Anheuser-Busch, Inc. May 9, 2005 ARD-05-001 Page 1 of 4

_____________________________________________ ] Anheuser-Busch, Inc. ] FINAL RACT ORDER 221 Daniel Webster Highway ] ARD-05-001 P.O. Box 610 ] May 9, 2005 Merrimack, NH 03054-0610 ] _____________________________________________ ]

A. Introduction

This NOx RACT Order is issued by the New Hamp shire Department of Environmental Services, Air Resources Division, to Anheuser-Busch, Inc. pursuant to RSA 125-C.

B. Parties

1. The New Hampshire Department of Environmental Services, Air Resources Division ("DES"), is a duly constituted administrative agency of the State of New Hampshire having its principal offices at 29 Hazen Drive, Concord, NH 03301, telephone number (603) 271-1370.

2. Anheuser-Busch, Inc., (“Anheuser-Busch”), is a Missouri corporation, registered with the NH Secretary of State, and has a mailing address of 221 Daniel Webster Highway, P.O. Box 610, Merrimack, NH 03054-0610.

C. Statements of Fact and Law

1. Anheuser-Busch owns and operates a beer manufact uring facility located on a site bordered to the east and west by the Merrimack River and Daniel Webster Highway in Merrimack, New Hampshire.

2. Anheuser-Busch’s significant NOx emitting sources in clude three Babcock & Wilcox boilers, fired by either natural gas or No. 6 fuel oil (maximum sulf ur content of 1.0 percent sulfur by weight), and occasionally some on-site generated specification used oil is blended with the No. 6 fuel oil for combustion to provide process steam for the brewing process.

3. Effective May 20, 1994, DES adopted PART Env-A 1211 NITROGEN OXIDES (NOx).

4. Anheuser-Busch filed a "NOx RACT Compliance Schedule" dated September 12, 1994, indicating it planned on installing new low NOx burners (LNB) for firing fuel oil in each of the three boilers. Installation of the Todd low NOx oil burners was completed on October 10, 1995. Post LNB compliance testing of the three boilers was completed on October 11, 1995.

DES conducted a technical evaluation of the LNB inst alled in the three boilers at Anheuser-Busch. Each boiler had a LNB score of 31 and a total score of 39. The evaluation indicated that the technology installed in all three boilers met the technical component requirements of a commercially available LNB (LNB score of at least 23). Based on the 1995 compliance stack tests after installationAnheuser-Busch, Inc. May 9, 2005 ARD-05-001 Page 2 of 4

of the LNB, DES set a NOx limit of 0.40 lb/MMBtu while firing fuel oil and 0.25 lb/MMBtu while firing natural gas.

5. DES received a permit application from Anheuser-Bu sch on January 10, 2005, for the installation and operation of a wastewater treatment system, referred to as the Bio Energy Recovery System or “BERS” process. The BERS process will ultimately reduce biological oxygen demand (“BOD”) of the facility’s wastewater, which is sent to the To wn of Merrimack Publicly Owned Treatment Works (POTW) wastewater treatment plant. The BERS process includes anaerobic reactors, with collection and treatment of biogas (largely methane with th e remainder being mostly carbon dioxide and small amounts of hydrogen sulfide) generated in the reactors. The primary means of treatment of the biogas is supplemental combustion of the biogas with natural gas or No. 6 fuel oil in any of the three boilers, with a flare being added as a backup biogas combus tion device in case the boilers are unavailable for service.

6. In that the facility is subject to NOx RACT re quirements, Anheuser-Busch submitted a NOx RACT Order application on February 7, 2005 for the inst allation and operation of the flare and also is seeking an alternative emission limit for the three boilers. The application was filed in accordance with Env-A 1211.14, Emission Standards and Control Options for Miscellaneous Stationary Sources (for the flare), and Env-A 1211.15, Alternative RACT Emission Limits (for the three boilers).

7. The flare will function as a backup control device to control hydrogen sulfide emissions when the boilers are not operating.

Flares often serve as backup control devices for engines, boilers, turbines, or process heaters that fire waste gas. NOx emissions from flares are typically lower than the NOx emissions from the primary control devices. This is especially true with open flares, where the combustion occurs in the open and overall combustion temperatures would be expected to be lower than in most enclosed combustion devices. Furthermore, because of the design of open flares, the typical combustion controls applied to other combustion devices, such as staged combusti on, are not feasible. Therefore, there are no technically feasible NOx control technologies for the proposed open flare.

Emissions from open flares can not be tested with conventional testing methods because the combustion occurs in the open. Therefore, NOx emissions from the proposed flare are based on Table 13.5-1 in USEPA’s AP-42, which indicates an emission factor of 0.068 lb/MMBtu for
industrial flares.

Anheuser-Busch’s proposed NOx RACT emission limit for the flare is the AP-42 emission rate of 0.068 lb/MMBtu.

8. Env-A 1211.05(d)(3)b. and c. specify an emission limit of 0.25 lb/MMBtu when co-firing oil and gas. The low NOx oil burners, which have a firing capacity of 138 MMBtu/hr, operate at a NOx emission level between 0.35 and 0.40 lb/MMBtu when firing No. 6 fuel oil. The biogas, which is functionally equivalent to natural gas, is expected to genera te NOx emissions on the order of 0.25 lb/MMBtu. The biogas will be co-fired as a supplementary fuel, a nd will typically comprise about 10 to 15% of the fuel being fired on a heat input basis (expected av erage of 11 MMBtu/hr). The boilers, therefore, can not meet an emission limit of 0.25 lb/MMBtu when co-fi ring No. 6 fuel oil with biogas. To the extent that the biogas displaces oil, ther e is an expected NOx reduction of approximately 0.15 lb/MMBtu ofAnheuser-Busch, Inc. May 9, 2005 ARD-05-001 Page 3 of 4

biogas fired, but at the low firing rate of biogas, this lower NOx emission rate would reduce the overall NOx emissions on a lb/MMBtu basis only slightly. Furthermore, the biogas firing rate varies somewhat, and the exact ratio of oil to biogas firing at any given time will not be predictable.

Add-on NOx control technologies, such as ammonia or urea injection, would render the use of the biogas for a supplemental fuel as economically infeasi ble. The firing of biogas in the boiler is a beneficial use of the byproduct (biogas) from the wastewater treatment process. Use of biogas will reduce NOx and sulfur dioxide (SO 2 ) emissions to the extent that th e biogas displaces oil firing in the boilers and will reduce consumption of non-renewable fossil fuels to the extent that both natural gas and oil firing is displaced by biogas firing in the boilers.

Anheuser-Busch proposed the following alternative NOx RACT limits for co-firing of biogas in the
boilers:

• NOx emissions when firing natural gas or a combination of natural gas and biogas will be limited to less than or equal to 0.25 lb/MMBtu on a 24-hour calendar day average;

• NOx emissions when firing oil or a combination of oil and biogas will be limited to less than or equal to 0.40 lb/MMBtu on a 24-hour calendar day average and the use of the existing low NOx burners; and

• With the exception of pilot gas to light off th e boilers, natural gas and oil will not be cofired in any of the boilers.

D. Order

Based upon the above findings and de terminations, DES hereby orde rs Anheuser-Busch as follows:

1. Comply with a limit of less than or equal to 0. 068 lb NOx/MMBtu, for the proposed open flare.

2. Comply with a limit of less than or equal to 0.40 lb NOx/MMBtu on a 24-hour calendar day average and use of the existing, DES approved, low NOx burne rs, when firing oil or a combination of oil and biogas in each of the three boilers.

3. Comply with a limit of less than or equal to 0.25 lb NOx/MMBtu on a 24-hour calendar day average, when firing natural gas or a combination of na tural gas and biogas in each of the three boilers.

4. With the exception of pilot gas to light off the boile rs, natural gas and oil will not be co-fired in any
of the boilers.

5. Within 60 days of achieving maximum operating ra te on the BERS process and not later than 180 days after initial startup of the BERS process, conduct initial performance testing and subsequent periodic NOx RACT testing of the three boilers in accordance with Temporary Permit TP-BP-0695 for the following fuels: No. 6 fuel oil only; No. 6 fuel oil and biogas; natural gas only; and natural gas and biogas.Anheuser-Busch, Inc. May 9, 2005 ARD-05-001 Page 4 of 4

6. Perform annual tune-ups for each of the boilers, separ ately for fuel oil alone and natural gas alone, in accordance with Env-A 1211.05(b).

7. Comply with the monitoring requirements in Temporary Permit TP-BP-0695, including, but not
limited to:

• Monitor and record the monthly biogas fed to each of the Boilers and the Flare;

• Monitor and record the hours of operation of the Flare on a monthly basis;

• Monitor and record monthly, the hours of time biogas is fed to each of the Boilers;

• Inspect the flare before May 1 st of each year to verify that the flare continues to be operated in accordance with the manufacturer’s specifi cations for the operation of the flare.

8. Maintain at the facility and make available for re view by DES and/or EPA upon request a copy of the manufacturer’s maintenance specifications for the flare.

9. Maintain records of any manufacturer-specifi ed maintenance conducted on the flare.

10. Comply with the record keeping and reporting requirements of Env-A 900.

Please address any correspondence and communication in reference to this Order to:

Mr. Douglas C. Laughton NHDES, Air Resources Division Stationary Source Management Bureau P.O. Box 95 Concord, NH 03302-0095 (603) 271-1370

_____________________________ Robert R. Scott, Director Department of Environmental Services Air Resources Division

cc: Timothy Drew, PIP Office David Conroy, US EPA Town Selectmen

RRS/dcl

finalNOxRACTOrderMay092005.doc