# I<AISER ALUNIINUIVI FabricatedProducts, LLC

George T. Czerniak, Chief AirEnforcement and Compliance Assurance Branch U.S. Environmental Protection Agency- Region 5 Mail Code: AE-17J 77 West Jackson Boulevard Chicago, IL 60604-3590 June 9, 2011

Re: Applicability Determination October 2009; Alternate Operating Scenarios Under National Emissions Standards for SecondaryAluminum Production

DearMr. Czerniak:

In August 2009 Kaiser Aluminum Fabricated Production LLC (Kaiser) requested clarification of applicability ofalternate operating scenarios underNational Emissions Standards for Secondary Aluminum Production (Subpart RRR). TheU.S. Environmental Protection AgencyRegion 5 (EPA) responded with an ApplicabilityDetermination in October 2009. Subsequently, Kaiser disagreed and provided additional information in a March 15,2010letter. EPA responded with a Revised ApplicabilityDetermination dated June 11, 2010.

Wehave, inthe interim, attempted to informallyresolve this issue and also have beenworking through the phased operations startup at the Kalamazoo, MI facility. However, even though Kaiser found the Revised Applicability Determinationto behelpful, we do not understand why the Group 1 furnace without add-on air pollution control alternative scenario (first alternative scenario) cannotbe approved. Additionally, we disagree with some ofthe restrictions on the use ofthe Group 2 furnace alternative scenario (second alternative scenario). In case we are unable to reach amicable agreement, please include this correspondence in the administrativerecord for this matter. Necessity ofAlternative Operating Scenarios

Weknow that EPA is supportive ofproviding flexibility to business operations that enhancesjob creation and retention when doing so results in no unacceptable air emissions increase. 74 Fed. Reg. 51418, 51419 (October 6, 2009). Kaiser's Kalamazoo, Michigan facility employs over 175 people producing extruded aluminum shapes and aluminum billet for sale (and has over 200 employees.facility-wide). The aluminum melting and casting portions ofthe facility are integral parts ofthat production. The facility has little capacity for in-process storage ofintermediate product. Ifmelting/casting operations are shutdown for anyreason, the downstreamportions ofGeorge T. Czerniak, Chief U.S.EPA, Region 5 June 9, 2011 Page 2

the process would run out ofnecessarymaterial to process substantiallyinterfering with the entire facility.

Underthe current Permit to Install (PTI), ifthe baghouse where to become inoperative, the melting and castingoperation could not operate and would be effectively shut downuntil repairs could bemade. Kaiserhas taken all reasonable precautions to prevent this from happening, but needs alternatives ifthere is a catastrophic failure ofthe baghouse system. Therequested alternative operating scenarios are intended to allow productionto continue ifthe baghouse becomes inoperative beyond ourreasonable control and despite ourroutine maintenance.

The economic viability ofthe Kalamazoo facility relies onusing painted aluminum scrap, and this is ourprimary operating scenario which wewill workhard to maintain. Painted scrap is much less expensive than cleaner aluminum materials. The Kalamazoo facility was specifically designed to beneficiallyrecycle less desirable materials in place ofmeltingprimary aluminum and clean scrap. Recycling ofaluminum also requires much less energy than producingprimary aluminum, and thereby provides an indirect environmental benefit. However, availability of sufficient quantities ofsuitable painted scrap cannotbe guaranteed. Ifpainted scrap is not available and the facility has to melt cleanermaterial, operation ofthe baghouse is an unnecessary expense and a waste ofenergy. Continuing to operate the baghouse system during periods when cleaner, more expensive material is beingprocessed, but still with emission limits beingmetusing RRR defined workpractices, is simplynot financially or environmentally justified.

Neither ofthese adverse events (baghouse system failure orunavailability ofpainted scrap) can be predicted ahead oftime. While Kaiser would certainlyprovide reasonable notice upon switching to an alternative operating scenario (as discussed below), the time and expense of pursuing an airpermit modification is not feasible ornecessary. The facility needs flexibility to respond in order to continue production in an economicallyviable way.
First alternative scenario

In the June 11, 2010 Revised Applicability Determination, EPA acknowledges that there could be more than one operating scenario but references parts ofSubpart RRR ( 40 CPR 63.151O(m) and 63.1510(n)) to demonstrate that operating requirements prohibit operation without the baghouse operating. Kaiserbelieves that EPA intended to reference 40 CPR 63.1506(m) and 63.1506(n). However, these two subparts apply separatelyto Kaiser's normal operation (with add-on control) and to the first alternative scenario (without add-on control). Kaiserproposes to comply fully with 40 CPR 1506(n) and all other area source requirements for a Group 1 furnace with add-on control under normal operation. Under the first alternative scenario Kaiser would complywith 40 CPR 63.1506(n) and all other area sourcerequirements for a Group 1furnace without add-on control.

1228 Courtland Avenue, Park Ridge, Illinois 60068 Tel (847) 430-8045 Fax (847) 770-4459 www.kaiseraluminum.com ,.George 

### T. Czerniak, Chief U.S.EPA, Region 5 June 9, 2011 Page3

As an area source ofhazardous airpollutants the Kaiser Kalamazoo facility is subject only to requirements pertainingto dioxin/furan (D/F) emissions and associated operating, monitoring, reporting and recordkeeping requirements. Kaiserhas already demonstrated compliance with D/F emissions under normal operation. Ifthe first alternative operating scenario is approved, Kaiser would demonstrate compliance with D/F emissions limits in accordance with Subpart RRRusing a worst case scenario for D/F emissions. Operating workpractices would be demonstrated and parameter limits wouldbe established during the performance test. Again, providing this operational flexibility would not threaten air quality.

Second alternative scenario

Kaiser agrees to revise the PTI to include all operating scenarios and the Operation, Maintenance and Monitoring (OM&M) Plan to contain complianceprocedures and operatingparameters, including chargematerials, for each operating scenario. Furnace labeling requirements of Subpart RRR would also be applied to each scenario and a successful performance test would be performed for each scenario to establishparametric monitoring ranges. We can and will work with MDEQ on these items. However, otherrestrictions described in EPA's June 11,2010letter
are not reflected in Subpart RRR and are not feasible ornecessary. Additionally, alternative operating scenarios provisions ofTitleV (40 CFR 70.6(a)(9)) do not contain these restrictions. Kaiser's permit is not a Title V permit, but the requirements ofTitle V set a relevant precedent.

As discussed above, the Kalamazoo facility was specifically designed and constructed to recycle low quality, painted scrap. As such it would not be economically feasible to sustain operation of the melting furnace primarily as a Group 2 furnace, and importantlythere is no such arestriction in Subpart RRR.

Since the events that could trigger changing operating scenario cannot always be anticipated (as discussed above), applying for a permitmodification orproviding advance notification to MDEQ would not be feasible. Kaiser would agree to notify the permitting authority upon making a change, but any advance notice requirement could unnecessarily interrupt production-so long
as we have the requisite RRR compliant work practices inplace and assure air quality requirements are met. Also, when such an event occurs there likelywould be some amount of painted scrap on-site in storage. We could set in place compliance procedures that would assure that this stored scrap is not charged to the melt furnace, but it would not always be feasible or necessaryto physicallyremove it from the facility.

Request for meeting

Kaiserrequests a further opportunity to meet with you and your staffat your earliest convenience to discuss these issues. Webelieve that both ofthe alternative operating scenarios requested are allowable under Subpart RRR. Werequest that EPAremove the restrictions placed on use of Group 2 scenario. This scenario is also consistent with alternative operating scenario contained

1228 Courtland Avenue, Park Ridge, Illinois 60068 Tel (847) 430-8045 Fax (847) 770-4459 www.kaiseraluminum.comGeorge T. Czerniak, Chief U.S.EPA, Region 5 June 9, 2011 Page4

in the Hydro AluminumNorthAmerica, Inc Air Quality Permit (Permit ID F-06-035); we also note that to the extent competitors are allowed operational flexibility, we are placed at an unfair disadvantage. We also request that EPA allow the use ofthe Group 1furnace without add-on control provided that the PTI and OM&M Plan are revised to assure compliance with Subpart RRRrequirement related to DIF.

Please call me at 847-430-8045 ifyouhave any questions concerning this matter.

Sincerely,

J. Roger Crawford V.P. EHS

cc: Deborah Carlson, Associate Regional Counsel, U.S.EPA Region V Charles M. Denton, Barnes & Thornburg LLP Charles Maxwell, Kaiser Bob Stabler, Kaiser Bill Vinzant, Kaiser

1228 Courtland Avenue, Park Ridge, Illinois 60068 Tel (847) 430-8045 Fax (847) 770-4459 www.kaiseraluminum.com