## NO x 

## Reduction Technology Evaluation and Mitigation Proposal for Keetac Expansion February 10, 2010

Project
United States Steel Corporation, Minnesota Ore Operations, is proposing to expand the production capacity of its facility in Keewatin, MN. The facility (Keetac) is located in Northern Minnesota, and is approximately 50 miles from the Boundary Waters Canoe Area Wilderness (BWCAW) and 100 miles from Voyageurs National Park in northeastern Minnesota.

SO 2 emissions from the proposed project will be cont rolled under Prevention of Significant Deterioration (PSD) Best Available Control Technology (BACT) requirements for emission controls. The NO x emission increase for the facility with proposed permit lim its is less than the major modification threshold and therefore the proposed project NO x emissions are not subject to PSD permitting requirements. The Project has a potential to emit (PTE) of 3,110 tons per year of nitrogen oxides (NO x ). NO x emissions from the facility will exceed the 100 ton per year threshold established at 40 CFR 52.21(b)(1)(i)(a) therefore the Project would be classified as a major source for NO x emissions. Keetac has calculated the baseline emission for the existing facility to be 5,805 tons of NO x per year. Keetac has proposed permit
limits that will limit emissions from both furnaces for a co mbined total of 5,840 tons per year. This results in an emission increase from the project of 35 tons per year, less than the major modification threshold of 40 tons per year. Therefore the NO x emissions from the project are not subject to BACT or other PSD permitting requirements.Page: 2

The PSD emission threshold is not triggered because th e existing furnace historically was only fired with natural gas. In 2005 a permit was issued that allo ws the furnace to burn coal, which in a grate-kiln
furnace leads to much lower NO x compared to natural gas combustion. Through a fueling strategy for
both the new furnace that will utilize biomass and natural gas with coal and fuel oil as back-ups and the use of coal, natural gas, or fu el oil for the existing furnace, NO x emissions can be maintained less than the baseline. To meet the proposed NOx limits, perm it conditions will require compliance demonstration through the use of a CEMS on both lines. This will allow for real time fuel choice decision making and ability to take advantage of operating information. The associated limit on the expansion kiln to meet netting requirements will be a 180 rolling day sum of 1157 tons which is equiva lent to approximately 2314 tons per year.

Annual emissions will not increase above the threshold compared to historical baseline emissions. However, changes in stack parameters and the poten tial to burn 100 % natural gas for short periods of time need to be evaluated and compared to the imp acts on visibility of the proposed project. Visibility standards in both parks can be affected by NO x and SO 2 emissions from sources throughout the mid-west.
This NO x emission reduction technology evaluation and associated air quality modeling analysis are being used to demonstrate that NO x emissions from the proposed project do not adversely affect visibility in these parks.

Normal operation of the facility is expected to be a 60/40 coal/natural gas mix on the existing line and a 50/50 biomass/natural gas mix on the new line. Alternativ e fuel use is proven to reduce the generation of NOx. Typically 100% natural gas is utilized for short pe riods during startup or if there is an issue with alternative fuels or the process. Although issues can ar ise with the coal and/or biomass systems, it is unlikely that both systems would be down for an exte nded period of time. The new line will be capable of utilizing both biomass and coal which will furthe r reduce the likelihood to burn 100% natural gas for extended periods of time.

The proposed project includes renovation of a taconite induration furnace that has been shutdown for an extended period and is being permitted as a “new” fu rnace. The furnace is a grate/kiln design. NO x emissions originate from fuel combustion in the kiln section of the furnace. This NO x reduction technology evaluation will consider potential NO x reduction measures which include:

1. Reduced NO x generation from fuel combustion through improvements in process design that reduce energy consumption as compar ed to the existing Keetac furnace.Page: 3

2. Reduced NO x generation by using combustion tec hnology for minimizing NOx generation
3. Control of NO x emissions through use of add-on emission control equipment.
4. Fueling strategy to minimize NO x emissions

Following the evaluation of potential control technologies is a summary of modeled impacts and a proposed approach for mitigating visi bility impacts in the Class I areas.



## Overview of Emission Reduction Technologies
Several control technologies are included in this NO x control technology review for Keetac’s Expansion Project. The emission reduction technologies evaluate d include process designs, controls which reduce the generation of NO x , add-on controls and fueling strategies.



## Reduce NOx generation through process improvements that reduce
energy use
The taconite pellet production process is very energy in tensive. The unfired pellets must be heated to 2,300°F to 2,400°F in order to achieve the desired phy sical and metallurgical properties in the finished taconite pellets. Once the pellets have been fired, ai r is used to cool the pellets down to safe handling temperatures. Taconite induration furnaces are designe d to recover heat from the process by using hot air exhausted from the pellet cooling to pre-heat unfired pellets coming into the furnace and to pre-heat
combustion air used in the kiln burner.

Because NO x emissions are directly related to fuel combustion, improvements in heat recovery design can reduce the generation of NO x emissions by reducing fuel consump tion. The new taconite induration furnace is designed to use approximately 36% to 44% less fuel than the existing Keetac furnace, on an mmbtu per short ton of pellet produced basis. NO x emission rates used in the emission inventory were used as model inputs and were reviewed by the MPCA. The NO x emission rates are based on testing results from furnaces with lower heat recovery and a higher fuel use rate than expected for the new furnace. The reduced fuel usage numbers were de veloped using process design inputs from Hatch. These improvements are accomplished by:

 Expanding the preheat and cooling sections of th e furnace to increase the available pellet surface
for heat transferPage: 4

 Improved air flow patterns for more efficient transfer of heat

 Optimizing use of recovered energy between heating unfired pellets and combustion air

 Improved air seals to minimize infiltration of cold air into the furnace

 Improved insulation to minimize heat loss

Process improvements are already incorporated into th e design of the new furnace. Therefore, a direct cost feasibility of process improvement is not necessary. Typically, cost evaluations are not required of technologies that are selected for implementation.

The exact relationship between reduced fu el usage and the resulting reduction in NO x emissions is not known. Due to the uncertainty associ ated with the exact reduction in NO x emissions that will be achieved, no change was made to the emission rates that were used for model inputs.



## Reduce NOx generation through use of combustion technology
Two key factors that lead to the generation of NO x are temperature and amount of oxygen (O 2 ) present.
NO x emissions may be reduced by minimizing flame temperatures. This may be accomplished with flue gas recirculation and optimization of the burner design. NO x emissions can also be minimized by minimizing the amount of O 2 present. However, in a taconite induration furnace, oxygen (O 2 ) levels must be kept at 15% O 2 so that sufficient oxygen is present for the oxidation of iron ore from magnetite to
hematite. Oxidation of the ore is needed so that fini shed pellets have the correct metallurgical properties for use in a blast furnace. The oxidation process also provides most of the heat needed for proper pellet formation. In boilers and process heaters flue gas oxygen levels of 2% - 3% can be achieved thereby minimizing NO x formation. The same level of oxygen control is needed for NO x control by flue gas recirculation. To reach maximum energy efficiency, pa rt of the heat recovery system must be used for preheating the combustion air. So, the ability to limit combustion air temperatures is limited.

Due to the complex nature of controlling the com bustion process in a rotary kiln, burner design is typically done by modeling the burner and kiln using computational fluid dynamic (CFD) models. At the U. S. Steel Minntac facility, an investigation of burner design options by CFD modeling is being conducted by Hatch, the project engineering group, and Coen, a burner manufacturer. Preliminary results for the grate/kiln systems at Minntac suggest that a NO x reduction upwards of 40% may be feasible with advanced burner designs for the kiln burner. Similar results may be possible on the new line at Keetac. However, differences in the grate/kiln design at Mi nntac vs. Keetac and fueling strategies may affect the
level of NO x reduction achievable. Because of uncertainty associated with the exact reduction in NO xPage: 5

emissions that will be achieved, no change was made to the emission rates that were used for model inputs.



## Reduce NOx emissions by using add-on emission control equipment Selective Catalytic Reduction (SCR)
Selective catalytic reduction is a post combustion NO x control technology in which ammonia (NH 3 ) is injected into the flue gas stream in the presence of a catalyst. SCR control efficiency on utility boilers is typically 70% - 90%. SCR requires an optimum temperature range of 570-850  F.

For the Keetac Expansion Project, there is the option of placing the SCR system in two different
locations. These locations and their related f easibility and costs are described below.

Selective Catalytic Reduction (SCR) on Pre-Heat (PH) Zone exhaust stream SCR is a potential candidate for control of NO x emissions from the PH exhaust stream because the design exhaust gas temperature is within the temperatur e range where SCR works properly. However, this technology has been identified as technically infeasibl e due to high solids loading as compared to power plant applications. There is also concern with hydrogen chloride and potassium compounds, as well as
the SO 2 and SO 3 content of the gas stream. The high moisture content and ammonia injection would strongly promote the production of ammonium sulfate and ammonium bisulfate. Ammonium sulfate salts can cause catalyst deactivation and are also corrosive. Ammonium sulfate deposition could affect both the SCR system as well as the traveling grate system in DDD1 which would be downstream of an SCR system in this option. In addition, SCR catalyst will promote oxidation of SO 2 to sulfuric acid (H 2 SO 4 ).
Sulfuric acid formed in an SCR reactor could cau se additional corrosion problems in DDD1. Based on the factors listed above, installation of a SCR system at th e PH exhaust is technically infeasible, and is not
evaluated further.

SCR following Electrostatic Precipitator (ESP) on PH exhaust stream LKAB, a taconite production facility located in Sweden, contracted with Alstom Power to construct a gas cleaning system on the PH exhaust stream at its KK4 plant. The gas cleaning system uses an ESP to remove particulates from the PH exhaust prior to NO x treatment by an SCR system. Reportedly the SCR system at LKAB was designed for 90% NO x removal. The SCR system is followed by heat recovery and
SO 2 controls. An ESP upstream of an SCR reactor would remove a significant amount of particulate matter and the contaminants associated with particul ate matter that are catalyst poisons. This controlPage: 6

scheme does not address potential adverse impacts on S CR catalyst from SO2, SO3 and HCl described in the SCR analysis above.

Representatives of U. S. Steel and LKAB met at Keetac during the summer of 2009 for a tour and meeting. Metso, LKAB’s design engineer, also attended. At the time of the meeting, LKAB’s KK4 line had been operating for approximately 6 months. Th e representatives from Metso and LKAB discussed the SCR technology installed on KK4. They discussed that while in theory SCR should work, the tight temperature profile didn’t allow for successful operation. In addition, LKAB representatives said they did not have any catalyst poisons in their gas stream. They also informed U. S. Steel that they would pursue
more efficient low NO x burners in the future.

Alstom Power, the company that designed the SCR sy stem at LKAB, was requested by U. S. Steel to provide a bid for an SCR system at Minntac and subse quently declined to bid. Additionally, Mitsubishi declined to bid saying that SCR was not technically feasible.

U. S. Steel previously has asked representatives of the MPCA for any information that the MPCA has received from the Swedish government on performance of the SCR system at LKAB. The MPCA has stated that they haven’t received any response fro m the Swedish government on the performance of SCR.

Based on these factors, SCR with ESP pre-treatment is considered technically infeasible.



## Regenerative Selective Catalytic Reduction (RSCR)

Regenerative Selective Catalytic Reduction (RSCR) is a form of clean-side SCR technology. The RSCR system is located after the particulate control devi ce, which minimizes impact to the SCR catalyst. While
the SO 2 and SO 3 may be removed from the flue gas stream with a GSA/ESP emission control system, other contaminants, which have the potential to pois on the SCR catalysts, may not be removed. Ammonia is added to the flue gas stream in order to reduce NO x to N 2 and H 2 O. For the DDD1 exhaust stream, the temperatures at this location are approximately 165  F. Because this temperature is below the required temperature for NO x SCR operation, the flue gas temperature must be raised to between 570  F and 650  F. Temperature elevation takes place in the RSCR, wher e a regenerative heater (RH) is used. The RH uses beds of ceramic media to achieve thermal efficiencies of >95%. The goal of the RSCR system is to combine heat recovery, temperature control, and cat alyst elements of SCR into a single unit. RSCR is designed for heat efficiency and lower operating costs.Page: 7

While this technology could theoretically work at a t aconite facility, this technology has yet to be proven effective for this industry. There is the potential th at constituents in the induration furnace exhaust, not present in coal fired utility boiler exhaust streams, would poison the RSCR catalyst. Poisons include calcium oxide, arsenic, potassium, alkali and alkali-ear th metals and phosphorous. Calcium oxide, which is present in pellet fluxing reactions, could also pois on the catalyst. The concentrations of these potential catalyst poisons at the RSCR inlet is unknow n and could significantly impact the effectiveness of this control. The technical feasibility of RSCR is currently under investigation by U. S. Steel at Minntac, but RSCR has not been installed on a tac onite furnace and therefore is an innovative and unproven technology.



## Selective Non-Catalytic Reduction (SNCR)
Selective Non-Catalytic Reduction (SNCR) u tilizes aqueous ammonia or urea to reduce NO x emissions. The optimal range for the flue gas temperature is 1800-2000 deg. F. This technology was pilot tested at Minntac and considered technically infeasible.



## Low Temperature Oxidation (LoTO x 

## )
BOC Gases’ LoTOx technology is a form of low temperature oxidation. LoTOx is an innovative NO x control technology which, to date, has not been app lied to a taconite induration furnace or a source with similar size and exhaust gas characteristics. This technology utilizes ozone, which is generated from pure oxygen on site with an electrically powered ozone generator. The ozone generation rate is controlled to
match the needs for NO x control. The ozone used to oxidize NO to NO 2 and NO 2 to N 2 O 5 prior to removal in a wet scrubber (absorber). The N 2 O 5 is converted to HNO 3 in a wet scrubber, and may be
neutralized with lime or caustic. Additional wastew ater treatment is necessary to remove the nitrates from the wastewater stream and would require further evaluation. Another concern is whether or not iron dust in furnace exhaust gas would react with ozone and reduce the control efficiency of LoTOx. The
normal NO x control efficiency range for LoTOx is 80% to 90% with outlet NO x concentrations in the 15ppm – 25 ppm range. This Project will utilize dry controls, whereas LoTOx requires the use of a wet
scrubber. LoTOx has not been installed on a tacon ite furnace and therefore is an innovative and unproven technology. Therefore, this technology is considered technically infeasible.Page: 8 

## Powerspan ECO
The ECO is a multi-pollutant control system, controlling SO 2 , NO x , Hg, and PM. The ECO has only been applied to power plants, so the removal rates ar e not necessarily representative of what Keetac could expect. The product website cites 99% SO 2 , 90% NO x , 80-90% Hg, and 95% control of PM 2.5 emissions. The system relies on an activated carbon filter to remove aqueous mercury from the wastewater stream, which is primarily ammonium sulfate. Powerspan states that the stream will be pure enough to sell as fertilizer. There will be liquid and solid waste generated from the activated carbon filtration.

The treatment train consists of the following:

ESP → ECO Reactor (plasma oxidizer) → wet absorber and ammonia addition (removes SO 2 , NO x , and oxidized mercury) → wet ESP (final PM removal).

Keetac’s proposed system will control 90% SO 2 , 0% NO x , 50% Hg, and 95% of PM 2.5 emissions. Keetac’s current proposed syst em looks like the following:

Spray Dryer Absorber → Activated carbon injection → ESP. Since this technology is innovative, this technology is technically infeasible.



## Fueling Scenarios

NO x generation is maximized when the existing line and the new line are running 100% natural gas. Control technology evaluations routinely require ev aluation of the effectiveness of fueling scenarios on pollutant generation. The range of fueling scenar ios was evaluated to understand and define ranges reflective of operating conditions for the kilns.

NO x emissions were calculated by multiplying fuel speci fic emission factors by the fuel mix used and the process throughput to get a total lb/hr rate.

Fuel specific emission factor (lbs/ton pellet) x max pellet through put (tons/hr) = lbs/hr NO x Max hourly rates: Expansion kiln - 450tph, Existing kiln - 830 tph Total annual production rates do not e quate directly to instantaneous hourly max rates because it is not feasible to run the line continuously thought out the year.Page: 9

The expansion kiln emission factor was modifi ed by assuming a conservative 20% reduction in NO x emissions due to the heat recovery design of the new furnace. These calculations show that an emission rate of 1,655 lb/hr is an approximate bound on where both kilns can run at the same time while one is firing 100% natural gas. The 1,655 lb/hr rate was determined primarily by evaluating kiln fueling scenarios by using this estimate of improved efficien cy for the expansion kiln (applied to the existing emission factor with a 20% decrease).

The attached graph shows these operating scenarios. Th e operating envelope that is contained within the boundaries of this limit is shown as the green area on the graph. The operating scenarios shown range from 100% natural gas for both kilns to 0% natural gas/ 100% solid fuel for both kilns. The red portion of the graph reflects operating scenarios where the 1655 lb/h r limit would be exceeded. Note that the target operating scenario (60% solid fuel existing/50% solid fuel expansion) is well below the 1655 limit. The emission rate for the 100% natural gas expansion k iln/60% solid fuel-40% natural gas existing kiln, which represents the solids target ra te for the existing kiln, is also well below the 1655 lb/hr limit. When firing the expansion kiln at 100% natural gas, the na tural gas component of the fuel mix of the existing line can be as high as 55% and still be under the 1655 lb/hr limit.

The 100% natural gas existing/100% solid fuel expans ion scenario is approximately 1655 lb/hr. See the following graph.Page: 10

In summary the above graph shows the fueling scenar ios corresponding to the green area of the graph will
result in an emission rate less than 1655 lbs/hr. As e xplained below, U. S. Steel is proposing to have a
NO x emission limit of 1655 lb/hr for the combination of emissions from the existing line and new line. As identified from the red area of the graph which de fines emissions above the 1655 lb/hr limit, measures
will be taken to ensure that the limit is not exceeded.



## Summary of Class I Modeling
Class I modeling was completed in accordance with the protocol submitted in November 2008. Visibility modeling requires that the worst case scenario is used to determine the impact to Class I Areas. The worst case scenario for this project is when 100% natu ral gas is used on the existing line and new line. Modeling 100% natural gas on both lines resulted in a modeled impact. A NO x emission rate of 2,727 lb/hr was studied in the draft Class I report from Janua ry 2009. As indicated in the Draft Environmental Impact Statement (DEIS), U. S. Steel will be required to propose a mitigation plan to address the modeled impact. The results reported in the Draft EIS were:

o Days >10% = 6Page: 11

o Days >5% = 31

The modeling assessed what has been refe rred to as “Scenario 4-1”. This scenario consists of Scenario 1 (the existing facility, as operated prior to solid fuel and the scrubber addition) subtracted using CALSUM from Scenario 4 (the full facility, existing and expa nsion sources, as proposed after the expansion). Emission rates reflect the 24-hour maximum rates. POSTUTIL was used on Scenarios 1 & 4 prior to their combination with CALSUM, using MNITRATE=1, with Ammonia background concentrations of 1 ppb. Several visibility analyses were performed using CALPOST.

For FLAG 2000, Method 2 was used, with background concentrations based on the Annual Average Natural Background. Initial submittals used the default Eastern US background found in the FLAG 2000 Appendices. FLAG 2000 noted that these background c oncentrations “...will serve until better estimates
of natural condition are available.” Recent conversati ons have indicated that the site-specific background concentrations found in the Appendices to the proposed FLAG guidance (FLAG 2008) are acceptable, and these are used in the results provided here.

For FLAG 2008: Method 8 was used, with background concentrations based on the 20% Best Days Natural Background, as provided in the Appendices to FLAG 2008.

Subsequent modeling has been performed using the November 2008 protocol as the basis with revised emissions that reflect a 24-hour block average limit of 1655 lb/hr as identified in the fueling scenario evaluation. An additional analysis was added to th is round of modeling reflecting a BART-like Analysis. Method 6 was used, with background concentrations based on the 20% Best Days Natural Background, as provided in the Appendices to FLAG 2008. Visibility modeling using an emission rate of 1,655 lb/hr from the fueling strategy analysis resulted in the following:

o Days >10% = 0

o Days >5% = 4

o BART Method Days DdV 0.5 = 3 for the total of the three years modeled.



## Mitigation Proposal
U. S. Steel has committed in the permit application to have the following new mobile equipment meet Tier IV emission standards. The visibility modeli ng used the lower emission rates from the Tier IV mobile equipment. The applicable new equipment includes:Page: 12

 Diesel-driven Haul Trucks

 Diesel-driven Mining Shovels

 Diesel-driven Front-end Loaders

 Diesel-driven D10 Dozers

 Diesel-driven Grader

These commitments apply to equipment acquired for the expansion facility. U. S. Steel will include more information on the feasibility to retro fit existing trucks in the future, but can not provide this information currently.

U. S. Steel will agree to a 24-hour block average limit of 1,655 lb/hr for sum total of emissions from both of the induration processes. Compliance with this em ission limit will be demonstrated through the use of
CEMs on both lines.

In addition, U. S. Steel has agreed to a 180-day Rolling Limit to meet the PSD netting requirements. This limit will restrict the amount of time the facility is able to burn 100% natural gas while still ensuring both
limits are met.

U. S. Steel also considered the cumulative emission impact as compared to the goals of the NE Regional Haze Plan. See the attached Regional Haze SIP Nort heast Minnesota Plan emission tracking spreadsheet.

In summary, under a majority of the fueling scenarios as shown in the graph above, U. S. Steel would be below the proposed limit of 1655 lb/hr on a 24-hr block. Under the 100% natural gas on both lines scenario additional NOx mitigation would need to be employed in order to be in compliance with the proposed limit. Additional NOx mitigation incl udes but is not limited to identification and implementation of additional operati ng and maintenance practices after the unit is operating to further reduce NOx emissions, reduction of production, idling of a line until the issue requiring the use of 100% natural gas on both lines is resolved.

Other Mitigation Opportunities Investigated by U. S. Steel The following other mitigation opportunities were investigated by U. S. Steel. These were evaluated by
U. S. Steel and determined not to be feasible: 1. Emission allowances and Green EnergyPage: 13

 Securing and retiring tradable emission allowa nces from National Emissions and on-site green energy generation are not attractive. Both opti ons would be difficult for the MPCA to enforce and would not result in visibility improvement in th e national parks of concern for this project.

2. Enforceable reductions in emissions from nearby sources

 A permit condition which restricts emissions from non-U. S. Steel facilities would be difficult for the Company to ensure permit conditions are being met by those facilities.



## Conclusion
Based on the review of NOx reduction technology, all add-on controls are either innovative technologies, technically infeasible based on induration furnace opera ting conditions, or there are constituents in the DDD1 exhaust stream which, if present in sufficient quantities, would adversely affect the feasibility of add on controls. Fuel combustion improvements, process design and fueling strategies are the most feasible methods of NOx reduction. An emission limit of 1,655 lb/hr on a 24-hr block average will result in minimal visibility impacts.