www.AndoverTechnology.com 1 

### August 2 , 2012

To: Doug Grano

Fm: Jim Staudt

Re: Response to Comments Regarding Ash Grove Cement and Holcim Cement Kilns
Responses to Ash Grove Cement Comments

Ash Grove Comment: Ash Grove stated that they did not object to EPA’s conclusion that BART should be based in the installation of LNB and SNCR. However, the company stated that they objected to the assumptions made about what SNCR can achieve. Ash Grove stated that they explained in the prior correspondence that the company did not believe that it is appropriate to assume that the Montana City kiln can achieve 50% control effectiveness. Ash Grove stated that as the data in Table 10 of the preamble clearl

y showed, only one of the three kilns at Ash Grove’s Midlothian plant is able to achieve 50% control effectiveness. The other two kilns had an average control efficiency of 37.7% and 40.5% and Ash Grove stated that no other credible evidence is provided f or EPA’s conclusion as to SNCR NO x control efficiency. Ash Grove stated that EPA referenced studies from other industry sectors and a marketing brochure from Cadence stating that “control efficiency of up to 50% can be achieved on long wet kilns” and that this quote states the upper end of what might be achievable. Ash Grove stated that it does not state that 50% control efficiency can be achieved on all long wet kilns and that Cadence’s experience with SNCR on long wet kilns is what is shown in Table 10 as it was Ash Gove’s partner in developing the Midlothian SNCR

– the only wet kilns in the United States with any track record of SNCR use. Ash Grove stated that even after years of optimization on the Midlothian kilns, the data show that it has not been possible to bring all three kilns up to a 50% control efficiency and that the Midlothian NO X reduction data reflect not only the benefits of SNCR, but also the mid

- kiln firing of tires, use of a mid

- kiln fan and other technologies that are not available to the Montana City kiln, but that were implemented concurrent with the SNCR installation/optimization at Midlothian to reduce NO x emissions. Ash Grove explained that in considering the Midlothian data, one needs to account for the direct control efficiency these technologies provide, in addition to the synergistic effects of using more than one control device/technique at a time at Midlothian and that these benefits would not be available at Montana City and should not be
assumed.
Ash grove summarized that they continued to believe that a SNCR system at Montana City cannot be assumed to reach greater than 35% control efficiency and that EPA has produced no credible evidence in the record for supporting a different conclusion. Ash Grove stated that they rec ognized that their initial BART submittal listed 50% control as achievable for the combination of a low NO x burner and SNCR at the Montana City kiln but now believe they cannot get to that level on all three kilns at Midlothian. Ash Grove stated that they are willing to not contest the 8.0 lb/ton clinker limit, and they anticipate that compliance could require additional control technologies/strategies; therefore, they need the maximum time allowable to find ways to consistently maintain NO x at or below th at level.www.AndoverTechnology.com 2

Response:
For the reasons described below, I disagree that SNCR cannot achieve a 50% control effectiveness at Ash
Grove ’s Montana City kiln . The data in Table 10 of the proposed FIP, 77 FR 24003, show the control effectiveness that was achieve d with SNCR on Ash Grove’s three Midlothian, TX kilns (shown in Figure 1 below) , but it was not intended to imply that this is the upper bound of what might be achieved. From Figure 1 it appears that these kilns are virtually identical in design, and one might expect that they would have similar performance. Ash Grove did not submit any information explaining why these three kilns, of apparently the same design, have significantly different performance when using SNCR for NOx control . SNCR was used at t he three Midlothian kilns to comply with the emission limit established at Texas Administrative Code (TAC) 117.3110 (a)(1)(B) of 4.0 lb/ton clinker. TAC 117.3110(b) allowed an owner or operator of a long wet kiln to comply with the 4.0 lbs /ton clinker emission limit on the basis of a weighted average for multiple cement kilns. Thus, it is not necessary for each individual kiln to achieve the maximum p ercentage reduction possible but only for the three to average an emission rate below the limit of 4.0 lbs/ton clinker.
Figure 1. Ash Grove’s Midlothian, TX Kilns

The data from Table 10 of the proposed FIP is reproduced in Table 1 below along with additional
statistics

. Table 1 shows the data of Table 10 of the proposed FIP with kiln capacity and date in service and calculated standard deviation of the three kiln NO x levels over the period and the coefficient of variation (COV = standard deviation divided by the mean or average). Figure 2 graphically depicts the data. The three kilns are apparently of similar design (all t he same capacity of 291 TPY), were built within six years of one another, utilize the same raw materials , and they have very similar uncontrolled
emissions

. From Figure 1, the kilns appear to be virtually identical in design. As a result, it is expected that all three kilns should be capable of similar performance in any given period , and this is confi r me d bywww.AndoverTechnology.com 3

the very similar NO x emissions for each of the kilns exhibited in any given month in 2006. As shown
, the
CO V was about 5% on average in 2006 and was at about 10% or below for each of the three months in
2006. Kiln 1 was generally the highest NO x emitter during the 2006 period, but in the same range as the other two kilns (as confirmed by the low COV during thi s period). However, the COV for the same three months in 2008 was over 20% on average (almost 4 times the COV for the same period in 2006) and 12% in the month with the lowest COV (see COV data in red) . This difference demonstrates that the kilns, which appear to be of similar design and operated at a similar NOx emission rate in 2006, were clearly operated at very different NO x rates in 2008. For the three month period in 2008, kilns 2 and 3 have nearly identical NO x e missions rates. The refore
, higher COV in 2008 was almost entirely due to the fact that Kiln 1 was consistently operated at a much lower NO x level than the other two kilns, which is unexpected if the kilns are all of the same or similar design and were bei ng operated in the same way with respect to NO x control. Because SNCR is a “dial up” technology in the sense that additional reagent will provide additional NO x reduction and one would expect similar NO x levels in 2008 if the three kiln SNCR systems were being operated in the same way, it appears that kiln 1’s SNCR system was not being operated in the same manner as kilns 2 & 3 during the 2008 period. This seems to indicate that kilns 2 and 3 were capable of greater NO x reductions than were being realized during the 2008 period , at least comparable to the NO x reductions achieved on kiln 1.

Table 1. NO x Emission Rate Data from Ash Grove Midlothian Kilns, lb/ton clinker

In service 2006 2008

Kiln TPY June July Aug. Avg. Std. Dev COV June July Aug. Avg. Std. Dev COV

1 291 1966 5.2 5 4.5 4.9 0.36 7.36% 1.7 1.6 2.2 1.8 0.32 17.9%

2 291 1969 5 4.1 3.9 4.4 0.59 13.3% 2.7 2.6 2.8 2.7 0.10 3.70%

3 291 1972 5 4.4 4.2 4.5 0.42 9.25% 2.9 2.6 2.5 2.7 0.21 7.71%

Average 5.07 4.50 4.20 4.60 0.44 9.57% 2.43 2.27 2.50 2.40 0.12 5.01%

Standard Deviation 0.12 0.46 0.30 0.26

-- 0.64 0.58 0.30 0.52

-- Coefficient of Variation

(COV) 2.28% 10.18% 7.14% 5.75%

-- 26.4 % 25.5 % 12.0 % 21.7 %

-- TPY and In Service from 2006 US and Canadian Portland Cement Industry: Plant Survey, Portland Cement Association Figure 2. NO x Emission Rate s from Ash Grove Midlothian Kilns

0 1 2 3 4 5 6

June July Aug Emission Rate, lb/ton clinker kiln 1, 2006
kiln 2, 2006
kiln 3, 2006
kiln 1, 2008
kiln 2, 2008
kiln 3, 2008
kiln Average, 2006
kiln Average, 2008www.AndoverTechnology.com 4

As a technology with the ability to respond to changes in NO x levels, SNCR has the potential to reduce
NO x emission variability of the kiln . The ability of the SNCR system to reduce variability in emissions is shown in the column that shows standard deviation of the monthly data for each kiln in 2006 and in 2008. As shown, in every case the standard deviation dropped. The month to month variability of e ach kiln’s NO x emissions (as indicated in the COV data in blue) dropped significantly for kilns 2 and 3, and the overall month

- to

- month variability of NO x emissions for all three kilns dropped. This demonstrates that SNCR can be used to reduce variability in emission rates as well as reducing them overall.
On the other hand, Ash Grove has not submitted any data to demonstrate that SNCR was optimized in an attempt to achieve the lowest emissions possible , and the data in Table 1 appears to confirm that at
l east kilns 2 and 3 were not optimized to achieve the lowest emissions

. The emissions rate data for the Midlothian kilns from June

– August in the years 2006 through 2010 where available is shown in Figure 3 . The 2009 and 2010 emission rates are signific antly higher than the emission rates from June to August 2008 (an average of 1.8 lbs/ton clinker for kiln 1, 2.7 lbs/ton clinker for kiln 2, and 2.7 lbs/ton clinker for kiln 3). An increase in NO x emissions over time would not be expected if the SNCR were being operated in an optimized fashion
, and if changes in feed properties were the explanation, I would expect the same trends for all kilns, but that is not the case. As shown in Figure 3, for a ll years where there is data, kiln 2 and kiln 3 have similar emission rates. And, in 2006
, before applying SNCR all three kilns have similar emission rates. However in 2009 and 2010 the trends in kilns 1 and 2 differ, with kiln 2 having a the same steady NO x emission rate in both years and kiln 1 having a much lower rate in 2010 than in 2009. The trends in Figure 3 indicate that the SNCR systems of the three similar (if not virtually identical) kilns were being operated in very different ways, and there fore they could not all be optimized.

Figure 3. June

- Aug Midlothian kiln NO x Emission Rate D ata 2006

- 2010.

With regard to Ash Grove’s claim that EPA should account for the direct control efficiency of other technologies that are not available to the Mon tana City Kiln, the tire

- derived fuel system was already being used at Midlothian in 2006 and is already accounted for in the 2006 baseline to which the 2008

0.00 1.00 2.00 3.00 4.00 5.00 6.00

2005 2006 2007 2008 2009 2010 2011 Emission Rate, lb/ton clinker

kiln 1

kiln 2

kiln 3

note: data not available for kiln 3 in 2009 due to shut downwww.AndoverTechnology.com 5

post

- SNCR emissions are compared. 1 Thus, no further adjustment is necessary. Ash Grove has not

p rovided data to demonstrate that a synergistic effect has occurred between mid

- kiln firing of tires and SNCR at Midlothian.
Ash Grove has not submitted data to support their claim that only 35% reduction can be achieved with SNCR at the Montana City kil n. All of the Midlothian kilns were able to achieve greater than 35% reduction with SNCR and there is no information to demonstrate that SNCR was optimized to its maximum potential. The BART Guidelines state, " In assessing the capability of the control alternative, latitude exists to consider special circumstances pertinent to the specific source under review, or regarding the prior application of the control alternative. However, you should explain the basis for choosing the alternate level (or range) of control in the BART analysis. Without a showing of differences between the source and other sources that have achieved more stringent emissions limits, you should conclude that the level being achieved by those other sources is representative of the ac hievable level for the source being analyzed ." 70 FR 39166. Ash Grove has not demonstrated the differences between their Montana City kiln and the Midlothian kilns.
With regard to Ash Grove’s statement that EPA did not produce credible evidence in the re cord for supporting a greater than 35% control effectiveness for SNCR, EPA provi ded a detailed explanation in thei r proposed FIP at 77 FR 24003. Ash Grove has used SNCR at its Midlothian kilns where it was shown to achie ve the reductions ranging from 37.7 % to 62.5% and these are within the range of control effectiven ess demonstrated at other kilns. As described earlier, similar performance would be expected for each of the three Midlothian kilns if the SNCR systems were being operated in a similar manner and because the kilns could average under their permit, it was not necessary to control all kilns to the same degree . So, it appears that the higher NO x reduc tion is a better representation of what the SNCR system is capable of for the Midlothian kilns

. Moreover, c onsidering that control effectiveness (in terms of percent reduction) is greater when initial NO x concentrations are greater, and that the baseline NO x emissions of the Montana City kiln are significantly greater than the Midlothian kilns, the Montana City kiln would be expected to achieve even greater control effectiveness when compared to the Midlothian kilns. 77 FR 24003 and 77 FR 24004.

Ash Grove’s comment that they are willing to not contest the 8.0 lb/ton clinker limit is noted. W ith regard to Ash Grove’s comment that they anticipate that compliance could require additional control technologies/strategies and, therefore, they need the maximum time allowable to find ways to consistently maintain NO x at or below that level, I disagre e that additional control technologies/strategies are necessary

. T he final FIP does not require specific control technologies/strategies to be used. The final FIP allows for the maximum time available to comply with the 8.0 lb/ton clinker limit.

1 Letter from Molly Cagle to Chance Goodwin, Initial Control Strategy Development for DFW Ozone Nonattainment Area, July 30, 2010, p. 1.www.AndoverTechnology.com 6

Res ponses to Holcim Cement Comments

Holcim Comment A.1.a : An SNCR system at Trident will not be as effective as EPA assumed

. Holcim argues that the Texas kilns cited by EPA in the FIP are not representative and two of the three kilns did not achieve 50% NO x reduction. Holcim cites several site

- specific factors that impact SNCR performance that they state that EPA did not adequately consider, including turbulent mixing, heat transfer, spray droplet size, spray drop evaporation, devolatilization and others. Holcim also argues that the CO levels at the Trident kiln are much lower than the CO levels at the Texas kilns, which they argue will adversely impact NO x reductions and ammonia slip at the Trident kiln relative to the Texas kilns. Holcim additionally ar gued that EPA did not adequately consider NO x emissions variability in setting the limit because of the limited time frame considered for the data from the Texas kilns.

Response:
EPA has assumed that 50% reduction is possible with SNCR; however, this does not rule out the possibility that Holcim may determine that other means may be better than SNCR alone in terms of cost or other factors for achieving 50% NO x reduction. For example, Holcim may determine that 50% reduction is more effectively achieved thro ugh combination of SNCR with another technology. In any event, 50% NO x reduction is achievable with S NCR and this is supported by the data cited in the proposed FIP. See response to comments from Ash Grove Cement for more on this.

In the proposed FIP EP A also assumed that a combination of SNCR with LNB would provide 58% reduction (50% from SNCR and 15% from LNB
, which is reasonable because LNB with indirect firing has been shown to provide greater than 15% NO x reduction on average

. 2 ) Although LNB and SNCR is a viable approach that should provide NO x reductions in the range EPA assumed and at a cost similar to what they assumed in the proposed FIP , it may be possible that Holcim determine s that other approaches used in combination wit h SNCR will be less expensive overall than indirect firing with LNB. For example, in the proposed FIP EPA ruled out Mid Kiln Firing (MKF) because it was uncertain if tires could in fact be burned in the kiln due to Montana permit requirements; however, th is would not preclude MKF of coal or pet coke rather than tires, which would provide the same NO x reduction (30%), albeit, without the benefit of the revenue realized from burning tires. If MKF provides greater NO x reduction than indirect firing, there wo uld be an offsetting benefit in the form of a reduction of SNCR reagent costs.
With regard to Holcim’s specific comments, Holcim also noted that SNCR performance depends upon a wide range of site

- specific factors

. They list rate

- limiting processes, includ ing turbulent mixing, heat transfer, spray droplet size, spray drop evaporation, devolatilization and others

.

 Spray droplet size is clearly related to evaporation rate and reagent devolaltilization. Spray droplet size is something that the SNCR system des igner can control and tailor to the needs of the system.

2 NOX Control Technologies for the Cement Industry, FINAL REPORT, EPA Contract No. 68

- D98

- 026, Work Assignment No. 2

- 28, EC/R Project No. ISD

- 228, September 19, 2000 at p. 7www.AndoverTechnology.com 7

 Turbulent mixing may or may not be within the SNCR system designer’s ability to impact. For example, it may be possible to utilize something like Cadence Recycling Mixing Air technol ogy 3 to improve turbulent mixing for the SNCR system.

Increased tu rbulence improves mass transfer (contacting the ammonia with the NO x ), which will reduce mass transfer limitations on the chemical reaction. SNCR can be limited from the chemical kinetic perspective also, as described in detail by Muzio and others

. 4 This effect is illustrated in Figure 4 that shows the calculated effect of temperature and residence time on the controlled NO x level for ammonia SNCR. As shown, NO x reduction seems to be best within a temperature window of about 1600

- 1950°F for ammoni a SNCR, but reaction time at that temperature plays a role as well, especially at the lower end of t he temperature range. A t the lower end of the temperature range, reaction time makes a large difference in the outlet NO x achieved . For urea SNCR similar results w ould be observed, but at a higher temperature range than for ammonia

. Therefore, mor e reaction time is advantageous for SNCR as is more turbulence.
Figure 4

. Effect of Reaction Temperature and R eaction Time on NO x Reduction for Ammonia SNCR 4

The concentration of carbon monoxide ( CO ) is another factor raised in Holcim’s comments. As Holcim notes, CO tends to cause the SNCR reaction to behave in a manner as if the temperature was higher

– allowing urea or ammonia injection at a lower temperature than otherwise possible because the CO will mitigate ammonia slip. This effect is shown in Figure 5

. As shown, without CO present, NO x reduction is best with an initial temperature around 1000°C and with 1000 ppm of CO present, NO x reduction is best

3 Cadence Recycling Web site: http://www.cadencerecycling.com/mixingtechnology.html

4 Muzio, L., Montgomery, T., Quartucy, G., Teixeira, D., “The Effect of Residence Time on SNCR Processes”, 1993 Joint Symposium on Stationary Combustion NOx Control, Miami, FL, May 1993.www.AndoverTechnology.com 8

with a starting temperature around 850°C. Holcim argues that the difference in CO emissions b etween one kiln and another will impact how performance at one kiln may be related to an other . However , if the CO at the Trident kiln is much lower than at the Texas kilns referred to in the comments , as Holcim describes , this simply means that the SNCR r eagent should be introduced at a point in the process where the gas temp erature is higher than the injection point used at the Texas kilns where the CO levels are higher. This would mean injecting the reagent farther upstream in the process (from a gas

- fl ow perspective rather than solids perspective ) at the Trident kilns than the location used at the Texas kilns referred to in the comments, which is also advantageous from a NO x reduction and ammonia slip perspective because it enables the reaction to occur over a lo nger period of time in the kiln

. A nd
, as demonstrated in Figure 5, there is no disadvantage in terms of NO x reduction performance by injecting at a higher temperature and lower CO level. Therefore, with regard to the impact of lower CO levels in the Trident kiln s, these may in fact improve (and certainly will not harm) performance relative to facilities with higher CO emissions because greater reaction time is likely to be possible as the injection point is moved farther upstream in the kiln ga s flow

. Figure 5

. Effect of CO on NO x Reduction using SNCR 5

NO x emission variability is another factor raised by Holcim in their comments. First, t he data used by EPA in Table 10 of the proposed FIP covers a three month period which should be adequate time to address normal operating ch anges that would impact NO x . Second, SNCR can be used to mitigate variability in NO x emissions. I f NO x emissions change over time due to operating changes , the percent

5 Horton, J., Linero, A., Miller, F., “ USE OF SNCR TO CONTROL EMISSIONS OF OXIDES OF NITROGEN FROM CEMENT PLANTS” , 1

- 4244

- 0372

- 3/06/ (c)2006 IEEEwww.AndoverTechnology.com 9

reduction that is possible will also change because of the well

- established fact that NO x reductions from SNCR are generally higher from higher NO x baselines . The effect of temperature and baseline NO x level on percent NO x reduction is shown in Figure 6 for urea SNCR. F or ammonia SNCR a similar trend wou ld be observed except at lower temperature levels

. Because of the phenomenon shown in Figure 6
, h igher NO x levels will typically permit greater levels of NO x reduction so that similar emission rates may be achievable

. Therefore although baseline NO x emi ssions may vary, with SNCR it is possible to respond to the variability in NO x emissions by variation of treatment rate . This is confirmed by the data on the Midlothian kilns that is in the proposed FIP and as described in Response to Comments from Ash Gr ove Cement . For every kiln, the standard deviation in the monthly NO x emission rate was lower after the application of SNCR than before, indicating a lower variation in NO x emissions.

Figure 6

. Effect of Baseline NO x on Percent Reduction Using Urea SNCR 6

Holcim Comment A.1.b : An SNCR system cannot be operated year

- round at Trident

Holcim argues that a detached plume may result from operation of the SNCR in the winter months, which will make it necessary to not operate the SNCR system or to allow a condition where visibility is adversely impacted to continue. The detached plume could be the result of the formation of ammonium salt reactions with sulfate or chlorides.

6 Hofmann, J., Sun, W., “Process for Nitr ogen Oxides Reduction to Lowest Achievable Level”, US Patent 5,229,090
, July 20, 1993.www.AndoverTechnology.com 10

Response:
As discussed by Miller, 7 there are several factors that contribute to visible detached plume, and these include moisture, temperature, and availability of the constituents that contribute to the plume

– ammonia, sulfates and chlorides. Ammonia slip from the SNCR process can be well controlled in a cement kiln, while ammonia contributed by raw materials probably cannot be well controlled and would not be affected by the SNCR system.
Sulfates and chlorides are largely the result of impurities in the raw materials , and ammonia can be contributed by raw materials . Holcim’s SO2 emission rate, which is sufficiently low that additional controls are not needed for BART, indicates low levels of sulfates in the exhaust. Therefore, the risk of an ammonium sulfate plume , even with ammonia present, is small

. The presence of chorides will depend upon the raw materials and whether the chlorides become bound to alkaline material befo re being emitted up the stack.
Chlorides, if present, will typically preferentially be bound to alkaline material that is present than be emitted

. Holcim d id not provide any information on stack chloride emission levels at this site to support their con cerns about detached plume from ammonium chloride.
Because of the importance of impurities in the raw materials in contributing to the chemical
constituents t hat form a plume, the experience at one kiln cannot be directly applied to another without more information. Therefore, w hile there may be a risk of a plume at the Trident kiln, Holcim has not provided enough data to indicate that addition of an SNCR syst em would increase this risk significantly

. Holcim Comment A. 2 : EPA failed to consider the NO x contr ol technology already installed at Trident

. EPA did not properly consider the technology installed at the kiln, which includes a new multichannel burner and indirect firing of Pet coke (not indirect firing of other fuels) , which resulted in a 13% NO x reduction . Holcim believes that indirect firing for other fuels wil l not provide a NO x benefit and that EPA’s analysis did not properly take into acc ount the reductions from the burner change in developing its proposed NO x limit. In the proposed FIP, EPA assumed 15% NO x reduction from LNBs and indirect firing would achieve a 15% NO x reduction, but Holcim ’s Tr ident kiln already achieves 13% reduction, which indicates that additional reductions can only be achieved through SNCR, and EPA’s analysis is therefore erroneous and should be disregarded.

Response:
As the June 9, 2009 letter from Mr. Greg Gannon of Holcim to US EPA Region 8 notes, “a low NO x burn er modification would require low primary air and, thus, a conversion of Trident’s firing system from a direct to an indirect system. This modification would require several changes including but not limited to installation of a baghouse, additional explo sion prevention, pulverized coal storage and dosing equipment in addition to the low NO x burner”. The Trident kiln has not installed an indirect firing system for coal, and therefore does not meet the definition in Mr. Gannon’s letter. As a result, the burner is not capable of operating at low primary air levels on pulverized coal and cannot achieve the

7

. Miller, F. M., “Management of Detached Plumes in Cement Plants ”’ 2001 IEEE

- IAWPCA Cemen t Industry Technical Conference Vanc ouver, British Colombia, Canada April 200 1www.AndoverTechnology.com 11

NO x reductions that an indirect firing system would achieve. For this reason there is no reason for EPA to assume that the NO x reductions associated wit h a low NO x burner modification, as described in the June 9, 2009 letter, have been achieved. Moreover, d ata from the March 2, 2012 letter from John Goetz to Vanessa Hinkle does not support a 13% reduction in NO x emission rate from the burner that was
ins talled

. In the proposed FIP, EPA did assume 15% NO x reduction from LNB and indirect firing; however, this was a conservative assumption used for the purpose of estimating cost effectiveness. LNB with indirect firing was found to provide an average emissio n reduction of 27% (a range of 4%

- 47%) from an average emission rate of 9 lb/ton of clinker. 8 Even if the Trident kiln had achieved 13% NO x reduction from the burner changes they have made (and EPA does not see support for this claimed reduction in Holcim ’s
NO x emission rate), there is good reason to believe that an indirect firing system would provide significant additional NO x reduction due to the ability to reduce primary air levels.

Holcim Comment A. 3.a : EPA underestimated the costs o f installing and maintaining an SNCR system. Holcim estimated the direct annual cost of commercial SNCR to be $443,341 and the indirect annual costs for commercial SNCR to be $227,538 for a total of $670,879, while EPA estimated a total annual cost of $271,216 in the prop osed FIP, despite the fact that EPA cited Holcim’s earlier estimate. It is unclear how EPA derived its cost estimate and Holcim requests clarification. EPA also used a 20

- year amortization schedule rather than 15

- year as used by Holcim. Holcim also beli eves that if SCR is required in subsequent reasonable progress planning periods, the 20

- year amortization period would not accurately represent the cost of the SNCR system. Also, Holcim’s recently installed SNCR system at its Hagerstown, MD kiln cost $1,9 20,000 installed and operating costs have been in the range of $1.40 per metric ton of clinker.

Response:

EPA has revised its estimate for the cost of SNCR and has determined that the total annualized costs would be $650,399 resulting in an average cost e ffectiveness of $1,170/ton. These are very consistent
with Holcim’s estimated costs for SNCR. I f Holcim’s costs are used for SNCR ($670,879 per year) then
the cost effectiveness of the NOx reduction (556 tons per Table 39 of the proposed FIP) is $1206/to n , which is well within the estimated cost effectiveness values for other BART sources affected by the proposed FIP

. For SNCR

- EPA relied on capital and annual cost from Holcim except that EPA used a CRF corresponding to 7% and 20 years (0.0944). (77 FR 24015).
Regarding Holcim’s information on the costs of SNCR at Holcim’s Hagerstown, MD kiln
, Holcim ’s Hagerstown, MD kiln is much larger than the Trident kiln. The Trident kiln is permitted at 425,000 tons per year of clinker production. (Montana Air Qua lity Permit #0982

- 11, Condition II.B.6). The Hagerstown kiln is rated at 630,114 tons per year of clinker production capacity (PSD Permit Application For Approval, Holcim Hagerstown, October 30, 2008). Also, the Hagerstown kiln

– a dry kiln

- likely has d ifferent emission rates than the Trident kiln. Also, without more information it is not possible to

8 NOX Control Technologies for the Cement Industry, FINAL REPORT, EPA Contract No. 68

- D98

- 026, Work Assignment No. 2

- 28, EC/R Project No. ISD

- 228, September 19, 2000 at p. 7www.AndoverTechnology.com 12

determine how much of the claimed $1,920,000 capital cost of the Hagerstown kiln SNCR system would be costs that are permissible for inclusion in a BART co st estimate. For these reasons without more information the costs of the SNCR system at the Hagerstown kiln are not useful for estimating the costs at the Trident kiln.

Holcim Comment A. 3.b. : EPA failed to give proper weight to t he costs of installing indirect firing and ignored the lack of visibility benefits. Holcim believes that EPA underestimated the costs of indirect firing at the Trident kiln and used a lower cost than used in Holcim’s estimate. 9 However, even using EPA’s e stimate of cost and an assumption of 15% NOx reduction, the incremental cost effectiveness is such that it does not warrant a determination as BART. Because the majority of emission reduction would result from SNCR, the average cost of NOx reductions from the combination of indirect firing and SNCR are much lower than the incremental cost effectiveness of the indirect firing alone and make the combination seem reasonable. EPA’s estimate of $4279/ton for the incremental cost of indirect firing is outside t he range of what EPA has considered to be reasonable for BART and EPA’s estimate of the incremental cost effectiveness of LNB+SNCR at $8,029 is well outside the range that EPA has considered reasonable under BART. As a result of the high incremental cost of indirect firing plus SNCR over the cost of SNCR alone and the low NOx reduction from indirect firing which offers only 0.125 deciview improvement at the Gate of the Mountains Wilderness Area (proposed FIP at 24017), it is unreasonable for EPA to require indirect firing. A 58% reduction in NOx would result in only 0.424 deciview improvement in visibility at Gate of the Mountains Wilderness Area (proposed FIP at 24017), which is below the 0.50 threshold for a perceptible change in visibility 70 Fed. Reg. at 39119

- 20, n. 28, but the Agency uses the deciview metric precisely because a change of 1 deciview is generally the limit of human perceptibility. See 64 Fed. Reg. 35714, 35725 (July 1, 1999) (“A one deciview change in haziness is a small but noticeable change in haziness under most circumstances when viewing scenes in Class I areas.”). Given that, it would be unreasonable to require Trident to install indirect firing as it would result in no perceptible improvement in visibility.

Response:

For LNB

- EP A relied on capital cost and annual cost from Holcim except that EPA used a CRF corresponding to 7% and 20 years (0.0944) and EPA used a retrofit factor of 1 instead of 1.5 for the indirect installation costs. (77 FR 24014). The effect of this was to redu ce the capital cost from $4,958,209 to $4,385,307 and to reduce the annualized cost from $846,061 to $714,629. This results in a 12% reduction in estimated capital cost and a 16% reduction in annualized cost. The cost effectiveness value is also impacte d by the assumed level of NOx reduction. Although EPA assumed 15% reduction in the proposed FIP, EPA believes that higher levels of NOx reduction are likely from addition of indirect firing with an LNB. Some sources showed an average emission reduction o f 27%, nearly double that assumed in the proposed FIP. 10 This would reduce the incremental cost effectiveness of NOx reductions from an indirect firing conversion roughly in half. It would also increase the visibility improvement. Therefore, there is t he likelihood that the visibility improvement cited in the FIP that is attributable to LNB (with indirect firing) is low and that the cost effectiveness value is high.

9 June 9, 2009 letter from Mr. Greg Gannon of Holcim to US EPA Region 8
10 NOX Co ntrol Technologies for the Cement Industry, FINAL REPORT, EPA Contract No. 68

- D98

- 026, Work Assignment No. 2

- 28, EC/R Project No. ISD

- 228, September 19, 2000 at p. 7