p.1 

OAR Box 1781 

Prepped by Ollie Stewart 

Document Number: 

24)11-1-16 

Docket Number: 

A-90-37 

Printed 10/29/2008 10:46:19 AM Sheet 24 of 142 
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AIR SCIENCES INC 

/9-^7 

RECEIVED 

Aprill7,1989 \ ? ^ ^ \ AP R U 1989 

Project 48-02 \ S^^^Z^^W^ ^ PONTROl niVISION 

.

 V

 ,. _ STAT.0N«rt.Y *&y .tt*&8 PROGRAM 

Ms. Cathy Rhodes 

Air Pollution Control Division 

Colorado Department of Health 

4210 E. 11th Avenue 

Denver, CO 80220 

Re: Additional infonnation regarding Best Available Control Technology for 

the Cimarron Chemical Project - Permit No. 89BA060 

Dear Cathy: 

As discussed in our telephone conversation of March 29,1989, Air Sciences is 

providing herein- the following infonnation on the Cimarron Chemical, Inc. (CCl) 

Project: 

• Supporting infonnation for fuel costs 

• Supporting information for additional water resource 

development 

• Estimated costs of Selective Catalytic Reduction (SCR) NOx 

control for specific application to the CCl Project. These costs are 

prepared to address the top down approach to Best Available 

Control Technology analysis. Costs of steam injection NOx control 

for the project were previously submitted in our letter dated 

March 23,1989. 

• CCl Project BACT justification 

Supporting information summarizing projected fuel costs for the CCl project 

are presented as Attachment A. This summary was developed from financial 

resources, references of which are noted in the attachment. Details of costs 

associated with additional water resource development are presented as Attachment 

B. These costs were developed by Malcolm Jones and Associates. 

SCR Cost Estimation 

SCR technology involves the injection of ammonia into the turbine exhaust and 

passing the mixture over a fixed catalyst bed to affect NOx reduction to N2. The 

ammonia injected is consumed during the reaction and the consumption rate is 

directly proportional to the amount of NOx present in the exhaust stream. 

Therefore, it is most.optimal with regard to costs, that the NOx concentration of the 

12596 West Bayaud Avenue. Lakewood. Colorado 80228 303/988 2960 FAX 988 2968 
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April 17,1989 ' ^ r 

Ms. Cathy Rhodes 

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exhaust stream be as low as possible prior to its treatment by SCR. For this reason, 

NOx concentration must be reduced to at least 25 ppm through the use of steam 

injection when SCR technology is used. SCR units can achieve a NOx reduction to 

about 9 ppm. 

.Annualized costs for SCR are estimated for plant operation at average annual 

conditions, and using engineering and economic data and cost factors. Costs were 

estimated using traditional cost recovery and time value of money considerations, 

and represent approximate rather than rigorous estimates on a before-tax basis. 

Fixed capital costs are annualized over an assumed 15 year useful equipment life at 

a 15 percent discount rate. 

Annualized costs of SCR are based on installing two SCR units. Included in 

these costs are incremental increases for the boilers and control system. The catalyst 

is sensitive to high temperatures so that the stream passed over the catalyst must be 

cooled prior to treatment. Typically, the boilers are split so that most of the heat 

contained in the exhaust stream is recovered prior to feeding tiie stream to the SCR 

equipment, and remaining heat is recovered by a second boiler section. Significant 

increases in boiler costs are incurred as a result of the two-section boiler 

requirement. 

.. SCR systems require frequent tuning and adjustment. As such, a control 

system capable of controlling ammonia injection, steam injection, fuel supply rate 

and generator power output simultaneously will be required. Such a control system 

will involve a continuous NOx stack monitoring system integrated with SCR and 

turbine operating controls. 

Other fixed costs include the initial catalyst cost, vessels, piping, and an 

ammonia injection system. Financing charges for the SCR installation (15 years at 

12 percent) are adjusted to present value and then annualized over 15 years at a 15 

percent discount rate, as are all other fixed costs. 

Operating costs for the SCR process include ammonia consumption, 

replacement of the SCR catalyst beds every three years, consideration of cost 

increases due to reduced plant performance and incremental increases in water 

consumption associated with the higher required steam injection rates. These 

annual costs are levelized to account for escalation of commodity prices. 

Economic calculations for the SCR case are presented in Attachment C. The 

incremental annual and total lifetime costs of NOx control are presented in Table 1. 

The costs of steam injection control previously submitted in the March 23, 1989 

letter are also presented in Table 1 for completeness. Table 2 summarizes present 

value incremental costs for the various control levels. 
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April 17,1989 

Ms. Cathy Rhodes 

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TABLE 1 

INCREMENTS ANNUAL AND TOTAL COSTS FOR STEAM 

INJECTION AND SCR CONTROL 

(two turbines) 

Cost Basis 100-75 ppm 75-42ppm 42-9 ppm 10-09 ppm 

.Annual • $247,100/yr $891,720/yr $3,593,525/yr $4,732,345/yr 

Total $3,706,500 $13,375,500 $53,902,875 $70,985,175 

(15 years) 

TABLE 2 

INCREMENTAL COSTS OF STEAM 

INJECTION AND SCR CONTROL 

(present value dollars, two turbines) 

Cost Impact Component 100-75 ppm 75-42ppm 42-9 ppm 100-9 ppm 

Operating Costs 

Fuel $120,000 

Water Treatment Chemicals 26,194 

Boiler Feedwater Chemicals 5,613 

Additional Raw Water 8,160 

Ammonia 

Catalyst 

Operating Cost Total ($/yr) 

Capital Costs 

Water Treatment Equipment $63,750 

Piping 3,000 

Pump and Desuperheater 4,000 

Capacity 

Additional Water Resource 

Development 

SCR System 

Ammonia System 

Incremental Boiler Increase 

Incremental Control System 

Increase 

Installation Labor 17,500 

Capital Cost Total ($) $88,250 

$200,000 

75,499 

16,178 

23,520 

$159,967 $315,197 

$183,750 

9,000 

6,000 

1,000,000 

$141,894 

67,795 

14,530 

21,120 

190,080 

508,776 

$944,195 

$165,000 

7,000 

2,800 

3,400,000 

400,000 

800,000 

100,000 

$461,894 

169,488 

36,321 

52,800 

190,080 

508,776 

$1,419,359 

$412,500 

19,000 

12,800 

76,800 1,076,800 

3,400,000 

400,000 

800,000 

100,000 

50,000 1,237,900 1,305,400 

$1,248,750 $6,189,500 $7,526,050 
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April 17,1989 

Ms. Cathy Rhodes 

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Table 1 and 2 costs are expressed as incremental increases because these are 

the true costs of increasing the control level. Each successive increase in control 

effectiveness costs more per ton of pollutant controlled than does the previous level of 

control. 

BACT Justification 

The following is a top down analysis of Best Available Control Technology 

(BACT) for the CCl Facility and is limited to nitrogen oxides emissions. The 

analysis is based on the definitions of BACT and Lowest Achievable Emission Rate 

(LAER) as provided in the Common Provisions of the Colorado Regulations. Both 

BACT and LAER are triggered by "major source" status. BACT is applied in areas 

designated attainment of the ambient nitrogen oxides standard and takes into 

consideration energy, environmental, economic and other costs of control 

application. LAER is applied in areas designated nonattainment of the ambient 

standard. 

The analysis considers the control of NOx with steam injection to three levels 

(100 ppm, 75 ppm and 42 ppm turbine exhaust concentration) as well as control to 9 

ppm with maximum steam injection supplemented with selective catalytic reduction 

(SCR). The 100 ppm level is considered baseline control.and its costs are not 

developed. .Annual and total lifetime economic costs of the three control scenarios 

above baseline are presented in Table 1. Cost effectiveness of NOx control is 

presented in Table 3. 

TABLE 3 

NOx REMOVAL COST EFFECTIVENESS 

(basis: 100 ppm control level = $0/yr) 

Units 75 ppm 42 ppm 9 ppm 

$/yr 247,100 1,138,820 4,732,345 

ton/yr 234 542 882 

$/ton 1,055 2,100 5,365 

There will be environmental costs for nitrogen oxides control in addition to the 

direct economic costs presented in Table 1. The environmental costs will be in terms 

of increased water consumption in an arid region of the state, increased carbon 

monoxide emissions and potential hazards associated with storage and 

transportation of ammonia. Water is available only from ground water supplies and 

CCl use is in competition with agriculture. Water consumption is shown in Table 4.. 

CO emissions will increase as steam injection is increased. These emissions 

will be as high as 150 tons per year for the highest steam injection rate considered in 

this analysis. This emission rate is above the 100 ton per year CO significance level 

a 
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April 17,1989 

Ms. Cathy Rhodes 

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so that BACT for CO will also have to be addressed. Approximate CO emission rates 

are also shown in Table 4. 

SCR systems require substantial quantities of ammonia. This ammonia will be 

stored on site so that there will exist a potential for accidental ammonia releases. 

Furthermore, transportation of ammonia to the project will require frequent truck 

travel through the rural communities surrounding the project. The potential danger 

of storing and transporting large quantities of ammonia is an environmental cost 

which is not represented in the costs listed in Tables 1 and 2. Estimated ammonia 

consumption is presented in Table 4. 

TABLE 4 

ENVIRONMENTAL COSTS OF NOX CONTROL 

NOx Control Level 

Component Units 75 ppm 42 ppm 9 ppm 

Water Consumption million gal/yr 18.2 41.8 62.9 

acre-feet/yr 55.8 128.3 193.0 

CO Emission ton/yr 20.0 46.0 150.0 

Ammonia Consumption ton/yr -- -- 95.0 

The most stringent control scenario is steam injection with supplementary 

SCR, which will increase the level of NOx control from 100 ppm to 9 ppm in the 

turbine exhaust. This control is equivalent to the removal of 882 tons per year of 

NOx at an annual cost of $4,732,345. Annualized cost from Table 3 is $5,365 per ton 

of NOx controlled. The environmental costs in terms of water consumption and 

hazards are listed above. This means of control is applied in the NO nonattainment 

. areas of the United States. It is also applied in the ozone nonattainment areas of 

California as it is considered a precursor of ozone. In the ozone nonattainment areas 

of California NO emissions are treated as a nonattainment pollutant. From review 

of the July 1988 U. S. EPA BACT/LAER Summary (PB89-109060) this degree of 

emission treatment has not been applied in other areas of the United States. 

The cost of SCR control is not warranted in southeast Colorado where the 

ambient concentration of NOx is negligible and there is no significant 

industrialization within 100 miles. Furthermore, emissions from this facility will 

have no significant impact on any NOx nonattainment areas. 

The next level of emission control is with steam injection and the degree of 

control varies with the quantity of steam injected. Two levels of steam control above 

a baseline of 100 ppm are considered here, 42 ppm and 75 ppm". The costs associated 

with steam control are from plumbing equipment, water treatment and increased 

fuel and water consumption. As with most control systems, the effectiveness of the 

steam injection in terms of emission control per unit of steam injected decreases with 
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April 17,1989 

Ms. Cathy Rhodes 

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increased steam injection. In other words, the incremental increase of one ton of 

steam per hour will control more N0X when going from five tons to six tons per hour 

injection than from 10 tons to 11 tons per hour. 

From Table 3, the cost for control to 42 ppm is $1,138,800 per year and this will 

control 542 tons of NOx per year for a control rate of $2,100 per annual ton NOx. 

This level of control has been considered BACT on some installations as listed in the 

BACT/LAER Clearinghouse. However, there is an unusual and substantial cost for 

water in southeast Colorado because its availability is limited. Water used for the 

CCl project will come from ground water supplies. A well field extending beyond the 

existing property will be required to obtain the quantity of water required for control 

to 42 ppm, which involves the purchase of additional land. 

There is an added environmental cost of consuming 41.8 million gallons of 

water per year (128.3 acre-feet/yr) in this area of Colorado because the water could 

otherwise be used for agriculture. Because of this environmental cost and the 

unusually high direct cost for the water and on-site purification, this control level is 

not proposed as BACT for CCL 

, The next control level considered is 75 ppm. From Table 1, annual cost will be 

$247,100 for control to this level and will decrease NOx emissions by 234 tons per 

year. This cost is equivalent to $1,055 per ton of NOx controlled. The argument for 

not considering this as BACT is the same as for control to 42 ppm, but it is not as 

strong. The primary issue for this level of control is the relative importance of the 

55.8 acre-feet of water consumed annually for emission control balanced with the 

value of controlling 234 tons of NOx in a rural area, well away from significant 

industrial activity. CCl proposes that the economic and environmental costs are too 

high considering that the region is rural and the primary industry is agriculture. 

CCl proposes that control to the level of 100 ppm, which is better than New Source 

Performance Standards (NSPS), is BACT. 

A gas turbine project with similar water limitations has recently been issued a 

PSD permit in the State of Alaska. This permit was issued to Alaska Electrical 

Generation and Transmission for an 80 MW combustion turbine facility (permit 

number 8622-AA002). The location of this project is sufficiently far from Anchorage 

that existing ambient NOx concentrations were considered negligible. BACT for this 

project was determined to be 75 ppm NOx in the exhaust stream controlled via water 

injection. 
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April 17,1989 

Ms. Cathy Rhodes 

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Please contact me as soon as is convenient if you have any further questions 

regarding this information or any other issues for the Cimarron application. 

GWM:cmf 

cc: Ms. Elizibeth Sumerlin - CCl 

Sincerely, 

GatyW.McFaddin —"*" 

Project Engineer