RESPONSE TO SIGNIFICANT PUBLIC COMMENTS ON THE PROPOSED CLEAN AIR MERCURY RULE Received in response to:

Proposed National Emission Standards for Hazardous Air Pollutants; and, in the Alternative, Proposed Standards of Performance for New and Existing Stationary Sources: Electric Utility Steam Generating Units ( 69 FR 4652; January 30, 2004)

Supplemental Notice for the Proposed National Emission Standards for Hazardous Air Pollutants; and, in the Alternative, Proposed Standards of Performance for New and Existing Stationary Sources: Electric Utility Steam Generating Units ( 69 FR 12398; March 16, 2004)

Proposed National Emission Standards for Hazardous Air Pollutants; and, in the Alternative, Proposed Standards of Performance for New and Existing Stationary Sources, Electric Utility Steam Generating Units: Notice of Data Availability ( 69 FR 69864; December 1, 2004)

Docket Number OAR 2002 0056 7.0 IMPACT ESTIMATES US Environmental Protection Agency Emissions Standards Division Office of Air Quality Planning and Standards Research Triangle Park, North Carolina 27711 15 March 2005 i General Outline 1.0 INTRODUCTION AND BACKGROUND 2.0 APPLICABILITY AND SUBCATEGORIZATION 3.0 PERFORMANCE STANDARDS FOR COAL FIRED ELECTRIC UTILITY STEAM GENERATING UNITS 4.0 PERFORMANCE STANDARDS FOR OIL FIRED ELECTRIC UTILITY STEAM GENERATING UNITS 5.0 MERCURY CAP AND TRADE PROGRAM 6.0 MERCURY EMISSIONS MONITORING 7.0 IMPACT ESTIMATES 8.0 COMPLIANCE WITH EXECUTIVE ORDERS AND STATUTES 9.0 NODA 10.0 OTHER Appendix A LIST OF COMMENTERS 7 1 7.0 IMPACT ESTIMATES 7.1 IPM MODELING Comment:

One commenter ( OAR 2002 0056 2578) stated that both they and EPA have been employing Eulerian regional models for simulating both deposition patterns of Hg under current emissions, and how those deposition patterns might change under proposed utility Hg regulation. The commenter stated that there is strong evidence that those models tend to overestimate near source ground level concentrations and deposition of Hg when compared to equivalent calculations using Gaussian plume simulation local scale models. The commenter stated that the consequences associated with this model precision include the following: 1) it helps explain why models tend to show higher deposition than is measured by Hg monitoring stations in some regions of the U. S., and 2) these overpredictions of deposition will tend to overestimate the assessments of how much Hg is entering various waterbodies, accumulating in fish and eventually resulting in a potential exposure to humans.

Response:

There is no evidence that in our applications of Eulerian regional models that they overestimate ground level wet deposition of Hg. The models generally do not show higher wet deposition than the Hg monitoring sites. The Community Multiscale Air Quality ( CMAQ) Model used for the Clean Air Mercury Rule ( CAMR) underestimated annual Hg wet deposition at the majority of Mercury Deposition Network sites. There is not a measurement network for Hg dry depositions or Hg concentrations, so it cannot be concluded that the Eulerian regional models overpredict these values. In general, the Gaussian models do not have adequate atmospheric chemistry or deposition algorithms to predict Hg as well as the Eulerian regional models.

Comment:

One commenter ( OAR 2002 0056 3454) stated that the current Hg control proposal made under the CAA, section 111 provisions would not create markets for technology development nor encourage innovation as the projected Hg cap level was set too high ( i. e., at the revised co benefit level). The commenter further stated that EPA's modeling analysis does not consider the low cost reductions that will come from enhancing existing control technologies for greater Hg capture. The commenter stated that these innovations will reduce the cost and overall demand for Hg specific reductions. The commenter stated that EPA's projections for Hg specific control installations under the Section 111 proposal estimate that only 1 GW, or approximately two of the more than 1000 coal fired boilers in the U. S., would install Hg control technologies by 2010.

Response:

EPA has set the first phase cap of CAMR at a level that represents the Hg reductions 7 2 expected as co benefits accompanying the SO2 and NOx caps under CAIR in 2010, of the combined emission reductions that SO2 and NOx controls provide in terms of reducing Hg emissions. The ability of sources to bank excess Hg allowances in the first phase of the program, as well as the lower second phase cap, will provide a strong incentive for the development of efficient and cost effective Hg control technologies. In fact, developments in Hg control technologies, such as advanced sorbents, are already occurring. EPA's Office of Research and Development has a white paper ( available in the docket) discussing the current state of Hg control technology development.

Comment:

One commenter ( OAR 2002 0056 2578) stated that modeled predictions of when emissions would ultimately reach the 15 ton/ yr Phase II cap in the proposed cap and trade rule are sensitive to model assumptions concerning co benefits, control effectiveness, and other poorly determined variables. The commenter stated that EPA assumptions produce a longer phase in period than the set of assumptions used by the commenter, considered more realistic based on research results. The commenter stated that differences in emissions banking behavior between their simulations and EPA's results are due to three factors ( the commenter provided evidence supporting each of the following points): 1) EPA assumes larger Hg reductions from key SO2 and NOx controls (" co benefits") than is the current technical consensus; 2) EPA's cost and effectiveness assumptions for removal of Hg using activated carbon injection are more pessimistic than those incorporated in the commenter's model, and; 3) Other EPA assumptions appear to cause the model to rely more on FGD retrofits over coal switching for units to achieve SO2 targets than the commenter assumed. The commenter asserted that their simulations employ assumptions which their researchers view as more realistic and thus result in the 15 ton cap being met by 2020.

Response:

EPA agrees that projections of the timeline for achievement of the 15 ton second phase Hg cap are sensitive to modeling assumptions. EPA published a NODA discussing some of these assumptions and input the Agency received from commenters that conducted modeling of the Hg cap and trade program. EPA requested comment in the NODA on the following: projected improvements in variable operating costs for ACI over time, consideration of additional Hg control technology options, availability of ACI, Hg control technology costs, the impact of banking on achieving the second phase Hg cap, the level of co benefit Hg reductions under CAIR, and Hg removal assumptions for the various technology combinations included in IPM. Assumptions in IPM are discussed in detail in the documentation for IPM v. 2.1.9, which is available in the docket. EPA's economic analysis of the final rule is discussed in Chapter 7 of the Regulatory Impacts Analysis ( RIA). Regarding the modeling submitted by the commenter, EPA has noted that the projected emissions of 15 tons in 2020 appear to be an artifact of the grouping of the 2020 run year with the model end run year of 2040. EPA maintains that, in a least cost solution model like the commenter's, the model would solve for the cap in the final run year grouping. 7 3 4 Comment:

One commenter ( OAR 2002 0056 3552) disputed EPA's rationale for not using section 112 as a control strategy because of the anticipated absence of local or regional hot spots. The commenter stated that EPA based this position on the expected 70 percent emission reduction under the proposed section 111 rule and cap and trade program and that analyses of the Acid Rain program did not show any hot spots. The commenter stated that EPA should provide evidence to support this position, including a description of the models, assumptions, and default. The commenter asserted that states should have the opportunity to review the modeling runs used to determine local deposition and check input values such as default values, percent Hg in coal, control devices and their efficiencies, and Hg composition of the emissions released. The commenter stated that for such an important decision, the methodology EPA used to arrive at this prediction should be clear to the states.

Response:

EPA is finalizing a cap and trade program under section 111. All analysis of the rule is available in the RIA. Documentation of EPA's models and assumptions are available in the docket. EPA believes that the final rule will protect public health, as show in its analysis.

7.2 HEALTH 7.2.1 Mercury in Coal Comment:

One commenter ( OAR 2002 0056 3538) stated that the proposed rule downplays Hg health risks, retreats from previous findings, and exaggerates scientific uncertainties to justify a weak standard.

Response:

EPA disagrees with the comment. The U. S. is, for the first time, establishing Federal rules that will limit Hg emissions from coal fired power plants. We are moving forward with a regulatory program that is unprecedented in the world and will address health risk resulting from coal fired utility Hg emissions. As new scientific and health data become available, the standards provide for a reanalysis of the appropriateness of the level of the standard.

Comment:

One commenter ( OAR 2002 0056 2929) stated that in EPA's December 2000 regulatory determination, EPA noted " there are uncertainties regarding the extent of the risks due to electric utility mercury emissions." The commenter stated that previously, in its Mercury Research Strategy, EPA stated that "[ t] he amount of mercury deposited in the United States that can be directly attributed to domestic combustion sources remains uncertain." The commenter further 7 4 stated that three years later, after extensive research on the fate and transport and atmospheric chemistry of Hg, EPA stated in the proposed Hg rule that the agency " cannot currently quantify whether, and the extent to which, the adverse health effects occur in the populations surrounding these facilities, and the contribution, if any, of the facilities to those problems." The commenter further stated that, in addressing the state of the science, the proposed rule notes that " the relationship between Hg emission reductions from utility units and methylmercury concentrations in fish cannot be calculated in a quantitative manner with confidence." The commenter also stated that EPA admits that "[ t] he Agency is unable to provide a monetized estimate of the benefits of Hg ( mercury) and Ni ( Nickel) emissions reduced by the proposed rule at this time." The commenter added that recent and comprehensive research undertaken by the Centers for Disease Control and Prevention ( CDC), which measured Hg in the blood of women, indicates that people in the U. S. are not being exposed to levels of Hg considered to be harmful to fetuses, children, or adults. The commenter stated that according to the CDC, " The levels reported in this NHANES [ National Health and Nutrition Examination Survey] 1999 2000 subsample for maternal aged females were below levels associated with in utero effects on the fetus, or with effects in children and adults ( National Academy of Sciences, 2000)." Another commenter ( OAR 2002 0056 3440) added that health effects of Hg reductions from power plants have not been demonstrated.

Response:

As part of its analysis of the final rule, EPA has estimated the health benefits of reducing Hg from utilities. EPA's analysis focuses on the benefits of reducing neurological impacts of exposure to MeHg via consumption of self caught freshwater fish. The RIA for this rule contains this analysis in Chapter 11.

Comment:

Many State Attorney Generals contended that EPA downplayed and mischaracterized the current science and technology concerning the public health impacts caused by Hg exposure, which supports the need for an appropriate MACT standard under section 112. Many U. S. Senators and one Congressman agreed that certain scientific evidence appears to have been changed to diminish the significance of health risks. One commenter stated that EPA disregarded the available science when evaluating the adverse health impacts of Hg exposure, ignored the degree to which the public is exposed to Hg, did not assess the benefits to public health of decreased MeHg ingestion in fish, and presented, without foundation, the global and local impacts of Hg deposition. The commenters contended that there is overwhelming evidence, including recent new data, that Hg emissions from U. S. powerplants are severely impacting inland and coastal waters, leading to massive environmental damage and the need for fish consumption advisories. The commenters stated that Hg emissions from U. S. powerplants are also contributing to adverse effects on human health. The commenters stated that the relationship between Hg emissions from coal fired plants and the elevated levels of Hg in fish is not in dispute. The commenters added that there is sound scientific basis for requiring stringent controls for Hg emissions based on EPA's own statements. Further, the commenters stated that uncertainties that may exist point to the need for, not the weakening of, safeguards to reduce the public's exposure to Hg. The commenters stated that in light of EPA's own findings that power plants are the 7 5 largest emitters of Hg, the overwhelming evidence that 8 percent of women of childbearing age have elevated Hg levels, that over 600,000 babies are born overexposed to Hg in utero with potential neurological deficits, and the fact that fish consumption advisories nationwide are on the rise, EPA regulatory response should be to establish an appropriate plant by plant MACT standard under section 112 to achieve meaningful reductions of Hg emitted to the atmosphere.

Response:

Through this rulemaking and the separate CAIR rule, EPA is taking steps to lower the Hg emissions from utilities. As explained in the preamble to the final rule, EPA believes that the steps taken in these packages will provide a substantial positive step in reducing the health effects which may result from the release of Hg from these utilities.

As part of its analysis of the final rule, EPA has estimated the health benefits of reducing Hg from utilities. EPA's analysis focuses on the benefits of reducing neurological impacts of exposure to MeHg via consumption of self caught freshwater fish. The RIA for this rule contains this analysis in Chapter 11.

Comment:

One commenter ( OAR 2002 0056 3499) stated that EPA has underestimated and distorted the health effects caused by Hg from power plants. The commenter stated that the brief discussion of the potential cardiovascular effects of methylmercury ( MeHg) concludes that the existing studies present conflicting results. The commenter asserted that this statement is not documented and is largely not the case. The commenter also noted that EPA identifies those at risk from MeHg as those who regularly and frequently consume large amounts of fish. The commenter asserted that this is not necessarily the case and misleading. The commenter stated that even moderate consumption of fish with high Hg concentrations can lead to significantly elevated Hg levels and health risk.

Response:

The science of documenting and estimating the health effects of exposure to low levels of Hg is evolving. EPA is aware that a study on potential cardiovascular effects has been recently entered into the docket to this rulemaking ( February 22, 2005). EPA was not able to evaluate the results of this study in the determination for the final rule. EPA is aware of this effect and other effects of low level Hg exposures. Our RIA for this rulemaking lays out our understanding of the current state of the science and provides quantified or qualitative estimates of the effects of reducing Hg emissions from utilities.

7.3 ENVIRONMENTAL IMPACTS Comment:

One commenter ( OAR 2002 0056 2430) recommended that if EPA pursues regulation 7 6 under section 111, it include some type of risk and environmental health assessment including an evaluation of the effects of Hg deposition. The commenter stated that although residual risk requirements under section 112 address risk to public health and the environment, section 111 does not. The commenter stated that the disassociation of CAA regulations from public health and the environment is unacceptable public policy and sets a bad precedent.

Response:

EPA has addressed the implications of the rule as suggested by the commenter.

7.4 COSTS AND ECONOMICS Comment:

One commenter ( OAR 2002 0056 3528) stated that most, if not all, small businesses will be impacted by a regulatory structure that imposes new requirements on Electric Utility Steam Generating Units ( power plants). The commenter noted that small business owners need electricity to run their businesses, and it is certain that if and when a new regulatory scheme is implemented, the costs associated with it will be passed on to small firms in the form of higher electricity prices. The commenter stated that Dr. Willie Soon, a physicist at the Solar, Stellar, and Planetary Sciences Division of the Harvard Smithsonian Center for Astrophysics and an astronomer at the Mount Wilson Observatory, has noted that " industrial demands for mercury ( and hence emissions) in the U. S. have been systematically and rapidly decreasing over time through common sense public policy controls on Hg content in less essential products like paints, pesticides and batteries. From a regulatory efficiency standpoint, the relatively clean U. S. power plants are not the best target for addressing the global mercurial emission problem. Why? We lack the technological know how to eliminate Hg emissions... As such, the proposed regulations are likely to drive up energy costs significantly. Since the poor and middle class pay a greater percentage of their income on basic energy needs, the heaviest burden of such regulations will fall on those least able to afford them." The commenter submitted that indeed, an April 2003 report from the U. S. Department of Energy ( DOE) declared that " technology to cost effectively reduce mercury emissions from coal fired plants is not yet commercially available." The commenter stated that one estimate placed the annual price tag of reducing Hg emissions from U. S. power plants at $ 3 billion. The commenter stated that the electric power industry provides a vital service to our nation and is a key driver of local and national economies. The commenter believed that while EPA might contend that, on average, the costs of the rule will be " low", even a seemingly small 5 to 10 percent increase in electricity costs will impact small businesses, low income families and retiree households. The commenter believed that in the end, while it is highly unlikely that the EPA will abandon the proposed Hg emissions regulation, the Agency must present clear scientific justification for moving forward   that regulating will create net significant human health benefits, especially if promulgated under the Clean Air Act. The commenter submitted that if the EPA moves forward, it cannot require too much too soon as would be the case under a maximum achievable control technology ( MACT) requirement. The commenter noted that the 29 percent reduction target for 2007 is not scientifically feasible as noted above. The commenter believed that if reductions are pushed too quickly, this would endanger the use of cost effective coal as a 7 7 fuel and would put more pressure on already strained natural gas markets. The commenter stated that a variety of fuels is needed so that there is no run up in prices, such as has occurred recently for natural gas. The commenter noted that natural gas prices are very important for all consumers, including families, farmers, manufacturers and, of course, small businesses. If controls are required, and presented with the limited options under the proposed rule, the commenter viewed the cap and trade program as less restrictive and more cost efficient than MACT. The commenter stated industry will not be forced to utilize expensive alternatives to coal, the nation's most abundant, affordable fuel source. The commenter noted that the cost increases for small businesses will not be as high ( though any cost increase is burdensome to price sensitive small firms). Similar to the acid rain program, the commenter believed EPA should manage the new program by laying out the rules of the road but not dictate the path to the destination.

Response:

EPA is finalizing a cap and trade program for Hg emissions. One of the advantages of a cap and trade approach is that the ability for emissions reductions to be achieved more efficiently than a command and control approach. EPA projects that today's rule will have an impact on retail electricity prices of less than 1 percent. This analysis is discussed in Chapter 7 of the RIA. It should also be noted that EPA's modeling does not take into account advancements in pollution control technology and the cost reductions associated with these, such that EPA is likely overestimating the impacts of the final rule.

Comment:

One commenter ( OAR 2002 0056 3556) stated that the costs of implementing this program are significant. The commenter supported the comments on implementation and compliance being supplied by UARG. The commenter stated that EPA's estimates are too low. The commenter stated that they are currently spending in excess of seven hundred million dollars to implement the NOx SIP Call. The commenter stated that this number is more than a factor of 3 higher than their original estimate   which was higher than EPA's estimate. The commenter stated that the NOx SIP call dealt with retrofitting existing units with known technologies. The commenter expected the costs of implementing the Hg rule to be higher, once the to be determined Hg specific controls are included in the system. The commenter stated that many utilities, including the commenter, are facing the reality of obtaining adequate financing to cover the costs of implementation. The commenter stated that this is further complicated by the need to clearly layout a cost recovery mechanism, within the current regulatory system in Michigan. The commenter strongly recommended that EPA use a more accurate methodology for projecting the costs of MACT, including characterizing each individual unit in the database, using site specific conditions to determine which technology is the least cost option.

Response:

EPA is finalizing a cap and trade program for Hg under section 111 of the CAA, rather than a Hg MACT. This system allows for a variety of control technologies and provides 7 8 incentives for achieving least cost reductions. The projected impacts of the final CAMR are discussed in Section 7 of the RIA.

Comment:

One commenter ( OAR 2002 0056 4191) stated that EPA must ensure that the Hg rule does not disadvantage coal, especially Gulf Coast lignite, because doing so would aggravate the already precarious natural gas supply and price situation. The commenter submitted that high natural gas prices are a significant economic challenge to business and industry, especially small businesses. The commenter added that high natural gas prices are undermining U. S. economic recovery, pushing jobs offshore in gas dependent industries, and are increasing the cost of electricity in several regions of the U. S. The commenter pointed out that during the late 1990' s, the historic surplus of natural gas disappeared due to a growing economy, governmental access restrictions to large gas deposits onshore and offshore, and clean air regulations that encouraged electric generators to use natural gas instead of coal. The commenter stated that by 2000, spot market prices soared and the average annual price for gas more than doubled. The commenter added that the industrial sector, unable to pass through costs to consumers, was hit hard. The commenter noted that U. S. natural gas production is not keeping pace with the demands of a growing population and a slowly recovering economy. The commenter believed that this crisis, brought on partly by national policies encouraging the use of natural gas while discouraging its domestic production, makes clear the need for the U. S. to maintain a diverse fuel supply and provide adequate domestic production of energy. The commenter submitted that if the Hg rule was to even slightly decrease the dependence on coal as a viable fuel for electric generation, the natural gas supply and the price problems would increase. The commenter stated that it is estimated that forced replacement of coal with natural gas as fuel in electric generation would increase the demand for natural gas by about 35 percent and would increase natural gas prices by about 33 percent. The commenter stated that EGUs designed to burn lignite cannot easily, quickly, or cheaply switch to burn other fuel types. The commenter noted that lignite's low heat content and its other properties call for a specific boiler design. The commenter claimed that, as such, lignite fired EGUs would require significant alterations to allow them to burn non lignite fuels. The commenter added that in addition to being time consuming, such alterations would be very expensive. The commenter stated further that companies that own and operate lignite fired EGUs are often parties to long term contracts to purchase the lignite. The commenter noted that, therefore, even if such EGUs could no longer burn lignite, they would still be required to purchase it pursuant to any such long term contracts. The commenter added that moreover, Gulf Coast lignite fired EGUs in Texas are " mine mouth" plants, which means they are located on the property from which the lignite is mined. The commenter stated that therefore, for many such EGUs, rail lines to the EGUs that could be used to transport other types of fuel to the site would have to be constructed. The commenter asserted that for the foregoing reasons, the final rule must take into account the need to avoid any undue switching from coal, especially Gulf Coast lignite, to another type of coal or natural gas as fuel in electric generation.

Response:

The impacts of CAMR on coal production are discussed in Chapter 7 of the RIA. Coal 7 9 fired generation and natural gas fired generation are projected to remain relatively unchanged because of the phased in nature of CAMR, which allows industry the appropriate amount of time to install the necessary pollution controls. Additionally, no coal capacity is projected to be uneconomic to maintain under CAMR relative to the CAIR.

Comment:

Several commenters ( OAR 2002 0056 2609,  2684,  3380) in Colorado believed the rule will have a negative economic impact on Aspen because continuation of high Hg emissions from coal fired plants subsidizes coal which contributes to global warming and prevents a level playing field for developers of renewable energy sources.

Response:

Under this rulemaking, EPA is placing Hg emission reduction requirements on coal fired electricity generating units that will require investment by the industry, and, thus, is not providing a subsidy to coal fired generation.

Comment:

One commenter ( OAR 2002 0056 2887) recommended that the capital costs and cost effectiveness of Hg controls be expressed in terms of costs to the ratepayer ( e. g., mills/ kWh of electricity). The commenter believed from this perspective, the costs are lower than those for NOx control from electric utilities ( which are considered to be cost effective by industry and state regulators and the basis for the " Section 110 transport SIP call" and the Clean Air Interstate Rule proposed concurrently with the MACT standard). According to the commenter, the total annual costs for Hg controls ranges from 0.18 to 1.15 mills/ kWh compared to 0.21 to 0.83 for low NOx burners and 1.85 to 3.62 mills/ kWh for selective catalytic reduction. The commenter contended that EPA's presentation of cost effectiveness in terms of dollars per pound of Hg removed by a control technology compared to the costs of controlling NOx or SO2 emissions from power plants is misleading because Hg is emitted in far small quantities than conventional pollutants. The commenter added that, however, Hg presents a far greater public health and environmental threat on an equivalent mass basis.

Response:

EPA discusses the projected impact of CAMR on retail electricity prices in Chapter 7 of the RIA. EPA believes that cost effectiveness measures ( e. g., $/ ton) are useful tools to evaluate and compare marginal costs of various programs. EPA agrees that cost effectiveness measures for different pollutants may not be meaningfully compared with each other. The benefits and costs of CAMR are discussed in detail in the RIA.

Comment:

One commenter ( OAR 2002 0056 4177) believed EPA's economic analysis is inadequate 7 10 and flawed. The commenter asserted that EPA used the wrong economic benchmark. The commenter stated that the economic cost of Hg control should not be assessed the same way as criteria pollutants because Hg creates public health problems at lower levels. The commenter stated that EPA should evaluate the costs in terms of the additional cost of electrical production rather than in cost/ ton of pollutant removed. The commenter stated that using the other approach, the best Hg controls cost 0.18 to 1.15 mils/ kWh. The commenter stated that given the added costs of litigation, health care, and special education for affected children, EPA would determine that a legally reasonable standard is economical.

Response:

EPA does evaluate the cost of Hg control in terms of the additional cost of electrical production. This analysis is presented in Chapter 7 of the RIA.

Comment:

One commenter ( OAR 2002 0056 2819) did preliminary cost estimates for installing FGD or ACI on their coal fired boilers using EPA methodology and compared their estimates to those from Public Service of New Hampshire, ADA ES, and DOE. The commenter reported that the results are similar to NESCAUM estimates ( see Mercury Emissions from Coal Fired Power Plants: The Case for Regulatory Action, October 2003). The commenter reported that estimated capital costs for FGD range from $ 54.2$ 100.4 million and for ACI range from $ 0.98 to $ 47.3 million depending on size and other factors. The commenter stated that while these costs may not be applicable to all units nationwide, they are sufficient to justify standards at least as stringent as those for New Jersey and Massachusetts. The commenter added that allowing emissions averaging can further reduce the costs.

Response:

See the preamble for EPA's discussion of Hg control technology, and IPM documentation ( available in the docket) for EPA's assumptions regarding the capital costs of FGD and ACI.

Comment:

One commenter ( OAR 2002 0056 3449) believed the current costs of ACI are reasonable. The commenter noted that DOE has a goal of reducing it to 1/ 4 of current costs. The commenter added that ACI also has low capital costs, which would allow for replacement if other technology is shown to have lower operational costs. In support, the commenter cited the U. S. DOE Report on Preliminary Cost Estimate of Activated Carbon Injection for Controlling Mercury Emissions from an Unscrubbed 500 MW Coal Fired Power Plant.

Response:

See the preamble, and EPA's Office of Research and Development's white paper on Hg 7 11 control technology for the Agency's position on the costs and availability on Hg control technologies.

Comment:

One commenter ( OAR 2002 0056 2182) stated that some political leaders in Ohio argue that stricter environmental rules will cost jobs, but Ohio now has the dirtiest air in the nation. The commenter added that at the same time, Hg pollution has cost their fisheries millions and compromised public health. The commenter stated that the total health related and lost productivity costs have not been calculated. The commenter stated that Ohio can have both cleaner air and a strong economy  the key is to support pollution control vendors as a promising new industry.

Response:

EPA believes that the rule being finalized is the best approach to both remove Hg from the air and water and promote Hg specific control technologies for use in the U. S. and around the world.

Comment:

One commenter ( OAR 2002 0056 0916) stated that proposals make excessively costly restrictions on utilities.

Response:

EPA's chosen cap and trade approach to reducing Hg emissions will limit the cost impact on utilities relative to a command and control approach. The economic impacts of CAMR are discussed in Chapter 7 of the RIA. Several aspects of CAMR are designed to minimize the impact on energy production. First, EPA recommends a trading program rather than the use of command and control regulations. Second, compliance deadlines are set cognizant of the impact that those deadlines have on electricity production. Both of these aspects of CAMR reduce the impact of the proposal on the electricity sector.

Comment:

One commenter ( OAR 2002 0056 1352) stated that the proposals will be harmful to the economy for lack of positive effect on the environment and disruption of energy supplies.

Response:

The benefits and costs of CAMR are discussed in the RIA. It should be noted that according to EO 13211: Actions that Significantly Affect Energy Supply, Distribution, or Use, this rule is not significant, measured incrementally to CAIR, because it does not have a greater than 1 percent impact on the cost of electricity production and it does not result in the retirement 7 12 of greater than 500 MW of coal fired generation.

Several aspects of CAMR are designed to minimize the impact on energy production. First, EPA recommends a trading program rather than the use of command and control regulations. Second, compliance deadlines are set cognizant of the impact that those deadlines have on electricity production. Both of these aspects of CAMR reduce the impact of the proposal on the electricity sector.

Comment:

One commenter ( OAR 2002 0056 1573) stated that in setting its reductions targets and compliance deadlines, EPA should fully consider the complexities of this new regulatory program and the costs of compliance. The commenter stated that the power generation industry finds itself facing the biggest round of emission reductions in its history. The commenter pointed out that the power generation industry also faces substantial uncertainty because power plant Hg controls have yet to be commercially demonstrated. The commenter was keenly aware that some view compliance cost estimates on the part of industry as little more than " crying wolf" whenever a new regulatory requirement is imposed. However, the commenter noted their experience in implementing controls under the NOx SIP Call. The commenter stated that EPA originally projected that two thirds of the controls installed for NOx SIP Call compliance would consist of Selective Non Catalytic Reduction ( SNCR) controls, with the remaining one third mostly consisting of Selective Catalytic Reduction ( SCR) controls. The commenter also stated that EPA also estimated SCR capital costs as about $ 60/ kW. Now that companies have installed most of their NOx controls, the commenter stated that EPA substantially underestimated compliance costs. The commenter stated that across the industry, the vast majority of the NOx SIP Call controls have been SCR, with few installations of SNCR. The commenter opted to install nine SCRs with no SNCR at all. Contrary to EPA's estimated compliance costs of $ 60/ kW, the commenter's actual installed SCR costs were more than double that figure. The commenter urged EPA to carefully assess the lessons learned from the regulatory initiatives of the recent past.

Response:

EPA is addressing uncertainty in the cost of Hg emissions control under CAMR by having a first phase cap that is equal to the projected co benefit Hg reductions under CAIR in 2010, and thus does not require the installation of Hg specific control. Additionally, the second phase cap of 15 tons is also set with consideration for cost uncertainty faced by the industry. EPA believes that the use of a Hg cap and trade program will lead to the development of more efficient and cost effective Hg control technology options through the market incentives provided by the cap and trade mechanism.

Comment:

One commenter ( OAR 2002 0056 2067) stated that in addition to the limitations with existing control technology, structural barriers also exist in terms of monitoring equipment. The commenter stated that to adequately demonstrate removal of Hg, monitoring equipment, such as 7 13 continuous emissions monitoring systems or sorbent trap monitoring technology, must also be installed. According to the commenter, the cost of monitoring equipment, as well as the cost of its operation and maintenance, is significant, and no monitoring technology has emerged that is both cost effective and accurate. The commenter asserted that compliance standards must recognize the limited development of such monitoring technology as well.

Response:

The final rule contains flexibility by allowing sources to account for their Hg emissions by using Hg CEMS, sorbent trap monitoring systems ( or a combination thereof), and, in some cases, using low mass provisions. EPA disagrees with the commenter and believes that field tests have demonstrated Hg CEMS to be cost effective, accurate, and reliable. The Hg CEMS have performed adequately for several months and meet the Ontario Hydro Reference Method specifications. Furthermore, several dry chemistry Hg CEMS are currently being tested at sites that represent the most challenging conditions and the Agency plans to share with industry the results of such experiences to facilitate the selection of appropriate monitoring methodology. EPA is also confident that substantial advancement of Hg CEMS will occur before the implementation of the rule and as other monitoring techniques may become available, is allowing the use of systems that can meet performance based specifications. The performancebased approach allows for use of various suitable sampling and analytical technologies while maintaining a specified and documented level of data quality.

Comment:

Several commenters ( OAR 2002 0056 1269,  2065,  2074,  2082) asked how much will plants increase rates as a result of the proposals.

Response:

The impact of CAMR on retail electricity prices relative to CAIR is projected to be less than 1 percent. This is discussed in more detail in Chapter 7 of the RIA.

Comment:

One commenter ( OAR 2002 0056 2160) was concerned about the potential economic impacts of losing their bituminous coal market. The commenter asserted that to meet stringent and possibly unattainable limits, plants that burn bituminous coal mined in Illinois will switch to subbituminous coal because of the cost, less stringent limit, or unavailability of control equipment. The commenter stated that fuel switching would have a devastating economic effect on their coal industry ( the Illinois coal market will fail), associated industries, and their tax base. The commenter asserted that fuel neutral rules would avoid this effect.

Response:

The reductions in emissions from the power sector under CAIR and CAMR will be met 7 14 through the installation of pollution controls for Hg, SO2, and NOx removal. The pollution controls can achieve up to a 95 percent SO2 removal rate, which allows industry to rely more heavily on local bituminous coal in the eastern and central parts of the country that has a higher sulfur content and is less expensive to transport than western subbituminous coal.

Comment:

One commenter ( OAR 2002 0056 2160) stated that there is an increased risk on capital investment because of the uncertainty in the availability of control technology. The commenter stated that obtaining financial backing for purchasing equipment will require larger outlays from power companies ( lending institutions avoid risk). The commenter believed these increased costs will be passed on to consumers, thus harming the State's ability to provide inexpensive electric power an economic asset. The commenter stated that the proposed rules should be reviewed to determine the availability of technologies which have minimal risk in attaining the necessary emissions performance.

Response:

EPA's Office of Research and Development has produced a white paper ( available in the docket) that assess the current state of Hg emissions control technology. EPA has set the first phase cap at a level that represents projected co benefit Hg emission reductions that will occur under CAIR as of 2010, and the 15 ton cap in 2018 allows sources adequate time for the installation of the necessary pollution controls.

Several aspects of CAMR are designed to minimize the impact on energy production. First, EPA recommends a trading program rather than the use of command and control regulations. Second, compliance deadlines are set cognizant of the impact that those deadlines have on electricity production. Both of these aspects of CAMR reduce the impact of the proposal on the electricity sector.

Comment:

One commenter ( OAR 2002 0056 1969) stated that monitoring costs for small units will be disproportionate to the costs of compliance with the MACT emissions limit. The commenter supported lower frequencies and lower cost monitoring requirements for those units that emit under 25 pounds per year.

Response:

The Agency has decided to use a cap and trade program to control Hg emissions. Complete and accurate accounting of Hg emissions is required for a credible cap and trade program. Therefore, Hg CEMS or sorbent traps are required in the final rule. However, qualifying, low emitting sources may comply with today's monitoring requirements by using conservative default Hg emission factors and annual or semi annual stack testing. 7 15 Comment:

One commenter ( OAR 2002 0056 2075) stated that if the proposed regulations result in the closure of coal fired generation plants, there would be significant fallout for the state, regional, and local economies. The commenter stated that excessive regulation decreases the capacity of U. S. companies to compete in global markets. The commenter also stated that when the costs of compliance with environmental regulations rise, U. S. firms are less able to perform optimally. The commenter further stated that the entire economy suffers. The commenter stated that for Texas, coal mining results in an addition to business activity of:

$ 2.438 billion in annual Total Expenditures; $ 0.957 billion in annual Gross Product; $ 0.713 billion in annual Personal Income; $ 0.258 billion in annual Retail Sales; and 12,684 Permanent Jobs.

The commenter stated that East Texas is where the majority of Texas' coal mines are concentrated. The commenter further stated that the economic impact of coal mining on the regional economy is:

$ 1.356 billion in annual Total Expenditures; $ 0.526 billion in annual Gross Product; $ 0.405 billion in annual Personal Income; $ 0.154 billion in annual Retail Sales; and 7,210 Permanent Jobs.

The commenter stated that the total economic impact of coal mining and coal fired electric generating plants is estimated to be:

$ 10.498 billion in annual Total Expenditures; $ 3.516 billion in annual Gross Product; $ 2.081 billion in annual Personal Income; $ 0.584 billion in annual Retail Sales; and 33,197 Permanent Jobs.

Response:

The economic impact of CAMR is discussed in Chapter 7 of the RIA. It should be noted that according to EO 13211: Actions that Significantly Affect Energy Supply, Distribution, or Use, this rule is not significant, measured incrementally to CAIR, because it does not have a greater than a 1 percent impact on the cost of electricity production and it does not result in the retirement of greater than 500 MW of coal fired generation.

Several aspects of CAMR are designed to minimize the impact on energy production. First, EPA recommends a trading program rather than the use of command and control 7 16 regulations. Second, compliance deadlines are set cognizant of the impact that those deadlines have on electricity production. Both of these aspects of CAMR reduce the impact of the proposal on the electricity sector.

Comment:

One commenter ( OAR 2002 0056 2578) performed an analysis that compared the Hg cap and trade provisions of the Clear Skies Act ( CSA) of 2003 to a generic MACT standard of 2.2 lb/ trillion Btu for all generating units. The commenter stated that these two policies are reasonably similar to the two alternative Hg rules proposed by EPA. The commenter's cost effectiveness analysis found that the CSA cap and trade alternative would cost less than an illustrative MACT rule on a present value basis by about a factor of 3, yet it would produce slightly larger deposition changes and MeHg exposure reductions by 2020. The commenter pointed out that in either case, however, the effectiveness of the policies in reducing deposition of Hg in the U. S. appeared small. The commenter analyzed EPA's December 2003 rule proposals using the same analysis framework as before ( but with greater detail and updated modeling assumptions) and found a similar comparison. According to the commenter, the relative cost effectiveness of the proposed cap and trade rule compared to the proposed MACT rule appears to be even greater than was estimated for the two alternatives studied in the earlier analysis. The commenter stated that the primary apparent difference between the proposed MACT rule and the cap and trade rule is that MACT provides earlier reductions than the proposed cap and trade policy. However, this earlier implementation, according to the commenter, leads to a small percentage change in deposition ( and hence in exposure) but at an additional $ 8 billion ( present value) in costs.

Response:

EPA is finalizing a cap and trade program for Hg under section 111 of the CAA. EPA believes there are a number of advantages to this approach relative to a MACT approach. First, the cap and trade program will set a fixed limit on the total number of allowable Hg emissions, which cannot be exceeded even when existing plants are expanded and new plants are constructed. Second, a trading program provides a market incentive for sources to reduce emissions beyond the required level, because of the ability to bank allowances, or sell allowances on the market. This incentive acts to stimulate innovations in control technology that might not occur under a command and control approach such as MACT, and will also lead to cheaper emissions reductions overall.

Comment:

One commenter ( OAR 2002 0056 2634) stated that the cost of compliance should be proportionate to the intended environmental benefit. The commenter noted that the purpose of controlling Hg emissions from power plants is to address potential adverse impacts that exposure to Hg can have on human health and the environment. The commenter pointed out that, more specifically, EPA states in the preamble to the notice of proposed rulemaking ( NPR) that the focus of this rulemaking relates to " oral exposure of MeHg as it is the route of primary interest 7 17 for human exposures" [ 69 FR 4658]. The commenter pointed out that EPA further states that MeHg " is typically formed by biological processes after mercury has precipitated from the air and deposited into water bodies" [ 69 FR 4657]. The commenter stated that, therefore, when weighing the cost of compliance against the environmental benefit, it is imperative that EPA consider the impact of the proposal in terms of reductions in Hg deposition ( and ultimate human exposure) versus reductions in emissions. The commenter pointed out that over 70 percent of Hg deposition in the U. S. comes from sources outside of the U. S., and in much of the western U. S., between 80 percent and 100 percent of the deposition originates outside of the U. S. [" New Findings on Mercury Dynamics," EPRI et al., presented at the 7th Electric Utilities Environmental Conference, Tucson, AZ, January 21, 2004]. The commenter stated that modeling performed by EPRI indicates that a reduction of Hg emissions from coal fired power plants to 15 tpy ( an approximate 70 percent reduction from 1999 levels) would result in only a 6.9 percent reduction in deposition. The commenter stated that it has not been determined whether this level of reduction in deposition will effectively reduce the levels of MeHg in the environment, which is the stated focus of the proposed rule. The commenter stated that the level of Hg reductions and the means to achieve those reductions must be " cost effective" in terms of the ultimate reduction in exposure to MeHg.

Response:

Executive Order 12866 requires EPA to estimate and compare the costs and benefits for major regulatory actions. It does not require that the monetizable benefits exceed the monetizable costs. However, in the design of this rulemaking, EPA has carefully weighed the costs of controlling Hg from utilities, the benefits resulting from these reductions and other factors ( e. g. the desire to provide global leadership in reducing Hg emissions). As detailed in the preamble to this rulemaking and the regulatory support documents, EPA has selected a regulatory approach which balances all these factors.

Comment:

One commenter ( OAR 2002 0056 2721) strongly disagreed with EPA's estimated annual monitoring, reporting and recordkeeping costs for compliance with this regulation. The commenter stated that EPA estimated the annual reporting costs to be $ 48.4 million, which equates to approximately $ 85,000 per unit. The commenter claimed this number is extremely low when taking into account the annual Hg compliance audit, which is budgeted over $ 30,000 for a single annual audit alone. The commenter pointed out that the number of audits can be increased to semi annual or more frequent based on the actual monitor's performance. The commenter stated that the capital expense that EPA reported was approximately $ 117,000 per unit. The commenter submitted that this value is also extremely understated. According to the commenter there are presently no long term Hg monitoring systems in place at a coal fired facility. The commenter pointed out that the current state of monitoring is very labor intensive and involves an extremely highly trained workforce. The commenter stated that the current monitor itself is over $ 100,000 alone. The commenter further stated that this does not account for secondary systems required to support this equipment, e. g., monitor cabinets, air supplies, electrical power supply, electronic communication networks, data storage devices, software enhancements, etc. 7 18 Response:

The cost information is largely based on documents generated for the Clean Air Markets Division, specifically the Cost Analysis of Mercury Monitoring Techniques done by Arcadis , on November 2003, that is part of the docket. This analysis provides an overview of the cost information gathered and analyzed to date, focusing on sources such as utility boilers that are required to monitor Hg emissions under the proposed rule. EPA believes that sources will probably operate the systems taking advantage of installations currently in use under other Clean Air Act programs, such as CEMS shelters, platforms, etc and will not be the focus of further analysis. In addition, it is estimated that no major structural modifications are needed for access or support equipment, and that power is available in the area. Based on the information provided by the Arcadis report, EPA estimates that the average CEMS cost will be $ 80,000 and that the annual operating cost, with one RATA test done based on the Ontario Hydro method will be also about $ 80,000.

EPA believes that field tests have demonstrated Hg CEMS to be accurate and reliable. The Hg CEMS have performed adequately for several months and meet the Ontario Hydro Reference Method specifications. EPA is also confident that substantial advancement of Hg CEMS will occur before the implementation of the rule and as other monitoring techniques may become available, is allowing the use of systems that can meet performance based specifications. In addition, the final rule contains flexibility by allowing sources to account for their Hg emissions by using Hg CEMS, sorbent trap monitoring systems ( or a combination thereof), and, in some cases, using low mass provisions.

Comment:

One commenter ( OAR 2002 0056 2843) expressed concern that the Hg reduction requirements proposed by the EPA for new plants fueled with Powder River Basin ( PRB) coals will be so restrictive that they will limit the fuels that can be burned in new facilities. The commenter's analysis followed the forecast of available PRB fuels performed by the National Mining Association ( NMA), the Subbituminous Energy Coalition ( SEC), and the Center for Energy and Economic Development CEED); such forecasts generally suggest that the available fuels will be less than 10 percent of the 360 million tons of coal mined annually in the PRB. The commenter stated that if this forecast is correct, the cost of these fuels will likely be impacted so substantially that the development of new generating resources using PRB coals might be expected to be diminished substantially.

Response:

The impacts of CAMR on coal production and coal costs are discussed in Chapter 7 of the RIA.

Comment:

One commenter ( OAR 2002 0056 2843) believed that new coal fired generating plants 7 19 are vital if affordable electric energy prices are to be ensured in the future. The commenter agreed with the DOE, Energy Information Administration, ( DOE/ EIA) Annual Energy Outlook 2004 forecast that projects a need for an additional 112 Gigawatts of new coal generating capacity by 2025. The commenter believed that any new Hg emissions standard that would make such new coal fired generation either technically or economically infeasible will compel the U. S. power generation industry to rely upon other fuel sources, including importation of " compliance coal" or reversion to natural gas fired combustion turbines as the only near to mid term alternatives to provide large blocks of new electric generation capacity. The commenter stated that consequently, imposition of such a standard would stimulate additional, significant increases in the price of compliance coals and natural gas as well as a surge in imports associated with increased demand for LNG. The commenter contended that such an increase in imports would further exacerbate U. S. dependence upon off shore energy supplies. The commenter did not believe that this outcome has been considered in the policy debate about stringency of Hg emissions control on U. S. coal fired power plants. The commenter felt that such an outcome should be unacceptable given the adverse consequences of energy inflation and further reliance upon imported energy.

Response:

The projected economic and energy impacts of CAMR are discussed in Chapter 7 of the RIA. It should be noted that, according to EO 13211: Actions that Significantly Affect Energy Supply, Distribution, or Use, this rule is not significant, measured incrementally to CAIR, because it does not have a greater than a 1 percent impact on the cost of electricity production and it does not result in the retirement of greater than 500 MW of coal fired generation. In fact, CAMR is not projected to result in any additional coal retirement relative to CAIR.

Several aspects of CAMR are designed to minimize the impact on energy production. First, EPA recommends a trading program rather than the use of command and control regulations. Second, compliance deadlines are set cognizant of the impact that those deadlines have on electricity production. Both of these aspects of CAMR reduce the impact of the proposal on the electricity sector.

Comment:

One commenter ( OAR 2002 0056 2843) asserted that the adverse impact of the proposed rulemaking upon development of new coal fired electric generation will have a direct bearing on the financial condition of, and prospects for electric utilities and independent power producers ( IPP) alike. Specifically, the commenter stated that as a consequence of the collapse of wholesale power markets and the malaise gripping the IPP sector for the past two years, investors and lenders require assurance that new plants meet rigorous requirements of financial performance on a long term basis. The commenter pointed out that such requirements include the need to incorporate fixed price, turnkey construction with strong technology performance guarantees, long term fuel contracts, long term off take agreements with credit worthy entities, and the ability to achieve compliance with current ( as well as contemplated) environmental requirements. 7 20 Response:

The projected economic and energy impacts of CAMR are discussed in Chapter 7 of the RIA. It should be noted that, according to EO 13211: Actions that Significantly Affect Energy Supply, Distribution, or Use, this rule is not significant, measured incrementally to CAIR, because it does not have a greater than a 1 percent impact on the cost of electricity production and it does not result in the retirement of greater than 500 MW of coal fired generation. In fact, CAMR is not projected to result in any additional coal retirement relative to CAIR.

Several aspects of CAMR are designed to minimize the impact on energy production. First, EPA recommends a trading program rather than the use of command and control regulations. Second, compliance deadlines are set cognizant of the impact that those deadlines have on electricity production. Both of these aspects of CAMR reduce the impact of the proposal on the electricity sector.

35 Comment:

One commenter ( OAR 2002 0056 3327) claimed that without changes requested by the commenter, the utility Hg reductions rule ( UMRR) will eliminate Gulf Coast Lignite from the marketplace. The commenter submitted that if Texas loses Gulf Coast Lignite, it will lose more than $ 17 billion annually in direct and indirect benefits, including 8,000 direct jobs and more than 100,000 indirect jobs. The commenter added that some rural communities will lose more than 50 percent of their tax revenues. The commenter also stated that without Gulf Coast Lignite, it will become nearly impossible to develop a balanced energy policy or ensure the reliability and affordability of electric power in Texas.

Response:

The impacts of CAMR on coal production are discussed in Chapter 7 of the CAMR RIA. EPA is not projecting the shutdown of any coal capacity relative to CAIR.

Comment:

One commenter ( OAR 2002 0056 3403) requested that the EPA ensure that any future Hg reductions requirements be achieved in an efficient and cost effective manner. The commenter stated that as a not for profit, they will be forced to pass along the costs of meeting new Hg emissions reduction requirements to their consumer owners.

Response:

EPA is finalizing a cap and trade program for Hg under section 111 of the CAA, which will provide for efficient and cost effective Hg emissions reductions relative to a command and control approach.


Statement Supporting the Revisions to the Tier I and Tier II Emergency and Hazardous Chemical Inventory Forms (Final Rule) for Community Right-to-Know Reporting Requirements of the
              Emergency Planning and Community Right-to-Know Act

1.	IDENTIFICATION OF THE INFORMATION COLLECTION

      1(a)	Title of the Information Collection Request

       Hazardous Chemical Reporting:  Revisions to the Emergency and Hazardous Chemical Inventory Forms (Tier I and Tier II) (Final Rule).  EPA No. 2436.02, OMB No. 2050-0072.

      1(b)	Short Characterization

      This information collection request (ICR) estimates the burden and costs associated with adding some new data elements to the Hazardous Chemical Inventory forms, Tier I and Tier II, under section 312 of EPCRA.

      Sections 311 and 312 of the Emergency Planning and Community Right-to-Know Act (EPCRA) apply to the owner or operator of any facility that is required to prepare or have available a Material Safety Data Sheet (MSDS) for a hazardous chemical under the Occupational Safety and Health Act of 1970 and its implementing regulations.  Under section 311 of EPCRA, these facilities are required to submit an MSDS to the State Emergency Response Commission (SERC), the Local Emergency Planning Committee (LEPC), and the local fire department for each hazardous chemical stored on-site in a quantity greater than the reporting threshold.  Alternatively, a list of subject chemicals, grouped by hazard type, may be submitted.  The reporting threshold is 10,000 pounds unless the chemical is specifically listed as an Extremely Hazardous Substance (EHS) under EPCRA section 302, in which case the reporting threshold becomes 500 pounds or the Threshold Planning Quantity (TPQ), whichever is less.  The reporting threshold for gasoline (all grades combined) is 75,000 gallons and for diesel fuel (all grades combined) is 100,000 gallons, when stored entirely underground at retail gas stations that are in compliance with Underground Storage Tanks (UST) regulations.

      Section 312 of EPCRA requires owners and operators of facilities subject to section 311 to annually report the inventories of those chemicals reported under section 311.  The Environmental Protection Agency (EPA) is required to publish two emergency and hazardous chemical inventory forms, known as "Tier I" and "Tier II," for use by these facilities.  These forms were published in October 1987 and amended in July 1990.  On August 8, 2011 (76 FR 48093), EPA proposed some additional data elements to the Tier I and II forms and proposed to revise some existing data elements to the Tier II form.
EPA is now finalizing most of the data elements proposed.  EPA is also adding some optional data elements.

      The Tier I form provides the minimum amount of information necessary to comply with section 312.  Any facility that is required to submit an MSDS or list of chemicals under section 311 must submit a Tier I form annually on March 1, incorporating the chemicals reported under section 311.  Tier I form is submitted to the SERC, LEPC, and local fire department.  The Tier II form, which provides chemical-specific information, is submitted in lieu of the Tier I form only if specifically requested by the SERC or LEPC.
      States were always given the flexibility to implement EPCRA as appropriate for their State to meet the goals of EPCRA, which is to prepare for and respond to releases of EHSs and to provide the public with information on potential chemical risks in their communities.  This flexibility includes adding more chemicals, setting lower reporting thresholds and creating a reporting form or format that includes more information than the federal reporting requirements.  Many States have more stringent requirements, such as additional chemicals and lower reporting thresholds.  Some States developed their own inventory reporting form, including electronic reporting format and certification.  Other States use the federal inventory reporting form or the federal electronic reporting format, Tier2 Submit.

      The data elements that EPA is finalizing are for the federal emergency and hazardous chemical inventory reporting forms, Tier I and Tier II.  EPA is also revising some existing data elements in the chemical reporting section of the Tier II form to ease reporting for facilities and make the forms more user-friendly for state and local agencies.  The data elements that EPA is adding to the forms are requested by state and local agencies for improving their emergency response plans and for coordinating response during an emergency.

      EPA estimates that approximately 390,000 manufacturing and non-manufacturing facilities are currently subject to reporting and recordkeeping requirements under EPCRA sections 311 and 312.  EPA believes that this final rule would impose only minimal burden since the data elements that EPA is finalizing are readily available to facilities.  The data elements are related to the general facility identification and contact information for the parent company, owner or operator of the company, facility emergency coordinator etc.  These data elements usually would not change from year to year.  The data elements that we are revising in the chemical reporting section of Tier II form would ease reporting for facilities and make forms more user-friendly.  The total one-time burden for facilities to report the data elements is estimated to be 97,500 hours at a cost of $5,152,125.  Since the new data elements added are useful for planning and emergency response, it is important that facilities review the information reported annually and make revisions.  Therefore EPA assumes the same burden annually.

      During the first year that the rule becomes effective, facilities would need to get familiarize with the new changes to the Tier II inventory form and also to gather information for reporting the new data elements.  EPA estimates a total one-time burden for manufactures and non-manufacturers for this activity to be 292,500 hours at a cost of $15,456,375.

      There are estimated to be 3,552 SERCs and LEPCs.  As of 2010 reporting year, there are only 20 states that have developed their own reporting format.  EPA estimates that each of these states would spend approximately 200 hours at a cost of $50,000, initially in the first year when the rule becomes effective to modify their electronic reporting software to add and revise existing data elements.  The cost associated with adding new data elements is estimated to be $1,000,000.

2.	NEED FOR AND USE OF THE COLLECTION

      2(a)	Need/Authority for the Collection

      The authority for these requirements is EPCRA section 312 (42 U.S.C. §11022).

      Section 312 requires the same owners or operators of facilities subject to section 311 to annually report the inventories of the chemicals reported under section 311.  Section 312(g) requires EPA to publish emergency and hazardous chemical inventory forms for use by facilities subject to this section.  In final rules published in the Federal Register on October 15, 1987, and amended on July 26, 1990, EPA published the two "formats" required under EPCRA, "Tier I" and "Tier II."  Tier I is the minimum amount of information necessary to comply with the section.  Using Tier I, facilities aggregate reportable chemicals by hazard type and provide the quantities and locations of the chemicals.  The Tier II Form is chemical-specific information and only needs to be submitted (in lieu of the Tier I Form) if specifically requested by the SERC or LEPC.

      EPA is adding some new data elements to the Tier I and Tier II forms and revising some existing data elements in the chemical reporting section of the Tier II form.

      2(b)	Practical Utility/Users of the Data

      The reports required under sections 311 and 312 are submitted to the state and local officials which will be then accessible to the public.  The public will have knowledge of the hazards in their community.  State and local officials use the information submitted to them for developing and modifying emergency response plans for their community.

3.	NON-DUPLICATION, CONSULTATIONS, AND OTHER COLLECTION CRITERIA

      3(a)	Non-Duplication

      Many states have laws that require information similar to that called for by sections 311 and 312 of EPCRA.  EPA allows the state program to suffice for reporting provided that the minimum reporting requirements are met.  The burden estimate in this ICR also includes burden imposed on facilities that comply with State requirements.

      3(b) Public Notice

      Prior submitting an ICR to OMB, EPA is required to publish a Federal Register notice soliciting comments on the burden and cost estimates that EPA developed for the proposed rule.  The notice was published on August 8, 2011 (76 FR 48093).

      3(c) Consultations

      EPA received comments from few members of the regulated community on the estimates for the number of hours for reporting new data elements on the Tier II form.  The commenter stated that EPA underestimated the burden that it would only take 15 minutes to comply with the new data elements that EPA proposed.  EPA realizes that the regulated community would also need to get familiar with the new data elements and other changes made to the Tier II form.  Therefore, EPA is revising the estimates for the number of hours that this final action would impose on the regulated community.  See Section 6 of this document.

      3(d)	Effects of Less Frequent Collection

      The reporting deadlines for sections 311 and 312 are set by statute.  EPA has no authority to allow less frequent collection.

      3(e)	General Guidelines

      The collection activities specified in this ICR adhere to the guidelines specified by OMB.

      3(f)	Confidentiality

      The respondent may claim specific chemical identities as trade secret in reports submitted under Section 312 and in the list of chemicals and material safety data sheets submitted under Section 311.  Such information must be submitted according to EPCRA sections 322 and 323 (40 CFR Part 350).

      All trade secrecy claims submitted to EPA under EPCRA are handled and stored according to procedures set out in the Manual for Physical Handling, Security, and Protection of Files containing Trade Secret Claims Submitted under Sections 303, 311, and 312 of the Emergency Planning and Community Right-to-Know Act (EPCRA), March 2010.  These procedures were developed for EPCRA trade secrecy claims with the knowledge that these documents are sensitive.  Handling and review of documents containing EPCRA trade secret information is permitted only by persons who have obtained formal clearance to access the information based on a work-related need to engage in these activities.  When not being processed or reviewed by authorized individuals, the claim submissions containing trade secret information are stored in restricted access areas.  To ensure that appropriate handling procedures are activated and the confidentiality of EPCRA trade secret submissions is maintained, the Agency attaches a cover sheet to the top of each trade secret document and otherwise marks the document to clearly identify the document as "confidential".

      3(g)	Sensitive Questions

      The information gathering activities under this renewal ICR do not involve any sensitive questions.

4.	THE RESPONDENTS AND THE INFORMATION REQUESTED

      4(a)	Respondents

      Section 312 is applicable to all facilities that are required to prepare or have available an MSDS for a hazardous chemical as required under OSHA and its implementing regulations.  Section 1910.1200 of the OSHA regulations provides exemptions from the definition of hazardous chemical.

      In addition, Section 311(e) of EPCRA excludes the following substances:

      ::	Any food, food additive, color additive, drug, or cosmetic regulated by the Food and Drug Administration;

      ::	Any substance present as a solid in any manufactured item to the extent exposure to the substance does not occur under normal conditions of use;

      ::	Any substance to the extent it is used for personal, family, or household purposes, or is present in the same form and concentration as a product packaged for distribution and use by the general public;

      ::	Any substance to the extent it is used in a research laboratory, hospital, or other medical facility under the direct supervision of a technically qualified individual; and

      ::	Any substance to the extent it is used in routine agricultural operations or is a fertilizer held for sale by a retailer to the ultimate customer.

      Also, reporting thresholds have been established under sections 311 and 312 (codified in 40 CFR part 370).  A facility must report those hazardous chemicals that are present at the facility at any time at or above the following levels:

 For EHSs, 500 pounds or the threshold planning quantity (TPQ), whichever is less.

 For hazardous chemicals other than EHSs, the reporting threshold is 10,000 pounds.

 For gasoline, 75,000 gallons (all grades combined) and 100,000 gallons for diesel fuel (all grades combined), when stored entirely underground at retail gas stations that are in compliance with UST regulations.

      4(b)	Information Requested

      4(b)(i)	Data Items

      On or before March 1 of each year, facilities having hazardous chemicals that need reporting must submit a Tier I Form.  However, the Tier II Form must be submitted upon request by the SERC, LEPC or the fire department with jurisdiction over the facility  Currently all states require facilities to submit the federal Tier II inventory form or the state developed inventory reporting form or electronic reporting format.  Some states require facilities to use Tier2 Submit, the electronic software developed by EPA.

       The Tier I Form includes the following information as required by the statute:

         * An estimate in ranges of the maximum amount of hazardous chemicals in each hazardous category present at the facility at any time during the previous year;

         * An estimate in ranges of the average daily amount of hazardous chemicals on-site in each hazard category present at the facility during the preceding calendar year; and

         * The general location of hazardous chemicals in each category.

EPA has added the following information on the Tier I form in the final rules published on October 15, 1987 (52 FR 38344), July 26, 1990 (55 FR 30632) and November 3, 2008 (73 FR 65452).

         * NAICS code and Dun and Bradstreet number of the facility

         * Emergency contact (added to give SERCs, LEPCs, and local fire departments a contact at the facility who could clarify information at any time, particularly in the event of an emergency); and

         * Number of days on-site (added to produce a more accurate estimate of the average daily amount, particularly for those chemicals that are on-site for only a short period of time each year).

The Tier II Form includes the following information as required by statute:

         * The chemical name or the common name of the chemical as provided on the material safety data sheet;

         * An estimate (in ranges) of the maximum amount of the hazardous chemical present at the facility at any time during the preceding calendar year;

         * An estimate (in ranges) of the average daily amount of hazardous chemical present at the facility during the preceding calendar year;

         * A brief description of the manner of storage of the hazardous chemical; and

         * The location of the hazardous chemical within the facility.

The following data elements were added to the Tier II form in the final rules published on October 15, 1987, July 26, 1990 and November 3, 2008.

         * CAS number to identify more accurately each chemical that is reported;

         * The physical state to help identify the type of hazard a chemical represents in an emergency;

         * The physical and health hazards associated with the chemical;

         * Primary NAICS code and Dun and Bradstreet number of the facility

         * Two emergency contacts (added to give SERCs, LEPCs, and local fire departments a contact at the facility who could clarify information at any time, particularly in the event of an emergency); and

         * Number of days on-site (added to produce a more accurate estimate of the average daily amount, particularly for those chemicals that are on-site for only a short period of time each year).

	On August 8, 2011 (76 FR 48093), EPA proposed to add some new data elements to Tier I and Tier II forms and revise some existing data elements in the chemical reporting section of the Tier II form.  EPA is now finalizing the following as mandatory data elements to both Tier I and Tier II forms.  Although Tier I inventory form is no longer used by any state, the statute requires EPA to publish both forms so changes are also finalized on the Tier I inventory form.

         * Latitude and Longitude of the facility;

         * Maximum Number of Occupants;

         * An indication whether the location of the facility is manned or unmanned;

         * Facility identification numbers assigned under the Toxic Chemical Release Inventory and the Risk Management Programs;

         * Email address for the owner or operator of the company;

         * Name, title, email address, phone number and 24-hour phone number of the facility emergency coordinator;

         * Name, title, email address, phone number of the person knowledgeable of the information reported on the Tier I and Tier II forms;

         * Email address of the emergency contact(s);

         * To indicate whether the facility is subject to EPCRA section 302; and

         * To indicate whether the facility is subject to Clean Air Act (CAA) section 112 (r), also known as the Risk Management Program.

The following data elements are added to the forms as optional.

         * Name, address, phone number, Dun & Bradstreet number and email address of the parent company; and

         * Phone number of the facility.

	Since the statute specifically states that an estimate in ranges for the maximum amount and average daily amount should be reported on the Tier I and Tier II inventory forms, the regulations may only require reporting of these amounts in ranges.  The range codes currently listed in the regulations are very broad.  However, in order for the States, local agencies and emergency response officials to have information on the maximum amount and average daily amount that are closer to the actual amounts present at the facility, EPA proposed to narrow the ranges in August 2011 and we are now finalizing the reporting ranges.

	EPA also proposed to revise some existing data elements under the chemical reporting section of the Tier II inventory form.  Prior to the proposal, the form only included one entry to report pure chemical and mixtures.  EPA proposed two separate entries, one for pure chemical and one for mixture, which will make reporting easier for facilities and make the form more user friendly for states and local agencies.  EPA is now finalizing two separate entries for reporting pure chemical and mixtures.  As stated in section 370.14 of the regulations, facilities have the option to report the components or the total mixture.  However, EPA encourages facilities to report consistently under sections 311 and 312 for mixtures.

	EPA also proposed facilities to provide a description for storage types and conditions on the Tier II form for the hazardous chemicals that are reported.  Prior to the proposal, facilities were asked to report a code to represent the storage types (i.e. steel drum, underground storage tank, etc.) and storage conditions (i.e. ambient temperature, ambient pressure, etc).  These codes were provided in section 370.43 of the regulations.

	State and local agencies requested EPA to delete the codes and require facilities to provide a description so these agencies would have information readily available during an emergency rather than searching through the instructions of the form to see what each code represent.

	In the final rule, EPA is requiring facilities to provide a description for storage types and conditions as proposed.

	4(b)(ii)	Respondent Activities

      To determine if the facility is subject to section 311, a facility must look at inventory records for all of its chemicals that are required to have MSDSs.  The facility would also have to review the EHS list to determine if any of the chemicals are subject to a lower reporting threshold.

      If the facility determines that it has hazardous chemicals that must be reported, it must determine the address of the SERC, LEPC, and local fire department.  Copies of the MSDSs for these chemicals may be submitted, or if preferred, the facility may provide a list of the subject chemicals grouped by hazard type.  To use the list option, the facility would have to read the MSDS to determine into which of the five hazard types the chemical falls and to identify it on the list.

      The same chemicals that a facility would need to report under section 311 would need to be reported under section 312.  To complete the Tier I form, the facility would need to monitor its inventory records for the chemical (to determine the inventory information), add the quantities together for chemicals having the same hazards, and determine the correct code for the total quantity.

      A site map may be easier to show locations of hazardous chemicals, or the facility may choose to provide the general location.

      As mentioned in the previous section of this document, all states now require facilities to submit the federal Tier II inventory form or the state developed inventory reporting format, including electronic submission.

5.	THE INFORMATION COLLECTED:  AGENCY ACTIVITIES, COLLECTION METHODOLOGY, AND INFORMATION MANAGEMENT

      5(a)	Agency Activities

      No information provided under sections 311 and 312 is sent to EPA.  All of the information is collected and kept at the state and local agencies.

      EPA developed the electronic reporting format, Tier2 Submit and is modified annually.  EPA also input State required data fields in the Tier2 Submit requested by the State.  Approximately 10 states request EPA to input new data fields annually.  The Agency would be revising the Tier2 Submit to include the new data elements finalized in this action.

      5(b)	Collection Methodology and Management

      EPA does not receive the data; therefore, EPA does not have any special data collection methodology and management.  EPA created computer software for use by facilities to submit Tier II reports, Tier2 Submit.  Approximately 20 states use Tier2 Submit.  Other states have created their own software using their own resources and require facilities to submit electronically (online or diskette).  Few states still accept paper submission.

      5(c)	Small Entity Flexibility

      The burden hours for small businesses are considered to be smaller than those for large facilities because of the reduced number of chemicals present at smaller facilities.  However, for the new data elements added to the Tier II form, EPA is considering the same burden for small and large facilities.

      5(d)	Collection Schedule

      The frequency of collection for these sections of EPCRA is required by the statute.  The facilities subject to Section 312 is required to submit either Tier I or Tier II (upon request) by March 1 annually.   As stated earlier in this document, all states now require facilities to submit Tier II or the state equivalent inventory form or format.

6.	ESTIMATING THE BURDEN AND COST OF THE COLLECTION

      6(a)	Estimating Respondent Burden

      EPA estimates that approximately 390,000 facilities may be subject to section 312 reporting requirements, therefore, subject to reporting the new data elements finalized to the Tier II form.  EPA estimates that out of 390,000 facilities, there are 120,000 manufacturers and 270,000 non-manufacturers.  As mentioned earlier in the document, EPA estimates the same unit burden for small, medium and large facilities since the time required to report the new data elements that EPA is finalizing will be the same for all facilities.

	All states now require facilities to submit the federal Tier II form or the state developed reporting form or format.  Therefore this ICR only accounts the burden imposed for reporting the Tier II or the state developed reporting form or format.  The new data elements that the Agency is finalizing are readily available to facilities.  EPA estimates that it takes approximately 15 minutes (0.25 hours) for a technical staff at each facility to record new data elements on the Tier II form.  During the first year that the rule becomes effective, EPA estimates that it would take a technical staff approximately 45 minutes (0.75 hours) to get familiarize with the rule and gather information for the new data elements that EPA is finalizing in this action.   In subsequent years, EPA assumes that it would only take facilities 0.25 hours to review the new data elements and revise if necessary.

      Total burden for manufacturers to report the new data elements on the Tier II form is 30,000 hours.  Total burden for non-manufacturers to report the new data elements on the Tier II form is 67,500 hours.
      During the first year of the effective date of the rule, EPA estimates a total burden of 90,000 hours for manufacturers to get familiarize with the new requirements,   For non-manufacturers, the total burden to get familiarize with the rule is estimated to be 202,500 hours.  EPA do not expect this burden beyond the first year of the effective date of the rule.

      The new data elements that EPA is finalizing may not change yearly for any facilities.  Approximately 40 states require facilities to submit their inventory form electronically. For these facilities, any changes that may occur for any of the new data elements can be revised with little or no burden.   Therefore the burden associated with this ICR for reporting new data elements is not expected to incur after the initial reporting.  However, since the information is vital for planning and emergency response, EPA assumes a total of 97,500 hours for manufacturers and non-manufacturers.

	The existing data elements that EPA is revising in the chemical reporting section of the Tier II form would ease reporting for facilities and make the form more user-friendly for state and local agencies.

	As of reporting year 2010, approximately 20 states have their own electronic reporting tool for submitting hazardous chemical inventory.  Based on the federal cost and hours to make changes to the Tier2 Submit, EPA estimates that each state would spend approximately 200 hours to add new data elements and revise existing data elements to their existing software at a cost of $50,000.  The costs include initial analysis, design, programming, alpha and beta testing, and field deployment.

      Data management burden for State and local agencies is not estimated in this ICR since the new data elements will be part of the inventory form that these entities receive annually.

      6(b)	Estimating Respondent Costs

      The annual costs to manufacturers were estimated by multiplying the respondent burden estimate for manufacturing facilities by the labor rate for the technical staff for reporting the information for the new data elements that EPA is proposing. The annual costs to non-manufacturers were estimated by multiplying the respondent burden estimate for non-manufacturing facilities by the labor rate for the technical staff responsible for recording the information for the new data elements that EPA is proposing.

      EPA estimates an hourly respondent labor cost for a technical staff at a manufacturing facility is $61.24, including wages and benefits.  Hourly respondent labor cost for a technical staff at a non-manufacturing facility is estimated at $49.11.  (Source:  Bureau of Labor and Statistics, December 2011.

      Capital and O&M Costs

	There are no capital or O&M costs associated with this proposed rule.  States will be using their existing computer software to add the new data elements or revise the existing data elements.

      Estimating Agency Burden and Cost

      EPA estimates that it will cost the Agency approximately $50,000 to make changes to the electronic reporting software, Tier2 Submit, for adding new data elements and revising the existing data elements.

      6(d)	Estimating Total Annual Respondent Burden

      Although EPA believes that the new data elements added to the Tier II form may not change annually, EPA estimates that the total respondent burden for 390,000 facilities (120,000 manufacturers and 270,000 non-manufacturers) is 97,500 hours, at a cost of $5,152,125.  The data elements that EPA is proposing are expected to be the same year after year.  However, it is important for facilities to review and update the data elements that EPA is finalizing in this action since the information reported would be used for effective emergency planning and response.

      In addition, during the first year of the effective date of this final action, EPA assumes that facilities would need to get familiarize with the new changes to the Tier II form and also to gather information for reporting the new data elements.  EPA estimates a total one-time burden for manufactures and non-manufacturers for this activity to be 292,500 hours at a cost of $15,456,375.

      Atleast 20 states would have to make changes to their reporting software for the changes discussed in the proposed rule.  For these states, EPA estimates that it may cost $50,000 for each state, for a total cost of $1,000,000.   Approximately 23 states use Tier2 Submit and these states are not expected to incur any burden since EPA is modifying the system and making it available to states.

      6(e)	Bottom Line Burden Hours and Cost

      The total one-time burden to facility respondents for rule familiarization is 292,500 hours at a cost of $15,456,375.   The Annual burden for reporting new data elements and making any necessary revisions in subsequent years is estimated to be 97,500 hours at a cost of $5,152,125.

      The total one-time burden for 20 states that need to modify their reporting software is 4,000 hours at a cost of $1,000,000.

      6(f)	Burden Statement

      For this final rule, the average burden for facilities to get familiarize with the new requirements is 0.75 hours.  The average burden for reporting new data elements is estimated 0.25 hours for facilities.

      The average burden for each state to add new data elements and revise existing data elements in their electronic software is 200 hours.  Most of the states may already require these data elements that EPA is finalizing.  Only a percentage may need to revise their regulations or software to require the new data elements that EPA is finalizing.

      Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency.  This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information.  An agency may not conduct or sponsor such a request and a person or facility is not required to respond to a collection of information unless it displays a currently valid OMB control number.  The OMB control numbers for EPA's regulations are listed in 40 CFR Part 9 and 48 CFR Chapter 15.

 	To comment on the Agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, EPA has established a public docket for the proposed rule, which includes this ICR, under Docket ID number EPA-HQ-SFUND-2010-0763, which is available for online viewing at www.regulations.gov, or in person viewing at the superfund docket in the EPA docket center (EPA/DC), EPA West, Room 3334, 1301 Constitution Avenue, NW, Washington, D.C.  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<PHONE_NUMBER>, and the telephone number for the superfund is<PHONE_NUMBER>.  An electronic version of the public docket is available at www.regulations.gov.  This site can be used to submit or view public comments, access the index listing of the contents of the public docket, and to access those documents in the public docket that are available electronically.  When in the system, select "search," then key in the Docket ID Number identified above.   Also, you can send comments to OMB at the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW, Washington, DC 20503, Attention: Desk Office for EPA.  Please include the EPA Docket ID Number EPA-HQ-SFUND-2010-0763 and OMB Control Number 2050-0072 in any correspondence.