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Control of Emissions of Arsenic, Cadmium, and Nickel from Non- Chromium Metal Melting Operations

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Control of Emissions of Arsenic, Cadmium, and Nickel from Non- Chromium Metal Melting Operations BOARD MEETING DATE: September 6, 2019 AGENDA NO. 24 PROPOSAL: Certify Final Environmental Assessment and Amend Rule 1407 – Control of Emissions of Arsenic, Cadmium, and Nickel from Non- Chromium Metal Melting Operations Staff is recommending that the public hearing on this item be continued to the October 4, 2019 Board Hearing. SYNOPSIS: Proposed Amended Rule 1407 applies to non-chromium metal melting operations and is designed to reduce emissions of arsenic, cadmium, and nickel. The proposed amended rule revises emission standards, enhances monitoring provisions for pollution control equipment, adds building enclosure provisions to limit fugitive emissions, and updates housekeeping, source testing, and monitoring, recordkeeping, and reporting requirements. COMMITTEE: No Committee Review RECOMMENDED ACTIONS: Adopt the attached Resolution: 1. Certifying the Final Environmental Assessment for Proposed Amended Rule 1407 – Control of Emissions of Arsenic, Cadmium, and Nickel from Non-Chromium Metal Melting Operations; and 2. Amending Rule 1407 – Control of Emissions of Arsenic, Cadmium, and Nickel from Non-Chromium Metal Melting Operations. Wayne Nastri Executive Officer PMF:SN:MM:UV Background Rule 1407 – Control of Emissions of Arsenic, Cadmium and Nickel from Non-Ferrous Metal Melting Operations, (Rule 1407) was adopted on July 8, 1994 and is designed to implement the CARB Airborne Toxics Control Measure for non-ferrous metal melting. Rule 1407 controls emissions of arsenic, cadmium, and nickel from non-ferrous metal melting, which includes aluminum, brass, and bronze melting operations. Proposed Amended Rule (PAR) 1407 expands the applicability of the rule to non-chromium metals, which includes non-ferrous metals and carbon steel. Non-chromium metals are metals that contain less than 0.5 percent by weight total chromium content. Many of the provisions in PAR 1407, such as revisions to point source pollution controls, provisions for building enclosures, and enhancements to housekeeping provisions, are based on updates to other metal melting rules that have been recently adopted or amended. PAR 1407 also modifies exemptions to ensure arsenic, cadmium, and nickel emissions are being appropriately controlled. Public Process Development of PAR 1407 was conducted through a public process. South Coast AQMD staff held nine working group meetings at the South Coast AQMD headquarters in Diamond Bar: September 5, 2017, November 9, 2017, January 30, 2018, April 25, 2018, July 19, 2018, August 30, 2018, March 12, 2019, May 23, 2019, and July 17, 2019. A Public Workshop was held on June 19, 2019. Staff also visited 30 of the 60 facilities that will be affected by the proposed rule changes. Proposed Amendments PAR 1407 establishes additional requirements to further control arsenic, cadmium, and nickel emissions from non-chromium metal melting operations. Arsenic, cadmium, and nickel are classified by U.S. EPA as carcinogenic compounds. By January 1, 2021, operators will be required to control emissions from non-chromium metal melting furnaces through either meeting a control efficiency of 99% per furnace or an aggregate mass emission limit for arsenic, cadmium, and nickel, individually. In addition, PAR 1407 requires periodic source testing of pollution controls, and additional monitoring requirements to ensure proper operation of emissions collection systems and control devices. PAR 1407 requires metal melting operations, including grinding and cutting, to be conducted within a building enclosure by July 1, 2020 to limit fugitive emissions. PAR 1407 also enhances housekeeping requirements by requiring weekly cleaning of areas near metal melting and grinding operations, and inspection and cleaning of vent openings and ducting of metal melting operations. In response to comments from industry representatives, a provision has been added to allow an operator to request an alternative cleaning method when conducting weekly cleaning near metal melting, grinding, and cutting areas. Other amendments include requirements for material testing, additional reporting, and recordkeeping. -2- PAR 1407 modifies exemptions to better address arsenic, cadmium, and nickel emissions. PAR 1407 adds a throughput limit for facilities that are using a metal or alloy purity exemption, because facilities that utilize metals with low percentages of arsenic and cadmium with high throughput levels can have significant arsenic and cadmium emissions. PAR 1407 modifies the clean aluminum scrap exemption by limiting the arsenic, cadmium, or nickel content in alloys melted, adds an exemption for facilities that are regulated under lead melting operations rules, and adds an exemption for facilities that are melting minimal amounts of arsenic or cadmium. Key Issues Through the rulemaking process, staff has worked with stakeholders to address comments and resolve a number of key issues. The California Metals Coalition commented that the cost impact of PAR 1407 will occur in the first year after rule adoption and the costs to facilities should not be amortized in the socioeconomic analysis. The staff report includes total costs as requested by the commenter. Between $5.4 and $6.4 million are one-time costs in the first year after rule adoption. The remaining cost are recurring costs over a 21-year period. The total present worth value cost to meet the 2020 deadline is $43.4 million to $59.6 million using a 4 percent or 1 percent discount rate, respectively. When conducting socioeconomic analyses, the South Coast AQMD staff typically annualizes capital costs. This allows accounting for the cost of financing and the opportunity cost of capital. For the 41 smaller facilities subject to PAR 1407, it is estimated that most will have minor costs associated with housekeeping and building amounting to $50,000 in one-time costs and another $1,000 per year in recurring costs. The majority of the costs apply to the four largest facilities which also melt the most metal. California Environmental Quality Act PAR 1407 is considered a “project” as defined by the California Environmental Quality Act (CEQA) and the South Coast AQMD is the designated lead agency. Pursuant to South Coast AQMD’s Certified Regulatory Program (Public Resources Code Section 21080.5 and CEQA Guidelines Section 15251(l); codified in South Coast AQMD Rule 110) and CEQA Guidelines Section 15070, the South Coast AQMD has prepared a Final Environmental Assessment (EA) for PAR 1407, which is a substitute CEQA document, prepared in lieu of a Negative Declaration. The environmental analysis in the Final EA concluded that PAR 1407 would not generate any significant adverse environmental impacts. The Final EA is included as an attachment to this Governing Board package (see Attachment H). Socioeconomic Analysis There are 60 facilities subject to PAR 1407 which are classified mainly as steel product manufacturing from purchased steel facilities, alumina and aluminum production and processing facilities, and foundries. Of these 60 facilities, 40 are located in Los Angeles County, four in Orange County, four in Riverside County, and 12 in San Bernardino County. -3- The estimated total average annual cost of PAR 1407 is $3.0 to $3.1 million from 2019 to 2040 assuming a 1 percent and 4 percent real interest rate, respectively. Facilities processing or producing alumina or aluminum are expected to incur about 66 percent of the total average annual cost of PAR 1407, while foundries are expected to incur about 24 percent of the total average annual cost of PAR 1407. About 90 percent of the total average annual cost of PAR 1407 is expected to occur from purchase, engineering, installation, and annual maintenance of new pollution control devices (baghouses), with the remainder due to building enclosures, source testing, smoke testing, slot velocity testing, and housekeeping. PAR 1407 is expected to result in approximately 90 to 92 jobs on average forgone annually from 2019 to 2040 assuming a 1 percent and 4 percent real interest rate, respectively. The projected job forgone impacts represent about 0.001 percent of total employment in the four-county region for both the low- and high-interest-rate scenarios. AQMP and Legal Mandates Pursuant to Health & Safety Code Section 40460 (a), the South Coast AQMD is required to adopt an AQMP demonstrating compliance with all federal regulations and standards. The South Coast AQMD is required to adopt rules and regulations that carry out the objectives of the AQMP. PAR 1407 is an air toxics control measure (TXM-06) in the 2016 AQMP, but is not a control measure for attainment of state or federal regulations and standards. PAR 1407 is needed to reduce emissions of arsenic, cadmium, and nickel from non-chromium metal melting operations. Implementation and Resource Impacts Approximately one FTE will be necessary to conduct compliance inspections, evaluate permit applications for control equipment, and review source test protocols and results. Attachments A. Summary of Proposal B. Key Issues and Responses C. Rule Development Process D. Key Contacts List E. Resolution F. Proposed Amended Rule 1407 G. Final Staff Report for Proposed Amended Rule 1407 H. Final Environmental Assessment I. Socioeconomic Assessment J. Board Meeting Presentation -4- ATTACHMENT A SUMMARY OF PROPOSAL Proposed Amended Rule 1407 – Control of Emissions of Arsenic, Cadmium, and Nickel from Non-Chromium Metal Melting Operations Applicability • Expands applicability to non-chromium metal melting operations where non- chromium
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