ILLINOIS POLLUTION CONTROL BOARD

August

7,

1981

IN THE MATTER OF:

AMENDMENTS TO CHAPTER

2, AIR

)

R79-11

POLLUTION CONTROL RULES AND

REGULATIONS, RULE 203(g).

PROPOSED OPINION OF THE BOARD

(by

I.

Goodman):

This Opinion supports the Order entered herein on ~July23,

1981.

On February 15,

1980,

Caterpillar Tractor Co.

(Caterpillar)

filed a substitute proposal to add a subsection to Rule 203(g) of

Chapter

2:

Air Pollution Control Rules and Regulations to

limit:

particulate matter

(TSP)

emissions from coal—fired industrial

boilers equipped with flue gas desulfurization systems

(scrubbers)

to 0.25 pounds of TSP per million Btu of actual heat input.

Although the original proposal submitted on September 5,

1979

limited the rule to spreader stoker boilers, Caterpillar’s

February 15,

1980 amended proposal proposed the rule’s appli-

cability to all industrial boilers using coal to provide energy

for heating, ventilation, manufacturing and related operations.

Technological hearings were held on January 16,

1980

in

Peoria and February 15,

1980 in Chicago; economic hearings were

held on January 13,

1981 in Chicago and January 19,

1981 in Peoria.

At hearings, testimony from Caterpillar and from both industrial

and environmental organizations was heard.

The

Board has received public comments from a business

organization, a governmental department, an environment~alorgan-

ization, and a legislator.

A newspaper article and a witness’

post—hearing responses to questions were also included in the

Board’s public comment file,

A synopsis of the written comments

follows.

The Illinois Department

of

Commerce and Community Affairs

supported the petition, citing Caterpillar’s history of commitment

to using available technology, the need to encourage industries to

use Illinois’ high sulfur—content coal,

and the need to adopt

environmental standards which are similar to those of adjacent

states in order to facilitate the Department’s efforts to retain

The Board acknowledges the assistance of Ms.

Terry

E. Cox

in the drafting of this Opinion and in acting as hearing officer

herein.

4~—147

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existing Illinois industries.

United States Representative

Tom Railsback stated general support for the use of scrubbers

which enable the use of Illinois coal.

The Illinois Coal

Association

(ICA) stated that the greatest impediment to the

increased use of Illinois coal is the difficulty in reducing

sulfur dioxide emissions without the use of scrubbers,

which it

maintained are not yet fully developed control technologies.

The ICA further stated that retrofitting spreader stoker boilers

with scrubbers generates particulate matter, which side effect

should be weighed against the reduced sulfur dioxide emissions

gained with the use of scrubbers.

Finally,

ICA stated

that Cater-

pillar’s projected use by 1985 of 450,000 tons per year of Illinois

coal is not of insignificant consequence when presently some

17,000,000 tons of low sulfur,

non—Illinois coal are imported into

the state,

and that the use of oil

or gas would be an inefficient

use of energy resources.

Deere

& Company reiterated that the

effect of the proposal would be a reduction of Illinois Industry’s

dependence on foreign oil and thereby

a reduction of inflation.

Citizens For a Better Environment

(CBE) stated that the

proposal

should be restricted to boilers owned by Caterpillar

which are presently equipped with scrubbers,

and should not be

adopted as a statewide regulation.

CBE wrote that at the hearing

of January 13,

1981 the impact of the proposal upon ambient air

quality was not adequately assessed in that one affected source

had already installed a dry scrubber and other sources could be

ordered under various laws to convert to coal as

a fuel for

combustion.

Further,

CBE cites the fact that the Illinois

Institute of Natural Resource’s economic impact study considered

impact only with respect to four of Caterpillar’s five affected

Illinois plants.

Caterpillar’s petition states that of six Illinois industrial

sources constructing or using scrubbers on spreader stoker boilers,

five are Caterpillar’s plants.

Pending completed scrubber construc-

tion these five plants had controlled the particulate with multiclone

dry particulate dust (flyash)

systems.

Caterpillar intends to apply

to the United States Environmental Protection Agency

(USEPA) for a

new source, innovative system of continuous particulate matter

reduction determination pursuant to §111(j)

of the Clean Air Act

(CAA),

42 U.S.C.

§7401, et~.

(Petition, p.1,

ri 1.)

Caterpillar filed this proposal in conjunction with the

filing of four variance petitions

(PCB 79—188, —189, —190,

and

—191; see consolidated Order of November 29,

1979, modified

January 24, 1980,

and consolidated Opinion of November 29,

1979).

These variances from the particulates emission limitation of 0.10

lbs./million Btu

imposed, pending this regulatory proceeding,

limitations of 0.23 lbs./million Btu

(East Peoria boilers #21

1Contained in the State Implementation Plan (SIP)

(see §110(a)

of

the

CAA) as Rules 203(g)(1)(B)

and

(C).

See,

also,

Illinois

State Chamber of Commerce, et al. v. Illinois Pollution

Control

43f148

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and #22), 0.27 lbs./million Btu (Mossville boiler

#5),

0.28 lbs.!

million Btu

(Joliet boiler #3), and 0.25 lbs./rnillion Etu for

thirteen other boilers at those four plants.

In those petitions,

Caterpillar alleged that its regenerative double alkali scrubbers

were an incompletely developed, innovative technology;

the Agency’s

variance recommendations concurred that these scrubbers had been

thought to be the best technology available when considered for

installation by Caterpillar during the early 1970’s.

Caterpillar’s

regulatory petition states that during hearings

in R71—23, which

first adopted Rule 203(g),

Zurn Industries,

Inc.,

a manufacturer

of the double alkali scrubbers, testified that the scrubbers would

reduce particulate emissions by 98,

hut that Caterpillar’s data

show only a 52—71

effectiveness.

Caterpillar states that its

problems are similar to those of General Motors Corporation.

(Petition, pp.14—15.)

Some of the excess particulate matter emissions are attribut-

able to the carryover of sulfuric acid mist and scrubber liquid

salts from the scrubbers.

Carryover contributions range from 18

(1977 Joliet stack tests)

to 50

(1979 Mossville stack tests).

USEPA has recognized this,

in relation to its particulates Test

Method25, as

a problem stemming from the combustion of high sulfur

coal.

Approxirnately half of the particulate emitted from

the

Joliet

and Morton boilers are greater than one micron in size; Caterpillar

has sought to reduce the amount of fine particulates

(submicron)

emitted,

and has identified some of its problems therewith.

For

example, when stored coal is exposed to natural elements, the

resulting increased moisture content causes variability in heat

output during combustion, and a boiler design criterion of 30

excess air can seldom be attained due to both the moisture content

and the lower ash fusion temperature.

Reinjection into the

boilers of flyash captured by the multiclones may cause increased

particulate emissions, and spreader stoker boiler manufacturers will

supply guarantees only as to combustion efficiency and not stack

emissions.

(Petition, pp.16—20).

Caterpillar alleges that its scrubbers are the best particulate

matter control technology available,

but that no technology exists

for satisfactory simultaneous control of both sulfur dioxide and

Board and consolidated cases,

67 Ill.App.3d 389,

384 N.E.2d 922

(1st Dist.1978), and People v. Commonwealth Edison Com~

and

related case, 490 F.Supp.

1145 (N.D.Ill.,1980).

The limitation

is also the one applicable as the new source performance standard

for industrial boilers.

Section 9.1(b) of the Illinois Environ-

mental Protection Act (Act);

40 C.F.R. §60.42.

2Public comment of Citizens For A Better Environment,

submitted during the First Notice period,

states that USEPA is

experimenting with a Test Method 5B at a General Motors plant

and is considering similar experimentation at one of Caterpillar’s

plants.

43—14!~

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particulates when the combustion fuel

is Illinois coal.

Therefc~:e,

Caterpillar contends that it would be economically unreasonable for

the Board to require either additional controls or

the installation

of replacement technology.

The proposal, besides promoting the

combustion of Illinois coal,

and effectuating an economic boost

therefrom,

is alleged not to adversely impact ambient air quality,

although it is clear that more than twice the amount of particulate

allowed under the SIP and the new source performance standards

would be emitted into the atmosphere.

At hearings, evidence was received in support of Caterpillar’s

contentions.

When

the CAA and the Act were enacted in the

beginning of the 1970’s, Caterpillar experienced a variety of

problems with the combustion fuels of gas, oil, and low sulfur

coal

(R.16—21).

Although natural gas had been touted as being in

reasonable supply,

later federal regulations gave supply priority

to the public rather than to industry.

Caterpillar concluded that

natural gas was not a dependable fuel.

Oil similarly was unde-

pendable over the long tern~,primarily because producers had little

desulfurization capacity and because of ongoing federal regulatory

activity in the face of a continued unfavorable domestic—to—imported

ratio.

The use of electricity was considered to be prohibited by

cost.

As to low sulfur coal,

it was in short supply in the early

1970’s.

(Caterpillar defines “low sulfur” coal as coal for which

no scrubbers are necessary to meet sulfur dioxide emission

limitations.)

Caterpillar’s decision against low sulfur coal

centered upon the dependability of timely deliveries;

given

problems relating to rail transportation (labor,

car availability,

loading competition, accidents),

a steady supply was not foreseen.

In contrast,

Illinois coal could be transported by highway and

barge in addition to rail.

Caterpillar for these reasons decided

to use Illinois coal and to invest in the necessary scrubbers.

However, after this decision was made the supply of low sulfur coal

improved.

Caterpillar committed one of its plants to the use of

this coal

(R.19—20).

Several legal considerations involved in use of oil or natural

gas as combustion fuels exist.

The Powerplant and Industrial Fuel

Use Act of 1978, Pub.L.

95—620,

November

9,

1978,

92 Stat. 3289,

which supersedes the Energy Supply and Environmental Consideration

Act of 1974, prohibits the use of oil or gas in boilers upon which

construction commenced after November

9,

1978 unless an exemption

is obtained.

In addition, the United States Department of Energy

can require conversion to coal as the combustion fuel if boilers

have coal—burning capacity.

All of Caterpillar’s boilers have the

capacity to burn coal.

Finally, the Natural Gas Policy Act of 1978,

Pub.L.

95—621,

November

9,

1978,

92

Stat.

3350, had imposed mandatry

incremental pricing regimes on domestic natural gas supplies.

New source performance standards for industrial boilers (see

§111 of the CAA and 40 C.F.R.,

Part 60)

are expected to be proposed

by the USEPA in revised form in November of 1981.

In the alternative,

43—150

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regulations may be promulgated which r~~ir~

utilizing adequately

demonstrated operational and other standards reflecting the best

technological

system of continuous emission reduction which takes

reduction costs as well as energy re.~uirerientsinto account

(~111(h)

of the CAA;

see also §111(a)(7) and

(8) and §111(b)(5) and

(6)).

Section 111(a) of the CAA would apparently give emission credit for

pre—combustion coal treatment (coal washing,

etc.), whereas such

credit is uncertain under §111(h).

Most of Caterpillar’s boilers

would be “new” sources for purposes of these provisions of the

CAA.

Nothing

in

this Order negates applicability of §111 of the

CAA.

Soon after the particulate matter emission limitations were

first promulgated by the Board,

Caterpillar determined that one way

to meet both the sulfur dioxide and the particulates emission

limitations would be to desulfurize the coal before applying control

equipment,3which procedure could address

the problem of small—sized

particles.

Such procedures would include coal heneficiation

(R.21—3).

The record contains no evidence as

to the technological

feasibility or economic reasonableness of these procedures.

On

October

27,

1978 Caterpillar met with representatives of the

Agency and of the USEPA to discuss improvements in scrubber tech-

nology.

The meeting was unsatisfactory.

Caterpillar’s experience

with venturi scrubbing has been unsuccessful, regardless of the

level of pressure drop during operation (R.76-8).

Caterpillar, then,

seeks a technology-based particulate matter

emission limitation;

the technology would be regenerative double

alkali scrubbers equipped with flyash arrestors

~

multiclonc

collectors) of good engineering practice design (R.25).

Some

measures to reduce or minimize the coal’s contribution to partic-

ulate emissions have been taken

(coal analyses upon delivery) but

some have not (storage in silos to prevent absorption of moisture)

(R.136—9)

Further support of an emission limitation greater than 0.10

lbs./million Btu was presented in a July,

1979 USEPA report of

pebble lime

(CaO)

or ground limestone

(CaCO3) scrubbers which

remove both sulfur dioxide and particulates without additional

particulate control equipment.

The report was based on 2—4

(medium—high) sulfur content coal and achieved emission rates

only as low as 0.15 lbs./million Btu, with typical rates ranging

from 0.20 to 0.30 lbs./million Btu.

Particulate removal averaged

93—4.

(See Ex.3.)

Caterpillar believes that its proposed 0.25—lb.

limitation for regenerative double alkali scrubbers is consistent

with this study

(R.50—1); however, the two control

systems are

not identical.

3USEPA is currently determining whether to regulate emissions

of particulates in terms of size; such regulations would likely

change the applicable particulate matter emission rates for both

new and existing sources.

See also 45 Fed.Re~.84098—9 regarding

Agency SIP submittals.

43—151

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Caterpillar does not believe that ceasing the reinjection of

flyash, which can lower particulate emissions, would justify the

increased energy expenditures occasioned thereby.

To improve the

performance of its scrubbers, Caterpillar has improved the operation

of the demisters, modified its chemicals handling procedures,

and

replaced bypass dampers to minimize leakage.

To date,

$27 million

has been expended by Caterpillar to meet both sulfur dioxide and

particulate emission limitations

(R.39—1,117,126—8).

It alleges

that its present system constitutes “best available

particulate

matter

control technology”

(see §169(3) of the CAA)

and that it

would be technologically infeasible and economically unreasonable

to require, in order to meet both sulfur dioxide and particulates

emission limitations,

either additional controls or, assuming the

availability of a new generation of scrubbers or other technology,

replacement of its existing controls.

Caterpillar alleges that

the “ultimate solution” to compliance with both sulfur dioxide

and particulate emission limitations when using high sulfur coal

is the desulfurization of that coal in order to make the use of

scrubbers unnecessary and to enable the use of particulate matter

controls without “scrubber interference”.

Desulfurizing the coal

would address the problem,

and not the result (R.41-2,47).

Indeed,

Caterpillar is unsure of the proportions of its particulate emis-

sions constituting flyash,

sulfuric acid mist,

or both.

Although

intermittent control systems and fluidized bed processes could

he appropriate control technologies

(R.168), these are allegedly

insufficiently developed to date.

Further development of controls

may be delayed if designers are made to consider intermittent

rather than continuous control methodologies.

Caterpillar’s boilers would not be the only sources subject

to its proposal.

At least one other source, the Pfizer plant

in

East St. Louis, presently uses s~rubbers(R.52).

Other possible

affected sources exist

(R.151—6)

but the record does not reveal

their identity or location.

Caterpillar seeks to have the proposal

apply statewide to all industrial boiler sources.

Particulate

matter removal capability, however, may be unrelated to other

physical or chemical plant and equipment configurations

(R.52—8).

Caterpillar hired ETA Engineering,

Inc.

(ETA)

to model the

expected air quality impacts of increasing the particulate matter

emission limitation from 0.10 to 0,25 lbs,/million Btu.

Its

report was made Exhibit

6 to this proceeding.

(The Illinois

Institute of Natural Resource’s economic impact study,

see post,

which also evaluated air quality impacts, considered four of

4me Agency pointed out that Caterpillar’s proposal may force

Pfizer’s plant to decrease allowable emissions by 7.7 pounds per

hour from its three boilers which vent to one stack

(R.159—1).

Although the Illinois Manufacturers’ Association is conducting

a

survey to ascertain potentially affected sources

(R.155—6),

the

record does not contain the results of such study.

However, any

industrial

source having scrubbers comes within the rule.

43—152

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Caterpillar’s plants,

whereas ETA’s considered the Morton plant

as

well.)

ETA’s study used as input to USEPA’s Climatological

Dispersion Model

(CDM) projected 1980 Illinois coal usage data

and current stack test data.

One hundred sixty-eight equidistant

receptors points were used; annual

concentrations were based on

“expected 1980 annual emission rates” and the receptor area

concentrations were calculated by ratioing the concentrations in

proportion to the change in emissions were a 0.25—lb. limitation

to be allowed at each plant (R.91-2).

Incremental impact on air

quality was shown by computing the differences between concentration

levels monitored at the receptors;

maximum an~ualconcentrations

were used to estimate by the Larsen procedure

maximum 24—hour

concentrations.

Results of ETA’s modeling showed maximum annual concen~ratioris

of the five facilities, in micrograms per cubic meter

(ug/m

),

as:

Joliet,

3.0; Mossville,

2.7;

East Peoria,

1.1; Mapleton and Morton,

0.6.

These concentrations range from 0.80

(Mapleton) to 4.0

(Joliet) of the primary annual particulate matter national ambient

air quality standard

(NAAQS), and from 0.8

(Mapleton) to 5.5

(Joliet)

of the 24-h~urNAAQS.

Annual inemental

concentrations

ranged from 0.2 ug/m

(Morton)

to 2.3 ug/m

(Joliet);

the “level

of significance,” as defined by USEPA for PSD purposes,

is

1 ug/~

Twenty—four—hour incr~mentalconcentrations ranged from 0.7 ug/m

(Morton) ~o 11.2 ug/m

(Joliet); the “level of significance” here

is

5 ug/m

.

Although the Mossville plant as well as the Joliet

plant violate both “levels of significance,” the Mossville plant’s

impacts were measured within a 0.17—square—mile area around the

facility and were completely within the plant property.

As to

the Joliet plant,

44

of the readings were within plant property

and the remainder were upon nonresidential land within a 0.22—

square—mile area around the plant.

These figures are likely to

be inaccurate given that the Hi—Volume sampler reference method

can produce deviations from true statistical values of

+

50

depending on air flow rate and whether particulate has clogged

the filter (R.96—100).

No information regarding particle size

was presented, although Caterpillar has such information for at

least the Joliet and Morton facilities.

(Pet., p.17).

Caterpillar cites that reductions

in background concentrations,

particularly in Peoria and Joliet, will soon be achieved by reduc-

tions

of industrial and nontraditional source emissions of fugitive

dust mandated by recently promulgated R78-1i.

The CDM, however,

did not account for the effects of terrain.

Caterpillar furthe~

notes that none of the areas where concentrations over 1.0 ug/m

5The Larsen procedure uses as one variable the data’s

standard geometrical deviation;

this input is

allegedly higher for

the Joliet portion of the modeling than the correlative input used

by the Agency in its study of Peoria area air quality.

The result

might be ETA’S overestimation of both high and low maximm

concentrations for the Joliet area (R.106—7).

43—153

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(24—hour) were recorded are accessible to the public

(R.134—5).

The

Board notes that Edwards power plant is 7.4 kilometers,

and

Powerton is 5.4 kilometers,

away from the Mapleton plant, and

that Wallace is 1.1 kilometers away from the East Peoria plant.

Caterpillar suggests that impact on air quality would be negligi-

ble because the variation in monitored incremental concentrations

would likely be greater than the entire contribution from the

plant;

in other words, the plant’s contributions are within the

error range of the monitoring technique itself

(R.113—4).

Caterpillar has spent over $27 million in capital costs

in an

effort to comply with both sulfur dioxide and particulates emission

limitations.

Caterpillar estimates that in order

to comply with a

0.10—lb. particulate emission limitation it would have to undergo

extensive modifications of its plants to accommodate the instal-

lation of particulates—control.ing

baghouses; however, there may

be insufficient space both within and outside of the plants for

the installation of baghouses.

Another modification would be the

replacement of the stack gas systems and, possibly, the stacks.

These modifications would consequently necessitate a change

in

electrical service to the newer and larger induced draft fan

systems.

Finally, it would be important not

to interrupt

the

boilers’

steam service for manufacturing operations.

Such modifi—

cations could be made at a capital expenditure of $50—60 million

over a three— to five—year period

(R.120—1, 128-0).

The economic impact study of the Illinois Institute of Natural

Resources,

Doc. No.

80/24,

November,

1980, “The Economic Impact of

R79—11

to allow a Relaxation of

Rule

203(g)”

(EIS), used these

Caterpillar cost estimates in balancing the “benefits” of the

proposal.

(“Benefits” in economic impact studies are typically

defined as foregone source expenditures when the environmental

proposal

is to loosen a standard because there can be no health

benefits to increased pollution.)

The study mentioned that besides

Pfizer, one other coal—fired industrial boiler source may exist

and stated that the degree of economic impact of the regulation

depends on the number and size of affected sources.

(EIS, pp.2—i

to 2—4.)

The EIS described the benefits of this regulation as

eliminated air pollution control costs associated with meeting the

limitations contained in the SIP.

(EIS,

pp.1—4.)

Four accounting

scenarios were projected to describe secondary costs

(described as

“loss of benefits,” pp.1—4) and secondary benefits

(described as

loss of costs to Caterpillar consumers and suppliers).

These were:

(1) all of Caterpillar’s costs were passed on to its consumers,

sales figures remaining constant;

(2)

costs were passed on but

Caterpillar expensed its capital and operating costs;

(3) costs

were not passed on and Caterpillar expensed over two years’ time;

and

(4) cost amounts were allocated to production rather than air

pollution controls.

(EIS, pp.5—i to 5-7.)

The study’s conclusion,

in comparing costs with benefits, is that from inauguration of the

$50—60—million compliance plan,

given a two—year construction

43—154

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period,

the state economy obtains a short—term economic stimulus,

and that this stimulus will be greater if all equipment

is pur-

chased from Illinois manufacturers,

e.g., $91 million instead of

$57 million

(EIS, pp.6—2.)

When total health and other social

costs from the increased pollution,

not to be greater than $400,000

(depending on the damage coefficients used),

are considered, the

study’s conclusion is that the cost to Caterpillar of disallowing

its proposal is far greater than the cost to the public of allowing

its proposal.

The Board does not limit its findings to Caterpillar’s four

plants and will apply the regulation to other sources and

installations.

The Board has adopted an Order with reference

to all sources existing as of the date of the final order herein

which presently have installed scrubbers of any kind.

However,

the Board notes that,

pursuant to §9.1(b)

of the Act, presently

existing industrial boilers equipped with scrubbers may become

subject to the USEPA’s new source performance standards when they

are promulgated.

See also Part IX of Chapter 2:

Air Pollution

Control Rules and Regulations.

Although conversion to coal from

another type of fuel alone may not convert an existing coal—

designed source to a modified source for purposes of the CAA (40

C.F.R. §60.14), other operational modifications can lead to

ti-is

consequence.

A particulate matter emission limitation on industrial boilers

of 0.25 lbs./million Btu is found to be technologically feasible

using either wet or dry flue gas desulfurizatiori systems

(scrubhers).

Caterpillar as an example has met close to this limitation to date,

using high sulfur—content coal, and with further sensible preventive

practices (for example,

dry storage, pretreatment, and proper equip-

ment operation)

all affected sources will be able to consistently

meet both this limitation and the SIP’s sulfur dioxide limitation,

The Board also finds that allowing this higher emission

limitation is economically reasonable.

Given Caterpillar’s past

scrubber expenditures, allocated both for particulate matter

and

sulfur dioxide control, and given the scrubbers’

successful removal

of sulfur dioxide, the Board finds that requiring compliance with

anything other than

a technology-based emission limitation for

simultaneous compliance with particulate matter and sulfur dioxide

limitations would be economically unreasonable.

Caterpillar has

retrofitted multiclones upon the scrubber operation;

to require

redesign based upon the present scrubber equipment would involve

extensive modifications of plant,

equipment, and operating

procedures.

I,

Christan L. Moffett,

Clerk of the Illinois Pollution

Control

Board, hereby certify that the above Opinion was adopted

on the

‘7~’

day of

,

1981 by a vote of

____

Christan

L. Mof~e~t,Clerk

Illinos Pollutio~(ControlBoard

43—155