ILLINOIS
    ENVIRONMENTAL
    PROTECTION
    AGENCY
    1021
    NORTH
    GRAND
    AVENUE
    EAST,
    P.O.
    Box
    19276,
    SPRINGFIELD,
    ILLINOIS
    62794-9276
    (
    217)
    782-2829
    JAMES
    R.
    THOMPSON
    CENTER,
    100
    WEST
    RANDOLPH,
    SUITE
    11-300,
    CHICAGO,
    IL
    60601
    -(312)
    814-6026
    ROD R.
    BLAGOJEVICH,
    GOVERNOR
    DOUGLAS
    P.
    Scon,
    DIRECTOR
    May
    4,
    2009
    SOpFICE
    0
    MAY
    06
    2009
    Mr.
    Tim
    R.
    Nicol
    pTTE
    ILLINOIS
    Flint
    Hills
    Resources
    (On
    Control
    8
    oard
    P.O.
    Box
    941
    Joliet,
    IL
    60434
    09
    (
    Re:
    Provisional
    Variance
    Application
    Joliet
    Facility
    Facility
    I.D.
    No.
    197800ABZ
    Dear
    Mr.
    Nicol;
    On April
    30, 2009,
    the
    Illinois
    Environmental
    Protection
    Agency
    (“Illinois
    EPA”)
    received
    an
    application
    for a
    provisional
    variance
    from
    Flint
    Hills
    Resources
    (“FHR”)
    (attached
    as
    Exhibit
    A)
    relating
    to
    a
    planned
    natural
    gas
    outage
    at its
    facility
    located
    in
    Joliet,
    Illinois.
    Per
    a request
    by
    the Illinois
    EPA,
    FHR
    supplemented
    the
    application on
    May
    1, 2009
    (attached
    as
    Exhibit
    B).
    In its
    submission,
    FHR
    requested
    a provisional
    variance
    from
    certain
    conditions
    contained
    in
    its
    CAAPP
    pennit
    (permit
    no.
    96010025,
    conditions
    7.7.6(a)
    and
    7.7.5(b)).
    The
    Illinois
    EPA
    has
    reviewed
    the
    request
    pursuant
    to
    the Illinois
    Environmental Protection Act
    (“Act”)
    and
    corresponding
    regulations
    at 35
    Ill. Adm.
    Code
    Parts
    104
    and
    180.
    Pursuant
    to
    Section
    3
    5(b)
    of
    the
    Act
    and
    35 Ill.
    Adm.
    Code
    104.302,
    the
    request
    is hereby
    approved
    for
    the
    reasons
    and
    under
    the
    conditions
    stated
    below
    for
    a
    period
    commencing
    on
    the
    date
    of
    this
    decision
    letter
    and
    ending
    on
    May
    8, 2009.
    This
    provisional
    variance
    is granted
    subject
    to
    the
    following
    conditions:
    1.
    That
    FHR
    take
    reasonable
    measures
    for
    the alternative
    propane
    fuel
    system
    (described
    in
    FHR’s
    provisional
    variance
    request)
    to
    maintain
    a fuel
    supply
    to
    the
    pilot
    burner
    of
    the
    flare
    during
    the
    period
    when
    the
    natural
    gas
    supply
    to
    the
    flare
    is
    interrupted,
    provided,
    however,
    that
    this
    propane
    fuel system
    shall
    not be
    used
    if it is
    determined
    that
    it
    will
    threaten
    the safety
    of personnel,
    will
    pose
    a significant risk
    of damage
    to equipment, or
    cannot
    adequately
    maintain
    a
    pilot
    flame
    for the
    flare.
    2.
    That
    within
    15
    days
    after
    expiration
    of
    the provisional variance
    term,
    FHR
    submits
    to
    the
    Illinois
    EPA,
    Bureau
    of
    Air,
    Compliance
    Section,
    a report
    regarding
    the
    success
    or
    failure
    of the
    propane
    fuel
    system
    for the
    flare.
    If the
    propane
    system
    was
    not
    successfully
    used
    to
    maintain
    a
    pilot
    flame
    for
    the
    flare,
    this
    report
    shall
    include
    a
    description
    of the
    outage
    of
    the
    flare,
    the
    reasons
    for
    the
    outage
    (e.g.,
    an
    explanation
    of
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    .
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    Des
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    IL
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    693-5463
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    University
    St.,
    Peoria, IL
    61614
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    — 2125
    South First
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    Champaign,
    IL 61820
    —(217)
    278-5800
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    Collinsville,
    IL
    62234—
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    —(618)
    993-7200

    the causes or likely causes
    of the failure of the propane
    system), the total duration
    of the
    outage (hours), and an estimate
    of the actual emissions of
    VOM and methane
    from
    anaerobic reactor
    ER-70 1 during the
    period of flare outage,
    with supporting
    calculations.
    Provisional variances may
    be granted by the Illinois EPA
    when
    compliance
    on a
    short-term
    basis
    with any rule
    or
    regulation,
    requirement or order
    of the Illinois
    Pollution Control Board, or
    any
    permit requirement would
    impose an arbitrary
    or
    unreasonable hardship.
    415 ILCS 5/35(b).
    FHR has
    requested a
    provisional
    variance from the following permit
    conditions:
    CAAPP
    Permit
    No.
    96010025
    Condition 7.7.6(a): methane limit
    of 31.9 lb/hr and
    volatile organic
    materials (“VOM”)
    limit of 0.1 lb/hr from the flare.
    Condition
    7.7.5(b): requires that flares
    be operated
    such that
    a
    minimum of 95%
    biogas
    sent
    to
    the flare is converted to carbon dioxide and water.
    FHR’s request is due to a
    planned natural
    gas outage to
    its entire Joliet facility.
    Nicor, FHR’s
    natural
    gas
    supplier, will be replacing valving, piping, and the meter for the
    natural gas supply
    line coming into the plant. There is an area of active
    corrosion on Nicor’s piping and an active
    leak which, while temporarily
    mitigated, needs
    to be
    addressed to avoid a potentially
    larger and
    more dangerous
    natural
    gas
    release in the future. As a result of the outage, the
    flare system used
    to
    control emissions of methane from anaerobic reactor ER-701,
    which is
    part
    of the facility’s
    wastewater treatment system, will be
    nonoperational.
    This will result in exceedances of
    permitted methane and VOM
    limits for a period of 120 hours or less. FHR estimates
    that the
    maximum
    emissions from the reactor during that
    time period will
    be 167
    lb/hr of methane and
    1.8
    lb/hr of VOM.
    FHR has indicated that it
    will attempt
    to use
    propane as an alternative pilot gas for
    the
    flare
    during the natural
    gas outage; however, use of
    propane for this
    purpose is
    unproven and therefore
    may
    not work, or may result
    in unexpected complications with flare performance. FHR
    has
    also
    explained that
    discontinuing wastewater feed into the
    anaerobic
    reactor
    during
    the
    outage is not a
    viable option,
    as a
    discontinuance
    for more than 17 hours increases the risk of an adverse effect
    on
    the bacteria in the
    aerobic and anaerobic
    systems which
    could, in turn,
    result in other
    compliance issues.
    FHR has examined other
    alternative methods
    of
    compliance, such as the use
    of
    alternative flare ignition
    devices and continued flaring without
    a
    pilot flame, and has
    sufficiently demonstrated
    that such alternatives are not
    viable.
    FHR
    has
    met
    the application
    requirements of 35 Ill.
    Adm.
    Code 180.202. The Illinois EPA
    agrees that no adverse
    environmental impacts are
    likely to result
    from granting
    the requested
    relief, as the primary
    pollutant being released is
    methane, which
    is not a regulated
    pollutant. The
    Illinois EPA also
    agrees that inaction by
    Nicor could present
    serious safety
    issues related to
    future natural gas
    releases. Further, FHR will
    only require the
    requested relief
    if
    its
    attempt
    to
    use propane as an
    alternate pilot gas is
    unsuccessful. Therefore,
    considering the
    short duration
    of the potential
    exceedances, the Illinois EPA
    agrees that any
    impacts relating to
    the requested
    2

    provisional
    variance
    are
    outweighed
    by the arbitrary
    and
    unreasonable
    hardship
    FHR
    would
    suffer
    if
    it were
    denied such
    relief.
    If you
    have any questions
    regarding
    this
    decision,
    please
    contact
    Dana
    Vetterhoffer
    at 2
    17-782-
    5544.
    Very
    truly yours,
    JJK:dev
    Enclosures
    Cc:
    Kathy
    Hodge,
    HDZ
    David
    Bloomberg,
    IEPA
    Chris
    Romaine,
    IEPA
    Rob
    Kaleel,
    IEPA
    Dean
    Hayden,
    JEPA
    Dana
    Vetterhoffer,
    IEPA
    John
    Therriault,
    Assistant
    Clerk,
    IPCB
    ohnJ.Kim
    Managing
    Attorney
    Air Regulatory
    Unit
    3

    T
    FLINT
    HiLLs
    RE
    SO
    U
    R
    C
    E
    Joliet
    Facility
    April
    29, 2009
    VIA
    hAND
    DELIVERY
    P.O.
    Box
    941
    Joliet,
    IL
    60434
    RE:
    Flint
    Hills
    Resources,
    LP
    -
    Joliet
    Facility
    FacilityI.D.
    No.
    I
    97800ABZ
    Request
    for
    ProvisionalVariance
    VI
    • John
    J.
    Kim,
    Esq.
    Program
    Dvelopment
    &
    Appeals
    Illinois
    Environmental
    Protection
    Agency
    1021
    North
    Grand
    Avenue
    East
    Post
    Office
    Box
    19276
    —Mail
    Code
    #21
    •‘
    Springfield,
    Illinois
    62794
    Dear
    Mr. Kim:
    V
    Flint
    Hills
    Resources,
    LP
    Joliet
    (‘FHR”)
    hereby
    submits
    an
    application
    for
    a
    provisional
    variance
    pursuant
    to
    35
    Iii.
    Admin.
    Code
    Part
    180.
    Therequested
    provisional
    variance
    will
    address
    various
    permit
    conditi9ns
    in
    the
    Clean
    Air
    Act
    Permit
    Program
    (“CAAPP”)
    permit
    96010025.
    Pleaserefer
    to
    Attachment
    1
    for
    details
    in
    support
    of
    this
    provisional
    variance
    request,
    as
    Tequired
    by
    35
    Ill
    Admin
    Code
    §
    180
    202(b)
    FHR
    requests
    this
    provisional
    variance
    V
    V
    VVV
    td
    allow
    an
    upcoming
    planned
    natural
    gas
    outage
    to
    its
    entire
    Joliet
    plant.
    V
    V
    Nicor,
    FHR’s
    natural
    gas
    supplier,
    will
    be
    replacing
    yalving,
    piping
    and
    the
    meter
    for
    the
    natural
    VV
    gas
    supply
    line
    coming
    into
    the
    plant.
    There
    is
    an
    area
    of
    active
    corrosion
    on
    Nicor’s
    piping
    and
    an
    active
    leak,
    which
    has
    been
    temporarily
    mitigated
    Nicor
    will perform
    the
    work
    on
    the
    natural
    VV
    V
    gas pipe
    at
    the
    metering
    station
    where
    FHR
    takes
    ownership
    of
    the
    gas. Therefore,
    the
    natural
    V
    V
    V
    gas
    supply
    to
    the
    entire
    FHR
    plant
    will
    be
    out
    of
    service
    for
    de-commissioning,
    maintenance
    and
    re-commissioning
    activities.
    V
    V
    V
    V
    V
    The
    air
    ethissions
    impact
    of
    the
    natural
    gas
    outage
    is
    outlined
    in
    (b)(4)
    in
    Attachment
    I
    and
    VV
    V
    detailed
    within
    Attachment
    2.’
    FHR
    will
    exceed
    the
    hourly
    limit for
    methane
    (31.9
    lblhr)
    and
    possibly
    for
    VVOM
    (0.1
    lb/br)
    set
    forth
    in
    Section
    7.7.6(a)
    of
    the CAAPP
    permit,’
    for no
    more
    than
    V
    120 hours.
    The
    estimated
    maximum
    methane
    and
    VOM
    emissions
    will
    be
    167
    lb/br
    and 1.8
    lb/br,
    rcspectively,
    when
    there
    is
    wastewater
    feed
    into
    anaerobic
    reactor
    ER-70
    1
    without
    an
    V
    operational
    flare.
    FHR
    does not
    expect
    any
    ecceedance
    of
    the
    annual
    ‘emissions
    limits.
    In
    addition,
    FHR
    is
    seeking
    relief
    from
    the
    requirements
    of
    Section
    7
    7
    5(b)
    of
    the
    CAAPP
    permit
    In
    order
    tO
    minimize
    the
    emission
    resulting
    from
    the
    natural gas
    outage,
    FHR
    will
    undertake
    the
    V
    actions
    discussed
    below.
    V
    V
    V
    V
    EXHIBIT
    A

    John J.
    Kim,
    Esq.
    April
    29,
    2009
    Page2
    FHR
    is
    examining
    the
    possibility
    of
    using popane
    as
    an
    alternate
    flare
    pilot
    fuel.
    The
    utilization
    of
    propane
    is
    dependent
    on
    the
    pilOt
    burner
    working
    properly
    with
    propane.
    Altiough
    currently
    unproven,
    the
    successful
    use
    of
    propane
    in
    place
    of
    natural gas
    would
    give
    FHR
    a
    functional
    biogas flare
    for
    the
    duration
    of
    the
    natural gas
    outage.
    Since
    the
    use
    of
    prOpane
    for
    this
    purpose
    is
    unproven,
    some
    unexpected
    complications
    with flare
    performance
    may
    arise
    including
    -
    difficulties
    at
    the
    time
    natural
    ga
    is
    once again
    introduced
    to
    the
    Joliet
    plant
    as
    a
    result
    of
    the
    need
    to
    air-free
    the
    incoming
    lines
    after completion
    of
    Nicor
    activities
    However,
    FHR
    does
    not
    anticipate
    such
    complications.
    •V:V.
    •VV
    - :
    If,
    at any
    time
    the
    IllinOis
    EPA
    has
    concerns
    with
    this
    request,
    please
    contact
    us
    immediately
    so
    that
    we
    can
    address
    them
    as
    quickly
    as
    possible.
    Please
    contact
    Mike
    Hallgarth
    at
    815-467-3307
    with
    any
    question
    regarding
    this
    request and
    corresponding
    attachments
    Sirkerely,
    Tim
    R.
    Nicol
    V
    -
    Plant
    Manager
    Vice
    President,
    Manufacturing
    cc:
    GaleNewton,
    Esq
    V
    V
    VV
    Katherine
    D.
    Hodge,
    Esq.
    V
    File
    V
    V

    Attachment 1
    Information
    Required
    per
    35
    Iii. Admin.
    Code
    §
    180.202(b)
    (b)(1)
    A statement
    identifying
    the
    regulations,
    Board
    Order,
    or
    permit
    requirements
    from
    which
    the
    variance
    is requested;
    Flint
    Hills
    Resources,
    LP
    Joliet
    (“FHR”)
    is
    requesting
    a variance
    from the
    following
    regulations
    and
    permit
    requirements:
    Clean
    Air
    Act
    Permit
    Program
    (“CAAPP”)
    permit
    96010025,
    condition
    7.7.6(a)
    limiting
    emissions
    of
    methane
    (31.9
    lb/br)
    and volatile
    organic
    material
    (“VOM”)
    (0.1
    lb/br) from
    the flare;
    and
    CAAPP
    permit
    96010025,
    condition
    7.7.5(b)
    which
    requires
    flares
    to
    be
    operated
    such
    that a
    minimum
    of 95%
    biogas
    sent to
    the flare
    is
    converted
    to carbon
    dioxide
    and
    water.
    (b)(2)
    A description
    of the
    business
    or
    activity
    for
    which
    the
    variance
    is requested,
    including
    pertinent
    data on
    location,
    size,
    and
    the
    population
    and
    geographic area
    affected
    by
    the applicant’s
    operations;
    Nicor,
    FHR’s
    natural
    gas
    supplier,
    will
    be replacing
    valving,
    piping
    and the
    meter
    for
    the
    natural
    gas
    supply
    line
    coming
    into
    the
    plant.
    There
    is
    an area
    of active
    corrosion
    on
    Nicor’s
    piping
    and
    an active
    leak,
    which
    has
    been temporarily
    mitigated.
    Nicor
    will
    perform
    the
    work
    on
    the
    natural
    gas pipe
    at
    the
    metering
    station
    where
    FHR
    takes
    ownership
    of the
    gas.
    Therefore,
    the
    natural
    gas supply
    to the
    entire
    FHR
    plant will
    be
    out
    of
    service
    for de-commissioning,
    maintenance
    and
    re-commissioning
    activities.
    The
    EM705
    flare
    system
    is
    used
    to control
    emissions
    of
    methane
    from
    anaerobic
    reactor
    ER-701,
    which
    is
    part
    of the
    facility’s
    wastewater
    treatment
    system.
    Please
    be
    advised
    that
    feed
    to
    anaerobic
    reactor
    ER-70 1
    cannot
    be
    discontinued
    for the
    entire
    duration
    of
    the Nicor
    natural
    gas
    outage.
    Anaerobic
    reactor
    ER-701
    uses
    bacteria
    to
    remove
    organic
    load
    pursuant
    to
    applicable
    HON
    requirements.
    The
    bacteria
    require
    food
    to survive.
    Organic
    material
    serves
    as
    food for
    the bacteria
    and
    is
    normally
    provided
    by
    the streams
    that
    lead
    to
    anaerobic
    reactor
    ER-70
    1.
    Although
    the
    bacteria
    in anaerobic
    reactor
    ER-70
    1 can
    remain
    viable
    in a
    dormant
    state
    for a
    period
    of
    time,
    historical
    data
    shows
    that
    discontinuing
    wastewater feed for
    greater
    than 17
    hours
    results
    in increased
    risk of
    an
    adverse
    effect
    on
    the
    bacteria
    in
    the aerobic
    and
    anaerobic
    systems
    which
    could,
    in
    turn,
    result
    in
    noncompliance
    with
    mass
    removal
    and NPDES
    permit
    requirements.
    The
    air
    emissions
    impact
    of the
    natural
    gas outage
    is
    outlined
    in
    (b)(4)
    and
    detailed
    within
    Attachment
    2.
    FHR
    will
    exceed
    the
    hourly
    limit
    for methane
    (31.9 lb/br)
    and
    possibly
    VOM
    (0.1
    lb/br)
    set
    forth in
    Section
    7.7.6(a)
    of
    the
    CAAPP
    permit,
    for
    no
    more
    than
    120
    hours.
    The
    estimated
    maximum
    methane
    and
    VOM
    emissions
    will
    be 167
    lb/hr
    and 1.8
    lb/br, respectively,
    when
    there
    is
    wastewater
    feed
    into
    anaerobic
    reactor
    ER-70
    1
    without
    an
    operational
    flare.
    If
    efforts
    to
    use
    propane
    as
    an
    alternative
    pilot
    gas
    for the
    flare
    (see discussion
    in
    the
    cover
    letter

    April
    27,
    2009
    Page
    2
    and
    in
    (b)(8)
    below)
    are
    unsuccessful,
    FHR
    expects that
    the methane
    and
    VOM
    emission
    limits
    for
    the
    flare
    will
    be exceeded for
    no more
    than
    120
    hours. FHR
    does
    not
    expect
    any exceedance
    of
    the
    annual
    emissions
    limits.
    FHR’s
    Joliet
    Plant
    is located
    in
    Channahon
    Township
    within
    Will
    County.
    Neighbors
    in the
    immediate
    vicinity
    of
    the
    plant
    are
    industrial and
    commercial.
    Those
    neighbors
    include
    Adrian
    Carriers
    and
    GVA
    Real
    Estate
    to
    the
    north;
    Meyers Quarry
    and
    Exxon
    Mobil
    to
    the
    south;
    Stephan
    Chemical
    to
    the
    east;
    and
    Guardian
    Pipeline
    to
    the
    west.
    The
    City
    of
    Channahon,
    with
    an
    estimated
    population
    of 13,821, is
    located 2 miles
    west-southwest
    of the
    plant.
    FHR
    does
    not
    expect
    the
    resulting
    emissions
    from
    this
    variance to impact
    either
    its immediate
    neighbors
    or
    the
    City
    of Channahon.
    (b)(3)
    The
    quantity and
    types
    of materials
    used
    in
    the process
    or
    activity
    for
    which
    the
    yariance is
    requested,
    as
    appropriate;
    Not
    Applicable.
    FHR
    is not
    proposing
    to
    use
    any
    materials
    which
    are
    specifically
    prohibited
    by
    the current Title
    V
    permit
    or
    applicable
    regulations.
    (b)(4)
    The
    quantity,
    types
    and
    nature
    of materials or
    emissions
    to
    be
    discharged,
    deposited
    or
    emitted
    under
    the
    variance,
    and
    the
    identification
    of the
    receiving
    waterway or
    land,
    or
    the
    closest
    receiving
    Class
    A and
    Class
    B land
    use,
    as
    appropriate;
    During
    the
    requested
    variance
    period,
    FHR
    estimates
    the
    maximum
    hourly
    air emissions
    from
    anaerobic
    reactor
    ER-70
    1 to
    be as
    follows
    (see
    calculations
    in
    Attachment
    2):
    Pollutant
    Emission
    Rate
    (lb/hr)
    Methane
    167
    VOM
    1.8
    Methane and
    possibly
    VOM
    are
    emitted
    as
    constituents in
    the
    biogas
    produced
    by
    the
    anaerobic
    reactor.
    The
    maximum
    hourly
    air
    emissions
    are
    calculated assuming
    there
    is
    feed
    to the
    anaerobic
    reactor
    and
    attempts
    to
    utilize
    propane
    as
    an
    alternate
    flare
    pilot
    fuel
    are
    unsuccessful.
    In
    other
    words,
    the
    flare
    is
    not
    combusting
    the
    anaerobic reactor
    waste
    gas.
    (b)(5)
    The
    quantity
    and
    types
    of
    materials
    in drinking
    water
    exceeding the
    allowable
    content, or
    other
    pertinent
    facts
    concerning
    variances from
    the
    Board’s
    public
    water
    supply
    regulations;
    Not
    applicable
    as
    this
    variance
    request
    does
    not
    affect
    a public
    water
    supply.

    April
    27, 2009
    Page
    3
    (b)(6)
    An
    assessment of
    any
    adverse
    environmental impacts
    which
    the
    variance
    may
    produce;
    FHR
    does not
    anticipate any
    adverse
    environmental
    impacts
    as a
    result
    of
    this
    variance.
    The
    primary
    pollutant
    being
    released
    is
    methane, which
    is
    not
    a
    regulated
    pollutant.
    (b)(7)
    A statement
    explaining why
    compliance
    with
    the
    Act,
    regulations
    or
    Board
    Order
    imposes
    arbitrary
    and
    unreasonable hardship;
    See
    the
    response
    under
    (b)(l)
    and
    (b)(9).
    (b)(8)
    A description
    of
    the
    proposed methods
    to
    achieve
    compliance with
    the
    Act,
    regulations
    or
    Board
    Order,
    and
    a
    timetable
    for
    achieving
    such
    compliance;
    Nicor
    will
    shut
    down
    FHR’s
    natural
    gas
    supply
    at
    approximately
    12:00
    midnight
    on
    May
    3,
    2009.
    FHR
    is investigating
    the
    use
    of
    propane
    as an
    alternative fuel
    source
    for the
    flare
    pilot
    flame.
    The
    utilization
    of
    propane
    is
    dependent
    on
    the
    pilot
    burner
    working
    properly
    with
    propane.
    The
    natural
    gas
    supply
    outage
    to the
    flare
    is expected
    to
    last
    no longer
    than
    72 hours.
    However,
    since
    the
    resumption
    of the
    natural
    gas
    supply
    is
    dependent on the
    activities
    of a third
    party,
    FHR
    can not
    provide
    an exact
    estimate
    of the
    duration
    of
    the
    natural
    gas
    outage.
    Therefore,
    FHR
    is
    requesting
    a
    maximum
    provisional
    variance
    window
    of 120
    hours.
    FHR
    will be
    in compliance
    with
    applicable
    regulations
    once
    the natural
    gas
    supply
    is restored
    and
    the
    flare
    is relit.
    (b)(9)
    A
    discussion
    of
    alternate
    methods of
    compliance
    and
    of
    the factors
    influencing
    the
    choice
    of
    applying
    for
    a
    provisional
    variance;
    FHR
    looked
    into
    the
    possibility
    of an
    alternate
    method
    of
    compliance,
    the
    use
    of
    propane
    in
    the
    flare,
    before
    applying
    for
    a
    provisional
    variance.
    However
    the
    following
    factors
    preclude
    FHR
    from
    relying
    on
    propane
    as
    an alternative
    and
    have
    led
    to
    FHR’s
    application
    for
    a
    provisional
    variance:
    1.
    The
    use
    of
    propane
    as
    an
    alternative
    pilot fuel
    to
    the
    flare
    is
    unproven
    and
    may
    not
    work.
    2.
    Nicor
    is
    the
    only
    natural
    gas
    supplier
    for
    the
    site.
    Nicor
    will
    be
    replacing
    valving,
    piping
    and
    the
    meter
    for
    the
    natural
    gas
    coming
    into
    the
    plant.
    There
    is an
    area
    of
    active
    corrosion
    on
    Nicor’s
    piping
    and
    an
    active
    leak
    which
    has
    been
    mitigated. Although
    a temporary
    mitigation
    is in
    place,
    FHR
    believes
    that
    proactively
    addressing
    the
    affected
    piping
    is
    advisable
    in
    order
    to avoid
    a
    potentially
    larger
    and
    more
    dangerous
    natural
    gas
    release
    in
    the
    future.
    The
    shut
    down
    of
    FHR’s
    natural
    gas
    supply
    will
    cause
    the
    compliance
    issues
    described
    above.
    As
    indicated
    above,
    FHR
    will
    attempt
    to
    minimize
    excess
    emissions by
    investigating and
    utilizing,
    if
    posib1r.
    propane
    as
    a
    temporary
    alternate
    pilot
    flame
    fuel
    at
    the site.

    April
    27,
    2009
    Page
    4
    3.
    FHR
    could
    minimize
    and
    potentially comply
    with
    the
    flare
    methane
    and
    VOM
    emission
    limits
    by
    eliminating
    the
    feed
    to
    anaerobic
    reactor ER-70
    1
    for
    the
    entire
    duration
    of the
    natural gas
    outage. However, based on
    past
    experience,
    removal
    of
    the
    feed
    from
    anaerobic
    reactor ER-70
    1 for
    longer
    than
    17
    hours
    would
    likely
    adversely
    affect
    the
    health
    of
    the
    bacteria
    in
    the
    wastewater
    treatment system and
    lead
    to
    other
    issues
    of
    non-compliance.
    (b)(1O) A statement
    of
    the
    period, not
    to
    exceed
    45
    days,
    for
    which
    the
    variance
    is
    requested;
    FHR
    is
    requesting
    the
    variance for
    the
    time
    period
    from
    12:00
    midnight
    on May
    3,
    2009
    to
    12:00
    midnight on
    May
    8,
    2009.
    This
    timeframe
    will
    provide an
    adequate
    buffer
    for
    any
    contingencies
    that
    may
    arise
    during
    the
    planned maintenance
    work.
    (b)(11) A
    statement
    of
    whether the
    applicant
    has
    been
    granted
    any
    provisional
    variances
    within the
    calendar
    year,
    and
    the
    terms
    and
    duration of
    such
    variances;
    FHR
    has
    not
    been
    granted
    any
    provisional
    variances
    within the
    previous
    calendar
    year.
    (b)(12)
    A
    statement
    regarding
    the
    applicant’s
    current
    permit
    status
    as
    related
    to
    the
    subject
    matter
    of
    the
    variance
    request;
    FHR
    is
    currently
    in compliance
    with
    the
    applicable
    CAAPP permit
    96010025
    permit
    conditions
    for
    which
    this
    variance
    is
    requested.
    V
    (b)(13)
    Any
    Board
    orders
    in
    effect
    regarding
    the
    applicant’s
    activities
    and
    any
    matters
    currently
    before
    the
    Board
    in
    which the
    applicant
    is
    a
    party.
    There
    ae
    currently
    no board
    orders
    in effect
    regarding
    applicant’s
    activities.
    However,
    FHR
    is
    currently
    in the
    final
    stages
    of
    negotiating
    a
    Final
    Consent Order
    with
    the
    Illinois
    Attorney
    General’s
    Office
    in a
    civil
    action
    filed
    in
    Will
    County
    Circuit
    Court
    regarding
    environmental
    issues
    previously
    disclosed
    by FHR
    to
    the
    Illinois
    Environmental
    Protection
    Agency.

    Attachment
    2
    -Anaerobic
    Reactor
    Emissions
    of
    Methane
    and
    VOM
    DATE
    &
    TIME
    HOURS
    ::
    SCF
    .Lb/hr•
    Lb/hr
    .
    BIOGAS
    .
    METHANE
    VOM
    5/3/09
    12:00AM
    0
    to
    1
    7200
    5/3/09 1:00
    AM
    1
    to 2
    7200
    5/3/09
    2:00
    AM
    2
    to
    3
    7200
    5/3/09
    3:00
    AM
    3
    to
    4
    7200
    5/3/09
    4:00
    AM 4
    to
    5
    7200
    5/3/09
    5:00
    AM
    5
    to
    6
    7200
    5/3/09
    6:00 AM
    6
    to 7
    7200
    5/3/09 7:00
    AM
    7
    to 8
    7200
    5/3/09
    8:00 AM
    8
    to
    9
    7200
    5/3/09
    9:00AM
    9
    to 10
    7200
    5/3/09
    10:00AM
    10 to
    11
    7200
    5/3/09
    11:00AM
    11
    to
    12
    7200
    5/3/09 12:00
    PM 12
    to
    13
    7200
    5/3/09
    1:00
    PM 13
    to 14
    7200
    5/3/09
    2:00
    PM
    14 to
    15
    7200
    5/3/09
    3:00 PM
    15
    to
    16
    7200
    5/3/09 4:00
    PM 16
    to 17
    7200
    5/3/09
    5:00
    PM
    17 to
    18
    7200
    5/3/09
    6:00 PM
    18
    to
    19
    7200
    5/3/09
    7:00 PM
    19 to 20
    7200
    5/3/09
    8:00
    PM
    20
    to 21
    7200
    5/3/09
    9:00
    PM 21
    to 22
    7200
    5/3/09
    10:00
    PM
    22 to
    23
    7200
    5/3/09
    11:00 PM
    23
    to
    24
    7200
    5/4/09
    12:00AM
    24
    to 25
    7200
    5/4/09
    1:00
    AM 25
    to 26
    7200
    5/4/09
    2:00
    AM
    26 to
    27
    7200
    5/4/09
    3:00 AM
    27 to
    28
    7200
    5/4/09
    4:00
    AM
    28
    to
    29
    7200
    5/4/09
    5:00
    AM
    29
    to
    30
    7200
    5/4/09
    6:00
    AM 30
    to
    31
    7200
    5/4/09
    7:00
    AM 31
    to 32
    7200
    5/4/09
    8:00
    AM
    32 to
    33
    7200
    5/4/09
    9:00
    AM
    33
    to
    34
    7200
    5/4/09
    10:00AM
    34
    to 35
    7200
    5/4/09
    11:00AM
    35 to
    36
    7200
    5/4/09
    12:00
    PM
    36 to
    37
    7200
    5/4/09
    1:00
    PM
    37
    to 38
    7200
    5/4/09
    2:00
    PM 38
    to
    39
    7200
    5/4/09
    3:00
    PM
    39
    to 40
    7200
    5/4/09
    4:00 PM
    40 to
    41
    7200
    5/4/09
    5:00
    PM
    41
    to
    42
    7200
    5/4/09
    6:00
    PM 42
    to 43
    7200
    5/4/09
    7:00
    PM
    43 to
    44
    7200
    5/4/09
    8:00 PM
    44 to
    45
    7200
    5/4/09
    9:00
    PM
    45
    to
    46
    7200
    5/4/09
    10:00
    PM 46
    to 47
    7200
    5/4/09
    11:00
    PM
    47 to
    48
    7200
    5/5/09
    12:00AM
    48
    to 49
    7200
    5/5/09
    1:00 AM
    49 to
    50
    7200
    5/5/09
    2:00
    AM 50
    to
    51
    7200
    5/5/09 3:00
    AM
    51 to
    52
    7200
    5/5/09
    4:00
    AM
    52
    to 53
    7200
    5/5/09
    5:00
    AM
    53
    to 54
    7200
    5/5/09
    6:00
    AM 54
    to
    55
    7200
    5/5/09
    7:00
    AM
    55
    to
    56
    7200
    5/5/09
    8:00
    AM 56
    to
    57
    7200
    5/5/09
    9:00
    AM 57
    to
    58
    7200
    5/5/09
    10:00AM
    58 to
    59
    7200
    5/5/09
    11:00
    AM
    59 to
    60
    7200
    5/5/09
    12:00 PM
    60 to
    61
    7200
    5/5/09
    1:00
    PM 61
    to
    62
    7200
    5/5/09
    2:00
    PM
    62
    to
    63
    7200
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    ‘167
    • 167
    167
    167
    167
    167
    167
    167
    167
    .167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    167
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.6
    Methane
    and
    VOM
    Emissions
    are
    based
    on
    modeling
    of the
    anaerobic
    reactor utilizing
    conservative
    assumptions
    of
    inflow
    composition.

    Attachment
    2
    -
    Anaerobic
    Reactor
    Emissions
    of
    Methane
    and
    VOM
    DATE
    &TIME.
    -
    HOURS..[
    SCF
    Lb/hr*
    Lb/hr::’.
    BIOGAS
    METHANE
    VOM;
    5)5/09 3:00
    PM
    63
    to
    64
    7200
    167
    5/5/09
    4:00
    PM
    64 to
    65
    7200
    167
    5/5109
    5:00
    PM
    65
    to
    66
    7200
    167
    5)5/09
    6:00
    PM
    66
    to
    67
    7200
    167
    5/5/09
    7:00
    PM
    67
    to
    68
    7200
    167
    5/5/09
    8:00
    PM
    68
    to
    69
    7200
    167
    5/5/09
    9:00
    PM
    69
    to
    70
    7200
    167
    5/5/09
    10:00
    PM
    70
    to
    71
    7200
    167
    5/5/09
    11:00
    PM
    71 to
    72
    7200
    167
    5/6/09 12:00AM 72
    to
    73
    7200
    167
    5/6/09
    1:00AM
    73
    to
    74
    7200
    167
    5)6/09
    2:00
    AM
    74
    to
    75
    7200
    167
    5/6/093:OOAM
    75
    to
    76
    7200
    167
    5/6/094:OOAM
    76
    to
    77
    7200
    167
    5/6/09
    5:00
    AM
    77
    to
    78
    7200
    167
    5/6/09
    6:00
    AM
    78
    to
    79
    7200
    167
    5/6/097:OOAM
    79
    to
    80
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    j_167
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1.8
    1 .&
    1.8
    1.8
    1.8
    1.8
    1.8
    FLARE
    START
    UP
    W/
    NATURAL GAS
    SUM
    (LB)
    20,039
    216
    METHANE
    VOM
    Methane
    and
    VOM
    Emissions
    are
    based
    on
    modeling
    of the
    anaerobic
    reactor
    utilizing
    conseriative
    assumptions
    of
    inflow
    composition.

    Page
    1
    of2
    Vetterhoffer,
    Dana
    From:
    Katherine Hodge
    [khodgehdzlaw.com]
    Sent:
    Friday,
    May 01, 2009 4:28
    PM
    To:
    Kim, John
    J.;
    Vetterhoffer,
    Dana; Romaine, Chris;
    Schnepp,
    Jason;
    Desai, Kaushal
    Cc:
    Newton, Gale; Nicol,
    Tim; Hallgarth, Michael;
    Bose,
    Gokul;
    Matthew
    Read
    Subject:
    Flint Hills
    Resources
    -- Provisional Variance
    Supplemental Information
    To
    All:
    Thank you for holding
    a conference
    call
    this
    afternoon
    to discuss with us
    our request for a
    provisional variance,
    dated April 29,
    2009.
    During the
    call,
    you requested that we
    supplement our written
    request with an
    email
    addressing
    certain
    issues
    identified
    during the cafl. The
    issues identi1cd and our
    responses are
    as LHow:
    Timing of the Request
    FHR realizes
    and
    apologizes
    for the
    ‘last minute’ timing of the
    request. However, although
    FHR
    was
    aware that
    the
    natural gas to
    the facility may be shut
    down and had taken steps
    to eliminate
    emission exceedances
    from its
    production
    emission
    units, FHR did not
    identify the
    potential
    WWTP flare methane
    and VOM emissions
    exceedances until
    very recently.
    As you
    are aware,
    methane limits in
    air permits are very rare.
    In fact,
    as you
    pointed out during
    the conference call, the
    methane limit
    in FHR’s underlying construction
    permit (as carried
    over
    to the CAAPP
    permit) was removed
    in the
    November
    17, 2005 construction
    permit (#05040017) issued
    for
    modifications
    to
    the
    facility’s
    wastewater treatment
    plant. FHR will
    attempt
    to remove the
    methane limit
    from
    the
    CAAPP permit during
    the
    renewal process.
    Alternative
    Flare Ignition Devices/Gases
    FHR intends
    to
    use propane
    as a flare
    pilot fuel gas during this
    event. FHR
    has
    been
    informed
    that
    the
    use
    of
    propane
    will likely
    work
    for this
    purpose.
    However,
    the
    use
    of
    propane
    is untried
    and
    FHR is not
    certain that
    propane
    will work
    to
    keep a
    pilot flame at
    the flare. The provisional
    variance
    is
    being sought
    in the event
    that
    FHR
    is not
    successful
    in its
    intended use of
    propane. As discussed
    during the call, the use
    of
    an electronic
    ignition
    device,
    while possible,
    is
    not practical
    given
    the
    height of the flare. In
    addition,
    while a
    portable
    flare may present
    another
    alternative, the imminence
    of
    the
    upcoming natural gas shutdown
    would
    not provide
    enough time to
    obtain such a
    portable
    device
    or to obtain
    the necessary
    permit for the
    device. Finally,
    burning the
    biogas
    in
    another
    of the facility’s units and/or
    in
    the boiler
    will not be possible during
    this
    event because
    all of the Facility’s
    production
    units and the boiler
    will be
    shut
    down due
    to
    the natural
    gas outage.
    Continued
    Flaring without
    a
    Pilot
    Flame —
    As
    discussed during the
    call, the
    methane
    content of
    the
    gases
    that feed to the flare
    are variable. During certain
    intervals, the methane
    content of the
    gases could fall
    to
    a point
    where
    the
    flame
    in the flare would not be
    sustainable without
    a pilot flame.
    H2S/Odor
    Issues —
    As
    discussed during
    the call, the
    emission
    limits
    in the permit are very
    conservative.
    FHR has calculated
    probable
    H2S
    emissions during this
    event (assuming
    the alternate
    use
    of
    propane as
    a flare pilot fuel
    is not
    successful)
    and it
    would
    expect
    the
    maximum
    amount
    of H2S emissions
    to
    be
    approximately
    0.22 lbs/hr,
    or
    approximately
    26
    pounds for
    the duration
    of the event (assuming
    120
    hours).
    Again, we
    thank
    you for
    your timely
    response
    on this issue. Please
    let
    us
    know
    if you
    have any
    additional
    questions
    and/or
    need
    additional
    information.
    Kathy
    Katherine
    D.
    Hodge
    HODGE
    DWYER
    & DRIVER
    EXHIBIT
    3150
    Roland Avenue
    IdI7flflQ

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