# NOx Reduction Technology Evaluation and Mitigation Proposal for Keetac Expansion February 10, 2010 Project United States Steel Corporation, Minnesota Ore Operations, is proposingto expand the production capacity ofits facility in Keewatin, MN. The facility (Keetac) is located in Not1hern Minnesota, and is approximately 50 miles fi·om the Boundary Waters Canoe Area Wilderness (BWCAW) and 100 miles from Voyageurs National Park in not1heastern Minnesota.
S02 emissions from the proposed projectwill be controlled under Prevention ofSignificantDeterioration (PSD) BestAvailable Control Technology (BACT) requirements for emission controls. The NOx emission increase for the facility with proposed permit limits is less than the major modification threshold and therefore the proposed projectNOxemissions are not subjectto PSD permittingrequirements. The Project has a potential to emit (PTE) of3,110 tons per year ofnitrogen oxides (NOx). NOx emissions fi·om the facility will exceed the 100 ton per year threshold established at 40 CFR 52.21(b)(l)(i)(a) therefore the Projectwould be classified as a major source for NOx emissions. Keetac has calculated the baseline emission for the existing facility to be 5,805 tons ofNOx peryear. Keetac has proposed permit limits thatwill limit emissions from both furnaces for a combined total of5,840 tons peryear. This results in an emission increase from the project of35 tons peryear, less thanthe majormodification threshold of 40 tons per year. Therefore the NOx emissions from the project are not subjectto BACT or otherPSD permitting requirements.Page: 2 The PSD emission threshold is nottriggered because the existing fumace historically was only fired with natural gas. In 2005 a permit was issued that allows the fumace to burn coal, which in a grate-kiln fumace leads to much lowerNOx compared to natural gas combustion. Through a fueling strategy for boththe new furnace that will utilize biomass and natural gas with coal and fuel oil as back-ups and the use ofcoal, natural gas, or fuel oil for the existing furnace, NOx emissions can be maintained less than the baseline. To meetthe proposed NOx limits, permit conditions will require compliance demonstration through the use of a CEMS on both lines. This will allow for real time fuel choice decision making and ability to take advantage ofoperating information. The associated limit onthe expansion kiln to meetnetting requirements will be a 180 rolling day sum of 1157 tons which is equivalentto approximately 2314 tons peryear. Annual emissions will not increase above the threshold compared to historical baseline emissions. However, changes in stackparameters and thepotentialto burn 100 % natural gas for shotiperiods oftime need to be evaluated and compared to the impacts on visibility ofthe proposed project. Visibility standards in both parks can be affected byNOx and 

### S02 emissions from sources throughoutthe mid-west. This NOx emission reduction technology evaluation and associated air quality modeling analysis are being used to demonstrate thatNOx emissions from the proposed project do not adversely affectvisibility in these parks. Normal operation ofthe facility is expected to be a 60/40 coal/natural gas mix on the existing line and a 50/50 biomass/natural gas mix on the new line. Altemative fuel use is proven to reduce the generation of NOx. Typically 100% natural gas is utilized for shortperiods during startup or ifthere is an issue with altemative fuels orthe process. Although issues can arise with the coal and/or biomass systems, it is unlikely thatboth systems would be down for an extended period oftime. The new line will be capable of utilizing both biomass and coal which will further reduce the likelihood to bum 100% natural gas for extended periods oftime. The proposed project includes renovation ofa taconite induration fumace thathas been shutdown for an extended period and is being**pe~mitted** as a "new" furnace. The fumace is a grate/kiln design. NOx emissions originate from fuel combustion in the kiln section ofthe fumace. This NOx reduction technology evaluation will consider potential NOx reduction measures which include:
1. Reduced NOx generation from fuel combustionthrough improvements in process design that reduce energy consumption as comparedto the existing Keetac fumace.Page: 3 2. Reduced NOx generation by using combustion technology for minimizing NOx generation 3. Control ofNOx emissions through use ofadd-on emission control equipment. 4. Fueling strategy to minimize NOx emissions Following the evaluation ofpotential control technologies is a summary ofmodeled impacts and a proposed approach for mitigating visibility impacts in the Class I areas. 

## Overview of Emission Reduction Technologies Several control technologies are included in this NOx control technology review for Keetac's Expansion Project. The emission reduction technologies evaluated include process designs, controls which reduce the generation ofNOx, add-on controls and fueling strategies.


## Reduce NOx generation through process improvements that reduce energy use The taconite pellet production process is very energy intensive. The unfired pellets must be heated to 2,300°F to 2,400°F in orderto achieve the desired physical and metallurgical properties in the finished taconite pellets. Once the pellets have been fired, air is used to cool the pellets down to safe handling temperatures. Taconite induration furnaces are designed to recover heat from the process by using hot air exhausted from the pellet coolingto pre-heat unfired pellets coming into the furnace and to pre-heat combustion air used in the kiln burner.
BecauseNOx emissions are directly related to fuel combustion, improvements in heatrecovery design can reduce the generation ofNOx emissions by reducing fuel consumption. The newtaconite induration furnace is designed to use approximately 36% to 44% less fuel than the existing Keetac furnace, on an mmbtu per shortton ofpelletproduced basis. NOx emission rates used in the emission inventory were used as model inputs and were reviewed bythe MPCA. TheNOx emission rates are based on testing results from furnaces with lower heatrecovery and a higher fuel use rate than expected for the new furnace. The reduced fuel usage numbers were developed using process design inputs from Hatch. These improvements are accomplished by:Page: 4

• Expandingthe preheat and cooling sections ofthe furnace to increase the available pellet surface for heattransfer • Improved air flow patterns for more efficienttransfer ofheat • Optimizing use ofrecovered energy between heating unfired pellets and combustion air • Improved air seals to minimize infiltration ofcold air into the furnace • Improved insulation to minimize heat loss
Process improvements are already incorporated into the design ofthe new furnace. Therefore, a direct cost feasibility ofprocess improvement is notnecessary. Typically, costevaluations are not required of technologies that are selected for implementation. The exactrelationship between reduced fuel usage and the resultingreduction in NOx emissions is not known. Due to the uncetiainty associated with the exactreduction in NOx emissions that will be achieved, no change was made to the emission rates thatwere used for model inputs. 

## Reduce NOx generation through use of combustion technology Two keyfactors that lead to the generation ofNOx are temperature and amount ofoxygen (02) present. NOx emissions may be reduced by minimizing flame temperatures. This may be accomplished with flue gas recirculation and optimization ofthe burner design. NOx emissions can also be minimized by minimizingthe amount of0 2 present. However, in a taconite induration furnace, oxygen (02) levels must bekept at 15% 0 2 so that sufficient oxygen is present for the oxidation ofiron ore from magnetite to hematite. Oxidation ofthe ore is needed so thatfinished pellets have the correctmetallurgical properties for use in a blastfurnace. The oxidation process also provides most ofthe heat needed for properpellet formation. Inboilers and process heaters flue gas oxygen levels of2%- 3% can be achieved thereby minimizingNOx formation. The same level ofoxygen control is needed for NOx control by flue gas recirculation. To reach maximum energy efficiency, patiofthe heat recovety system must be used for preheating the combustion air. So, the abilityto limit combustion airtemperatures is limited.
Dueto the complex nature ofcontrollingthe combustion process in a rotary kiln, burner design is typically done by modeling the burner and kiln using computational fluid dynamic (CFD) models. Atthe U. S. Steel Minntac facility, an investigation ofburner design options by CFD modeling is being conducted by Hatch, the project engineering group, and Coen, a burner manufacturer. Preliminmy results for the grate/kiln systems atMinntac suggestthat a NOx reduction upwards of40% maybe feasible with advancedPage: 5 burner designs for the kiln burner. Similar results may be possible on the new line at Keetac. However, differences in the grate/kiln design at Minntac vs. Keetac and fueling strategies may affectthe level ofNOx reduction achievable. Because ofuncertainty associated with the exactreduction in NOx emissions that will be achieved, no change was made to the emission rates thatwere used for model inputs. 

## Reduce NOx emissions by using add-on emission control equipment Selective Catalytic Reduction (SCR) Selective catalytic reduction is a post combustion NOx control technology in which ammonia (NH3) is injected into the flue gas stream in the presence ofa catalyst. SCRcontrol efficiency on utility boilers is typically 70%

- 90%. SCRrequires an optimum temperature range of570-850°F.
Forthe Keetac Expansion Project, there is the option ofplacing the SCR system in two different locations. These locations and theirrelated feasibility and costs are described below. Selective Catalytic Reduction (SCR) on Pre-Heat (PH) Zone exhaust stream SCR is a potential candidate for control ofNOx emissions from the PHexhaust stream because the design exhaust gas temperature is within the temperature range where SCRworks properly. However, this technology has been identified as technically infeasible due to high solids loading as compared to power plant applications. There is also concern with hydrogen chloride and potassium compounds, as well as the S02 and S03content ofthe gas stream. The high moisture content and ammonia injection would strongly promote the production ofammonium sulfate and ammonium bisulfate. Ammonium sulfate salts can cause catalyst deactivation and are also corrosive. Ammonium sulfate deposition could affect both the SCR system as well as the traveling grate system in DDDl which would be downstream ofan SCR system in this option. In addition, SCR catalyst will promote oxidation ofS02 to sulfuric acid (H2S04). Sulfuric acid formed in an SCRreactor could cause additional corrosion problems in DDD1. Based on the factors listed above, installation ofa SCR system atthe PH exhaust is technically infeasible, and is not evaluated further. SCR following Electrostatic Precipitator (ESP) on PH exhaust stream LKAB, a taconite production facility located in Sweden, contracted with Alstom Powerto construct a gas cleaning system on the PH exhaust stream atits KK4 plant. The gas cleaning system uses an ESP to remove pmticulates from the PH exhaustprior to NOx treatmentby an SCR system. Reportedly the SCR system atLKAB was designed for 90% NOx removal. The SCR system is followed byheatrecovery and S02 controls. AnESP upstream ofan SCRreactor would remove a significant amount ofparticulate matterPage: 6 and the contaminants associated with patiiculate matterthat are catalyst poisons. This control scheme does not address potential adverse impacts on SCRcatalyst from S02, S03 and HCl described in the SCR analysis above. Representatives ofU. S. Steel and LKAB met at Keetac during the summer of2009 for a tour and meeting. Metso, LKAB's design engineer, also attended. Atthe time ofthe meeting, LKAB's KK 4 line had been operating for approximately 6 months. The representatives from Metso and LKAB discussed the SCR technology installed on KK4. They discussed that while in theory SCR should work, the tighttemperature profile didn't allow for successful operation. In addition, LKAB representatives said they did not have any catalystpoisons in their gas stream. They also informed U. S. Steelthatthey would pursue more efficient low NOx burners in the future.
Alstom Power, the companythatdesigned the SCR system at LKAB, was requested byU. S. Steel to provide a bid for an SCR system atMinntac and subsequently declined to bid. Additionally, Mitsubishi declined to bid saying that SCRwas nottechnically feasible.
U. S. Steel previouslyhas asked representatives ofthe MPCA for any information thatthe MPCA has received from the Swedish government on performance ofthe SCR system atLKAB. The MPCA has stated thatthey haven'treceived any response from the Swedish government on the performance ofSCR.
Based on these factors, SCRwith ESP pre-treatment is considered technically infeasible. 

## Regenerative Selective Catalytic Reduction (RSCR) Regenerative Selective Catalytic Reduction (RSCR) is a form ofclean-side SCRtechnology. The RSCR system is located after the patiiculate control device, which minimizes impactto the SCRcatalyst. While the SOz and S03 may beremoved fi·om the flue gas stream with a GSA/ESP emission control system, other contaminants, which have the potential to poison the SCR catalysts, may not be removed. Ammonia is added to the flue gas stream in orderto reduce NOx to N2 and H20. Forthe DDDl exhaust stream, the temperatures atthis location are approximately 165°F. Because this temperature is belowthe required temperature for NOx SCR operation, the flue gas temperature mustbe raised to between 570°F and 650°F. Temperature elevation takes place in the RSCR, where a regenerative heater (RH) is used. The RHuses beds ofceramic mediato achieve thermal efficiencies of>95%. The goal ofthe RSCR system is toPage: 7 combine heat recovery, temperature control, and catalyst elements ofSCR into a single unit. RSCR is designed for heat efficiency and lower operating costs. While this technology could theoretically work at a taconite facility, this technology has yetto be proven effective for this industry. There is the potential that constituents in the induration furnace exhaust, not present in coal fired utility boiler exhaust streams, would poison the RSCR catalyst. Poisons include calcium oxide, arsenic, potassium, alkali and alkali-eatih metals and phosphorous. Calcium oxide, which is present in pellet fluxing reactions, could also poison the catalyst. The concentrations ofthese potential catalyst poisons atthe RSCR inlet is unknown and could significantly impactthe effectiveness ofthis control. The technical feasibility ofRSCR is currently under investigation by U. S. Steel at Minntac, but RSCRhas notbeen installed on a taconite furnace and therefore is an innovative and unproven technology. 

## Selective Non-Catalytic Reduction (SNCR) SelectiveNon-Catalytic Reduction (SNCR) utilizes aqueous ammonia orurea to reduce NOx emissions. The optimal range for the flue gas temperature is 1800-2000 deg. F. This technology was pilottested at Minntac and considered technically infeasible. 

## Low Temperature Oxidation (LoTOx) BOC Gases' LoTOxtechnology is a form oflow temperature oxidation. LoTOx is an innovative NOx control technology which, to date, has not been applied to a taconite induration furnace or a source with similar size and exhaust gas characteristics. This technology utilizes ozone, which is generated from pure oxygen on site with an electrically powered ozone generator. The ozone generation rate is controlled to matchthe needs for NOx control. The ozone used to oxidize NOto N02 and N02to N20s priorto removal in a wet scrubber (absorber). TheN20 5 is convmied to HN03 in a wet scrubber, and may be neutralized with lime or caustic. Additional wastewater treatment is necessary to remove the nitrates from the wastewater stream and would require futiher evaluation. Another concern is whether or notiron dust in furnace exhaust gas would react with ozone and reduce the control efficiency ofLoTOx. The nonnal NOx control efficiency range for LoTOx is 80% to 90% with outletNOx concentrations in the 15ppm

- 25 ppm range. This Project will utilize dry controls, whereas LoTOxrequires the use ofa wet scrubber. LoTOx has not been installed on a taconite furnace and therefore is an innovative and unproventechnology. Therefore, this technology is considered technically infeasible.Page: 8 

## Powerspan ECO The ECO is a multi-pollutant control system, controlling S02, NOx, Hg, and PM. The ECO has only been applied to powerplants, so the removal rates are not necessarily representative ofwhat Keetac could expect. The productwebsite cites 99% S02, 90% NOx, 80-90% Hg, and 95% control 

### ofPM2.s emissions. The system relies on an activated carbon filter to remove aqueous mercury from the wastewater stream, which is primarily ammonium sulfate. Powerspan states thatthe stream will be pure enough to sell as fettilizer. There will be liquid and solid waste generated from the activated carbon filtration.
The treatmenttrain consists ofthe following: ESP**~** ECO Reactor (plasma oxidizer)**~** wet absorber and ammonia addition (removes S02, NOx, and oxidized mercury)**~** wetESP (final PM removal).
Keetac's proposed system will control90% S02, 0% NOx, 50% Hg, and 95% 

### ofPM 25 emissions. Keetac's currentproposed system looks like the following: Spray Dryer**Absorber~** Activated carbon**injection~** ESP. Since this technology is innovative, this technology is technically infeasible. 

## Fueling Scenarios NOx generation is maximized when the existing line and the new line are running 100% natural gas. Control technology evaluations routinely require evaluation ofthe effectiveness offueling scenarios on pollutant generation. The range offueling scenarios was evaluated to understand and define ranges reflective ofoperating conditions for the kilns. NOx emissions were calculated by multiplyingfuel specific emission factors bythe fuel mix used and the process throughputto get a totallb/hrrate. Fuel specific emission factor (lbs/ton pellet) x max pelletthrough put (tons/hr) 

### =lbs/hrNOx Maxhourlyrates: Expansion kiln- 450tph, Existingkiln- 830 tph Total annual production rates do not equate directlyto instantaneous hourly max rates because itis not feasible to run the line continuouslythought outthe year.Page: 9 The expansion kiln emission factor was modified by assuming a conservative 20% reduction in NOx emissions due to the heatrecovery design ofthe new furnace. These calculations show that an emission rate of 1,655 lb/hr is an approximate bound on where both kilns can run atthe same time while one is firing 100% natural gas. The 1,655 lb/hrrate was detennined primarilyby evaluating kiln fueling scenarios byusing this estimate ofimproved efficiency for the expansion kiln (applied to the existing emission factor with a 20% decrease). The attached graph shows these operating scenarios. The operating envelope that is contained within the boundaries ofthis limit is shown as the green area on the graph. The operating scenarios shown range from 100% natural gas for both kilns to 0% natural gas/100% solid fuel for both kilns. The red portion of the graph reflects operating scenarios where the 1655 lb/hr limit would be exceeded. Note thatthe target operating scenario (60% solid fuel existing/50% solid fuel expansion) is well below the 1655 limit. The emission rate for the 100% natural gas expansion kiln/60% solid fuel-40% natural gas existing kiln, which represents the solids target rate for the existingkiln, is also well belowthe 1655 lb/hr limit. When firing the expansion kiln at 100% natural gas, the natural gas component ofthe fuel mix ofthe existing line can be as high as 55% and still be underthe 1655 lb/hr limit.
The 100% natural gas existing/!00% solid fuel expansion scenario is approximately 1655 lb/hr. See the following graph.Page: 10

100%S olid Fuel 100%NGE xis

ting 

### Total Kiln Emissions Related to Fueling Scenarios (w/Expansion Efficiency)

0 Existing Line Target Rate

### = 40% NG, 60% Solid Fuel Expansion Line Target Rate= 50% NG, 50% Solid Fuel . 1655-2055

. 760·1655

In summarythe above graph shows the fueling scenarios correspondingto the green area ofthe graph will result in an emission rate less than 1655 lbs/hr. As explained below, U. S. Steel is proposing to have a NOx emission limit of 1655 lb/hr for the combination ofemissions from the existing line and new line. As identified from the red area ofthe graph which defines emissions above the 1655 lb/hr limit, measures will be taken to ensure thatthe limit is not exceeded. 

## Summary of Class I Modeling Class I modeling was completed in accordance with the protocol submitted in November 2008. Visibility modeling requires thatthe worst case scenario is used to determine the impact to Class I Areas. The worst case scenario for this project is when 100% natural gas is used on the existing line and new line. Modeling 100% natural gas on both lines resulted in a modeled impact A NOxemission rate of2,727 Jb/hr was studied in the draft Class I report from January 2009. As indicated in the DraftEnvironmental Impact Statement (DEIS), U. S. Steel will be required to propose a mitigation plan to address the modeled impact The results repm1ed in the DraftEIS were: o Days >1 0% = 6Page: 11

o Days >5% = 31 The modeling assessed what has been referred to as "Scenario 4-1 ". This scenario consists ofScenario 1 (the existing facility, as operated priorto solid fuel and the scrubber addition) subtracted using CALSUM from Scenario 4 (the full facility, existing and expansion sources, as proposed after the expansion). Emission rates reflect the 24-hourmaximum rates. POSTUTIL was used on Scenarios 1 & 4 priorto their combination with CALSUM, using MNITRATE=1, with Ammonia background concentrations of 1ppb. Several visibility analyses were performed using CALPOST.
ForFLAG 2000, Method 2 was used, with background concentrations based on the Annual Average Natural Background. Initial submittals used the default Eastern US background found in the FLAG 2000 Appendices. FLAG 2000 noted that these background concentrations"...will serve until better estimates ofnatural condition are available." Recent conversations have indicated that the site-specific background concentrations found in the Appendices to the proposed FLAG guidance (FLAG 2008) are acceptable, and these are used in the results provided here.
ForFLAG 2008: Method 8 was used, with background concentrations based on the 20% BestDays Natural Background, as provided in the Appendices to FLAG 2008. Subsequent modeling has been performed using the November 2008 protocol as the basis with revised emissions thatreflect a 24-hour block average limit of 1655 lb/hr as identified in the fueling scenario evaluation. An additional analysis was added to this round ofmodeling reflecting a BART-like Analysis. Method 6 was used, with background concentrations based onthe 20% BestDays Natural Background, as provided in the Appendices to FLAG 2008. Visibility modeling using an emission rate of 1,655 lb/hr from the fueling strategy analysis resulted in the following: o Days >10% = 0 o Days >5% =4 o BARTMethod Days DdV 0.5 = 3 for the total ofthe three years modeled. 

## Mitigation ProposalPage: 12 U.S. Steel has committed in the permit application to have the following new mobile equipment meet Tier IV emission standards. The visibility modeling used the lower emission rates from the Tier IV mobile equipment. The applicable new equipment includes: • Diesel-driven Haul Trucks • Diesel-driven Mining Shovels • Diesel-driven Front-end Loaders • Diesel-driven D 1 0 Dozers • Diesel-driven Grader These commitments apply to equipment acquired for the expansion facility. U. S. Steel will include more information on the feasibility to retro fit existingtrucks in the future, but can notprovide this information currently.
U. S. Steel will agree to a 24-hour block average limit of 1,655 lb/hr for sum total ofemissions from both ofthe induration processes. Compliance with this emission limit will be demonstrated through the use of CEMs on both lines.
In addition, U. S. Steel has agreed to a 180-day RollingLimitto meetthe PSD nettingrequirements. This limit will restrictthe amount oftime the facility is able to burn 100% natural gas while still ensuring both limits are met. U. S. Steel also considered the cumulative emission impact as compared tothe goals ofthe NE Regional Haze Plan. See the attached Regional Haze SIP NortheastMinnesotaPlan emission tracking spreadsheet.
In summary, under a majority ofthe fueling scenarios as shown in the graph above, U.S. Steel would be belowthe proposed limit of 1655 lb/hr on a 24-hr block. Underthe 100% natural gas on both lines scenario additionalNOxmitigation would need to be employed in orderto be in compliance with the proposed limit. Additional NOxmitigation includes but is not limited to identification and implementation ofadditional operating and maintenance practices after the unit is operatingto further reduce NOx emissions, reduction ofproduction, idling ofa line until the issue requiring the use of 100% natural gas on both lines is resolved.
OtherMitigation Opportunities Investigated by U. S. SteelPage: 13 The following other mitigation opportunities were investigated by U. S. Steel. These were evaluated by U. S. Steel and determined notto be feasible: 

### 1. Emission allowances and Green Energy Securing and retiringtradable emission allowances from National Emissions and on-site green energy generation are not attractive. Both options would be difficult for the MPCA to enforce and would not result in visibility improvement in the national parks ofconcern for this project. 

### 2. Enforceable reductions in emissions from nearby sources A permit condition which restricts emissions from non-U. S. Steel facilities would be difficult for the Company to ensure pennit conditions are being metby those facilities. 

## Conclusion Based on the review ofNOx reduction technology, all add-on controls are either innovative technologies, technically infeasible based on induration furnace operating conditions, orthere are constituents in the DDD1 exhaust stream which, ifpresent in sufficient quantities, would adversely affectthe feasibility of add on controls. Fuel combustion improvements, process design and fueling strategies are the most feasible methods ofNOx reduction. An emission limit of 1,655 lb/hr on a 24-hr block average will result in minimal visibility impacts.