From: Steven Rosenthal/R5/USEPA/US To: Christos Panos/R5/USEPA/US@EPA, Cc: Steven Rosenthal/R5/USEPA/US@EPA Date: 01/15/2013 10:22 AM Subject: FIP Docket - United Taconite Line 1 and Line 2 FGD Costs We proposed FGD for Tilden's Line 1 ($4000-$5000/ton) and UTAC's Lines 1 and 2 ($2000-$3000/ton). - August 15, 2012 Proposed FIP Based upon Cliffs response to comments and their response to Don's clarifying questions, we have the following $/ton: UTAC Line 1 - $5,911/ton UTAC Line 2 - $5,308/ton Based on Cliffs proposal Tilden would switch to gas and would not need a FGD. Based upon 155 lbs SO2/hr for line 1 and 374 lbs SO2/hr for Line 2, and 7992 hrs/yr. the cost-effectiveness would be : $12,021 for Line 1 $7,680 for Line 2 The difference being a substantial reduction from Cliffs' permitted/baseline emissions: UTAC Line 1 - 1293 TPY SO2 vs. 619 TPY SO2 UTAC Line 2 - 2394 TPY SO2 vs. 1495 TPY SO2 ----- Forwarded by Steven Rosenthal/R5/USEPA/US on 01/15/2013 10:09 AM ----- From: Don

_ Shepherd@nps.gov To: Steven Rosenthal/R5/USEPA/US@EPA, Cc: Susan

_Johnson@nps.gov, Patricia

_ F

_ Brewer@nps.gov, John

_ Notar@nps.gov, twickman@fs.fed.us Date: 11/14/2012 02:54 PM Subject: Cliffs' Response to EPA's Questions on the Regional Haze FIP Comments (October 30, 2012) re UTAC Line 1 

### Steve, As we discussed this morning, i am providing comments on Cliffs' Response re UTAC Line 1 : I estimate that addition of a dry scrubbing system (GSA+FF) to treat all of the UTAC Line #1 gas stream would cost $7.6 million/yr. (See attached workbook.) (See attached file: UTAC Line 1 GSA+ B aghouse 94% Control Zachry method. xls ) Assuming 94% SO2 removal and 100% PM capture, SO2 emissions would be reduced by 1,214 tpy from the permitted rate of 1,293 tpy and PM emissions by 71 tpy. The cost-effectiveness of this control strategy would be $5,900/ton of SO2+PM reduced. However, Cliffs contends that the baseline SO2 emission rate is 729 tpy. (See attached workbook.) (See attached file: UTAC Line 1 GSA+ B aghouse Cliffs baseline w Zachry method. x ls ) Assuming 94% SO2 removal and 100% PM capture, SO2 emissions would be reduced by 650 tpy and PM emissions by 71 tpy. The cost-effectiveness of this control strategy would be $10,200/ton of SO2+PM reduced. Because UTAC Line 1 has only one exhaust stack, the only way i can see to reduce costs is to

### eliminate $2.5 million capital cost for the new ESPs that Cliffs says would be necessary: 

## Consideration of the impact of placing the dry scrubber system upstream of p articulate controls was evaluated. Because the wet scrubber is used to protect the exhaust gas fan, installation of dry SO2 controls up stream of a wet scrubber would require that the exhaust fan overcome the total pressure drop associated with the dry SO2 control system and the wet scrubber... There is also the potential for the iron ore dust causing adverse reactions in the dry scrubber; thus reducing the efficiency of the dry scrubber. The Cliffs/Barr argument is a "red herring." If the SDA/GSA system were placed upstream of the fan, the baghouse component of that system would provide superior protection for the fan. Elimination of the ESPs would reduce annual costs by about 10%. As you can see, the critical issue is the definition of the baseline emission rate, and i discussed that in one of my emails yesterday. I suggest that EPA has two reasonable options: Assume that baseline emissions are represented by the recent GPP permit and negotiate a  

### p ermit limit with Cliffs that is low enough to make scrubbing uneconomical--say current emissions + 20%.. Assume that baseline emissions are represented by Cliff's assumptions and write them  

### into the permit (like WY did) with a safety margin (e.g., 39 tpy). While this would probably make scrubbing uneconomical, it would force Cliffs to get a NSR permit if it increases its emissions significantly. Don Shepherd N ational Park Service Air Resources Division 12795 W. Alameda Pkwy. Lakewood, CO 80228 Phone: 303-969-2075 Fax: 303-969-2822 E-Mail: don

_ shepherd@nps.gov "the man who really counts in the world is the doer, not the mere critic" TR 1891

UTAC Line 1 GSA+Baghouse 94% Control Zachry method.xls
UTAC Line 1 GSA+Baghouse Cliffs baseline w Zachry method.xls ----- Forwarded by Steven Rosenthal/R5/USEPA/US on 01/15/2013 10:09 AM ----- From: Don

_ Shepherd@nps.gov To: Steven Rosenthal/R5/USEPA/US@EPA, Cc: Susan

_Johnson@nps.gov, Patricia

_ F

_ Brewer@nps.gov, John

_ Notar@nps.gov, twickman@fs.fed.us Date: 11/14/2012 04:10 PM Subject: Cliffs' Response to EPA's Questions on the Regional Haze FIP Comments (October 30, 2012) re UTAC Line 2
Steve, As we discussed this morning, i am providing comments on Cliffs' Response re UTAC Line 2: I estimate that addition of a dry scrubbing system (GSA+FF) to treat all of the UTAC Line #2 gas stream would cost $14.7 million/yr. (See attachedworkbook.) (See attached file: UTAC Line 2 GSA+Baghouse 94% Control Zachry method.xls) Assuming 94% SO2 removal and 100% PM capture, SO2 emissions would be reduced by 2,241 tpy from the permitted rate of 2,394 tpy and PM emissions by 529 tpy. The cost-effectiveness of this control strategy would be $5,300/ton of SO2+PM reduced. However, Cliffs contends that the baseline SO2 emission rate is 910 tpy. (See attached workbook.) (See attached file: UTAC Line 2 GSA+Baghouse Cliffs baseline w Zachry method.xls) Assuming 83% SO2 removal (because of the 5 ppm lower scrubber outlet threshold) and 100% PM capture, SO2 emissions would be reduced by 757 tpy and PM emissions by 529 tpy. The cost-effectiveness of this control strategy would be $11,000/ton of SO2+PM reduced. Cliffs notes that, "The Line 2 exhaust gas systems (north and south exhaust streams) are mirror images of one another, and both streams are very similar in nature and are expected to have similar SO2 concentrations." Based upon my review of the gas flows shown in Attachment 1, Figure 2, i agree. The only way i can see to reduce costs is to eliminate $5.1 million capital cost for the new ESPs that Cliffs says would be necessary: Consideration of the impact of placing the dry scrubber system upstream of particulate controls was evaluated. Because the wet scrubber is used to protect the exhaust gas fan, installation of dry SO2 controls up stream of a wet scrubber would require that the exhaust fan overcome the total pressure drop associated with the dry SO2 control system and the wet scrubber... There is also the potential for the iron ore dust causing adverse reactions in the dry scrubber; thus reducing the efficiency of the dry scrubber. The Cliffs/Barr argument is a "red herring." If the SDA/GSA system were placed upstream of the fan, the baghouse component of that system would provide superior protection for the fan. Elimination of the ESPs would reduce annual costs by about 10%. As you can see, the critical issue is the definition of the baseline emission rate, and i discussed that in one of my emails yesterday. I suggest that EPA has two reasonable options: Assume that baseline emissions are represented by the recent GPP permit and negotiate a permit limit with Cliffs that is low enough to make scrubbing uneconomical--say current emissions + 20%.. Assume that baseline emissions are represented by Cliff's assumptions and write them into the permit (like WY did) with a safety margin (e.g., 39 tpy). While this would probably make scrubbing uneconomical, it would force Cliffs to get a NSR permit if it increases its emissions significantly. Don Shepherd National Park Service Air Resources Division 12795 W. Alameda Pkwy. Lakewood, CO 80228 Phone: 303-969-2075 Fax: 303-969-2822 E-Mail: don_shepherd@nps.gov "the man who really counts in the world is the doer, not the mere critic" TR 1891

UTAC Line 2 GSA+Baghouse 94% Control Zachry method.xls
UTAC Line 2 GSA+Baghouse Cliffs baseline w Zachry method.xls