BOARD MEETING DATE: February 6, 2004
AGENDA NO. 16
Implementation Status Report on Rule 1102 – Dry Cleaners Using Solvent Other Than Perchloroethylene
SYNOPSIS:
When Rule 1102 was amended in November of 2000, the Board directed staff to prepare an implementation status report to assess the availability, cost-effectiveness and feasibility of closed-loop machines and other appropriate technologies for replacing transfer machines that clean reusable soiled textile materials pursuant to the requirements of California Health and Safety Code Section 25144.6(b). This 2004 status report meets this directive by summarizing compliance efforts by operators at the affected facility.
COMMITTEE:
Stationary Source, January 23, 2004, Reviewed
RECOMMENDED ACTION:
Receive and file.
Barry R. Wallerstein, D.Env.
Executive Officer
Background
Rule 1102, originally adopted on January 6, 1978, controls VOC emissions from dry cleaning operations that use solvents other than perchloroethylene. (The use of perchloroethylene in dry cleaning operations is regulated under Rule 1421 – Control of Perc Emission from Dry Cleaning Systems.) The November 2000 amendment to Rule 1102 required the phase-out of most transfer machines by January 1, 2003. However, Rule 1102 also allowed a delayed compliance date of January 1, 2005 for transfer machines used in cleaning reusable textile materials, pursuant to California Health & Safety Code Section 25144.6(b). There is only one known facility in the Basin, M.L. Winters Co., LLC (Winters) located in Pico Rivera, that falls under this category.
Winters is a large industrial dry cleaning facility that cleans industrial gloves and absorbents using Stoddard solvent, and recovers and recycles oils that would otherwise be disposed of as hazardous waste if the gloves and absorbents were thrown away. The company recovers approximately 220,000 gallons of oily waste per year and transfers it to an oil recycling facility.
The company operates two large-capacity dry cleaning machines (700 pounds of materials per load each machine). A third unit located at the facility serves as back up. These machines have been in operation for 35 years and the manufacturer has discontinued support for the equipment; thus, the availability of replacement parts has been an on-going problem for Winters. As a result, the company has to keep a fourth dry cleaning machine at the facility to be used primarily for parts replacement. According to Winters, the back-up units provide the company the capability to continue operating the dry cleaning machines for at least another 10 years.
The VOC emissions associated with Winters’ dry cleaning operation are about 25 tons in year 2003 as reported in the Annual Emissions Reporting (AER) system. At the time of the amendment, closed-loop technology for use with Stoddard solvent had not been developed for this type and size of industrial application, thus, justifying the delay in compliance date.
Additionally, the Board directed staff to prepare an implementation status report assessing the availability, feasibility and cost-effectiveness of closed-loop dry cleaning machines and other technologies for replacing the transfer machines at Winters in time to meet the January 1, 2005 compliance date. This status report, submitted to the Board in May 2003, concluded that closed-loop machines capable of handling soiled textile materials like those processed at Winters’ facility were not available at that time. Furthermore, staff recommended that another status report be prepared by January 2004 to provide the Board with updated information on the availability and cost-effectiveness of closed-loop machines that will meet the 2005 compliance requirement of Rule 1102. This final status report meets the Board directive and summarizes the most recent compliance efforts by the facility.
Compliance Efforts
Staff visited Winters to ascertain the company’s latest efforts in complying with the requirements of Rule 1102. During the past several months, Winters has worked with numerous equipment manufacturers on the design and availability of closed-loop dry cleaning machines for large industrial cleaning applications. Winters has identified two large-capacity dry cleaning machines that could meet their operational requirements. The first machine, manufactured by Columbia, has a maximum capacity of 160 pounds per load and uses DF-2000 solvent for washing. This solvent has similar properties as Stoddard solvent. Winters has witnessed this unit in actual operation at an industrial cleaning facility in Detroit, Michigan and finds the size and performance of the machine to be acceptable.
Columbia has proposed a tandem unit to replace Winters’ existing transfer machines. The equipment consists of two 160-lb capacity washing and drying units, a double distiller with a condenser, and two nitrogen generators and storage tanks. Due to the combustibility of various dry cleaning solvents, the nitrogen generator is required for each washing and drying section and serves as a fire suppressant system in conformance with the standards established by the National Fire Protection Association. Since the load capacity of the Columbia dry cleaning machine is not equivalent to Winters’ existing transfer units, the company (Winters) will have to operate the machines on three shifts in order to handle the same volume of materials washed on a daily basis. In spite of this, Winters still finds this option to be acceptable.
Another equipment manufacturer being considered by Winters is RealStar. The manufacturer has a 180-lb capacity dry cleaning unit with similar features as the Columbia machine. Winters has witnessed this particular unit in actual operation in Canada. A tandem unit is also being proposed to handle Winters’ production needs. Recently, a representative of RealStar has indicated that a 220-lb capacity machine can be built to replace Winters’ existing transfer units. It should be noted at this time that Winters prefers a larger-capacity dry cleaning unit due to their production requirements.
Both closed-loop dry cleaning equipment from Columbia and RealStar are estimated to reduce Winters’ solvent usage by at least fifty percent. This translates to a minimum emission reduction of about 12.5 tons per year of VOCs.
Cost of Compliance
The cost of complying with the 2005 requirement of Rule 1102 consists of capital costs to be incurred in acquiring compliant equipment including installation and building modification costs, additional operating cost, and any cost savings associated with reduced emissions. The current cost of the 160-lb capacity Columbia equipment, including shipping and installation, is about $462,000. The purchase price of the RealStar equipment (220-lb capacity) is estimated at $750,000 and includes shipping and installation costs. In addition, the building will have to be modified in order for either equipment to fit inside. Building modification cost is estimated at $30,000.
Winters has estimated that the company will incur additional operating cost of approximately $120,000 annually due to the additional work shifts needed to handle the same volume of materials washed daily. Most of the incremental operating cost is spent on additional labor to run the machines. The company is expected to realize savings in annual emission fees of approximately $4,500 and $7,700 for the cleaning solvent cost due to reduced solvent usage.
The cost-effectiveness of complying with Rule 1102 varies depending on which equipment Winters decides to purchase. Assuming a 10-year equipment life and a minimum emission reduction of fifty percent, the cost-effectiveness for the Columbia machine is about $10,932 per ton of VOC reduced. The RealStar machine has a cost-effectiveness of approximately $13,233 per ton of VOC reduced. Both cost-effectiveness values are acceptable based on the guideline set for meeting new regulatory requirements during rule development. In recent conversations with Winters, the company has indicated that both Columbia and RealStar closed-loop systems could meet their production needs. The company also expressed willingness to comply with the requirements of Rule 1102 but indicated that it cannot meet the January 1, 2005 compliance date due to financial constraints (cash flow limits). Winters expressed a need for a one-year extension of the compliance deadline. If the extension is granted, Winters expects to be in full compliance by September 2005.
Conclusion and Recommendation
Staff has concluded that there are available industrial dry cleaning machines that can replace M.L. Winters Co.’s existing transfer units and meet the performance needs of the company. The replacement units, which utilize closed-loop technology, are cost-effective and meet the requirements of Rule 1102. In regard to extending the compliance deadline, instead of amending Rule 1102 to address this issue, staff is recommending that Winters pursue a one-year extension through the variance process. Staff will be available to provide any necessary technical assistance and will return for a rule amendment should the variance request fail.
Attachment
Cost Effectiveness Analysis
COST EFFECTIVENESS ANALYSIS
Assumptions:
- Total shipping and installation cost is approximately 10% of equipment purchase price
- Minimum 50% emission reduction due to conversion to closed-loop system
- Same VOC content for DF-2000 and Stoddard solvent
- Equipment amortized over 10 year; DCF method using 4% interest rate
Capital Cost
Scenario 1: Columbia Dry Cleaning Unit Equipment (160-lb capacity tandem unit) $420,300 Shipping/Installation $42,000 Building Modification $30,000 Total for Scenario 1 $492,300
Scenario 2: RealStar Dry Cleaning UnitEquipment including shipping &
installation (220-lb capacity tandem unit)$750,000 Building Modification $30,000 Total for Scenario 2 $780,000
Annual Operating Cost
Estimated Increase in Annual Operating Costs: Labor = $70,000 Insurance = $20,000 Utilities = $30,000 Total = $120,000
Emission Reductions (based on 2003 AER data)
VOC Emissions = 25 tons/year VOC Reduction = (25 tons/year) x (50%) = 12.5 tons/year
Annual Emission Fee Reduction
2003 Emission Fee Rate = $356/ton Emission Fee Reduction = (12.5 tons/yr) x ($356/ton) = $4,450/yr
Annual Solvent Cost Reduction
Solvent Usage Reduction: 12.5 tons/yr Solvent Reduction (gals) = 12.5 tons/yr x 2,000 lb/ton = 3,876 gals/yr
6.45 lbs/galStoddard Solvent Average Cost = $2.00/gal DF – 2000 Solvent Average Cost = $2.00/gal Solvent Cost Reduction = 3,876 gals/yr x $2.00/gal = 7,752/yr
Net Annual Operating Cost
Net Annual Operating Cost = Annual Operating Cost – (Annual Emission Fee Reduction
+ Annual Solvent Cost Reduction)= $120,000 – ($4,450 + $7,752) = $107,798
Cost Effectiveness (CE)
Scenario 1: Columbia Dry Cleaning Unit CE = [(Capital Cost) + (Net Annual Operating Cost x 8.11)]/(Emission Reduction x 10) = [($492,300) + ($107,798 x 8.11)]/(12.5 x 10) = $10,932/ton of VOC reduced
Scenario 2: RealStar Dry Cleaning Unit
CE = [(Capital Cost) + (Net Annual Operating Cost x 8.11)]/(Emission Reduction x 10) = [($780,000) + ($107,798 x 8.11)]/(12.5 x 10) = $13,233/ton of VOC reduced
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