Date: July 29 , 200 9

Subject: Meeting with The Fertilizer Institute (TFI)

Nitric Acid NSPS Review

EPA Contract No. EP

- D

- 06

- 118; Work Assignment No. 3

- 22 RTI Project No. 0210426.00 3 .0 22

From: Roy Neulicht

Melissa Ice nhour

To: Bill Neuffer

OAQPS/SPPD/MMG (D243

- 02) U. S. Environmental Protection Agency Research Triangle Park, NC 27711

A meeting was held on June 30, 2009 to discuss EPA’s review of the New Source Performance Standards (NSPS) for Nitric Acid plan t s (40 CFR Part 60, Subpart G ). The agenda and a detailed list of attendees are attached. The meeting attendees included :

EPA Steve Fruh, EPA, OAQPS, SPPD, Metals and Minerals Group Bill Neuffer, EPA, OAQPS, SPPD, Metals and Minerals Group Tina Ndoh, E PA, OAQPS, SPPD, Program Design Group Larry Sorrels, EPA, OAQPS, HEID, Air Benefits and Cost Group (via phone) Robin Segall, EPA, OAQPS, AQAD, Measurement Technology Group (via phone) Mausami Desai, EPA, OAR, Climate Change Division (via phone)

Nathan Fran k, EPA, Region V (via phone)

The Fertilizer Institute (TFI) William (Bill) Herz, TFI; Vice President of Scientific Programs Johnny McD aniel , Coffeyville Resources (via phone) Adam Diamond, CF Industries; Manager, Public Affairs
Jim Schellhorn, Terra Indus tries ; Director of Environmental Health and Safety Chris Leason, Gallagher and Kennedy; Attorney at LawEPA Support Contractors : Roy Neulicht, RTI International
Melissa Icenhour, RTI International Jason Goldsmith, RTI International

Purpose: The purpo se of the meeting was to initiate communication with The Fertilizer Institute (TFI) on the activities related to the review of the Nitric Acid Manufacturing

NSPS.

Discussion: A summary of the key items discussed during the meeting follows.

Industry ov erview . Bill Herz (TFI) gave an overview of the industry and the process operations. They indicated that TFI represents companies responsible for about 60 percent of the Nitric Acid production in the United States. Mr. Neuffer asked who might represent t he other producers not represented by TFI; he asked if it would be the American Chemistry Council (ACC). TFI indicated they were not certain, but it would likely be the ACC. After the Sierra Club’s notice of intent to sue, TFI conducted a survey of their members and also obtained data from the International Fertilizer Center (IFC) in Mussel Shoals, Alabama. TFI identified forty nine n itric a cid production locations, including seven Department of Defense (DOD) facilities. Twenty two of the company locati ons of the 42 non

- DOD facilities are TFI members and represent approximately 60 percent of the production.

TFI compared their information to a list of the facilities provided to them by Bill Neuffer. The list provided by Mr. Neuffer represents EPA’s most current list of facilities and was developed as a result of an EPA project to de velop a bottom up inventory of

g reenhouse gas (GHG) emissions for the industry. TFI indicated that six of the facilities

identified on EPA’s list may not be active nitric aci d facilities . Furthermore, EPA’s list

did not include the seven DOD facilities . A ccording to the TFI information, DOD is the third largest producer of nitric acid in the US.

TFI indicated that 22 member company facilities out of 25 have responded to

th eir survey. T he 22 locations have 37 unique nitric acid production units ( also known as trains) . Twenty eight of these trains are subject to the nitric acid NSPS. All of the 37 nitric acid trains at the 22 locations are producing nitric acid with an aci d strength in the range of 53 to 67 percent acid. The NSPS applies to “weak nitric acid” production units; the NSPS defines “weak nitric acid” as acid which is 30 to 70 percent in strength. Whether the NSPS should be expanded to include strong acid facil ities was raised as one issue to consider during the NSPS review.

Process Description and Data Presentation . Jim Schellhorn (Terra Industries ) presented a brief overview of the process , which b asically has three step s

. A mixture of ammonia in air (ap proximately 10 percent ammonia in air) reacts in the presence of a precious metal catalyst in the nitric acid converter to produce nitric oxide (NO). Then,NO is reacted non

- catalytically with residual oxygen and the addition of bleach air to

form NO 2

. T he NO 2 is then passed through an absorption tower and absorbed in water to

form nitric acid. Un

- reacted NO and NO 2 leave the absorption tower, pass through process heat exchangers and ultimately to the stack. N itrous oxide (N 2 O) is a byproduct

that is f ormed in the converter and passes through the nitric acid process as an inert to the

stack

.

In the mid 1970’s to 1980’s a typical absorber outlet was 800 to 1000 ppm NO

x (NO

x is the combined NO and NO 2 emissions). Changes to the process technology have

reduced the uncontrolled emissions levels on some nitric acid plant designs (i.e., without

add

- on emissions control). For example, Terra Industries has a facility that meets the

current NSPS limit without emissions control. The current NSPS limit is 3 l b NO

x per ton of acid produced ( 100 percent acid basis) and equates to a concentration of approximately 200 ppm NO

x .

A discussion ensued about the term “extended absorption

. ” It was stated that it is

difficult to d ifferentiate between “extended absorpt ion ” whose intent is to improve plant efficiency and “extended absorption” whose intent is to control emissions

. It was stated that industry uses the term “extended absorption” to refer to an additional absorption tower that in many cases is considered a part of the process rather than a control device

.

A question was asked regarding whether one could assume that all new plants would be built using the dual pressure design. Although the TFI representatives felt

many new plants would be the dual pressur e desi gn, it was noted that the Coffey ville unit built in 1998 was a single pressure unit.

With respect to emissions controls, TFI stated that of the 28 process trains subject

to the nitric acid NSPS that respond ed to the survey:

• 16 are equipped with s elective catalytic reduction (SCR),

• 6 are equipped with non

- selective catalytic reduction (NSCR),

• 2 use extended absorption,

• 1 uses extended absorption and NSCR;

• 1 uses extended absorption and hydrogen peroxide catalyst addition ;

• 1 uses a water chiller; and

• 1 is uncontrolled

.

With respect to permit limits, NO

x emissions limits range from 0.6 to 3 lb per ton of acid produced (100 percent acid basis), and average 1.1 lb/ton per ton of acid produced, (100 percent acid basis). TFI stated that the Sierra C lub asserts emissions reductions ranging from 95 to 98 percent for extended absorption, SCR and NSCR. They have data from facilities that extended absorption achieves only 91 percent reduction, SCR achieves approximately 75 percent reduction, and NSCR ach ieves at most a 93 percent reduction.Bill Neuffer indicated that EPA would likely want to make some site visits in

order to view the process first hand and gain a better understanding of the process. TFI indicated that site visits could be arranged.

History of NSPS . Bill Neuffer gave a brief overview of the history of the NSPS.

The handout is attached.

NSPS reviews occurred in 1979 and 1984. The emissions standard did not change as a result of either of the reviews. EPA will again be reviewing the NO

x emissions limit. EPA also is interested in collecting information on GHG’s, specifically, N 2 O. Terra indicated there is very little actual N 2 O data, other than data based on emissions factors (EF). The available monitoring information indicates the emission factors are “pretty good.” There was a brief discussion on measurement techniques for N 2 O. Nathan Frank

referred to a 1991 EIIP document. Robin Se gall indicated that FTIR was one method for measuring N 2 O. Nathan Frank indicated he knew of at least one facility that was using

an in

- situ continuous emission monitoring system ( CEMS ) to measure both NO

x and

N 2 O.

Path Forward/Cooperative Efforts . Bill Neuffer asked TFI if they had particular issues they wanted to discuss. TFI representatives stated that one issue is the regulation of GHG (i.e., N 2 O) under an NSPS. They believe it is more appropriate to regulate under GHG legislation. N 2 O emissions are of interest to the industry, but the nitric acid production industry should not be the fir st regulated industry. When natural gas price increases drove up the price of nitrogen in 1991, many nitrogen plants closed. Due to the reduction in US nitrogen capacity, a pproximately 50 percent of the nitrogen used in the

US is imported. The nitrogen production process results in G HG emissions in the form

of CO 2. Now that nitrogen production capacity has been reduced, the baseline for total

GHG emissions is reduced. TFI is concerned that a lower baseline might result i n increased regulatory pressure to reduce N 2 O emissions. TFI believes that the GHG issue needs to be investigated holistically for the industry.

TF I asked a question about what type of economic impact analysis will be done by EPA for the NSPS, and were particularly interested in how th is analysis would estimate impacts on trade. Larry Sorrels replied that an economic impact analysis will be done for this NSPS as is typically done by OAQPS . The analysis will include est imates of impacts on product prices and output, and impacts on impo rts and exports of affected products from implementing the NSPS. Such impacts are normally estimated for the fifth year after proposal of the NSPS, and the economic analysis uses the compliance costs for the NSPS as an input.

TFI indicated that commen ts on the GHG reporting rule have been solicited for

nitric a cid production and ammonia production and the comments submitted to EPA. TFI also indicated that EF numbers have been reported to the IFC.

Emissions test methods were discussed. The issue of whether Method 7E (instrumental method) was an appropriate method for determining compliance with theNSPS was raised by Bill Neuffer. Bill mentioned that only Methods 7 though 7D (wet

chemistry methods) are approved methods in the current regulation. R obin Segall explained that there are two issues with the use of Method 7E: 1) how moisture in the sample is handled, and 2) the calibration procedures/gases used. The concern is a bias in

measured emissions as a result of the loss of NO 2 (which is highly soluble in water) during sample transport/conditioning. She stated EPA would look into clarifying 7E for use in nitric acid production units; e.g., specifying sample conditioning procedures and the use of dynamic spiking to verify performance.

Jim Sche llhorn (Terra Industries ) indicated they would like EPA to look at the emissions characteristics of new (relative to when the NSPS was written) sources. He

stated that the newer sources have low NO 2 emissions relative to NO emissions, and the

gas stream h as low moisture content. He stated that the NO 2 emissions are sufficiently

low that accurate measurements of NO

x can be made without being overly concerned

about NO 2 solub ility in water . TFI indicated they would like EPA to look at ways to
allow Method 7 E as an approved performance test method for nitric acid plants

. TFI also indicated they would like EPA to look at the NSPS Subpart G provision that currently states the calibration gas must be NO 2. They would like to see NO 2 and /or NO allowed as the cal ibration gas depending upon what is most appropriate for the analyzer

.

Start up, shutdown, and malfunction emissions (SSM) are another area of concern for TFI. Currently, in Part 60, SSM emissions are excluded from regulation. Jim Schellhorn (Terra In dustries ) indicated it would not be a correct approach to include SSM

emission s in a short

- term (3

- hr) average emission limit. He believes a more appropriate approach to address SSM emissions would be to set a maximum annual emissions cap, or a long

- term average. Nathan Frank indicated he thought SSM emission s would vary substantially from facility to facility.

Information collection was also discussed. TFI asked whether the EPA regulatory development team had access to the Section 114 information col lected during the nitric acid enforcement initiative. Nathan Frank indicated there was no single repository for

that Section 114 information. He also suggested that the enforcement initiative focused on the high emitters and would not likely provide the information needed for NSPS

review. He stated he was the OECA National Coordinator for the enforcement initiative.

Summary and Action Items: EPA indicated they wanted to keep lines of communication open with TFI and other representatives of the indus try. The following action items and areas of concern

were identified:

1. Working with TFI to refine the list of facilities and process units, as well as each facility’s process design (e.g., single pressure, dual pressure) and emissions controls (e.g., SC R, NSCR) characteristics;

2. Planning site visits to two or three representative facilities in the September

November time frame;

3. Assessing the applicability of Method 7E for nitric acid facilities; 4. Assessing the use of NO in addition to NO 2 for ana lyzer calibration;5

. Obtaining the most recent CEMS data for NO

x emissions;

6

. Regulation of GHG (N 2 O) via an NSPS revision or through GHG legislation ( TFI’s preferred option) ;
7

. Possibly o btaining available N 2 O data and emissions factors (TFI does not agree that this is warranted) ; and

8

. Obtaining available stack emissions test data collected via the Section 114

NSR enforcement initiative.ATTACHMENTS

Meeting Agenda Attendee Listing History of NSPSWilliam C. Herz

Vice President,

Scientific Programs

Union Center Plaza 202.962.0490 820 First Street, NE Suite 430 202.962.0577 fax Washington, DC 20 002 www.tfi.org P ROPOSED A GENDA

EPA AND TFI M EETING

N I TRIC A CID P LANT NSPS

J UNE 30, 2009

R ESEARCH T RIANGLE P ARK

, NC

I

. I NTRODUCTIONS

– P EOPLE AND R OLES

II

. D ISCUSSION OF TFI AND ITS M EMBERS

III

. D ISCUSSION OF EPA C ONTEMPLATED A CTIVITIES

IV

. TFI D ATA D ISCUSSION

V

. S YNERGIES

VI

. N ITROUS O XIDE AND C LIMATE C HANGE L EGISLATION

VII

. P A TH F ORWARD /R ESOURCESJune 30, 2009 EPA/TFI MEETING

- Nitric Acid NSPS

FIRST NAME LAST NAME ORGANIZATION PHONE E

- MAIL

Bill Neuffer ESP/SPPD (919)541

- 5435 neuffer.bill@epa.gov

Bill Herz The Fertiliz er Institute (202)515

- 2706 wcherz@tfi.org

Chris Leason Gallagher & Kennedy (602)530

- 8059 csl@gknet.com

Adam Diamond CF Industries (202)371

- 9271 adiamond@cfindustries.com

Jim Schellhorn Terra Industries (918)266

- 9653 jschellhorn@terraindustires.com

Melissa Icenhour RTI (919)316

- 3734 mkic enhour@rti.org

Jason Goldsmith RTI (919)541

- 7383 jgoldsmith@rti.org

Tina Ndoh EPA/SPPD (919)541

- 2750 ndoh.christina@epa.org
Roy Neulicht RTI (919)316

- 3736 rmneulicht@rti.org

Steve Fruh EPA/SPPD (919)541

- 2837 fruh.steve@epa.gov

Attendance by Phone
Larry Sorrels EPA/HEID/ABCG (919)541

- 5041 sorrels.larry@epa.gov

Robin Seagall EPA/AQAD (919)541

- 0893 segall.robin@epa.gov

Mansami Desai EPA/OAP/CCD (202)343

- 9381 desai.mausami@epa.gov

Nathan Fran k EPA/Reg5/ARD (312)886

- 3850 frank.nathan@epa.gov
Johnny McDaniel Coffeyville Resources (620)870

- 4610 jmcdaniel@CVREnergy.comSubpart G NSPS Review

Notes for June 30, 2009 Meeting with The Fertilizer Institute

Why is EPA reviewing the NSPSs?

The EPA is required by the CAA (section 111(b)(1)(B)) to review and, if appropriate, revise existing NSPS at least every 8 years.

In addition to the CAA requirem ent to review the NSPS periodically, EPA has received a citizen suit from Sierra Club and Environmental Integrity Project related to the nitric acid NSPS which is also prompting review of the standards.

NSPS (40 CFR part 60) Promulgation date Previous changes to rule Nitric Acid (subpart G) June 14, 1974 (39 FR 20794) Changes dated October 6, 1975 [40 FR 46258], April 22, 1985 [50 FR 15894], and February 14, 1989 [40
FR 6666]

NSPS Reviews were 1985

and 1989

What is the schedule for the NSPS reviews ?

Preliminary draft of Consent Decree (6/18/09):

- Proposal of review in FR by November 15, 2010

- Promulgation of review in FR by November 15, 2011

The proposed/final FR notices must be one of the following:

- Determination that revision to the NSPS is unnecessary based on complete

review

- Revisions to the NSPS

What are some potential outcomes of the NSPS reviews?

Potential outcomes include one or more of the following:

- No changes

- Clarifying amendments

- Changes to emissions limits or other rule requirements

- Add emission limits for additional pollutants (i.e., N 2 O)

We currently have no inclination as to what will be changed. It will depend on what the information gathered reveals.

Now is the time to provide your ideas on potential amendments needed.Test Methods

Changes that increase stringency of the rule (if any) would apply only to new units installed following the NSPS review proposal date.

What is the process?

1. Data gathering (emissions test data, site visits, permits, information from companies/trade groups/equipment vendors/states, state regulations, etc.) 2. Data analysis (compile data, analyze regulatory options, make recommendations) 3. Develop FR proposal (preamble and rule amendments) 4. Receive, summarize, and review publi c comments on proposal 5. Review conclusions, conduct additional analyses needed, make recommendations 6. Develop final FR notice 7. Litigation (hopefully none)

What is the status of our data gathering efforts?

A list of nitric acid facilities has been compiled from various information sources such as EPA’s AIRS, ICIS, Region 5, etc.

We have obtained many title V permits from state websites. We will use permit data to identify any States with requirements more stringent than NSPS, equipment capable of meeting more stringent emission limits, etc.

Additional data needs include:

- For each facility subject to NSPS, the NO X emissions (in the same terms as the NSPS limits) and the NO X abatement method.

- Emissions test data (e.g., for NO X and any other po llutants such as N 2 O) to evaluate the performance of current NO X abatement technologies and emerging NO X or N 2 O abatement technologies (if any).

There are approximately 60 facilities of which we are aware and resources are limited. Our goal is to get as much data from trade associations and states.