Permitting and Regulatory Issues in IGCC Project Development

Gasification Technologies 2001San Francisco, CaliforniaOctober 7-10, 2001

BY: Dwight N. Lockwood, PE, QEPManager, Regulatory AffairsGlobal Energy Inc.Cincinnati, OH

&

Todd P. Royer, PEPrincipal Project ManagerURS Corporation325 West Main St., Suite 1200Louisville, KY 40202

GTC-Oct2001.ppt

2

Contents• Introduction• Background and Technical Description• Summary of Key Permit Requirements• Air Permitting

– PSD Permit Process– Key Issues

• Kentucky Pioneer Permit Limits & NOx• Municipal Waste Combustor Rule

• Other Permits– DOE - NEPA - EIS– Public Utility Siting– NPDES & Water & Corp of Engineers– Acid Rain & NOx SIP

• Public Involvement• IGCC Future

3

BGL – IGCC Process

Kentucky Pioneer Energy

5

6

SVZ• Sekundarrohstoff

Verwertungszentrum SchwarzePumpe Gmbh

• World’s largest BGL facility– New 12 foot system installed in

2000• Europe’s largest recycling center

– Multi fuel operation: coal, MSW,sludge, plastics, wood waste

– 500MW thermal capacity– 70MWe plus Grade AA Methanol– 7 Lurgi fixed bed and 2 entrained

flow gasifiers extend capability– Over 2 Million tons of dry feed

processed into clean syngas

7

Project - StatusScope• 520 MW net Output – Coal & RDF Pellet Feed

Kentucky Pioneer Energy• $78MM DOE Funding Pending NEPA-EIS ROD ~ End 2001• PSD / Title V Permit Issued for Construction – June 7th 2001• 100% Output Sold in Long Term Contract to Host Utility• Project Finance 1H02

Lima Energy• PSD Permit in Ohio EPA Management Review – Expect Public ~ 1 Nov.• Ohio Power Siting Board Permit Ready for Public Hearing• 2 of 3 Long Term Off-Take Contracts Signed• Brownfield Site Dating to 1885 – “Remedied” by City of Lima• Commercial Operation Mid-2005

8

Universe of Permits – A Hint !

PSD & Title 5W/ Subpart EbW/ NOx BACT

& SCR

Acid Rain&

NOx SIP Call

USACEGeneral Nationwide

Water Discharge& Intake &

Sec. 404 Wetlands

NPDES& Withdrawal

Waste-To-Energy

Public UtilityCommission

Siting & Jurisdiction

DOE-NEPA-EISW/ ESA & FLM

9

Air PermittingPSD PERMIT PROCESS DESCRIPTION

• Best Available Control Technology Required (Especially NOx & SO2 )

• Modeling Required to Show No Significant Impacts

• Identification of Applicable Regulations with Compliance Demonstration

• Toxic Health Risk Assessment

• Typically > 1 – Year Process for Obtaining a Permit

• Process Includes Public Hearings

• States Must “Anticipate” Nature of Input from USEPA Regions

10

Air PermittingSUMMARY - KENTUCKY PIONEER EMISSION LIMITS

NOx 15 ppm 0.072 # / mmBtuCO 15 ppm 0.032 # / mmBtuSOx 40 ppm (H2S in Syngas) 0.032 # / mmBtuPM 0.011 # / mmBtuVOC 0.0044 # / mmBtuBeryllium 6.0 E-07 # / mmBtu

HCl 0.2 ppmvHg 0.080 mg / m3

Cadmium 0.020 mg / m3

Lead 0.20 mg / m3

Dioxin/Furan 0.01 ng / m3

• Emission on Natural Gas @ 25 ppmv Annual Usage Limit• No SCR but Provide “New Source” BACT Analysis after 1-1/2 – 2 years Operation• KY & Region 4 Expect TECO-Polk SCR to Resolve Viability of SCR for IGCC

11

Air PermittingNOx BACT & SCR ISSUES

• Low NOx Burners Not Viable for Syngas due to Hydrogen Content

• USEPA Has Hard Time Accepting That HRSG Fouling is a Big Deal

• Ammonium Sulfide Fouls HRSG & Resulting Viability & Cost Debate

• Metals & Other Compounds in Syngas Poison SCR Catalyst

• PC Boiler SCR Units Manage Exhaust Different

• No SCR Vendor will Fully Guarantee System with Syngas

• SCONOX and Others do not have Large Turbine Or Syngas Experience

• USEPA does not allow Economic Loss During HRSG Cleaning

12

Municipal Waste Combustor RuleFor Kentucky - USEPA Region 4 Controls Interpretation

• Phrase in NSPS Subpart Eb is “...and gasified waste...”

• Gasifier Creates “...gasified waste...”

• Combustion Turbine is Combustor

• Requires “Siting Analysis” and “Waste Separation Plan”

• Rule Requires Gasifier and Turbine Operator – Training & Certification By ASME Specialist – As Incinerator Operator Not As Gasifier and Gas Turbine Operator

• State Also Has Rule that Mirrors Subpart Eb But Also Adds Some Solid Waste Requirements Being Appealed

13

IGCC vs. MWC Allowed EmissionsFigure 2

Emissions Comparison Conventional MWC and Proposed IGCC Project- Hazardous Air Pollutants -

0.08 mg/m3

10 mg/m3

0.65 mg/m3

560 ppm 1000 ng/m3

0.02 mg/m3 0.2 mg/m3 0.08 mg/m3

25 ppm

13 ng/m3

0.004 mg/m3 0.008 mg/m3 0.0006 mg/m3< 1 ppm < 0.01 ng/m3

Cd Pb Hg HCl Dioxin

Pollutant (at 7% Oxygen on a dry basis)

Re

lati

ve

Co

nce

ntr

at

Uncontrolled MWCNSPS Controlled MWCProposed IGCC

14

IGCC vs. MWC Allowed EmissionsFigure 1

Emissions Comparison Conventional MWC and Proposed IGCC Project - Criteria Pollutants -

2400 mg/dscm

64 ppm

160 ppm150 ppm

64 ppm

30 ppm

150 ppm

24 mg/dscm

15 ppm 15 ppm

8.2 mg/dscm

39 ppm

NOx (at 15% oxygen) SO2 (at 7% oxygen) CO (at 7% oxygen) PM (at 7% oxygen)Pollutant (dry basis)

Rel

ativ

e C

on

cen

trat

io

Uncontrolled MWCNSPS Controlled MWCProposed IGCC

15

Other Permits

• DOE - NEPA - EIS

• FERC & PUBLIC SEVICE or UTILITY COMMISSION

• NPDES and WATER and USACE - WATER INTAKE & DISCHARGE

• WASTE

• ACID RAIN & NOx SIP - BUDGET

16

US DOE US DOE NEPA-EIS

• Information Volume Submitted July 1999

• Public Scope Input Meeting Held May 2000

• NEPA – Draft EIS Approved October 3rd, 2001

• Draft EIS for Public Comment in Early October 2001

• Record of Decision (ROD) Expected End 2001 to Early 2002

17

Generator / Utility RegulatorsFERC – Exempt Wholesale Generator (EWG)• Issued in Early 2001• Enables KY-PSC Comfort That Oversight Exists

Kentucky Public Service Commission• “Declaratory Order of Non-Jurisdiction” Issued July 2000• Extensive interaction with EKPC

Ohio Power Siting Board• Rigorous Application Similar to EIS• Requires Regional Utility Interconnect Studies• Requires Public Input to Application and Hearing on Project• Expect Approval - Early 2002

18

Water PermitsKPDES

• Common Discharge with EKPC• Independent Compliance before Junction of Lines• Diffuser May Be Required – Thermal & Mixing Zone Considerations

General Nationwide 7 -- (To Install Water Intake)• Kentucky River : Corp of Engineers - Louisville• Intake for Joint EKPC & KPE Use

Withdrawal• Kentucky River Use & Allocation Oversight• Utilities Exempt From Permit• EKPC will Increase Its Volume and Meter Flow to KPE

Lima• Pre-Treat Waste Water Into City of Lima POTW• Purchase Water From City of Lima

19

Other PermitsWaste – To – Energy

• Some View a Kentucky Statute as ALSO Requiring Solid Waste Permit

• Definitions of RDF and RDF Processing

• Exclude RDF from MSW Definition and KPE from this Statute

• KY Legal Opinion & Decision Pending

Municipal Solid Waste Incineration

• Regulation Mirrors Subpart Eb in Air Issues

• BUT – Also has Solid Waste Permit Language

• We are Appealing This Aspect

20

Other PermitsNOx SIP Call – Budget

• Its Not Enough to Have a Permit – Must ALSO Have “Budget Allowance”

• “Budget” is Share of State Allocation From USEPA

• All Large Utility and Industrial Generators and Boilers Affected

• Existing Sources 95% of Budget & New Sources 5% on Ton-For-Ton Basis

• New Sources Share the 5% on a Pro-Rata Heat Input Basis

• Ozone Season – May to September Annually & USEPA is the Bank

• Emissions Beyond Share of Budget Bought on NYMEX

• Current Market $1000 to $7000 Per Ton – Varies Yr Used - O & M Budget

21

Public SupportKENTUCKY PIONEER• Very Small Rural Community – Economic Value to Community

• Governor and State & County Leaders Very Supportive

• Transportation Impact Concern (e.g. Trains Blocking Streets)

• Actively Sought Dept. of Transportation Input – To Help With This

LIMA ENERGY• Tremendous Community and State Support • Mayor in Particular Very Active From Beginning

• Informational Meetings in Local Neighborhood & Environmental Groups

• Stay Open with Local Media Too – With Frequent Input on Progress

22

IGCC Future – Policy Change Ideas

Carpe Diem• Opportunity Cross-Roads With Regulatory and Congressional Initiatives

• IGCC Has Clear Foothold in National Energy Policy

• BUT – USEPA Needs a “BOX” For IGCC – To Know How to Regulate It

• GTC & IGCC Community Needs to Help USEPA Define The “Box”

• The Question Is How to Craft IGCC & Syngas Friendly Regulations ?

• CONSIDER : NSPS for Modern Slagging Gasification Put a Fence Around Several Initiatives in Form USEPA Can Relate To USEPA-OSW & OAQPS Efforts and Roles in Rule Development Multi-Media and Multi-USEPA Program Solution – Is Feasible

ENVIRONMENTAL TECHNOLOGY