Cost Containment: Beyond the Obvious

Utilities today can implement a number of different initiatives to help them contain costs and maximize profits. Some of those, such as switching to a more efficient fuel source if possible, can produce obvious results that are relatively easy to calculate. But there are other initiatives, though less obvious, that can produce significant results at the bottom line. One such cost-containment initiative involves evaluating something professionals might never think to consider: their choice of continuous emission monitoring (CEM) protocol calibration gases.

In 2003, the EPA conducted a blind audit in which they purchased (from an electrical power plant) new gas cylinders of protocol calibration gases that were produced by various suppliers of specialty gases. The EPA then sent the gas cylinders to a third-party analytical laboratory where they were analyzed against National Institute of Standards and Technology (NIST) standards, generally regarded as supplying the most accurate metrological standards available. The first results of the audit showed substantial variations in the accuracy of the protocol gases tested. Some of the gases were off by 8 percent. EPA audit results have been posted on their website:

Does variation of the inaccuracy of a calibration gas really matter all that much? More than one might think. This is all the more true when considering the issue of emissions credits. Suppose a facility has an inaccurate calibration gas that was either improperly prepared or has degraded while in the cylinder, so that the accuracy is less than what is stated on the tag (tag value). Admittedly, the facility may still be in the clear regarding actual compliance: the tag specifies ±2-percent accuracy, which is the minimum that the EPA requires. So unless the cylinder certification has expired, the facility has every reason to believe that tag value is correct.

But considering the EPA’s audit results, it is possible that the cylinder’s contents may not match the tag. When an environmental calibration gas goes bad, it does so in a manner that results in CEM calibration on the “too-sensitive side,” when a facility uses this gas to calibrate its CEM, it will report inflated emissions values. Therefore, the facility is in danger of overstating the number of tons of SO2, NOX, CO2, or VOCs emitted, thus losing tens if not hundreds of thousands of dollars in emission credits, all due to one inaccurate calibration gas.

Example Case

Consider the case of a coal-fired power plant in the state of New Jersey that emits 10,700 tons of SO2 per year. If their CEM is calibrated using a gas whose accuracy is off by 1 percent, the facility is incorrectly measuring and therefore overstating, their SO2 emissions. How does this seemingly small error translate to the power plant’s bottom line? Based on SO2 credits valued at approximately $1,000/ton, the overstatement will cost the utility $107,000 worth of emissions credits it could have banked or traded (1 percent of 10,700 = 107 tons x $1,000/ton of SO2).

Making matters worse, since a CEM is essentially an SO2/NOX/VOC billing meter for both credit trading and tax purposes, the utility will pay inflated Title V emission fees to the tune of $81/ton. That is an additional unnecessary expense of $8,667. All the while the plant would remain in compliance with EPA regulations for uncertainty, but the combined hidden loss would be $115,667.

The above example suggests an inaccuracy error of a mere 1 percent. But suppose the plant was unfortunate enough to use a gas that was off by 8 percent; the potential loss in unclaimed emission credits and unnecessary taxes would be much higher.

New trading requirements such as the Clean Air Interstate Rule (CAIR), California Reclamation Rules, the Highly Reactive Volatile Organic Rule (in the greater Houston area), the potential CO2 Regional Greenhouse Gas Initiative, or RGGI, and others add even more weight to the issue of accuracy. The increased demand for emissions measurement will place increasing focus on accurate measurement and instrument calibration. And that can’t happen without accurate calibration gases. The potential for millions more dollars in lost emissions credits, entirely due to bad protocol calibration gases, is staggering.

The hidden cost of inaccurate protocol calibration also can result in purchasing expensive materials that are entirely unnecessary. If a facility is using an SCR or an SNCR system to reduce NOX emission, and it is injecting ammonia, potential costs can go higher still. Ammonia is injected at rates that are based on the readings from an NOX inlet monitor. If the inlet monitor is inaccurately calibrated by bad calibration gas, it will detect NOX levels that are higher than the plant NOX emissions allowance and will trigger ammonia injection. Every ppm of NOX that is incorrectly read can result in spending tens of thousands of dollars on unnecessary ammonia or urea. As an example, in a natural gas turbine application with an SCR system, a 1-ppm error can result in injecting excess ammonia that, at today’s price, is worth over $30,000/year.

There are also less dramatic, though still substantial ways a company can reduce cost and avoid unnecessary expenses. With leading gas cylinder suppliers that offer Internet and IP technology-driven etools, facilities can pare down administrative and managerial expenses.

Tracking gas cylinder expiration is a good example. When a protocol cylinder reaches the expiration date shown on its Certificate of Analytical Accuracy, the contents can no longer be trusted to remain within 2 percent of the listed tag value. Under EPA guidelines, it is no longer compliant with test methods for emissions. If the cylinder retains enough gas pressure (500 psi) the facility might return it to the manufacturer for possible recertification. However, a way to avoid this problem altogether is to have the gas supplier automatically notify customers before a cylinder expires, and also warn customers each time a cylinder in their inventory expires so they won’t continue using it.

It is now also possible to obtain Certificates of Analytical Accuracy and MSDS documentation online. These documents are important for test verification and completion of most Part 60 tests. The ability to produce documentation when needed can save hours of frustration and organization. Gas suppliers can provide Internet access to detailed historical data that includes cylinder certificates, contents, ship and pickup dates. Facilities looking to contain costs should take a hard look at something they cannot see with the naked eye: the accuracy of the protocol gases used to calibrate their CEMs, and the services provided by the supplier who produces them.

About Scott Specialty Gases
Scott Specialty Gases, located in Plumsteadville, PA, is a leading international producer and supplier of specialty gas products and equipment. More information on the company and Scott’s products can be found at About the Author
Robert Davis is the marketing manager with Scott Specialty Gases, the world’s largest producer of EPA Protocol gases and a leading global manufacturer of specialty gases for all types of applications.

This article is copyrighted by Scott Gases. It may not be reproduced in whole or in part and may not be posted on other websites, without the express written permission of the author who may be contacted via email at

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