11011 C ODY O VERLAND P ARK

, KS 66210

PHONE 913 / 451-8900 FAX 913 /451-1686

CURTIS D

. LESSLIE

, PE

V ICE P RESIDENT

, E NVIRONMENTAL A FFAIRS WRITER ’ S DIRECT LINE

– 913/319-6065

J ULY 26, 2010

VIA ELECTRONIC MAIL

Mr. Peter Tsirigotis Director, Sector Policies and Programs Division U.S. EPA, Emission Standards Division

Mail Code: D205-01 Research Triangle Park, NC 27711

Re: Regulation of Portland Cement Kiln Mercury Emissions Under 40 CFR 63, Subpart LLL (Portland Cement MACT)

Dear Mr. Tsirigotis:

This letter is to update th e Environmental Protection Agency (EPA) regarding Ash

Grove’s efforts to lead the na tion in the control of mercury from cement kilns. As you know, over much of 2006 and 2007, Ash Grove worked with a large group of stakeholders, including EPA, the Oregon Depa rtment of Environmen tal Quality, various tribes, medical professionals, engineers a nd environmental groups to gain consensus around the installation of new mercury controls for Ash Grove’s Durkee, Oregon plant.

These stakeholders concurred that the new system envisioned for Durkee would set a new standard for mercury control. However, because nothing like it had even been permanently installed on a cement kiln, there was concern as to whether the control could live up to expectations. Since the group reach ed its conclusions, Ash Grove has spent two years and approximately $20 million to bring this design to reality. This state of the art mercury control system recently commenced operation and Ash Grove is submitting this letter to provide you with actual performance data from the first weeks of operation. As you will see, the system is exceeding the upper range of expectations and provides new data supporting the establishm ent of a subcategory for kilns, such as the Durkee kiln, that employ such advanced control technology.

Background

Ash Grove Cement Company (Ash Grove) is an American owned business headquartered in Overland Park, Kansas. Ash Grove is th e fifth largest cement manufacturer in the United States with cement plants in nine states across the count ry. A pioneer of theMr. Peter Tsirigotis July 26, 2010 Page 2

limestone and cement industries, the Compa ny was incorporated in Missouri in 1882 and has been majority owned and controlled by the Sunderland family since 1913. The eight cement plants operating in the Ash Grove system are some of the most efficient and best maintained in the country and have an annual production capacity of more than 8.0 million tons of cement. The quality portla nd and masonry cements produced at these plants are used in the cons truction of highways, bridge s, commercial and industrial complexes, residential homes, a nd a myriad of other structures.

One of Ash Grove’s cement plants is lo cated in Durkee, Oregon. The Durkee plant utilizes limestone and other materials quarrie d on site to make portland cement. The plant typically employs 116 persons includi ng persons represented by 6 trade unions. With an annual payroll of $9 million and an operating budget in excess of $40 million, the Ash Grove Durkee plant is an important part of the economy in an economically depressed part of the state of Oregon. The unemployment rate in Baker County is currently 11.7% (May 2010 value). Unem ployment in the counties immediately surrounding the plant is as high as 21.8% (Adams County, ID).

Ash Grove’s Durkee plant, like most cement plants, relies on limestone quarried from a collocated quarry. The limestone from this quarry has elevated levels of naturally occurring mercury. Given the magnitude of the amount of raw material used, it is technically and economically inf easible to import raw materials from an off-site quarry. In late 2006 Ash Grove voluntarily performed ex tensive testing to be tter understand the nature and magnitude of its mercury emissi ons. This constituted some of the most advanced and comprehensive mercury stack and raw material testing ever performed at a cement plant. Ash Grove engaged national experts to perform multiple different types of tests using a variety of test methods so as to increase the compa ny’s understanding of the quantity and type of mercury emitted from the plant. The stack testing indicated that the vast majority of the mercury was either oxidized mercury or elemental mercury, with elemental mercury making up as much as 70 percent of the total.

With the emissions testing data in hand, Ash Grove performed a human health risk

assessment to ensure that its uncontrolled em issions do not pose an unacceptable risk to the community. Relying on a nationally rec ognized mercury risk assessor, the company commissioned a complex risk analysis c onsistent with the requirements under the

Hazardous Waste Combustor NESHAP. This risk assessment demonstrated that the plant’s uncontrolled mercury emissions do not pose an unacceptable health risk to the surrounding community.

Although the risk assessment did not indicate that an issue existed, Ash Grove voluntarily decided to develop mercury emission controls for its Durkee plant. Ash Grove knew that no cement plant in the country had installed controls for the purpose of reducing mercury emissions. Five kilns in the country have wet scrubbers to co ntrol sulfur dioxide emissions and these controls are believed to pr ovide a moderate level of mercury control. However, scrubbers (which consume millions of gallons of water per year) are not aMr. Peter Tsirigotis July 26, 2010 Page 3

practical control techno logy in the arid western U.S, where water is scarce. Ash Grove

also learned that wet scrubbers only control oxidized mercury as elemental mercury is not water soluble. This was particularly importa nt where Ash Grove’s data indicate that a substantial percentage of the mercury in its exhaust is elemental mercury and so not amenable to control by a wet scrubber. Ther efore, Ash Grove realized that it was going to have to develop a means of controlling mercury that was previously unknown in the industry.

Ash Grove engaged the experts at EERC, a res earch center associated with the University

of North Dakota that had extensive e xperience developing mercury control and monitoring techniques in the electrical generation sector. Armed with the stack test data, the EERC researchers proposed the use of an activated carbon injection (“ACI”) system to control mercury emissions. Ash Grove invested over $1 million to have EERC temporarily install a pilot ACI system at the Durkee plant. EERC was at the plant installing and operating the pilot system for over six weeks. Based on this in situ study EERC predicted that if the performance of a full scale system matched that of the pilot system, Ash Grove could reduce mercury emi ssions by approximately 75 percent on an annual average basis.

Although Ash Grove believed that the EERC study had developed the optimum system design, the company conducted a peer review of EERC’s work with a broad array of stakeholders. Through a partnership with residents, environmental groups, Tribes, medical professionals, engineer s and the state environmental and health agencies, Ash Grove went through a long and public process to determine the best means of addressing mercury emissions. What ultimately wa s approved by this diverse team was the

installation of an activated carbon injection system with a recirculation loop and mercury recovery. These controls were anticipated to remove at least 75 per cent of the mercury in the Durkee plant exhaust. However, Ash Grove committed to strive to get as close as possible to removing 85 percent of the mercury in its emissions. This level of mercury control had previously been considered unattainable fo r a cement kiln. We are submitting this letter to inform you that the initial results from operating the mercury control system indicate that we are capable of achieving at least the 85 percent mercury

removal that the state and the stakehol ders asked us to strive to achieve.

Emissions Control Success

The Durkee mercury controls have only been completed a short time and are still in the initial stages of shakedown. As a resu lt, Ash Grove does not yet know the maximum long term control efficiency th at can be achieved by operating the system. However, we have had two approximately one week runs of the control system. During each of those two periods, activated carbon was added to the control system at th e start of the run period. Mercury levels in the exhaust gas ente ring the control system and mercury in the exhaust gas leaving the contro l system was sampled and measured for the entire time period. During the first run period, the activat ed carbon was added to the system partwayMr. Peter Tsirigotis July 26, 2010 Page 4

through the first day and removed from the system partway through the eighth day. No recycling of carbon was attempted thus providing good information regarding the carrying capacity of the carbon. The average removal efficien cy during those intervening 6 days was 92.8 percent. During the second run period, the activated carbon was added to the system late in the first day and removed from the system partway through the twelfth day. The amount of carbon used in the second run (980 pounds) was approximately half the amount of carbon used in the first run (2,000 pounds). In the second run, the average mercury removal effi ciency during the first 6 full days of operation was 82.6 percent. Starting on the seve nth day the control efficiency dropped by approximately half indicating that the carbon was becoming saturated. By the eleventh day, the carbon was adsorbing very little mercur y. The raw data for these time periods is

included as an attachment to this letter. The kiln is currently down for scheduled maintenance and so additional control data cannot be generated until the kiln starts back

up.

Based on these preliminary results, Ash Grove believes that the Durkee mercury control system has the clear potential to meet the upper end of the contro l effectiveness range identified for the plant, i.e., removal of 85 percent of the mercury in its emissions. We wanted to share these data with you so th at you could take them into account in the finalization of the rule. Although we have not had the opportunity to run the control system for months and develop a full unders tanding of the variability across operating conditions and seasons, we believe that it is safe to say th at we have demonstrated in practice that between 75 percen t and 85 percent control of mercury can be achieved. We also believe that once we complete the instal lation of equipment to allow for the removal of some main baghouse dust for use in our cem ent mills (“dust shuttling”) that we can ultimately reach a goal of 90% control.

Subcategorization of Outlier Kilns

We believe that this new evidence is of great importance as you finalize the Portland

Cement NESHAP. With these data in ha nd there is now a reasonable basis under the Clean Air Act to establish a separate subcat egory for those sources with high levels of mercury in their on-site raw materials. Si milarly, there is now a basis for a beyond the floor determination that will result in previous ly inconceivable levels of mercury control. Therefore, we are providing these data to you so as to support a decision to subcategorize based on the type of facility (i.e., a cemen t plant collocated with a quarry containing materials with high levels of naturally occurring mercury) and to support your determination to go beyond the floor and require that sources in this subcategory employ the now proven control technology in operation at the Durkee kiln. Absent such an outcome from the regulatory process, Ash Grove will likely be forced to close the Durkee plant and dismantle the controls currently in pl ace at the plant. It would be a perverse outcome if the best controlled plant in the country was shut down by EPA’s standards, thereby putting over 100 people out of work and decimating an already economically challenged part of the country.Mr. Peter Tsirigotis July 26, 2010 Page 5

Conclusions

Ash Grove’s Durkee plant is an area source th at voluntarily installed mercury controls

that have redefined the state of the art for cement kilns. These controls are operational three years in advance of an ticipated EPA requirements and the initial data demonstrate that they are capable of removing at leas t 75 percent of the mercury from the kiln emissions and likely will be able to meet or exceed the upper end goal of 85 percent removal. Notwithstanding an initial investment of a pproximately $20 million in the controls and substantial annual operating expens e, the Durkee plant will not be able to comply with a PC MACT emission standard eq ual to the average emission rate of the 12 percent of the cement plants utilizing limestone with the lowest mercury content. If EPA does not subcategorize in order to recognize the unique attribut es of plants such as the Durkee plant, then the Durkee plant will likely have to shut down and the controls go unused. This outcome is contrary to both the Clean Air Act and the statement in the D.C.

Circuit’s Brick MACT decision that “one legitimat e basis for creating additional subcategories must be the interest in k eeping the relation betw een ‘achieved’ and

‘achievable’ in accord with common sense and the reasonable meani ng of the statute.” EPA can keep the relation between “achieve d” and “achievable” in accord with common sense and the reasonable meaning of the statut e by establishing a subcategory for the high mercury limestone sources and requiring that they employ the now proven state of the art controls in use at the Durkee plant.

Thank you for your considerati on of this information.

Sincerely,

Curtis D. Lesslie, P.E. Vice President, Environmental Affairs Ash Grove Cement Company

cc: Steve Silverman

Keith Barnett100015002000250030405060708090100 LBS PAC Injected

% Hg Emission ReductionDurkee Plant - Pulverized Activated Carbon InjectionSaturatedPAC RemovedSaturatedPACRemoved05000102030

%PAC Injected LBS% HG Reduction050010001500200025000102030405060708090100 LBS PAC Injected

Run Hours and % Hg RemovalDurkee Plant - Pulverized Activated Carbon InjectionKiln Status HRS RunRM Status HRS Run% HG ReductionPAC Injected LBS