Date: May 201 2

Subject: Impacts of Nitric Acid

Nitric Acid NSPS Review EPA Contract No. EP RTI Project No. 0210 From: Melissa Icenhour To: Nathan Topham

OAQPS/SPPD/M U. S. Environmental Protection Agency Research Triangle Park, NC 27711 The EPA is required by s ection 111(b)(1)(B) of the Clean Air Act (CAA) to review and, if appropriate, revise existing New Source Performance The nitric acid NSPS (part 60, subpart G) has been reviewed in the past but the last review was more than 8 years ago. As a result of this, and Environmental Integrity Project prompting The purpose of an NSPS review is to determine if the standards reflect the “degree of emissions limitation achievable through application of the best sy stem of emission reduction which (taking into account the cost of achieving such reduction and an y nonair quality health and environmental impact and energy requirements) the Administrator determines has been adequately demonstrated.” The EPA requested information from companies operating nitric acid 114 authority

to obtain short term 7E (modified version), or 320 and emissions monitoring systems (CEMS) technologies, including nonselective catalytic reduction (NSCR), selective cataly tic reduction (SCR), and H 2 O 2 injection . Cost data w production trains . This information was summarized in Section 114 ICR (NO X Summary) based on 7% interest and 15 year useful life.

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Impacts of Nitric Acid NSPS Review

— NO X (Updated Memo for Final NSPS) Nitric Acid NSPS Review EPA Contract No. EP

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- 084 ; Work Assignment No. 0

- 0 1 RTI Project No. 0210 3199 .00 0 .0 0 1

OAQPS/SPPD/M IC G (D243

- 02) U. S. Environmental Protection Agency Research Triangle Park, NC 27711 The EPA is required by s ection 111(b)(1)(B) of the Clean Air Act (CAA) to review and, if appropriate, revise existing New Source Performance Standards (NSPS) at least every 8 years. The nitric acid NSPS (part 60, subpart G) has been reviewed in the past but the last review was more than 8 years ago. As a result of this, the EPA has received a citizen suit from Sierra Club

tegrity Project prompting a review of the standards. The purpose of an NSPS review is to determine if the standards reflect the “degree of emissions limitation achievable through application of the best sy stem of emission reduction which (taking unt the cost of achieving such reduction and an y nonair quality health and environmental impact and energy requirements) the Administrator determines has been requested information from companies operating nitric acid plants under CAA

short term NO X emissions data using EPA Methods 7, 7A, 7B, 7C, 7D, and long term NO X emissions data using NO X continuous emissions monitoring systems (CEMS)

. The EPA also collec ted cost data for NO technologies, including nonselective catalytic reduction (NSCR), selective cataly tic reduction . Cost data w ere received from 9 facilities with a total of 12 nitric acid . This information was summarized in Summary of Cost Data Received from Summary) dated November 22 , 2010

. The c apital recovery factor was based on 7% interest and 15 year useful life. (Updated Memo for Final NSPS)

The EPA is required by s ection 111(b)(1)(B) of the Clean Air Act (CAA) to review and, if Standards (NSPS) at least every 8 years. The nitric acid NSPS (part 60, subpart G) has been reviewed in the past but the last review was EPA has received a citizen suit from Sierra Club The purpose of an NSPS review is to determine if the standards reflect the “degree of emissions limitation achievable through application of the best sy stem of emission reduction which (taking unt the cost of achieving such reduction and an y nonair quality health and environmental impact and energy requirements) the Administrator determines has been plants under CAA Section Methods 7, 7A, 7B, 7C, 7D,

continuous NO X abatement technologies, including nonselective catalytic reduction (NSCR), selective cataly tic reduction with a total of 12 nitric acid Summary of Cost Data Received from

apital recovery

factor was2

The purpose of this memo is to calculate the expected cost impacts for new and modified sources to meet a standard of 0. 50 lb NO X/ton nitric acid. The NO X Summary

memo contained production data ranging from 40 tons per day (tpd) to 1,600 tpd of nitric acid. The data supports the use of two model plants to represent the nitric acid production industry . The first model plant size is 300 tpd and the second model plant size is 1,000 tpd. In the NO X Summary memo, the cost data were normalized based on the production rate at the facility

(cost per ton of nitric acid produced). Table 1 shows the results of the cost data anal ys is for NO X c ontrol. These cost estimates are based on the installation costs gathered through the Section 114 request for information

. They are shown here for comparison . Their inclusion is not an indication of the level of control that can be achieved with these control devices. CEM S data , as summarized in Statistical Evaluation of CEMS Data to Determine the NO X Emission Standard (Updated Memo fo r Final Standard) , indicate that SCR and some NSCR units achieve a 30 day

rolling emission rate of 0.5 0 lb NO X/ton acid . Available CEM S data from 1 facility using H 2 O 2 injection indicate that the unit has emissions greater than 0.5 0 lb NO X/ton acid , However, due to the limited data set (only from 1 facility), installing H2 O 2 injection may meet 0.5 0 lb NO X/ton acid

. **Table 1. Normalized NO**  **X Control**  **Costs by Model Plant for New Sources**  **Control 300 tpd ($/ton)**  **1,000 tpd ($/ton)** NSCR $20.02 $7.80 SCR $3.93 $1.10 H2 O 2 Inj ection $2.06 $1.36
The conclusion that selective catalytic reduction (SCR) is BSER has not changed from proposal. The justification includes the following reasons: (1) SCR is the only known NO X control technology

being installed in new NAPUs; (2) SCR has been determined to be BACT; (3) SCR technology

is less expensive and more cost

- effective than NSCR for control of NO X emissions; and (4) SCR produces minimal secondary environmental impacts. Ta ble 2 shows the control device cost (annual cost per ton of acid) for an SCR installed at Agrium North Bend as part of a modification to the nitric acid plant. The plant produces 288 tons acid per day . SCR costs associated with a modification of a 1,000 tpd plant were not supplied.
**Table 2**  **. Normalized SCR Costs**  **by Model Plant for Modified or Reconstructed**  **Sources Control**  **288 tpd** 

**($/ton acid** **) 1,000 tpd** 

**($/ton acid** **)** SCR $ 3.52

----- Nitric acid production was estimated beginning with 2006 production data (TSD for Greenhouse Gas Reporting Rule), using the production growth of 6.5% from 2006 to 2007 (ICI S) , the predicted production growth rate of 3% for 2007 through 201 7 (ICIS) , and the exclusion of3

plants that were not operating in 2010

. These estimates are shown in Table 3 . In the period from 201 2 through 201 7 , the growth is expected to be approximately 1. 48 million tons of nitric acid. Assuming 3 6 5 days per year, this equals approximately 4 , 0 00 tpd of nitric acid production

. Using the model plants, the estimate roughl y equals 3 production trains that produce 300 tpd, and 3 production trains that produce 1,000 tpd over the f ive ye ar period after promulgation

. For purposes of this cost assessment, the growth will consist of f ive newly constructed production trains and one modification of an existing production train . These six production trains will be come subject to the Subpart Ga limit of 0. 5 0 lb NO X/ton acid between 201 2 and 201 7

. **Table 3**  **. Nitric Acid Production Growth** 

**Year Nitric acid** 

**produced (metric tons)**  **Nitric acid**

**produced (tons) Increase** 

**(tons)** 2010 6 , 729 , 836 7 , 419 , 644

----------- 2011 6 , 931 , 731 7 , 642 , 233 222,589 2012 7 , 139 , 683 7 , 871 , 500 229,267 2013 7 , 353 , 873 8 , 107 , 645 236,145 2014 7 , 574 , 489 8 , 350 , 874 243,229 2015 7 , 801 , 724 8 , 601 , 401 250,526 2016 8 , 035 , 776 8,859,443 258,042 2017 8,276,849 9,125,226 265,783 For the five new production trains predicted from 201 2 to 201 7 , the annualized cost s of controlling NO X emissions for the 3 types of control equipment outlined in The NO X Summary were calculated using the costs in Table 1. The control costs are shown in Table 4

. These are the costs for each of the control devices in the 5 th ye ar after promulgation of these standards. **Table 4**  **. Annualized**  **Control Costs for**  **New Production Trains in 201**  **7 Model Plant (tpd)**  **Number of**

**Plants Nitric Acid (** **tons )**  **NSCR SCR**  **H 2**  **O 2**  300 2 2 2 0 ,000 $ 4 , 4 0 0 , 0 00 $ 8 60 , 0 0 0 $4 50 , 0 00 1,000 3 1, 100 ,000 $ 8 , 50 0 ,000 $ 1, 200 ,000 $ 1, 500 ,000 For the 1 production train that will undergo modification or reconstruction from 201 2 to 2017 , the annualized costs of controlling NO X emissions for SCR were calculated using the costs in Table 2. The control costs are shown in Table 5. The capacity, emission reductions, and control costs for the modified plant are based on actual data submitted to the EPA by a modified facility

. These are the costs for each of the control devices in the 5 th ye ar after promulgation of these standards.4

**Table 5**  **. Annualized**  **Control Costs for Reconstructed or Modified**  **Trains in 201 7**  **Plant (tpd) Number of Plants**  **Nitric Acid ( tons** **) SCR** 

288 1 10 5 , 0 00 $ 370, 000
The production trains could use any of the three control ty

pes to control NO X emissions but we assumed that SCR would be universally applied as this is BSER. While hydrogen peroxide injection has the lowest potential costs, this control may not be feasible for all production trains. Also, some H2 O 2 and NSCR installations may not be able to achieve emissions less than or equal to 0.5 0 lb NO X/ton acid

. The potential NO X emission reductions were calculated in Table 6 . The baseline emissions were calculated as 3.0 lb NO X/ton acid (the level of the existing NSPS). The controlled emissions were calculated as 0

. 50 lb NO X/ton acid

. **Table 6**  **. NO X**  **Em ission Reductions**  **for All New , Modified, or Reconstructed**  **Production Trains**  **with SCR Control in**  **201 7** 

**Plant Type**  **Model**

**Plant (tpd)**  **Days**

**per year**  **Number of**  **Plants Nitric** 

**Acid (t**  **ons )**  **Baseline**

**NO X**  **(tons NO X** **) Controlled** 

**NO X**  **(tons NO X** **) NO**  **X**

**Emission reductions**  **(t ons** **)** New 300 3 6 5 2 2 20 , 000 3 55 55 300 New 1,000 3 65 3 1, 100 ,000 1, 779 27 4 1,506 Modified 288 365 1 105, 000 315 17 299

TO TALS 2, 449 345 2,104 The last step in calculating impacts for sources to meet the revised standard of 0.50 lb NO X/ton acid is to calculate the costs and reductions per ye ar over the 5 year period after promulgation. In addition to control equipment, each modified or reconstructed production train will be required to install the following: a stack gas flow monitor and a dual range NO X concentration monitor

. The capital cost s are $3 9 ,000 and $23,000, respectively

. The annualized costs are $15,000 and $9,000, respectively. These c osts were calculated using the CEMS Cost Model

. In addition to these costs, each new or modified production train will be required to perform an annual stack test according to Appendix F to Part 60 . These testing costs were inadvertently excluded from the proposed rule. These tests are estimated at $12,000 per test.5

The costs for monitoring and testing are consistent with comments received from The Fertilizer Institute (TFI). The requirement of a NO X CEMS was included in the existing NSPS so its cost is not included in this analysis. The SCR is already

being used to control NO X emissions to the current NSPS level of 3.0 lb NO X/ton acid. As shown in Statistical Evaluation of CEMS Data to Determine the NO X Emission Standard (Updated Memo for Final Standard) , there are at least 3 production trains using SCR that already meet the revised NSPS level of 0. 50 lb NO X/ton acid. The control device costs are based on current usage where sources are only required under an NSPS to meet 3.0 lb NO X/ton. Sources are not likely

to have spent additional money to meet a limit of 0. 50 lb NO X/ton acid when they

were onl y required to meet a limit of 3.0 lb NO X/ton. Therefore, we believe that the lower limit is achievable without additional cost impacts. Accordingl y, there is no incremental control cost to control NO X emissions for a facility that triggers Subpart Ga compared to the controls that would likely be installed if that same facility triggered Subpart G . The costs of monitors and operation and maintenance costs in the 5 th ye ar after promulgation are shown in Table 7 and Table 8

. **Table 7**  **. Incremental**  **Costs in 5 th**  **Year after**  **Promulgation for**  **All New Production Trains** 

**Model Plant**  **(tpd) Number** 

**of Plants**  **SCR Cost** 

**( $2010**  **- 2**  **nd quarter)**  **Annual**

**s tack flow**  **monitor cost ($2010**  **- 2**  **nd quarter)**  **Dual range**

**NO X**  **monitor cost**  **Annual**

**stack testing**  **cost Total Annualized** 

**Costs ($2010**  **- 2**  **nd quarter)**  300 2 $0 $30,000 $1 8 , 0 00 $24,000 $7 2 , 0 00 1,000 3 $0 $45,000 $2 7 , 0 00 $36,000 $10 8 , 0 00
**Table 8**  **. Incremental Costs in 5 th**  **Year after Promulgation for All Modified or**  **Reconstructed Production Trains** 

**Plant (tpd)**  **Number of**  **Plants SCR**  **Cost**

**( $2010**  **- 2**  **nd quarter)**  **Annual**

**s tack flow**  **monitor cost ($2010**  **- 2**  **nd quarter)**  **Dual range**

**NO X**  **monitor cost**  **Annual**

**stack testing**  **cost Total Annualized** 

**Costs ($2010**  **- 2**  **nd quarter)**  288 1 $ 370,00 0 $ 15 ,0 00 $ 8,9 00 $12,000 $40 6 , 00 0 Using the total monitoring costs, the cost effectiveness was also calculated. These numbers are shown in Table 9

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**Table 9**  **. Total**  **Incremental Cost Effectiveness in 5 th**  **Year after Promulgation for All New, Reconstructed, and Modified**  **Production Trains Plant (tpd)**  **Type Number** 

**of Plants**  **Total Annualized**

**Costs ($2010**  **- 2**  **nd quarter)**  **NO X**  **Emission reductions (tpy)**  **Cost effectiveness**  **($/ton NO X** **)** 300 New 2 $72,000 300 $240 1,000 New 3 $108,000 1, 500 $70 288 Mod 1 $406,000 300 $1,400 All

---- 6 $585 ,000 2,104 $280
For the new 300 tpd model plant s , total annualized costs in the 5 th ye ar after promulgation are $ 72 ,000 . The amount of NO X reductions expected in the 5 th ye ar after promulgation is approximately 300 tpy . This results in a cost effectiveness of approximately $ 2 4 0

. For the new 1,0 00 tpd model plant s , total annualized costs in the 5 th ye ar after promulgation are $ 108 ,000 . The amount of NO X reductions expected in the 5 th ye ar after promulgation is approximately 1 , 500 tpy . This results in a cost effectiveness of approximately $ 7 0

. For the modified 288 tpd plant, total annualized costs in the 5 th year after promulgation are $ 406,000 . The amount of NO X reductions expected in the 5 th ye ar after promulgation is approximately 300 tpy . This results in a cost effectiveness of approximately $ 1 , 40 0. Overall, total annualized costs in the 5 th ye ar after promulgation are $ 58 5 ,000. The amount of NO X reductions expected in the 5 th ye ar after promulgation is approximately 2,104 tpy . This results in a cost effectiveness of approximately $ 280

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**References** CEMS Cost Model. Updated March 2007. Accessed November 17, 2010. Memorandum from W. C. Herz, Vice President of Scientific Affairs, The Fertilizer Institute

. TFI Comments on New Source Performance Standards Review for Nitric Acid Plants, Docket No. EPA

-HQ

- OAR

-2010

- 0750. Document number EPA

- HQ

- OAR

- 2010

- 0750

- 0098. November 28, 2011. Memorandum from M. Icenhour, RTI International, to B. Neuffer, EPA. Summary o f Cost Data Received from Section 114 ICR

. Document number EPA

- HQ

- OAR

- 2010

- 0750

- 00 60

. November 22 , 2010. Memorandum from M. Icenhour, RTI International, to B. Neuffer, EPA. Statistical Evaluation of CEMS Data to Determine the NO X Emission Standard (Updated Memo for Final Standard)

. May 2012

. U. S. EPA. Technical Support Document for the Nitric Acid Production Sector: Proposed Rule for Mandatory

Reporting of Greenhouse Gases, January 22, 2009. http://www.epa.gov/climatechange/emissions/archived/downloads/tsd/TSD%20Nitric%20Acid% 20_EPA%201

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