1 Attachment

Christian

Here is the technical amendment le tter for subpart KKKK we discussed

Jerry Joseph URS Corporation

Foster Plaza 4 501 Holiday Drive Suite 300 Pittsburgh, Pa 15220 Technical amendment Jerry_Joseph
to: Christian Fellner 02/07/2011 04:46 PM Cc: "Lash,Frederick W." Hide Details From: Jerry_Joseph@URSCorp.com

To: Christian Fellne r/RTP/USEPA/US@EPA

Cc: "Lash,Frederick W." <LASHFW@airproducts.com>

History: This message has been replied to.

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...Air Products and Chemicals, Inc. 7201 Hamilton Boulevard Allentown, PA 18195-1501 Telephone (610) 481-4911 8 February 2011

Mr. Christian Fellner Energy Strategies Group Sector Policies and Programs Division (D243–01) U.S. EPA, Research Triangle Park, NC 27711,

Subject: Blast Furnace Gas (BFG) Energy Recovery New Source Performance Standard KKKK

Dear Mr. Fellner:

As we have discussed, Air Products and Chemicals, Inc. (Air Products) is requesting a technical amendment to New Source Performance Standards (NSPS) 40 CFR 60 Subpart KKKK (Standards of Performance for Stationary Combustion Turbines). The amendment is needed to avoid an unintended and undesirable obstacle to new waste energy recovery technology. The amendment will correct an oversight in the current rule, and avoid double counting sulfur dioxide (SO 2 ) emissions from blast furnace gas (BFG) combustion.

Blast Furnace Gas Energy Recovery In the steel industry, BFG is a by-product that is generated when the iron ore is reduced with coke to metallic iron in a blast furnace. BFG has a very low heating value (compared to natural gas or fuel oil) because it consists predominantly of carbon monoxide plus nitrogen and carbon dioxide

. BFG is typically utilized as a fuel in some of the steel making operations, including boilers to produce plant steam. However, at a number of steel mills, a significant portion of the BFG is flared for safety purposes, due to a lack of viable energy recovery options.

In the U.S., BFG has never been recovered and combusted in a gas turbine. The first BFG-fired combustion turbine in the U.S. is proposed by Air Products, to be installed next to the blast furnace at AK Steel Corporation's Middletown Works in Middletown, Ohio. The Department of Energy has approved a $30 million in financial assistance for the project under the American Recovery and Reinvestment Act of 2009. Rerouting BFG from a flare to a combustion turbine does not add any SO 2 or CO 2 emissions (which are the same whether the BFG is flared or used as a combustion turbine fuel), but recovers waste energy and more efficiently (higher energy recovery rate than boilers in use at typical mills) produces useful electricity and industrial process steam than would otherwise be generated from incremental fossil fuel consumption. For the AK Steel project, the technology will reduce NOx emissions by more than 500 tons per year.

Additionally, use of these BFG waste gases to generate electricity will reduce overall CO 2 emissions, a greenhouse gas affecting global climate change. For the AK Steel project it is2 estimated it will displace between 600,000 to 800,000 tons of CO 2 per year, in addition to other regulated pollutants (including SO 2 , NOx, PM, and mercury) otherwise emitted from fossilfueled power plants in the region.

Waste energy recovery projects of this type are consistent with the EPA’s direction to reduce emissions of both criteria pollutants and greenhouse gasses. It generates new increments of electricity with overall reductions of emissions. In addition, this type of facility improves the energy efficiency of a key industrial enterprise, a corollary goal of federal EPA. And it is consistent with EPA’s past support for combined heat and power (CHP) projects and support for cogeneration, in general. Presuming this project is successful, Air Products intends to develop analogous projects at other U.S. steel manufacturing sites.

With regards to the local economy, Middletown Cogen will support AK Steel Middletown Works' efforts to remain cost-competitive through stabilization of energy pricing. It will help preserve over 2,000 steelmaking and related jobs at the site.

Near term economic stimulus will include adding 140 plus construction jobs over ~2.5 years beginning in 2012, with the long term creation of ~14 new permanent jobs on-site, plus local maintenance work. Importantly the local economy will see both direct and indirect economic benefits -- resulting in an infusion of nearly $600 million into the local economy.

Attachment 1 contains letters from DOE concerning the finding of no significant impacts from the proposed project to combust blast furnace gas.

Regulatory Background It is clear from the regulatory rulemaking for Subpart KKKK, that conversion of low-Btu BFG into useful electricity and process steam was not considered in setting the standard for a fuel's potential sulfur dioxide emissions. EPA intended that fuels with sulfur concentrations of 500 parts per million by weight (ppmw) or less would be compliant with the SO 2 limits in Subpart KKKK, which was reflected in the proposed rule (70 FR 8314). Although the final rule (71 FR 38482 contains a fuel-based SO 2 limit of 0.060 pounds per million British thermal units (lb/MMBtu), the preamble noted that the adopted SO 2 limit was based on the potential SO 2 emissions rate of natural gas containing 20 grains of sulfur per 100 standard cubic feet and 500 ppmw sulfur distillate oil.

EPA further clarified this position when the Agency issued the direct final rule on March 20, 2009 amending Subpart KKKK by adding a new subcategory and SO 2 limit for biofuels. In this direct final rule, EPA stated the rationale was:

...fuels with low energy density, such as biogas, have a higher potential SO2 emission rate relative to the sulfur concentration in the fuel because of their lower heating value. As a result, this change in format is causing difficulties for owners/operators of new stationary combustion turbines planning to burn landfill gas. We did not intend, in adopting the rule, to require biogas projects (landfill gas, digester gas, etc.) burning fuel with less than 500 ppmw sulfur, but having a potential SO2 emission rate of greater than 0.060 lb/ MMBtu due to the low heating value of the gas, to install an SO2 control device.

As currently written § 60.4330(a)(2) requires owners/operators of combustion turbines burning biogas containing more than approximately 180 ppm hydrogen sulfide (H2S) to3 install SO2 controls, which was neither proposed nor intended. To remedy this, we are establishing a new subcategory for owners/operators of stationary combustion turbines burning over fifty percent biogas. The new subcategory will have an SO2 limit of 0.15 lb/MMBtu (closer to the original fuel-based 500 ppm sulfur limit) ....

Proposed Technical Amendment A technical amendment is proposed to the Subpart KKKK emission limits for sulfur dioxide (SO 2 ) as applied to BFG, to avoid an unintended and undesirable obstacle to new waste energy recovery technology. The amendment will correct an oversight in the current rule, and avoid double counting SO 2 emissions from BFG combustion.

The use of BFG as a fuel for combustion turbines was not considered in the proposed or final Subpart KKKK rules. BFG has never before been used as a fuel for combustion turbines in the U.S., but technology is now available to do so. The proposed technical amendment to Subpart KKKK will rectify an unintended obstacle to the environmentally beneficial use of BFG in a combined heat and power application.

First-of-its-kind technology to burn BFG in a combustion turbine combined heat and power generator provides substantial environmental benefits and public policy benefits.

Conversion of low-Btu BFG into useful electricity and process steam was not taken into account in setting the standard for a fuel's potential sulfur dioxide emissions. Since BFG is a recovered waste rather than a newly supplied fossil fuel such as natural gas or fuel oil, it does not add SO 2 emissions. To address new combustion turbine technology that can be fired with a combination of BFG and natural gas, the proposed amendment applies the sulfur-to-Btu ratio requirement in 40 CFR 60.4330(a)(2) to only the newly-added fuel, natural gas. The proposed amendment simply applies the standard to fuels "other than blast furnace gas." A definition of "blast furnace gas" is proposed to be added to 40 CFR 60.4420. A redline of the existing rules with the proposed amendment is included as Attachment 2.

In summary, Air Products respectfully requests EPA to review and approve this technical amendment in an expeditious manner, using the administrative path EPA believes to be most suited for this action. If you have any questions, please telephone me at 610-481-6241. Thank you for your consideration and assistance in this matter.

Most Sincerely,

Frederick Lash Air Products and Chemicals, Inc. Lead Environmental Specialist lashfw@airproducts.comATTACHMENT 1

Air Products FONSIAttachment 2

Suggested Technical Amendment

Subpart KKKK—Standards of Performance for Stationary Combustion Turbines

Changes highlighted in red

§60.4330 What emission limits must I meet for sulfur dioxide (SO 2 )?

(a) If your turbine is located in a continental area, you must comply with either paragraph (a)(1), (a)(2), or (a)(3) of this section. If your turbine is located in Alaska, you do not have to comply with the requirements in paragraph (a) of this section until January 1, 2008.

(1) You must not cause to be discharged into the atmosphere from the subject stationary combustion turbine any gases which contain SO 2 in excess of 110 nanograms per Joule (ng/J) (0.90 pounds per megawatt-hour (lb/MWh)) gross output;

(2) You must not burn in the subject stationary combustion turbine any fuel, other than blast furnace gas , which contains total potential sulfur emissions in excess of 26 ng SO 2 /J (0.060 lb SO 2 /MMBtu) heat input. If your turbine simultaneously fires multiple fuels, each fuel, other than blast furnace gas must meet this requirement; or

(3) For each stationary combustion turbine burning at least 50 percent biogas on a calendar month basis, as determined based on total heat input, you must not cause to be discharged into the atmosphere from the affected source any gases that contain SO 2 in excess of 65 ng SO 2 /J (0.15 lb SO 2 /MMBtu) heat input.

(b) If your turbine is located in a noncontinental area or a continental area that the Administrator determines does not have access to natural gas and that the removal of sulfur compounds would cause more environmental harm than benefit, you must comply with one or the other of the following conditions:

(1) You must not cause to be discharged into the atmosphere from the subject stationary combustion turbine any gases which contain SO 2 in excess of 780 ng/J (6.2 lb/MWh) gross output, or

(2) You must not burn in the subject stationary combustion turbine any fuel which contains total sulfur with potential sulfur emissions in excess of 180 ng SO 2 /J (0.42 lb SO 2 /MMBtu) heat input. If your turbine simultaneously fires multiple fuels, each fuel must meet this requirement.

[71 FR 38497, July 6, 2006, as amended at 74 FR 11861, Mar. 20, 2009]

§ 60.4420 What definitions apply to this subpart?

As used in this subpart, all terms not defined herein will have the meaning given them in the Clean Air Act and in subpart A (General Provisions) of this part.

Biogas means gas produced by the anaerobic digestion or fermentation of organic matter including manure, sewage sludge, municipal solid waste, biodegradable waste, or any other biodegradable feedstock, under anaerobic conditions. Biogas is comprised primarily of methane and CO 2

.

Blast Furnace Gas means that gas by-product of blast furnaces when iron ore is reduced with coke to metallic iron