Estimated Costs Associated with Proposed Uniform Standards



Many companies and organizations potentially impacted by the proposed Uniform Standards submitted comments on the proposed rules.  Many of the comments posited  how the proposed standards were unlawful and that EPA lacks the legal authority to adopt such rules. Furthermore, comments also addressed definitions and applicability and the subsequent potential expansion of these type standards to additional components. The comments also included cost analysis of implementing the proposed requirements.  For many of the new proposed requirements provided within the uniform standards adequate cost analysis was not provided nor was a cost effectiveness analysis performed.  Furthermore, EPA acknowledges that for some of the proposed requirements (e.g., vacuum systems monitoring and pressure relief device (PRD) monitoring systems) there would not result in emissions reductions.  Therefore, a cost effectiveness analysis cannot be performed to demonstrate cost per ton of emissions reduced. 

Based on studies performed, American Petroleum Association (API) and the American Fuel & Petrochemical Manufacturers (AFPM)1 as well as the American Chemistry Council (ACC)2 ,the following are some of the more significant costs associated with proposed Uniform Standards:

  • The estimated cost effectiveness for valves in light liquid service associated with reducing the VOC threshold from 10 weight percent to 5 weight percent  for refineries is about $23K per ton of VOC.  (API/AFPM comments, p. 145)
  • The estimated cost effectiveness for connectors in gas/vapor service associated with reducing the VOC threshold from 10 weight percent to 5 weight percent  for refineries is about $1.2M per ton of VOC. (API/AFPM comments, p. 145)
  • The estimated cost effectiveness to replace a tank vent for a certain size diesel storage vessels to comply with the proposed uniform standards is about  $60K to $5.1M per ton of VOC. (API/AFPM comments, p. 99)
  • The estimated cost effectiveness of controlling emissions from the loading of low volatility stocks at a refinery in order to comply with the proposed   uniform standards is about $122K per ton of VOC. (API/AFPM comments, p. 123)
  • The estimated average cost to install and maintain vacuum systems’ continuous parameter monitoring system to comply with the proposed Uniform Standard is  about $164K per refinery and furthermore, such monitoring systems are not expected to reduce emissions.  (API/AFPM comments, p. 155)
  • The estimated average cost to conduct annual Method 21 monitoring for closed vent systems and fuel gas systems as outlined in the proposed Uniform Standard  is about $292K per refinery.  The difficult-to-monitor components (which would on average be about 20%) would cost $133K per refinery of the aforementioned  cost. (API/AFPM comments, p. 162)
  • The estimated average cost to install and maintain PRD monitoring systems to comply with the proposed Uniform Standard is about $1.5M per refinery for   wireless monitors and about $7M per refinery for wired monitors.  Please note installation of such monitoring systems is not expected to result in emissions reductions. (API/AFPM comments, p. 155)
  • The estimated cost effectiveness for requiring an early shutdown due to 5-year limit on delay of repair is highly dependent on the type of unit to be   shutdown (critical, support, or tank farm), component type (valve, pump, or connector), and Method 21 reading.  For instance, the estimated effectiveness  for a valve in gas/vapor service or in light liquid service with a reading of 1,000 part per million (ppm) associated with a critical unit is $784M per ton  of VOC and $3.9B per ton of organic HAP.(API/AFPM comments, p. 203)
  • The estimated cost associated with not exempting safety valve discharge line (e.g., low leg drains, high point bleeds, analyzer vents, and PRDs needed for  safety) is about $400K per year per refinery (or >$60M per year for the refinery industry). .(API/AFPM comments, p. 245)
  • The estimated cost associated with monitoring to determine when a floating roof is “about to land”is $8K to $10K per storage vessel at a chemical plan.   (ACC comments, p. 30)
  • The estimated cost effectiveness associated with Method 21 monitoring on fixed roof tanks is $40K  per ton for storage vessel storing a light liquid and  $10M per ton for a storage vessel storing a heavy liquid at chemical plants. (ACC comments, p. 38)
  • The estimated cost effectiveness for Method 21 monitoring conducted on connectors in gas/vapor service or in light liquid service ranges from $16K to $18K  per ton VOC depending on the size of the facility.  (ACC comments, p. 38)

As can be seen from the sample of cost analysis data provided above, the cost per refinery would be expected to potentially exceed $100 million.  As such, EPA is required to conduct analysis and justify the negative impacts on jobs, small business, and on energy supply per Executive Order 13211. 

1  Matthew Todd, Senior Policy Advisor, American Petroleum Institute (API) and David Friedman, Vice President, Regulatory Affairs, American Fuel and Petrochemical Manufacturers (AFPM) Letter to EPA.  24 September 2012.  Document ID: EPA-HQ-OAR-2010-0869-0064
2 Lorraine Krupa Gershman, P.E., Director, Regulatory/Technical Affairs, American Chemistry Council (ACC) Letter to EPA.  24 September 2012.  Document ID: EPA-HQ-OAR-2010-0869-0058