MEMORANDUM

DATE: March 29, 2012

SUBJECT: GCC Dacotah - NO x Emission Reduction and Cost Calculations

FROM: Mike Owens, Environmental Engineer

Air Permitting, Monitoring & Modeling Unit

TO: Monica Morales, Chief Air Quality Planning Unit

The purpose of these calculations is to provide bac kground information for the docket for EPA Region 8’s rulemaking on final approval of the Sout h Dakota regional haze SIP submittal. GCC Dacotah is listed as a Reasonable Progress source i n the SIP submittal.

Some of the comments EPA received on its proposed a pproval of the SIP submittal involved the possibility of obtaining further NO x emission reductions at Kiln #6, for purposes of vi sibility improvement. The current NO x controls consist of “staged combustion with a ther mally efficient, in-line, low-NO x calciner complimented by a low NO x burner with indirect firing in the rotary kiln.” (ref: page 4-16 of January 16, 2002 PSD permit application by GCC Dacotah for Kiln #6 system.) Commenters presented arguments wh y Selective Non-Catalytic Reduction (SNCR) should be installed.

South Dakota considers SNCR to not be feasible unle ss a large new pre-calciner is installed, to provide an adequate temperature profile for SNCR to work, at 1600 o F or higher. (ref: 10/11/11 email from Kyrik Rombough of SD DENR to Gail Fallon of EPA Region 8.) Kiln #6 currently has a small pre-calciner. Trinity Consultants prov ided a “BACT Cost Estimate for Large Calciner,” dated March 13, 2003, which estimated th e cost and potential NO x emission reductions from installation of a large pre-calcine r. EPA does not have any data from SD DENR on what SNCR might cost at GCC Dacotah, if a large pre-calciner was also installed to

accommodate SNCR.

The only NO x emission limit in the current South Dakota PSD per mit for the kiln #6 system is 2,267 tons per rolling 12-month period. (ref: Con dition 4.2 of SD DENR Permit #28.1101- PSD.) Actual NO x emissions for 2008-2010 averaged 816 tons per cale ndar year (tpy) and 2.96 lb/ton clinker. (ref: xcel spreadsheet, attached to 03/20/12 email from Kyrik Rombough of SD DENR to Gail Fallon of EPA Region 8).These EPA calculations are based on the following a ssumptions and bases :

1. EPA Region 8 is relying on SD’s statement that a l arge pre-calciner system would need to be installed, if SNCR is to be accommodated at K iln #6. A 10/11/11 email from Kyrik Rombough of SD DENR to Gail Fallon of EPA Region 8 states that a larger calciner system "may have had an appropriate location" for S NCR and was considered during the 2003 PSD BACT analysis.

2. EPA Region 8 is relying on Trinity Consultants’ est imated costs and NOx emission reduction achievable by a large pre-calciner to be reasonable estimates. Trinity’s cost estimate does not include the cost of SNCR, just th e cost of the large pre-calciner itself. It also does not include the cost of dismantling an d removing the existing small precalciner. (ref: BACT Cost Estimate for Large Calc iner, Trinity Consultants, March 13, 2003.) It is important to note that the large pre- calciner, by achieving NO x reductions of 955 tpy, is acting as both process equipment and em ission reduction equipment.

3. EPA Region 8 is relying on an EPA-OAQPS document wh ich indicates that SNCR can be expected to achieve 50% emission reduction at a preheater/precalciner kiln. EPA Region 8 is also relying on the estimate of annual cost of SNCR to be a reasonable estimate, in 2005 dollars. (ref: Alternative Cont rol Techniques Document Update – NO x Emissions from New Cement Kilns, EPA-453/R/07-006, November 2007, page 111, Table 12-2, “SNCR and SCR Costs for Preheater/Preca lciner Kilns in 2005 Dollars”)

4. EPA Region 8 assumes that EPA-OAQPS’s estimate of c ost for SNCR at a 100 ton-perhour kiln is a reasonable approximation to the cost for SNCR at a 94 ton-per-hour kiln. (ref: same as item 3 above.)

5. Consumer Price Index (CPI) scale-up factor from 200 3 to 2011 dollars is 1.22. Scale-up

factor from 2005 to 2011 dollars is 1.15.

Calculation of current NOx reduction :

PTE of Kiln #6, uncontrolled, at production capacit y: 2,152 tpy. (ref: Table 3-2 of the 2002 PSD permit application for GCC Dacotah)

2008-2010 actual average clinker production: 550,4 83 tpy. (ref: xcel spreadsheet, attached to 03/20/12 email from Kyrik Rombough of SD DENR to Gail Fallon of EPA Region 8)Kiln #6 system design capacity clinker production: 2,250 tons per day, equivalent to 821,250

tpy. (ref: page 3-2 of January 16, 2002 PSD permi t application by GCC Dacotah, revised August 31, 2002)

Therefore, during 2008-2010, Kiln #6 operated at: 550,483 / 821,250 = 67% of capacity, on

average.

Potential uncontrolled NO x emissions at 67% of capacity: 2,152 x 0.67 = 1, 442 tpy.

2008-2010 actual average controlled NOx emissions: 816 tpy (equivalent to 3.0 lb/ton clinker). (ref: xcel spreadsheet, attached to 03/20/12 email from Kyrik Rombough of SD DENR to Gail Fallon of EPA Region 8)

Current percent reduction from uncontrolled NOx emi ssions, at 67% of kiln capacity: [1,442 – 816] / 1,442 = 43.4% reduction.

Controlled emissions at capacity: 816 tpy / 0.67 = 1,218 tpy

CONTROL UPGRADE SCENARIO #1 : REPLACE EXISTING NO X CONTROL SYSTEM WITH A NEW LARGE PRE-CALCINER, BUT WITHOUT S NCR

Calculation of cost and emission reduction for new large pre-calciner, to replace current NO x control system, but without installing SNCR :

As noted in assumption/basis item #2 above, Trinity Consultants has estimated that a new large pre-calciner alone (without SNCR) could achieve NO x emission reductions of 955 tpy, therefore acting as both process equipment and emission reduc tion equipment.

Capital cost: $34,523,546 (2003 dollars). Total a nnual cost: $4,823,925 (2003 dollars). Emission reduction from potential uncontrolled emis sions, at kiln capacity: 955 tpy. (ref: BACT Cost Estimate for Large Calciner, Trini ty Consultants, March 13, 2003.)

Potential controlled emissions at capacity: 2,152 – 955 = 1,197 tpy.

Reduction from current controlled emissions, at cap acity: 1,218 – 1,197 = 21 tpy. (This is the basis for the incremental cost-effecti veness calculation below.)The total cost-effectiveness calculation below is t he annualized cost of a large new pre-calciner,

divided by the emission reduction expected to be ac hieved by the new pre-calciner from potential

uncontrolled NOx emissions.

Total cost-effectiveness (2003 dollars): $4,823,92 5 / 955 = $5,051/ton. Total cost-effectiveness (2011 dollars): $5,051 x 1.22 = $6,164/ton

The incremental cost-effectiveness calculation belo w is the annualized cost of a large new precalciner, divided by the emission reduction expecte d to be achieved by the new pre-calciner from

current controlled NO x emissions. The incremental cost-effectiveness ana lysis uses the same

annualized cost as the total cost-effectiveness ana lysis because the cost of achieving the current controlled emissions is zero, i.e., current control s are already installed and operating.

Incremental cost-effectiveness (2003 dollars): $4, 823,925 / 21 = $229,710/ton. Incremental cost-effectiveness (2011 dollars): $22 9,710 x 1.22 = $280,246/ton

EPA Region 8’s preliminary conclusion on Scenario # 1 : Replacement of the current small precalciner with a large pre-calciner, without SNCR be ing installed along with it, can be expected to achieve substantial NOx control, but very little ad ditional NO x control as compared to the existing NO x control system, and at an extremely high increment al cost-effectiveness.

CONTROL UPGRADE SCENARIO #2 : REPLACE EXISTING NO X CONTROL
SYSTEM WITH A NEW LARGE PRE-CALCINER AND SNCR

Calculation of cost and emission reduction for new large pre-calciner and SNCR, to replace current NOx control system :

Total annual cost for urea injection form of SNCR: $755,192.

Uncontrolled NO x emission rate: 1,360 tpy (equivalent to 3.6 lb/to n clinker)

Estimated NO x reduction with SNCR: 50%. (ref: 2007 ACT Document, cited earlier)

Annual cost of SNCR, scaled up from 2005 to 2011 do llars: $755,192 x 1.15 = $868,471.

Annual cost of new large pre-calciner, scaled up fr om 2003 to 2011 dollars: $4,823,925 x 1.22 = $5,885,188.

Total annual cost, in 2011 dollars: $868,471 + $5, 885,188 = $6,753,659.Additional NO x reduction that might be achievable by SNCR, on the controlled emissions from a

new large pre-calciner, at kiln capacity: 50% of 1 ,197 tpy = 598 tpy.

Total NO x reduction that might be achievable with new large pre-calciner plus SNCR, at kiln capacity: 955 + 598 = 1,553 tpy.

Incremental NO x reduction, versus current NO x control system, at kiln capacity: 1,553 – 1,218 = 335 tpy.

Total cost-effectiveness: $6,753,659 / 1,553 tons reduced = $4,348 per ton reduced.

Incremental cost-effectiveness: $6,753,659 / 335 t ons reduced = $20,160 per ton reduced.

EPA Region 8’s preliminary conclusion on Scenario # 2 : Replacement of the current small precalciner with a large pre-calciner and SNCR can be expected to achieve substantially more NOx control than just a large pre-calciner alone, and i s not extremely expensive (i.e., less than $5k/ton) in terms of total cost-effectiveness, but is much more expensive in terms of incremental cost-effectiveness (greater than $20k/ton), where c urrent NOx controls are taken into

consideration.