From: "Laura K. McAfee" <LMcAfee@bdlaw.com>

To: Chuck French/RTP/USEPA/US@EPA Cc: Conrad Chin/RTP/USEPA/US@EPA Date: 10/04/2012 04:02 PM Subject: RE: Summary of 2012 Stack Test ing and Historical PM data

Hi Chuck

–

I have forwarded this on to the client to see what we have.

In the interim, I wanted to get back to you on the question you asked a few weeks ago about the potential costs associated with using ACI at Fe lman’s facility. Since we originally spoke, we have had LAN looking into this to attempt to develop some cost calculations, although they are understandably rough figures given the short time available and the fairly speculative nature of the potential s ystem.

A few notes:

 First, you specifically asked only about the costs associated with disposing of vs. recycling the baghouse dust, because you indicated you already had a good sense of the capital costs
associated with an a ctivated carbon system f rom Eramet’s submission. We respectfully disagree
with that conclusion: as we discussed briefly on the phone, Felman’s existing baghouse system is different from Eramet’s (positive pressure vs. negative pressure) and therefore requires a different configuration for an ACI system. We have therefore developed cost estimates for both capital and operating costs.

 We have developed two cost estimates reflecting two different alternatives for insta lling ACI.
The first would involve adding ACI to the current Felman configuration, i.e., upstream of the current positive pressure baghouses. The second would involve replacing Felman’s current baghouses with negative pressure baghouses, then adding the ACI system before a new polishing baghouse.

 Where possible, we have calculated costs using the same inputs EPA and Eramet used to
estimate ACI costs at Eramet’s facility, from the cost equations developed for the Utility NESHAP (as reflected in a Marc h 2011 Memorandum from Sargent & Lundy).

 Flow rates are based on the flow rates measured during Felman’s stack tests from July and November, 2010 and August 2012.

 You asked specifically whether the baghouse dust, which is currently recycled to the p rocess for
its manganese content, would have to be disposed of as a hazardous waste if ACI were installed.
At this point, we cannot determine whether the mercury in the dust would require disposal as ahazardous waste, so we have calculated two differen t figures to reflect both alternatives. The

primary concern would be the potential for mercury to accumulate in the dust if the dust was recycled to the process, which could create both a health concern for Felman workers and a waste disposal concern. As a side note, the Felman facility experienced a similar situation several years ago due to the use of an ore with a higher lead content. As a result of the lead levels in the baghouse dust, Felman was not able to either recycle the dust or find a purcha ser for the dust; Felman ultimately paid approximately $750K to dispose of dust that had accumulated at the site. Felman is understandably hesitant to pursue any alternatives that might re

- create a similar situation.

Option 1

Option one involves ad ding ACI upstream of Felman’s current positive pressure baghouses. Felman
estimates that the capital costs of this installation would be approximately $10MM for all three furnaces
combined.

Because this option would install the ACI upstream of the baghouses, Felman would lose the opportunity to recycle the baghouse dust back to the process because of the mercury in the dust. Felman currently recycles approximately 1,200 tons/month of baghou se dust back to the process from
all three furnaces combined. Accordingly, this alternative would require Felman to: (i) dispose of approximately 1,200 tons/month of dust as waste (which alone would cost between $48,000

- $480,000/month, using Eramet’s est imate of $40/ton for nonhazardous waste disposal and $400/ton for hazardous waste disposal); and (ii) purchase the equivalent amount of ore to make up for the manganese in the baghouse dust (approximately $750,000

- $1MM/year, based on the cost and grade of the ore).

LAN has calculated that the annual operating costs, including capital recovery, would range from approximately $3.2MM (if the dust is non

- hazardous waste) to $8.5MM (if the dust is hazardous waste).

Option 2

Option 2 involves replac ing the current positive pressure baghouses with negative pressure baghouses, installing ACI downstream of these baghouses, and then installing a new polishing baghouse after the ACI system. This system would have the benefit of allowing Felman to contin ue to recycle the dust from the initial baghouses and therefore minimizing both waste disposal and replacement raw material costs. However, the costs of installing and operating the new systems more than offset these cost savings. LAN
has calculated that the capital cost of installing all of the required new baghouse systems would exceed $120MM, and that the annual operating costs would exceed $16MM (again including capital recovery).

As another point of comparison, LAN’s calculations indicate that i nstalling an ACI system at Felman’s facility would cost between $28,000

- $143,000 per pound of mercury removed (assuming that both theassumed mercury levels and assumed mercury removal rates are accurate). Felman believes that these

figures demonstrate t hat an ACI system is simply not cost

- effective.

I hope this answers your question.

Laura Laura K. McAfee Principal Beveridge & Diamond, P.C.
201 North Charles St. Suite 2210 Baltimore, MD 21201 T (410) 230

- 1330 ~ F (410) 230

- 1389 LMcAfee@bdlaw.com

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*************************************************************************************

From: Chuck French [mailto:French.Chuck@epamail.epa.gov] Sent: Wednesday, October 03, 2012 4:39 PM
To: Laura K. McA fee
Cc: Conrad Chin Subject: Re: Summary of 2012 Stack Testing and Historical PM data

Hi Laura,

Thank You very much for sending the test result summaries. The data are helpful. I have another
request. We are trying to make sure the emissions release heights that we input to the model are as

accurate as we can get them. Attached is a table of the process units and information we have on release heights that we got from the 2010 ICR responses. You will see that several cells are empty (i.e.,
no releas e height info). Could you and your colleagues please review this table and provide your best
estimates of release heights for each of these emissions sources? Also, let us know if you have any
corrections. Please let us know as soon as you can.

Thank You.Let me know if you have questions.

Chuck French Group Leader Metals and Inorganic Chemicals Group Office of Air Quality Planning and Standards
U.S. EPA
Phone: 919

- 541

- 7912