BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

RECEIVED

IN THE MATTER OF:

)

DEC

052005

PETITION OF LAFARGE MIDWEST, INC.

)

AS

06-I

FOR BOILER DETERMINATION

)

PURSUANT TO 35111. Adm. Code

720.132 and

)

720.133.

)

NOTICE OF FILING

TO:

Illinois Pollution Control Board

Attn:

Dorothy M.

Gunn, Clerk

100 West Randolph Street

James R. Thompson Center, Suite

11-500

Chicago, IL

60601-3218

James G. Richardson, Assistant Counsel

Division of Legal Counsel

Illinois Environmental Protection Agency

1021

North Grand Avenue East

P.O. Box

19276

Springfield,

IL

62794-9276

PLEASE TAKE NOTICE that on this

2h1(~

day of December 2005,

a copy of the attached

Amended Petition for Boiler Determination

Through

Adjusted Standard Proceedings

was filed

with the Office of the Clerk of the Illinois

Pollution

Control Board,

a copy ofwhich

is herewith

served on you.

Respectfully submitted,

Jo~eft~eyfo

Pe

~onerLa

ge Midwest,

Inc.

Howard & Howard Attorneys, P.C.

One Technology Plaza, Suite 600

211

Fulton Street

Peoria, IL

61602

(309) 672-1483

G:\J-L\Lafarge\South Chicago\PCB

Filings\Notice_Filing_AmendPetition_l 2-2-05.doc

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---

RECEIVED

CLERK’S OFFICE

BEFORE THE ILLINOIS POLLUTION CONTROL BOAROEC

052005

IN THE MATTER OF:

)

Poflui~~~

PETITION OF LAFARGE MIDWEST, INC.

)

AS 06-1

FOR BOILER DETERMINATION

)

PURSUANT

TO 35

Ill.

Adm. Code 720.132 and

)

720.133.

)

AMENDED PETITION FOR BOILER DETERMINATION

THROUGH ADJUSTED STANDARD

PROCEEDINGS

NOW

COMES

the

Petitioner,

LAFARGE

MIDWEST,

INC.,

by

and

through

its

attorneys,

Howard

&

Howard

Attorneys,

P.

C.,

and

presents

to

the

Illinois

Pollution

Control

Board

(“Board”)

its

Petition

for

Adjusted

Standard

pursuant

to

35

Ill.

Adm.

Code

Sections

720.132

and

720.133

requesting

a determination

that

a

slag

dryer operated

at Petitioner’s South

Chicago Slag Grinding Plant may be considered a “boiler”

as that term is defined in 35

Ill. Adm.

Code 720.110.

The Board’s

determination

that

the

slag

dryer

is

a

“boiler”

pursuant

to

the

criteria set

forth

in

35

Ill.

Adm.

Code

720.132

will

allow

it

to

be

used

for

the

combustion

of

off-

specification used oil

for energy recovery,

in

compliance with 35

Ill.

Adm.

Code

739.161.

The

Board regulations

at

35

Ill.

Adm.

Code

720.133

provide

that the Board will make such a boiler

determination on

a case-by-case basis utilizing the Adjusted Standard procedures ofSubpart D of

35

Ill. Adm.

Code

104.

In support of its Petition, the Petitioner states as follows:

I.

Background and Procedural History

On September

12,

2005,

the Petitioner filed a

Petition with the Illinois

Pollution

Control

Board

seeking

a

determination

that

a

slag

dryer

operated

at

its

South

Chicago

Slag

Grinding

Plant may be

considered

a

boiler

for the

purposes of reclaiming

thermal

energy

from

utilizing

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off-specification

used oil

as a

supplemental

fuel.

The

Board

regulations

at

35

III. Adm.

Code

720.132

provide

that

the

Board

will

make

such

a

determination

on

a

case-by-case

basis

by

evaluating

the

criteria specified

at

35

III.

Adm.

Code

720.132

and

by

utilizing

the Adjusted

Standard procedures ofSubpart

D of 35 Ill.

Adm. Code 104.

In

accordance

with

the

Board’s

procedural

rules,

specifically

35

Ill.

Adm.

Code

104.408(a), Petitioner arranged for publication of notice of its

Petition in

a newspaper of general

circulation

in

the

area

likely

to

be

affected

by

Petitioner’s

activity.

On

September

30,

2005,

Petitioner timely filed with the Board a certificate ofpublication stating that the

Daily Southtown

had

published notice of the Petition

on

September

15,

2005.

Filing of the certificate complied

with the Board’s procedural rules at 35

Ill. Adm.

Code

104.410.

On October 24, 2005,

the Illinois Environmental Protection Agency, through its Assistant

Counsel

James G. Richardson,

filed its Recommendation to

the Board in accordance with 35

Ill.

Adm.

Code

104.416.

The Agency recommended that the Board

grant the Petitioner’s

requested

relief.

On October

20,

2005,

the Board

issued

an

Order

in

this

proceeding

which

directed

the

Petitioner to

provide additional

information in

support of its

Petition and request for relief.

The

Board’s October

20th

Order directed Petitioner to provide the requested additional

information by

filing

an

Amended

Petition.

This

Amended Petition

is

filed

in

accordance with

the

Board’s

October

20th

Order and provides the additional information requested by the Board.

II.

Description of Petitioner and South Chicago Facility

The

South

Chicago

Slag

Grinding

Plant

(“Grinding

Plant”)

is

owned

and

operated

by

Lafarge

Midwest,

Inc.

(“Lafarge” or “Petitioner”),

a

subsidiary of Lafarge North America,

Inc.

Together

with

its

subsidiaries,

Lafarge

North America

is

the largest

supplier of cement

and

a

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leading

ready-mixed

concrete supplier in

North America.

The

Company also

is

one of the

top

four

producers

of

construction

aggregate

(crushed

stone,

sand

and

gravel)

and

a

leading

manufacturer of gypsum

drywall.

Lafarge

North

America

has

over

1,000

operations

doing

business

in

almost

every

State

and

throughout

all

provinces

in

Canada

through

its

Lafarge

Canada,

Inc.

subsidiary.

Lafarge’s products are used in

the construction of such diverse projects

as

roads,

office

buildings,

factories,

hospitals,

department

stores,

sports

stadiums,

banks,

museums,

high-rise

apartments,

amusement

parks,

swimming

pools

and

bridges.

In

2002,

Lafarge

North America

shipped

117.1

million

tons

of aggregate,

11.1

million

cubic

yards

of

ready-mixed concrete, 13.8

million tons of cement and 2.0 billion square

feet of gypsum drywall.

Lafarge

developed the South

Chicago Slag Grinding Plant

in

2001

and

2002.

The plant

was developed on

existing Lafarge property

that had been used as

a terminal for cement storage

and distribution since approximately

1987.

The Grinding Plant is located at the common address

of2150 East

130th

Street, Cook County, Chicago, Illinois,

adjacent to

the Calumet River and the

southernmost portion of Lake Calumet.

The Lake Calumet area is a heavily industrialized

area of active and closed steel mills, oil

refineries, railroad

yards, coke ovens, heavy manufacturing and waste

disposal

facilities.

Waste

disposal

facilities are a major feature of the landscape;

five major facilities

—

Paxton I, Paxton II,

Land &

Lakes,

CU) No.1

and

CII) No.

2

—

cover approximately

820

acres

in

the Lake Calumet

area,

with

only

Waste

Management’s

CII)

No.2

landfill

currently

operating.

An

aerial

photograph

showing the

Grinding

Plant

is

attached

hereto

as

Exhibit

A.

In

addition,

a

map

showing the location of the Grinding

Plant

and

the

low

population density of the surrounding

Lake Calumet area is attached hereto as Exhibit B.

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The

economy and

communities

in

the

Lake

Calumet area

are

still

recovering

from

the

loss of several steel mills,

including Wisconsin Steel

(1980), U.S.

Steel Company’s South Works

(1992), LTV and Acme

Steel

(2003), and the closing of the many area businesses that

supported

the steel

industry.

The Lake Calumet area has vast

acres of vacant

land available

for industrial

development;

at

least

1,000

acres ofvacant property is identified as

available for industrial

uses

in

the City of Chicago’s

2002

Calumet Area

Land

Use

Plan.

That Land Use Plan

designates

property

in

the

Lake

Calumet

area

for

fifture

industrial

development and

open

space,

but

no

property is designated for future residential development.

Sustainable

development, using

a

byproduct

from another industry,

was

one

of the key

factors

in

Lafarge’s

decision

to

construct

the

Grinding

Plant

at

this

location.

The

principal

product produced by Lafarge’s Grinding Plant is

a slag cement product marketed under the trade

name

“NewCem®”.

NewCem

is

produced

by

drying

and

grinding

a pelletized or

granulated

iron

blast

furnace

slag

to

cement

fineness.

The

blast

furnace

slag

used

by

Lafarge

in

the

production of NewCem

is

generated

at

the Ispat-Inland,

Inc.

integrated steel

facility located

in

East Chicago, Indiana, approximately 20 miles away.

Blast furnaces, which produce iron

from iron ore in thepresence oflimestone or dolomite

fluxes,

produce

a

molten

slag.

The molten

slag

is

tapped

off the furnace separately

from

the

molten iron metal and quenched with water through a granulation or pelletizing process.

Modem

blast furnaces produce

slag having a very low variability.

Typically, the oxide forms of silicon,

calcium, aluminum and magnesium make up

95

or more of theblast furnace slag.

Slag

cement such as Lafarge’s NewCem

product can

be used to

replace a portion of the

cement

in

a

concrete

mix.

The

advantages

of

slag

cement

are

improved

workability

and

pumpability

in

the plastic

(unhardened)

form of concrete.

In hardened concrete, the use of slag

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cement

increases

strength,

reduces

permeability

and

heat

of

hydration,

increases

sulfate

resistance and controls the alkali/silica reaction.

The

environmental benefits associated with

production of NewCem

slag

cement

include

productive

use

of

an

industrial

byproduct,

i.e.

blast

furnace

slag

that

otherwise

would

be

landfilled,

reduced

use

of

virgin

materials

and

substantially

reduced

energy

consumption

compared

to

the

energy

demands

of

Portland

cement

manufacturing.

Lafarge’s

proposal

to

utilize off-specification used oil fuel

in the slag drying process provides additional environmental

benefits by

recycling

and

reclaiming

the thermal

energy

from the

waste

oils

that

are

generated

from

motor

vehicles,

refineries

and

manufacturing processes using

machining/cutting oils,

heat

transfer fluids,

hydraulic fluids

and general lubricants.

The

U.

S.

Environmental

Protection

Agency

(“USEPA”)

has

actively

promoted

and

approved

the

recycling

of used

oil

for

energy

recovery

since

Congress

passed

the

Used

Oil

Recycling Act

in

1980.

Consistent

with

the legislative mandate

to

adopt

a hazardous

and

solid

waste management

program consistent

with the

federal program and to

secure USEPA

approval

thereof, the Board

has adopted “identical-in-substance” regulations

designed

to

encourage

used

oil

recycling

and

burning

specification

and

off-specification

used

oil

for

energy

recovery.

Utilization

of off-specification

used

oil

fuel

in

the

slag

drying

system

at the

Lafarge

Grinding

Plant is

not expected to change the current air emissions

from the facility, other than a

negligible

increase in

the emissions of sulfur dioxide

emissions

from the drying operation.

The

air emissions associated with the proposed use of off-specification used oil fuel will be s4t

to

approval by the

IIEPA

through modification of the Grinding

Plant’s existing Lifetime

Operating

Permit.

The

permit

modification

procedures

will

provide

the

opportunity

to

address

any

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questions

related

to

emissions

of air contaminants

associated

with

the

combustion

of used

oil

fuels.

III.

Petition Content Requirements of35

III. Adm.

Code

104.406

Set

forth below is the information specified by

35

Ill.

Adm. Code

104.406

to be

included

in

a

Petition

for Adjusted

Standard.

Since 35

Ill.

Adm.

Code

720.132 and

720.133

mandate the

use

of the

Board’s adjusted

standard procedures

of Subpart

D

of

35

Ill.

Adm.

Code

104

for

determining whether

a particular enclosed

flame

combustion

device

is

a

“boiler,” this

Petition

addresses

the

requirements

of

Subpart

D

and

includes

the

information

specified

in

Section

104.406.

The

information

is

organized

under

headings

corresponding

to

the

informational

requirements of each subsection of Section

104.406, in compliance with that Section.

a)

A

statement

describing

the

standard

from

which

an

adjusted

standard

is

sought.

This

must

include the

Illinois

Administrative

Code

citation

to

the

regulation

of

general

applicability

imposing

the

standard

as

well

as

the

effective date of that regulation;

Response:

The

Board

has

promulgated

administrative

regulations

applicable

to

the

management ofused oil set

forth at 35 Ill. Adm.

Code Part 739.

Section 739.161(a) of Subpart G

of the Part

739

35

Ill.

Adm.

Code

739.161(a)

allows

the combustion of off-specification used

oil

for

energy

recovery

in

“industrial

boilers

located

on

the

site

of a

facility

engaged

in

a

manufacturing

process

where

substances

are

transformed

into

new

products,

including

the

component parts of products, by mechanical or chemical processes.”

The

Board

has

promulgated

regulations

at

35

Ill.

Adm.

Code

720.132

and

720.133

establishing

criteria and

procedures

for making

a

determination

that

certain

enclosed devices

using

controlled

flame

combustion

are

“boilers”

that

may

be

utilized

for the

burning of off-

specification used oil, even though such devices do not otherwise meet the definition of “boiler”

set

forth at 35

Ill.

Adm.

Code 720.110.

Section 720.132

establishes the criteria to

be considered

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by the Board

in

making a case-by-case

boiler determination

and

Section

720.133

mandates

use

of

the

Adjusted

Standard

procedures

of

Subpart

D

of

35

III.

Adm.

Code

104

to

determine

whether a particular enclosed flame combustion device is

a “boiler” that may be used to burn off-

specification used oil.

Through

this

adjusted standard proceeding,

Petitioner seeks

a determination

that

its

slag

dryer

may

be

considered

a

boiler,

even

though

it

may

not

otherwise

meet

the

definition

of

“boiler”

at

35

Ill.

Adm.

Code

720.110.

Such a case-by-case

determination may be

made by the

Board

upon

demonstrating compliance

with

the criteria set

forth at

35

Ill.

Adm.

Code

720.132.

The applicable Board regulations, specifically

35

Ill. Adm.

Code 720.132

and 720.133 were both

promulgated with

an effective date ofJuly

17, 2003

(27

Iii.

Reg.

12713,

effective July

17,

2003).

b)

A

statement

that

indicates

whether

the

regulation

of general

applicability

was promulgated

to implement,

in

whole

or

in

part, the requirements of the

CWA

(33

USC

1251

et

seq.),

Safe

Drinking

Water

Act

(42

USC

300(1)

et

seq.), Comprehensive Environmental Response, Compensation

and Liability

Act (42 USC 9601

et seq.),

CA.A (42 USC 7401

et seq.), or the State programs

concerning RCRA, UIC, or NPDES

415

ILCS

5/28.11;

Response:

The

regulations

applicable

to

case-by-case

boiler

determinations,

specifically

35

Ill.

Adm.

Code

720.132

and

720.133,

were promulgated to

implement,

in

whole

or in part, the requirements of the Illinois program for the management of solid

and hazardous

waste, the state analog to

the federal

regulatory program under the Solid Waste Disposal

Act, as

amended by the Resource Conservation

and

Recovery Act, 42

U.S.C.

§6901,

et ~g.

(hereafter

“RCRA”.)

c)

The

level

of

justification

as

well

as

other

information

or

requirements

necessary

for

an

adjusted

standard

as

specified

by the

regulation of general

applicability

or

a

statement that the regulation of general

applicability

does

not specify

a

level of justification

or

other

requirements

415

ILCS

5/28.11

(See Section

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Response:

The

Board’s

regulations

at

35

III.

Adm.

Code

720.132

and

720.133

establish

the

criteria

and

procedures

for obtaining

a

case-by-case

boiler

determination

by

the

Board.

Section

720.132

establishes the

criteria

to

be

considered

by

the Board

for making

a

determination that certain enclosed devices using controlled

flame combustion are “boilers”

that

may

be

utilized

for

burning

off-specification

used oil

for

energy recovery,

even

though

such

devices

do

not

otherwise

meet

the

definition

of a

“boiler”

set

forth

at

35

Ill.

Adm.

Code

§720.110.

Section

720.133

mandates

use of the Adjusted Standard procedures of Subpart

D

of

35

III. Adm.

Code

104 to

determine whether a particular enclosed flame combustion

device

is

a

“boiler” that maybe used to burn off-specification used oil.

(Note:

Sections

720.132

and

720.133

are

virtually

identical

to

the

federal

RCRA

regulations

at 40 CFR 260.32

and 260.33

which establish the criteria and variance procedures for

“case-by-case” determinations that specific

combustion devices can be considered “boilers.”)

The criteria to be considered by the Board and the procedures

to be followed

in making a

determination that certain enclosed devices using controlled

flame

combustion

are “boilers”

are

set

forth in Sections 720.132

and 720.133.

Those regulations are set forth in

full below:

Section 720.132

Boiler Determinations

In accordance

with

the

standards

and

criteria

in

Section

720.110

(definition of

“boiler”),

and the procedures in

720.133, the Board will

determine on

a case-by-

case

basis

that

certain

enclosed

devices

using

controlled

flame

combustion

are

boilers,

even though they do not otherwise meet the definition of boiler contained

in

Section 720.110, after considering the following criteria:

a)

The extent

to which

the unit has provisions

for recovering

and

exporting

thermal energy in the form of Steam, heated fluids or heated gasses;

b)

The

extent

to

which

the

combustion

chamber

and

energy

recovery

equipment are ofintegral design;

c)

The efficiency of energy recovery,

calculated

in

terms

of the

recovered

energy compared with the thermal value ofthe fuel;

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d)

The extent to which exported energy is utilized;

e)

The

extent

to

which

the

device

is

in

common

and

customary

use

as

a

“boiler”

functioning primarily

to

produce

steam, heated

fluids

or heated

gases;

and

0

Other relevant factors.

(Source:

Amended at 27

III. Reg.

§

12713, effective July

17, 2003.)

Section

720.133

Procedures for Determinations

The Board

will use the

procedures of Subpart

D

of

35

III.

Adm.

Code

104

for

determining

whether

a

material

is

a

solid

waste

or

for determining

whether

a

particular enclosed flame

combustion device is a boiler.

(Source:

Amended at 27

Ill. Reg.

§12713, effective July

17, 2003.)

d)

A description

of the

nature of the petitioner’s

activity that

is the

subject of

the

proposed adjusted standard.

The

description must

include the location

of, and

area affected by, the petitioner’s

activity.

This

description

must

also

include

the number of persons

employed

by the petitioner’s facility

at issue,

age of that

facility, relevant pollution

control

equipment already

in

use,

and

the

qualitative

and

quantitative

description

of

the

nature

of

emissions,

discharges

or releases currently generated by the petitioner’s activity;

Response:

The

principal

product

produced

by

Lafarge

at

the

South

Chicago

Slag

Grinding Plant is a slag cement product marketed under the trade name “NewCem®”.

NewCem

is

a

ground granulated blast furnace slag

produced by grinding

a

pelletized or granulated blast

furnace slag

to

cement

fineness.

The blast furnace

slag

used by

Lafarge

in

the production of

NewCem

is

generated

at

the Ispat-Inland,

Inc.

integrated

steel

mill

located

in

East

Chicago,

Indiana, approximately 20 miles away.

Pelletized

slag is delivered to the Grinding Plant via truck.

The

10-12

moisture content

of the

slag

guarantees

a

dust-free

transfer of slag

from

the truck

to

the raw

material

storage

hoppers at the Grinding Plant.

From the storage hoppers, raw material

is moved via conveyors

and

elevators

through

the

Grinding

Plant

where

any

metallic

compounds

are

removed

via

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magnets before

the

slag

is

introduced

into

the drying

system.

The

slag

dryer

functions

as

a

direct-fired process heater to reduce the moisture content ofthe blast furnace slag

so that the slag

can be

ground into a fine powder and processed

into slag cement.

The dried slag discharges to

a

cyclone

collector before

being

fed

to

a

large ball

mill

to

reduce the

slag

to

a fine

powder and

achieve product specifications.

NewCem

is

a

Grade

120

slag

cement

that meets

ASTM

C-989

and ASHTO M-302 specifications.

The

Grinding Plant has the capacity to

grind over 500,000 metric tons of granulated slag.

Sales ofNewCem

in 2002 were

120,000

metric

tons

and

for 2003

were

approximately

200,000

metric

tons.

NewCem product produced by the

Lafarge

Grinding

Plant is

distributed through

a

marine transportation system using the Great Lakes

and major rivers through Lafarge distribution

terminals located in Red Rock, Minnesota, Kansas

City, Missouri

and Cleveland, Ohio.

The

slag

cement manufacturing operations are

continually monitored

to

ensure

efficient

operation

of the

Grinding

Plant.

There

are currently

sixteen

(16)

full-time

employees

at

the

Grinding

Plant;

fifteen

salaried

plant

employees

and

one

salaried

distribution

employee.

The

annual payroll is approximately $850,000.

Annual tax payments made to the State of Illinois and

Cook

County

are

approximately

$326,000.

Through

its

payroll

and

tax

payments,

Lafarge

supports the depressed economy in the Lake Calumet area and has an active community relations

presence

through

its

involvement

with

the

Calumet

Area

Industrial

Commission,

Hegewisch

Chamber

of

Commerce,

East

Side

Chamber

of

Commerce

and

the

Illinois

Manufacturers

Association.

NewCem

is

produced at the Lafarge

Grinding

Plant

with

state-of-the-art

manufacturing

technology

ensuring

consistent

supply

for

customers,

exacting

quality

control

to

guarantee

excellent

product

quality

and

minimal

environmental

impact.

The

environmental

benefits

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associated

with

production

of NewCem

slag

cement

include

productive

use

of

an

industrial

byproduct, reduced use ofvirgin materials and reduced energy consumption.

Lafarge’s proposal to

utilize off-specification used oil fuel in the drying process provides

additional

environmental benefits by

recycling

used oils

that

are

continuously

generated

from

motor

vehicles,

refineries

and

manufacturing

operations

using

machining/cutting

oils,

heat

transfer

fluids,

hydraulic

fluids

and

general

lubricants.

Burning

used oil

is

an

accepted

and

proven

means

of energy recovery

in

Illinois

and

throughout

the

United

States.

Utilizing

off-

specification

used

oil

fuel

would

permit

Lafarge

to

better

manage

its

fuel

costs

to

stay

competitive

in

the

market.

It

would

provide additional

security for operations

at the Grinding

Plant

and reduce the

Company’s

exposure

to

the volatility of price and

supply of natural gas,

a

non-renewable source ofenergy.

Additional Information.

The Board’s October

20th

Order included

the following request

for additional

information

to

address

35

Ill.

Adm.

Code

104.406(d):

“The Board requests that

Lafarge submit data regarding both controlled and uncontrolled emissionsfrom

the slag dryer ~f

that data is collected as part of an emissions monitoring program at theplant.

Also under 35

IlL

Adm.

Code

104.406(d),

the Board

asks

Lafarge to clar~fy

whether operation of theplant results

in any discharges other than air emissions.”

Reported

Emissions.

The

federal

Clean

Air

Act

and

the

Illinois

Environmental

Protection Act

require reporting of air pollutant emissions

by regulated sources and

tracking of

reported emissions

data by

the

State of Illinois.

To

implement

the requirements of State

and

Federal law,

the

State

of Illinois

has implemented an

Annual

Emissions

Reporting

requirement

which applies to all

sources required to have an operating permit in accordance with 35

Ill. Adm.

THIS FILING SUBMITTED ON RECYCLED PAPER

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Code

201.302.

The requirements applicable

to

the

Annual

Emissions

Reporting

program

are

codified in 35

Ill. Adm. Code 254.

In

accordance

with

applicable

regulations,

Petitioner

submits

an

Annual

Emissions

Report

to

the Illinois

Environmental

Protection

Agency

to

report

on

actual

emissions

from

all

emissions

units

and

activities

at

the

South

Chicago

Grinding

Plant.

The most

recent

Annual

Emissions

Report was

due

on

or before

May

1,

2005.

Set

forth below

is

a

summary of the

emissions

reported

by

Petitioner

in

its

most

recent

Annual

Emissions

Report

which

was

submitted

to

the Agency

on

March

15,

2005.

The

first

summary

table

identifies

all

reported

emissions

from the entire Grinding Plant and the second

table identifies reported emissions

from

only

the

slag

drying

system.

A

complete

copy

of Petitioner’s

Annual

Emissions

Report

is

attached hereto as Exhibit

E.

2004 REPORTED EMISSIONS

FOR ENTIRE FACILITY

2004 REPORTED EMISSIONS FOR SLAG DRYING SYSTEM ONLY

Pollutant

2004 Emissions (ton s4’ear)

CO

9.96

NO~

7.68

PM

10.08

PM10

5.02

SO2

0.59

VOM

9.07

Pollutant

CO

NO~

PM

PM10

SO2

VOM

2004 Emissions (tons/year)

9.96

7.68

11.54

~.01

0.59

9.07

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Other Discharges.

Other

than the

air emissions

reported

to

the Illinois

Environmental

Protection

Agency

and

summarized

above,

operation of the

Grinding

Plant results

in

no

other

discharges to the environment.

e)

A

description of the efforts

that would

be

necessary

if the petitioner

was to

comply

with

the

regulation

of

general

applicability.

All

compliance

alternatives,

with

the

corresponding

costs

for

each

alternative,

must

be

discussed.

The discussion

of costs

must

include the

overall capital costs

as

well as the annualized capital

and operating costs;

Response:

Through

this

proceeding,

Petitioner

seeks

a determination by

the Board that

the slag dryer operated

at

its

South Chicago Plant may be

considered a “boiler”

for purposes of

using

off-specification

used

oil

as

a

supplemental

dryer

fuel.

The

slag

dryer

functions

as

a

direct-fired process heater to

reduce the moisture content ofblast furnace slag so

that the slag can

be ground into

a fine powder and

processed

into

slag cement.

The finished slag

cement product

is

used

as

an

architectural

building

material

and

in

a

number

of

construction

and

building

applications.

In January

2004,

the Petitioner requested

confirmation from

the Illinois

Environmental

Protection

Agency (“IEPA”)

that

the

slag

dryer

could

be

considered

a

“boiler”

as that

term

is

defined at

35

Ill.

Adm.

Code

720.110,

and

was therefore

authorized

to burn off-specification

used oil

for energy

recovery.

By

letter dated May 28,

2004,

the

IEPA

through

Ms.

Joyce

L.

Munie,

P.E., Manager-Permit

Section,

Bureau ofLand,

stated that

the slag dryer

“.

.

.

would not

meet the definition ofindustrial boiler in 35111. Adm.

Code 720.110.”

Although Petitioner disagreed with

the IEPA’s

decision and believed that the

slag dryer

meets the

definition of “boiler”

in

35

Ill.

Adm.

Code

§720.110,

Petitioner

would

not

risk

an

enforcement

action

by

proceeding

to

utilize

off-specification

used oil

as

a supplemental

fuel in

the

slag dryer.

As

a

result of IEPA’s

interpretation of Section

720.110,

Petitioner is

prohibited

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from

burning

off-specification

used

oil

for

energy

recovery

in

its

slag

dryer.

There

are

no

compliance

alternatives,

no

capital improvements

and

no

operational changes

that

would

allow

Petitioner to “comply with the regulation of general applicability.”

Additional Information.

The Board’s October ~

Order included the following request

for additional

information

to

address 35

Ill.

Adm.

Code

104.406(e):

“The Board requests that

Lafarge provide

a

comparison

of the cost of using

spec~flcation

fuel

under

the

regulation

of

general applicability and of using off-specification fuel under the requestedrelief”

Comparison ofCosts

—

Specification

Used Oil vs. Off-Specification

Used OiL

Petitioner

is

proposing

to

supplement

the

use

of

natural

gas

with

off-specification

used

oil

as

a

supplemental

fuel

for its

slag

drying

system

as

a

cost

saving

measure.

Specification

used

oil

could be

used as supplemental fuel

in

the

slag drying system, but the cost

savings with this

type

offuel

do not justify the investment required to

burn used oil in the slag

dryer. Off-specification

used oil, due to its lower cost,

is required to make the project

economically feasible.

Lafarge is proposing to use approximately 500,000 to

600,000 gallons of used oil fuel per

year.

Specification

used

oil

is

priced

at

an

average

of $0.90

per

gallon

while off-spec

oil

is

averaging

around

$0.67

per

gallon.

Based

on projected usage of 500,000

gallons per

year

and

current market pricing, this translates

to an

annual cost of $450,000

for on-specification used oil

and

$335,000

for off-specification

used oil.

The

additional

cost savings of $115,000

gained by

using

off-specification

used oil

as

supplemental dryer

fuel

is

required

to

make the project

cost

effective.

Additionally,

as

the

costs

of natural

gas

and

specification

used

oil

fuel

increase,

the

economic benefits

associated

with

use of off-specification

used oil as

a supplemental

fuel

also

increase.

According

to

the

Energy

Information

Administration

of the

U.S.

Department

of

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Energy,

natural

gas

prices

in

the United

States

have

more

than

doubled

in

the

past

three years,

primarily because development of new gas supplies has not

kept pace with

increasing demand.

(see

Annual Energy Outlook 2005

—

Market Trends: Natural

Gas Demand and Supply).

Natural

gas

is increasingly popular for use in homes, businesses,

industrial

facilities

and

electric

power-

generation

because

it

is

efficient,

clean

and

reliable.

Over the

last

several

years,

increased

demand was spurred by the electric power industry, which

is opting for cleaner,

gas-fired power

plants

rather than

conventional coal-fired power

generation.

Power

plants were

consuming

24

percent

more

natural

gas

in

July

2005

than

in

July

2004,

according

to

the

federal

Energy

Information Administration.

In

addition

to

a

lag

in

the

development

of

new

natural

gas

production

supplies,

catastrophic

weather

has

further

widened

the

gap

between

supply

and

demand.

In

2005,

hurricanes Katrina and Rita

devastated more than 250 oil

and natural gas platforms.

Almost nine

percent of the

Gulf Coast’s

annual production of natural

gas was lost

between August

26th

and

October

19th, according to the U.S. Minerals Management Service.

Historically, the factors

that

led to rising oil prices,

such

as political

instability or war in

major production areas such as the Middle East,

did

not

affect

U.S.

natural

gas prices, because

more

than

90

percent

of

the

natural

gas

used

in

this

country

was

produced

domestically.

However,

many large

industrial

facilities can switch

between natural

gas and

oil

with

modest

capital expenditures

for fuel

oil storage and distribution facilities.

In the past,

in

times ofrising

natural gas prices, these industrial facilities would switch to

lower-priced fuel oil and diesel, thus

relieving demand and upward price pressure on the natural gas market.

Today, however, with oil

prices spiking

at

prices

of upwards of $60

or

$70 per

barrel, many industrial

facilities

cannot

afford

to

switch

to

virgin

fuels

and

are

utilizing

large quantities of alternative

fuels,

including

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recycled used oil.

The

rising

prices for natural

gas and

refined petroleum

products has further

increased

the

demand for

used oil

fuels,

and

thus,

the

market

prices

for both

specification

and

off-specification

used oil are expected to continue to

increase.

1)

A

narrative

description

of

the

proposed

adjusted

standard

as

well

as

proposed

language

for

a

Board

order

that

would

impose

the

standard.

Efforts necessary

to

achieve this

proposed

standard

and

the

corresponding

costs

must also be presented;

Response:

Pursuant

to

the criteria set

forth at 35

III. Adm.

Code

§720.132, the Board

may

determine

that

the

slag

dryer

is

a

boiler,

even

though

it

may

not

otherwise

meet

the

definition

of

the

term

“boiler”

set

forth

at

35

Ill.

Adm.

Code

§720.110.

Once

the

Board

determines

that

the

Petitioner’s

slag

dryer

meets

the

criteria set

forth

at

35

Ill.

Adm.

Code

§720.132,

it

will meet

the regulatory

definition

of the

term “Boiler

by

designation”

at

35

Ill.

Adm.

Code 720.110,

which states in relevant part:

Boiler by

designation.

The unit is

one that

the Board has determined,

on

a case-

by-case basis, to be a boiler,

after considering thestandards

in Section

720.132.

An industrial boiler located on the site of a facility engaged in

a manufacturing process is

authorized under Subpart G of35

Ill.

Adm.

Code Part 739

to utilize off-specification used oil for

energy

recovery.

Upon

determination

by

the

Board

that

Petitioner’s

slag

dryer

should

be

classified

as

a “boiler,” Petitioner will

be

allowed

to

burn off-specification

used oil

for energy

recovery in

its

slag

dryer because it will

be

considered a

“Boiler

by designation,”

provided all

other elements ofSubpart G of35

Ill. Adm. Code Part 739

are satisfied

Set forth below is proposed language

for a Board Order that would approve the requested

case-by-case boiler determination and Adjusted Standard relief:

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1.

Procedural History

2.

Background

3.

Agency Recommendation

4.

Response to Recommendation

5.

Discussion

-

Legal Framework

-

Availability ofReliefUnder Section

720.132

-

Section

720.132 Factors

-

Other Relevant Factors

6.

Conclusion

The Boardfinds

that Lafarge Midwest,

Inc.

has established under Section

720.132 of the

Board

regulations

(35

IlL

Adm.

Code

720.132),

that

the

slag

dryer

operated at

the

South

Chicago facility

satisfies the

criteria

set forth

in

Section

720.132 to

be

considered a

“boiler.”

Accordingly,

the Board finds and determines that the slag dryer is a

“boiler” within the meaning

of35 ilL

Adm. Code 720.110.

The Board’s

determination

that the slag dryer

is

a

“boiler”

will allow it to

be usedfor

the

combustion

of off-specification

used

oil for

energy

recovery,

in

compliance

with

Section

739.161 ofthe Board’s regulations (35 ilL

Adm. Code

739.161).

The Board emphasizes that use

of off-spec~ficationused

oil as fuel for

the slag

dryer

must comply

with

all other

applicable

Illinois

and

federal

environmental

standards

and

requirements,

including

the

terms

and

conditions

of L(fetime Operating Permit No.

98010053,

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Blast

Furnace

Slag

Grinding

and

Drying

Operation

and

associated

air

pollution

control

equipment and any subsequent modWcations thereto.

This opinion constitutes

the Board ‘sfindings offact and conclusions of law.

ORDER

1.

The

Board finds

that

the

slag

dryer

operated

by

Lafarge

Midwest,

Inc.

at

its

South

Chicago

Cement

Distribution

Terminal/Slag Processing

Facility

meets

the

criteria

set

forth

in

35 ilL Adm. Code §720.132 to be

considered a

“boiler.”

The Board accordingly

grants Lafarge

Midwest,

Inc.

the regulatory

relief available under

35

Ill.

Adm.

Code

720.132

and determines

that

the slag

dryer

is

a

“Boiler

by

designation”

under

35

IlL

Adm.

Code §720.110.

2.

The Adjusted Standard will allow the slag dryer to

combust off-specUication used oilfor

energy recovery under

35

IlL

Adm.

Code

739.161,

subject to

compliance with

all

other

applicable Illinois andfederal environmental standards and requirements.

ITIS SO ORDERED.

Additional Information.

The Board’s October

20th

Order included the

following request

for additional

information to

address 35

Ill.

Adm.

Code

104.406(f):

“The Board requests that

Lafarge state

whether

any

additional air pollution

control devices

or modWcations of existing

equipment would be

necessary if

it

(sic)

slag

dryer uses

off-specification

used oil asfuel

in

its

slag dryer.

Ifadditional or modified devices are necessary,

the Board also requests thatLafarge

provide

information

about

any

costs

associated

with

the

installation

or modj.fIcation

of that

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Adequacy of Current Air Pollution

Control Equipment.

The slag dryer is equipped with

a modem, high-efficiency fabric filter baghouse particulate control system to minimize the

release ofparticulate matter and other air contaminants in

the exhaust gases.

The combined

capture and removal efficiency of these baghouse

systems typically achieve greater than 99.9

overall control efficiency.

The dried product captured in the fabric filter baghouse is a valuable

material that

is returned to the production process.

In addition to controlling particulate

emissions, maximizing capture of the dried slag entrained in the exhaust gases increases plant

productivity and profitability that is critical to the overall financial health and long-term

viability

ofthe Grinding Plant.

Consequently,

there exists a strong economic incentive to operate the

fabric filter baghouse at maximum removal efficiency.

Petitioner has estimated the potential particulate emissions from utilizing up to 500,000

gallons of off-specification used oil as a supplemental fuel in the slag dryer.

Based on those

calculations, total particulate matter (“PM”) emissions and emissions of PM1O resulting from the

combustion of used oil supplemental fuel will orders of magnitude lower than the emissions

allowed by the current Lifetime Operating Permit.

Set

forth in Exhibit F are the calculations of

emissions of all regulated pollutants that would be associated with annual combustion of up to

500,000 gallons ofoff-specification fuel in the slag dryer.

Allowable emissions ofPM under the Operating Permit are 6.70 tons/year; maximum

potential PM

emissions resulting from combustion of off-specification used oil are predicted at

0.03 tons/year.

Similarly, allowable emissions ofPM1O under the Operating Permit are

3.05

tons/year; maximum potential

PM1O emissions resulting from combustion of off-specification

used oil are predicted at

0.02 tons/year.

Because predicted PM

and PM1O emissions from the

combustion ofoff-specification used oil are predicted to be well below the permitted allowable

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emission limits, Petitioner believes that no modifications to the existing fabric filter baghouse

control equipment will be required to

further control PM or PM1O emissions.

Additionally,

Petitionerbelieves that

no

additional pollution control equipment will

be required to control

emissions from the combustion of off-specification used oil as supplemental fuel in the

slag

dryer.

Utilization of off-specification

used oil

fuel

in

the

slag

drying

system

would

need

to

be

reviewed and

approved

by the

Illinois

Environmental Protection Agency air permitting officials,

with

issuance of a

Construction

Permit

and/or modifications

to

the

existing

Operating Permit.

Currently, the Grinding Plant is permitted to utilize natural gas as fuel for the slag drying system.

Under the provisions of 35

III. Adm. Code Section

201, the use of used oil as a supplemental fuel

in

the slag

drying

system

is likely to

be considered a change

in

the

method of operation

which

would

trigger

construction

and

operating

permit

requirements.

All

questions

about

the

air

pollutant emissions

associated

with

combustion

of used oil

fuel

would

be

addressed

and

fully

answered through the air permitting review process.

g)

The quantitative and qualitative description of the impact of the petitioner’s

activity

on

the

environment

if

the

petitioner

were

to

comply

with

the

regulation

of

general

applicability

as

compared

to

the

quantitative

and

qualitative

impact

on the environment

if the petitioner were to comply only

with the proposed adjusted

standard.

To

the extent

applicable,

cross-media

impacts must be discussed.

Also, the petitioner must compare

the qualitative

and

quantitative

nature of emissions,

discharges

or

releases that

would

be

expected

from

compliance

with

the

regulation

of

general

applicability

as

opposed to that which would be expected from compliance with the proposed

adjusted standard;

Response:

As noted

above,

IEPA

questioned

whether the

slag

dryer

and drying

system

at the Lafarge

Grinding

Plant

met

the definition of a

“boiler”

in

35111.

Adm.

Code

720.110.

Although Lafarge believes that the slag dryer meets the boiler definition

and therefore is allowed

to combust off-specification used oil

fuels, it is not

utilizing off-specification used oil as a fuel in

THIS FILING SUBMITTED ON RECYCLED PAPER

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the slag dryer.

As a result, Lafarge is not able to secure the benefits of used oil recycling and the

recovery ofthermal energy contained in these materials.

Lafarge

will

continue

to

combust

substantial

quantities

of natural

gas

and

suffer

the

economic uncertainties

associated

with

the volatility of natural

gas

supplies

and

costs.

As

the

cost of natural gas increases and

availability decreases, the

economic success and viability of the

slag

cement

production

operation

at

the

Grinding

Plant

becomes

questionable;

a

production

process that utilizes secondary materials from the steel industry that otherwise must be landfilled

or otherwise disposed of.

If the Board

grants

the requested adjusted standard relief,

Lafarge

would

purchase used

oil fuel from regulated used oil marketers at a cost per Btu of thermal energy that is significantly

less

than

the

escalating

cost

of natural

gas.

The

used

oil

fuels

would

be

subject

to

strict

specifications

to

ensure

high

Btu

value,

allow

complete

combustion

and

produce

negligible

change in the combustion

exhaust gas composition.

The

only

consequence

associated

with

the

Board’s

approval

of Lafarge’s

request

to

utilize

used oil

fuels in

its

slag

drying

system would be

a

change

in the air pollutant emissions

from

the

slag dryer.

Currently, the drying

system

utilizes natural

gas as

the primary dryer

fuel

and

air

contaminants

from

the

combustion

process

are

authorized

under

Lifetime

Operating

Permit

No.

98010053

issued

by

EPA

on

June

25,

2004.

The

Operating Permit

establishes

emissions

limitations

for total

particulate matter (“PM”), PM

with

an

aerometric

diameter less

than

10

microns

(“PM10”),

sulfur

dioxide

(“502”),

carbon

monoxide

(“CO”),

volatile

organic

material

(“VOM”),

and

nitrogen

oxides

(“NO~”). Compliance with

the

permitted

emissions

limits

is achieved by full

and complete combustion of the

fuel and operation of a high-efficiency

fabric filter baghouse system to control emissions in the dryer exhaust.

THIS FILING SUBMITTED ON RECYCLED PAPER

21

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Lafarge has investigated how

combustion of off-specification used oil fuel would affect

air pollutant emissions from the Grinding Plant drying system.

As noted above, Exhibit F

provides the supporting calculations of emissions ofall

regulated pollutants that would be

associated with annual combustion of up to

500,000 gallons of representative off-specification

used oil fuels that would be supplied by reputable, authorized used oil marketers.

Lafarge

estimates there will be no increases in any of the permitted emissions other than a slight increase

in

the emissions of sulfur dioxide

(SO2),

as compared to current emissions

from combustion of

natural gas.

Utilization of off-specification used oil fuel in the slag drying system would need to

be reviewed and approved by the IEPA air permitting officials, with issuance of a Construction

Permit and/or modifications

to the existing

Operating Permit.

Any questions about

the air

pollutant emissions associated with combustion of used oil fuel would be addressed and fully

answered through the air permitting review process.

Additional Information.

The Board’s October

20th

Order included the

following request

for additional

information to

address

35

Ill.

Adm.

Code

104.406(g):

“With

its

responsibility

to

review

the

environmental

impacts

of Lafarge

‘s

proposed

activity,

the

Board

requests

that

Lafarge

submit

a

copy

of its

4fetime

operating permit

issued by

he(sic) Agency.

Second,

the

Board

requests

that Lafarge provide

emission

levels,

whether

monitored or

estimated,

under

both

the

rule

ofgeneral applicability

and the proposed relieffor all contaminants of concern:

PM, SO2,

CO,

VOM, and NOx.

Third, the Board requests that Lafarge describe the quantitative

and qualitative

impacts

on

the environment of using off-specification

used oil asfuel instead of

natural gas.

Fourth, the Board requests that Lafarge describe the nature and source of the used

oil

that

it

intends

to

use

as fuel

in

terms

of

its

previous

use,

handling,

and

presence

of

contaminants.

Finally,

the Board requests

that Lafarge

address

whether it intends

to

THIS FILING SUBMITTED

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22

---

any

quality control measures

on

the off-spec(fication used oil

it

plans

to

use asfuel for

its slag

dryer.”

Lifetime

Operating

Permit and Emissions

Calculations.

As

requested,

Petitioner has

included

as

Exhibit 0

a true

and

complete

copy

of Lifetime

Operating Permit

No.

98010053

issued

by

IEPA

on

June 25,

2004 authorizing

operation of the

Grinding

Plant.

The

Operating

Permit

establishes

emissions

limitations

for PM,

PM10,

SO2,

CO, VOM,

and N0~. Compliance

with the permitted emissions

limits

is

achieved by full

and complete combustion of the fuel

and

operation of a

high-efficiency

fabric filter baghouse

system

to

control PM

and

PM10

emissions

entrained in the dryer exhaust.

In Exhibit

F

attached hereto, Petitioner has provided its

calculations

of the emissions of

all

contaminants of concern identified in the Board’s October

20th

Order,

specifically PM,

SO2,

CO, VOM, and NOx, that would result from the combustion ofup to 500,000 gallons/year of off-

specification

used

oil

as

supplemental

dryer

fuel.

All

values

and

parameters

utilized

in

the

emissions

calculations

are

set

forth

in

Exhibit

F.

In addition

to

the

foregoing,

Exhibit F

also

includes calculations of the emissions of the same contaminants PM,

SO2,

CO, VOM, and NOx,

that

result

from

the

combustion

of natural

gas

in

the

slag

dryer.

Note

that

Exhibit

E

also

provides

the actual

emissions

data for

PM,

SO2,

CO. VOM,

and NOx, emissions

from

the

slag

dryer for the 2004 calendar reporting year which are based on the current use of natural gas fuel.

Quantitative and Qualitative Impacts of Using Supplemental Used Oil Fuels.

In

preceding sections ofthis Petition,

Lafarge has described the results ofits investigations of air

emissions associated with the combustion of off-specification used oil fuel as a supplemental

dryer fuel compared to continuing use of 100 percent natural gas as the only dryer fuel.

Exhibit

F provides the supporting calculations ofemissions ofall regulated pollutants that would be

THIS FILING SUBMITTED

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23

---

associated with annual combustion of up to 500,000 gallons of representative off-specification

used oil fuels.

Based on those calculations, there will be no significant increases in any of the

permitted emissions with the largest increase

in the emissions of SO2 when compared to current

emissions

from the combustion of natural

gas.

Emissions of CO would actually decrease with

the use of used oil

fuel.

Moreover,

all

emissions associated with combustion ofoff-specification

used oil fuel would be less than the allowable emissions under the current Lifetime

Operating

Permit, with the exception of SO2.

Utilization of off-specification used oil

fuel

in

the

slag drying

system

would

need

to

be

reviewed

and

approved

by

the IEPA

air permitting

officials,

with

issuance of a

Construction

Permit

and/or

modifications

to

the existing

Operating Permit.

The

permitting

process would

ensure that all emissions associated with combustion of used oil fuel would be in full compliance

with all applicable regulatory requirements and environmental standards.

On a qualitative

basis,

Lafarge’s proposal to

utilize

off-specification used oil

fuel

in

the

slag drying process provides significant environmental

benefits by recycling and

reclaiming the

thermal

energy

from

the

waste

oils

that

are

generated

from

motor

vehicles,

refineries

and

numerous

industrial

processes.

Recycling

used

oil

for

reuse

or

energy

recovery

provides

environmental

and

economic

benefits.

According

to

the USEPA’s Office of Solid

Waste, re-

refining used oil takes only about one-third the energy ofrefining crude oil to lubricant quality; it

takes 42 gallons of crude

oil, but

only one

gallon of used oil,

to produce two

and a half quarts of

new, high-quality lubricating oil;

and

one

gallon of used

oil processed

for fuel contains about

140,000 British Thermal Units (BTUs) ofenergy.

Substituting

off-specification used oil

for natural

gas

also

helps

to

conserve

this

non-

renewable

resource.

As noted in

preceding

sections of this

Petition, the demand

for natural gas

THIS FILING SUBMITTED ON RECYCLED PAPER

24

---

has

far

outpaced

current

supplies

and

as

a result,

natural

gas prices

in

the United

States

have

more than doubled in the past three years.

Lafarge’s proposal to

substitute used oil

fuel

in place

of natural gas provides

an environmental benefit by conserving a valuable natural resource.

Indirectly,

the Board’s

approval

of the

relief requested

by

Lafarge

would

support

the

additional environmental benefits associated with the industrial byproduct recycling operations at

the

Grinding

Plant.

As

noted

earlier,

Lafarge’s

production

of NewCem

slag

cement

at

the

Grinding

Plant

uses

an

industrial

byproduct,

i.e.

blast

furnace

slag

that

otherwise

would

be

landfilled.

Production of cement

from

a byproduct of the steel manufacturing industry reduces

the

amount

of

virgin

raw

materials

and

energy

that

otherwise

would

be

consumed

in

manufacturing Portland cement

from

natural raw

materials.

Controlling

the operating

costs

of

the Grinding

Plant

by

approving

use of lower

cost

used oil

supplemental

fuel

would

provide

more

stability

to

Lafarge’s production

operations

and

maintain

the

environmental

benefits of

recycling

blast

furnace

slag

into

commercial

cement

products.

It

would

provide

reduce

the

Company’s

exposure to

the volatility ofprice and supply ofnatural

gas, a non-renewable source

ofenergy.

Sources

of Used

Oil

Supplies

and

Bask

Quality

Control

Management

Standards.

Included in Exhibit

G is

a description ofthe nature and source of the used oil

that

is likely to

be

available

for use as supplemental fuel

for the slag dryer.

In addition,

Exhibit

G

summarizes the

key

procedures

that would be

instituted to

control the quality of off-specification used oil to

be

used as fuel for the slag

dryer.

This summary document,

entitled

“Potential Supply Sources and

Basic Principlesfor Management of Used Oil Fuelfor the South Chicago Slag

Grinding Plant,”

was prepared for Lafarge by

Systech Environmental Corporation,

a wholly owned subsidiary of

Lafarge.

It

is

anticipated

that

Systech

Environmental

Corporation

will

serve

as

Lafarge’s

THIS

FILING SUBMITTED

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25

---

principal

contractor for identifying

and

qualifying

used oil

suppliers

and

making

arrangements

for delivery of used oil fuels to the

Grinding Plant by pre-qualified suppliers.

h)

A

statement which

explains how

the petitioner

seeks

to

justify, pursuant

to

the applicable

level ofjustification, the proposed adjusted standard;

Response:

Section 720.132

of the Board’s regulations (35

Ill.

Adm.

Code §720.132),

establishes the

criteria to

be

considered by the Board

in

making

a “case-by-case” determination

that certain enclosed devices using controlled flame combustion are boilers, even though they do

not otherwise

meet

the definition of a

“boiler”

contained in

Section

720.110.

The criteria for

“case-by-case” boiler determination track closely the regulatory definition of “boiler” set

forth at

35

Ill.

Adm.

Code

720.110.

Consequently,

when

evaluating whether

a

particular

combustion

source,

such as the

slag

dryer

at the

Lafarge

Drying Plant, should be

classified

as

a boiler, the

regulatory definition of “boiler” provides the determining physical characteristics.

Set

forth below

is the regulatory definition of a “boiler” which identifies the key physical

characteristics

of

a

boiler

to

be

considered

in

making

a

“case-by-case”

boiler

determination

under 35

Ill.

Adm. Code 720.132.

The

35111.

Adm. Code

720.110 “boiler”

definition states:

“Boiler”

means

an

enclosed

device

using

controlled

flame

combustion

and

having the following characteristics:

Boiler physical characteristics.

The

unit

must

have

physical

provisions

for

recovering

and

exporting

thermal

energy

in

the

form

of steam,

heated

fluids,

or

heated

gases;

and

the

unit’s

combustion

chamber

and

primary energy

recovery

sections

must

be

of integral

design.

To be ofintegral design, the combustion

chamber and the primary energy

recovery

sections

(such

as

waterwalls

and

superheaters)

must

be

physically

formed into one

manufactured or assembled unit.

A unit in which the combustion

chamber

and

the primary energy recovery sections

are joined

only

by

ducts

or

connections

carrying

flue

gas

is

not

integrally

designed;

however,

secondary

energy recovery equipment (such

as

economizers

or air preheaters)

need

not

be

physically

formed into the same unit as the combustion chamber and

the primary

energy

recovery

section.

The

following

units

are

not

precluded

from

being

boilers

solely because they are not of integral

design:

process heaters (units

that

THIS FILING SUBMITTED

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---

transfer energy directly to

a process

stream)

and

fluidized bed

combustion units;

and

While

in

operation,

the

unit

must maintain

a

thermal

energy recovery efficiency

of at least 60

percent,

calculated in terms of the recovered

energy compared

with

the thermal value of the

fuel; and

The unit

must

export

and

utilize

at

least

75

percent

of the

recovered

energy,

calculated

on

an

annual

basis.

In this

calculation,

no

credit

may be

given

for

recovered heat used internally in

the same

unit.

(Examples of internal use are the

preheating of fuel or combustion

air,

and

the driving

of induced or forced draft

fans or feedwater pumps);

or

Boiler by designation.

The

unit

is

one that the Board has determined,

on

a

case-

by-case basis,

to be

a boiler, after considering the standards in Section 720.132.

The

35

III.

Adm.

Code

720.132(a)

Criteria.

Set

forth

below

is

a demonstration that

Petitioner’s

slag

dryer satisfies

each

of the criteria specified at

35

Ill.

Adm.

Code 720.132(a)

to

be considered a boiler.

Section

720.132(a)

The extent to

which the unit has provisionsfor recovering

and exporting

thermal energy

in

the form

of steam,

heatedfluids

or heated

gases:

The process unit is

a thermal

dryer with

its

main

objective being to

recover the thermal

energy in

the

fuel

being

burned

in

order

to

heat

the

slag

and

drive off moisture.

The

dryer

functions

as a direct-fired process heater, in

which the process material, wet

blast furnace

slag,

and

additional air are brought into

contact with the hot combustion product

gases.

The

thermal

energy released

by the

combustion

of the

fuel

is transferred

to

the wet

slag.

Heating the

slag

vaporizes a portion of the moisture that

is in

the pores of the material.

The heat is then exported

in

the

form

of heated

slag,

gases and

water

vapor.

The

slag,

hot

gases

and

water

vapor

are

discharged

from

the

dryer

through

a

cyclonic separator,

where

the

slag

is

removed

from

the

exhaust gas stream,

which

is

cleaned by

a

high-efficiency

fabric filter baghouse

system

before

THIS FILING SUBMITTED

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27

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being

discharged

to

the

atmosphere.

The

dried

slag

captured

in

the

cyclone

separators

is

conveyed to

a mill where

it is ground to

the desired particle size.

The dryer

is

fully

enclosed

with

an

outer

shell of steel.

The

burning

chamber

is

lined

with

a

high temperature resistant refractory material

and the transport shaft is lined

with ceramic

tile.

This design is conducive to recovering as much energy as possible from the

fuel.

Section

720.132(b).

The extent to

which the combustion

chamber and energy recovery

equipment are ofintegral design;

The dryer is

fully enclosed and of integral design.

The combustion chamber and vertical

shaft

were

assembled

to

be one

piece of equipment.

The

dryer

is

an

inline

portion of the

slag

cement manufacturing process,

in which the slag is dried, ground and size-classified to produce a

salable

cement

product.

For a graphic depiction of the

slag

dryer,

see the engineering drawing

attached hereto as Exhibit

C.

The regulatory definition of a “boiler” set

forth in the Board’s regulations at 35

Ill.

Adm.

Code

720.110

includes

an

express

exemption

from

the “integral

design”

element

for

process

heaters such

as the

slag

dryer.

The

regulation states,

“The following

units

are not precluded

from

being

boilers

solely because

they are not of integral

design:

process

heaters

(units

that

transfer energy directly to a process stream) andflu idizedbed combustion units.”

Because the

slag

dryer

is

a direct-fired process heater

where the

thermal energy of the

combusted fuel

is transferred to the

wet slag being processed, the

element of“integral design” is

not determinative

in

this

proceeding.

However, the

slag

dryer is

fully enclosed and of integral

design

so

compliance

with

this

criterion

is

established

even though

the unit

is

subject to

the

process heater exemption.

Section

720.132(c)

The

efficiency of energy recovery,

calculated in

terms

of

the recovered energy compared with the thermal value ofthe fuel;

THIS

FILING SUBMITTED ON RECYCLED PAPER

28

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For purposes of calculating

the efficiency of energy recovery,

a

detailed analysis

of the

South

Chicago

Drying

System

is

necessary.

The

South

Chicago

Drying

System

can

be

graphically depicted and

summarized with the following process flow diagram:

Qin

=

neat into system from

DRYER

Qout

=

Heat out of system

Air,

slag, Natural gas. fa!se

P

from Air, radiation, slag

air.

Wcycle

“Qin”

=

heat into the system

“Qout”

=

Energy out of the system

“Wcycle”

=

net amount of energy transfer by heat and work.

Systems

undergoing

the drying process

as

described above deliver a network

transfer of

energy to

the surroundings. This is called a “power cycle.”

Thermal efficiency is calculated in

engineering thermodynamic reference materials as the

following:

=

WcyclelQin

eq#1

An alternative form based on the balance of the system described above can be:

=

(Qin-Qout)/Qin eq#2

Equation #2 translates into:

Efficiency

=

Energy Absorbed (Qin-Qout) divided by Qin (Heat into system)

The efficiency method described above is based on the principles of the First and Second

Laws of Thermodynamics, hence a method uniformly used worldwide

for the design,

operation

and

evaluation ofheat systems.

(See

Fundamentals ofEngineering Thermodynamics,

Michael J.

Moran, Third Edition,

1996,

pages

60-61;

Chemical and Process

Thermodynamics,

B.G.

Kyle,

Second Edition,

1992, page 63

A

heat

balance

has

been

calculated

for

the

Slag

Drying

System

to

provide

the input

variables

for the

thermal

efficiency calculations.

All

values

and

parameters used

in

the heat

balance

calculations

are

set

forth

in

the

following

“Table

1.

Heat

balance Calculations:

Total

Heat In”

and

“Table

2. Heat Balance Calculations: Total Heat Out.”

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Table 1.

Heat Balance Calculations:

Total

Heat

In

Heat

Moisture

As

measured

lg/

(Kcal/Xg

Line

Feed

Definition

As Measured

Qcg/Fv)

Calculation

(dry basis)

Feed

Kg

slag

T(C)

CP

(kcat&gC)

Slag)

OF

Dilution Fan

82.116

61681

61,681

0.843

22.0

0.2421

4.4892

2

CF

combustion

Fan

10,800

10.724

10.724

0,147

24.0

0.2425

0.8531

3

FAD

FreshAiroarnpec

17,717

17.593

17.593

0.240

27.0

0.2432

1.5789

4

Slag

Slag

Feed

81,300

73,170

73,170

1,000

36.0

0.1779

6.4041

5

Slagjl2O

SlagWater

8,130

8.130

0.111

36.0

0.4574

1.8296

6

DF_H20

Dilution Fan

Air

Water

435

435

0.006

24.5

0.4527

0.0659

1

CF_H20

combustion

Fan AirWater

76

76

0.001

27.0

0.4537

0.0127

8

FAD_H20

FreshAiroamperAirWater

124

124

0.002

22.3

0.4518

0.0171

9

FUEL_H20

Fuel Gas

Water

42.47

42.47

0,001

25.0

0.4529

0.0066

10

Fuel Latent Heat

425

382

382

0.005

25.0

0.2500

0.0326

II

FalseAir

10.118

10.118

10.118

0.138

23.0

0.2423

0.7708

12

FUEL

combustion Heat

22,245

1,013

77.6085

13

Total

Heat

In

93,6688

Outlet

Outlet

Table 2.

Heat Balance

Calculations:

Total Heat Out

14

False Air

in Stack

Gas

10.118

Estimato 10

10,118

10,118

0,138

72.0

0.2536

2.5244

15

Stack Gas

91,058

90.420

90,420

1.236

72.0

0.2536

22.5604

16

Stack

Gas_H20

Stack

Gas

Water

637

7,437

7,437

0.102

72.0

0.4725

3.4582

17

Slag

Slagoutlet

76,500

76.500

76,500

1,046

42.0

0.1791

7.8642

18

Slag

H20

Slag water

1,700

1.700

1,700

0.023

42.0

0.4599

0.4487

Approximately

2.5

19

Radiation

of

total heat

out

2.2294

20

Heatofvaporization

6,800

0.093

539

50.0916

21

.

Heat

Out

89.1769

22

Other

heat contained

v4thin

the

system

4,4920

23

Total

Heat

Out

93.6688

24

.

Recovery

Notes:

Slag feed is 85000 kg/hr

@10

moisture.

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The following parameters were used to calculate the heat balance for the Slag Drying System:

Inlet Parameters

Heat inputfrom dilutionfan

(DF)

=

(Pty

Dilution Fan Airflow (kg/hour) /0’)’ Slag Feed Rate (Kg/hour))

*

Temperature ofAir stream

(°c)

*

Specific Heat capacity ofAir

~)

stream

T

Heat inputfrom cornbastion fan

(cF)

(Dry

combustion Fan Airflow (kg/hour) /Dry Slag Feed Rate (Kg/hour))

*

Temperature ofAir s~~ij

(‘C)

*

Specific Heat

capacity ofAir ~

stream

T

Heat inputfrom Fresh

Air Damper (FAD)

=

(Dry

Fresh Air Damper Airflow (kg/hour)

/Dry

Slag Feed Rate (Kg/hour))

*

Temperature of Air

stream (‘C)

*

Specific Heat

capacity ofAir

t~

stream

T

Heat inputfrom Slag stream

=

(Dry

Slag Feed Rate (kg/hour) /Dry Slag Feed Rate (Kg/hour))

*

Temperature Slag Feed before

dryer (°C)

*

Specific

Heat capacity ofSlag ~)stream

T

**

The

slagfred

rate was

used as the

reference material (Kcal/Kg slag)

Heat input from water in

slag

(Water mass flow in slag

(kg/hour)

*

/

Dry Slag Feed Rate (Kg/hour))

*

Temperature water in

slag (‘C)

*

Specific Heat

capacity

ofwater ~

stream

T

Heat inputfrom

waterin dilutionfan air stream

(Water massflow

in

dilution air stream from relative humidity (kg/hour) */Dry Slag Feed

Rate (KR/hour))

*

Temperature ofwater in dilution air strea,n

(‘C)

*

Specific Heat capacity of water ci)

stream

T

Heat inputfrom water in combustion fan air stream

(Water massflow in

cornbustionfan air streamfrom

relative humidity (kg/hour) */Dry

Slag Feed Rate (Kg/hour))

*

Temperature ofwater in combustion fan air stream (‘C)

*

Specific Heat capacity ofwater

ci)

stream

T

Heat inputfrom

water infresh air damper air stream

(Water mass flow in fresh air damper air streamfrom relative

humidity (kg/hour)

*/

DrySlag Feed Rate (Kg/hour))

*

Temperature ofwater infresh air damper air stream

(‘C)

*

Specific Heat capacity ofwater ~

stream

T

Heal input from water in Natural Gas stream

=

(Water massflow

in gas from moistureprovided by gas company (kg/hour)

*/Dry

Slag

Feed

Rate (Kg/hour))

*

Temperature ofwater in

gas stream from gas company (‘C)

*

Specific Heat

capacity ofwater ~

stream

T

Hew

input from latent heat ofnaturalgas

=

(Dry natural gasflow rate (kg/hour) / Dry Slag Feed Rate (Kg/hour))

*

Temperature ofnaturalgas

stream

(‘C)

*

Spec4fic Heat capacity ofnatural gas ~

stream T

Heat inputfrom false air

=

(Dry false air Airflow (kg/hour) / DrySlag Feed Rate (Kg/hour))

*

Temperature ofAirstream (‘C)

*

Specific Heat

capacity ofAir

®

stream T

***

False air is the air as a result ofin-leakage

in

the system. It is estimated

to

be about 10

ofthe

stack’s airflow

rate

Heal inputfrom natural gas stream

=

naturalgasflow

rate from

gas meter (ft”J/hour)

*

Gasfuel valuefrom

gas company (BTU/ft”3)

*

conversion factor to Kcal/Drv Slaz Feed Rate (Kg/hour)

I

Total

heat in

SUM Lines (I to 12)

Outlet Parameters

Heat outputfromfalse air

(Dryfalse air Airflow (kg/hour) /Dry Slag Feed Rate (Kg/hour))

*

Temperature ofAir

stream (‘C)

*

Specific Heat

capacity

ofAir@ stream

T

False air is the air as

a result

ofin-leakage

in

the system. It is estimated to be about 10

ofthe

stack’s airflow

rate

Heat outputfrom stack stream

(Dry stack stream Airflow (kg/hour)

/Dry

Slag Feed Rate (Kg/hour))

*

Temperature ofAir stream (‘C)

*

Specific

Heat

capacity

ofAir ~

stream

T

Heat outputfrom water in

stack air stream

—

(Water

mass

flow in

stack air streamfrom relative humidity (kg/hour) */Dry Slag Feed Rate

(Kg/hour))

*

Temperature of water in

stack air stream (‘C)

*

Specific

Heat capacity ofwater ~

stream

T

Heat outputfrom Slag stream

—

(Slag massflow

rate after dryer (kg/hour) /Dry Slag Feed Rate (Kg/hour))

*

Temperature Slag after dryer (‘C)

*

Specific Heal capacity ofSlag ~

stream T

Heatoutputfrom

water in slag

stream after dryer

(Water massflow

in slag

steam

(kg/hour) /Dry Slag FeedRate (Kg/hour))

*

Temperature

water in

slag (‘C)

*

Specific Heat

capacity ofwater ~

stream

T

I

Heat outputfrom heat loss

thru the system walls

Total heat out (SUM lines 14 to 18 and line 20)

*

0.025

I

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Heat output

releasedfrom the vaporization of water

=

Water mass flow rate (kg/hr)/Dry Slag Feed Rate (Kg/hour)

*

heat of vaporizatio~

water

Heat out

=

(SUM Lines (14 to 18) and Line 20) /0.975

(stack factor)

I

I

Other heat contained within the

system

=

Line

13.

Line

21

**

This heat includes the radiation

heat loss

I

Total

heat Out

=

SUM Lines (21

to 22)

I

Other

Definitions

CP

=

Specific Heat Capacity.

At

a given temperature, this is the heat input expected

from each ofthe components named above.

•

As measure sample: On

actual conditions, without moisture adjustments

•

Moisture calculation: In the case of the air, the relative humidity and

temperature is

used along with

a Psychometric

chart to determine the Kg of water/Kg or air ratios.

•

As measured (Dry basis):

Stream of water or material with the moisture removed

•

Kg/Kg_slag

:

When

performing heat balances

it

is

important

to

select

a reference

variable. In this case, we selected the slag feed as a reference variable.

•

T: The actual temperature ofthe material or gas stream.

•

Heat: The heat consumption

can be

obtained by multiplying the Kg/Kg_slag times

the temperature times the CP of the individual values.

Assumptions

Used

in

Heat

Balance

Calculations.

One

of

the

primary

tasks

in

designing

combustion

equipment

or

engineering

a

complex

mineral

drying

process

is

the

development

of

a

heat

balance.

Development

of

a

heat

balance

is

essentially

a

detailed

accounting of the distribution of heat input,

heat output

and

system

losses.

The

heat balance

accounting

relies

on

actual

test

data,

mathematical

derivations

and

generally

accepted

engineering assumptions.

Two ofthose assumptions used by Petitioner in preparation of the heat

balance

calculations

for the

Slag

Drying

System

were

the

amount

of “false

air”

input

to

the

system and the amount ofheat loss due to “shell radiation.”

For Lafarge cement manufacturing and mineral processing facilities and generally within

the

cement

industry,

an

accepted

assumption

for

average

“false

air”

in

newer

combustion

equipment

and

mineral

drying

systems

is

a

10

percent

value.

This

value

takes

into

account

devices such as

expansion joints,

inspection

doors/ports,

normal equipment wear

and

any

other

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in-leakage inherent with

the

system.

This

value for the

“false air”

assumption has been used in

the

design

of

equipment

and

mineral

drying

systems

for

Lafarge’s

numerous

cement

manufacturing

and

mineral processing

facilities.

As

noted

in

the

heat balance

calculations

set

forth

above,

Petitioner

used

the

generally

accepted

10

percent

value

for

the

“false

air”

assumption.

For Lafarge cement manufacturing and mineral processing facilities and

generally within

the cement

industry, an

accepted

assumption

for average

heat losses

due

to

“shell radiation” in

newer

combustion

equipment

and

mineral

drying

systems

is

a

2.5

percent

value.

This

assumption

addresses

the

radiant

heat

lost

to

the

surrounding

structures

of

the

dryer

or

combustion device. This value for the “shell radiation” heat loss

assumption has been used in the

design of equipment

and

mineral drying systems

for Lafarge’s numerous cement manufacturing

and

mineral

processing

facilities.

As

noted

in

the

heat

balance

calculations

set

forth

above,

Petitioner

used

the

generally

accepted

2.5

percent

value

for

the

“shell

radiation”

heat

loss

assumption.

In

connection with

development

of the

heat balance

set

forth

in

this

Petition,

Lafarge

engineers consulted

with

reputable vendors

of cement

kilns

and

mineral

dryers.

Through

that

consultation,

Petitioner verified that

a

10

percent

value for the “false air” assumption

and

a

2.5

percent

value

for

the

“shell

radiation”

heat

loss

assumption

are

values

used

in

designing

equipment and mineral processes for other cement manufacturers and raw material processors.

Additional Information.

The

Board’s October ~

Order included

the following request

for additional

information to

address 35111.

Adm.

Code

104.406(h):

“While Lafarge has named

a

design

engineer

with

which

it

verified these

assumptions,

the petition

does not

include

any

supporting documentation or affidavits.

The Board requests that Lafarge submit

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33

---

or affidavits

supporting the assumptions

made

in

calculating

the energy recovery efficiency of

the slag dryer system.

M

requested by

the

Board,

Petitioner has included the affidavit of Mr.

David

Ledesma

which

is

attached hereto as Exhibit

I.

Mr. Ledesma currently holds

the position of Engineering

Manager of the Process

Engineering Department

with

Lafarge

Midwest,

Inc.

In

that

capacity,

Mr.

Ledesma

provides

engineering

support

for

Lafarge’s

cement

manufacturing

and

mineral

processing

facilities

from

the

corporate

engineering

offices

located

at

the

Lafarge

Alpena

Portland Cement

Plant located

in

Alpena, Michigan.

In addition to

the Lafarge

Alpena

Cement

Plant,

Mr.

Ledesma’s engineering

duties

include

other Lafarge

facilities,

including

the

Lafarge

South Chicago Slag Grinding Plant located in Chicago, Illinois.

Mr.

Ledesma prepared the heat

balance calculations for the Slag Drying System that are set forth in this Petition.

The Affidavit of Mr.

Ledesma

provides

the

support

requested

by

the Board’s October

20th

Order.

Based

on

his

project

experience,

engineering judgment,

consultation

with

other

engineering

professionals

and

a

reasonable

degree

of scientific

certainty,

Mr.

Ledesma

has

verified that

use of the

10 percent value for the “false air” assumption

and the

2.5

percent value

for the “shell radiation” heat loss

assumption

were

appropriate

in

conducting

the heat balance

calculations for the South Chicago Slag Drying System.

Thermal Energy Recovery Efficiency Calculation.

The definition of the term “boiler”

at

35

Ill.

Adm.

Code

720.110

specifies a

standard for thermal energy recovery efficiency for a

boiler.

The relevant portion of the definition (which is

identical to

the

federal

definition)

states:

“While

in

operation,

the

unit

must

maintain

a

thermal

energy recovery efficiency of at

least 60

percent,

calculated in terms ofthe recovered energy compared with the thermal value of the fuel”

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Calculations to

demonstrate compliance with the 60

thermal energy recovery efficiency

standard of Section 721.110

were performed as described below:

•

Thermal

value

of

the

fuel

from

line#

12

“Table

1.

Heat

Balance

Calculations:

Total Heat In”

=

77.6085

Kcal/Kg_Slag

•

Recovered

Energy

=

Energy used by the

system.

This

value

is calculated

as follows:

o

The total

value

of energy

used

(based

on

a

one

year production

period)

is calculated by

subtracting the total energy consumed

in a

one

year period minus the pre-heat portion of the

system

(1.5

of

the

total

energy

used).

The

total

energy

was

calculated

by

multiplying

the known energy consumption

from the heat balance

(93.6688

Kcal/Kg_Slag)

with

the

total

Kg

of slag

used

in

2002

(111,991,000). To

this number, subtract the 1.5

of energy used in

the pre-heating process of the

furnace.

o

In order

to

calculate the

recovered

energy (energy

absorbed)

from

the

system,

to

the

total

heat

value

calculated

above,

we

will

subtract

all heats that leave the system (False air in

stack gas, stack

gas, stack gas H2O, and Radiation)

o

The value obtained from the step above is 61.69 KcaI/Kg slag

•

Finding the

thermal

energy recovery as per 40

CFR 260. 10(1)(iii):

The

last

step

is

to

divide

the

recovered

energy

(energy

absorbed)

by

the

Thermal

value of the fuel: 61.69/77.61

*

100

=

79.23

As

demonstrated

by

the

foregoing

calculations

(and

supported

by

the

heat

balance

calculations),

the Slag Drying System achieves a thermal

energy recovery efficiency of 79.23.

The

thermal

energy

recovery

efficiency

clearly

exceeds

the

Section

720.110

criteria

of

a

minimum of 60

recovery.

Section

720.132(d)

The extent to which exported energy is utilized;

The definition of the term “boiler”

at

35

Ill.

Adm.

Code 720.110

specifies a standard for

utilization of the

recovered thermal

energy for

a

boiler.

The

relevant

portion

of the definition

(which is identical to

the

federal definition)

states:

“The unit must

export and utilize

at least

75

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percent of the recovered energy, calculated

on an annual basis.

In this calculation, no credit may

be

given for recovered

heat used internally in

the

same

unit.

(Examples of internal use are the

preheating of fuel or combustion air,

and the

driving ofinduced or forced draft fans or feedwater

pumps.)”

Internal

use of the recovered

heat only occurs during preheating every time the

system

is

started.

The preheating hours account for 1.5

of the total

operating

hours

in

a

year.

With

the

loss of

1.5

percent of the

fuel heat input

due to

preheating the dryer,

the annual energy recovery

is estimated to be

79.23.

Total Kcal

used without

heat of drying

Total Kg of

slag from

2002

Kcal/hg slag

Used in Pre-

Heat

Kcal/kg slag

used in pre-

heat

Recovery

after

subtracting

preheat_used

111,991,000

93.67

1.50

157,350,997

10,332,715,500

92.26

79.23

Section

720.132(e)

The

extent

to

which

the

device

is

in

common

and

customary

use as

a

“boiler” functioning primarily

to

produce steam,

heated

fluids or heatedgases.

Direct-fired dryers

and process

heaters are

widely used in

the production of cement

and

other non-metallic mineral products.

Cement kilns

and the associated process heaters and dryers

used in

the production of Portland cement

utilize

a tremendous

amount of fuel

to

dry the raw

materials

before

being

introduced

into

the

pyroprocessing

steps

and

to

produce

the

extreme

temperatures

and

long

residence

times needed

to

calcine limestone

rock,

shale,

sand and

other

minerals to produce clinker and ultimately Portland cement.

It is a matter ofcommon knowledge

that cement kilns

utilize a variety of fuel types including

coal, petroleum coke,

specification and

off-specification used oil, used vehicle tires and hazardous wastes in a safe and

environmentally

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sound

manner under

express authorization

and

approvals from

state and

federal

environmental

regulatory agencies.

Lafarge

operates

a

large

Portland

cement

manufacturing

plant

located

near

Alpena,

Michigan.

The Alpena Plant is Lafarge’s largest Portland cement-producing

facility and reputed

to

be

the largest cement manufacturing

facility in

North America.

The

plant

consists

of five

cement

kilns

that

produce

approximately

2.7

million

tons

of

cement

annually.

At

Alpena,

cement

is made from

high quality limestone,

silica,

alumina

and

iron.

The

limestone is crushed

into nuggets, which are transported by conveyor to the plant.

There, the limestone and other raw

materials arc dried in the

raw feed dryers and fed into raw grinding mills which

grind and blend

the raw feed mixture

into a fine powdered kiln feed.

This

“raw grind” kiln feed is conveyed into

rotary cement kilns where

it

is heated to

over 2700°Fahrenheit becoming grayish-black

nuggets

called

clinker.

When

the clinker emerges

from the

kiln,

it

is

cooled, mixed

with

gypsum,

and

ground into the fine powder known as Portland cement.

Lafarge

is

committed

to

sustainable development

and

the Alpena

Plant has served

as

a

showcase

for several

environmentally beneficial

recycling projects.

For

example, the Alpena

Plant is one of the few North American cement plants to

use waste heat from the cement kilns to

generate

steam

which

drives

turbines

that

produce

electricity

to

power

the

plant’s

internal

electrical

system.

Additionally,

through a program known

as “industrial ecology”

Lafarge

has

implemented

projects

to

utilize

the

waste

byproducts of two

other manufacturing processes as

raw materials

used in

the manufacture of Alpena

cement.

The projects result

in

a reduction

in

the

total

waste

stream from

the plant

while maintaining the high-quality cement for which

the

plant

is known.

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Another

recycling

opportunity

implemented

by

Lafarge

at

the

Alpena

Plant

was

the

utilization of off-specification

used oil

as

fuel

in

the raw grind dryers.

The

State

of Michigan

administers

a

used

oil regulatory

program

that

is

virtually identical

to

the

federal

and

Illinois

used

oil

management

programs.

Consequently,

Lafarge

consulted

with

the

Michigan

Department of Environmental

Quality (“DEQ”) to

secure approval to combust

off-specification

used oil

fuel in the raw grind

dryers.

Under the DEQ-administered used

0iIIRCRA regulations,

specifically Michigan DEQ rules R299.9814 and 299.9101,

Lafarge was required to demonstrate

that the Alpena raw grind dryers satisfied the physical boiler criteria established by USEPA (and

adopted

by

both

Illinois

and

Michigan),

to

demonstrate

use

of

used

oil

fuel

in

the

dryer

constituted a

legitimate use for energy recovery.

As

noted above, those

physical criteria are set

forth

in

the

definition of “boiler”

and

rely

upon

the concepts of integral

design,

combustion

efficiency and energy recovery.

The

Michigan

DEQ

reviewed

the

design,

combustion

efficiency

and

energy

recovery

attributes of the raw

grind

dryers

and

determined that

the “boiler”

criteria were

established

for

these process heaters.

Because the DEQ officials determined that

the physical criteria were met,

Lafarge was

given approval to proceed with the

combustion of off-specification used oil

fuel

in

the raw grind dryers.

The

Michigan DEQ approved the use of used oil fuel

by

a detailed analysis

ofthe

dryer

information provided by Lafarge, and

did

not require Lafarge

to

seek

a variance

or

adjusted standard

through

the “boiler

by designation” process.

A copy of the Michigan DEQ’s

April

2,

2004 determination is attached hereto as Exhibit D.

The

raw slag

dryer

utilized

at

Lafarge’s Grinding

Plant

is the

same

type of combustion

source

as

the

raw

grind

dryers

at

Lafarge’s Alpena cement

plant

that

were

authorized

by

the

Michigan

DEQ

to

combust

off-specification used

oil.

With

respect

to

the

physical

criteria

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established in

the definition of “boiler,” specifically

integral

design,

combustion

efficiency and

energy

recovery,

the

South

Chicago

slag

dryer

and

the

Alpena raw

grind

dryers

are

virtually

identical combustion

sources.

The Michigan DEQ’s

determination

that

the Alpcna dryers meet

the boiler physical characteristics and therefore

are

authorized to

combust off-specification

used

oil

fuel

is

an excellent

example that

such dryers, including the slag

dryer

at the Grinding Plant,

are

combustion

sources

“in

common and customary use

as

a

“boiler “functioning primarily

to

produce

steam,

heated fluids

or

heated