# Appendix O Cargill RFP Analysis

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# Ca~g~ll Sweeteners NorthAmerica August 2,2007 Timothy S. Owen, Chief Energy Branch Air Division Alabama Departmentof EnvironmentalManagement 1400 Coliseum Blvd. Montgomery, AL 361 10-2059
Dear Mr. Owen:
In response to your request on July 3, Cargill is providing herein our estimates of the costs of SO2emission controls for the Keeler Stoker Boiler (Unit S-407) at our Decatur plant. In addition to providing our cost estimates, this letter also presents information we have gathered that underlies our concern about whether applying controls to our boiler would be effective in reducing visibility impacts.
COST ESTIMATES
For a stoker type boiler such as Unit S-407, the following control technology options are generally considered for the reduction of SO2emissions:
Lower sulfur coals Wet scrubbers Dry scrubbers We are not providing cost estimates for the option of burning lower sulfur coal, because in the time we had available to evaluate this alternative,we were not able to determine whether this is both an available and technically feasible choice for Unit S-407. We are particularly concerned about the following issues:
The sulfur content of the coal we have been burning since 1999 has averaged approximately 1.2 to 1.3 IbIMMBtu. Accordingly, we would most likely need to obtain coal from the western USA, such as the Powder River Basin (PRB), to achieve any reductions in SO2emissions via lower sulfur coal. The informationwe have available to us indicates that lower sulfur coal is largely under contract at this time and may not be available for new users, and that this is unlikelyto change in the foreseeable future. We are also aware that these coal types are typically not available to industrial plants except in cases where a relatively local coal-fired power plant "host" has a committed supply. We do not know at this time whether such a host is available to us. 1030StateDocks Road Te1256-355-8815 Decatur; AL 3560 1 -7538 Fax256-351-8012Our boiler was not designed to burn a low sulfur western coal. Since these coal types typically have a higher dust content than the coal we are currently burning, significant boiler modifications could potentially be required in order for us to be able to burn it. Even so, burning coal with a higher dust content could increase the risk of spontaneous combustion in coal bunkers, silos, and hoppers. Slag buildup and removal could also be a more appreciable problem. Our operators would need to learn how to limit damage from slag buildup on boilertubes, and how to capture and control the additional dust cost effectively without compromising safety. For these reasons, PRB coal is typically not burned in stoker boilers such as Unit S-407.
Lower sulfur western coals have lower heat values than the coal we are currently burning. Thus even if such coalwas available to us, and was technically feasible for us to burn it, the boiler will generate less heat burning it than it does currently, and so to generate the same amount of heat as we do currently, we would have to burn more coal.
We are providing estimates of the costs associated with employing either a wet or dry SO2 scrubber for Unit S-407. Our estimates were derived using information we obtained from the following USEPA documents, supplementing this with information we have from equipment vendors: Air Pollution Control Technology Fact Sheet 

## - Flue Gas Desulfurization (FGD) 

### - Wet, Spray Dry, and Dry Scrubbers, available at 

### ~://www.epa.aovlttn/catc/dirl Iffdg.pdf

@ Air Pollution Control Technology Fact Sheet

## - Packed-BedIPacked-TowerWet Scrubber, available at 

### http://www.epa.aov/ttn/catc/dirl/fpack.pdf These documents present the most up-to-date guidance that USEPA has published regarding cost levels for wet and dry scrubbers. Each provides a range of factors for estimating capital and operating costs. Our resulting cost estimate ranges, derived using these factors, updated to current dollar values, and based on assuming that a minimum SO2 emissions reduction efficiencyof 90% can be achieved, are as follows: Total capital costs



### ............range from $1.3 millionto $36 million Total operational costs



### ....range from $192,000 to $1.9 millionlyear Cost-effectiveness..



### . . .

## . .. . . .ranges from $1,00O/ton to $7,60O/ton We are concerned that our estimates of cost-effectiveness, measured in dollars per ton of emissions reduction, may be misleading for the purpose intended here, i.e., determining the effectiveness of a dollar expended in reducing impacts on visibility in the Sipsey Wilderness Area. As discussed below, our concern is based on our fundamental question as to whether Unit S-407 impacts visibility in Sipsey at all, and if so, how much.EFFECTIVENESS IN REDUCINGVISIBILITY IMPACTS Figure 1 shows the location of the Cargill facility in Decatur, Alabama relative to Sipsey. It is evident that the facility is only about 50 km from Sipsey, but requires a northeast wind to transport the emissions from Unit S-407 to Sipsey. A 50-km transport distance is at the lower limit of consideration of regional haze due to SO2transformation to sulfates because the travel time is rather minimal for much conversion to take place. On the other hand, this distance is too largefor a coherent plume to be visible. Figure 2 shows a wind rose derived from 5 years of data from the nearest airport, Huntsville, Alabama. The wind rose indicates that of all possible directions, the wind has the lowest probability of blowing from the northeast (only about 3% of the time). Since the Regional Haze Rule reasonablefurther progress tracks the improvement in visibility for the 20% worst days, it is evident that even if the Cargill facility were contributing to these worst 20% days, it could only contribute to a small fraction of these at worst, and very well may not contribute to any of them at all due to the infrequency of northeast winds. Based upon this review of wind direction probabilities, we have serious doubts that any emission controls for Unit S-407 will change the reasonable further progress analysis outcomefor Sipsey.
Before any such emission controls are required, Cargill respectfully requests that ADEM needs to conclusively demonstrate that such controls would have a demonstrated effect on the reasonable further progress outcome for Sipsey. If needed, Cargill would be willing to retain a firm to conduct a refined modeling analysis for the subject boiler to determine if indeed the application of control would have a meaningful effect on regional haze in Sipsey.
CONCLUSIONS
We appreciate the Department's consideration of the information contained herein. As stated above, we would welcome the opportunity to work closely with the Departmentto assist you in developing a strategy to meet the National Progress Goals in the most cost-effective manner possible. Please direct any questions to me at (256) 351-4228 or email at heron@cargill.com

Jaryes Heron EHS Manager Cargill, Inc. Decatur, AL DHL Waybill 

### # 73225847240Figure 

### 1 Location of the Cargill Decatur, AL facility with respect to Sipsey

### Figure

### 2 Five-yearwindrosefor Huntsville, Alabama WIND#O@EPLOT: DISPLAY: Wind 

### Rare for HuntsvlllelMadlsonCountyJet, AL Wind Speed 8urfaaeWind Data Dire~tion (blowingfrom)

-

WIND 8PEEB (tH/8)

2= 11.1 8.8- 11.11 1.9- b.B 

# m 3.6- 8.7 

# -

1984 1985 1986 1987 1988 Carglll Jan 1

# - Dec 31 0o:Oo 

# - 23:OO MODELER: A. Kieldsing
CALMWINDS: TOTALCOUNT: 

## ENSR

# / AI(:( 7.84% 43848 hrs.
AVO.WINDSPEED: DATE: PRQJEOT NO.: 3.72 mls 7/25/2007 01256-364-OlOQ RPLOtVIw - Lak~ LnviranmentcrlSoftware," 

# Catg~ll Sweeteners NorthAmerica
August 28,2007 Timothy S. Owen, Chief Energy Branch Air Division Alabama Department of Environmental Management 1400 Coliseum Blvd. Montgomery,AL 361 10-2059
Dear Mr. Owen:
We are responding to Mr. Dewayne Gaines' e-mail of August 21, 2007 regarding ADEM's request to narrow the SO2 cost effective range reported in my letter to you dated August 2, 2007. In responding we note the following: The Keeler Stoker Boiler (Unit S-407) at our Decatur plant is part of a Consent Decree that was lodged on September I,2005 and entered by the Court on March 3, 2006. This Consent Decree was signed by Cargill, the U.S. EPA and other stakeholders, including the State of Alabama. Paragraph 15 of the Consent Decree requires Cargill to submit permit applications to the applicable permitting authority within three years from entry (March 2, 2009) of the Consent Decree that will contain annual SO2emission limits for the facilities and boilers listed in Appendix B of the Consent Decree that, in aggregate, limit total annual SO2emissions to less than 15,355 tons per year based on a 12-month rolling sum. Unit S-407 is part of the Consent Decree and its SO2emissions will be part of the cap. To meet the cap Cargill is authorized under the Consent Decreeto make changes to the listed boilers that maintain the heat input capacity of the coal boiler (including changes to coal boiler fuel receiving and handling systems and ash handling systems) that do not result in an increase in any single pollutant's emissions above current boiler allowable emission rates or an increase in the heat input to the boiler and result in an overall decrease in emissions. As a result, Cargill will be evaluating numerous SO2 control options for Unit S-407 and per the Consent Decree will submit a permit application no later than March 2, 2009. Therefore, Cargill must retain the flexibility afforded by the Consent Decree to make SO2changes if any at Unit S-407 to stay within the cap and not be bound by BART reasonable further progress. This is especially true in light of our August 2, 2007 response inwhich we stated that because of the source-receptor

10.30StateDocksRoad Decatu/; AL 35601 -7538 Tel256-355-8815 Fax256-351-80 12relationship between Unit S-407 and the Sipsey Wilderness Area and the prevailing winds, SO2reductions are not likelyto have any real affect on regional Haze in Sipsey. Notwithstanding the above, Cargill is responding to ADEM's request to narrow the cost effective range by reporting on one SO2control option 

## - a wet scrubber starting with two different baseline SO2emissions that are currently being considered under the Consent Decree. For this wet scrubber Cargill estimated that the total installed capital costs could range from $5MM to $10MM and total annual operating costs could range from $500,000 to $1.5MM. Therefore, in evaluating cost effectiveness for this response Cargillselected the mid-point of each of these ranges, i.e., $7.5MM total capital cost and $1MM total annual operating costs for the new wet scrubber. Cost effectiveness calculations using U.S. EPA procedure and these mid-points costs are reportedbelow. Option 1 This option assumes that Cargill will not reduce any additional SO2emissions under the Consent Decree. The typical SO2content of the coal currently burned in Unit S-407 is 1.3 IbIMMBtu. The typical annual heat input to Unit S-407 is 1.2x106 MMBtuIyr. This equates to a baseline mass emission of 780 TPY of SO2. We assumed 90% SO2control from the wet scrubber and the mid-point capital and operating costs above. On this basis, the SO2cost perton controlledwas calculatedto be $2,946.

This option assumes that Cargill will reduce SO2emissions under the Consent Decree by 50% from its current levels. This equates to a baseline mass emission of 780 (see paragraph above)

### X 0.5 or 390 TPY of SO2. We assumed 90% SO2control from the wet scrubber and the mid-point capital and operating costs above. On this basis, the SO2 cost perton controlled was calculated to be $5,891.
CONCLUSIONS
As part of the Consent Decree Cargill is evaluating numerous options for SO2control on Unit S-407. We have presented cost effectiveness data for two options currently being considered. The SO2cost effectiveness for Option 2 was calculated to be $5,89l/ton. Cargill concludes that this cost is higher than what would typically be considered cost effective for SO2 BART control. Even the cost effectiveness for Option 1 at over $2,90OIton is too high to be considered cost effective considering that SO2 reductions from Unit S-407 are likely to have little to no impact on regional haze at Sipsey for the reasons described above and in our letter dated August 2, 2007.

### We appreciate the Department's consideration of the information contained herein. We understand from previous correspondence that ADEM will not proceed with any BART reasonable further progress commitmentsfor Unit 5-407 without further discussion with Cargill. Please direct any questions or meeting requests to me at (256) 351-4228 or email at

## hs. h.eecargill.com.

Cargill, Inc. Decatur,AL

cc: JJZmudzinski S. Peters V. 

### Manetta ENSR Central File

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# Carg~li Sweeteners NorthAmerica
October 15, 2007

Dewayne Gaines Energy Branch Air Division Alabama Departmentof EnvironmentalManagement 1400 Coliseum Blvd. Montgomery,AL 36110-2059
DHL Waybill 

### # 73225851 042
Dear Mr. Gaines: The following information is in response to your email request October 2 concerning basis for calculations under option 1. A consultant utilizinga spreadsheet based on U.S. EPA BACT cost estimating procedures conducted the calculations. Due to time limitations the annual operating cost and the initial costs are estimates based on previous projects within our industry. The uncontrolled SO2 tonnage was calculated using our estimated annual MMBTU and 1.3 # SO2 per MMBTU.
If you need additional information please give me a call at (256) 351-4228 or email at james heron@.?cargill.com

~a&sJheron EHS Manager Cargill, Inc. Decatur, AL

1030StateDocks Road Tel256-355-8815 Decatu~; AL 3560 1 -7538 Fax256-351-8012