Non-Utility Floor Allocation for Sulfur Dioxide

May 21, 2002 Presentation to the WRAP Market Trading Forum

Source Specific Allocations

• Source Specific Allocations have two components– Floor Allocation– Reducible Allocation

Floor Allocation

• The Floor allocation is defined as that portion of the facility's allocation that will not be reduced, it is the minimum allocation that the source would need to operate if it was controlled at a defined level. That defined level is either BACT, BART, LAER or is some cases NSPS. The floor allocation will be determined by the state on a source by source basis, based upon the methodology developed by the MTF for the non-utility sources. Those allocations will be allocated to the source prior to the allocation of the reducible portion.

Reducible Allocation

• This is the portion of the sources allocation over and above the floor allocation. It is that portion of the sources allocation that will be reduced over time in order to meet the milestones. The reducible portion will first be aggregated across the region and then distributed across both utility and non-utility sectors to meet the milestones.

Distribution Order of Allocations

• 20,000 ton for the tribes

• 9,000 ton for new sources

• California RECLAIM

• Floor Allocations

• Renewable energy allocations

• Early reduction bonus allocations

• Reducible allocation for existing sources

Non-Utility Source Categories• Smelters• Refineries• Natural Gas Processing Plants• Oil & Gas Production Plants• Lime Plants• Cement Plants• Utility Boilers (cogens, CHP)• Industrial Boilers• Pulp and Paper

Analysis Steps:

1. Assume CA sources at the floor.

2. Copper smelter allocations already determined.

3. Focus on non-CA, non-smelter sources >100 tpy.

4. Define floor by source category.

5. Gather data.

6. Estimate floor amounts by source category/plant.

SO2 Emissions of Interest - Annual Tons in 2000

State CHPs Non-Utility Point

Arizona 0 4,196

California 883 37,329

Colorado 2,583 6,856

Idaho 117 27,646

Nevada 0 743

New Mexico 0 36,934

Oregon 0 8,988

Utah 3,588 6,798

Wyoming 0 40,147

Totals 7,171 169,637

Non-California Totals 6,288 132,308

Issues:

Sulfur can be in the fuel, or the feedstock material.

Old information on factors/controls in AP-42.

Some simple relationships:

Boilers

Some complex relationships:

Lime

Cement

Floor Calculation Methodology

Smelters• Smelter-by-smelter analysis.

• Hidalgo smelter is the only BART-eligible source.

• Double-contact acid plant.

• Fugitive SO2 capture system at Hidalgo satisfies BART.

Copper Smelters

State Facility

1990 Annual

Tons SO2

2018 Allocation

Annual Tons SO2

Arizona ASARCO-Hayden 29,814 21,000

BHP-San Manuel 15,900 14,000

Cyprus Miami Mine 5,676 8,000

New Mexico Phelps Dodge-Chino Mines 28,058 14,200

Phelps Dodge-Hidalgo 41,433 20,000

Utah Kennecott Utah Copper 26,829 1,000

Total Copper Smelters 148,510 78,000

RefineriesThere are four sources of SO2 emissions at the refinery level. Floor based upon NSPS where applicable.

Description

Assumed Average Control Level

SRU 99.8% control or the equivalent of 3-stage Claus units with a tail gas unit (NSPS and the tail gas unit does not apply to Claus units smaller than 20 long tons/day or less)

Fuel gas combustion units

Fix at the NSPS emission limit rate of 0.026 lbs/mBtu assuming fuel gas input and not fuel oil.

Catalytic crackers

NSPS (J) selected: 9.8 lbs of SO2 per 1,000 lbs of coke burned.

Flares

Based upon average of the last 5 years' emission, AP-42 factors for calculated. No additional controls.

Floor Calculation Methodology

Petroleum Refining

10 refineries, 4 States.

Floor built up from applying emission limits/factors at 4 primary SO2 sources.

Natural Gas Processing Plant

Description Assumed Average Level of Control

Process Emissions

96.8% control 3-stage Claus unit to treat the acid gas off the amine unit.

Flaring

Based upon average of the last 5 years' emission.

Floor Calculation Methodology

Oil and Gas Production units

Description

Assumed Average Level of Control

Flaring

Based upon average of the last 5 years' emission.

Floor Calculation Methodology

Cement Plant• Two SO2 sources: feed material sulfur and kiln

fuels (coal, gas, tires, wood, petroleum coke).• Calculating the floor fuel source = coal control via

five-stage calciner assuming 85% control.

Floor Calculation Methodology

Cement

Wide variety of emission rates.

Difficult to estimate control technology effect on complex sources.

Lime Plants• No additional reduction.

• Approximately 50% control inherent in the process.

• Additional SO2 controls are not typically applied.

Floor Calculation Methodology

What do we know now?

Floor is close to recent historical emissions.

Source Categories/Sectors SO2 Year 2000 Annual Tons

Petroleum Refining 16,944

Lime Manufacturing 2,316

Cement Manufacturing 7,495

Natural Gas Processing 50,323

Elemental Phosphorus Production 15,861

Glass Manufacture 363

Pulp and Paper 9,628

CHPs 6,288

Compressor Stations 2,927

Industrial/Commercial Boilers 20-25,000

*Non-California, non-smelter.