Enhancements planned for the ISIS-cement based on PCA’s review comments 

Meeting with the Portland Cement Association (PCA) 

December 15, 2009 

Portland Cement Association and constituents joined EPA over the phone 

Tyrone Wilson 

Stuart Sessions 

Doug Roark 

Ed Sullivan 

Tian Liu 

EPA

Elineth Torres 

Ravi Srivastava 

Tom Walton- over the phone 

Will Yelverton

Contractors to EPA

Samudra Vijay- Sam Analytic Solutions LLC – over the phone 

Brooks Depro- RTI – over the phone 

Topics for discussion 

I. Market Structure 

Texas, Florida and California will each have to demand centers. Demand centers will be 

based on the main metropolitan areas and population. 

 

II. Demand projections - 

EPA updated consumption data based on the latest projections from PCA (summer 2009 

Forecast and 2009 Long-term forecast which reflects the deeper and prolonged slump for 

cement consumption with the recession) 

III. Supply 

EPA updated kiln retirement and projections based on the latest projections from PCA 

(October, 2009) 

III. Transportation - Ravi 

Cost of transporting cement will come from the data received from PCA 
Units 

Bureau of 

Transporta

tion 

Statistics 

Washington 

State Dept of 

Transportation 

North 

American 

Cement 

Transportation

American 

University 

(Cents per 

Metric Ton 

per Mile) 

33.06 7.64 11.02 7.18 

(Cents per 

Short Ton per 

Mile) 

29.99 6.93 10.00 6.51 

($ per Short 

Ton per mile) 0.30 0.07 0.10 0.07 

IV. AVC – Elineth and Brooks 

Per PCA, PCA’s Financial Benchmark Report will be release to us – within to weeks to 

EPA 

On the fuel cost and availability) – EPA developed a Fuel Matrix in ISIS based on fuel 

data reported in PCA’s U.S. and Canadian Portland Cement Industry: Plant Information 

Summary of 2008 

PCA commented that the ISIS Model is unrealistic in simulating the possibility that kilns 

would change from a primary fuel to 100% alternate fuel, and instead the following fuel 

use pattern may be used: 

o Kilns typically use Bituminous coal 

o TDF and MKF - 20% maximum for wet and long dry, 10-12% for preheater and 

precalciner 

o Natural gas - 1-2% co-firing 

o Pet Coke – 10-20% 

Also PCA’s Labor Energy Survey- from Ed. Sullivan- breaks down by type of kilnnational total for each fuel. Ed will send the Survey to EPA. 

Also, PCA commented that using some sort of waste fuels together with coal can have a 

SO2 removal effect that won’t be capture on the emission intensity of each fuel. 

On the new ph/pc kilns –performance guarantee that all the SO2 from fuel will be 

scrubbed out with the limestone- lime conversion 

Nox- short term variable varies more with combustion requirements and conditions 

- emissions of NOx are well established 
5. Updating escalation factors 

PCA commented that for the transportation cost escalation factor- EPA should 

differentiate vs. the cost of the fuel vs. the cost (labor) of the driver and capital charge for 

the truckCost escalation for new kilns- escalation cost will be similar to the escalation cost of a 

refinery or other facilities 

Economic parameters- 

- Capital recovery period- manufacturing of a new plan + pollution control 

i. Stu- 15% nominal – low end of capital recovery 

ii. At least 15 years- use 12 years 

- Critical life – plant life- upper 50 years- as low as 30-35 years – assume 40 

years 

- Capital recovery period for new cement plants ??? PCA to get back to us 

Brownfield facilities have a shorter life period, - 8 years 

PCA assessment of the NESHAP have some of this information- depend on the age of the 

plant- longevity of plant depends on the quarry- so 15 years might not be feasible for all 

kilns 
IV. Capacity Replacement 

1. Updating cost of installing new equipment, substitution of new/expansion/upgrade 

production capacity for existing capacity based on data provided by PCA 

2. Abandoning the “conversions” - EPA should abandon the “conversion” concept 

altogether, and instead assume only expansions/replacement and/or Greenfield. 

- PCA- commented on capacity constraints in the model: 

o If reasonable values are used for: a) the $/ton for greenfield facilities as 

well as replacements; and b) rate of return required for investment in new 

capacity, then ISIS would not need to focus that much on capacity 

constraints. 

- PCA suggested that instead of having a capacity constraint for greenfield facilities 

or replacements, ISIS perhaps could have an aggregate constraint on capital 

availability for the entire industry. EPA will need some guidance from PCA on 

what is acceptable- annually or in five year blocks. This to be discussed as an 

agenda item in the call to address the transportation matrix. PCA concurred. 

- PCA mentioned that the 7%- OMB social discount rate is not reasonable as the 

minimum rate of return required for new capital investment. Ravi suggested that 

perhaps a 12-15% discount rate is more appropriate. PCA agreed. We need to 

agree to a number that is reasonable. This also will be an agenda item for our next 

call. PCA agreed.