2001)). The commenters asserted that as long as a source is operating properly, follows procedures in the malfunction plan, and proceeds appropriately to corrective action, then variations within the range of proper operation should not constitute deviations. The commenters stated that the EPA may require plants to log such information and even report it, but not necessarily as a deviation under title V.

Response: In followup discussions with the industry, we were able to determine that the taconite industry's primary concern regarding the operating limits was being able to maintain the equipment so that they did not exceed the established operating limit. Specifically, their concerns included their ability to maintain the pressure drop above the operating limit for venturirod deck units with a fixed throat and/or a volumetric flow dependent of process conditions; and, their ability to operate and obtain meaningful readings of opacity from dry ESP using a COMS in conditions of high moisture and low opacity.

Regarding the measurement of the pressure drop, we have increased the averaging time from hourly to daily. The daily averaging period addresses industry's concerns about their ability to control pressure drop during short periods of time when the scrubber may experience a pressure drop lower than the operating limit. In addition, for dynamic wet scrubbers, we have provided the flexibility of monitoring either the daily average pressure drop or the daily average fan amperage, in addition to the daily average scrubber water flow rate. This addresses industry's concern that for dynamic wet scrubbers, both pressure drop and fan amperage are good indicators of proper performance.

Regarding the measurement of opacity using COMS, we have verified with equipment vendors that COMS are available that will provide accurate readings under the moisture and low opacity conditions present at taconite facilities. However, we understand that currently there are no COMS in operation at taconite plants and that due to costs or site specific operating conditions a COMS may not be the best option. Therefore, in the final rule have provided plants the flexibility to establish their operating limit either as the 6minute average opacity or as the daily average secondary voltage and the daily average secondary current for each field.

In addition, we have included language in the final rule to clarify when not meeting an operating limit becomes an exceedance. Specifically, after the first two times that you do not meet the operating limit, you must take corrective action. After the third time that you do not meet the operating limit, you must submit a written report within 5 calendar days and report the third unsuccessful attempt of corrective action as a deviation and continue corrective action. Bag Leak Detection Systems

Comment: Two commenters stated that the requirement in Sec. 63.9634(d)(1) of the proposed rule that requires that the bag leak detection system not alarm for more than 5 percent of the time should be deleted from the final rule.

[[Page 61876]]

Two commenters pointed out that Sec. 63.7833(d)(1)(iii) of the proposed rule specifies that 1 hour of alarm be logged even if procedures are implemented to determine the cause of the alarm and corrective action is taken in less than 1 hour. The commenters contended that the requirement artificially and unfairly inflates the semiannual percentage of alarm time and does not provide an incentive for sources to initiate procedures as quickly as may be possible. The commenters suggested that the final rule should require the plant to ``count the actual amount of time it took to initiate procedures to determine the cause of the alarm.''

Three commenters stated that in the requirement in Sec. 63.9634(d)(1)(v) that the bag leak detection system not alarm for more than 5 percent of the ``total operating time,'' it is unclear if the ``total operating time'' refers to the operating time of the affected source or the time the baghouse is actually evacuating emissions generated by the affected source. The commenters pointed out that some baghouses, by design, evacuate emissions for only a few minutes each hour. The commenters recommended that EPA clarify its intent that the ``total operating time'' refers to the total operating time of the affected source.

Response: We agree with the commenters and have not included the 5 percent operating limit requirement for baghouse leak detectors in Sec. 63.9634(d)(1) of the final rule. As a result, the requirements to log alarm time and to determine the ratio of the sum of the alarm times to the total operating time have also not been included. However, it is important that corrective action be initiated promptly, so we are retaining the requirement in Sec. 63.9600(b)(2) that you ``initiate corrective action to determine the cause of the alarm within 1 hour of the alarm, initiate corrective action to correct the cause of the problem within 24 hours of the alarm, and complete the corrective action as soon as practicable.''

Wet Scrubber CPMS

Comment: Three commenters stated that the labor hours required for the monthly transducer checks and the quarterly gauge calibration checks for the pressure drop sensor (Sec. 63.9632(b)(1)(iv)), and the semiannual flow sensor calibration checks (Sec. 63.9632(b)(2)(iii)) are excessive compared to the potential emissions control improvement. Two of the commenters suggested that rather than mandatory monthly, quarterly, or semiannual calibration checks, any control unit which emits less than 5 percent of the total annual PM emissions at the plant should be allowed to reduce the periodic checks required by each of the cited provisions to once annually. The other commenter suggested that the EPA should allow each source to propose an alternative method to the proposed calibration checks to the appropriate permitting agency.

Three commenters stated that the daily pressure tap pluggage check (Sec. 63.9632(b)(1)(iii)) and monthly electrical connection continuity checks (Sec. 63.9632(b)(1)(vi)) are overly burdensome and costly to implement. The commenters argued that the manual labor and clock hours required for such continuity checks would be so large that the monitoring systems would have to be shut down so frequently and for such a length of time that they would have virtually no operating time. According to the commenters, these provisions should be modified so as to provide ``a program within the CPMS to alarm the process unit operator and to record the alarm for a zero value indication and for a static value indication that satisfies the requirement of this provision.'' In addition, one commenter stated that, if no change is made, the labor costs for the continuity checks must be factored into the economic analysis.

Response: The specific installation, operation, and maintenance requirements for wet scrubber CPMS have not been included in the final rule. Therefore, the requirements for monthly transducer checks, quarterly gauge calibration checks, semiannual flow sensor calibration checks, daily pressure tap pluggage checks, and monthly electrical connector continuity checks have not been included in the final rule. In place of the specific requirements, we have included the requirement that, for each CPMS, you must develop and make available a site specific monitoring plan that addresses the following:
[sbull] Installation of CPMS sampling probe so that measurement is representative of control of the exhaust emissions.
[sbull] Performance and equipment specifications for the sample interface, the parametric signal analyzer, and the data collection and reduction system.
[sbull] Performance evaluation procedures and acceptance criteria (e.g., calibrations).
[sbull] Ongoing operation and maintenance procedures in accordance with the general requirements of Sec. 63.8(c)(1), (3), (4)(ii), (7), and (8).
[sbull] Ongoing data quality assurance procedures in accordance with the general requirements of Sec. 63.8(d).
[sbull] Ongoing recordkeeping and reporting procedures in accordance with the general requirements of Sec. 63.10(c), (e)(1), and (e)(2)(i).

Comment: Three commenters stated that it is inappropriate to set a single (pressure drop) point for operating wet scrubbers and recommended that EPA remove the pressure drop requirement and rely on the operation and maintenance plan for compliance. The commenters pointed out that venturirod deck scrubbers operate over a range of pressure drop that is affected by scrubbing water flow rate, scrubber water flow distribution, water temperature, gas temperature, and the square of the process gas flow rate. The commenters stated that operators cannot directly control the pressure drop in a venturirod deck scrubber. By setting the average pressure drop at the minimum level established during the performance test, the commenters stated that the rule effectively forces a source to operate well below the emission limit.

Response: In followup discussions with the commenters, it was clarified that their comments referred only to venturirod deck scrubbers installed on indurating furnaces. These venturirod deck scrubbers are fixedthroat scrubbers for which the pressure drop can be measured, but not directly controlled. Two commenters stated that they cannot directly control the pressure drop across the venturirod deck scrubbers because of the following factors:
[sbull] The scrubbers are of a fixedthroat design;
[sbull] The fan drawing or pushing air through the scrubber operates at a fixed speed and fixed diameter; and
[sbull] The damper prior to the scrubber is used to control the overall flow of air through the system; therefore, it cannot be used to control the pressure drop to the scrubber without affecting the entire process. The damper is opened more or closed more, as necessary, to modulate the air flow as changes occur in the process. As production rate increases, the damper is opened more and, therefore, the pressure drop across the scrubber increases. Due to these factors, the pressure drop across the venturirod deck scrubbers on the furnaces is more variable than other controls and is difficult to regulate.

The commenters presented data showing the variability of the pressure drop for their venturirod deck scrubbers. One commenter presented pressure drop readings taken every 20 minutes that ranged from 12 to 4 inches of pressure drop, with very few points below 4 inches of pressure drop.
[[Page 61877]]
However, after excluding periods of malfunction and looking at the daily average pressure drop instead of instantaneous readings, the data showed that the daily average pressure drop for each scrubber fell within a narrow range. The difference between the lowest daily average pressure drop and the highest daily average pressure drop was only about 2 or 3 inches of pressure drop. Based on these data, the commenter stated that they were confident that they could maintain a pressure drop at or above the operating limit based on a daily average.

The other commenter provided daily average pressure drop for their venturirod deck scrubbers. The data showed that on a daily average basis, the pressure drop for each venturirod deck scrubber varied by 1 to 3.6 inches over a

FOR FURTHER INFORMATION CONTACT Conrad Chin, Metals Group (C439-02), Emission Standards Division, U.S. EPA, Research Triangle Park, NC 27711, telephone number (919) 5411512, electronic mail (email) address, chin.conrad@epa.gov.