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Date: December 1 5 , 2010 (Updated J uly 27 , 2011)

Subject: Impacts of Nitric Acid NSPS Review

— NO X

Nitric Acid NSPS Review

EPA Contract No. EP

- D

- 06

- 118; Work Assignment No. 4

- 3
RTI Project No. 0210426.00 4 .0 03

From: Melissa Icenhour

To: Bill Neuffer

OAQPS/SPPD/MMG (D243

- 02)
U. S. Environmental Protection Agency Research Triangle Park, NC 27711

The EPA is required by section 111(b)(1)(B) of the Clean Air Act (CAA) to review and, if appropriate, revise existing New Source Performanc e Standards (NSPS) at least every 8 years.

The nitric acid NSPS (part 60, subpart G) has been reviewed in the past but the last review was
more than 8 years ago. As a result of this, EPA has received a citizen suit from Sierra Club and

Environmental Inte grity Project prompting a review of the standards.

The purpose of an NSPS review is to determine if the standards reflect the “degree of emissions
limitation achievable through application of the best system of emission reduction which (taking

into accoun t the cost of achieving such reduction and any nonair quality health and
environmental impact and energy requirements) the Administrator determines has been adequately demonstrated.”

EPA issued an Information Collection Request (ICR) under Section 114 aut hority to obtain NO X emissions data using EPA Methods 7, 7A, 7B, 7C, 7D, 7E (modified version), or 320. The ICR

also collected cost data for NO X abatement technologies, including nonselective catalytic
reduction (NSCR), selective catalytic reduction (SCR), and H 2 O 2 injection . Cost data w ere
received from 9 facilities with a total of 12 nitric acid production trains . This information was

summariz ed in Summary of Cost Data Received from Section 114 ICR (NO X Summary) dated

November 22 , 2010

. The c apital recovery factor was based on 7% interest and 15 year useful

life.

The purpose of this memo is to calculate the expected cost impacts for new sources to meet a

standard of 0. 5 lb NO X

/ton nitric acid or 1.9 lb NO X /ton nitric acid

.2

The NO X Summary memo contained production data ranging from 40 tons per day (tpd) to 1,600 tpd of nitric acid. T he data supports the use of two model plants to represent the nitric acid
production industry. The first model plant is 300 tpd and the second model plant is 1,000 tpd. In

the NO X Summary memo, the cost data were normalized based on the production rate at the
facility (cost per ton of nitric acid p roduced). Table 1 shows the results of the cost data analysis

for NO X c ontrol.

Table 1. Normalized NO X Control Costs by Model Plant

Control 300 tpd ($/ton) 1,000 tpd ($/ton)

NSCR $20.02 $7.80

SCR $3.93 $1.10

H 2 O 2 $2.06 $1.36

Nitric acid production was estimated for 2006 (TSD for Greenhouse Gas Reporting Rule), using
the production growth of 6.5% from 2006 to 2007 (ICIS) and the predicted production growth rate of 3% for 2007 through 2016 (ICIS). These estimates are shown in T able 2. In the period
from 2010 through 2016, the growth was approximately 1. 6 million tons of nitric acid. Assuming 350 days per year, this equals approximately 4

, 586 tpd of nitric acid production

. Using the model plants, the estimate of 4

, 586 tpd equa ls 2 production trains that produce 300 tpd, and 4 production trains th at produce 1,000 tpd over the f ive year period after promulgation

.

Table 2. Nitric Acid Production Growth

Year Nitric acid

produced
(metric tons) Nitric acid

produced (tons) Increase

(tons)

2006 6,446,767 7,107,560 461,991

2007 6,865,806 7,569,552 227,087

2008 7,071,781 7,796,638 233,899

2009 7,283,934 8,030,537 240,916

2010 7,502,452 8,271,453 248,144

2011 7,727,526 8,519,597 255,588

2012 7,959,351 8,775,185 263,256

2013 8,198,132 9,038,441 271,153

2014 8,444,076 9,309,594 279,288

2015 8,697,398 9,588,882 287,666

2016 8,958,320 9,876,548

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For the 6 new production trains predicted from 201 1 to 2016, the annualized cost s of controlling

NO X emissions for the 3 types of control equipment outlined in The NO X Summary were
calculated using the costs in Table 1. The control costs are shown in Table 3. These are the

costs for each of the control devices in the 5 th year after promulgation of thes e standards.

Table 3

. NO X Control Costs for All New Production Trains in 2016

Model Plant (tpd) Number of

Plants Nitric Acid ( tons ) NSCR SCR H 2 O 2

300 2 210,000 $4,204,200 $825,300 $432,600

1,000 4 1,400,000 $10,920,000 $1,540,000 $1,904,000

The production trains could use any of the three control types to control NO X emissions, as

shown by the control efficiencies in Table 4, but we assumed that SCR would be universally
applied. While hydrogen peroxide injection has the lowest potential costs, t his control may not

be feasible for all new production trains

.

Table 4

. NO X Control Efficiencies

Control Efficiency

NSCR 99%

SCR 98%

H 2 O 2 95%

Emission Limit of 0. 5 lb NO X /ton

Using the control efficiency for SCR, the potential NO X emission reductions were calculated in

Table 5. The baseline e missions were calculated as 3.0 lb NO X /ton acid (the level of the existing
NSPS). The controlled emissions were calculated as 0

. 5 lb NO X /ton acid

.

Table 5. NO X Emission Reductions for All New Production Trains with SCR Control in

2016

Model

Plant (tpd) Days per

year Number

of Plants Nitric

Acid
(t ons ) Baseline

NO X (lb/ton) Controlled

NO X (lb/ton
acid) Controlled

NO X Emissions
(t ons ) NO X

Emission

reductions
(t ons )

300 350 2 210,000 3

. 0 0. 5 53 263

1,000 350 4 1,400,000 3

. 0 0. 5 350 1,750

The last step in calculating impacts for new sources to meet the revised standard of 0. 5 lb

NO X /ton acid is to calculate the costs and reductions per year over the 5 year period after promulgation. In addition to control equipment, each new production train will also be required
to install a stack gas flow monitor. The annualized cost of a stack g as flow monitor is $15,0194

for 2 nd quarter of 2010. The requirement of a NO X CEMS was included in the existing NSPS so its cost is not included in this analysis.

The SCR is already being used to control NO X emissions to the current NSPS level of 3.0 lb

NO X /ton acid. As shown in Summary of Test Data Received from Section 114 ICR , dated August

25, 2010

, there are 5 production trains using SCR that already meet the proposed revised NSPS

level of 0. 5 lb NO X

/ton acid. The control device costs are based on current usage where sources are only required to meet 3.0 lb NO X /ton. Sources are not likely to spend additional money to

meet a limit of 0. 5 lb NO X /ton acid that is not mandatory. Therefore, we believe t hat the lower limit is achievable without additional cost impacts.

Accordingly, t here is no incremental control cost s to control NO X emissions from the current

NSPS limit of 3.0 lb NO X /ton acid to the proposed revised NSPS limit of 0. 5 lb NO X /ton acid

. The costs of adding stack flow monitors in the 5 th year after promulgation are shown in Table 6.

Table 6

. Incremental Costs in 5 th Year after Promulgation for All New Production Trains

Model

Plant (tpd) Number

of Plants SCR Cost

($2010

- 2 nd quarter) Stack flow monitor cost ($2010

- 2 nd quarter) Total Annualized Costs ($2010

- 2 nd quarter)

300 2 $0 $30,038 $30,038

1,000 4 $0 $60,076 $60,076

Using the total costs of SCR costs and monitoring costs, the cost effectiveness was also

calculated. These numbers are shown in Table 7.

Table 7

. Incremental Cost Effectiveness in 5 th Year after Promulgation for All New

Production Trains

Model Plant (tpd) Number of

Plants Total Annualized

Costs
( $ 2010

- 2 nd quarter ) NO X Emission
reductions (tpy) Cost

effectiveness ($/ton NO X )

300 2 $30,038 263 $ 114.21

1,000 4 $60,076 1,750 $ 34.33

For the 300 tpd model plant, total annualized costs in the 5 th year after promulgation are $ 30,038

. The amount of NO X reductions expected in the 5 th year after promulgation is 2 63 tpy. This results in a cost effectiveness of approximately $ 11 5

.

For the 1,0 00 tpd model plant, total annualized costs in the 5 th year after promulgation are
$ 60 ,0 7 6 . The amount of NO X reductions expected in the 5 th year after promulgation is 1

, 750 tpy. This results in a cost effectiveness of approximately $ 3 5

.5

Emission Limit of 1.9 lb NO X /ton

Using the control efficiency for SCR, the potential NO X emission reductions were calculated in

Table 8. The baseline emissions were 3.0 lb NO X /ton acid and the controlled level equals 1.9 lb

NO X /ton acid.

Table 8. NO X Emission Reductions with SCR Control for All New Production Trains in

2016

Model

Plant (tp d) Days per

year Number

of Plants Nitric

Acid
(tons) Baseline

NO X (lb/ton) Controlled

NO X (lb/ton
acid) Controlled

NO X Emissions
(tons) NO X

Emission

reductions
(tons)

300 350 2 210,000 3.0 1.9 200 116

1,000 350 4 1,400,000 3.0 1.9 1,330 770

The last step in calculating impacts for new production lines to meet the revised standard of 1.9

lb NO X /ton acid is to calculate the costs and reductions per year over the 5 year period after
promulgation. In addition to control equipment, new sources will also b e required to install a stack gas flow monitor. The annualized cost of a stack gas flow monitor is $15,019 per new
production train for 2 nd quarter of 2010. The requirement of a NO X CEMS was included in the existing NSPS so its cost is not included in th is analysis.

As discussed above, the SCR is already being used to control NO X emissions to the current

NSPS level of 3.0 lb NO X /ton acid. As shown in Summary of Test Data Received from Section

114 ICR , dated August 25, 2010, there are 5 production trains using SCR that already meet the
proposed revised NSPS level of 1.9 lb NO X /ton acid. Therefore, we believe that the lower limit is achievable without additional cost impacts.

Accordingly, there is no incremental control cost to control NOx emissions from the current

NSPS limit of 3.0 lb NO X /ton acid to the proposed revised NSPS limit of 1.9 lb NO X /ton acid. The costs of adding stack flow monitors in the 5 th year after promulgation are shown in Table 9.

Table 9. Costs in 5 th Year after Promulgation for All New Production Trains

Model

Plant (tpd) Number of

Plants SCR Cost

($2010

- 2 nd quarter) Stack flow monitor

cost ($2010

- 2 nd quarter) Total Annualized

Costs ($2010

- 2 nd quarter)

300 2 $0 $30,038 $30,038

1,000 4 $0 $60,076 $60,076

Using the total costs of SCR costs and monitoring costs, the cost effectiveness was also

calculated. These numbers are shown in Table 10.6

Table 10. Cost Effectiveness in 5 th Year after Promulgation for All New Production Trains

Model Plant (tpd) Number of Plants Total Annualized

Costs ($2010

- 2 nd

quarter) NO X Emission

reductions (tpy) Cost

effectiveness ($/ton NO X )

300 2 $30,038 116 $258.95

1,000 4 $60,076 770 $78.02

For the 300 tpd model plant, total annualized costs in the 5 th year after promulgation are $30,038.

The amount of NO X reductions expected in the 5 th year after promulgation is 116 tpy. This results in a cost effectiveness of approximately $260.

For the 1,000 tpd model plant, total annualized costs in the 5 th year after promulgation are $60,076. The amount of NO X reductions expected in the 5 th year after promulgation is 770 tpy. This results in a cost effectiveness of approximately $80.

Incremental New Source NO X Control Costs

The incremental cost of lowering the NO X emission limit from 1.9 to 0

. 5 is the difference in costs and emission reductions between the two options (Table 7 and Table 1 0 ). These are shown

in Table 15. Our costs are only dependent on the type of control and the size of the production line. Both emission limits are believed to be achieved by using SCR so there is no difference in
cost between the two options. In this case, the incremental costs betwee n the two options are negligible so the lower emission limit of 0. 5 lb NO X /ton is recommended.

Table 15. Incremental Cost from 1.9 lb NO X /ton to 0. 5 lb NO X /ton for All New Production

Trains

Emission Limit Cost Emission reductions
(NO X ) Cost effectiveness

($/ton NO X )

0. 5 $90,112 2,013 $ 44.78

1.9 $90,112 886 $10 1

. 76

DIFFERENCE $ 0 1,127 $07

References

CEMS Cost Model. Updated March 2007. Accessed November 17, 2010.

Memorandum from M. Icenhour, RTI International, to B. Neuffer, EPA. Summary of Cost Data
Received from Section 114 ICR

. November 22 , 2010.

Memorandum from M. Icenhour, RTI International, to B. Neuffer, EPA. Summary of Test Data Received from Section 114 ICR

. August 2 5 , 2010.

U. S. EPA. Technical Support Document for the Nitric Acid Production Sector: Proposed Rule for Mandatory Reporting of Greenhouse Gases, January 22, 2009.
http://www.epa.gov/cli matechange/emissions/archived/downloads/tsd/TSD%20Nitric%20Acid%

20_EPA%201

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