ATTACHMENT J

Letter dated January 7, 2008, submitted by Chemstone

in support of its BART determination

(response to VRO 30-day letter

for revised SO2 BART proposal)
OIV

O-N MINERALS

CHEMSTONE OPERATIONS

1696 ORANDA ROAD

PO BOX 71

STRASBURG, VA 22657

0." L. TEL 540-465-5161

FAX 540-465-5150

www.oglebaynorton.com

January 7, 2008

Via E-MaillOriginal via Overnight Deliverv

Ms. Sharon G. Foley,P.E.

Air Permit Manager

Commonwealth of Virginia Department of Environmental Quality

Valley Regional Office

4411 Early Road

P.O. Box 3000

Harrisonburg, VA 22801

RE: Response to Department Comments on S02 BART Determination Addendum (November

2007) for ON-Minerals (Chemstone) Strasburg, VA

Dear Ms. Foley:

In response to your comments and request of December 14,2007 for further information, O-N

Minerals (Chemstone) is providing responses and additional information relative to the Best

Available Retrofit Technology (BART) S02 determination for our the Strasburg facility

submitted in November 2007. As you will see, this additional analysis confirms our original

conclusions.

We hope this letter provides the Virginia Department of Environmental Quality (DEQ) with the

additional information needed to confirm our proposed BART determination for S02. We are

glad to engage in further discussions as necessary.

VA DEQ Comment #1:

Section 4.2 (Step 1: Identification of Available Retrofit S02 Control Technologies): Please also

evaluate the technical and economicfeasibility of controlling S02 using a hydrate injection

system similar to the one proposed by Chemstone inAugust 2006for control of hydrochloric

acid (HCI)from the rotary kiln. Your evaluation should include expected S02 reductionsfrom

such a system as well as a cost analysis.

O-N Minerals Chemstone Response:

Sorbent (hydrate) injection is an available and proven technology for S02 control on boilers.

Chemstone, however, has been unable to identify an application of this control technology on
Ms. Sharon G. Foley, P.E.

January 7, 2008

existing lime kiln operations for S02 reduction. Consequently, there is no data available with

which to establish an expected S02 control efficiency and corresponding BART emission limit.

And, there is no reasonable method to define the cost per ton of S02 removed. Please note that

the previous trials of this technology at the Winchester facility do not help us here. That trial

was done with the hope of making reductions in HCI at our Winchester facility, but those plans

were abandoned for a number of significant technical and economic reasons. We did not test for

S02 emissions during this trial, so there is no data that will help us in this context from those

trials. We should note that hydrate injection has been shown to be inherently less efficient in

removing S02 versus HCI. Also, because the temperatures in a lime kiln exhaust stream are

much greater than a boiler, the adsorption processes are less efficient.

Page 2 of6

VA DEQ Comment #2:

Section 4.2.4.1 (Wet Scrubber Impact Analysis)

(Comments also addressAppendixA - CostAnalysis, incorporatedby reference into report):

Please reevaluate cost effectiveness after adjusting for the following discrepancies (based on

guidance in EPA's Cost Control Manual):

. Please provide documentation for quoted Purchased Equipment Costs (PEC);

. The contingencyfee should be threepercent of PEC, not 10%of TotalDirect and Indirect

Costs;

. Capital Recovery should be based on a 15-year unit life and seven percent interest;

. Please perform two cost effectiveness (cost/ton) calculations assuming 90% and 95% removal.

O-N Minerals Chemstone Response:

Due to the expeditedmanner in which this analysiswas completed, the ability to properly engineer

and cost the various options being considered are simply not available. While we understand that

DEQ is citing available guidance from EPA on related subject matter in making these comments,

each BART determination needs to be completed on a case-by-case basis.

To that end, we reiterate that our prior conclusions that both wet and dry scrubbing alternatives

are not economically feasible. Please refer to our original analysis (performed consistent with

available guidance and requirements) in addition to the materials accompanying this letter.

Chemstone provides additional assessment of economic impacts using various assumptions cited

by the DEQ for the two scrubbing technologies. Ultimately, changing these variables does not

change the conclusion that the costs are extremely high and application of such technologies

would only provide for a miniscule improvement in visibility.

Purchased Equipment Costs (PEC). Documentationfor quoted PurchasedEquipment Costs

(PEC) is included as part of the attachment. In order to accountfor size differencesbetween the

model plant used and the rotary kiln at Chemstone the sixth tenth's power rule was used based on

the airflows of the two units to provide a more accurateestimate of PEC for the subject kiln. The

provided costs were for a new kiln line and not a retrofit applicationwhich would be expected to

slightly underestimatecosts for applicationof this technologyon the Strasburg rotary kiln.
Ms. Sharon G. Foley, P.E.

January 7, 2008

Page 3 of6

Contingency Percentages. The DEQ has suggestedusing a contingencyfee of 3 percent of the

purchased equipment costs per the U.S. EPA's Control Cost Manual (CCM). However, the Coal

Utility EnvironmentalCost (CUECost)Model Version 1.0 availablefrom the U.S. EPA's Clean

Air Technology Center, which specificallyprovides cost estimatesfor wet scrubbing (albeitfor

coal-fired power plants), detailsthat the contingency fee could be as high as 20 percent of the total

installation cost.1 We would also like to illustrate that the CCM calculationsreferenced by the

DEQ are for venturi-type scrubbers and do not reflectretrofitscenariosfor a flue gas

desulfurizationsystem that includes a spray tower absorber.

While Chemstone generally agrees with the CUECost contingencyfee, especially since the rotary

kiln would be retrofitted with the control technology,we need to realistically use more

conservative cost estimatesthan 3 percent. Using a contingencyfee of 10percent of the Total

Direct and Indirect Costs accomplishesthis goal, but is still only half of the contingency fee that

could be used using U. S. EPA guidance. Therefore,Chemstone believesthat a 10percent (or

more) contingency fee is more appropriatefor retrofit applicationsof a wet scrubberthan the

reference cited by the DEQ. Despite the CCM's use of 10percent of the PEC each for

engineering, construction fees, and construction and field expense,Chemstone utilized 8, 3, and 10

percent respectively for calculating the cost associatedwith the wet scrubbertechnology.

Capital Recovery. The values used for capital recovery periods(10 years at 9 percent interest)

presented in our 2007 submittal are reasonable and have been accepted in othersimilar analyses

reviewed by EPA when determining economic feasibilityof these same technologies on lime kilns.

Nonetheless,we have includedcosts based on variousrecovery periods as presented in the

attachments and discussion below.

Expected Control Efficiencies. We are not aware of any BART or BACT limitationthat

incorporates a 95% S02 removal using a wet or dry scrubber. Considering this level of control has

not been demonstrated on a lime kiln to date for these technologies,a cost analysis at this control

level is not appropriate for BART. Nonetheless,we have evaluated that variable in our presented

materials so we can compare them to the originalinformation.

Cost Evaluation Scenarios and Sensitivities. To addressthe variablesthat DEQ has provided

comment on, we developed a series of cost estimation scenariosto assess the sensitivity of cost

estimates. Specifically,we looked at economic impacts based on varying interestrates, capital

recovery periods, and control efficiencies. As shown in Table 1 of the attachment,the costs remain

very high and reflect a range of 4,090 to 6,423 $/ton removed. Similarly,costs per deciview

improvement were in excess of $22,400,000. At this cost level, the application of wet scrubbing

is economically infeasible. For this reason and the other environmental and energy

disadvantages associated with this technology, this technology does not constitute BART.

1 Coal Utility Environmental Cost (CUECost) Workbook User's Manual, Version 1.0.
Ms. Sharon G. Foley, P.E.

January 7, 2008

Page 4 of 6

VA DEQ Comment #3:

Section 4.2.4.2 (Inherent Dry Scrubbing ImpactAnalysis): Please explain how the "70-99+"

percent removal was calculated.

O-N Minerals Chemstone Response:

The efficiencies for inherent dry scrubbing, as referenced in the revised BART Detennination, represent

the approximate range of system removal achieved from the Strasburg Plant's rotary lime kiln based on a

rough mass balance estimate. Specifically, the 70 to 99+% removal efficiencies should accurately reflect

emissions data collected from the 2000 and 2007 stack test data from the rotary kiln at Strasburg.

VA DEQ Comment #4:

Section 4.2.4.3 (Spray Dryer Absorber Impact Analysis)(Comments also address Appendix A -

Cost Analysis, incorporated by reference into report):Please reevaluate cost effectiveness after

adjusting for the discrepancies noted above for the wet scrubber impact analysis (except that the

cost effectiveness cost/ton) calculation should be based on 90% removal). Additionally, please

clarify whether the reagent to be used would be lime or trona.

O-N Minerals Chemstone Response:

As with our response to VA DEQ Comment#2 (which also containssome informationrelevant to

this response), documentationfor quoted Purchased EquipmentCosts (PEC) has been included as

part of the attachment. The values applied in our submitted analysis are consistent with EPA

guidance and reflect the case-specific naturewith which a BART analysisisrequired to comply.

In order to account for size differencesbetween the model plant used and the rotary kiln at

Chemstone the "sixth tenth's power" rule was used based on the airflows of the two units to

provide a more accurate estimate of PEC for the subject kiln. The provided costs were for a new

kiln line and not a retrofit applicationwhich would be expected to slightly underestimatecosts for

applicationof this technology on the Strasburg rotary kiln.

To address the variableson which DEQ has provided comment, we developed a series of cost

estimation scenariosto assessthe sensitivity of cost estimates. Specifically,we looked economic

impacts based on varying interestrates, capital recovery periods, and control efficiencies, as

described in our response to Comment #2. Importantly,the expected reagent used for this

technology would be lime due to lime's local availabilityversustrona's natural availability in the

western U.S.

As shown in Table 2, the resultsremain very high and reflect a range of $5,218 to 7,283 per ton

S02 removed. Similarly,costs per deciview improvementwere in excess of $27,190,300. At this

cost level, the application of dry scrubbing is economically infeasible. For this reason and the

other environmental and energy disadvantages this technology brings, this technology does not

constitute BART.
Ms. Sharon G. Foley, P.E.

January 7, 2008

Page 5 of6

VA DEQ Comment#S:

Section 4.2.6 (Comparison to Datafrom Other Preheater Rotary Lime Kilns): Please indicate

the units (lbs/ton lime or lbs/tsf)for the emissionfactors listed.

O-N Minerals Chemstone Response:

The referenced S02 emission factors were derived from data located in the V.S EPA's RBLC

database from the Clean Air TechnologyCenter. Because not all emission factors in this database

are appropriatelylabeled, Chemstone attempted to replicate calculatingthe emission factors by

utilizing the emission rates and potential throughputincluded in the RBLC data. With this in mind,

Chemstone has addressed this comment, to the extent possible, by including the appropriate units

in the revisedTable 4-7. This table is included as an attachmentto this response letter.

VA DEQ Comment #6:

Please evaluate the feasibility of and expected emissions reductions from the use of lower-sulfur

fuel(s) in the rotary kiln.

O-N Minerals Chemstone Response:

We already use relatively low sulfurcoals (and are currently limited to 1.5%sulfur in coal) in our

rotary kiln. As a whole, these lower sulfurfuels are less available and more costly due to the

demand in many industries/uses. In addition, the nature of the preheaterlime kiln process

inherently removesfuel sulfur unlike traditionalcombustion processes. And, it is also known that

sulfur in raw material can significantlycontribute to S02 emissionsfrom lime kilns. The

contribution of emissionsfrom raw materials are unaffected by changesin fuel sulfur. For these

reasons and as discussed in the following,reductionsin fuel sulfurin lime kilns do not result in

direct reductions of S02 from the process. This is a far differentresult than traditional combustion

sources (e.g., boilers). Furthennore, data collected from the subject kiln also confirm that there is

no direct correlation between fuel sulfur input and S02 emissionsfrom the rotary kiln.

An engineering study of fuel sulfurlevelsin our rotary kiln that was conducted in May 2000

showed no reduction in S02 emission levels with 1.5% sulfur coals versus 1% sulfur coals. This

result demonstrated that the reduction of S02 emissionsis associatedwithmore complex factors

(e.g., potentially sulfur in raw materials) and were not significantlyaffectedby the fuel change.

Notwithstanding the fact that a fuel sulfurreduction strategyon the Strasburg rotary lime kiln

would only result in a partial (at best) reduction of S02 emission from kiln system,Chemstone has

made a preliminary economic assessmentshould such a sulfur in fuelreduction strategy be applied.

Based on the heat input needs of the kiln, the facility would experience increased annual operating

costs of between $4,000,000 and more than $18,000,000to eliminate solid fuel use and use natural

gas or fuel oil. If you falsely presume that all 290 tons per year of S02 could be removed by

applying such a strategy, the costs would be in the order of $15,000 to $64,000 per ton S02
Ms. Sharon G. Foley, P.E.

January 7, 2008

removed if it were implemented. Clearly, neither fuel change alternativeis economically feasible

and is not BART.

Page 6 of6

---------------

We hope that the information provided above will assist in the Department's review of this

BART analysis. If you have any questions or comments, please do not hesitate to contact me at

(540) 465-6822.

Sincerely,

Karl D. Everett, P.E.

Senior Environmental Health and Safety Manager

O-N Minerals Chemstone Corporation

ATTACHMENTS

cc: Mr. Mike Kiss, VDEQ

Mr. Mike Remsberg, Trinity

Mr. John Richards, Air Control Techniques