1. MPCA Citizens’ Board Meeting: United States Steel Corporation-Keetac Air Emissions Permit Owen Seltz Industrial Division September 13, 2011

2. Overview Background Proposed Modification Key Public Comments & Contested Case Hearing Request Proposed Resolutions

3. Owen Seltz Lead Permit Engineer David Beil Pollution Control Analysis Peer Review Hongming Jiang Emission Calculations Brian Timerson Project Coordinator Air Permit Review Team Ruth Roberson Air Dispersion Modeling Kristie Ellickson Air Risk Analysis Bob Beresford Enforcement Andy Place Stack Testing Anne Jackson Mercury Consultation

5. Background 1969 – Phase I furnace began production 1977 – Phase II furnace began production 1980 – Phase I furnace idled 2003 – U. S. Steel purchased the facility Current day – One operating taconite furnace (Phase II) with annual production of 6 million short tons

6. Taconite Production Forming pellets Finished pellets in railcars

7. Proposed Modification Expansion Project (Phase III): Expansion furnace - Increase production Now: 6 million short tons per year Proposal: additional 3.6 million short tons per year Total of 9.6 million short tons per year

8. Environmental Review Joint State & Federal Environmental Impact Statement December 30, 2010 Adequacy Decision Permitting Federal – Prevention of Significant Deterioration (PSD) State – Mercury Controls Proposed Modification

9. Comments Received Regulation of Greenhouse Gases Alignment with Mercury TMDL Contested Case Hearing Request

10. Greenhouse Gas Regulation CO 2 CH 4 N2ON2O CO 2

11. Greenhouse Gas Regulation Control Technology Selection (BACT) Fuel Mix Primary (biomass and natural gas) Backup (coal and fuel oil) Energy Efficiency Recuperative heat recovery Minimization of heat loss

12. Greenhouse Gas Regulation Control Technology Selection Permit Requirements CO 2 emission limit on fuel combustion Coal use limit Addition of CO 2 -e emission limit (CO 2, CH 4, N 2 O) Monitoring, recordkeeping and reporting

13. Control of Mercury Emissions Additional Stack Testing Increase from 1/yr to 4/yr Mercury Emissions Ore contains mercury Some fuels contain mercury No Net Increase of Mercury Emissions 2025 Mercury TMDL Reduction Goal

14. Implementation Plan for Mercury TMDL Goal for statewide reductions Guidelines for new and expanding sources Keetac and U. S. Steel Keetac expansion mercury controls Equivalent reductions Steps toward 2025 goal Control of Mercury Emissions

15. Keetac 75.5 lbs/yr mercury emission limit Particulate bound mercury control Installation and operation of mercury controls on expansion line Goal of less than 21 lbs/yr (i.e. at least 80% control efficiency)

16. Schedule of Compliance (SOC) for Keetac and Minntac Reductions at Keetac and Minntac Installation of controls Wasting scrubber solids Steps to Achieve 2025 Mercury Reduction Goal Testing of controls Installation of controls Control of Mercury Emissions

17. Keetac PermitSOC Control of Mercury Emissions No net increase in mercury emissions 2025 mercury reduction goal

18. Contested Case Hearing Request Criteria Necessary to Order a Contested Case Hearing Request Minn. R. 7000.1900, subp. 1: A. a material issue of fact in dispute; B. board has jurisdiction C. reasonable basis underlying disputed fact such that a contested case hearing would allow introduction of information that would aid in resolving the disputed issue.

19. Disputed Issues Future Emission Rate of Mercury Permit contains mercury limit. No disputed fact for contested case hearing. Timing and Magnitude of Future Mercury Emission Reductions No challenge to permit requirements. No disputed fact for contested case hearing. Challenges to existing permits, plans, or schedules of compliance are outside the allowed timeframe for challenge. Contested Case Hearing Request

20. Disputed Issues Alignment of Draft Permit with Mercury TMDL Implementation Plan Mixed issues of fact and policy Draft permit is consistent with Implementation Plan Compatibility of Schedules of Compliance with Minnesota’s Water Quality Permitting Issues are not related to Keetac air permit before the Board today Contested Case Hearing Request

21. Staff Resolutions Staff Recommends that the Citizens’ Board: For Decision on Contested Case Hearing Adopt the resolutions to deny the request for a contested case hearing For Decision on Proposed Air Emission Permit Adopt the Findings of Fact in support of its approval to issue the air emissions permit to U. S. Steel Corp. – Keetac Authorize staff to execute the Findings and air Permit on behalf of the MPCA and undertake all actions necessary for issuance and effectiveness of the Permit

24. PollutantSum of Emissions Increases from the Modification (tpy) Creditable Emissions Reductions (tpy) Net Emissions Change (tpy) PM3399NA3399 PM101262NA1262 PM2.5478NA478 NOx2340-230535 SO281NA81 CO97NA97 Ozone (VOC)29NA29 Lead (Pb)0.1NA0.1 CO 2 -e186,400NA186,400 Fluorides<0.1NA<0.1 Sulfuric Acid Mist3.6NA3.6 Hazardous Air Pollutants (single/all) 13.0/19.7NA13.0/19.7

25. Greenhouse Gas Regulation Step 1Identify all control options and technologies Step 2Eliminate infeasible technologies Step 3Rank remaining technologies Step 4Evaluate most effective controls and document results Step 5Select BACT BACT Analysis

26. GHG BACT Analysis Green House Gas Regulation Step 1 (List all available control options) Fuel Mix Energy Efficiency Lower Emitting Processes CO2 Capture CO 2 Sequestration Step 2 (eliminate technically infeasible options) Lower Emitting Processes CO2 Capture CO 2 Sequestration

27. GHG BACT Analysis Step 3 (Rank Remaining Technologies) 1- Fuel Selection and Energy Efficiency 2- Energy Efficiency 2- Fuel Selection Step 4 (Evaluate most Effective Control) Natural Gas and Biomass with Recuperative Heat Recovery, and Minimization of Heat Loss Green House Gas Regulation

28. GHG BACT Analysis Step 5 (Select BACT) Energy efficient furnace design - 305-345 MJ/t Fuel mix - Natural gas and biomass Associated limits – Fuel CO 2 emission limit and coal use limit Green House Gas Regulation

29. Public Notice EIS Public Process Public Meetings Public Comment Draft Permit Public Meeting Paper Notice News Release

30. Public Notice Draft Permit Public Notice

31. August 2010 Mercury Reduction SOC June 9 th Multi-media Pollutant Reduction SOC Mercury Reduction SOC Minntac Water Quality Resolution Compliance with Recent, more Stringent Air Quality Standards at Minntac Research to Set Effluent Limits at Minntac Minntac Water Quality Resolution Compliance with Recent, more Stringent Air Quality Standards at Minntac Research to Set Effluent Limits at Minntac