Region 6 Comments on Domtar BART analysis
8/29/13

General Comments

 ADEQ should provide the proposed SO2 and NOx BART emission lim its shown in Table 1-1 in
terms of lbs/MMBtu.

 Section 2 of the BART report explains that a ne w baseline emission rate for SO2, NOx, and PM is proposed for Power Boiler 1 to reflect the change in emissions resulting fro m the installation of a wet ESP in 2007. ADEQ should also provide updated emissions information for Power Boiler 1 in support of the new baseline emission rates.

 ADEQ should provide calculations and fuel use data utilized in estimating the 24-hr maximum
emission rates for the revised base line period for Power Boiler 1.

SO2/NOx BART Em ission Limits

 The SO2 BART analysis (section 5.1) states “Be cause No. 1 Power Boiler does not contribute to visibility impairment greater than 0.5 Δ dv at any of the Class I ar eas, and moreover does not contribute to visibility impairment on even a single day, Domtar propos es no additional add-on
controls...” This is not an appropriate justification for not conducting a BART analysis for SO2. The 0.5 dv threshold applies only to the determinati on of whether the facilit y, considering all BART eligible units, is subject to BART. If the total impact from all BART eligible units at the facility is greater than 0.5 dv, then each unit must be evaluate d for BART. In addition, we also note that the preamble of the RH rule explains that “Failing to consider less-than-perc eptible contributions to visibility impairment would ignor e the CAA’s intent to have BART requirements apply to sources that contribute to, as well as cause, such im pairment” (70 FR 39104, at 39129). Given that sources are subject to BART based on a contribution th reshold of 0.5 dv, it would be inconsistent to automatically rule out additional controls where th e improvement in visibility may be less than 1.0 dv or even less than 0.5 dv. A perceptible visibility improvement is not a requirement of the BART determination because visibility improvements that ar e not perceptible may still be determined to be significant.

We note that in some cases, states may adopt a more streamlined approach to making BART determinations where appropriate. For example, a State need not undertake an exhaustive analysis
where it is clear that controls would be costly and any improveme nts in visibility resulting from reductions in emissions would be negligible (70 FR 39104, at 39116). An examination of the baseline visibility results for Boiler 1 indicates that visibility impacts on the high impact days are primarily due to nitrate. Therefore, it is likely that further reductions in SO 2 emissions would not be
cost-effective in terms of visibility benefit unless those controls were extremely inexpensive. After taking the above into considerati on, if ADEQ has found it is still appr opriate to take the streamlined approach to making a BART determination for SO 2, it should provide an appropriate justification
that satisfies the RH rule and is c onsistent with the BART guidelines. The BART analysis dismisses th e control options evaluated fo r NOx BART for Power Boiler 1
because “The No. 1 Power Boiler does not contribute to visibility impairment greater than 0.5 dv nor any single day of impairment [greater than 0.5 dv ] at any of the Class I areas ... therefore, the considered control options provide no improveme nt in visibility impairment” (section 6.3). As
discussed in our comment above fo r SO2 BART, given that sources are subject to BART based on a
contribution threshold of 0.5 dv combined for all BA RT eligible units at the facility, it would be
inconsistent to rule out additional controls on the ba sis that the improvement in visibility is less than 0.5 dv. Therefore, we recommend that the above quoted language be revised. Additionally, we note that we have remaining concerns with the evaluati on of the NOx control scenarios, as detailed in
comments below.

 The maximum 24-hr emission rate for Power Boiler 1 is estimated as 17.5 lb/hr for SO2 and 121.2 lb/hr NOx. However, an emission limit of 21 lb/hr for SO2 and 145 lb/hr for NOx demonstrated based on a monthly and 12-month ro lling basis are proposed as BART . Given that compliance with the SO2 and NOx BART emission limits is propos ed on a monthly basis, we do not believe a 20% compliance margin above the 24-hr maximum emissi on rates is necessary. A justification, including any supporting emissions data or other informa tion, explaining the need for a 20% compliance margin should be provided.

 The Lundberg report on emissions controls for Power Boiler 2 states that “With regard to the BART regulation, as discussed, there has been no guidance from the regulatory authorities. Given this, we
have selected 90% SO2 reduction as a common-sens e approach to the situation... if higher removal rates are required the equipment offered can probab ly be re-designed without a major impact on the project.” We disagree that there has been no gui dance from EPA regarding what level of control should be evaluated for BART. The RH rule requires that in analyzing cont rols for BART, the most stringent emission control level that the technolo gy is capable of achieving must be taken into account (70 FR 39166). Based on the above statement made in the Lundberg report, it does not appear this requirement has been met in the SO2 BART analysis. Addi tionally, the SO2 BART analysis states that consideration of any furthe r control using an add-on wet scrubber/WESP beyond
what was evaluated and selected as BART is unreasonable. This appe ars to contradict the statement made in the Lundberg report concerning the feasibili ty of re-designing the equipment to achieve a higher removal rate if needed. Th e potential for greater removal e fficiency may result in greater visibility improvement than what is currently ex pected. ADEQ should ensure that the requirement to evaluate the most stringent level of SO2 cont rol the add-on wet scrubb er/WESP is capable of achieving has been met.

 In analyzing SO2 BART for Power Boiler 2, Domtar states that Lundberg evaluated upgrades to the existing scrubber but that it has b een unable to quantify any potent ial additional control. After discarding this potential BART control option from further consideration w ith little explanation, however, Domtar subsequently determined that the SO2 BART control it did evaluate – an additional add-on scrubber/wet ESP - is not BART. In light of this, Domtar should re-evaluate thescrubber upgrade option it rejected and provide a ny reports prepared by Lundberg or others on the scrubber upgrade option.

SO2 Cost Analysis

 One of the reasons Domtar cites for rejecting the scrubber/wet ESP for SO2 BART for Power Boiler 2 is the cost for additional energy and water use. However, this appears to conflict with the Lundberg report which states, “there would be no additional process water requirement because spent water from the spray scrubber/wet ESP could ‘feed forward’ to the sc rubber system as makeup.” If this statement from the Lundbe rg report is incorrect and water cost/availability is really being used as a reason for rejecting the scrubber/we t ESP as SO2 BART, the BART analysis should provide additional information on the amount of wa ter this scrubber/WESP will use over and above the plant’s process water and the cost of that water.

 ADEQ should provide suppor ting information for some of the lin e items in the scrubber/wet ESP cost analysis for Power Boiler 2:

o Detailed documentation should be provided fo r the “Costs to Retrofit” figure of $13,175,000, referenced as footnote 11 in Appendix B, wh ich states, “Domtar's engineers estimate that PEC accounts for only approximately 40% of the total investment to place a new WESP into service.”

o Documentation should be provided for the wastewater treatment figure of $6,092,425 and it should specifically be documented how much of that treatment would be due to the addition of the scrubber/wet ESP in rela tion to the rest of the plant.

o Documentation should be provided for the annual sorbent caustic usage of $2,300,000. It should specifically be documented how much of that sorbent caustic is ne cessary due to the addition of the scrubber/wet ESP over and a bove that supplied by the existing process

stream.

o The cost analysis bases its capital recovery factor (CRF) on a 20 year life based on a reference from the CCM. The section of the CCM referenced states that “For ESPs, the system lifetime varies from 5 to 40 years, with 20 years being typical” (Section 6, Chapter 3 of the CCM). Since Domtar has obtained a quote from the vendor, documentation of the vendor’s estimate/guarantee of the expected lif etime of the equipment should be provided and ADEQ should ensure that the CRF is based on the vendor’s estimate/guarantee.

o The need for an annual wastewater treatment cost of over $6M should be documented. In particular, it should be explaine d how much of this treatment cost is due solely to the addition of the scrubber/wet ESP over and above the treatment needed for its existing process wastewater streams. This should include docum entation of the additi onal wastewater volume generated due to the scrubber/wet ESP.

o A fully working spreadsheet of the co st calculations should be provided.NOx BART

 Regarding the evaluation of SNCR for Power Boilers 1 and 2, ADEQ should ensure that Domtar provides any information it received from FuelT ech that was used to analyze the potential control efficiency, cost, reagent usage, and any other information that is relevant to a BART determination. For instance, Figure 6-1 appears to have been copied from a report. This and all other reports relevant to the NOx BART dete rmination should be provided. Domtar should justify any assumptions regarding the control scenarios it assumed and evaluated for SNCR and why those control scenarios are different for Power Boilers 1 and 2. The RH rule requires that in analyzing controls for BART, the most stringent emission control level that the technology is capable of achieving must be taken into acc ount (70 FR 39166). Therefore, ADEQ should ensure
that Domtar demonstrates that it has evaluated the most stringent level of NOx control SNCR is capable of providing for Power Boilers 1 and 2.

 For Power Boiler 2, Domtar proposes a 6% de crease in NOx from the original BART determination (30% reduction using LNB). Domtar also states that this level of control (36%) is potentially achievable with SNCR. However, SNCR was evaluated at 35% control. It is unclear
how this level of reduction was determined ba sed on an evaluation of the five-factors and evaluation of the control efficiency of the availabl e control technologies. It is also unclear if the
combination of LNB and SNCR was examined.

 Methane de-NOx (MdN) is modeled at 50% control efficiency for Power Boiler 2 and is modeled to reduce visibility impacts at Caney Creek by approximately 0.3 dv. However there is no discussion of MdN feasibility, anticipated control efficiency, or cost. It is unclear how MdN was considered as part of the 5-factor analys is. Domtar’s previous analysis, prepared in 2006/2007 and submitted with the Arkansas Regional Haze SIP in 2008 evaluated MdN and
determined that it was not cost-effective but did not perform a visibility analysis on this control option. Similarly, no cost or emissions data ar e provided for LNB in the revised draft BART analysis, even though the revised draft BART repor ts states the source may install LNB to meet the NOx BART emission limit proposed for Power Boiler 2. ADEQ must ensure that the revised Domtar BART analysis it submits as part of the Regional Haze SI P revision includes the complete evaluation of all NOx controls, includi ng MdN and LNB. If in its Regional Haze SIP revision, ADEQ decides to rely on or use any pa rts of the 2006/2007 Domtar BART analysis, it must ensure that the information (especially a ny information on costs, control efficiency, and availability of controls) continues to be up to date and that those portions of the 2006/2007 BART analysis are re-submitted and included in the Regional Haze SIP revision package. If ADEQ is indeed relying on the cost informa tion for MdN provided in the 2006/2007 Domtar BART analysis, we believe the cost of that control for Power Boiler 2 ($4,259/NOx ton reduced) is not unreasonable given the sign ificant visibility improvement expected at Caney Creek. The BART analysis should include a discussion of why MdN was not selected for NOx BART for
Power Boiler 2 after all five factor s were taken into consideration.

NOx Cost Analysis Domtar should provide the following re garding the cost an alyses for SNCR:

o Domtar should assume a 30 year operating life.

o Domtar should provide documentation for th e annual maintenance fee of $310,000, and the fixed (indirect) costs of $771,895.

o There are a number of factors that are listed in the SNCR co st evaluations that are not explained. For instance, Domtar should explain why the bark co st and the ash disposal cost, the 2011 and 1998 cost indices, and the bark HHV are relevant to the SNCR cost estimations.

o Domtar should explain how the e quation for the direct capital costs was derived, including all constants and parameters.

o Domtar should justify why a projec t contingency of 15% is needed for this project. Why is a process contingency also specified and how is that calculated?

o Domtar should explain the following costs, what they cover, and how they are calculated: preproduction cost, inventory cap ital, general facilities, engi neering and home office fees. [Domtar cites the CCM as a reference for SNCR co sts, but these fees s hould still be justified as real costs].

o Domtar should provide a more accurate docume ntation for the urea cost. The link provided
in the notes to the SNCR cost table in Appendix B refers to a World Bank quote for a bulk spot FOB price for delivery to the Black Sea area and Eastern Europe . In addition, there appears to be a huge spike in price in 2008 that does not appear to be representative of the general price trend.

PM BART

 We agree with the general approach of relying on the MACT PM standard to satisfy the PM BART requirement for Power Boiler 2. However, to be able to take this streamlined approach,
the current MACT PM limit must be used to satisfy PM BART. The BART guidelines provide that for “For VOC and PM sources subject to MACT standards, sates may streamline the analysis by including a discussion of the MA CT controls and whether any major new technologies have been develope d subsequent to the MACT st andards... Unless there are new technologies subsequent to the MA CT standards which would lead to cost-effective increases in the level of control, you may rely on the MACT standards for purposes of BART” (Appendix Y to Part 51, section IV.C). Based on this langu age, it is clearly not acceptable to take the streamlined approach by using an outdated MA CT PM emission limit to satisfy PM BART. On January 31, 2013, EPA took final action on the proposed reconsideration of certain issues related to the MACT emission standards, promulgati ng a final MACT PM limit of 0.04 lb/MMBtu for existing coal-burning boilers a nd process heaters (see 78 FR 7138) . However, Domtar proposesto take the streamlined approach for PM BA RT by accepting the previous MACT PM emission limit of 0.07 lb/MMBtu, which was promulgate d in 2004 and has since been vacated and remanded by the DC Circuit Court. In the Arkansas RH SIP submitted in 2008, it was appropriate for the state to rely on the 0.07 lb/MMBtu MACT PM emission limit for Power
Boiler 1 because the effective date of the DC Ci rcuit’s vacatur of the 2004 MACT rule was after the close of the public notice and comment period for Arkansas’s proposed RH rule. However, ADEQ must now address PM BART for Power Boile r 2 in a RH SIP revisi on that addresses the portions of the 2008 RH SIP disapproved by EPA, and it must therefore ensure that if the streamlined approach is taken for PM for Power Boiler 2, the current MACT PM limit is used to satisfy PM BART. Additionally, ADEQ should en sure that the BART analysis includes a
discussion of the MACT controls and whether a ny major new technologies have been developed subsequent to the final MACT PM standard issued in January 2013.