Document ID: EPA-R02-OAR-2018-0817-0004
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2019-03-25T04:00Z

Technical Support Document
           NOx RACT Source Specific SIP Revision State of New Jersey
                                      for
             Commercial Metals Company formerly Gerdau Ameristeel
                             Sayreville, New Jersey

                                       
 INTRODUCTION

   Title I of the Clean Air Act Amendments of 1990 (CAA) contains many requirements for areas that have not attained the national ambient air quality standards (NAAQS) for six criteria air pollutants, one of which is ground level ozone. The EPA published guidance on April 16, 1992, General Preamble to Title I, to assist states regarding interpretations of various Title I provisions. On November 25, 1992 the EPA published a supplement to the General Preamble to Title I to clarify requirements for nitrogen oxides (NOx), referred to as the NOx Supplement. See 57 FR 55620. The NOx Supplement is important to mention because the CAA §182, Plan Submission Requirements, for the most part specifies volatile organic compounds (VOC) and NOx for serious, severe and extreme nonattainment, and although intended, CAA section 182 does not express NOx for marginal and moderate nonattainment areas. The state of New Jersey is designated marginal and moderate nonattainment and is part of the Ozone Transport Region (OTR). 

   This TSD outlines the state of New Jersey Department of Environmental Protection's (NJDEP's) State Implementation Plan (SIP) revision to the 8-hour ozone SIP for NOx. Specifically, the State seeking EPA's approval to continue to operate under the facility's 2005 facility specific emission limit (FSEL) for controlling NOx emissions with ultra-low NOx burners on the 172.8 million British Thermal Units per hour (MMBtu/hr) natural gas fired billet reheat furnace (BRF). The affected source will not increase hourly NOx emissions, therefore, the NAAQS for ground level ozone is protected.
   Please note that on December 5, 2018, the NJDEP approved an administrative amendment reflecting new ownership and name change of the Sayreville facility from Gerdau Ameristeel to Commercial Metals Company. All control options for the Sayreville BRF and CAA permit limits (as approved by the NJDEP in the March 2005 NOx control plan) remain the same under the new ownership as were under the former owner Gerdau Ameristeel. 
II.	CLEAN AIR ACT REQUIREMENTS FOR NOx OZONE AND RACT
      
A.	Federal NOx Ozone Requirements  

Ground level ozone is created by chemical reactions between NOx and VOCs when pollutants emitted by sources chemically react in the presence of sunlight. Nonattainment for ground level ozone is defined as an area that is not meeting (or that contributes to ambient air quality in a nearby area that does not meet) the primary or secondary NAAQS for 8-hour ozone. Nonattainment areas are classified as either marginal, moderate, serious, severe, or extreme. The state of New Jersey is nonattainment for ozone comprised of two multi-state 8-hour ozone nonattainment areas; the Philadelphia-Wilmington-Atlantic City (PA-NJ-MD-DE) area is currently designated as a marginal nonattainment area, and the New York-Northern New Jersey-Long Island (NY-NJ-CT) area is currently designated as a moderate nonattainment area. Furthermore, the state of New Jersey is located in the Ozone Transport Region (OTR) . 

   The CAA section 182, Plan Submissions and Requirements, requires states with nonattainment areas to include in their SIPs, among other things, provisions to require the implementation of reasonably available control technology (RACT). However, section 182(f) does not fully clarify NOx requirements for marginal and moderate nonattainment as it explicitly speaks of NOx requirements only for serious, severe and extreme nonattainment (i.e., 182(c), (d), and (e) respectively). Also, 182(f) outlines requirements that do not apply to the OTR; not where they do apply. The NOx Supplement explains that the CAA section 182(f), read in conjunction with section 182(a)(2)(C) and other New Source Review (NSR) related provisions in section 182, require state NSR plans to apply to major stationary sources of NOx, the same requirements that govern major stationary sources of VOC emissions in ozone nonattainment areas and in other areas located in OTR. Section182(a)(2)(C) requires states to adopt and submit revised NSR regulations for all ozone nonattainment areas classified as marginal or above. 

   In addition, the CAA section 184(a), Control of Interstate Ozone Air Pollution, Ozone Transport Regions, addresses requirements for nonattainment areas located in the OTR, and the CAA section 176A, Interstate Transport Commissions, set forth the formation and responsibilities for the Ozone Transport Commission, that among other things, the Commission establishes control measures for RACT NOx for major sources located in the OTR.  

B.	Federal Ozone Design Values and Standards

A design value is a statistic that describes the air quality status of a given location relative to the level of the NAAQS. In 1997, the EPA revised the health-based NAAQS for 8-hour ozone, setting it at 0.084 parts per million (ppm) averaged over an 8-hour time frame. This rule became effective on September 16, 1997.  See 62 FR 38856. This rulemaking was based on scientific evidence demonstrating that ozone causes adverse health effects at lower ozone concentrations and over longer periods of time than was understood when the 1-hour ozone standard was set in 1979.   

   On April 30, 2004, the EPA finalized attainment/nonattainment designations for areas across the country with respect to the 1997 8-hour ozone standard and set design values based on fourth-highest daily maximum, averaged across three consecutive years. This rule became effective on June 15, 2004. See 69 FR 23951. 

   On November 29, 2005, the EPA finalized rules regarding emissions control and planning obligations applicable to areas designated nonattainment for 1997 8-hour ozone, including RACT measures and attainment demonstrations among other elements. This rule became effective on January 30, 2006.   See 70 FR 71612.

   The EPA has revised the 1997 8-hour ozone standard twice since 1997. First, on March 27, 2008, the standard was revised to 0.075 ppm. This rule became effective on May 27, 2008. See 73 FR 16436. On May 21, 2012, the EPA finalized the air quality thresholds that define the classifications assigned to all nonattainment areas for the 2008 ozone NAAQS. This rule became effective on July 20, 2012. See 77 FR 30088.

   Then, the EPA revised the 1997 8-hour ozone standard again on October 26, 2015, down to 0.070 ppm, but retained the 2008 ozone indicators, design value (i.e., fourth-highest daily maximum, averaged across three consecutive years) and averaging times (eight hours). This rule became effective December 28, 2015. See 80 FR 65292. On March 9, 2018, the EPA finalized the air quality thresholds that define the classifications assigned to all nonattainment areas for the 2015 ozone NAAQS. This rule became effective on May 8, 2018.  See 83 FR 10376.  

C.	Federal RACT Requirements   

RACT is defined as the lowest emission limit that a particular source is capable of meeting by the application of control technology that is reasonably available considering technological and economic feasibility. All the state of New Jersey is subject to RACT due to nonattainment area designations for the 8-hour ozone standard at 40 CFR 81.331. In addition, the entire state of New Jersey is located within the OTR, which triggers the RACT NOx requirements.  

   On November 29, 2005, the EPA published a "Phase 2 Rule" that discusses the RACT requirements for the 1997 8-hour ozone standard. See 70 FR 71612. Among other things, the Phase 2 Rule outlines the SIP requirements and deadlines for various areas designated as moderate nonattainment. The Phase 2 Rule states, in part, that where a RACT SIP is required, SIPs implementing the 8-hour ozone standard generally must ensure that RACT is met, either through a certification that previously required RACT controls represent RACT for 8-hour ozone implementation purposes or, where necessary, through a new RACT determination. Under EPA guidance, States should consider in their RACT determinations technologies that achieve 30 - 50 percent reduction within a cost range of $160 - 1300 per ton of NOx removed. See 70 FR 71652. 

D. 	NJ RACT Requirements

The state of New Jersey chose a uniform applicability level for RACT analysis for the entire state based on the New Jersey's previous classification under the 1979 one-hour ozone standard as in severe nonattainment, which resulted in a statewide definition of major sources of NOx and VOC as those emitting 25 tons per year or more of VOC and/or NOx. New Jersey could have chosen to apply, for example, the major source threshold (50 tons per year VOC, 100 tons per year NOx), for areas classified as moderate nonattainment, since one of its areas is currently classified as moderate under the 8-hour standard.  Instead, New Jersey chose to retain the more stringent 1-hour ozone limits statewide (25 tons per year or more of VOC and/or NOx) for RACT analysis purposes. The state of New Jersey's use of 25 tons per year major source threshold for RACT is consistent with the anti-backsliding provisions of the CAA.

   On August 1, 2007, the NJDEP finalized RACT revisions to its SIP to address the 8-hour ozone NAAQS (2007 NJ RACT plan) and on May 15, 2009 the EPA approved it. See 74 FR22837. Most counties in New Jersey were previously classified under the 1979 1-hour ozone standard as severe nonattainment (i.e., major source defined as 25 TPY NOx), and the remaining counties were subject to RACT as part of the OTR. In comparison, under the 1997 8-hour standard most of New Jersey was classified as moderate (i.e., major source defined as 100 TPY NOx). Leading up to 2007, the NJDEP worked collaboratively with stakeholders to conduct a RACT analysis of statewide NOx source operations and pieces of equipment that have the potential to emit 25 TPY because the State was interested in finding methods to go beyond the 1997 federal requirements. The result was that the NJDEP choose to implement more stringent RACT requirements based on the 1979 1-hour severe nonattainment. The use of 25 TPY for RACT is also consistent with the anti-backsliding provisions of the CAA. 
   
   The more stringent RACT requirements are outlined in the 2007 NJ RACT plan, at pages 18-21, as the following:
 past New Jersey costs for retrofitting a given control;
 average RACT cost (dollars per tons reduced) for a control technology and maximum RACT cost. The idea is that once a reasonable number of sources in a source category achieve a lower emission level, other sources should do the same;
 the seriousness of the Region's ozone air quality exceedance. For nonattainment areas with higher ozone levels higher cost for controls are reasonable;
 the seriousness of the need to reduce transported air pollution. As an OTR state, higher costs for RACT are justified; and
 the NJDEP plan for addressing economic feasibility in RACT rules. The NJDEP intends to specify RACT at the lowest emission limit that a reasonable number of similar industries had already successfully implemented for each source category

   Also, it is not uncommon for states to set RACT thresholds above the federal RACT levels.  For example, the current New York RACT threshold is $3,000 per ton NOx reduced per year.  See New York State Department of Environmental Conservation DAR-20 Economical and Technical Analysis for RACT (August 8, 2013), available at https://www.dec.ny.gov/chemical/91851.html

   The next step for the State was to codify in a rule by defining what is considered a major source of NOx, thus requiring use of RACT. On September 2, 2010 the EPA approved the NJDEP revised SIP to incorporate several amendments to the New Jersey Administrative Code Title 7, Chapter 27, one of which is Subchapter 19, "Control and Prohibition of Air Pollution from Oxides of Nitrogen" (N.J.A.C. 7:27-19). See FR 45483. As such, Subchapter 19.2 defines 14 sources as being major. Essentially 13 of the major sources derive from the stakeholder RACT study for sources with potential to emit 25 TPY NOx and thus have strictly defined maximum allowable emission rates. The fourteenth category is reserved for all other source operations or pieces of equipment that exceed 10 TPY NOx, such as the billet reheat furnace (BRF). 

III.	EPA'S ANALYSIS OF STATE SUBMITTAL  

 Gerdau Ameristeel, under new ownership as Commercial Metals Company, 1 N Crossman Road, Sayreville, Middlesex County, NJ 08872, Program Interest Number 18052, Activity Number BOP 150001 

In a letter dated March 20, 2018 from Debbie Mans, Deputy Commissioner NJDEP, to Peter D. Lopez, Regional Administrator U.S. EPA Region 2, the NJDEP requesting EPA's approval of a revision to the New Jersey SIP for 8-hour ozone. The SIP revision was submitted to EPA to evaluate Gerdau Ameristeel's request to continue to use the control options as outlined in the March 15, 2005 NOx control plan for maximum allowable NOx emission rate 58.9 TPY from the billet reheat furnace.

 EPA's Evaluation

OVERVIEW

The EPA reviewed Gerdau Ameristeel application and the NJDEP's source specific SIP revision for completeness and approvability and consulted with the State. Documents that were provided to EPA for review include the following:
 March 20, 2018, letter from NJDEP to EPA regarding SIP revision
 October 4, 2016, application package from Gerdau Ameristeel
 SIP completeness checklist
 Facility specific emission limit completeness plan for program interest number 18052, activity number BOP 150001, emission unit U2 (billet reheat furnace)
 Response to comments (no comments were received)
 Statement of basis
 Copy of public notice and opportunity for public hearing
 Copy of affidavit of publication of public notice
 Copy of N.J.A.C. 7:27-19 amended January 16, 2018

   The Sayreville BRF is used to raise the temperature of steel billets to the required level for hot rolling. This is a walking hearth furnace that provides an evenly heated product (steel billets) by applying heat from above. The facility currently has 64 roof mounted ultra-low NOx burners. A walking hearth furnace is predominately suited for small to medium size steel mills (the Sayreville facility is a mini steel mill). Due to the configuration of heat transfer mechanism only thinner steel can achieve proper reheating in a walking hearth furnace. This BRF creates 155-millimeter square billets cut to length and is designed to reheat the billets to 2100F that allow the billets to be reformed into reinforcing bars (e.g., "rebar" used in the construction industry). 

   Subchapter N.J.A.C. 7:27-19.13, "Alternative and facility specific NOx emission limits", gives legal authority to the State to approve FSEL for maximum allowable NOx emission rates and alternative emission limits (AEL) through mechanism of a NOx control plan submitted by a requesting facility. Subsection 19.13(a)(3) allows facilities that wish to continue to operate under an existing NOx control plan that was approved prior to May 1, 2005 to make the request by submitting an updated proposed NOx control plan. Gerdau Ameristeel made a request and was approved by the State prior to May 1, 2005. The facility originally submitted a FSEL NOx control plan for their old BRF to NJDEP in 1995, then in 2004 submitted to NJDEP a proposed FSEL NOx control plan for a replacement BRF designed with 64 ultra-low NOx burners. On March 15, 2005, the NJDEP authorized Gerdau Ameristeel to replace their BRF with ultra-low NOx burners. 
   
   The current Sayreville BRF has a heat input rating of 172.8 MMBTU/hr and is permitted under the facility's Clean Air Act Title V operating permit (i.e., PI 18052, BOP 150001) for no more than 0.1 MMBTU/hr of NOx, and as a major source with FSEL not to exceed 17.3 pounds NOx per hour and 58.9 tons NOx per year. The facility is required to conduct annual emission testing to demonstrate compliance with 0.1 lb/MMBtu NOx emission rate limit. 

RACT Technologically Feasible

RACT requires consideration for feasibility of technology for control device. On October 4, 2016 Gerdau Ameristeel submitted an updated proposed facility specific NOx control plan that reviews eight possible control technologies for a typical billet reheat furnace. Three were found to be technologically feasible for the Sayreville BRF, which are, ultra-low NOx burner, low excess air, and selective catalytic reduction. As required under section N.J.A.C. 7:27-19.13(d)3, a cost analysis must be conducted for technologically feasible control options.  

   The table below summarizes the eight control options were identified by the facility for a typical BRF:

                              Technically Feasible
Ultra-low NOx burners  -  currently in use at the Sayreville BRF. Reduces the flame temperature and incorporates the latest advancements in burner technology reducing even greater thermal NOx

Low excess air  -  currently in use at the Sayreville BRF. Reduces the amount of air into the burner which causes lower oxygen and nitrogen concentrations to be present in the local flame reducing thermal and fuel NOx

Selective catalytic reduction (SCR)  -  results of cost analysis outlined in this TSD. Optimum NOx reduction occurs at temperatures 600-800F and 470-510F depending on the catalyst used (vanadia-titania and platinum respectively). Outside these temperature ranges unreacted ammonia emissions, known as ammonia slip, can occur. The Sayreville BRF employs hot charging with temperatures of 1050F, a method where hot billets from cast are directly sent to the reheat furnace before they have time to cool down to minimize heat loss, and less natural gas consumption, prior to the billet rolling process. The facility also employs cold charging with maximum temperatures of 950F. The SCR is technologically feasible; however, Gerdau Ameristeel would need to install an evaporative cooler for the SCR to be effective. Another major concern is SCR catalyst poisoning from BRF process. There are no SCR installed on BRF that control NOx to compare potential catalyst poisoning. Lastly, there are no BRFs employing SCRs in the United States. 
                            Not Technically Feasible
Low NOx burners  -  lower the flame temperature thereby reducing the amount of thermal NOx created

Flue gas recirculation or reduction of air preheat temperature  -  the design of the existing burners makes this option technologically infeasible 

Burners out of service  -  would lead to increased NOx for the remaining burners in service and would create scale defects in the product steel billets therefore is technologically infeasible 

Selective non-catalytic reduction  -  the Sayreville BRF has a wide variability of gas stream flow rate, temperature and pollutant concentrations making this option to result in ammonia slip or reduced efficiency and SNCR is a post combustion technology that would need to be installed between the BRF and existing recuperator (recovers the waste heat), therefore SNCR is impactable and/or too costly and is therefore technologically infeasible 

Non-selective catalytic reduction  -  requires very low oxygen and high temperatures in the exhaust gas that have not completed combustion and is technologically infeasible for the Sayreville BRF

RACT Economically Feasible 

For any control device found to be technology feasible, the facility should demonstrate cost effectiveness to help determine if control is a RACT. If the cost effectiveness is higher than what is expected by the federal or state regulation, the technologically feasible control is deemed too costly to implement and is not RACT. In this case, the ultra-low NOx burner and low excess air control device are already in use on the Sayreville BRF. Therefore, the facility is required to conduct a cost analysis on the technologically feasible control device not currently in use which was determined to be the selective catalytic reduction (SCR). The facility must demonstrate that NOx reductions from the SCR are cost effective to be considered RACT for the Sayreville BRF. 

   Gerdau Ameristeel conducted the cost analysis for installing and operating the SCR at the Sayreville BRF using the cost information from their 2004 NOx RACT control plan adjusted for inflation for 2016 dollars. The facility estimated that to purchase and install the SCR is $4,279,380 and the annual operating cost is $1,164,379 (based on a 20-year useful life of the Sayreville BRF). The cost effectiveness is based on the annual cost of operating SCR and the amount of NOx that would be removed. The amount NOx that would be removed from the SCR is based on 90% (0.9) control efficiency not to exceed the permit limit of 58.9 NOx TPY (58.9 TPY x 0.9 = 53 TPY). Therefore, the SCR would result in 53 TPY NOx removed making the cost effectiveness to be $21,965 per ton NOx removed ($1,164,379 / 53 = $21,965). Since $21,965 per NOx removed is above the federal RACT and no other BRF in the U.S. has SCR control technology to compare, the SCR is not cost effective.  

 EPA's Determination

The EPA has determined that Gerdau Ameristeel, now under new ownership as Commercial Metals Company, to continue to operate under their 2005 facility specific maximum allowable emission limits for controlling nitrogen oxides emissions on the 172.8 MMBtu/hr natural gas fired billet reheat furnace equipped with ultra-low NOx burners and low excess air technologies is fully approvable. The N.J.A.C. 19.13(a)(3) allows facilities that wish to continue to operate under an existing NOx control plan that was approved prior to May 1, 2005 to make the request by submitting an updated proposed NOx control plan. Gerdau Ameristeel made a request and was approved by the State prior to May 1, 2005. The facility specific emission limit is incorporated into the CAA Title V operating permit at 58.9 TPY.  

Note this Technical Support Document (TSD) summarizes the State submission and EPA/State consultations.  The related correspondence and State Implementation Plan (SIP) revision are available for inspection and review at the EPA regional office located at 290 Broadway, floor 25, NY, N Y and the NJDEP state office.