Date: April 23, 2010

Subject: Minutes of the April 16, 2010 Meeting with Representatives of the Electric Arc Furnace Steelmaking Industry

From: Gabrielle Raymond and Marvin Branscome, RTI International EPA Contract No. EP-D-06-118; EPA Work Assignment No. 4-21 RTI Project No. 0210426.004.021

To: Donna Lee Jones, OAQPS/SPPD/MMG (D243-02) U.S. Environmental Protection Agency Research Triangle Park, NC 27711

I. Introduction

A meeting with representatives of the electr ic arc furnace (EAF) steelmaking industry was held at the U.S. Environmental Protection Agen cy facility in Research Triangle Park, NC on April 16, 2010. The purpose of the meeting was to discuss the pending information collection request for source testing, the upcoming EAF rule amendments for mercury, and the status of industry participation in the National Vehicl e Mercury Switch Removal Program (NVMSRP).

This memorandum summarizes the t opics discussed during the meeting.

II. Attendees

John Wittenborn, Kelley, Drye & Warren LLP Eric Stuart, Steel Manufact urers Association (SMA) Edgard Bertaut, Specialty Steel Industry of North America (SSINA)/Allegheny Technologies Lawrence Kavanagh, American Iron and Steel Institute (AISI) Bob Downie, Gerdau Ameristeel Corporation Mike Peters, Commercial Metals Company (CMC) Americas Steve Rowlan, Nucor Corporation

Steve Fruh, EPA/OAQPS/SPPD Donna Lee Jones, EPA/OAQPS/SPPD/MMG

Marvin Branscome, RTI International Gabrielle Raymond, RTI International2 III. Discussion

The major topics discussed during the meeti ng included the following: (1) section 114 testing requests for EAFs; (2) upcoming EAF mercury rule and potential subcategories; and (3) status of industry participation in the NVM SRP and signing of the new the Memorandum of Understanding (MOU). The agenda is attached along with a summary of EPA/OAQPS’s position

on the NVMSRP MOU.

Section 114 Test Request

EPA discussed the tentative schedule fo r the 114 testing request with industry representatives: (1) dr aft 114 request for review by industry tentatively planned for the end of May 2010; (2) mailing of the signed request s by June 2010 (and placed in docket); and (3) approximately 90 days for the testing results to be sent to EPA. Polluta nts to be addressed are mercury, for purposes of the NESHAP, as well as fine particulate matter (PM) less than 2.5 micrometers in diameter (called PM-2.5) and ca rbon monoxide (CO) for the update and review of the NSPS (subpart AA and AAa), which is overdue.

A primary concern expressed by the steel i ndustry representatives about the required mercury emission testing is related to the high va riability in mercury emissions that industry believes is due to differences in the types of scrap used, types of products produced, and batch processes, among possibly other factors. An indust ry representative stated that the quantity of shredded automobile scrap used is highly variable even at the same plant, and the EAF operator

does not know how much of the scrap comes from shredded automobiles. This further underscores the need to know the ty pes and quantities of scrap charged to enable EPA to identify any correlations of these and other factor s to the levels of mercury emissions.

EPA representatives explained that the variability in mercury emissions will be accounted for in the request by requiring a minimum of one month of continuous testing of mercury emissions. This time frame should incorporate the va riability of emissions at the facility over time due to changes in scrap and/or product mix. In addition, EPA plans to send testing requests to a representative mix of different types of EAF f acilities, including those producing carbon steel and those producing stainless or specia lty steels with no shredded autom obile scrap charged. EPA also will be requesting details on the types and amounts of scrap charged during all of the testing, as well as the quantities of other ma terials charged to the EAF.

Another concern of industry was the expense and difficu lty of performing continuous measurement of the volumetric flow rate during the month (or more) of testing. Since a few Nucor facilities are already equipped with c ontinuous emissions monitoring systems (CEMS), they, consequently, also have continuous measur ement of volumetric flow rate; but other EAF

facilities do not have this continuous measurement alrea dy set up. The steel industry representatives pointed out that they monitor fan amperage as a result of the New Source Performance Standard (NSPS), and that a fan am perage curve could be used to provide a

reasonable measure of volumetric flow rate. EPA agreed to follow-up on this issue with the EPA

measurement experts.3 The industry representatives st rongly encouraged EPA to re quire mercury emission testing at all EAF steelmaking facilities to ensure that the entire industry was represented. The EPA explained that such an approach would require more time because of the Office of Management and Budget (OMB) approval process. However, EPA agreed to consider the possibility of requiring more extensive testing beyond the nine companies under current consideration. The EPA asked about the possibility of voluntary testing to get additional mercury emissions data; however, the steel industry representatives said it was highly un likely that any company would test voluntarily and that a Section 114 request would be needed. The EPA representatives explained

that the more data EPA has to formulate the ru le, the better the rule will be in terms of incorporating the various types of processes and scrap used; and, if the industry wants the rule to represent them adequately, they should be intere sted in supplying data whether it is required or not. Another idea that EPA suggested was for a few facilities of a similar t ype to support one test among them so as to spread the cost over more than one facility. Industr y volunteered to provide

the names of facilities that could be tested and/or facility character istics that should be reflected in

the initial 114 fac ilities so as to be repres entative of the industry.

EAF Mercury Rule Amendments and Potential Subcategories

The EPA explained that it was li kely that the mercury emission test results would be used to develop mercury emission limits. The limits ma y or may not require all facilities to put on addon controls, depending on the level(s) of the limit(s ) and the emissions at each individual facility. All facilities are likely to be re quired by the rule to do at least one source test to show compliance with the limit, if one is developed. The rule coul d also accommodate faciliti es that do not use auto scrap as a separate category. The rule can be as complicated as it needs to be to reflect the range in industry operations. EPA representatives stre ssed that continued partic ipation in the NMVSRP can only help industry in terms of meeting any future mercury rule.

Industry representatives were c oncerned with the mercury emi ssion test results being used

as credible evidence and how resu lts from different mercury test methods could be comparable to each other. An industry represen tative made the comment that the state of Ohio has limited the amount of shredded steel scrap that could be char ged to 15 percent shredd ed steel for any single charge in the permit for one of th eir facilities. An obvious potent ial distinction for subcategories

would be carbon steel vs. stainl ess and specialty steel producers because the latter do not use shredded automobile scrap. There are certain ot her types of products th at do not use shredded scrap or that use smaller quantitie s than others. Industry representa tives also noted that there is variability in the different regions of the country pertaining to scrap mix content, market demands, and final products. The industry representatives agreed to provide more information on these potential differences among plants or produc ts that affect mercury emissions.

National Vehicle Mercury Switch Recovery Program

The EPA strongly encouraged the industry to continue to support th e NVMSRP and to sign the new MOU. A summary of EPA’s reasons for the continued support of the NMVSRP was provided to the industry representa tives and is attached here. Th e industry representatives stated that, for the record, they support the NVMSRP in its mission and also want to continue using the4 program as a compliance option to meet the mercury requirements in the area source rule for EAF. They see the funding issue as a separate it em from the program, as discussed below.

The steel industry had invested $2 million in th e program initially, as did the automobile makers. The funding was used for outreach and implementation for the first few months of the program; however, the funds were later devote d to paying incentives ($2 per switch) to dismantlers to encourage partic ipation. Although the initial funding was de pleted on July 20, 2009, the industry believes that this hasn’t affected switch collec tion yet. The steel industry representatives stated they thought that the program should subseque ntly be self sustaining, i.e., there would be no need to pay a “bounty” for sw itches removed because switch removal would be expected in order for scrap automob iles to enter the scrap supply.

The industry stated, as they have done a number of times this year, that they are hesitant to provide additional funding for the NMVSRP progra m unless they know the program will continue to be a compliance option for the EAF mercury require ments. The reason is that if they have to install add-on controls for mercury, they feel th ere would be no reason to also fund the NVMSRP. They stated that their share of the funding was expected to be about $11 million, and although the funding was intended to support the program until its termination in 2017, most of the money would be spent in the early years when most of th e mercury switches are exp ected to be recovered. However, a national meeting with the steel industry board to be held in mid-May will address the issue of the industry’s continue d financial support of the NMVSRP and the decision to be made for the industry on the funding fo r the NMVSRP is ultimately in the hands of the board.

The steel industry believes the NMVSRP program is working we ll, especially in light of 2009 steel production levels which had dropped to 40 to 50 percent of capacity. They further explained that they were performing a study to ob tain mercury switch data from the processing of 100,000 automobiles to better estimat e the number of mercury switche s available for removal. The original estimated number of available mercury switches for removal was based on a 2002 mercury switch study in Michigan with a data ba se of 1,000 automobiles and the R.L. Polk and Co. database of vehicle registrations. They e xpressed a concern that the previously reported recovery rate (about 30 percent) may have been understated because of the high uncertainty in the denominator of the calculation (i .e., how many mercury switches ar e available to be removed).

IV. Action Items

Industry

• The industry representatives will provide a list of facilities that could be tested and/or facility characteristic s that should be included to repr esent the full industry spectrum.

• The industry representatives will provide info rmation and ideas for potential subcategories that reflect the potential di fferences among plants or pr oducts that affect mercury emissions, ability to control the emi ssions, or “size, type, or class.”

• The industry will provide an example of fan amperage curve, how it is developed (e.g., how many measurements would be needed to develop it?), how monitoring amperage continuously would be translated into a daily volumetric flow.5 EPA

• The EPA will provide an exampl e of questions on scrap and other materials charged to furnaces during the mercury emission tests.

• EPA will check with testing experts at EPA for use of fan amp curves to determine

volumetric flow rates on a continuous basis during the one month of mercury testing.

.6 

### Meeting Agenda

EPA’s Sector Policies and Programs Divisi on and Steel Industry Representatives April 16, 2010 U.S. EPA, Research Triangle Park, NC

1. Introductions

2. Section 114 testing request for EAFs

• Mercury testing for review of area source MACT standard

• PM and PM 2.5 

### testing for review of the NSPS

• Send to nine companies

• Voluntary testing of additional facilities

3. Upcoming EAF mercury rule

• Potential regulatory options

• Schedule

4. Potential subcategories (indus try questions and comments)

• EPA may “distinguish among classes, types, and sizes of sources...”

• Carbon vs. stainless and specialty steel

• Size?

• Other?

5. Status of industry participation in th e National Vehicle Mercury Switch Removal Program (NVMSRP) and the Me morandum of Understanding7 April 16, 2010



### MEETING WITH STEEL INDUSTRY REPRESENTATIVES

CONTINUED PARTICIPATION BY STEELMAKERS IN NVMSRP

• EPA strongly encourages continued particip ation as a pollution prevention measure.

• Approximately $50 million could be available from Congress (“cash for clunkers program”) to keep the program viable and working for the next few years.

• “Win-win” for all stakeholders in reducing mercury releases by pollution prevention; demonstrates how stakeholders can work together to address mercury issues cost effectively.

• Continues to reduce mercury release not onl y to air, but in landfills (auto shred residue), water runoff at shredders, etc.

• Avoids potential bad publicity for a ll if program is deemed a failure.

• It is worth continuing at least for the near term until scrap auto supply no longer contains mercury switches.