From: John Summerhays/R5/USEPA/US To: "Schmidt Cortney" <CKSchmidt@vcsmc.com>, Cc: "Straw Ann" <ALStraw@vcnainc.com>, "Cox Dirk" <DACox@vcsmc.com>, FDindoffer@BODMANLAW.COM, "Gower Matthew" <MMGower@vcsmc.com>, Daniel Schaufelberger/R5/USEPA/US@EPA, Douglas Aburano/R5/USEPA /US@EPA, Jane Woolums/R5/USEPA/US@EPA Date: 10/15/2012 01:47 PM Subject: Urea Cost Information 

### Attached are the two emails we got from FuelTek with urea price information. We did various cost effectiveness calculations, but the upper end of the range of urea prices we assumed was $1.80 per gallon of 50% solution, which works out to about $758 per ton of actual urea.

From: Kevin Dougherty <KDougherty@ftek.com> To: John Summerhays/R5/USEPA/US@EPA, Cc: "Doug Austin (daustin@icac.com)" <daustin@ icac.com>, Hanif Suchwani <HSuchwani@ftek.com> Date: 10/05/2012 10:27 AM Subject: RE: Urea Cost Information
JohnThe $1.60 to $1.80 is the delivered price on a $ per gallon of 50% solution.

I have attached a spreadsheet which shows the calculation from 100% dry urea feedstock to the equivalent price on a $ per gallon of 50% solution. The spreadsheet does not account for the cost of the water, which we have seen typically evaluated at $0.03 to $0.05 per gallon. A s you can see, there are significant savings over delivered 50% solution, but there is labor and additional hardware required for dry urea storage, handling and solutionizing equipment to get to the point where a plant has a 50% solution that it can then store at a plant. The delivered price premium includes production, water, QA / QC, testing and freight costs and as previously noted, for small urea quantities many customers prefer the convenience of a delivered solution. A s noted in my original response, for larger urea quantities, there can be significant reagent savings by starting with dry urea and solutionizing on-site.

Feel free to use the spreadsheet any way you see fit. Let me know if you have any additional questions or if we can provide more information.

Sincerely,

Kevin Dougherty V P Business Development and Marketing Fuel Tech, Inc. 27601 Bella Vista Parkway Warrenville, IL 60555 W: 630-845-4472 C: 630-688-6898 kdougherty @ ftek

. com

ureacomparison.$pert on.vs.$pergal.xlsx



### From: John Summerhays [mailto:Summerhays.John@epamail.epa.gov] Sent: Wednesday, October 03, 2012 11:43 A M To: Kevin Dougherty Cc: Doug Austin (daustin@icac.com); John Summerhays Subject: Re: Urea Cost Information Thank you very much for this reply.

I would like to ask a clarifying question. When you say the delivered urea price would be $1.60 to $1.80, is that the price per gallon of pure urea or the price of a gallon of 50% urea solution (or even some other figure)?

I would have expected standard usage to talk in terms of gallon of solution, but that seems to suggest a much higher price than $400 to $500. Assuming say 9 pounds per gallon, i.e. 4.5 pounds of urea per gallon of 50% solution, it would take 444 gallons of 50% solution to have a ton of urea, and at $1.60/gallon of 50% solution, a ton of actual urea would cost $711. On the other hand, if your quote is for the cost of sufficient solution to contain a gallon of urea (or priced as if the urea wasn't in solution at all), then, still assuming 9 pounds per gallon, it would take only 222 gallons to have a ton , which at $1.60/gallon would be $356/ton.

### Perhaps my pound per gallon estimate is wrong, and perhaps there's some other way in which the cost estimates are provided. I would very much appreciate any clarifying information you can provide.

From: Kevin Dougherty <KDougherty@ftek.com> To: John Summerhays/R5/USEPA/US@EPA, Cc: "Doug Austin (daustin@icac.com)" <daustin@icac.com> Date: 09/25/2012 01:58 PM Subject: Urea Cost Information Mr. Summerhays –

We received your question which you submitted to ICAC, and have restated it below for your reference. Fuel Tech has over 520 SNCR installations worldwide, and we are happy to provide input on your questions. See answers below in red.

What is the price of urea in Central Michigan? I am asking in the context of a potential SNCR application which would use on the order of 1000 tons of urea per year, so I am interested in the price as it would be discounted for that quantity of purchase.

Delivered urea price in Michigan would be $1.60 to $1.80 per gallon, depending on the quantities and also the quality of the dilution water. If boiler quality water is used, then the price would be at the lower end of the range, and at the higher end of the range if plant service water is used. With plant service water, the hardness in the dilution water can cause pluggage in the system components, and a stabilizer package is added to avoid that issue. A ttached is a list with information on urea suppliers that can provide unstabilized urea solution and who also can supply urea with the stabilizer additive, and a link to our website is noted below. We have also attached a white paper for your reference on urea sourcing issues.

http :// www

. ftek

. com / en

- US / products / apc / urea

- reagent /

A s a related question, I anticipate that the actual injected material would be urea solution, e.g. 45% solution. Is there a price incentive for users to purchase urea themselves and do their own dilution, and if so is it the norm to do so?

The price above is based on the delivery of 50% urea solution, which is then Fuel Tech would dilute to around 10-15% concentration at the point of injection. Dry urea is available which can be delivered to a site and then solutionized on site using the appropriate water quality for solutionizing and dilution water. Based on current market prices, we would anticipate urea in Michigan at $400 to $500 per ton delivered.

It has been our experience that most customers have 50% urea solution delivered to their site. For larger utility boilers on the order of 500MW where SNCR technology is utilized, and also SCR systems which use urea as the feedstock, customers have purchased dry urea and have also added hardware to solutionize on-site. The economics of dry urea seem to cover the additional hardware expense in one to three years by reducing the reagent costs compared to having urea solution delivered to the site. Each case is very site specific, and is based on urea usage rate, proximity of the urea solution supplier, and overall plant usage rate. For SNCR systems, the use of dry urea would be more the exception than the norm. For Fuel Tech’s ULTRA system which converts urea to ammonia on-site for use with an SCR system, dry urea systems are much more common.

Thank you for any answers you can provide.

Please contact this office if you have questions or if you need additional information.

Sincerely,

Kevin Dougherty V P Business Development and Marketing Fuel Tech, Inc. 27601 Bella Vista Parkway Warrenville, IL 60555 W: 630-845-4472 C: 630-688-6898 kdougherty @ ftek

. com

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