From: Aagenes, Jason D.
To: "Beth Havlik" ; "George Pruchnofski" ; "Erik Boleman" ; "Paul Taylor (ptaylor@barr.com)" ; Dostal, Thomas C. ; Davis, Todd E.
Cc: Skolasinski, Dave Z. ; Roth, Todd D. Subject: FW: DRAFT STS report
Date: Tuesday, June 26, 2007 5:08:31 PM
Attachments: UTAC Cost Analysis SpreadsheetSO2 STSHWTDraft 5 30 07.xls STS UTAC cost analysis.doc Importance: High



## All, MPCA hired STS to perform a more detailed cost analysis of installing a second scrubber on Line 2 for SO2 control as part of BART. They’ve given us a lot of time to review the draft – by tomorrow. Please take a quick read through and let me know if you have any comments or concerns ASAP.

Tom Dostal, Please forward this information to Jardar and see if they have any comments. Thanks, Jason

From: Fenske, Mary Jean [mailto:Mary.Jean.Fenske@state.mn.us] Sent: Tuesday, June 26, 2007 1:11 PM To: Aagenes, Jason D. Cc: Seltz, John; Jackson, Anne; Taylor, Hal Subject: DRAFT STS report

Jason, Here is the draft report from Hal Taylor at STS. We are currently reviewing and assembling our comments. If you see any issues with the assumptions used, please comment directly to the MPCA (by tomorrow if possible).

You will receive a comment of the final report and you can provide more detailed comments on that product as well, if you choose .

<<UTAC Cost Analysis SpreadsheetSO2 STSHWTDraft 5 30 07.xls>> <<STS UTAC cost analysis.doc>>
Thanks Jason. Mary Jean

Mary Jean Fenske, P.E. Minnesota Pollution Control Agency
520 Lafayette Road N. St. Paul

, MN 55155 (651) 297-5472 e-mail: mary.jean.fenske@pca.state.mn.us

# Draft United Taconite LLC Forbes, Minnesota Line 2 Sulfur Dioxide Scrubbing May 30 , 2007

LINE 2

Item Description Unit # Operating Labor Per Chrissy Bartovich e-mail $/hr 45.31 Maintenance Labor Per Chrissy Bartovich e-mail $/hr 47

Electricity Expected annual average industrial price of electricity for 2007 - DOE http://tonto.eia.doe.gov/steo_query/app/elecpage. htm $/kwh 0.051 water Per Chrissy Bartovich e-mail $/mgal 2.07

Compressed Air EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 6 Chapter 1 Example problem; Dried & Filtered, Ch 1.6 '98 cost adjusted for 3% inflation $/mscf 0.32

Waste hauling Two truckloads / day to lined landfill or pond; 8500 ST/yr $/ton 52.00 Lime Estimate from Cutler-Magney Company 2006 $/ton 88.98 Ore Loss 5000 LTPY (with mechanical collectors) $/ton sell - cost 15.00

Sales Tax % 6.5

Operating Unit:
Emission Unit Number Design Capacity ( never used in calc. ) LT/hr 452 Expected Utilization Rate 94% Expected Annual Hours of Operation Hours 8,216 Annual Interest Rate 7.0% Expected Equipment Life yrs 20 Line No. 2 Standardized Flow Rate scfm@ 32F 518,220 Temperature Deg F 110 Moisture Content 10.0% Actual Flow Rate acfm 600,000 Standardized Flow Rate scfm @ 68 deg F 555,000 Dry Std Flow Rate dscfm @ 68 deg F 499,500

CAPITAL COSTS Direct Capital Costs

Purchased Equipment 1 (A) Mechanical Dust Collector(s) Barron Industries/HWT 1,150,000 Kiln system Fans and Motors (2) Robinson/Barron/WEG/H. Taylor 2,240,000 Scrubbers (2) H. Taylor 2,400,000 Recirculation tank (lined) Jamar/H. Taylor 320,000 Mist eliminator wash tank (rubber lined) H. Taylor 240,000 System recirculation piping (elastomer lined) H. Taylor 285,000 Lime storage silo and associated lime mixing/handling equipment Portec/H. Taylor 480,000 Scrubber blowdown thickener, filter and material handling and day storage sys Jardar Systems, Inc./H. Taylor 2,800,000 Unlined system piping H. Taylor 125,000 Ductwork H. Taylor/jamar 2,300,000 System Stack H. Taylor/R. C. Fabricators 425,000 Monolithic linings (scrubber, discharge ductwork and stack) Dudick Corrosion proofing/U. S. Coatings/H. Taylor 675,000 Recircualtion pumps/ blowdown pumps (including motors) Warman/H. Taylor 460,000 Instrumentation and controls Jardar Systems, Inc./H. Taylor 430,000 Structural steel and access (materials) STS/H. Taylor 880,000 Scrubber building (erected on foundation) STS 1,180,000

Purchased Equipment Costs (A) 16,390,000

MN Sales Taxes 6.5% 1,065,350 Freight 5% of control device cos 819,500 Purchased Equipment Total (B) 12% 18,274,850

Installation

"Foundations" (building, incl. floor; fan and motor pad, stack foundation STS 1,500,000 Handling & erection 2 of purchased equip c 12,000,000 Electrical (MCC and power distribution) Jardar Systems/H. Taylor 920,000 Structural steel installation STS 535,000 Inlet ductwork insulation and lagging H. Taylor 980,000 Painting 1% of purchased equip c 182,749 Installation Subtotal Standard Expenses 16,117,749 Total Direct Capital Cost, DC 34,392,599

CONTROL EQUIPMENT COSTS Capital Costs Direct Capital Costs Purchased Equipment (A) Purchased Equipment Total (B) of control device cos 16,390,000 18,274,850

Installation - Site Specific Costs 16,117,749

Total Direct Capital Cost, DC 16,117,749 Total Indirect Capital Costs, IC 15% of purchased equip c 34,392,599 Total Capital Investment (TCI) = DC + IC 2,192,982 58,536,929 Operating Costs

Total Annual Direct Operating Costs Labor, supervision, materials, replacement parts, utilities, etc.

Total Annual Indirect Operating Costs Sum indirect oper
costs + capital recovery cost 7,483,622 Total Annual Cost (Annualized Capital Cost + Operating Cost) 6,795,163 14,278,785

Indirect Capital Costs Engineering, supervision 5% of purchased equip c 913,743 Construction & field expenses 0% of purchased equip c 0 Contractor fees 0% of purchased equip c 0 Start-up 1% of purchased equip c 182,749 Performance test 1% of purchased equip c 182,749 Model Studies NA of purchased equip c NA Contingencies 5% of purchased equip c 913,743 Total Indirect Capital Costs, IC 12% of purchased equip c 2,192,982

# Draft United Taconite LLC Forbes, Minnesota Line 2 Sulfur Dioxide Scrubbing May 30 , 2007

Total Capital Investment (TCI) = DC + IC 36,585,581 Retrofit multiplier 60% of TCI 21,951,348

Total Site Specific Costs 0 Total Capital Investment (TCI) Retrofit Installed 58,536,929

OPERATING COSTS Direct Annual Operating Costs, DC

Operating Labor Operator 45.31 $/Hr, 0.5 hr/8 hr shift 23,267 Supervisor 15% 15% of Operator Cos 3,490 Maintenance Maintenance Labor 47.00 $/Hr, 0.5 hr/8 hr shift 24,135

Utilities, Supplies, Replacements & Waste Management Electricity NA 465,032 Water 2.07 #REF! 136,394 Waste hauling 52.00 $/ton 442000

Lime 88.98 $/ton, 178 lb/hr, 8216 hr/yr, 93% utilization 229476 Replacement Parts and Installation 6,159,828 Total Annual Direct Operating Costs 7,483,622

Indirect Operating Costs

Overhead 60% of total labor and material costs 30,535
Administration (2% total capital costs) 2% of total capital costs 731,712 Property tax (1% total capital costs) 0% of total capital costs 0 Insurance (1% total capital costs) 1% of total capital costs 365,856 Production loss 5000LTY 141,589 Capital Recovery 0.0944 for a 20- year equipm 5,525,472 Total Annual Indirect Operating Costs 6,795,163 Sum indirect oper co 6,795,163

Total Annual Cost (Annualized Capital Cost + Operating Cost) 14,278,785 14,278,785

See Summary page for notes and assumptions

Capital Recovery Factors Primary Installation Interest Rate 7.00% Equipment Life years 20 CRF 0.0944

Electrical Use

Blower, Scrubber EPA Cost Cont Manual 6th ed Section 5.2 Chapter Flow acfm 800,000

∆ P in H2O 14.5 Efficiency 0.65 kW 2,088.0

Circ Pump EPA Cost Cont Manual 6th ed Section 5.2 Chapter Flow 16,000 gpm Liquid SPGR 1

∆ P ft H2O 70 Efficiency 0.6 kW 300.8 H2O discharge to thickener EPA Cost Cont Manual 6th ed Section 5.2 Chapter flow 900 gpm Liquid SPGR 1

∆ P ft H2O 75 Efficiency 0.6 kW 16.9 Total kW 2,405.7

Reagent Use & Other Operating Costs

Lime Use Calculated lime usage 2,600 lt/yr = 608.6 #/hr 608.50 lb/hr lime, lime addition at 1.1 times the stoichiometric ratio 670.00

Liquid/Gas ratio * L/G = Gal/1,000 acf 20.0 Circulating Water Rate 2 gpm 16,000 Water Makeup Rate = Blowdown of 350 gpm + evap. Loss 493.00 143 gpm Evaporation Loss 4 = gpm 142.65

Operating Cost Calculations Annual hours of operation: 8,216 Utilization Rate: 93.7% Operating Labor Op Labor Unit cost $ $/Hr 45.31 Use rate hr/8 hr shift 0.5 Annual use* 514 Annual cost 23,267 $/Hr, 0.5 hr/8 hr shift, 8216 hr/yr Supervisor 15% of Op. Annual cost 15% of Operator Cos 3,490

Maintenance Maint Labor $/Hr 47.00 Use rate hr/8 hr shift 0.5 Annual use* 514 Annual cost 24,135 $/Hr, 0.5 hr/8 hr shift, 8216 hr/yr Maint Mtls 100 % of Maintenance Labor Annual cost 100% of Maintenanc 24,135

Utilities, Supplies, Replacements & Waste Management Electricity $/kwh 0.051 Use rate kW-hr 2406 Annual use* 18520072 Annual cost 465032 $/kwh, 2,406 kW-hr, 8216 hr/yr, 93.7% utilization

# Draft United Taconite LLC Forbes, Minnesota Line 2 Sulfur Dioxide Scrubbing May 30 , 2007

Water $/mgal 2.07 Use rate gpm 142.7 Annual use* 65,891 $/mgal, 143 gpm, 8216 hr/yr, 93.7% utilization Annual cost 136,394

Waste Disposal Two truckloads/day, 8500 st/year 0.0 Annual use* 0 Annual cost 0 $/ton, 8500 s./yr 7946 hr/yr, 94% utilization Lime $/ton 88.98 Use rate lb/hr 670.0 Annual use* 2579 Annual cost 229476 $/ton, 670 lb/hr, 8216 hr/yr, 93% utilization *annual use rate is in same units of measurement as the unit cost factor

Replacement Parts & Equipment:

Dust Collector Tubes Equipment Life yrs 4 CRF CRF factor from Table A-2 X equipment life 1.8878 Replacement cost each replacement Incl. tax and freight 57500 Replacement Installation Cost each replacement 33200 Capital recovery cost of replacementsInstalled Cost total all replacements 684894

Pump Impellor and Liners (Recirculation and Blowdown Pumps) Equipment Life yrs 4 CRF CRF factor from Table A-2 X equipment life 1.8878 Replacement cost each replacement Incl. tax and freight 43125 Replacement Installation Cost each replacement 12500 Capital recovery cost of replacementsInstalled Cost total all replacements 420036

Duct Expansion Joints Equipment Life yrs 5 CRF CRF factor from Table A-2 X equipment life 1.8878 Replacement cost each replacement Incl. tax and freight 46000 Replacement Installation Cost each replacement 11000 Capital recovery cost of replacementsInstalled Cost total all replacements 322814

Fan Wheels (proportioned cost for larger wheel; process needs fan with or without FGD Equipment Life yrs 10 CRF CRF factor from Table A-2 X equipment life 1.8878 Replacement cost each replacement Incl. tax and freight 460000 Replacement Installation Cost each replacement 75000 Capital recovery cost of replacementsInstalled Cost total all replacements 1009973

Scrubber Venturi Rods and Holders Equipment Life yrs 3 CRF CRF factor from Table A-2 X equipment life 1.8878 Replacement cost each replacement Incl. tax and freight 69000 Replacement Installation Cost each replacement 15000 Capital recovery cost of replacementsInstalled Cost total all replacements 898593

Mist Eliminator vanes Equipment Life yrs 6 CRF CRF factor from Table A-2 X equipment life 1.8878 Replacement cost each replacement Incl. tax and freight 260000 Replacement Installation Cost each replacement 30000 Capital recovery cost of replacementsInstalled Cost total all replacements 1277411

Scrubber, discharge duct and stack lining Equipment Life yrs 5 CRF CRF factor from Table A-2 X equipment life 1.8878 Replacement cost each replacement Incl. tax and freight 59000 Replacement Installation Cost each replacement 180000 Capital recovery cost of replacementsInstalled Cost total all replacements 1353553

Venuri Spray Nozzles Equipment Life yrs 2 CRF CRF factor from Table A-2 X equipment life 1.8878 Replacement cost each replacement Incl. tax and freight 15000 Replacement Installation Cost each replacement 3000 Capital recovery cost of replacementsInstalled Cost total all replacements 305824

Blowdown thickening/filtering parts Equipment Life yrs 4 CRF CRF factor from Table A-2 X equipment life 1.8878 Replacement cost each replacement set Incl. tax and freight 78000 Replacement Installation Cost each replacement 45000 Capital recovery cost of replacementsInstalled Cost total all replacements 928798

Instrumentation and controls components Equipment Life yrs 8 CRF CRF factor from Table A-2 X equipment life 1.8878 Replacement cost each replacement set Incl. tax and freight 80000 Replacement Installation Cost each replacement 0 30000 Capital recovery cost of replacementsInstalled Cost total all replacements 311487

Total CRC of all replacement parts for system for 20 year operating life 6159828

Sulfur Dioxide (SO 2 ) Molecular Weight 64.065 24-hr Max Emis Lb/Hr Max Emis Lb/Hr Projected future actual emissions (tpy) 2005 Emis Annual T/Yr lb/hr ppmv ton/yr ppmv Control Eff % 50% Exit Conc. Controlled Em T/yr 0.0 Reduction: ( 2.8 #/min = 2.8 x 60 x 8216)/2000) (No T/Yr 690.1

Control Cost $/Ton Rem 20690 Notes & Assumptions 1. Calculations per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 5.2 Chapter 1 (absorbers) 2. Equipment for FGD system estimated by manufacturers listed in notes and STS from recent kiln projects 3. Site prep cost estimates per H. Taylor based on specific UTAC installation area and site prep costs of recent projects. 4. Replacement parts intervals and associated costs based on manufacturers recommendations tempered by actural field experience on similar systems 5. Emission reduction based on Engeeser's report and predicted reduction rate over existing emissions.

# Detailed Cost Analysis to Enhance Sulfur Dioxide Removal For Scrubbers Installed on Line 2 Taconite Grate Kiln at UTAC. 

# DRAFT

Basis for analysis

This cost an alysis is based on the wet scrubber analysis prepared for the Minnesota Pollution Control Agency (MPCA) by Mr. John Engesser, P.E. ; “Evaluation of Minnesota Taconite Wet Scrubbers at Minntac, Keewatin Taconite, Hibbing Taconite, and United Taconite”

. The resu lts of this evaluation indicate that the United Taconite (UTAC) Line 2 system is the only Min nesota Taconite Induration scrubber system installation which h as the potential to increase sulfur dioxide (SO 2 

# ) collection efficiency by the addition of a chemical reagent to the system scrubbing water. Scenarios reviewed in John’s analysis included the use of the following reagents: sodium hydroxide or sodium carbonate, lime addition to the existing scrubbing system scrub water recirculation system and installation of a new re

- circulating lime scrubber similar to the Keewatin Taconite scrubber system. Due to the environmental issues which will result from the use of a sodium based reagents costing for th is scenario was not examined

.

Site Visit

The writer made a visit to UTAC to inspect the existing scrubber system and its suitability for lime addition SO 2 

# cont rol and to select an area for the installation of a new retrofit lime scrubber system.

The results of the site visit are as follows:

Existing Scrubber System

The installed particulate scrubber system uses two 2) identical pa rallel scrubber syst ems to control particulate exhaust emissions from the grate kiln. Each scrubber system has a dedicated “wet” ID fan discharging to a single system stack. Each scrubber system consists of two modified Ducon model “VVO’S” venturi throat scrubbers dischargi ng tangentially

, 180 degrees apart into a single cylindrical scrub water droplet separator or mist eliminat or. Each Ducon venturi was initially installed with swing door or “bomb b ay” style adjustable venturi throat . These bomb bay mechanisms have been r eplaced with venturi rods. The separator was initially designed to use red wood slat mist elimination blades or

vanes which were replaced with 3 pass metal 316 stainless steel chevron vanes in the 1980’s

. These vanes are now being retrofitted with higher efficiency sinusoid style thermoplastic vanes.

Spent scrub water is treated in each system by a dedicated thickener. The overflow from the thickeners is returned to the scrubber s with the system make up water. Thickener underflow is sent back to the pro cess. System scrub water

# blow down is used to control suspended solids in the scrub water to minimize abrasion wear in the scrubber.

Potential location for retrofit scrubber system

The existing system installation is very compact and does not permit t he installation of any required intermediate system flue gas components such as mechanical collectors between the kiln and existing scrubbers. Moreover , the existing location does not have the area available for a recirculation scrub water system. For th e retrofit scrubber system cost analysis an ar ea just outside the West end of existing building in the location of the existing stack was assumed to be available for the new system installation.

Line 2 SO 2 

# scrubbing scenarios

Lime addition to existing sy stem

The design basis for this system is to use the existing particulate scrubber system for simultaneou s SO 2 

# and particulate scrubbing. The only additional equipment required for this scenario is the addition of a lime storage and feed system

.

Cost An alysis

The cost analysis for this scen ario was not prepared since the operating chemistry required for this system and the inherent design of the existing scrubbers will cause severe scrubber internal chemical scaling rendering the system inoperable.

Ne w r etrofit lime scrubber system

The design basis for this recirculating lime scrubber system is similar to that of the Keewatin Taconite scrubber system and requires the use of a mechanical collector upstream of the scrubber to remove enough particulate f orm the gas stream to permit scrub water recirculation to conserve reagent (lime) , prevent calcium scaling, and prevent abrasion wear from the recirculated collected particulate in the scrub water.

The cost analysis for this scenario assumes that a new sc rubber system will be required to be installed in the area downstream of the kiln in the location presently taken by the existing scrubber system fan, scrubber and stack. The footprint requirements of this new system will require the existing building to be extended to the West in the area presently occupied by the existing system stack.

# Retrofit system design data

Volume (total two scrubbers): 600,000 ACFM Pre s sure (at scrubber inlet) : 16” W. C. Inlet flue gas temperature; 110 °F SO 2 

# inlet : 140 p pm Lime use : 608 lb/hr SO 2 

# Collection efficiency: A pproximately double existing rate @ 50%

Design

The scrubbing equipment required for the new system presented in the cost analysis is as follows:

• Mechanical Collector/multi tube cyclone

• Venturi Rod s crubbers (two for parallel operation required)

o Materials of construction:

 Monolithic lined carbon steel ( vinyl ester)

 AL 6XN alloy

 Rubber lined internal components

 Ultem plastic internal mist eliminator components

 Ceramic lined internal components

 Stellite scrub liquor nozzles

• System ID fans and motors (two required)

o Kiln/ mechanical collector/ scrubber ID fan systems, single dry fan replacement for each of the wet fan s 2A and 2B to provide additional pressure drop for mechanical collector and scrubber SO 2 

# scrubbing. Fans will be located downstream of the new mechanical collector.

• Ductwork

o Carbon steel ductwork to connect kiln discharge to new mechanical collectors, mechanical collector discharge to new ID fan inlets and fan outlets to scrubber inlets. All ductwork insulated and lagged.

o Lined carbon steel ductwork/stack breaching to connect scrubber discharges to stack. Carbon steel ductwork designed and fabricated to receive field installed monolithic vinyl ester lining for corrosion protection.

• Scrub water recirculation system

o Monolithic vinyl ester lined recirculation tank

# o Warman rubber lined pumps, operating and standby; each scrubber system

o Rubber lined recirculation piping

o Alloy and rubber lined valves and specialties

• Scrubber mist eliminator wa sh tank system

o Monolithic vinyl ester lined recirculation tank

o Warman rubber lined pumps, operating and standby; each scrubber system

o Rubber lined recirculation piping

o Alloy and rubber lined valves and specialties

• Scrub liquor settling and treatment syst em

o Cone thickener with filter press

o Monolithic lined vessel and launders with rubber covered rake system

• Lime storage and feed system

• Instrumentation and controls including the following

o PLC control system

o Nuclear densitometer

o System RTD temperature elem ents

o Differential pressure transmitters

o Tank level sensors

o Pressure sensors and transmitters

• System Stack

o Carbon steel monolithic vynilester lined

• Lot structural steel and supports for scrubber system components

• Foundations

• Scrubber system building

N ew retrofit s ystem installation and operating costs

The system operating and installation costs are displayed on the attached spreadsheet.

This spreadsheet was prepared from a sample spreadsheet transm itted to STS from the MPCA for the purpose of this co st analysis with missing formulations input from the "EPA Air Pollution Control Cost Manual", sixth edition".

# Estimates for the pollution control equipment and installation were computed using actual costs from recent system installations completed by STS on Grate Kiln particulate/ SO 2 

# scrubbing systems.