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American Coke and Coal Chemicals Institute Letter to Chairman Issa January 10, 2011

American Coke and Coal Chemicals Institute Letter to Chairman Issa January 10, 2011

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Published by CREW
In December 2010, Representative Darrell Issa, Chairman of the U.S. House Committee on Oversight and Government Reform, sent a letter to over 150 companies, trade groups, and research organizations asking them to identify federal regulations that adversely affect job growth. This letter is one of the many responses that CREW has collected and posted for public review.
In December 2010, Representative Darrell Issa, Chairman of the U.S. House Committee on Oversight and Government Reform, sent a letter to over 150 companies, trade groups, and research organizations asking them to identify federal regulations that adversely affect job growth. This letter is one of the many responses that CREW has collected and posted for public review.

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Published by: CREW on Jan 25, 2011
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American Coke and Coal Chemicals Institute
1140 Connecticut Ave. N.W.- Suite 705 • Washington, DC 20036202-452-7198Fax 202-463-6573Website: www.accci.org
January 10, 2011The Honorable Darrell Issa, ChairmanHouse Committee on Oversight and Government Reform2157 Rayburn House Office BuildingWashington, DC 20515Submitted electronically to sharon.utz@mail.house.govDear Chairman Issa:On behalf of the American Coke and Coal Chemicals Institute (ACCCI), I am pleased torespond to your inquiry regarding existing and proposed regulations that negatively impact theeconomy and jobs. ACCCI represents 100% of the producers of the nation's metallurgical coke,including integrated steel companies and independent producers, and 100% of the nation'sproducers of coal chemicals derived from byproducts of cokemaking. Our producer membersoperate facilities in 12 states. Coke is an essential raw material for the production of iron andsteel, and ACCCI fully supports the response to your inquiry by the American Iron and SteelInstitute.Both the U.S. Environmental Protection Agency (EPA) and the Occupational Safety andHealth Administration (OSHA) have recently promulgated or proposed or have pendingnumerous regulations that will have a negative impact on the ability of coke producers to operatecost-effectively and supply needed raw materials to allow the iron and steel industry to remaincompetitive in the international marketplace. We appreciate the opportunity to provide a fewdetails below on some of the more salient regulations of concern.
EPA
In recent months, EPA has undertaken an unprecedented regulatory agenda bypromulgating or proposing a host of rules in the areas of air, water, solid waste, greenhousegases, and toxic chemicals, and ACCCI has filed comments and taken other actions todemonstrate the adverse effects of those regulatory initiatives on our members. Ina nutshell,these new regulations will create permitting obstacles to expand and modernize our facilities andwill impose significant additional costs that are difficult recoup in the face of intenseinternational competition. Examples follow.Greenhouse Gas (GHG) RegulationsEffective this month, under its perceived Clean Air Act authority, EPA will beginregulating GHG emissions from large emitters, which will impactmost coke producers. Therequirements are largely undefined by guidance issued by EPA in December and are subject todecisions byindividual permitting authorities, but the uncertainty of implementation raisessignificant industry concerns with the potential for permitting delays and the prospect of 
 
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significant added costs of operation. The technical support document for the iron and steel (andcokemaking) industry failed to reflect the current status of technologies employed. Carbon is anecessary raw material for production of iron and steel, and coke is the dominant source of thatcarbon. Regulation of carbon through GHG regulations applicable to domestic producers whenno comparable regulations apply to foreign producers will have an adverse effect on the abilityof U.S. companies to remain competitive.Boiler MACT RegulationsTheregulations proposed by EPA for Maximum Achievable Control Technology(MACT) for existing and new boilers and process heaters and scheduled for finalization in thenear future (subject to an extension request to the Court) would not only have an inordinate costimpact on the industry but would have perverse and unintendedenvironmental and energyconsequences. Coke oven gas is a valuable byproduct of coke production and is a valuable fuelthat takes the place of other fuel requirements in coke plants and integrated steel plants, typicallyin coke oven gas-fired boilers. There are approximately 75 coke oven gas-fired boilers in theU.S. EPA has proposed emission limits for coke oven gas-fired boilers that have not beendemonstrated in the record to be achievable, even if control equipment with annualized costs of approximately $600 million, by EPA's own estimates, are installed. Given these costs andcompliance uncertainties, companies would likely opt toflare the coke oven gas and substitutenatural gas (at an estimated annualized cost of approximately $300 million) on these units tomeet the rule's proposed requirements for natural gas-fired units. The result would be increasedemissions of GHGs and hazardous air pollutantsfrom flaring the coke oven gas and the wastefuldepletion of natural gas that could be used elsewhere. ACCCI has called on EPA to re-proposethe boiler rule to acknowledge and reflect the environmentally beneficial and energy-conservinguse of process gases, and we support the agency's request to the Court for such an extension.National Ambient Air Quality StandardsEPA is in various stages of reviewing and proposing revisions to ambient air qualitystandards for criteria pollutants. New one-hour standards have been promulgated for nitrogendioxide and sulfur dioxide. In the latter case, EPA has adopted a new approach for designatingnonattainment areas by relying on modeling instead of monitoring, which appears to beinconsistent with language in the Clean Air Act and is being litigated. In addition, the one-hourstandards make permitting of new or modified combustion sources exceedingly difficult becauseof the conservative, worst-case conditions that are built into the models. EPA is also slated topropose a more stringent ozone standard in the near future. The tighter standard will makealmost the entire country nonattainment and require states to develop implementation plans thatwill impose even tighter restrictions for nitrogen oxides, which are precursors for ozone. Theagency also is considering tighter ambient standards for fine particulate matter (which will meanmore stringent controls for fine particle precursors,
i.e.
, sulfur and nitrogen oxides) and carbonmonoxide. These increasingly more stringent ambient standards will impact a wide variety of existing industry combustion sources and create permitting obstacles for applying newtechnology. For example, these new regulations and the threat of impending regulations causedone member company to delay a new $700 million coke plant with over 120 new jobs and anannual payroll, including benefits, of $8 million.
 
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Proposed Listing of Hydrogen Sulfide (H
 
2
S)as a Hazardous Air PollutantIn the 1990s, EPA proposed adding H
2
S to the list of chemicals requiring reporting underthe Toxic Release Inventory, but the action was stayed in response to industry's demands thatmore scientific investigation was needed into the health effects of the substance. Recently,however, EPA proposed lifting the stay despite having not developed any additional scientificsupport for the listing. This is of concern to ACCCI because of the presence of H
2
S in coke ovengas and would be an unnecessary and unjustified additional administrative burden for theindustry.TSCA Test Rule for CoalTar and Coal Tar-Derived ChemicalsUnder authority of the Toxic Substances Control Act (TSCA) EPA can demand testing of human and ecological effects of chemicals in situations where the agency believes exposure of achemical is substantial and there is insufficient health or ecological data to assess risks. EPA hasproposed such testing for coal tar, a byproduct of cokemaking, and five other chemicals derivedfrom coal tar and processed by tar refiners. The extent of required testing amounts to severalmillion dollars that would have to be borne by coke and coal chemicals companies. ACCCI hassubmitted extensive comments demonstrating that these chemicals have minimal exposurepotential that does not justifytesting under terms ofTSCA, and, moreover, that existingscientific dataon the health effects of these chemicals are sufficient to identify risks withoutimposingadditional costly testing. Final action by EPA is pending.Conductivity (Total Dissolved Solids) Water Quality StandardsEPA has proposed exceedingly stringent conductivity standards (a measure of totaldissolved solids) for streams in the Appalachian region, ostensibly targeting coal miningoperations. However, this action, apart from impacting the coal industry, on which the cokeindustry depends for its basic raw material, has the potential for broader adoption on a nationalscale. This would impose unrealisticdissolved solids limits, in some cases tighter than naturallevels, and force the installation of expensive control systems for a wide variety of industryinstallations, including cokemaking operations. Some states are beginning to adopt stringenttotal dissolved standards in anticipation of EPA regulation.
U.S. Geological Service (USGS)
One of the products produced fromcoal tar, a cokemaking byproduct, is a refined tarproduct used in the formulation of emulsions that are used as pavement sealants, which areperiodically applied to prolong the life of asphalt driveways and parking lots. Over the past fewyears, employees of the USGS have been conducting studies and publishing papers implicatingrefined tar pavement sealants as a major source of polynuclear aromatic hydrocarbons (PAHs) inthe environment, despite evidence that PAHs are ubiquitous in the environment and have manysources attributed to societal activities generally. Other studies show sealants to be but a minorsource of PAHs,but the USGS has identified the sealants to be the dominant source. BecausePAHs have beenidentified as hazardous to health and aquatic life, the USGS has assumed anadvocacy role in promoting bans of refined tar pavement sealants, and in response to USGS

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