National Emission Standards for Hazardous Air Pollutants for Area Sources: Chemical Preparations Industry, 39013-39032 [E9-18537]

Agencies

• ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 74, Number 149 (Wednesday, August 5, 2009)]
[Proposed Rules]
[Pages 39013-39032]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-18537]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 63

[EPA-HQ-OAR-2009-0028; FRL-8939-5]
RIN 2060-AN46


National Emission Standards for Hazardous Air Pollutants for Area 
Sources: Chemical Preparations Industry

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing national emissions standards for control of 
hazardous air pollutants from the chemical preparations area source 
category. These proposed emissions standards for new and existing 
sources reflect EPA's proposed determination regarding the generally 
available control technology or management practices for the source 
category.

DATES: Comments must be received on or before September 4, 2009, unless 
a public hearing is requested by August 17, 2009. If a hearing is 
requested on the proposed rules, written comments must be received by 
September 21, 2009. Under the Paperwork Reduction Act, comments on the 
information collection provisions are best assured of having full 
effect if the Office of Management and Budget (OMB) receives a copy of 
your comments on or before September 4, 2009.

ADDRESSES: You may submit comments, identified by Docket ID No. EPA-HQ-
OAR-2009-0028, by any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Agency Web Site: https://www.epa.gov/oar/docket.html. 
Follow the instructions for submitting comments on the EPA Air and 
Radiation Docket Web Site.
     E-mail: a-and-r-docket@epa.gov. Include Docket ID No. EPA-
HQ-OAR-2009-0028 in the subject line of the message.
     Fax: (202) 566-9744.
     Mail: Area Source NESHAP for Chemical Preparations 
Manufacturing

[[Page 39014]]

Docket, Environmental Protection Agency, Air and Radiation Docket and 
Information Center, Mailcode: 2822T, 1200 Pennsylvania Ave., NW., 
Washington, DC 20460. Please include a total of two copies. In 
addition, please mail a copy of your comments on the information 
collection provisions to the Office of Information and Regulatory 
Affairs, Office of Management and Budget (OMB), Attn: Desk Officer for 
EPA, 725 17th St., NW., Washington, DC 20503.
     Hand Delivery: EPA Docket Center, Public Reading Room, EPA 
West, Room 3334, 1301 Constitution Ave., NW., Washington, DC 20460. 
Such deliveries are only accepted during the Docket's normal hours of 
operation, and special arrangements should be made for deliveries of 
boxed information.
    Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-
2009-0028. EPA's policy is that all comments received will be included 
in the public docket without change and may be made available online at 
https://www.regulations.gov, including any personal information 
provided, unless the comment includes information claimed to be 
confidential business information (CBI) or other information whose 
disclosure is restricted by statute. Do not submit information that you 
consider to be CBI or otherwise protected through https://www.regulations.gov or e-mail. The https://www.regulations.gov Web Site 
is an ``anonymous access'' system, which means EPA will not know your 
identity or contact information unless you provide it in the body of 
your comment. If you send an e-mail comment directly to EPA without 
going through https://www.regulations.gov, your e-mail address will be 
automatically captured and included as part of the comment that is 
placed in the public docket and made available on the Internet. If you 
submit an electronic comment, EPA recommends that you include your name 
and other contact information in the body of your comment and with any 
disk or CD-ROM you submit. If EPA cannot read your comment due to 
technical difficulties and cannot contact you for clarification, EPA 
may not be able to consider your comment. Electronic files should avoid 
the use of special characters, any form of encryption, and be free of 
any defects or viruses.
    Docket: All documents in the docket are listed in the https://www.regulations.gov index. Although listed in the index, some 
information is not publicly available (e.g., CBI or other information 
whose disclosure is restricted by statute). Certain other material, 
such as copyrighted material, will be publicly available only in hard 
copy form. Publicly available docket materials are available either 
electronically in https://www.regulations.gov or in hard copy at the 
Area Source NESHAP for Chemical Preparations Manufacturing Docket, EPA/
DC, EPA West, Room 3334, 1301 Constitution Ave., NW., Washington, DC. 
The 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 
Public Reading Room is (202) 566-1744, and the telephone number for the 
Air Docket is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT: Mr. Warren Johnson, Outreach and 
Information Division, Office of Air Quality Planning and Standards 
(C404-05), Environmental Protection Agency, Research Triangle Park, 
North Carolina 27711, telephone number: (919) 541-5124; fax number: 
(919) 541-0242; e-mail address: Johnson.warren@epa.gov.

SUPPLEMENTARY INFORMATION: 
    Outline. The information in this preamble is organized as follows:

I. General Information
    A. Does this action apply to me?
    B. What should I consider as I prepare my comments to EPA?
    C. Where can I get a copy of this document?
    D. When would a public hearing occur?
II. Background Information for Proposed Area Source Standards
    A. What is the statutory authority and regulatory approach for 
the proposed standards?
    B. What source categories are affected by the proposed 
standards?
    C. What are the production operations, emission sources, and 
available controls?
    D. What existing national standards apply to this source 
category?
III. Summary of Proposed Standards
    A. Do the proposed standards apply to my source?
    B. When must I comply with the proposed standards?
    C. What are the proposed standards?
    D. What are the compliance requirements?
    E. What are the notification, recordkeeping, and reporting 
requirements?
IV. Rationale for this Proposed Rule
    A. How did we select the source category?
    B. How did we select the affected source?
    C. How did we address metal HAP emissions in this rule?
    D. How was GACT determined?
    E. How did we select the compliance requirements?
    F. Why did we decide to exempt this area source category from 
title V permitting requirements?
V. Summary of Impacts of the Proposed Standards
    A. What are the air impacts?
    B. What are the cost impacts?
    C. What are the economic impacts?
    D. What are the non-air health, environmental, and energy 
impacts?
VI. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health and Safety Risks
    H. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use
    I. National Technology Transfer Advancement Act
    J. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations

I. General Information

A. Does this action apply to me?

    The regulated categories and entities potentially affected by the 
proposed standards include:

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                                                NAICS
                  Category                     Code \1\               Examples of regulated entities
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Spice and Extract Manufacturing.............     311942  Area source facilities that manufacture salt products
                                                          containing trace mineral additives.
All other basic organic chemical                 325199  Area source facilities that manufacture products
 manufacturing.                                           containing metal compounds of chromium, lead,
                                                          manganese, or nickel.
Paint and coating manufacturing.............     325510  Area source facilities that manufacture products
                                                          containing metal compounds of chromium, lead,
                                                          manganese, or nickel.

[[Page 39015]]

 
All other miscellaneous chemical product and     325998  Area source facilities that manufacture products
 preparation manufacturing.                               containing metal compounds of chromium, lead,
                                                          manganese, or nickel. These include, but are not
                                                          limited to, fluxes, water treatment chemicals, rust
                                                          preventatives and plating chemicals, concrete
                                                          additives, gelatin, and drilling fluids.
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\1\ North American Industry Classification System.

    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be affected by this 
action. Chemical preparation operations described by the NAICS codes 
325199 and 325510 may be subject to area source regulations for 
chemical manufacturing (40 CFR Subpart VVVVVV) or paint and allied 
products (40 CFR Subpart CCCCCCC). To address this potential for 
overlap, the requirements specified in Subpart VVVVVV or Subpart 
CCCCCCC, as applicable, supersede the requirements specified in this 
subpart. Therefore, if the particular chemical preparation operation is 
subject to regulation by either of these other area source rules, then 
the operation must comply with the requirements specified in Subpart 
VVVVVV or CCCCCCC, as applicable, and not the requirements of the 
proposed chemical preparations area source regulation. To determine 
whether operations at your facility would be regulated by this action, 
you should examine the applicability criteria in 40 CFR 63.11579 of 
subpart BBBBBBB (NESHAP for Area Sources: Chemical Preparations 
Industry). If you have any questions regarding the applicability of 
this action to a particular entity or operations at your facility, 
consult either the air permit authority for the entity or your EPA 
regional representative as listed in 40 CFR 63.13 of subpart A (General 
Provisions).

B. What should I consider as I prepare my comments to EPA?

    Do not submit information containing CBI to EPA through https://www.regulations.gov or e-mail. Send or deliver information identified 
as CBI only to the following address: Roberto Morales, OAQPS Document 
Control Officer (C404-02), Office of Air Quality Planning and 
Standards, Environmental Protection Agency, Research Triangle Park, 
North Carolina 27711, Attention Docket ID EPA-HQ-OAR-2009-0028. Clearly 
mark the part or all of the information that you claim to be CBI. For 
CBI information in a disk or CD-ROM that you mail to EPA, mark the 
outside of the disk or CD-ROM as CBI and then identify electronically 
within the disk or CD-ROM the specific information that is claimed as 
CBI. In addition to one complete version of the comment that includes 
information claimed as CBI, a copy of the comment that does not contain 
the information claimed as CBI must be submitted for inclusion in the 
public docket. Information so marked will not be disclosed except in 
accordance with procedures set forth in 40 CFR part 2.

C. Where can I get a copy of this document?

    In addition to being available in the docket, an electronic copy of 
this proposed action will also be available on the Worldwide Web (WWW) 
through the Technology Transfer Network (TTN). Following signature, a 
copy of this proposed action will be posted on the TTN's policy and 
guidance page for newly proposed or promulgated rules at the following 
address: https://www.epa.gov/ttn/oarpg/. The TTN provides information 
and technology exchange in various areas of air pollution control.

D. When would a public hearing occur?

    If anyone contacts EPA requesting to speak at a public hearing 
concerning the proposed rule by August 17, 2009, we will hold a public 
hearing on August 20, 2009. Persons interested in presenting oral 
testimony at the hearing, or inquiring as to whether a hearing will be 
held, should contact Ms. Christine Adams at (919) 541-5590 at least two 
days in advance of the hearing. If a public hearing is held, it will be 
held at 10 a.m. at EPA's Campus located at 109 T.W. Alexander Drive in 
Research Triangle Park, NC, or an alternate site nearby.

II. Background Information for Proposed Area Source Standards

A. What is the statutory authority and regulatory approach for the 
proposed standards?

    Section 112(d) of the Clean Air Act (CAA) requires us to establish 
national emission standards for hazardous air pollutants (NESHAP) for 
both major and area sources of hazardous air pollutants (HAP) that are 
listed for regulation under CAA section 112(c). A major source emits or 
has the potential to emit 10 tons per year (tpy) or more of any single 
HAP or 25 tpy or more of any combination of HAP. An area source is a 
stationary source that is not a major source.
    Section 112(k)(3)(B) of the CAA calls for EPA to identify at least 
30 HAP that, as the result of emissions from area sources, pose the 
greatest threat to public health in the largest number of urban areas. 
EPA implemented this provision in 1999 in the Integrated Urban Air 
Toxics Strategy, (64 FR 38715, July 19, 1999). Specifically, in the 
Integrated Urban Air Toxics Strategy, EPA identified 30 HAP that pose 
the greatest potential health threat in urban areas, and these HAP are 
referred to as the ``30 urban HAP.'' Section 112(c)(3) requires EPA to 
list sufficient categories or subcategories of area sources to ensure 
that area sources representing 90 percent of the emissions of the 30 
urban HAP are subject to regulation. We also implemented these 
requirements through the Integrated Urban Air Toxics Strategy. A 
primary goal of the Integrated Urban Air Toxics Strategy is to achieve 
a 75 percent reduction in cancer incidence attributable to HAP emitted 
from stationary sources.
    Under CAA section 112(d)(5), we may elect to promulgate standards 
or requirements for area sources ``which provide for the use of 
generally available control technology or management practices (GACT) 
by such sources to reduce emissions of hazardous air pollutants.'' 
Additional information on GACT is found in the Senate report on the 
legislation (Senate Report Number 101-228, December 20, 1989), which 
describes GACT as:

* * * methods, practices and techniques which are commercially 
available and appropriate for application by the sources in the 
category considering economic impacts and the technical capabilities 
of the firms to operate and maintain the emissions control systems.

    Consistent with the legislative history, we can consider costs and 
economic impacts in determining GACT, which is particularly important 
when developing regulations for source categories, like this one, that 
have almost 40 percent of firms classified as small businesses 
according to the Small Business Administration (SBA) standards in 13

[[Page 39016]]

CFR 121.201. For this source category, small businesses are defined as 
those with fewer than 500 employees.\1\
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    \1\ Currently, we believe that all existing chemical preparation 
entities would be classified primarily under NAICS 325998 and 
311942, which define small businesses as those with 500 employees or 
less. Should any entities with primary NAICS 325199 be subject to 
the proposed standards, the small business definition for these 
entities would be those with fewer than 1,000 employees.
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    Determining what constitutes GACT involves considering the control 
technologies and management practices that are generally available to 
the area sources in the source category. We also consider the standards 
applicable to major sources in the same industrial sector to determine 
if the control technologies and management practices employed by those 
sources are transferable and generally available to area sources. In 
appropriate circumstances, we may also consider technologies and 
practices at area and major sources in similar categories to determine 
whether such technologies and practices could be considered generally 
available for the area source category being considered. Finally, as 
noted above, in determining GACT for a particular category of area 
sources, we consider the costs and economic impacts of using available 
control technologies and management practices on sources in that 
category.
    We are proposing these national emission standards in response to a 
court-ordered deadline that requires EPA to issue standards for a 
number of source categories listed pursuant to section 112(c)(3) and 
(k) by October 15, 2009 (Sierra Club v. Johnson, no. 01-1537, D.D.C., 
March 2006).

B. What source categories are affected by the proposed standards?

    We listed the chemical preparations manufacturing source category 
under CAA section 112(c)(3) in one of a series of amendments (November 
22, 2002, 67 FR 70427) to the original source category list included in 
the 1999 Integrated Urban Air Toxics Strategy. The decision to include 
this source category on the section 112(c)(3) area source category list 
is based on 1990 emissions data, as EPA used 1990 as the baseline year 
for that listing. Section 112(c)(3) requires EPA to list sufficient 
categories or subcategories of area sources to ensure that area sources 
representing 90 percent of the emissions of the 30 urban HAP are 
subject to regulation. The chemical preparations source category was 
listed for its contributions toward meeting the 90 percent requirement 
for the following metal HAP: Compounds of chromium (Cr), manganese 
(Mn), nickel (Ni) and lead (Pb), referred to hence forth in this 
preamble as ``target HAP.''
    This area source category comprises those establishments that 
conduct industrial operations that mix, mill, blend and/or extrude 
chemicals that contain the target HAP in their manufacturing processes 
during the production of chemical preparations. These manufacturing 
processes turn various dry and/or wet ingredients into chemical 
preparations. Chemical preparations, which are defined in the subpart, 
are a wide variety of compounds that may often be used as an 
intermediate in the manufacture of other products, such as fluxes and 
rubber compounding chemicals, or sold as a product, such as water 
treatment chemicals and drilling fluids. Chemical reactions typically 
do not occur in the manufacturing of chemical preparations. Emission 
points associated with these types of operations include sources such 
as Banbury mixers, mixing or blending tanks, extruders, and roll mills.
    This source category does not include those establishments that are 
covered by other area source NESHAP, such as paint and allied coatings, 
or establishments that mix, mill, blend and/or extrude chemicals that 
do not contain the target HAP. Based on current information, we believe 
there are 26 affected facilities in the source category. All of these 
facilities have relatively diverse chemical product lines, capacities 
and processes. We believe that 10 of these existing facilities are 
considered small businesses, which are defined by the SBA as businesses 
of less than 500 employees.

C. What are the production operations, emission sources, and available 
controls?

    When target HAP are present in the chemicals used to produce 
chemical preparations, the emission sources are comprised of some or 
all of the following equipment: mixers, blenders, mixing or blending 
tanks, rolling or grinding mills, and extruders.
    Despite their wide variety of products, these facilities use 
similar processing operations and common control strategies. Most of 
the production equipment at all of these facilities is well controlled 
as a result of State requirements which focus on particulate matter 
(PM) emission reductions. The control technologies employed to control 
PM emissions among similar types of process equipment remains 
consistent, since the focus is on PM emissions reductions. Since the 
target HAP are emitted as a particulate, and are a subset of PM, the 
existing control technologies which control PM, and hence target HAP, 
emissions from similar processes is consistent across facilities. For 
example, dry mixing operations will often use fabric filters to control 
PM emissions so that the captured dust may be re-used in the process. 
Likewise, wet scrubbers are typically used in situations where the 
captured wet material can be returned to the process either as-is or 
after being sent through a spray dryer.

D. What existing national standards apply to this source category?

    There are no existing national standards that apply to activities 
in the chemical preparations source category as defined in this 
subpart. However, it is important to note that the NAICS codes for this 
source category, 311942, 325199, 325510, and 325998, are comprised of 
sources that produce a wide variety of products and that some of the 
processes for producing those products are covered under other NESHAP 
or area source regulations.
    We have tried to minimize the potential for overlap issues with 
these other national standards by precisely defining the source 
category for this rule. In addition to specifying the nature of the 
activities conducted at the affected facility, the definition specifies 
the type of HAP that must be contained, contacted, or processed in the 
various manufacturing processes for those processes to be subject to 
the rule.

III. Summary of Proposed Standards

A. Do the proposed standards apply to my source?

    The proposed subpart BBBBBBB standards would apply to all existing 
or new manufacturing operations located at an area source that produce 
chemical preparations by mixing, milling, blending and/or extruding 
chemical compounds containing target HAP. The standards do not apply to 
research and development facilities, as defined in section 112(c)(7) of 
the CAA.

B. When must I comply with the proposed standards?

    All existing area sources subject to this proposed rule would be 
required to comply with the rule requirements no later than one year 
after the date of publication of the final rule in the Federal 
Register. New sources would be required to comply with the rule 
requirements on the date the final rule is published in the Federal 
Register or upon startup of the facility, whichever is later.

[[Page 39017]]

C. What are the proposed standards?

    The proposed standards for new and existing affected sources 
establish a PM control device percent reduction efficiency requirement 
and require all process vent streams from mixing, blending, milling and 
extruding equipment in target HAP service to be routed through a PM 
control device that meets the specified efficiency requirement. The 
proposed standards will be met through the use of a vent stream 
collection system and control device, such as a wet scrubber or fabric 
filter, meeting the specified percent reduction efficiency requirement. 
Sources must maintain and operate a control device which achieves the 
specified removal efficiency in accordance with the manufacturer's 
specifications and must maintain and inspect the vent collection system 
and control devices on a regular basis.
    New sources must demonstrate compliance with the PM control device 
percent reduction efficiency requirement through control device 
performance testing, manufacturer's control device performance 
guarantee information, or engineering calculations. The proposed 
standards allow existing sources to use the same three methods to 
demonstrate compliance, but existing sources may use the results of 
performance tests previously conducted, provided that the performance 
test was conducted using the reference test method specified in the 
proposed rule, represents the control device's normal operations (per 
manufacturer's recommendations) and was conducted within the last 5 
years.

D. What are the compliance requirements?

    The owner or operator of both new and existing sources would be 
required to submit an Initial Notification of Applicability that states 
they are subject to the regulation within 120 days of the effective 
date of the rule and a Notification of Compliance Status within 60 days 
after the applicable compliance date to demonstrate initial compliance 
with the proposed standards. Facilities would be required to comply 
continuously with the standards (to route emissions to a control device 
that achieves 95 percent PM emission reductions) during all operations 
that emit target HAP, including periods of startup and shutdown of 
these operations. Compliance on a continuous basis is determined on the 
basis of a three-hour rolling average, i.e., parameters for each three-
hour period are determined by averaging the control device operating 
parameters for each hour during the three-hour period including startup 
and shutdown. If a source is processing target HAP materials (i.e., in 
target HAP service) for a period less than 3 hours, then the control 
device operating parameters are averaged over the period that the 
target HAP is being processed. Under the proposed rule, sources will 
determine their compliance with the emission reduction requirements by 
continuously monitoring specified operating parameters. Sources must 
also comply with specified periodic inspection procedures for vent 
collection systems and control devices, and must submit semi-annual 
compliance summary reports.
    For the reasons specified in section IV of this preamble, EPA has 
determined that it is appropriate to use particulate matter emissions 
as a surrogate for target HAP emissions for all emission points in this 
source category, i.e., mixers, mixing and blending tanks, mills, and 
extruders. As described above, to demonstrate initial compliance with 
the emission reduction requirements, existing sources will be allowed 
to use the results of performance tests previously conducted provided 
the test was conducted using the specified reference test method, 
represents the control device's normal operations (per manufacturer's 
recommendations) and was conducted within the last 5 years. As also 
described above (and in Table 2 of the proposed regulations), in lieu 
of a performance test, both new and existing sources may use control 
device manufacturer's performance guarantees or engineering 
calculations to demonstrate initial compliance with the emission 
reduction requirements. Due to the wide variety of operations conducted 
at facilities in the chemical preparations industry, it is possible 
that affected facilities could have target HAP present in all, or only 
some, of the process emissions. Therefore, each facility will be 
required to identify and document periods of operation in which 
chemical preparations operations are processing target HAP-containing 
materials and to document that the vent collection system and control 
device were operating properly during these periods when the equipment 
is in target HAP service. Daily, monthly and annual inspections are 
required to ensure proper maintenance and operation of the vent 
collection system and control device components. Records of the 
inspection activities and corrective actions must be maintained to 
document compliance with these management practices.
    Continuous compliance with the emission reduction requirements is 
demonstrated through both control device parameter monitoring and 
keeping records of periods where the chemical preparations operation is 
in target HAP service. The control device manufacturer's recommended 
(or those conditions present during the performance test, if a test was 
performed) pressure drop, scrubber water supply pressure, and flow 
rate, as appropriate, depending on the device used to control 
emissions, must be maintained for each PM control device. As mentioned 
above, the source must document that each control device was being 
operated normally, according to the device manufacturer's 
recommendations, during periods of processing target HAP-containing 
materials. Records of calibration and accuracy checks of the continuous 
parameter monitoring system must be maintained to document proper 
operation and maintenance of the monitoring system.

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

    The owner or operator of new and existing sources would be required 
to comply with the requirements of the General Provisions (40 CFR part 
63, subpart A) identified in Table 6 of this proposed rule. The General 
Provisions include specific requirements for notifications, 
recordkeeping, and reporting. We are proposing that the owner or 
operator of an affected facility submit an Initial Notification of 
Applicability and a Notification of Compliance Status according to the 
requirements in 40 CFR 63.9 of the General Provisions. These 
notifications are needed for EPA to determine applicability of the 
standard to a particular source and a source's initial compliance with 
specific rule requirements. Sources would also be required to submit 
semi-annual compliance summary reports which document both compliance 
with the requirements of this rule and any deviations from compliance 
with any of those requirements.
    Owners and operators would be required to maintain the records 
specified by 40 CFR 63.10 and, in addition, would be required to 
maintain records of all inspection and monitoring data, including:
     Records of particulate matter control device operating 
parameters. For fabric filters, the parameter is the pressure drop 
across the device. For wet scrubbers, the parameters are the water 
supply pressure and water flow rate.
     Records of periods of target HAP processing that 
demonstrate, along with

[[Page 39018]]

the particulate matter control device operating parameters above, that 
the control device is being operated within the manufacturer's 
specifications while compounds containing target HAP are being 
processed.
     Records of control device make, model, and the 
installation date of each such piece of equipment.
     A copy of any performance guarantee certificate provided 
by the control device manufacturer.
     Records of inspections of vent collection systems and 
control devices.
     Records of calibration and accuracy checks for the 
continuous parameter monitoring systems.
     Records of engineering calculations or test results to 
demonstrate initial compliance with the control device removal 
efficiency requirement.

IV. Rationale for this Proposed Rule

A. How did we select the source category?

    As described in section II.B, we listed the chemical preparations 
source category under CAA section 112(c)(3) on November 22, 2002 (67 FR 
70427). The decision to include this source category on the area source 
category list was based on data from the CAA section 112(k) inventory, 
which represents 1990 urban air information. The chemical preparations 
source category was listed as contributing a percentage of the total 
area source emissions for the following urban HAP: metal compounds for 
chromium, lead, manganese and nickel (the ``target HAP''). For this 
source category, we gathered information on the production operations, 
emission sources, and prevalent emission controls employed by sources, 
through reviews of published literature, and reviews of construction 
and operating permits. We also held discussions with industry 
representatives and State permitting organizations. This research 
confirmed that the chemical preparations source category emits the 
listed target HAP and that the existing add-on controls are effective 
controls for reducing target HAP emissions.

B. How did we select the affected source?

    Affected source means the collection of equipment and processes in 
the source category or subcategory to which the subpart applies. For 
the chemical preparations source category, the affected source is 
comprised of the following process equipment when the equipment 
contains, contacts, or is processing target HAP: mixers, mixing and 
blending tanks, mills, and extruders.
    After reviewing the gathered information discussed above, we 
identified 26 facilities that reported emissions of target HAP. These 
26 facilities manufactured a wide range of chemical preparations, 
including, for example, fluxes, concrete additives, rust preventatives, 
drilling fluids, and gelatin. Some of these products contain target 
HAP, while other materials being produced using the same equipment may 
not. Despite the wide variety of products produced at these facilities, 
some common processing operations and control strategies became evident 
after further facility permit review and contact with some of the 
facilities. For example, fabric filters would often be used to control 
PM emissions from dry mixing operations, and wet scrubbers would be 
used in situations where the wet material could either be mixed back 
into the raw materials or sent through a spray dryer and then combined 
with raw materials.
    Our research indicates that each facility utilizes at least one of 
the listed operations. Therefore, we define the affected source as 
consisting of any (one or more) of these operations when the operation 
contains, contacts, or processes compounds containing target HAP to 
produce a chemical preparation. By specifying periods of production 
where the equipment is ``in target HAP service,'' we are able to 
clarify applicability to the periods of operation where emissions of 
target HAP would occur, thereby avoiding any burden to those operations 
or entities that are not processing target HAP-containing materials.
    We also realized the potential for overlap with other rules, 
especially the area source standards for chemical manufacturing (40 
Part 63 Subpart VVVVVV) and paint and allied products (40 Part 63 
Subpart CCCCCCC). We have, therefore, exempted chemical preparation 
operations that are subject to the requirements of Subpart VVVVVV or 
Subpart CCCCCCC, as applicable, from the requirements of the proposed 
chemical preparations regulation.

C. How did we address metal HAP emissions in this rule?

    For this proposed rule, we have selected PM as a surrogate for the 
target metal HAP, primarily because the target HAP are emitted as a wet 
or dry stack particulate (the target HAP are a subset of the 
particulate matter). As a result, a vent collection system and control 
device that is effectively controlling PM will also effectively control 
target HAP since these HAP are a fractional constituent of the PM being 
controlled. Further, based on the available information, we believe 
that specifying specific emission or reduction limits for each target 
HAP would not achieve any greater reduction in emissions of the target 
HAP than the control devices already achieve using PM as a surrogate. 
We also believe it would create a significant economic burden for the 
affected sources and permit authorities if this proposed rule required 
sources to demonstrate compliance with a specific limit for each of the 
target HAP compounds. Based on our knowledge of the relationship 
between PM as a whole and the target HAP, we believe that demonstrating 
compliance with the proposed PM reduction requirements will ensure that 
appropriate reductions in emissions of target HAP are achieved.

D. How was GACT determined?

    As provided in CAA section 112(d)(5), we are proposing standards 
that provide for the use of GACT to control chemical preparations area 
source category HAP emissions. As noted in section II.A of this 
preamble, the statute allows the Agency to establish standards for area 
sources listed pursuant to section 112(c) based on GACT. The statute 
does not set any condition precedent for issuing standards under 
section 112(d)(5) other than that the area source category or 
subcategory at issue must be one that EPA listed pursuant to section 
112(c), which is the case here.
    We gathered available data from a variety of sources, e.g., State 
and local permits and regulations mandating a specific level of 
control, regarding existing affected sources in the chemical 
preparations source category in order to determine the types of 
controls being used and the level of control generally achieved by 
those controls. Our analysis of that information revealed that all of 
the identified affected sources are well controlled because they employ 
some type of particulate matter control. The most common controls used 
were wet scrubbers and fabric filters. Based on our available permit 
background information for the chemical preparations source category 
and control device technical references, we found that existing PM 
control technologies (primarily fabric filters and wet scrubbers) in 
this category achieve between 93 and 98 percent PM reduction 
efficiency, with a median facility that achieves 95 percent PM 
reduction efficiency. We considered requiring controls for this 
category that achieve 98 percent PM emission reductions, but found that 
this would likely force a majority of existing sources to install new 
controls at an incremental cost to some facilities of over $400,000/ton 
for the additional

[[Page 39019]]

target HAP reduction, which we believe is unreasonable. In addition, 
while fabric filter technology is capable of achieving 98 percent PM 
reductions, we are not certain that available wet scrubber technology 
can achieve a 98 percent PM reduction. We considered requiring controls 
for this category that achieve 93 percent PM emission reductions, but 
believe that all existing facilities could achieve 95 percent PM 
reduction efficiency without requiring the installation of new emission 
control equipment. We recognize that some existing facilities may need 
to conduct new performance testing on existing controls to demonstrate 
95 percent PM emission reduction performance, but we believe that 95 
percent PM reduction efficiency, that is represented by the median 
facility control technology, best represents GACT for this source 
category. Based on this information, we have determined that GACT for 
this source category consists of a vent collection system to collect 
emissions from process operations, and an associated particulate matter 
control device, such as a fabric filter or wet scrubber that is 
achieving a 95 percent reduction in PM emissions.
    While our information indicates that all of the target HAP 
emissions points at identified existing sources are currently 
controlled with PM control devices, we are requesting comment on 
whether some chemical preparations operations are currently 
uncontrolled. We considered whether we should require the use of PM 
controls on ancillary processes (beyond mixers, mixing and blending 
tanks, mills, and extruders) at existing affected sources but concluded 
that these operations are beyond the scope of the original source 
category listing. We also recognize that there may be a point where 
installing PM controls would be economically or technically infeasible 
regardless of the size of the facility, especially where very low 
quantities of PM are being emitted. To address these issues, we 
analyzed permit information and applicable State regulations to 
determine if there were any PM concentration limits that would serve as 
a reasonable alternative to the percent reduction requirement. We found 
that, for chemical preparations affected sources, in most instances 
State permits do not specify a limit or control performance requirement 
beyond simply routing PM emissions to a control device. However, in a 
few situations, one State has specified a 0.03 grains per dry standard 
cubic foot (gr/dscf) PM concentration limit at the outlet of the 
control devices, the calculations for which are based on a 98 percent 
PM reduction assumption and site specific data. We are not certain if 
the site specific data in these cases is sufficient on which to base a 
nationwide equivalent emission limit, and are, therefore, requesting 
comment on whether an emission limit of 0.03 gr/dscf should be included 
in the final rule as an alternative compliance option. Commenters 
should include with their comments any data they believe supports an 
emission limit of 0.03 gr/dscf as a compliance alternative in the final 
rule.
    We have also considered whether new sources should have a PM 
reduction requirement that is greater than 95 percent. Based on our 
analysis of information we gathered from permits, technical references, 
and comparisons to similar area source requirements, we believe that it 
may be possible for GACT for new sources to be greater than 95 percent 
PM reduction. However, we currently do not have enough information for 
the chemical preparations source category to confirm that this level of 
control would be ``generally available'' for potential new affected 
sources. Therefore, we are also requesting comment on whether greater 
than 95 percent PM reduction is an economically feasible level of 
control for new sources.

E. How did we select the compliance requirements?

    We are proposing initial compliance demonstrations, monitoring, 
inspections, reporting, notification, and recordkeeping requirements 
sufficient to assure compliance with the rule as proposed. These 
requirements are based, in part, on requirements imposed on several 
facilities within the chemical preparations source category by State 
permits or regulations and on our general understanding, based on years 
of experience, of how control devices perform and can be effectively 
monitored. As is the case with many of our rules, we are proposing to 
use data from the monitoring of certain parameters which we have found 
to be indicative of the effective operation of collection systems and 
control devices to demonstrate compliance. The parameter monitoring 
requirements, together with vent collection system and control device 
inspection requirements, are intended to ensure that the information 
necessary to establish that emissions controls are maintained and 
operated properly on a continuing basis is collected and reported. We 
believe the proposed requirements will both assure compliance with the 
emission reduction requirements of this proposed rule and minimize the 
burden on facilities that must implement them.
    We are proposing that compliance with the requirements for mixers, 
mixing and blending tanks, mills and extruders in target HAP service be 
demonstrated by continuously monitoring particulate matter control 
device operating parameters. If a fabric filter is utilized, then the 
pressure drop of the fabric filter, as specified by the manufacturer or 
measured during the most recent compliance demonstration, is the 
monitored parameter. For a wet scrubber, monitoring of the water supply 
pressure and scrubbing water flow rate are proposed. The monitoring of 
these parameters will demonstrate that the device is being operated in 
accordance with the control device manufacturer's recommendations or 
consistent with its operation during the most recent compliance 
demonstration, whichever is applicable. Particulate matter hoods or 
vent collection systems routing the emissions to the control device 
must be designed to capture PM to the extent practicable from the 
emission point. Daily, monthly, and annual inspection and recordkeeping 
requirements will be used to demonstrate that the vent collection 
system and control device are being properly maintained.
    For the initial PM percent reduction efficiency compliance 
demonstration, the owner or operator of a facility subject to existing 
source standards would be allowed to use the results from prior 
performance tests as long as the performance test was conducted using 
the reference test method specified in the proposed rule, provided that 
the performance test represents the control device's normal operating 
conditions (per manufacturer's recommendations) and was conducted 
within the last 5 years. We believe that this will help to reduce the 
compliance burden for existing sources while at the same time providing 
adequate assurances that the results reflect the actual operating 
efficiency of the control device. Initial compliance with the proposed 
requirement to employ a PM control device with a PM reduction 
efficiency of 95 percent to control PM emissions from the identified 
emission points at both new and existing sources can be demonstrated 
using the results of PM control device performance tests, PM control 
device manufacturer performance guarantees, or engineering 
calculations. As discussed above, for existing sources, we are 
proposing to allow the use of the results of previous performance tests 
so long as those tests meet the specified criteria.

[[Page 39020]]

F. Why did we decide to exempt this area source category from title V 
permitting requirements?

    For the reasons described below, we are proposing to exempt 
affected sources in the chemical preparations area source category from 
title V permitting requirements unless the source is otherwise required 
to have a title V permit. That is, we are proposing that being subject 
to the chemical preparations area source rule would not itself trigger 
the need to obtain a title V permit. Section 502(a) of the CAA provides 
that the Administrator may exempt an area source category (in whole or 
in part) from title V if (s)he determines that compliance with title V 
requirements is ``impracticable, infeasible, or unnecessarily 
burdensome'' on an area source category. See CAA section 502(a). In 
December 2005, in a national rulemaking, EPA interpreted the term 
``unnecessarily burdensome'' in CAA section 502 and developed a four-
factor balancing test for determining whether title V is unnecessarily 
burdensome for a particular area source category, or portion thereof, 
such that an exemption from title V is appropriate. See 70 FR 75320, 
December 19, 2005 (Exemption Rule).
    The four factors that EPA identified in the Exemption Rule for 
determining whether title V is unnecessarily burdensome on a particular 
area source category are: (1) Whether title V would result in 
significant improvements to the compliance requirements, including 
monitoring, recordkeeping, and reporting, that are proposed for an area 
source category (70 FR 75323); (2) whether title V permitting would 
impose significant burdens on the area source category and whether the 
burdens would be aggravated by any difficulty the sources may have in 
obtaining assistance from permitting agencies (70 FR 75324); (3) 
whether the costs of title V permitting for the area source category 
would be justified, taking into consideration any potential gains in 
compliance likely to occur for such sources (70 FR 75325); and (4) 
whether there are implementation and enforcement programs in place that 
are sufficient to assure compliance with the NESHAP for the area source 
category, without relying on title V permits (70 FR 75326).
    In discussing these factors in the Exemption Rule, we further 
explained that we considered on ``a case-by-case basis the extent to 
which one or more of the four factors supported title V exemptions for 
a given source category, and then we assessed whether considered 
together those factors demonstrated that compliance with title V 
requirements would be `unnecessarily burdensome' on the category, 
consistent with section 502(a) of the Act.'' See 70 FR 75323. Thus, in 
the Exemption Rule, we explained that not all of the four factors must 
weigh in favor of exemption for EPA to determine that title V is 
unnecessarily burdensome for a particular area source category. 
Instead, the factors are to be considered in combination, and EPA 
determines whether the factors, taken together, support an exemption 
from title V for a particular source category, or portion thereof.
    In the Exemption Rule, in addition to determining whether 
compliance with title V requirements would be unnecessarily burdensome 
on an area source category, we considered, consistent with the guidance 
provided by the legislative history of section 502(a), whether 
exempting an area source category would adversely affect public health, 
welfare or the environment. See 70 FR 15254-15255, March 25, 2005. As 
explained below, we propose that title V permitting is unreasonably 
burdensome for the area source category at issue in this proposed rule. 
We have also determined that the proposed exemptions from title V would 
not adversely affect public health, welfare and the environment. Our 
rationale for this decision follows.
    In considering whether to exempt sources in the chemical 
preparations category from title V requirements, we first compared the 
title V monitoring, recordkeeping, and reporting requirements (factor 
one) to the requirements in the proposed NESHAP for the area source 
category. The proposed rule requires facilities to route all process 
vent streams from specified equipment in target HAP service to an add-
on PM control device with a demonstrated percent reduction efficiency 
of 95 percent. Continuous compliance with this requirement would be 
demonstrated using parametric monitoring of the vent collection system 
and control device and identifying processing periods of target HAP-
containing materials. For add-on control devices the proposed rule 
specifies the monitoring parameter(s) and averaging periods for each 
type of control device. The proposed rule would require that the owner/
operator maintain the 3-hour average (or overall average, for periods 
in target HAP service less than 3 hours) pressure drop across the 
control device or the water supply pressure and scrubbing liquor flow 
rate, as appropriate to the control device, within the manufacturer's 
recommended range for the control device, or within the range 
established during the most recent performance test. Sources would 
demonstrate initial compliance using one of the following methods: 
Conduct initial performance tests, use the results of previous 
performance tests meeting specified requirements for existing sources 
only, use and maintain records of control device manufacturer's 
guarantees, or use and maintain records of engineering calculations. 
Existing sources would be allowed to use previously conducted 
performance tests to demonstrate compliance provided they were 
conducted using the reference test method specified in the proposed 
rule, were conducted within the past five years and reflect the control 
device's normal operating conditions. The proposed rule also requires 
the preparation of a semi-annual compliance certification report which 
would identify any deviations from the rule requirements that occurred 
during the reporting period and submission of this report to the 
permitting agency. The semi-annual report would call attention to those 
facilities in need of inspection in the same way as the reporting 
requirements in a title V permit. In addition, records sufficient to 
ensure that the compliance requirements are followed and that any 
needed corrective actions are taken would be required. Therefore, this 
proposed rule contains monitoring requirements that constitute periodic 
monitoring sufficient to ensure compliance with the proposed rule.
    As part of the first factor, in addition to monitoring, we have 
considered the extent to which title V could potentially enhance 
compliance for area sources covered by this proposed rule through 
recordkeeping or reporting requirements. We have considered the various 
title V recordkeeping and reporting requirements, including 
requirements for a 6-month monitoring report, deviation reports, and an 
annual certification as specified in 40 CFR 70.6 and 71.6. For any 
affected area source in this category, this proposed rule would require 
an Initial Notification of Applicability and a Notification of 
Compliance Status. This proposed rule also requires owners or operators 
of affected facilities to certify compliance with a requirement that 
vent streams from specified equipment in target HAP service be routed 
to a control device with a demonstrated PM percent reduction efficiency 
of 95 percent on an annual basis. In addition, owners or operators of 
affected facilities must maintain records showing compliance with all 
of the proposed rule's

[[Page 39021]]

requirements and provide a report to the permitting agency if any 
deviation occurs. The information in the deviation report is similar to 
the information that must be provided in the deviation reports required 
under 40 CFR 70.6(a)(3) and 40 CFR 71.6(a)(3).
    We acknowledge that title V might impose some additional compliance 
requirements on this category, but we believe the monitoring, 
recordkeeping and reporting requirements of this proposed NESHAP for 
the chemical preparations source category would be sufficient to assure 
compliance with the provisions of this NESHAP, and that the application 
of title V would not significantly improve compliance.
    For the second factor, we determined whether title V permitting 
would impose a significant burden on the area sources in the category 
and whether that burden would be aggravated by any difficulty the 
source may have in obtaining assistance from the permitting agency. 
Subjecting any source to title V permitting imposes certain burdens and 
costs that do not exist outside of the title V program. EPA estimates 
that the average cost of obtaining and complying with a title V permit 
is $65,700 per source for a 5-year permit period, including fees. See 
Information Collection Request for Part 70 Operating Permit 
Regulations, January 2007, EPA ICR Number 1587.07. EPA does not have 
specific estimates for the burdens and costs of permitting sources in 
the chemical preparations area source category; however, there are 
certain activities associated with the part 70 and 71 rules that are 
required of all sources. These activities are mandatory and impose 
burdens on the facility. They include reading and understanding permit 
program guidance and regulations; obtaining and understanding permit 
application forms; answering follow-up questions from permitting 
authorities after the application is submitted; reviewing and 
understanding the permit; collecting records; preparing and submitting 
monitoring reports on a 6-month or more frequent basis; preparing and 
submitting prompt deviation reports, as defined by the State, which may 
include a combination of written, verbal, and other communications 
methods; collecting information, preparing, and submitting the annual 
compliance certification; preparing applications for permit revisions 
every 5 years; and, as needed, preparing and submitting applications 
for permit revisions. In addition, although not required by the permit 
rules, many sources obtain the contractual services of consultants to 
help them understand and meet the permitting program's requirements. 
The ICR for part 70 provides additional information on the overall 
burdens and costs, as well as the relative burdens of each activity 
described here. For a more comprehensive list of requirements imposed 
on part 70 sources (hence, burden on sources), see the requirements of 
40 CFR 70.3, 70.5, 70.6, and 70.7.
    In assessing the second factor for facilities in the chemical 
preparations area source category, we estimated that 10 out of the 26 
facilities that would be affected by this proposed rule are small 
businesses, all with fewer than 500 employees. We believe that these 
small sources lack both the technical resources to comply with 
permitting requirements and the financial resources needed to hire the 
necessary staff or outside consultants to provide those resources. As 
discussed previously, title V permitting would impose significant costs 
on these area sources, and, accordingly, we believe that title V would 
be a significant burden for sources in this category. Almost 40 percent 
are small businesses with limited resources, and under title V, they 
would be subject to numerous mandatory activities with which they would 
have difficulty complying, whether they were issued a standard or a 
general permit. Thus, we conclude that factor two supports title V 
exemption for this category.
    The third factor, which is closely related to the second factor, is 
whether the costs of title V permitting for these area sources would be 
justified, taking into consideration any potential gains in compliance 
likely to occur for such sources. In discussing the second factor, we 
explained that the costs of compliance with title V would impose a 
significant burden on many of the 26 facilities estimated to be 
affected by the proposed rule. Although title V might impose additional 
requirements, as discussed in more detail above, we believe that the 
monitoring, recordkeeping and reporting requirements in this proposed 
NESHAP would assure compliance with the emission standards imposed in 
the NESHAP as proposed. In addition, below in our consideration of the 
fourth factor, we find that there are adequate implementation and 
enforcement programs in place to assure compliance with the NESHAP. 
Because the costs, both economic and non-economic, of compliance with 
title V are high, and the potential for gains in compliance is low, 
title V permitting is not justified for this source category. 
Accordingly, the third factor supports title V exemption for this area 
source category.
    The fourth factor we considered in determining if title V is 
unnecessarily burdensome is whether there are implementation and 
enforcement programs in place that are sufficient to assure compliance 
with the NESHAP without relying on title V permits. EPA has implemented 
regulations that provide states the opportunity to take delegation of 
area source NESHAP, and we believe that states delegated programs are 
sufficient to assure compliance with this NESHAP. See 40 CFR part 63, 
subpart E (States must have adequate programs to enforce the section 
112 regulations and provide assurances that they will enforce all 
NESHAP before EPA will delegate the program).
    We also noted that EPA retains authority to enforce this NESHAP 
anytime under CAA sections 112, 113 and 114. Also, states and EPA often 
conduct voluntary compliance assistance, outreach, and education 
programs (compliance assistance programs), which are not required by 
statute. We determined that these additional programs will supplement 
and enhance success in complying with these proposed standards. We 
believe that together the statutory requirements for implementation and 
enforcement of this NESHAP by the delegated states and EPA and the 
additional assistance programs described above are sufficient to assure 
compliance with these proposed standards without relying on title V 
permitting.
    In light of all the information presented here, we believe that 
there are implementation and enforcement programs in place that are 
sufficient to assure compliance with the proposed standards without 
relying on title V permitting.
    Balancing the four factors for this area source category strongly 
supports the proposed finding that title V is unnecessarily burdensome. 
While title V might add some additional compliance requirements if 
imposed, we believe that this would not result in significant 
improvements in compliance with this proposed rule because the proposed 
rule requirements are specifically designed to assure compliance with 
the emission standards imposed on this area source category. We further 
maintain that the economic and non-economic costs of compliance with 
title V would impose a significant burden on the sources in the 
chemical preparations area source category. We determined that the high 
relative costs would not be justified given that there is likely to be 
little or no potential gain in compliance if title V were required. 
And, finally, there are adequate

[[Page 39022]]

implementation and enforcement programs in place to assure compliance 
with these proposed standards. Thus, we propose that title V permitting 
is ``unnecessarily burdensome'' for this area source category.
    In addition to evaluating whether compliance with title V 
requirements is ``unnecessarily burdensome'', EPA also considered, 
consistent with guidance provided by the legislative history of section 
502(a), whether exempting this area source category from title V 
requirements would adversely affect public health, welfare, or the 
environment. Exemption of this area source category from title V 
requirements would not adversely affect public health, welfare, or the 
environment because the level of control would remain the same if a 
permit were required. The title V permit program does not impose new 
substantive air quality control requirements on sources, but instead 
requires that certain procedural measures be followed, particularly 
with respect to determining compliance with applicable requirements. As 
stated in our consideration of factor one for this category, title V 
would not lead to significant improvements in the compliance 
requirements applicable to existing or new area sources.
    Furthermore, we explained in the Exemption Rule that requiring 
permits for a relatively small number of area sources could, at least 
in the first few years of implementation, potentially adversely affect 
public health, welfare, or the environment by shifting State agency 
resources away from assuring compliance by major sources with existing 
permits to issuing new permits for these area sources, potentially 
reducing overall air program effectiveness. Based on the above 
analysis, we conclude that title V exemptions for these area sources 
will not adversely affect public health, welfare, or the environment 
for all of the reasons explained above.
    For the reasons stated here, we are proposing to exempt this area 
source category from title V permitting requirements.

V. Summary of Impacts of the Proposed Standards

A. What are the air impacts?

    Since 1990, the performance of the PM control technology utilized 
by the chemical preparations industry has not advanced significantly. 
We believe, however, that market forces, such as the economic benefits 
inherent in minimizing raw material or product losses from dust 
emissions, have encouraged widespread use of these controls. Further 
improvements in formulations of products produced by the chemical 
preparations industry, such as reduction or elimination of lead 
chromate in certain products, have enabled the industry to further 
reduce their air impacts. Therefore, while this proposed rule does not 
require air emission reductions from existing sources beyond those 
currently being achieved by affected sources, we believe that this 
proposed rule reflects significant reductions in emissions since 1990 
based on the use of effective PM control technology together with a 
reduction in the use of target HAP b