Enclosure

1 **Nitric Acid New Source Performance Standards** 

**– EPA’s Responses to the** 

**Petition for Reconsideration Background**  The initial Nitric Acid Plants N ew Source Performance S tandards (NSPS ) w ere published in the Federal Register (FR) on December 23, 1971 (36 FR 24881 ) and codifie d at 40 CFR part 60, subpart G , pursuant to section 111 of the C lean Air Act (CAA)

. Pursuant to section 111(b)(1)(B) of the CAA, we have reviewed the NSPS three times

. The first review was completed on June 19, 1979 (44 FR 35265). The sec ond review was completed on April 5, 1984 (49 FR 13654). No changes were made to the NSPS as a result of these two reviews. However, based on the results of the third review, which we completed in August 2012, we determined it was appropriate to revise the NSPS. The revisions to the NSPS based on the third review w ere published on August 14, 2012 (77 FR 48433) . The revisions included a change in the nitrogen oxides (NO x) emission limit , from 3.0 pounds of NO x per ton of nitric acid production (3.0 lb/T ) on a 3

- hr basis to 0.5 lb/T on a 30

- day average basis , and additional testing and monitoring requirements. Throughout th e rulemaking process for this third review , we received comments, data and information that supported these revision s. This information is contained in the docket which is available at http://www.regulations.gov

. The revisions were proposed on October 14, 2011 (76 FR 63878). We received additional data and comments during the comment period. Th ese data and comments were considered and an al yz ed and , where appropriate, revisions to the NSPS were made

. The revised NSPS (40 C FR part 60, subpart Ga) w ere finalized on August 14, 2012 (77 FR 48433). Th e NSPS appl y to new , modified or reconstructed nitric acid production units (NAPU s ) that commence c onstruction, modification or reconstruction after October 14, 2011. **Section 307(d)(7)(B) Requirements** Section 307(d)(7)(B) of the CAA states that “[o]nly an objection to a rule or procedure which was raised with reasonable specificity during the period for public comment (including any public hearing) may be raised during judicial review

. If the person raising an objection can demonstrate to the Administrator that it was impractical to raise such objection within such time or if the grounds for such obje ction arose after the period for public comment (but within the time specified for judicial review) and if such objection is of central relevance to the outcome of the rule, the Administrator shall convene a proceeding for reconsideration of the rule and provide the same procedural rights as would have been afforded had the information been available at the time the rule was proposed.” A s to the first procedural criterion for reconsideration, a petitioner must show why the issue could not have been presented during the comment period, either because it was impractical to raise the issue during that time or because the grounds for the issue arose after the period for public comment (but within 60 days of publication of the final action)

. In the EPA’s view, an objection is of central relevance to the outcome of the rule onl y if it provides substantial support for the argument that the promulgated regulation should be revised

. See, e.g., the EPA’s “ Denial of the Petition s to Re cons i der the Endangerment and Cau se or Contribute Findings for Greenhouse Gases under Section 202 of the Clean Air Act, ” 75 FR 49556, 49561 (August 13, 2010)

. See also, 75 FR 49556, 49560

– 495632

(August 13, 2010) and 76 FR 4780 , 4786

– 4788 (January 26, 2011) for additional discussion of the standard for reconsideration under CAA section 307(d)(7)(B). O n October 10, 2012, Dyno Nobel Inc. ( DN I) submitted a P etition for Reconsideration and judicial review of the f

inal rule for Nitric Acid Plants (77 FR 48433 ). The EPA has carefully reviewe d the points raised in the Petition and is denying the Petition for the reasons described below. **A. Subcategory for Modifie**  **d or Reconstructed Plants that U se NSCR to Cont**  **r ol NO**  **x Claim:**  The petitioner states that “ as EPA long ago recognized , ” nonselective catal ytic reduction (NSCR) is not an end of pipe control technology , as some would describe selective catal ytic reduction ( SCR)

. The petitioner claims that there are significant and fundamental differences between NAPUs using SCR and NSCR. NSCR is desi gned differently from an SCR because an NSCR is built into, and is an integral part of the operation of a NAP U , particularl y in terms of heat balance and energy generation for other parts of the NAP U

. NAP U s with an NSCR must keep temperatures elevated in o rder to create the reductive environment within the unit that eliminates NO x . T o ensure temperatures and pressures are adequate for this reductive environment, the NSCR is placed upstream of the tail gas expander. Because of these differences, the petition er believes the EPA should have established a subcategory

for NAPUs with NSCR with regard to emissions limits for modified or reconstruction of existing sources. **EPA’s Response:** S ection 111(b)(2) of the CAA states that “The Administrator may distinguish among classes, types, and sizes within categories of new sources for the purpose of establishing such standards.” Pursuant to this discretionary authority , the general EPA policy is that i f one or more segments of an industry

have significant differences in class, ty pe or size of production processes or designs , which result in significant differences in the potential emissions, then we consider developing a subcategory or subcategories for these different segments. However , w e believe it is inappropriate to establish subcategories based on differences in control technologies , and decline to exercise our discretion to do so here

. As we explained in the preambles to the proposed and final rules, the EPA clearl y considers NSCR , as well as SCR , to be emissio ns control technologies. Therefore, for this reason alone, it would not be appropriate to establish a subcategory for units with NSCR. We are unaware of the basis of DNI ’s claim that the EPA “recognized” NSCR as not being an emissions control technology

. This is incorrect. None of the 14 NAPU s in the U

. S

. using NSCR has additional NO x control after NSCR. NSCR is the emissions control technology for these 14 NAPUs. There are about 50 NAPU s in the U

. S. The petitioner owns and operates seven of the 14 NSCR units. A possible justif

ication for developing a subcategory (or a different emissions limit) for existing NAPU s that become subject to this NSPS through modification or reconstruction would be a determination that it is technicall y impossible or cost prohib itive for a number of existing NAPUs with NSCR to achieve the NSPS emission l imit if these units are modified or reconstructed

. A s described below in section C , there are examples where some existing NAPUs with NSCR already achieve the NSPS emission limit and , therefore , would have no additional control costs if they were modified or reconstructed

. Furthermore, the costs for most other existing NSCR units to comply with3

the NSPS , if such units were modified or reconstructed, are not expected to be excessive ( as described further in section D below). If it were the case that the costs to comply with the NSPS for one specific NAPU with NSCR were excessive, that would not by itself justify

developing a subcategory for one , or for a very

limited number , of the N SPS affected facilities. Thus, there is no basis for subcategorizing units using NSCR from units using SCR. **B. Petitioner**  **B elieves EPA had Insufficient Data**  **Claim:** The petitioner claims that the EPA cannot meet the legal requirement that data relied on for setting an NSPS must be sufficiently “representative of potential industry

–wide performance” because none of the plants that were tested for the NSPS review (i.e., test plants) use NSCR

. Also, the test plants in the EPA’s anal ysis do not face the conditions, limitations in the ability to modify

plant operations , or the resulting impacts on NO x emissions that NAPUs with NSCR face. The petitioner claims the EPA cannot meet the mandates of National Lime Association v. EPA (DC Circuit 1981) and Sierra Club v. Costle (DC Circuit 1981) that data used in setting an NSPS must be sufficiently “representative of potential industry

- wide performance.” **EPA’s Response:** As required under s ection 111(a) of the CAA, 1990 Amendments, NSPS emission limits are based on th e emission level s achieved by the best system s of emission reduction (BSER) while considering the costs and any nonair quality health, environmental impact and energy requirements of these s ys tems. As noted in the preamble to the final rule (77 FR 48436), we concluded that SCR is BSER for NAPU s . As discussed in detail in the preambles to the proposed and final rule as well as the Response to Comment document, we determined we had ample emission test data to support SCR as BSER and that we had sufficient data to determine the appropriate revised emissions limit for NO x . However, we also explained that the NSPS does not require the use and installation of a specific control device as long as the affected facility complies with the NSPS. For example, as describ ed in more detail in s ection C below, available data indicate that some NAPUs with NSCR can meet the revised limit without the need for any additional controls. **C. Achievability of**  **C omplying with**  **S tandard for**  **E xisting**  **P lants**  **U sing NSCR**  **Claim :**  The petitioner claims that there are insufficient data showing that existing plants using NSCR can meet the emission limit

. The petitioner notes that there was no notice in the proposed rule that the EPA would use continuous emissions monitoring system ( CEMS ) data from DNI ’s Oregon plant as the primary

basis for supporting the rule for NSCR. The petitioner believes that this plant is not representative of NAPU using NSCR in the U.S. for at least three reasons. First, the plant is very small, only

70 tons per day

( T PD ) of nitric acid is produced

. DNI ’s largest NAPU produces 520 TPD. Second, the plant is not a ty pical NAPU as it was built for the sole function of scrubbing emissions from an on

- site urea plant. This plant functions without maximizing acid purity or pro duction rate as do other NAPU s . Thus, the relative vessel sizes and flow rates that are found in an NSCR used at a commercial NAPU are much different than DNI ’s Oregon plant . Third, the fuel used for the plant’s NSCR (purge gas from an on

- site ammonia plant

– 65

-percent hydrogen) is unusual. Four of DNI ’s seven NAPU s with NSCR use methane which , according to the petitioner, is the common fuel for NSCRs at NAPU s . The petitioner also claims that the use of hydrogen in fuel results in significantl y lower NO x emissions at the Oregon plant . Furthermore, the petitioner states that the only other data4

cited by the EPA to support that the NSPS emissions limit is achievable for NAPU s with NSCR are m onthly averages from the JR Simplot plant , which , according to the EP A , indicate a “strong probability” that this NAPU with NSCR would comply with this NSPS. **EPA’s Response:** As noted in the preambles to the proposed and final rules, the EPA has determined that SCR is BSER, so there is no requirement that the EPA conclude that NAPU s with NSCR can meet the revised limit without additional controls. Nevertheless, we still evaluated the potential for NAPU s with NSCR to achieve the revised limit. As explained further below, we disagree that there are insufficient data showing that some existing plants with NSCR can achieve the revised limit

. As noted in the preamble to the proposed rule, we had long term CEMS data from two NAPUs with NSCR which indicated difficulty in meeting the NSPS emission limit. However, we also noted we had monthly block averages (often 30

- day periods , which are the same time period of the NSPS emission limit) from two other facilities using NSCR , including DNI ’s Oregon plant (also known as the Deer Island plant or St. Helens plant) and the JR Simplot

- He lm plant , that indicated these plants are achieving the NSPS limit

. We noted that the monthly averages fo r both plants ranged from 0.15 to 0.36 lb NO x/T of 100

-percent acid; well below the emission standard of 0.50 lb/T. We also noted that since these data were not rolling 30

- day averages like the NSPS emission limit , but rather monthly averages, it was not exactly a direct comparison with CEM S data. However, we stated that these monthly averages indicate that at least some NAPU s with NSCR would be able to achieve the emission limit without additional controls (76 FR 63882)

. In the preamble to the final rule (77 FR 48437), we provided additional information and anal ys es that indicate the same two NAPU s with NSCR described in the proposal (i.e., DNI’s Orego n Plant and JR Simplot

- Helm plant) can m e et the NSPS emission limit

. Regarding the DNI Oregon plant , we received CEMS data for this plant after proposal that allowed us to calculate 30

- day rolling averages. Based on these data, we determined that the maximum rolling 30

- day emission rate was 0.21 lb/T acid for the DNI Oregon plant , which is well below the NSPS limit of 0.50 lb/T

. Regarding the JR Simplot

- Helm plant , we explained again that , based on available data , this plant had monthly averages that range d from 0.15 to 0.36 lb/T , which indicates this unit can also achieve the limit of 0.50 lb/T

. Therefore, similar to the proposal, w e concluded again in the preamble to the final rule that the NO x emission limit was achievable for some NAPUs with NSCR

. Since the final rule, we have re

- analyzed the JR Simplot data , which includes CEMS data . This re anal ys is of JR Simplot CEMS data showed that it is possible to determine 30

- day rolling averages for this unit. For the period, January 1, 2011 , thru August 1, 2 011, the 30

- day rolling averages range from 0.063 to 0.19 lb/T . The average 30

- day average was 0.11 lb/T . Thus, this unit , which is controlled with NSCR, easily me et s the NSPS emission limit. With this re

- anal ys is of the JR Simplot data , we have CEM S data from two NAPU s with NSCR that clearl y achieve the NSPS limit . Parameters for th e JR Simplot plant refute DNI’s contention that the DNI plant in Oregon is only able to meet the emission limit because it is non - representative of NAPU s with NSCR for the three points that DNImentions . Th e JR Simplot plant is larger (230 TPD) than DNI ’s Oregon plant (41 TPD). The sole plant function at JR Simplot is to produce nitric acid. It also5

uses a fuel for NSCR (butane ) that is similar to methane used in four of the s even NSCR controls at DNI plants

. While reviewing DNI ’s reconsideration petition, we requested CEM S data for DNI’s other plants with NSCR. DNI submitted data for two of their other units with NSCR , including the only unit with NSCR that DNI identified as being considered for modifi cation ( i.e., Unit 3 at DNI ’s Cheyenne , Wyoming plant). These data indicate that for many 30

- day periods, Unit 3 had emissions below the NSPS limit

. We acknowledge that this existing NAPU has not achieved emissions below the NSP S limit for all periods in the past

. However , that does not mean that they would not be able to c omply with the NSPS emission limit in the future if they decide to modify

this unit , especiall y if they take reasonable measures to improve process operations and/or add emissions controls during the modification or reconstruction process . It is uncertain what equipment and/or controls DNI would have to install in order to be in continuous compliance with th e NSPS if they decided to modify

or reconstruct this unit

. Nevertheless, we expect that by adding a pre

- heater, they could significantly

reduce their NO x emissions during startups and shutdowns. Furthermore, by changing the catal ys t more frequently , they could decrease their NO x emissions. We believe by applying these two relatively inexpensive measures, it is likely that this DNI unit could be in continuous compliance with the revised NSPS limit

. Otherwise, the other option would be to install an SCR control which would be more expensive, but still reasonable

. Costs for retrofitting an SCR are described below in s ection D

. **D. Costs of**  **C omplying for**  **M odified or**  **R econstructed**  **NAPU s**  **C urrently**  **U sing NSCR**  **Claim:** The petitioner claims that it would not be possible to meet the NO x standard without cost
prohibitiv e retrofits for existing NAPU s with NSCR

. The petitioner stated that it is considering modifying a plant that currentl y uses NSCR and claims that retrofit costs required for an NSCR plant to install SCR and meet the NSPS were not considered in the rulemaking. The petitioner also claims the EPA stated in its proposed rule that it was “uncertain” whether NAPU s with NSCR could meet the NO x emission limit as the EPA had not reviewed any CEMS data for these units that met this limit. The petitioner states that the EPA did not evaluate the additional steps that are required for these units to meet the emission limit. Also, according to the petitioner, the EPA did not evaluate the impact s these steps would have on operations and the costs for these steps. In December 2012, after DNI submitted its petition, in response to questions from the EPA, DNI supplied information on estimated costs for its Donora, PA plant to retrofit SCR to an existing NAPU with NSCR. With these estimates, DNI asserts that the total annual cost to retrofit the Donora unit to install an SCR would be an estimated $1,565,000, and that the cost effectiveness of this control would be $11,000 per ton of NO x removed. **EPA’s Response:** As noted in the preamble to the final rule (77 FR 48439), we evalu ated the costs of controls for an actual NAPU plant that was modified. The plant installed SCR at a capital cost of $2,700,000. The cost effectiveness was $1,360/T of NO x removed. We concluded that these costs and cost effectiveness were reasonable

.6

The EP A conclude s that retrofitting a NAPU with an NSCR to add SCR (or add other control measures) to meet the NSPS would not , in the vast majority of circumstances, incur substantiall y m ore costs than retrofitting any other NAPU. With regards to the Donora unit , it has a unique design, is the only remaining NAPU of its kind and is equipped with a 1960s era NSCR device that is considerabl y less effective than more modern NSCR devices

. For this reason, the Donora NAPU emits considerabl y more NO x than most NSCR controlled NAPUs , and retrofitting it with an SCR may present engineering challenges and potential additional costs that would not be present for retrofitting the vast majority

of other NAPUs. Therefore, the EPA believes these estimated costs provided b y DNI are not representative of a ty pical existing NAPU with NSCR that may need to retrofit controls to meet the NSPS. M ost existing NAPU s use SCR, the control technology that we determined is the BSER. There are no expected additional control costs for most (o r all) of these units if they are modified or reconstructed and become subject to the NSPS, as we expect most (or all) of existing NAPU s with SCR to be in compliance with the emission limit. For a few cases, minimal changes may be needed for NAPU s with SCR and , if so, costs are expected to be low. For the 14 NAPU s with NSCR, some already are complying with the NSPS (e.g. , the DNI Oregon and JR Simplot plants ) , so little or no control cost s would be incurred if these existing NAPU s with NSCR become subjec t to this NSPS through modification or reconstruction. Control c osts may well be minimal or zero for several other of the 14 NSCR units. Some NAPU s with NSCR could incur larger costs if they

become subject to the NSPS, but the costs are generally not expec ted to be more than $1,360/T

. Finally , even if there are one or a few NAPUs with NSCR that would not be able to meet this NSPS in a cost

- effective manner, courts have recognized that an NSPS may be considered "adequatel y demonstrated" even if not all existing sources would be able to meet it. Portland Cement Assn. v. Ruckelhaus , 486 F.2d 375, 391 (D.C. Cir. 1973) (" We begin by rejecting the suggestion of the cement manufacturers that the Act's requirement that emission limitations be ‘ adequatel y demonstrate d'necessarily implies that any

cement plant now in existence be able to meet the proposed standards. "). It should be noted that rather than the Donora unit, the NAPU that DNI is considering modifying is Cheyenne Unit 3. The additional air pollution control/practices and associated costs needed for Cheyenne Unit 3 are uncertain

. However, a s shown in section C above , CEM S data for this unit show many periods of compliance. Furthermore, there are a number of possible options under which this unit could meet the revised NSPS for a reasonable cost
. First, an SCR might not h ave to be installed

. For example, we believe Unit 3 could potentially co mply by fine tuning the NSCR, adding additional catal ys t to the NSCR, adding a preheater to lower NO x emissions during startups and replacing the catal ys t more frequentl y. If these measures did not achieve the NSPS emission limit, Cheyenne’s Unit 3 could possibly

compl y with the NSPS by installing a “mini” SCR with much less catal ys t and using much less ammonia than a full

- size SCR. Inany event, making retrofits or other improvements necessary to meet the NSPS at Cheyenne Unit 3 would be considerabl y less expensive than what DNI claims would be necessary for the Donora unit. Since DNI ’s cost estimates are entirel y based on the cost of retrofits to the Donora unit, the cost of retrofitting Cheyenne Unit 3 would be much lower than estimated by DNI , and are likely consistent with the EPA’s estimated cost

- effectiveness value of $1 , 360/T for a modified or reconstructed NAPU (77 FR 48442) . Nevertheless, as stated above in7

s ection A , if the c osts for most plants would be reasonable, but costs for an individual NAPU are considerabl y higher , that itself would not justify developing a subcategory for one or for a very limited number o f NAPU s . Finally , an in

- depth look at DNI ’s Donora plant estimates suggests that these cost s could be overestimated. We note that the estimated annual cost provided by DNI associated with retrofitting the Donora unit is mostly

energy costs ($916,000 per ye ar or 59 percent of the total annual cost) calculated based on steam losses associated with the removal of an economizer that DNI asserts is necessary to accommodate the installation of an SCR. We believe more cost

- effective options likely exist for repl acing this lost steam , such as installing a replacement economizer, that were not evaluated in DNI ’s analysis

. **E. DNI**  **Did Not Have a Chance to Comment on Analysis Presented in Final Rule Claim:**  The petitioner states that s ection 307(d)(7)(B) of the CAA requires the EPA to grant reconsideration when the petitioner:

“ [C]an demonstrate to the Administrator that is was impracticable to raise [an] objection [during the period for public comment] or if the grounds for such objection arose after the period f or public comment... and if such objection is of central relevance to the outcome of the rule. ” The petitioner further states the standards for reconsideration are clearly met. First, no interested party , including DNI , had any notice in the proposed NSPS th at the EPA would utilize CEMS data from DNI ’s Oregon plant as the primary basis for supporting the rule’s application to NAPU s with NSCR and rejecting the petitioner’s request for a separate emission limit for these units . This is clearl y stated in the pre amble to the final rule as the EPA admits that th ese data were evaluated “after proposal.” If the EPA had included this evaluation in the proposed rule, the petitioner states that they would have commented that DNI ’s Oregon plant is not representative of o verall industry performance of NAPUs with NSCR

. Also, the petitio ner stated that , as noted in their subsequent comments regarding the DNI Oregon plant , their objection is most certainly “of central relevance to the outcome.” The petitioner states that DNI ’s Oregon plant is the only hourly CEMS data showing compliance with the NSPS emission limit. Thus, the petitioner believes that the N itric A cid NSPS is arbitrary and capricious as it relates to NAPU with NSCR. **EPA’s Response:** First, it should be noted that data for DNI ’s Oregon plant were described in the preamble to the proposed rule. At proposal, we stated we had monthl y block averages for this NAPU , as well as for the JR Simplot plant (76 FR 63882). These averages were well below the NSPS emission limit. Th ese averages were not 30

- day rol ling averages , however , these data still indicate d these two NSCRs could likely meet the NSPS emission limit of 0.50 lb/T on a 30

- day rolling average

. The data that the EPA further evaluated after proposal and prio r to promulgation were hourly CEM S data for DNI ’s Oregon plant that we re qu ested in the preamble to the proposed rule

. These data were requested to assist in evaluating whether NSCR can achieve the NSPS emission limit. The rolling 30

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day averages for this NAPU with NSCR me et the NSPS emission limit. W e also had data from another NAPU controlled by NSCR, JR Simplot, as described above (in section C). In the proposal , we noted that monthly

averages from the JR Simplot plant were below the revised limit. A fter the final rule was promulgated , we re - anal yz ed data from the JR Simplot plant based on evaluation of hourly CEMS data

. The re - evaluation of the JR Simplot hourly data also show that JR Simplot’s emissions are well below the NSPS emission limit and could eas ily compl y with the NSPS. The CEMS data for these two NAPUs with NSCR show that the NSPS emission limit can be achieved by some NAPUs with NSCR. **F. Conclusion**  In response to th e reconsideration petition, we have reviewed the data/anal ysis supplied by th e petitioner. Also, we have review ed and analyzed previously available data to evaluate the claims made in th e reconsideration petition. Our responses to all issues raised b y the petitioner are explained in detail above in s ections A through E , and summari zed below

. Regarding the petitioner’s request for a subcategory for modified or reconstructed nitric acid plants that use NSCR, the main points are as follows:

 First , in s ection A , we explained that we believe it is inappropriate to establish subcategories based on differences in control technologies , so it is inappropriate to establish a subcategory for plants using NSCR

. Also, we believe it is technically possible for existing NAPUs with NSCR to achieve the NSPS emission limit if they were to be modifi ed or reconstructed

.  Second, as described in s ections C

– E above, we believe it is feasible for some units with NSCR to comply

with this NSPS without the need for any additional controls as some existing units with NSCR are already achieving the NSPS emi ssion limit.
 Third , as described in s ection D above , we believe other units with NSCR that are modified or reconstructed , could comply with the NSPS limit by

improving their controls at reasonable costs. Finally , regarding the petitioner’s argument that the EPA did not meet the legal requirement of having representative emission data to set an emission limit, as explained in s ection B above, we had ample test data to support SCR as BSER and to establish a revised emission limit. Therefore, based on our review and evaluation of all issues raised by the petitioner and relevant available data and information, w e have concluded that reconsideration is not warranted

.