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HomeMy WebLinkAboutPeat Commercial Feasibility Analysis Vol 2 1983PEAT COMMERCIAL FEASIBILITY ANALYSIS Prepared For: The State of Alaska, William Sheffield, Governor Department of Commerce and Economic Development Richard Lyon, Commissioner Division of Energy and Power Development . AWheelabrator-Five Inc. Liberty Lane Hampton, New Hampshire 03842 Volume II-DEPD-83-73-7-526-R6 LIBRARY COPY VOLUME II Table of Contents Section Page VIII. Harvesting; In-Depth Analysis A. Peat Deposits 181 B. Peat Extraction Method 181 C. Machinery Specifications 182 D. Peat Slurry Transport 184 E. Winter Storage of Peat Extraction 185 F. Open Questions in Peat Extraction 186 G. Cost Estimates; Peat Extraction, Transport and Storage 187 IX. Process Plant; In-Depth Analysis A. Plant Location and Capacity 195 B. Process Description 195 C. Wet Carbonization and Devolatilization 204 : Plant D. Waste Water Treatment 212 E. Product Storage and Shipping 225 F. Peat Beneficiation (De-ashing) 229 X. Environmental Analysis (Phase I & Phase II 236 Systems) A. Air Quality Impacts from Peat Harvest- 236 ing and Processing B. Water Quality 242 C. Peatland Reclamation 251 D. Permitability Assessment 263 E. Socioeconomic Impact 273 XI. Marketing of Primary Products 293 A. Primary Product Slate 293 B. Primary Markets for Peat Char Granules 294 C. Primary Markets Identified for Low 294 Volatile Peat Char Granules D. Anthracite Briquette Usage in Asia 297 E. Potential Use of Smokeless Briquettes 298 in Rural Alaska F. Smokeless Fuels 299 G. Activated Carbon 299 H. Markets for Co-Product Fuel Oil 300 I. Product Pricing and Shipment 301 J. Market Implementation Plan 302 XII. Economic Analysis 307 A. Capital Costs 307, B. Operating Cost Assumptions 309 C. Pricing Assumptions PROPERTY OF: Alaska Power Authority 334 W. 5th Ave. Anchorage, Alaska 99501 Section RITI. XIV. XV. D. Financing Assumptions E. Tax Treatment F. Economic Return Economic Enhancements and Recovery of By-Products A. Harvesting By-Products and Co-Products B. Products Derived from Processed Peat C. Summary of Potential Economic Enhancements Effecting Alaskan Peat Utilization Work Plan and Pre-Construction Scope of Work A. Additional Resource Identification and Assessment B. Field Trials, Wet Harvesting, Land Reclamation, Hydrological Impact C. Additional Dewatering Process Work D. Peat De-ashing Trials E. Processing Verification and Production of Samples for Evaluation F. Devolatilization Trials G. By-Products and Co-Products, Production and Recovery H. Waste Water Treatment Tests I. Additional Market Development Work J. Combustion Testing K. Site Specific Environmental Field Work L. Environmental Engineering Support M. Preliminary Engineering and Final Economic Assessment N. Construction and Start-Up of Work Conclusions and Recommendations A. Phase I Conclusions B. Phase II Conclusions C. Recommendations Glossary 328 328 330 334 339 339 340 341 342 343 343 343 344 344 345 345 346 346 347 349 349 352 354 VOLUME II Section VIII. IX. List of Charts and Tables Harvesting; In-Depth Analysis Table VIII-1 Raw Peat Costs Figure VIII-1 Kenai Site Map Figure VIII-2 Alaskan Peat Wet Harvesting Schematic Figure VIII-3 Peat Excavation, Pulping and Plumbing Barge Figure VIII-4 Winter Feedstock Storage Basin Process Plant; In-Depth Analysis . Figure IX-1 Simplified Process Flow Diagram Figure IX-2 Overall Block Diagram Table IX-1 Total Plant Mass and Energy Flows Table IX-2 Plant Electric Power Balance Table IX-3 Storage Facility Description Page 189 191 192 193 194 200 205 206 207 226 Section IX, (Continued) Table IX-4 Product Storage Cost Table IX-5 Product Shipping Cost Table IX-6 Chemical Analysis of Alaskan Peat Table IX-7 Wet Screening and Ash Analysis of Alaskan Peat Table IX-8 Results of Sink/Float Tests by IGT with Raw Alaskan Peat Figure IX-3 Comparison of Sink/Float Tests with Raw and Wet-Carbonized Peat Environmental Analysis (Phase I & Phase II Systems) Table X-1 Estimated Air Pollutant Emissions From Dry Peat Harvesting Combustion Sources (Foster- Miller, 1982) Table X-2 Estimated Air Pollutant Emissions from Wet Peat Harvesting Combustion Sources (Foster-Miller, 1982) Table X-3 Calculation of Wet Carbonization Wastewater Composition Figure X-1 Permitting Bar Chart Table x-4 Contacts for Various Permits Page 228 230 232 232 233 238 239 250 274 275 Section . Page xX. (Continued) Table X-5 289 Production Labor Requirements in Alaska (Foster-Miller, 1982). Figure X-2 292 Peatland Reclamation XI. Marketing of Primary Products Table XI-1 305 Alaska Peat Commercial Feasibility Analysis Phase II-Summary Figure XI-1 . 306 Asian Anthracite Briquettes and Appliances XIII. Economic Enhancements and Recovery of By-Products Figure XIII-1 335 Alternative Processed Products, Co-Products & By-Products from an Alaskan Peat "Refinery" Table XIII-1 336 Cooking Vessel Vent Gas Analysis - Wet Cabonized Alaska Peat Table XIII-2 337 Ethanol Feedstock Costs Table XIII-3 338 Potential Economic Enhancements VIII. Harvesting; In-Depth Analysis A. Peat Deposits South of Anchorage, in the Kenai area, there are considerable peat deposits that can be utilized as raw material. These peat bogs are close to the coast, facilitating a barge mounted and beached plant. There are three distinct peat bogs: 1. 8,000 acres between Kenai and Kalifonzky 2. 3,600 acres between Slikol Lake and Kasilof 3. 3,200 acres north of the Kenai airport The total bog area is, thus, 14,800 acres. If the mean peat layer thickness is 8 feet, the total peat resource is about 5,000 million cubic feet. Some 500 cubic feet of raw peat with a dry organic solids content of 10% is needed in producing PDF. Thus, to produce 500,000 t/a, the annual raw peat consumption would be 250 million cubic feet, so the total peat resource would last for 20 years production. The peat resources have been evaluated from maps and short visits to the bog area. No detailed peat bog survey has been done and hence only rough estimates have been made. A map of the area is in Figure VIII-1. Peat from about 750 acres would be extracted annually. As the Operating time for peat extraction is assumed to be about 270 days, peat from 2-3 acres will be extracted per day. B. Peat Extraction Method No extensive preparation work in the peat bogs would be needed. To be able to set up a detailed peat extraction plan, the peat layer surface and the underlying mineral soil elevation has to be determined in a 150 feet x 150 feet grid. With this information to hand, the final peat extraction plan can be worked out. 181 All machinery needed at the extraction site would mount on pontoons floating in the pond formed when the complete peat layer is removed. The wet peat would be extracted by a clamshell machine and transferred to a screen mounted on top of a pulper. The fine material would flow through the screen into the pulper and the coarse material transported by the screening device to a shredder and through this into the pulper. If too big stones came into the shredder, its direction of revolution would reverse and the stones would be dumped on a reject conveyor. In the pulper the peat would be macerated to a pumpable slurry, without decreasing the solids content below 10%. ‘The peat slurry would flow by gravity through the screening bottam plate of the pulper into a holding tank in the pontoon. Rejects collected in the junk box of the pulper would be transferred to the reject conveyor. The general peat extraction method is shown in Figure VIII-2. Two extraction lines would be needed, each with two excavating ma- chines and two pulpers. On each pontoon there would also be a pumping station to pump the peat slurry from the holding tank into the peat slurry pipeline. The general layout of the equipment mounted on the pontoon is shown in Figure VIII-2. C. Machinery Specifications 1. Pontoons Each pontoon would be assembled from 28 modular units with dimensions 10 x 20 x 5 feet, connected to form a camplete pontoon 140 x 80 x 5 feet. Some of the rear units in the pontoon could be used as water tanks to ballast the pontoon to balance it. ‘The pontoon would be anchored by two hydraulically operated poles, mounted one on each side of the pontoon. To move the pontoon forward, there would be two inclined hydraulically operated poles at the rear end of the pontoon. The harvesting barge is shown in Figure VIII-3. 182 2. Excavators Two electrically powered excavators with a total weight of 50 tonnes each would be installed at the front end of the pontoon. The loading capacity of each excavator would be 300 tonnes per hour, and the clamshell capacity about 180 cuft. ‘The machines could extract peat from a maximum depth of 12 feet. 3. Screens The screens, mounted on top of the pulpers, would have a screen- ing area of 10 x 20 feet and consist of several revolving star-shaped wheels. Each screen's power demand would be 10 KW. 4. Shredders Coarse material not passing through the screen would be conveyed by the screen to a rotating shredder powered by a 100 KW motor. =P Pulpers Two pulpers would be needed on each pontoon. They would be of a vertical type each weighing 20 tonnes, with diameter 20 feet, height 11 feet and peat slurry holding capacity 2,400 cuft. The total weight of a pulper when filled with peat slurry would be about 100 tonnes. The pulpers would macerate about 300 tonnes per hour of raw peat for an electrical power input of about 350 KW. 6. Holding Tank The peat slurry holding tank formed in the middle and rear of the pontoon would be 100 x 40 x 5 feet, with a total capacity of 20,000 cuft. The peat slurry would be pumped from the holding tank by a submerged pump, powered by a 80 KW motor. There would also be a stand-by pump. 7. Electrical System 183 The total electrical power demand of the machines mounted on each pontoon would be 1.6 MW. Power would be fed to the pontoon by a sea cable at 6 KV. The power would be transformed to 380 V by a 2,000 KVA transformer on the pontoon. The cable would be hung on poles mounted on anchored pole floats. For emergency purposes, there would be a 50 KW diesel generator on the pontoon. 8. Buildings Light wall and roof constructions would be built as indicated in Appendix I. In the rear end there would also be a crew cabin and a small spare parts store. All enclosed spaces would be heated and ventilated. D. Peat Slurry Transport The peat slurry would be pumped to the processing plant site through 18 inch pipelines, one pipeline from each pontoon. The pipeline material would be polyethylene, allowing a maximum pressure of 230 psig in the tube. The first 185 KW pump and a standby pump would be mounted on the pontoon. Booster pumping stations would be built every mile along the pipeline. The 185 KW booster pumps could be by-passed for pump maintenance. The booster pump stations would be electrically powered from the cable out to the pontoon following the pipeline. On solid ground the pipelines would be buried in trenches, dreg below the deepest frozen level and then refilled for pipeline anchor- ing and heat insulation. On reaching the excavated pond, the pipe- lines would be submerged by weights to prevent freezing. Near the pontoons the pipelines would be fitted with flexible joints to allow the pontoons to move, the jointed length of the pipelines being 650 feet. At certain intervals, depending on the extraction plan fol- lowed, the non-flexible part of the pipelines would have to be extend- ed. The flexible part of the pipeline and the electrical cable would 184 have to be moved daily. This would be done from a 20 x 40 feet working pontoon, fitted with a crane. A small tug boat, powered by a 20 KW diesel engine would be needed to move the extraction pontoons, and four small boats for personnel transportation would also be required. Every year, preferably in winter when the peat extraction ceased, the trenched part of the pipeline would be extended along the bog side, and the electrical power line extended close to the peat ex- traction area, using cheaper air lines suspended from poles. When starting peat extraction, some 2 miles of 18 inch inner diameter polyethylene tube would be needed. Every year the pipeline and electrical cable would have to be extended by about 2500 meters (plus about 500 meters/yr. of replacement pipe). E. Winter Storage of Peat Slurry Taking the climate into account, peat extraction in this area and with the proposed extraction method could take place during 8-9 months per year. For year-round processing, a surplus of raw material must be extracted during this period and stored near the processing plant. For this purpose a 70 million cuft storage basin would be built. The conceptual design of the storage basin is shown in Figure VIII-4. The basin would be excavated by earth-moving machinery in an area where as far as possible natural ridges could be utilized as dikes. Additional dikes would be built with the material removed from the basin area. If circular, the basin diameter would be 1,500 feet and the maximum basin depth 50 feet. To keep the peat slurry in the basin pumpable, the incoming slurry would be pumped to four outlets in the basin, by branching the two incoming pipelines into four different lines. The bottom of the basin must be leveled and asphalted at these points. These pipes would also serve as pipelines when pumping peat slurry to the PDF plant. To facilitate this, four pumping stations would be built at 185 these locations. There would also be 16 internal 6 inch pipes, also anchored to the bottom of the basin as indicated in Appendix I, to allow slurry circulation and mixing. The bottom material in the storage basin at the outlets of the mixing pipelines must be coarse gravel. The four pumping stations in the storage basin would be supported by a steel structure. The 80 KW pumps would be submerged with the motors above the slurry surface. Walkways must be constructed to give easy access to the pumping stations. The submerged pumps at the pumping stations would be used for emptying the storage basin. The peat slurry would be transferred with these pumps through the 18-inch pipelines to the processing plant. Two pumps would be needed to transport the slurry at full plant capacity. When all four pumps are in use, half of the pumping capaci- ty can be used for circulation to the mixing pipes to activate the slurry in a larger area of the basin. With this arrangement, it is believed that a very large proportion of the stored slurry could be extracted from the basin in the winter. F. Qpen Questions in Peat Extraction The harvesting plan presented is based on very limited peat survey work in Kenai. Prior to any further decisions concerning a peat processing plant, detailed surveys must be made to assess the raw material base for the plant. Several peat samples taken from this area show a very high ash content, 40-46%. Processing peat into a low-volatile product with a maximum of 30% ash implies some kind of de-ashing of the peat. The ash content in the PDF intermediate product should not exceed 15.7%. If de-ashing is to be done before wet carbonizing the peat, the raw peat ash content should not be higher than 12.3%. De-ashing has not been included in J. P. Energy's scope of work. The calculations in this report are based on the assumption that the 186 raw peat ash content is 12.3%. De-ashing of the wet carbonized peat prior to dewatering in the filter presses might prove easier than removing excess ash from the raw peat slurry. If this is found feasible, the mass flows through the wet processing part of the plant would be increased.On the other hand, the solids content in the slurries could be kept higher, so the volumetric flows would not be substantially increased. Thus neither the dimensions of the equipment nor the balances calculated would be considerably affected by passing the inert ash through the process. G. Cost Estimates; Peat Extraction, Transport and Storage 1. Capital Cost Estimate The capital cost estimate is based on a conceptual equipment list. No tenders have been requested the calculation. The costs are based on JAAKKO POYRY cost files. The cost level of the estimate is that of October 1982. The capital cost of the initial stage is summarized as follows: Civil Area works Materials Freight Erection - USD thousands - 1 Peat excavation 5,048 475 713 barges 2 Pipelines 820 40 150 3 Power lines 355 15 60 4 Service Boats 56 4 5 Storage ponds 5,100 736 46 302 Direct costs total Indirect costs PLANT COST TOTAL 187 Total 6,236 1,010 330 60 6,184 13,800 3,000 16,800 The capital cost of the pipeline and power line extension is summarized as follows: Civil Area works Materials Freight Erection Total - USD thousands - 5 Pipelines 210 735 40 165 1,150 6 Power lines 10 100 8 42 170 Direct costs total : 1, Indirect costs 280 PLANT COST TOTAL 1,600 2. Operating Costs The operating cost estimate is based on an operating time of 8 months a year. The manning is estimated as follows: 3 shift Day Total Supervisor 1 1 Barge personnel -loader operator 4x4 16 -pulper operator 4x4 16 -repairs, oiler 4x2 8 Service, maintenance -pipe fitter 2 -electrician 2 -service 1 188 TOTAL Average personnel costs have been calculated as USD 40,000 a year. The power consumption in the initial stage is calculated to In average 2,200 KW. The price used in the calculation is 34 USD/MWH. The additional power consumption of each pipeline extension would be average 120 KW. The operating costs include maintenance costs, which are based on a life of three years for the excavators and ten years for other equipment. The annual operating costs are shown in Table VIII-1. Table VIII-1 Raw Peat Costs Annual costs 1 2 3 4 5 6 7 8 9 10 11 Operating costs -personnel 200 200 200 200 200 200 200 200 200 200 -energy 431 431 455 479 479 503 515 527 551 551 -maintenance 100 100 200 500 500 500 500 500 500 500 Total 731 #731 855 1179 1179 1203 1215 1227 1251 1251 Investments 16800 400 1200 1400 200 1600 200 1400 1400 200 TOTAL COSTS 16800 1131 1931 2255 1379 2779 1403 2615 2627 1451 1251 NPVisg = 22,666.5 189 Estimated Raw Peat Costs at the PDF Plant —— at sosts at me Por Plant The average raw peat cost including harvesting, pumping and stockpiling has been calculated by discounting the cash flows and at an interest rate of 15%. The annual Operating costs and investments are shown in Table VIII-1 for ten operating years. The net present value of the total costs is USD 22.7 million. To determine the average cost of raw peat dry matter extracted and transported, the annual value of the raw peat has been discounted as tons times the unknown cost. This expression has been put equal to the net present value of the total costs, giving a specific raw peat dry matter cost averaging 10.4 USD/ton. It should be noted that the above estimate was simplified finan- cial assumptions. In Section XII (Economic Analysis), the actual project financial assumptions are applied to the combined harvesting and processing costs. The personnel needed for peat extraction are also listed in Section IX, and the electric power needed is included in that section. 190 Figure VIII-1 Kenai Site Map LANDING LANDING + AREA “ MACKEYS ; e COAL CREEK SuIKOK (02 eh oO - LAKE od LAKE SOLDOTNA L CS AN AIRPORT \ . | o Hs. . fon) BAY LAKE Lf + 4, Nes WY PSS ere a Hi wa d oi o/A = Old No. AP 5500! New No. —— prt tio NITO4-HM-3001 dO 1 2 3 km ALASKAN PDF PLANT POF FACTORY oan _——————— PEAT HARVESTING |KENAI’S PEAT RESBURCES [yo 6 5 4 3 2 1 Figure viili-z Alaskan Peat Wet Harvesting Schematic PEAT EXCAVATION CRUSHING SCREENING PULPING PUMPING TO THE STORAGE POND STOCKPILING PUMPING AND TO THE MIXING PDF-PLANT Old No. Joliaus SSoe4 ties Mo. | 4] No: N 1104-HM-4001 ame OT! JP-ENERGY OY -ALASKAN POF PLANT PEAT HARVESTING THE BLOCK FLOW: DIAGRAM. OF RAW PEAT Figure VIII-3 Peat Excavation, Pulping and Plumbing Barge (i = 76T Fm Lcamanon yrs tags me Yd | | | sete mes ee 1 Figure VIII-4 Winter Feedstock Storage Basin sam erat womsoe rea i | | | IX. Process Plant; In-Depth Analysis A. Plant Location and Capacity The peat refining plant would be on the western coast of Kenai Peninsula in Alaska. The main equipment would be barge mounted and beached in a suitable location on the Kalifonsky beach. Peat deposits within a radius of 10 miles from the plant would be used as raw material. The processing plant would consist of a PDF plant with a net output of 500,000 t/a in two trains and a subsequent devolatilizing plant, consisting of a fluidized bed carbonizer and auxiliary equipment, yielding 262,000 t/a of a devolatilized granulated product with 10% vola- tiles and a maximum of 30% ash. As a by-product, 100,700 t/a of a liquid fuel would be obtained. The waste water would be treated in an anaerobic water purification plant. The whole refining plant would be self-sufficient in fuels, whereas a substantial part of the electricity would be purchased. B. Process Description i. General Background Removing excess water is the first step in refining native peat into a combustible fuel. As peat originates from vegetable matter, it still contains closed, water filled cells. On decomposing, colloidal matter is formed in the peat soil, which consists mainly of very small particles, giving the raw peat a microporous structure. Only if the cellular structure and the colloids are both destroyed, can peat be efficiently dewatered by mechanical means. 195 Some 80 years ago it was discovered that simple heat treatment considerably diminished the ability of peat to retain water. The heat treatment was carried out with the peat suspended in water. It resulted in an increased carbon content of the product, so the phenomenon was called wet carbonization. It occurs when a peat slurry is heated to about 400° under pressure. At this tempera- ture slow chemical reactions take place, decomposing the colloids. A reaction time of some 20 minutes is usually needed. When the pressure on the hot slurry is released, the water partially vaporizes and the water vapor formed inside closed cells bursts them open. Wet carbonized peat can easily be dried in filter presses to a moisture con- tent of one part of water per one part of dry solids. Wet carbonization has been thoroughly studied and was even utilized in a 40,000 t/a commercial plant built in 1909 and operated by wet carbonizing Ltd. up to 1921 in Dumfries, Scotland. A comprehensive study on wet carbonization of peat was made in Sweden between 1951 and 1960, including pilot plant runs. Some 200 special re- ports were written. A conceptual design for a 60,000 t/a wet carbonizing plant in Sweden was made by the German engineering company Borsig A. G. However, in 1960, when this work was completed, the peat fuel to be produced could not compete with fuel oil, so no go-ahead decision was made. In 1974 wet carbonization as a peat dewatering method was reviewed by a research team in Finland. After compre- hensive desk-top and laboratory work, a pilot plant was built in 1977. In this pilot plant, rated at 70 t/h peat slurry flow, the design data for the major equipment - preheating system, reactors and filter presses - were established. The PDF process is based on the Swedish work reported in 1960 and the work done in Finland since 1974, 196 including close cooperation with several equipment manu- facturers. In 1981-82 peat was wet carbonized in Delary, Sweden to get fuel for combustion tests. About 100 tons of wet carbonized peat with 10% moisture content was produced. Extensive peat slurry pumping tests were carried out as part of this test. These tests confirmed the previously obtained results that showed that a properly macerated peat slurry with some 9% organic matter in it can be transported in a pipeline and pumped through the PDF process. 2. General Peat Extraction Description Several wet peat mining options have been studied, including suction dredging, clamshell extraction, backhoe extraction and deep milling. The most cost effective method must be chosen, for each case, taking into account the preparation work needed in the bog, the load carrying capacity of the bog area, the climate and the way in which the extracted peat is to be transported to the processing plant and the processing is to be done. An evaluation of these options clearly shows that wet extraction from an unprepared bog, slurry preparation at the extraction site and pumping of the prepared peat slurry to the dewatering plant is by far the most cost effective method. To overcome problems with the low load carrying capacity of peat bogs, the extraction should be done with machinery mounted on pontoons floating in the pond formed when the peat is extracted. To avoid ice formation in the pond and to maintain the water level in the pond, hot process water is pumped from the processing plant to the pond and discharge in the vicinity of the pontoon. 197 Suction dredging is widely used as a method of earth moving in water logged areas. This method has, however, two serious drawbacks: with suction dredging of peat, a dry solids content on the slurry above 5% can hardly be maintained and when dredging the lowest layers of peat the slurry becomes heavily contaminated with the underlaying mineral soil. All peat dewatering methods, including the PDF process, are adversely affected by a low solids con- tent in the incoming slurry. The very low settling rate of peat material makes it unpractical to increase the dry solids content of the slurry in settling ponds. Thus the slurry should not be diluted more than necessary to make it pumpable through the transport pipeline. The peat deposits in the Kenai-Kalifonsky area have a heavy burden of ash. Increasing this ash content through contamination with underlying sand and clay should as far as possible be avoided. Suction dredging is, therefore, ruled out as a peat extraction method. Peat can be extracted at nearly the original peat soil moisture content with a clamshell extractor mounted on a pontoon. With this machine the peat layer bottom profile can be closely followed in the extraction opera- tion, thus avoiding contamination of the peat with exces- sive mineral soil. The peat is, however, not pumpable in the extracted state. It must, therefore, be screened and macerated by equipment mounted on the pontoon prior to pumping it through the pipeline. The pipeline must be submerged in the pond to avoid freezing in cold weather. In the Alaskan climate, this extraction method could be used some nine months of the year, and is recommended as the peat mining method to be used. For year-round plant operation, a surplus of, peat should be extracted during the extraction period and stored in a holding basin to supply peat slurry to the processing plant during the winter months. 198 I General Process Description The process will be described with reference to the simplified flow diagram in Figure IXx-1l. The raw peat is extracted by the excavator (1) and transferred to the hopper on top of the macerator (2). The peat is actively screened, coarse particles are crushed and the peat is macerated to a pumpable slurry in the macerator. The slurry flows by gravity into a holding tank in the pontoon, from which the transport pump (3) propels it into the transport pipeline (4). The slurry is discharged into the Storage basin (5) built close to the refining plant. At the end of the extraction season this storage basin should be full. Peat slurry is continuously pumped from the storage basin to the wet processing part of the plant. Here it is preheated in the two heat exchangers (6) by hot process water to about 115°F and pumped to the preheating towers (7). Heat exchange takes place in them between the raw peat slurry, pumped stage-wise by centrifugal pumps to higher pressures, and the wet carbonized peat slurry flowing from the reactors (8). The pressure of the hot carbonized slurry is stage-wise reduced and the flash steam released is condensed in the raw peat slurry. To avoid accumulation of incondensible gases, mainly carbon dioxide, that are formed in the reactors, these gases are stripped off by steam i the stripper (9) before they enter the preheating tower. In these towers the raw peat slurry is heated to the wet carbonizing temperature, 410°F. For temperature control purposes, some live 435 psia steam is injected into the reactors. The peat slurry residence time in the reactors is 30 minutes to allow the colloids to decompose chemically. No chemicals are added to the slurry in the reactors. 199 002 - ES wvoNouswnre LEGEND: EXCAVATOR MACERATOR TRANSPORT PUMP TRANSPORT PIPE-LINES STORAGE BASIN HEAT EXCHANGERS PREHEATING TOWERS REACTORS STRIPPER FILTER PRESSES GRANULATOR DRYER DEVOLATILIZER PRODUCT COOLER SOLID PRODUCT STOCPILE LIQUID FUEL CONDENSER LIQUID FUEL COOLER LIQUID FUEL STORAGE TANK STEAM GENERATOR WASTE WATER TREATMENT TANK SCRUBBER TURBOGENERATOR RP RS PC TH GA GF WP WT Figure IX-1 { RAW PEAT RAW PEAT SLURRY CARBONIZED PEAT LIQUID FUEL AIR FLUE GAS PURIFIED WATER PURIFIED WASTE WATER JP-ENERGY OY Wb ow |B Hog ee Scale: WHEELABRATOR-FRYE INC, ALASKAN PDF PLANT SIMPLIFIED PROCESS FLOW DIAGRAM New No. No, N1104-HH-3002 Old No The wet carbonized peat slurry is cooled by flash evaporation to 175°F as it goes through the preheating towers and dried at this temperature in the filter presses (10). The filter cake has a dry solids content above 503%. It is extruded to 1/10 inch granules in the granulator (11) and fed to the dry processing part of the plant. Here the wet carbonized peat granules are further dried to 10% moisture content in a two-stage fluidized bed dryer (12) using steam as a heating agent. The dried granules are subsequently fed to the devolatilizer (13). Here the volatile matter is driven off at a temperature of 930°F, leaving about 10% volatile matter in the product. The product is then cooled in the product cooler (14) and stockpiled for shipment. The off-gases from the devolatilizer are cooled to 360°F in the liquid fuel condenser (16), where a liquid fuel is condensed from the gases. Boiling water is used as cooling medium, producing steam that is used as a heating agent in the dryer. The off-gas from the devolatilizer is then further cooled (17), and a light fraction of the liquid fuel is recovered and discharged into the liquid fuel storage tank (18). The incondensible gas is used as a fuel in the steam generator (19). The hot process water, separated from the dry solids in the filter presses (10), is cooled to 100°F in the heat exchangers (6) and fed to the anaerobic waste water treatment plant (20). Here the water is purified, yield- ing a mixture of methane and carbon dioxide as a by-product. This "biogas" is burnt in the devolatilizer unit (13), and surplus gas is used as a fuel in the steam generator (19). The organic matter in the off-gases from the reactors is also disposed of by combustion in the 201 steam boiler furnace. Particulates in the drying air leaving the dryer are separated in the wet scrubber (21). The steam produced in the steam generator is saturat- ed at 435 psia. This steam is used mainly in the stripper (9) and the reactors (8). The steam generated in the liquid fuel condenser (16) is saturated at 130 psia. In normal operating conditions, there would be a surplus steam from these steam generating units. The surplus steam is superheated to 750°F in the furnace of the steam generator (19) and fed to a condensing turbine (22) at 120 psia pressure. Part of the plant's electrical power demand is produced in the turbogenerator. 4. Product Specification A peat sample, extracted from the Kenai-Kalifonzky area, has been subjected to laboratory tests. A part of the sample has been wet carbonized and further devolatilized. The raw material, the intermediate peat derived fuel (PDF) and the coke and liquid fuel formed have been analyzed by the Technical Research Centre of Finland (Research Report No. POV 26292). The ash content of the Alaskan peat sample is 40.0%. In order to meet the specifications 30% ash in the carbonized end-product, the raw peat must be de-ashed to a remaining ash content of 12.3%, prior to processing. The analyses have, therefore, been recalculated to this ash content and the process design is based on the recalculat- ed values. The raw peat dry matter has the following ultimate analysis and higher heating value: 202 As Received Recalculated Carbon % 34.3 48.5 Hydrogen % 4,01 5.67 Sulfur % 0.26 0.37 Oxygen % 21.2 30.0 Nitrogen % 2.24 3.17 Ash % 40.0 12.3 Higher heating value, BTU/1b 6,002 8,770 The ultimate analysis and higher heating value of the intermediate wet carbonized peat are: Carbon % 53.1 Hydrogen % 5.41 Sulfur % 0.33 Oxygen % 22.9 Nitrogen % 2.53 Ash g 15.7 Higher heating value, BTU/1b 10,294 By devolatilizing the intermediate PDF product, the design capacity of this intermediate product being 500,000 tons per year, the following end-products will be ob- tained: 203 Semi-coke Liquid Fuel Annual capacity t/a 262,350 100,700 Ultimate analysis Carbon % 57.3 17.3 Hydrogen ‘7 2.15 10.0 Sulfur % 0.18 0.12 Oxygen % 7.59 8.0 Nitrogen % 2.74 4.5 Ash % 30.0 0.1 Higher heating value, BTU/1b 9,544 16,450 Cc. Wet Carbonizing and Devolatilization Plant 1. Mass _ and Energy Balances The specified mass and energy flows through the process are given in Figures IX-2 and Ix-3, respectively. 2. Utilities and Chemicals Required Under normal operating conditions, the plant would be self-sufficient in fuel. It is recommended that a natural gas pipeline from a local gas source be built to the plant. Natural gas would then be available as a back-up fuel and also as a start-up fuel after prolonged mainte- nance shut-downs. Alternatively, the liquid fuel produced could be used as back-up and starting fuel, which implies installation of tar burners in the steam boiler. Normal variations in the amounts of combustible gases produced in the process and used as steam boiler fuels do not imply usage of natural gas, because a surplus of process steam is generated in the boiler and fed to the 204 m0 PEAT EXTRACTION [P) «2 200-N] Poe (E00 TREATMENT Py Las Poe Ed LEGENO: RP RAW PEAT RS RAW PEAT SLURRY PS WET-CARBONIZED PEAT SLURRY PM WET-CARBONIZED PEAT FILTER CAKE PF PEAT-DERIVEO FUEL PC DEVOLATILIZED PEAT-DERIVED FUEL TH TAR TL: VOLATILE TAR WR RAW WATER WP PURIFIED WATER ANO PRIM.CONDENSATE WW WASTE WATER AND SECOND. CONDENSATE WT PURIFIED WASTE WATER GH RICH COMBUSTIBLE GAS GL LEAN COMBUSTIBLE GAS GF FLUE GAS AND NONCOMBUSTIBLE GAS GA AIR SH STEAM, HIGH PRESSURE SM STEAM, MEDIUM PRESSURE SL STEAM, LOW PRESSURE WATER ANO GAS TRANSPORT [500 STEAM AND POVE! ]GENE RATION P10. et Oo 700 ORY 0 JOE WA TERING E=) VET ICARBONIZATION Py ASCO Pee Py -2Ec0rN] Po [O0.607 P, sINPUT OF ELECTRIC POWER IN Mw P, "GENERATED ELECTRIC POWER IN MW @ ‘HEAT LOSSES IN 10° BTU/he JP-ENERGY OY CARBONIZATION 0.11588 - Figure 1X-2 OVERALL BLOCK DIAGRAM 9072 Table IX-1 TOTAL PLANT MASS AND ENERGY FLOWS ~~ PF PC TH TL we we ve we R ve wR wt we 47 701 702 703 451 3 053 072 503 705 752 201 62 335 361 MASS FLOW = T fi DRY SOLIDS, RAW PEAT 183,110] 183,110] 183,110 - - - - i . 7 . bs A 2 c = WET-CARB. PEAT : 133,321] 133,321] 131,988) - ‘ a - - - E : . aa i CARBONIZED PEAT : : . : 69, 960] - - - - - 7 < TAK : : - - - : : 16,973] 9,880 - - - - c 7 . z DISSOLVED ORGANIC MATERIAL 2 ? ‘i - 20,890) : : + - - - - - - +. 19,545] 19,545 WATER [1,543,196] 1,563, 196] 1,563, 196] 1,651,474 - - - 116,091]3,375,055} 686,954/3. 375,055] 572,220] 111,372 1.625, 308/1.590,382/1.590, 382 WATER VAPOR i - . [ - : - - : : : : + + : : COMBUSTIBLE CAS : : 7 - _ . - - - - - - - - - - - - CARBON DIOXIDE " - - : - - - 2 z . - E . 4 7 ‘ OXYGEN = z ai : : 3 : : - - - - - - - - NITROGEN » 7 7 5 e - - - - - - - - E - z = : MASS FLOW, TOTAL LB/HR }1,726, 306] 1,726, 306] 1,726, 306] 1,805,685} £9,960] 16,973] 9,880/ 57,933) 116,091/3,375.055] 686,954{3.375,055] 572,220] 111,372/1,633,530]1,633,530] 1,610, 594] 1.610,594 TEMPERATURE, oe 40.0 40.0) 40.0) 176.1 140.0] 212.0] 104.0] 347.0] 275.0) 50.0 40.0] 68.0 104.0] 104.0 85.0 95.0] 176.0 99.0) PRESSURE PSIA - 14.5) 14.5) 6.9) - 14.5] 14.5] 129.4, 45.6 14.5 14.5] 16.5, 16.5 14.5 165, 14.5 14.5 16.5) DENSITY 18/cUFT - : 4 ENERGY FLOW 7; PHYSICAL fo"wtusnR | 12.823] 12.823 247.893] 21.277! 10.373] 2.328) 4.358] 0.314] 18.458] 28.336] 61.028] 5.521] 121.769 12.879] 15.018] 232.374] 107.023 CHEMICAL 6," | #4550.609] 1,550. 60911, 550.609} 1,349.573]1,336.196] 667.716] 290.865] 150.783 - - * - - - - 30.844] 30.864] 178.271] 178.271 ENERGY FLOW, TOTAL s0°srusHe | 1,563. 43211, 563.432) 1,563,432 1,370-050]1,246.569] 670.042} 292.223) 151.097] 18.450] 28.334] 61.028] 5.521 121.769] arci91] 8.019] aaa23, 45.862] 410.645 cA oF cH cH cL cL st SL sM SM oH 756 502 651 67 351 753 706 707 71 751 531 MASS FLOW et 7 IR DRY SOLIDS, RAW PEAT - - - - - a . : < WET-CARB. PEAT - - - : a - - : 2 Cs a CARBONIZED PEAT = - - c _ : - - - - - TAR ? - : : o - - - - - - DISSOLVED ORGANIC MATERIAL - - - 5 5 - - - - - - - WATER - - : . 7 - - - - - - - WATER VAPOR - 683] 1,357] 47,361 43,459 114 401 798) 39,113 169 18,124) 5,637 997} 2,365] 57,933] 58,158] 111,150) * COMBUSTIBLE Gas - : - - - - - - - - = 1,481 3,211] 6,912 - : + = - CARBON DIOXIDE - - . - - - 60,299] 1,742 10,436] 23,425 - - - e 3 OXYGEN - - 79,922) 49,777 - 49,777 18,419] 36,622 9, 186) - - - - - - jas NETROGEN - - 105,144] 239,816] 166,904 - 166,906 61,760] 122,796] 162,442 2 : - 39,689, - - - - - MASS FLOW, TOTAL 45,384] 31,516] 137,185] 312,895] 264,708 222/ 260,140) 22,736] 80,580] 160,216] 271,041 6,481) 31,771] 75,663 997 2,365] 57,933] 58,158] 111,150) TEMPERATURE 212.0] 104.0 40.0 ‘0.0 158.0] 275.0] 147.2] 356.0] 356.0] 356.0/ 358.0 409.2] 120.2 212:0] 212.0| 347.01 347.0] asa.3 PRESSURE 14.5 14.5 14.5 1s 14.5 45.4 14.5 14.5 16.0 14.5 16.5 16.0 14.5 14.5) 14.5 129.4 129.4] 435.0} DENSITY rf - 0.0791 0.0791 0.0584] 0.1076] 0.0586] 0.0479} 0.0529] 0.0479| 9.0461 9.0875} 0.0429] 0.0660} 0.0373] 0.0373] 0.2883] 0.2883 0.9371 ENERGY FLOW PHYSICAL vist] 1.938 54.942 6.682 0.262] 0, 23.306 7.902] 1.146] 2.723 133,994 CHEMICAL 6.689 - - : 6.688 = = = 35.365 29.473] 106.220 - - ENERGY FLOW, TOTAL sustu/uR | 14.735] 2,266 mets Neel eaters 54.942 1.924] 6.082] 13.286 “s 35.627 084) 52.777) 114.122] 1.166) 2,723 condensing turbine. These variations would, therefore, only affect the amount of electric power generated in the turbo-generator, with variations around the calculated long-term mean value. A rough estimate of the amount of purchased natural gas needed for the first start-up is 120 10° scuft. The annual need of natural gas for start-up and back-up purposes is estimated to be some 25% of this value, 30 x 10° scuft/a. Some diesel oil would be needed for propelling tug boats on the peat extraction pond, the annual demand being approximately 12,000 ga/a. 3. Electric Power The electric power balance for the plant is indicat- ed in Table Ix-2. Table Ix-2 Plant Electric Power Balance Power Operating Energy demand time Consumption MW M/a MWh/a Extraction and maceration 2.200 6.000 13:.:200 (including lst transport pumps) Slurry transport and storage 0.180 7.500 £3350 Preheating and wet carbonization 2.830 7.500 21225 Mechanical dewatering 1.280 7.500 9.600 Thermal drying 2.790 7.500 20.5925 Steam generation 0.330 7.500 2.475 207 Water and gas treatment 1.430 7.500 Devolatilization (estimates) 1.800 #500 Miscellaneous, 5% Total plant power demand 12.840 Power generated 5.180 77500 Electric power to be purchased 7,660 Water All water used in peat slurry process streams origi- nates from the wet extracted peat. There is, however, a need for fresh cooling water in the dry carbonizing sec- tion heat exchangers and in pumps and fans running at elevated temperatures, and for boiler feed make-up water. There is also a sea water demand in the turbine condenser. The water requirement is: lb/hr Cooling water to heat exchangers 575,000 Cooling water to pumps, fans etc. 6,000 Boiler feed make-up water 112,000 FRESH WATER, TOTAL 693,000 Sea water to turbine condenser 3,400,000 4, Chemicals No chemicals are required for processing purposes. But, in the waste-water treatment plant there is a deficit of phosphorous nutrients, the calculated demand being 180 lb/hr or 675 t/a of crude phosphoric acid. 208 105725 132.500 97.650 38.850 58,800 Some chemicals would be needed in the boiler feed make-up water treatment plant, the amounts depending on the treatment system to be chosen and the raw fresh water quality. a. Manpower The manpower needed is estimated and the area of responsibility is indicated as follows: Daytime employees: 2 ° | Job Responsibility Plant manager Office staff Plant engineer > cE tg = Cele . tg = ~ Foreman Foreman Technician, electrical Technician, instrument Technician, laboratory Mechanics Mechanics Mechanics, instrument Electrician Electrician Store keeper Products storage worker Unskilled worker Unskilled worker FPNN WHE NY NHEPNHD AHP HP BP Be Be OD LE Su RUN EB EHP RM EUV EES Sw vy Unskilled worker TOTAL Shift work employees: 209 Total No. 1 6 1 1 1 1 1 1 6 2 1 2 2 1 3 2 2 4 |S ° Job Responsibility Total No. Shift foreman ‘J = Control room operator Wet process operator Filter operator Dryer operator Carbonizer operator Clamshell operator oO Pulper operator Mechanics s Mechanics ZERE Electrician . he ee Ee oe i ee I a Ce i ee er ele faa eet NFP RP NN BYP PP BP ee Baw Nea p ve wo lU O [Oem 5 OO OO ee me oe I i Be Unskilled worker TOTAL ls N Responsibility key: A = administration E = peat extraction and transport P = processing M = maintenance The total number of employees at the plant would be 111 persons. 6. Maintenance Requirements The plant should be continuously maintained to keep it running. Normal maintenance could be done by the maintenance personnel proposed, but some external services would be needed during an annual maintenance shutdown of the complete plant. The annual cost of maintenance materials and external services is expected to be some 2.5% of the total installed equipment cost. This figure 210 is based on statistics from similar wet processing plants, for example pulp industries. Spare equipment should be kept in stock to avoid prolonged shutdowns due to malfunction of crucial equip- ment. In the wet processing section, the following spare equipment is recommended: 1 centrifugal pump of the type used in the transport pipeline 1 spare rotating tube bundle for the heat exchangers 2 spare centrifugal process slurry pumps. 90 atomizing nozzles to be used in flash preheaters 10 pressure-reducing devices for wet-carbonized peat slurry needed in flash preheaters. 480 filter cloths for the suggested filter presses. In the whole plant there would be 6 x 80 = 480 filter cloths installed and the useful life of a filter cloth is estimated to be 4,000 hours. Some 900 filter cloths would be needed per. year. 480 pressing membranes for the suggested filter presses. The total number of membranes installed and their useful life are the same as for the filter cloths. Thus some 900 membranes would be needed per year. In the dry processing section of the plant the following spare parts would be needed: 211 6 dies for pelletizers EJ-4001 and EJ-4002. There would be 4 dies installed, and their expected useful life is 2,500 hours. Some 12 dies would be needed per year. 18 rollers for pelletizers EJ-4001...2. THe total number of rollers installed would be 12, and their expected useful life is 2,500 hours. Thus some 36 rollers would be needed per year. 1 spare rotary blower CC-7001. The spare equipment listed here is the minimum needed; if spare part delivery times to the plant site are long, the number of items would have to be substantially increased. De Waste Water Treatment This report contains an evaluation of various methods for the treatment of wastewater resulting from the wet 7 of peat. Principal characteristics of this wastewater are a high oxygen demand with relatively low suspended solids. To effectively treat this wastewater, an anaerobic/aerobic treatment system is recommended. The anaerobic stage will reduce the BOD and COD level while producing methane gas as a by-product. The aerobic stage will further reduce the oxygen demand. The estimated capital cost for an anaerobic/aerobic system designed to treat wastewater from a 500,000 short ton per year plant is 7.4 to 10.0 million (1982 U.S. Dollars), depending on the degree of treatment required. The cost of the system will be partially offset by the methane gas recovered from the anaerobic process. Assuming a methane production rate of 1.0 million cubic feet per day and a methane price of $2.25/1000 et, the value of gas produced would equal 0.70 million dollars per 212 year. Bench and pilot scale treatability tests should be conducted, especially for the anaerobic stage, to better define design parameters and determine which type of anaerobic system provides the most cost effective treatment. +a Introduction This report contains an evaluation of potential methods for treating wastewater produced by the wet carbonization of peat. The assumed characteristics of the raw wastewater from this process are as follows: ) PARAMETER CONCENTRATION* BOD, 7,700 CoD 21,000 TSS 1,400 Phosphate 31 Total Nitrogen 1,300 Ammonia Nitrogen S15) Sulfate 150 Sodium 30 pH 4.4 Temperature 92°F * All concentrations in mg/1 except pH and temperature Data Source: Bertel Myreen, Jaakko Poyry Current plans call for construction of two (2) 250,000 ton/year carbonization process trains having a combined wastewater flow of 3.6 MGD. Since discharge limitations for the treated wastewater have not been established, a sequential treatment process has_' been 213 developed, with each stage in the sequence designed to provide a certain degree of treatment. The first stage of treatment will be some variation of the anaerobic digestion process. This treatment method was selected as the initial stage because high levels of BOD and COD reduction can be achieved with little or no input of energy. In addition, energy can be recovered from the process by utilizing the methane gas produced. The second stage of treatment is an aerobic treatment process. This process will provide additional BOD removal and nitrification of ammonia, if required. The third stage of treatment is a system for treat- ment and disposal of biological solids that will be generated by both the anaerobic and aerobic processes. Site conditions and regulatory requirements will dictate whether a solids disposal system is needed. 2% Waste-water Treatment Description A combined anaerobic/aerobic process is proposed for waste-water treatment. The treatment plant would consist of a mesophilie anaerobic contact reactor followed by an aerobic activated sludge tank. The excess sludge from the aerobic stage would be returned to the anaerobic stage and digested there. Extensive pilot plant tests have been made by Sorigona AB in Sweden with waste-water formed in wet carbonizing peat. The volume of the anaerobic reactor in these tests was 350 cuft. A load of 0.31bCOD/cuft/day could be maintained with a higher than 95% BOD reduction in the complete plant. The COD reduction, however, is only about 75%. 214 The nutrient requirements for a combined anaerobic/aerobic treatment is reported to be BOD:N:P = 200:5:1. There is a surplus of N in the waste water, but some 180 lb/h of phosphoric acid must be added. The nitrogen concentration in the effluent might be too high. A denitrification unit could be added to the treatment plant, but it is not shown in the process flow diagram. No pH controlling chemicals would be needed; since the effluent would be neutral. About 60% of the energy in the COD added is converted into energy in a gas leaving the anaerobic reactor. The dry gas composition is 70% (by volume) methane and 30% carbon dioxide. This gas would be collected and used as fuel in the plant. The pumped water would be strongly colored; if neces- sary the color could be eliminated by ultra-filtration. The sludge produced in the activated sludge tank would be fed back to the anaerobic reactor, so there would be only small amounts of surplus sludge. This could be pumped back with the treated water to the peat extraction area for settling in the vicinity of the peat extraction pontoon. 3 Anaerobic Treatment Processes Evaluated a. ADI System Two 75,000 Me bulk volume fermentors (BVF's) have been proposed by ADI. A BVF is an earthen basin fitted with influent and effluent structures along with a float- ing cover to collect gases produced by the anaerobic process. ADI estimates that their system will achieve 40 to 50% COD removal and 80 to 90% BOD removal. The COD re- moval rate is significantly lower than the rate proposed for other anaerobic systems. Since the removal of soluble COD is directly related to methane gas production, less gas would be produced by the ADI system than by alternate systems described later in this section. The ADI cost estimate for a system designed to treat 3.6 MGD was 6.0 million dollars. The ADI proposal is for a complete system including piping, pump stations, site preparation, electrical gas handling system, pilot studies, and engineering. The largest ADI system in operation at this time is a 26,000 mM? BVF used to treat potato processing waste in France. b. Anamet Process The Anamet Process is an anaerobic/aerobic process developed by the Sorigona Company in Sweden. The first step in the process is an anaerobic digester which has been designed to keep the solids in suspension. Effluent from the digester passes through a sludge separator where the solids removed are returned to the digester. The second step is an aerobic treatment process designed to further reduce the BOD level in the wastewater. Solids are separated from the aerobic treatment effluent and recycled to the digester and aeration tank. Pilot tests conducted by Sorigona indicated a BOD removal of 75% in the anaerobic stage, 25% in the aerobic stage. Overall BOD removal for both stages was 93%. The ammonia concentration was essentially unchanged by both treatment processes. An estimate of the methane production rate was not provided. 216 Estimated installed cost of the Sorigona system was $2.3 million for a 1.0 MGD treatment plant. Approximately $1.75 million was for the anaerobic stage and $0.55 million for the aerobic stage. The Sorigona Company has several of their systems in Operation treating a variety of high strength organic waste. oe Biothane Process seCrnene i TOCeSss: The Biothane Process is described by the vendor as an upflow anaerobic sludge blanket process. In North America the process is marketed by the Joseph Oat Corporation. The system proposed for treating wastewater from wet carbonization consists of a 27,000 me digester divided into eight compartments. Joseph Oats estimates the Biothane system will achieve 85% reduction of BOD, and 80% of soluble CoD. Estimated methane production was two million cubic feet per day. Cost estimate for a complete Biothane system designed to treat 3.5 MGD was 10 million dollars. The largest Biothane system in operation is a 66,000 kg COD/day facility treating wastewater from the G. Heilman Brewery Company in La Crosse, Wisconsin. d. Anthane/Anodek Process The Anthane/Anodek Process is a patented two stage anaerobic digestion process marketed in the U.S. by the Institute of Gas Technology (IGT). The first stage is a complete mix, acid phase digester which is followed by a custom designed methane digester. Each stage of the digestion process is optimized, resulting in higher 217 loading rates when compared to conventional anaerobic pro- cesses. A full scale plant with a capacity of 350 kg COD/day is currently operating in Belgium and achieves a COD reduction of 87 percent. IGT has estimated that a 3.0 MGD Anthane/Anodek plant to treat wastewater from wet carbonization would cost 6.0 million dollars. e. Fixed-Media Anaerobic Reactor This system is a variation of the anaerobic process in which a reactor vessel is packed with a media that provides a large surface area to which the methane forming bacteria adhere. The media contains alternating flat and corrugated vinyl sheets welded to form rectangular holes. Each cubic foot of media contains about 35 square feet of surface area. A representative from B.F. Goodrich, manufacturer of the media, estimated that a treatment system for the wet carbonization wastewater would require a 185 ft. diameter tower packed with media to a depth of 30 feet. The reac- tor vessel would provide a 48 hour residence time and achieve a BOD,, removal of 80-90% and a CoD removal of 70-80%. Equipment cost for a 3.0 MGD system including tanks, media and support were estimated to be 3.4 million dollars, Installation cost for this system would bring the total cost up to 5.4 million dollars. A fixed-media type system is in operation at the Bicardi Corporation Plant in San Juan. The system is designed to treat 0.3 MGD of Wastewater with a BOD, of 37,000-42,000 mg/l. The system has been in operation for about one year and is averaging a BOD and a COD reduction of 703. 5 reduction of 90% 218 4, Operating Cost - Anaerobic System The operating cost of an anaerobic system will be dependent primarily on the amount of pumping required. Most systems include some degree of circulation which can require pumping at a rate much higher than the influent rate. For estimating purposes, a horsepower requirement of 250 hp should be used for pumping requirements of a 3.6 MGD system. Using a power cost of $0.04/kwh, the daily pumping cost would be approximately $180.00. Additional minor costs associated with pH adjustment and nutrient addition could bring the total daily operating cost to $250.00. Cost Summary Listed below are the anaerobic treatment systems that were evaluated in this report and the estimated installed cost for a system designed to treat wastewater from the carbonization process. Estimated Cost* Process Name (S$ X10°) ADI System 6.0 Anamet 6.5 Biothane a7 Anthane/Anodek 8.6 Fixed-Media 7.8 *All cost estimates have been adjusted to a treatment capacity of 286,000 kg COD/day at 3.6 MGD. 5. Aerobic Treatment Processes As indicated in the previous section, the anaerobic digestion process will normally reduce the BOD, by 80-85 percent. With an influent concentration of 7,700 mg/1, the treated wastewater discharged from the anaerobic 219 system would have a BOD, level of. 1;200t6" 1,500° mg/T1. Due to constraints dictated by site conditions, regulatory requirements, or other factors, it may be necessary to provide a further reduction in the BOD, concentration of the wastewater. Also, limitations may be placed on the ammonia content of the treated wastewater, necessitating a treatment step that will effect a reduction in ammonia. An aerobic biological treatment process is capable of providing a reduction in both the BOD, and ammonia level of the wastewater. As with the Laseeon i process, there are many variations of aerobic treatment, with each system having its advantages and disadvantages. Listed,below are descriptions of several aerobic systems which would be applicable to treatment of effluent from the anaerobic process. a. Non-Aerated Lagoons A non-aerated lagoon treatment system consists of a large basin (usually earthen) which holds the wastewater from an extended period while the organic components of the wastewater are stabilized. The biological processes usually take place relatively slowly since the conditions in the lagoon are not the optimum for biological degrada- tion. It is difficult to predict the degree of BOD and ammonia removal that will be achieved by a non-aerated lagoon. Very long retention times (6 months or more) may be required for the wastewater to degrade enough to be discharged to surface waters. It may be feasible to use the lagoons created by the peat dredging operation as lagoons for wastewater treatment, if the effluent from the anaerobic process is not detrimental to the water quality of the bog. 220 A non-aerated lagoon represents the lowest cost aerobic system available for this application. Use of existing lagoons resulting from peat dredging operations will require a minimum investment for piping, pump stations and inlet/outlet structures. b. Aerated Lagoons In an aerated lagoon, some form of supplemental aeration is provided to increase the rate of biological degradation. With adequate retention times the aerated lagoon will usually provide BOD reductions of 80-90 per- cent. The treated effluent from the lagoons will contain an appreciable amount of suspended solids which May not be acceptable due to regulatory requirements. Removal of these solids will require an additional clarification step and facilities to either recycle or dispose of the solids. With a lagoon system there is the potential for ground water contamination. If a liner is required it will have a major impact on the feasibility of this treat- ment alternative due to the large area of the lagoon. If available locally, materials such as clay could be used for a liner material. The estimated installed cost for a 3.6 MGD aerated lagoon (non-lined) is 1.0 million dollars. This cost does not include a clarifier for solids removal. Operation- ally, the lagoon will require an estimated 700 horsepower for aeration. Using a power cost of $0.04/kwh, the daily operating cost of the lagoon would be $500.00 plus any cost associated with chemical addition. Cc. Oxidation Ditch 221 The oxidation ditch consists of a ring-shaped con- crete channel containing an aeration device that circu- lates the wastewater at 1 to 2 feet per second. The system is simple to construct, easy to operate, and can achieve BOD and ammonia removals of 90%. Hydraulic re- tention time for this application would be 1-2 days, which should minimize freezing problems within the system. Oxidation ditches are normally designed to operate with mixed liquor suspended solids concentrations between 3,000 to 4,000 mg/l and utilize long sludge retention times. To maintain the required solids level, a clarifier is needed following the oxidation ditch to remove and recycle the suspended solids. Since solids are produced as part of the aerobic process, it will be necessary to periodically waste some of the solids to either the anaerobic digester or to a sludge lagoon. After removal of suspended solids, the overflow from the clarifier should be suitable for discharge to surface waters or return to the BOG area. One variation of the oxidation ditch is marketed by Envirotech Corporation under the Carrousel trademark. Over 200 Carrousel systems are currently in operation treating both municipal and industrial wastewater. The estimated cost of a 3.6 MGD Carrousel system to provide additional treatment for the effluent from the anaerobic system is 2.6 million dollars. Operationally, the system would require approximately 900 hp for aeration, mixing, and recycle sludge pumping. Using a power cost of $0.04/kwh, this daily operational cost of a Carrousel system would be approximately $650.00 plus any cost asso- ciated with chemical addition. 6. Sludge Disposal 222 It has been assumed that sludge disposal as a se- parate process will be required only if an activated sludge treatment process such as an oxidation ditch is employed. The oxidation ditch would produce an estimated 9.5 dry tons/day of excess sludge which would be returned to the anaerobic digester. In addition, the wastewater from wet carbonization will contain approximately 21 tons per day of solids. If there is a 40% reduction in solids by the anaerobic process, the amount of solids requiring disposal will be reduced to 18.3 tons/day. The total net sludge production can vary significantly (1-50% from this estimate depending on which anaerobic/aerobic treatment system is employed. Sludge disposal costs of either lagooning sludge in ponds formed by harvesting are low. If sludge dewatering equipment is required, this would increase water treatment costs Significantly. The stabilized sludge will be removed from the waste- water by a separation step following the anaerobic digester. In the absence of regulatory requirements, an assumption has been made that the waste sludge will be pumped to an on-site sludge lagoon for ultimate disposal. Since there is the potential for using a dredged peat bog as a sludge lagoon, a cost for the lagoon has not been included at this time. ia Proposed Treatment System A conceptual treatment system has been developed which involves recycle/reuse of the treated wastewater. The system consists of an anaerobic digestion system followed by an aerated lagoon. Treated wastewater from the lagoon would be discharged to the dredged peat bogs. The feasibility of this system is based on the following assumptions: 223 (1) Treated wastewater can be returned to the bog area for reuse. (2) The water in the bog will not overflow into surface streams. (3) Reduction of the ammonia level will not be required. This treatment system must be a no-discharge system since it will not necessarily meet the preliminary dis- charge guidelines furnished by the Alaska Department of Environmental Conservation. Based on cost estimates received from the various vendors, an anaerobic/aerobic treatment system as de- scribed above would have an installed cost of 7.4 to 8.9 million dollars. The breakdown of this cost would be 6 to 7 million for anaerobic treatment and 1.4 to 1.9 million for the aerated lagoon, including a pipeline for returning treated wastewater to the bog area. If the treated wastewater is discharged either directly or indirectly to surface waters, then a discharge permit will be required and the treatment system described above would probably not be acceptable. An alternate conceptual system has been developed that would potential- ly allow discharge of treated wastewater into surface streams. This system consists of an anaerobic treatment stage followed by an oxidation ditch with facilities for solids removal and recycle. The estimated installed cost of this system is 9.0 to 10.0 million dollars. The break- down of this cost is 6 to 7 million for anaerobic treat- ment and 3.0 million for the oxidation ditch and effluent piping system. 224 The treated wastewater could be returned to the dredged bog or discharged into Cook Inlet through a diffuser system, depending on site conditions and regula- tory requirements. E. Product Storage and Shipping ‘ The storage and shipping of the peat product has been re-evaluated based on revised and additional information of the physical characteristics of the product and from telephone contacts with Steve Doring and barge companies servicing the Anchorage, Alaska area. A revised prelimi- nary estimated cost for storing and shipping varies from $9,143,000 to $15,360,000 depending upon the type of product storage used. The cost is based on a four month outside storage with conveying to storage, loading barges from stockpile with front-end loaders, and transloading from barges to freighter at anchorage approximately six miles offshore. It is assumed that the barges and tug would be supplied under contract with a barge and tug company. The $6,217,000 difference in cost is dependent upon the type of outside storage used. The higher cost is based on using bunker type storage which would permit outside storage without covering with minimum loss of product due to the wind. The cheaper storage is a single window type and would require tarping, covering or spray coating to reduce product loss due to the wind. The cost for tarping or covering the product pile has been omitted from the above cost,' as considerable additional investi- gation is required to ascertain the method that would withstand the temperature differential of the 160°F product temperature and the air temperature that reaches below freezing, and would still be flexible to handle or not affect the final stage of the product usage. The 225 Table Ix-3 Storage Facility Description Product Processed Peat Product Size: 2mm pellets Bulk Density: 0.52 kg/cu decimeter Compressive Strength: Unknown Product Temperature: 160°F Stockpile Angle of Repose: Assume 37° 32.46 lbs/cu ft Production Rate: 90,500 lbs/hour = 45.25 tph Operating Schedule: 7,500 hours/year Per Hour Per Year Tons 45.25 339,375 Cubic Feet 2,788 20,910,350 Cubic Yards 103.5 . 774,475 Shippin Shipping Season: March through November = 9 months Shipments: 50,000 tons each Number: 7 per shipping season Storage Capacity Requirement: Winter Season Storage: 3 month Production Surge (early winter or late spring): 1 month production Total 4 months production = 113,125 tons ’ 6,970,000 £t3 258,160 yd3 226 Table IX-4 PRODUCT STORAGE COST Case I Case II Type of Storage Bunker Windrow Pile Site Preparation $240, 000 $382,000 Footers and Walls 4,302,000 -0- Base and Slab 471,000 572,800 Sub-Total $5,013,000 $954,800 Misc., Engr. Ant. Etc. 852,000 162,300 Contingency 1,465,000 279,000 Sub-Total $2,317,000 $441,300 Accum Sub-Total $7,330,000 $1,396,100 Conveying (Incl. Misc. & Contingency) $1,530,000 $1,247,000 TOTAL $8,860,000 $2,643,100 227 Table IxX-5 PRODUCT SHIPPING COST Batge Loading Equipment and Facilities Frontend Loaders 2 @ delivered in Alaska Wharf for Barges Barge to Ship Transloading 2 @ Mobil Cranes w/ Clam Buckets 2 @ Barges Ship Channel Anchorage 4 Anchors and Buoys Spillage Boom Service Boat and Buoy Tender TOTAL 228 $1,000,000 2,000,000 $3,000, 000 $1,600,000 500,000 $2,100,000 $1,000,000 200,000 $1,200, 000 $200,000 $6,500,000 bunker type storage would be permissible without covering. The structure would be constructed perpendicular to the prevailing wind and any product loosened by the wind would be retained by the bunker walls. It will be necessary to purchase cranes and barges for floating the cranes. There is no equipment in this area of Alaska for transloading from barge to freighter at offshore anchorage. The transloading from barge in the Cook Inlet is limited to a maximum of nine months. From Kalgin Island north to Anchorage, the water freezes suffi- ciently to eliminate the use of barges. The offshore anchorage of ships in early winter and early spring is hazardous due to floating ice. During shipping season, the barge loading is limited to approximately twelve hours per day due to 21-23 ft. tides. It would require beaching the barges during high tide and pulling them out at the next high tide. The only year-round shipping port in the area is Seward. F. Peat Beneficiation (De-Ashing) The objective of this task was to investigate possible methods of removing ash from the Alaskan peat prior to dewatering and/or after thermal pretreatment. The technical approach involved first evaluating conven- tional coal cleaning methods for applicability to peat de-ashing, then characterizing the Alaska peat sample by chemical analysis, and finally, conducting laboratory tests on magnetic separation, gravimetric (float/sink) separation, centrifugation, froth floatation, and the OTISCA process. Alaskan Peat Analysis 229 Table Ix-6 CHEMICAL ANALYSIS OF ALASKAN PEAT Moisture Content (as received), wt % Proximate Analysis (dry), wt % Volatile Matter Fixed Carbon Ash Total Ultimate Analysis (dry), wt % Carbon Hydrogen Nitrogen Sulfur Oxygen. (by difference) Ash Total Gross Calorific Value (dry), Btu/lb * Component, wt % of total ash Si0, Al,0 3 Fe,0 2°33 TiO, CaO MgO Na20 K0 Total 230 70.2 57 -0 20.8 S2ce 2 100.0 45 5 1. -00 -05 06 0.17 26. 22. 52 20 100. 00 7670 64 16 ee a ee 35 -56 -82 -67 +65 -73 -92 -30 100. 00 IGT received two 5-gallon containers (about 40 pounds) of Alaskan peat. The "as-received" moisture content was 70.3 wt &%. The proximate, ultimate, and heating value analyses are shown in Table IX-6. The "as- received" ash content of the Alaskan peat was 22.2 wt &. Chemical analysis of the ash showed that almost two-thirds of the ash was SiO... 2 The peat sample was wet screened and each size frac- tion was analyzed for ash content. In the wet screening the sample is washed through the screens with water. The apparently large clumps of particles are broken down into smaller individual particles. The results of the wet screening (Table IxX-7) showed that 42.4 wt % of the peat was -200 mesh size. The ash analysis showed high ash contents in the +10 mesh (probably due to small pebbles or other inorganic material) and in the -200 mesh fractions. By eliminating these two high ash fractions, the product ash content was reduced from 25.85 to 19.83 wt 3; however, the product yield was only 53.1 wt $%. Magnetic Separation A 60-gram sample of raw Alaskan peat was slurried with water (1 wt % solids) then passed through a Davis magnetic tube separator. The Davis separator generates a maximum magnetic field of 7300 Gauss. The result was that less than 0.06 wt % of the material was separated (or 0.01 gr). Therefore, magnetic separation is not a feasible ash reduction process for this sample of Alaskan peat. Gravimetric (Float-Sink Separation Tests were also conducted to determine if the ash content of Alaskan peat could be reduced by gravity 231 Table Ix-7 WET SCREENING AND ASH ANALYSES OF ALASKAN PEAT Mesh Size Fraction wt % + 10 4.5 -10 + 20 8.0 -20 + 40 13:1 -40 + 60 i.5 -60 + 80 4.9 -80 + 100 2.4 -100 + 200 14.2 -200 + PAN 42.4 Total 7.00.0 s/o ae iON eae SO Weighted average ash content of peat, % Ash Content of —10+200 mesh fraction, % Ash Content of Fraction, wt % 52. 23. 15 17 22. 22 22 30. Peat Recovered in -10+200 mesh fraction, % TableIX-8 RESULTS OF SINK/FLOAT TESTS BY IGT 1.2 Float 1.2-Sink- 1.3 Float 1.3 Sink Total WITH RAW ALASKAN PEAT 98.0 1.3 0.7 100.0 2o2 51 25 -67 -83 04 -54 -O1 56 Ash Content 56.8 85.6 of Fraction ~ Ash, % of Total 9.1 7.2 7.9 7.3 4.2 2.1 25.85 19.83 53.1 Ash Recovery 93.7 3.5 2.8 100.0 €€7 Alaska Moisture Th Tm Peat Ash — Content _ Sample Uy | HU . i f {| HT ] [I eee 51.5 @ wWet-Carbonized, Dewatered 100 NTT rl i Hi HiT 9.65 & Wet-Carbonized, Dewatered, dried (HHH | I - 41.8 Raw 90 it Lt TTT A iy i} WHEEL TRAIT Lat ANT T TTT i tad] Hy UU LU MT e SebuneG uy ia I t { ' PUT 1 i 80 AN in PUT a ie HTL Hb AN UI | HI ih l HTH H HHH HY HHT ni]! HH THEE 70 | MH TT T HH | r] l q iH LY Ul | | Hu 1 NIH HEL | l Ha HL 1 | 8 60 H PRE 1 | nn int LT it UH wy [ H HU LH LEE HH I HAH ° 4 1 HEN TTT | H x 50 Hu Ht { fit tN Bu WH PL = RY t] HL Ht HI HTN EL { lJ oO I 1 7 | | 1 : a TT iu ikl THAT nN nT ea + 1 PEEL 1 1} 1 4H i tty EE i | % 30 ia it tt tit NI i } a HHL PHAETON ii HUE EE HTH AHH F 2 Ht HLH 0 : TH Hy PL } Hitt THA tt ++ Hd td HH Litt 4 10 Hit Ho ed HET \ HALLE HH AT LULL o | ; 1.0 1.10 1.20 1.30 1.40 1.50 1.60 1.70 SPECIFIC GRAVITY OF THE MEDIA Figure IX-3 COMPARISON OF SINK/FLOAT TESTS WITH RAW AND WET-CARBONIZED PEAT separation methods. In the tests with raw Alaska peat, liquids with specific gravity (Sp. gr.) of 41.2 <and 1.3 gr/m were used. The results (Table IxX-8) showed that 98 wt % of the peat floated on a liquid of 1.2 sp. gr. Only 2.0 wt % sank. The ash content of the sink fraction was 85%, but it only represented 6.3% of the total ash. Sink/float tests were also conducted with Alaskan peat that had been wet carbonized at IGT in a batch laboratory autoclave at 425°R, 500 psig, and a residence time of 45 minutes. These conditions are similar to those of J.P. Energy's PDF process. Part of the wet-carbonized peat was mechanically dewatered and allowed to partially air-dry. Another portion of the sample was filtered. The results of these sink/float tests and those of the raw peat tests are presented in Figure IX-4. The figure shows the amount of peat that sank at each sp. gr. of the media. The amount of ash (as a percent of total ash) is also plotted. The results show that wet carbonization in- creases the sp. gr. of the peat significantly. However, increasing the moisture content of the sample also de- creases the apparent specific gravity. That the curves of ash and peat (both raw and wet carbonized) are within a few percentage points across the’ range tested, indicates that the ash is intimately bound to the peat substance and cannot be readily separated by gravimetric methods. CSMRI IGT sent 20 pounds of raw peat to Colorado School of Mines Research Institute (CSMRI) to conduct laboratory floatation tests. The results of these tests (see Appen- dix A) showed that the ash content of the peat could be reduced to about 10 wt %; however, the product represented less than 40 wt % of the total feed weight. According to 234 CSMRI the peat did not respond well to the floatation treatment and sample handling was difficult. OTISCA Industries, Ltd. A sample of about 1 pound of wet-carbonized peat was shipped to OTISCA Industries, LTD (Syracuse, NY) for a test of the OTISCA T Process. The results of their laboratory tests on an Alaska peat sample which had first been wet carbonized showed that the ash content of the product was reduced from 23% to 8% wt % and the recovery of feed calorific value was 89%. No detailed economic estimates of the OTISCA T Process for wet-carbonized peat were made. The process developers did not feel the process would work on raw peat slurry. The results of the ash reduction tests by OTISCA T process were encouraging. Based on economic analysis of the process on coal, a very rough estimate of $10-$15/ton of dry solids processed appears reasonable, CONCLUSIONS Magnetic and standard gravimetric separation methods are not feasible for reducing the ash content of Alaskan peat. The OTISCA T Process shows promise of being able to significantly reduce the ash content of wet-carbonized Alaskan peat while recovering almost 90% of the Btu con- tent. Refined economic estimates of the process have not been made and would require additional testing. The OTISCA T Process is not yet being commercially utilized. A large pilot plant is in start-up phase at this time. Details of the process are proprietary. It is known that the process agglomerates carbonations materials with Freon. The agglomerates are screened out of the slurry and the Freon flashed and recovered. 235 x Environmental Analysis (Phase I & Phase II Systems) These considerations outlined herein include the project's impact upon air and water quality, as well as its effect upon fish and wildlife and residents in the vicinity of the project site. A. Air Quality Impacts from Peat Harvesting & Processing Major potential sources of airborne pollutants from commercial peat harvesting, processing and combustion are: ° Peat harvesting, storage, handling and crusing operations ° Process gas vents ° Flue gas from plant boilers ° Dryer exhaust gas ° Exhaust emissions from vehicle traffic and heavy ma- chinery. Ls, Harvesting Emissions Dry peat harvesting may create fugitive dust emissions which are generated through wind action and physical disturbance of dried soil or peat particles. In the language of the Clean Air Act, this is a "criterion pollutant" and strict regulations limit concen- trations that may be emitted to the atmosphere. This constraint is important, since strong winds have been observed to carry milled peat dust twenty to thirty miles on a gusty day (Conklin, 1978). The quantities of fugitive emissions produced by dry harvesting can be greatly influenced by bog preparation, harvesting area, and harvesting process configurations. Bog preparation associated with dry peat harvesting, such as dewatering and removal of surface 236 vegetation and natural wind breaks, serve to break up and dry the peat fibers and expose the land surface to wind erosion. Harvesting areas with longer dimensions parallel with the prevailing wind direction helps to promote wind entrainment of smaller peat parti- cles, while exposing the bog surface to increased scouring action by those particles too large to remain suspended (Foster-Miller, 1982). Harvesting processes employing field drying and excessive handling may also promote the generation of fugitive emissions. y Associated Emissions Associated Emissions Combustion sources associated with peat harvesting include all internal combustion engines which power harvesting, handling and transporting equipment. Estimated emissions for dry harvesting processes are listed in Table X-1; table x-2 presents estimated emissions for combustion engines used in wet harvesting processes (Foster-Miller, 1982). Emissions were estimated based on the total annual horsepower requirements for each process, diesel fuel, and EPA emission factors (Computation of Air Pollution EPA AP-42). A major problem with dry harvesting is the proctivity of the milled peat process of bog fires. These fires can burn out of control for months and in addition to the air pollution associated with them, a significant loss of production can occur. 3. Wet Harvesting Emissions Wet harvesting will result in little or no generation of airborne particulate emissions from the bog itself. Since peat 237 8% Table x-1 Estimated air pollutant emissions from dry peat harvesting combustion sources (Foster-Miller, 1982) Emissions (tons/ycar) Total Production hp hr/year lNlarvesting system State NOx Particulates + Conventional milling Florida 12,240 1,920 362.4 23.9 Minnesota 16,290 1,440 Sol. 7 25:20 Alaska 19,035 1,200 35272 ZdKi2 Conventional sod Florida 27,840 2,400 1,,030:52 73.6 Minnesota 54,930 1,200 1076.23 72.6 900.7 64.3 Alaska 36,510 1,600 Improved milling Plorida §,316 2,240 183.4 Pid Minnesota 6,120 1,680 15855 iPe3 Alaska 7,790 1,440 173.0 12.4 Improved sod Florida 41,940 2,400 1 552.0 110.9 Minnesota 83,160 1,200 15387 109.9 Alaska 61,860 1,600 152641 109.0 Deep milling Florida 8 ,000 2,240 216.3 197 Minnesota 12,000 1,440 266.4 19.0 246.7 F726 10,000 1,600 Alaska 6S Table x-2 Estimated air pollutant emissions from wet peat harvesting combustion sources (Foster-Miller, 1982) ‘ Emissions (tons/year) Production hyr/year Harvesting system co 1c Noy SO2 Particulates 5,000 3,000 2,000 674 4.8 309.9 20.6 68.1] 253.2 314.5 20.9 63.9 | .23.6 295.4 19.6 Florida Minnesota Alaska Pull-face continuous Nw te Fe mw Ko 5,000 3,000 2,000 Florida Minnesota Alaska Pull-face cyclic 7,500 4,000 3,000 Plorida. Minnesota 3,500 Alaska 4,500 Hydraulic is harvested, handled, and transported while wet, there is little opportunity for fugitive emissions to occur. An insignificant amount of fugitive emissions may result from dried particles which may adhere to harvesting equipment and conveyor belts. Also, minor emission may be caused by bog preparation which may promote the drying of peat particles on the exposed surface of the bog. Many wet harvesting and transport systems are possible includ- ing: Ps Deep milling with truck or pipeline transport 2. Mechanical excavation with truck transport 36 Suction dredging with pipeline 4. Floating excavator (clamshell) with pipeline Of the wet processes, deep milling and mechanical excavation require prior bog drainage and, therefore, have the greatest poten- tial for fugitive emissions since these methods May result in at least some partially dried peat. Truck haulage will also result in significant dust emissions. Conveyor transport of wet peat is less prone to dust. Pipeline transit is essentially dust-free. Utili- zation of hydraulic harvesting methods should provide, essentially, complete control of particulate emissions. 4. Air Emissions - Alternative Dewatering Processes In addition to fugitive emissions due to harvesting, the air emissions from processing must also be considered. a. Wet Carbonization Process (Phase II Selection) Wet carbonization gaseous hydrocarbon discharge is approximate- ly 1-3% of process dry fuel weight with small amounts of CO, CH, 240 CoHe, Ho, furfural, acetone, acetic acid and other light hydrocarbons. The vent gases in the J.P. Energy Oy wet carbonization process are vented to the steam boiler for incineration of all hydrocarbons and recovery of any fuel value. Dryer gases contain little or no hydrocarbons because drying temperatures are below the prior peat wet carbonization temperature. Either boiler flue gas or dry air is used in the second dryer stage. If air is used, it can be utilized in the steam boiler as combustion air. If flue gas is used, multiple cyclons followed by wet scrub- bing is used. The plant boiler is fired with gaseous fuels (digester gas, coking gas, vent gas). Because some particulate might be associated with these gases, a precipitator would be used. It should result in nor more than .03 lbs. particulate per mmBTU fuel input or about 10.3 lbs/hr particulates (38.6 tons/yr). b. Air Emissions from Alternative Dewatering Processes Evaluated in Phase I aS eESS thetoase .t Partial wet oxidation gaseous effluents consist primarily of co, and saturated steam, with trace amounts of hydrocarbons. Assuming 10 ton/hr of peat solids oxidized, consisting of carbon and hydrogen (a fair assumption), approximately 18% of the feed is converted to co, and HAO using oxygen from compressed air. The partial wet air oxidation plant is conceptually similar to the wet carbonization plant. The peat slurry, however, is heated by the partial oxidation reaction rather than outside steam. The absence of a steam boiler to incinerate reactor vent gas and dryer exhaust will result in higher hydrocarbon emissions. Dryer exhaust could be compressed for use in the reactor to control emissions. In the Koppleman Process, the more severe thermal conditions result in a combustible vent gas. Hydrocarbon and particulate emissions should, therefore, be minimal. 241 In the Carver-Greenfield Process, hydrocarbon and particulate emissions from the peat/oil separation equipment could be a problem unless vented into the plant boiler. Because the process has never been tried on peat, no emissions data is available. When mechanical presses (i.e. Bell Press) is used with 2-stage drying, dryer exhaust can be used as boiler combustion air to incinerate the higher level of hydrocarbon emissions resulting from drying untreated peat. Use of boiler flue gas for drying would result in unacceptable levels of hydrocarbon emissions. B. Water Quality Water quality issues concerning commercial peat harvesting activi- ties primarily involve potential changes in acidity and siltation of on-site systems. On-site changes arise from clearing and draining of the bog area and run-off waters. The inundation of peat bogs results in an anaerobic condition that greatly reduces aerobic decay of plant detritus. Nevertheless, slow bacterial action produces waste organic acids which lower the pH of bog waters. The normal neutralization of acids from biological decay by alkaline mineral soils is greatly retarded by the depth of decomposing plant material that has accumulated in peat bogs. Process water discharges differ depending on the process utilized. The severity of thermal treatment determines the amount of material solubilized and its receptivity to biological treatment methods. 1, Dry Harvesting Impacts Bog preparation for dry harvesting processes involves the establishment of a drainage network to allow drainage of existing ponds and facilitate drainage of snow melts and rain. In addition, surface clearing occurs after the bog is sufficiently drained. 242 Water quality impacts associated with the preparation of peat bogs for dry harvesting can be very pronounced due to the increased drainage rate and the physical ditching process. Establishing a drainage network may cause increased concentrations of suspended solids, organic and inorganic compounds; also changes in the pH of the water draining from the bog may occur. In addition, draining water from the bogs will result ina lowering of the water table, which in turn lowers the moisture content of the peat and subsequently causes subsidence of the peat in the bog. Subsidence may result from a combination of the reduced buoyancy of the peat moss and the increased microbial oxidation of peat stimulated by improved soil aeration as a result of bog drainage. Biological oxidation of peat will cause the release of nutrients. However, the oxidation process is slow and therefore, the changes in water quality due to nutrient release may be low. The decomposition and subsidence of the peat, which increases the bulk density, will reduce the hydraulic conductivity and the saturated infiltration rate. An increase in surface runoff and peak discharges may occur, which could increase concentrations of suspended solids, organic and inorganic compounds, as well as compound possible changes in the pH of the water draining from the bog. Removing the surface vegetation from the harvest area will reduce transpiration in proportion to the amount of vegetation removed; this may reduce the rate at which ground water levels drop during the summer. Also, the evaporation rate of moisture from the bog may increase because of increased solar radiation reaching the soil surface. It is the balance between reduced transpiration and increased evaporation which will determine whether bog runoff rates change. Another impact of clearing the vegetative cover will be the removal of an effective erosion and runoff control mechanism. During some dry harvesting processes, the least decomposed peat is removed first. As the harvesting progresses, the exposed bog surface has greater decomposition and bulk density, which results in lower infiltration rates. The lowering of infiltration rates may 243 cause increased surface runoff and discharges. The increased rates of erosion and runoff, which may occur from dry harvesting, could cause an increase in concentration of suspended solids, organic an inorganic compound, as well as changes in pH of the area water. ys Wet Harvesting Water Impacts Wet harvesting techniques, which use hydraulic or mechanical excavators for one pass removal of peat, require little site prepara- tion. Although trees and brush may have to be removed from the bog surface, extensive drainage and grading at the harvest area is not required. Wet harvesting results in pond formation which generally have lesser impacts vs. dry processing techniques. In hydraulic systems, all water associated with the peat is pipelined to the dewatering plant and processed prior to discharge. The availability of large dredge ponds make long term settling and aeration of treated water possible at little cost. Peat extraction results in reduced inter- ception losses and increased water storage within the basin created by the removal of the peat. As the subsurface flow from the sur- rounding peat fills the basin, the available moisture storage in the peat surrounding the pond may increase. The extraction of peat may cause an increased loading of suspended solids, and organic and inorganic compounds; changes in pH may also occur. This water would flow through surrounding peat material which could act as a filter. It is possible that vegetation and microbial organisms in the bog May utilize the dissolved organic compounds. Also, the suspended solids will probably settle within the harvesting pond or be fil- tered by undisturbed bog sections used as buffer zones. Those wet harvesting systems, such as deep milling and mechan- ical excavation, will have drainage water impacts similar to dry harvesting systems. Less land is affected per unit of energy produced and run-off of precipitation is, therefore, reduced. 244 The waters draining peatlands contain appreciable quantities of phosphorus and nitrogen and this projected peatland site is no exception. Phosphorus and nitrogen have been studied extensively in limnology because of their effects on the rate of primary production and the eutrophication of aquatic systems. The term eutrophication is synonymous with increased growth rates of the aquatic biota in excess of the rate that would have occurred in the absence of perturbations to the system (Wetzel, 1975). Some peatlands can contain relatively high concentrations of iron, and other metals particularly when Sphagnum is abundant. Sphagnum tends to absorb metals from the environment. The release of these metals is dependent upon their concentration, peat charac- teristics, and peat harvesting and processing methods. The concen- trations of metals in fresh water can have both beneficial and/or detrimental effects. Some metals like iron and manganese may limit the rate of plant productivity. Other heavy metals, such as mercury, chromium, lead, and nickel appear to be toxic to aquatic life even in low concentrations. Additionally, bog waters may contain other chemicals that could adversely affect the local watershed during bog drainage. Organic waste products such as polyphenolic humic acids May retain nutrient inorganic ions and prevent their uptake by aquatic plants. Other humic decay products may prove toxic to aquatic species in receiving waters. 3' Minimization of Impacts Within a natural setting, swamps or marshes represent a very effective water purification system. Use of existing and man-made marshes is one possible means of achieving acceptable water quality at reasonable cost. The primary attraction of using marshes to remove pollutants from peat harvesting operations is that the pollutants (that is, nutrients and heavy metals) are removed from the water by non-food phreatophyte plant species, such as cattails (Typha spp.), swamp rush (Juncus spp.), willow (Salix spp.), black 245 spruce (Pices mariona), tramarack (Larix laricina), and swamp oak (Quercus bicolor). Specific techniques which are included under this system of coupling artificial and man-made ecosystems to achieve acceptable water quality include use of buffer zones, open water lakes, natural bog areas, pH control water flux control and artificially esta- blished marshes. It is believed that these components, used in combinations depending on site-specific conditions, can satisfy water quality requirements (Foster-Miller, 1982). A buffer zone is an area left undisturbed and unaffected by peat harvesting. Buffer zones are used to control and/or limit subsurface and surface interchange of waters within the harvest area and between the harvest area and surrounding environs. Buffer zones can provide areas of undisturbed natural habitat for the protection and perpetuation of biotic components of the system. These buffer zones can be left around the periphery of harvest areas between the limits of areas of peat removal and surface drainages such as rivers and creeks and within harvested areas. Both natural and artificial methods are available to control the pH of ponded waters within the peat recovery site and any surface or subsurface waters leaving the area. In all cases where natural means for control of pH are applicable, they are preferred over chemical addition, may be used to buffer pH. Several natural methods for control of pH are available. Some that may be used in the process of peat harvesting are: ° pH in surface ponds may be controlled by upwelling water from near-shore aquifers. ° Where suitable, water may be passed through calcareous, in situ soils. 246 Control of vertical and horizontal movement of surface and subsurface waters within the harvest area and between the harvest area and surrounding environs may be achieved by use of permeability characteristics. Use of the permeability characteristics of natural materials is the preferred methods of control. Some of these tech- niques include: ° The use of layers of hemic or sapric peat, which is a relatively impermeable material (107° to 10-8 cm/sec). Leaving a foot of hemic or sapric peat at the bottom of a ponded area would effectively control permeability (Fos- ter-Miller, 1982). ° The use of relatively impermeable clays. Some of the artificial methods of achieving permeability control are: ° Construction of cut-off walls, using sheet piling and/or compacted clays. ° Construction of berms and/or dikes where necessary. ° The routing of certain surface waters to areas less susceptible to seepage. Open water lakes located in close proximity to the point where water discharges from the harvest area can be used as settling ponds, allowing suspended solids to settle to the bottom. Sizes and numbers of the lakes will depend on characteristics of the hydrologic system. Such lakes may be either natural or man-made. Open water areas within a natural bog can be used or an artificial lake may be created by dredging. A portion of the bog can be left in an undisturbed state (preferably on the downstream side) to act as a filter for water 247 discharged from the harvest area. Such an area should function to remove some of the humic acids from the water and the bog vegetation will utilize the nutrients and consume heavy metals during periods of active growth. The natural bog. area will function as an enlarged buffer zone and use of this technique will allow natural processes to function on the discharge water for a longer period of time. This technique will also serve to attenuate peak flows. Building man-made marshes involves utilizing a stretch of a natural waterway that takes water from a bog. By altering the gradient of the water course and installing very low terrace-type baffles, an artificial marsh is created on poorly drained mineral soil bordering the waterway. Under normal flow conditions, maximum depth of water above the marsh surface should not exceed three feet, since emergent macrophyte species, such as cattails, cannot survive water depths greater than three feet (Foster-Miller, 1982). The negative aspect of this technique is that time, at least one growing season, is required for phreatophyte vegetation to become established in the marsh. While some plant species will occur naturally, others may require planting. Also, if significant grading is required to lower the stream gradient, grading will have to be accomplished during the winter season (Foster-Miller, 1982). The artificial marsh will allow further control of peat flows from the bog. This attenuation effect should increase as vegetation grows. The artificial marsh can also serve as a wildlife habitat and should accommodate some of the wildlife displaced by harvesting operations. 4, Process Wastewater In the J P Energy Oy (Myreen) wet carbonization process, 248 almost 870 tons/hr of wastewater require treatment (based on 1,000 ton,/hr feed). Myreen states that the water is high in dissolved organic matter and may have a Biological Oxygen Demand (BOD) as high as 4,000 ppm. IGT laboratory tests determined that nearly three-fourths of the organic wastewater loading results from methanol, acetone, and acetic acid. Table 9(h).5 lists wastewater composition from the wet carbonization process. Fortunately, the waste liquor is highly biologically active to both anaerobic and aerobic organisms. In the Phase II design case, water is treated to 150 ppm. The production of 3.7 million gpd of discharge, therefore, results in approximately 4600 lbs/day of BOD. There is no Federal or state industry discharge standard for peat. The above treatment level would, however, comply with the new Federal standards for pulp mills which produce similar effluents. For additional information on the base case water treatment system, see Section Ix. The peat partial oxidation process must use longer processing times and more severe temperatures. It, therefore, results in higher concentrations of dissolved solids which are less biological- ly active. The Koppleman process produces the most concentrated liquor. Processes involving pressing of untreated peat will produce waste water with higher suspended solids contents and humic acids. They may require floculants and neutralization to enhance settling and treatment. 249 Table x-3 Calculation of Wet Carbonization Wastewater Composition Liquid Sample Composition mg /1° tons /hour? Methanol (CHO) 1610 3.00 Ethanol (CHCH,0H) -- ad Acetone (CHCOCH,) 720 1.34 2-Butanone (CHCHCOCH,) 160 -30 Acetic Acid (CH,COOH) 800 1.49 Propionic Acid -- -- Pyridine (C,H,N) 40 -07 2-Methylpyridine (CgHON) 40 -07 3+4-Methylpyridine (CjHgN) 10 -02 Ethylpyridine (C 6H) 8 -O1 Methylpyrazine (C.H.N.) 91 -17 2-Furaldehyde (C 4H0CHO) 8 01 5-Methy1 furaldehyde (CH,C,HOCHO) 97 -18 o-Hydroxybenzaldehyde (HOC 6 (gCHO) -- -- Naphthalene -- -- Methyl Naphthalene _ — Phenol (C,H, OH) 218 -41 o-Cresol (CHC HOH) 51 -09 m + p-Cresol (CH CH OH) . 60 -00 o-Methoxyphenol (CH,0C HOH) 3 -00 o-Ethoxyphenol (CHOC ¢H OH) m + p-Ethoxyphenol (CHOC, HOH) 63 -12 2, 4-Xylenol ( (CH) .C¢H,0H] 4 -01 o-Ethylphenol (C H.C 5H OH) 2 -00 m + p-Ethylphenol (CjH,C,H,OH) 12 -02 C,-Phenol 3 -01 C,-Phenol 1 _.00 7.42 250 C. Peatland Reclamation Peat has been used quite extensively as fuel in the USSR where in the past, it was extracted down to the mineral subsoil. Today, many of these former peat harvest areas have become wastelands (Skoropanov, 1968). In Finland, where some organic peat soil is retained for reclamation, spent peatlands are productively reclaimed as forest lands. Reclamation implies a management scheme that will return or maintain excavated peatland in a useful condition. Reclamation options include redevelopment or maintenance of the land so that it support economically productive activities or retains conser- vation values. This section will address the reclamation alternatives suitable for the peatlands of South Central Alaska. It is necessary for land reclamation schemes to be site specific since land reclamation methods depend on the condi- tion of the land. One of the conclusions reached by the Institute of Gas Technology is that there will be close interaction between peat harvesting technique, local hydrology and water quality and land reclamation options in the course of large scale peat development. The Institute recommends that prior to actual development, an integrated peat harvesting-water quality control-land reclamation plan be formed (IGT,1979). The method of peat harvesting also greatly influences the timing of reclamation. With wet harvesting methods, the entire peat depth (except for 6 to 15 inches left for reclama- tion) is removed in one season allowing the plot to be immediate- ly reclaimed. Dry harvesting in northern climates seldon permits more than 3-6 inches of peat removal per year, postponing reclamation for 20 years or more. 1. Harvesting Techniques 251 Peat harvesting methods may be divided into the general categories of dry and wet harvesting (Bostwick, et al., 1981). Prior to dry harvesting, the peat bog is drained and the peat is air dried, removed and transported as a solid. In contrast to this, during wet harvesting peat is removed from an un- drained bog. The resulting water table in a bog after har- vesting will vary according to the harvesting technique. One method of dry harvesting is milled peat harvesting. For this technique, the bog is drained and a level field surface is prepared. The peat is then milled in layers about 12 mm thick (Galvin, 1972) over a rotating spiked drun. REsulting shreds are left on the field to dry, and large vacuum harvesters are passed over the dried peat. Only moderate depths of peat are harvested each season, thus, a fairly large peat deposit may require many years to be com- pletely harvested. An obvious disadvantage is associated with postponed reclamation. Milling methods which leave large, flat expanses devoid of both plants and animals require a long time to self-regenerate (Moore and Bellamy, 1979). Since these lands have been drained, problems may arise relative to surface erosion. In Ireland, bogs which have been harvested by this technique have been successfully reclaimed as grasslands using specialized drainage systems (Galvin, 1972). Sod peat harvesting is conducted with a cutting wheel and extrusion process resulting in a long band of peat which is then cut into sections (sods) and dried on the bog surface. Using this method, several\meters of peat may be removed at once. Consequently, care mist be exercised in preventing drainage water from the uncut sections for dischaxging into areas where undesirable surface ponding may occur (Galvin, 1972). This method of harvesting results in different land surface features in that milled peat harvesting forms large flat surface where sod peat harvesting creates concentrated depressions. Recultivation may not be quite as suitable as an 252 alternative in this instance, since drainage would be a greater problem. After experiments with surface grading and planning, however, lands harvested in this manner have been successfully reclaimed (Galvin, 1972). Wet harvesting methods include hydraulic dredging or other forms of hydraulic excavations. Peat from an undrained bog is removed by dredging and transported as a slurry toa dewatering facility. Since all the peat is removed in one season, land reclamation may begin at once. A result of this method is that the maintenance of normal ground water table elevation may be more readily accomplished. This is con- sidered to be the most beneficial harvest technique from a reclamation standpoint (Moore and Bellamy, 1974). During a hydraulic peat harvesting operation, peat will be removed to an average depth of approximately 7 feet. Techniques incorporating buffer zones, pH control and permeability control may be used to restore an exploited bog to a condition which may closely resemble the initial peat bog from the hydraulic and water quality standpoint. These techniques are outlined by Smith, 1981. 2. Buffer Zones Buffer zones are used to control and/or limit subsurface and surface interchange of waters within the harvest areas and between the harvest area and surrounding environs. Buffer zones also provide areas of undisturbed natural habitat for the protection and perpetuation of biotic components of the system. These buffer zones are left around the periphery of harvest areas; between the limits of areas of peat removal and surface drainages such as rivers and creeks; and within harvested areas. 253 The location, size and extent of buffer zones will be governed by local conditions and land forms and will be specifically delineated during the planning phase of peat removal. 3. pH Control Both natural and artificial methods are available for control of pH of ponded waters within a peat recovery area, and of any surface or subsurface waters leaving the area. In all cases where natural means of control of PH are available, they will be preferred over chemical treatment. 4. Permeability Control Control of vertical and horizontal movement of surface and subsurface waters within the harvest area and between the harvest area and surrounding environments may be achieved through utilization of locally occurring soil permeability variations. Use of the permeability characteristics of natural materials may be the preferred method of control, where feasible. Some of these techniques include: © The use of layers of hemic and sapric peat, a relatively impermeable material (107° =10- Leaving a foot of in-situ hemic and sapric peat at the bottom of a ponded area will effectively con- trol permeability. cm/sec). © The use of relatively impermeable in-situ clays also will control permeability. Some of the mechanical methods using permeability control include: 254 © Construction of cut-off walls, using sheet piling and/or recompacted clays. © Construction of berms and dikes. o The routing of certain surface waters to areas less susceptible to problems associated with seepage. In repeated examples of peatland reclamation studies where harvested bogs have been used for agriculture, it has been found that leaving a layer of peat unharvested in the bog will aid significantly in the reclamation process. Experi- ments in the Soviet Union with oat and hay production in former peateries revealed that a layer of 45-50 cm of peat should remain after harvesting (Skoropanov, 1968). A peat cover of approximately 50 cm was found to satisfactorily meet requirements for grassland revegetation in Ireland (Galvin, 1972) 5. Utilization of Peatlands Peatland utilization has long been practiced in many parts of Europe and North America where lands have been reclaimed primarily for afforestation and agricultural. Attempts at agricultural reclamation have been made at various times in the USSR with varying degrees of success. Such attempts were not driven by economic motivation and may be classified more as research than commercial efforts. In same cases in the USSR large amounts of organic or mineral fertili- zers were used to produce satisfactory vegetable crops or perennial grasses but the results often varied. In view of some of the difficulties encountered, proposals have been made for alternatives such as annual and perennial wild rice or fur farms (SKoropanov, 1968). 255 Experiments have been conducted to improve tree plantings in harvested peat bogs of Czechoslovakia (Ferda, 1972) and harvested peatlands in Ireland have been successfully re- claimed to grasslands by use of systems of grading the bog surfaces between widely spaced catchment drains (Galvin, 1972). It had been estimated that by 1980 about 90% of Finland's peatland (11 million hectares) will have been drained and planted to support a large segment of the national economy dependent upon forestry. It has been estimated that afforestation of peatlands may have had a marked effect on regional climate and water balance (especially river flow) characteristics (Moore and Bellamy, 1974). Both the United States and Canada the in-situ utilization of unharvested peat deposits has met with long term success in the cranberry and blueberry industry. Cultivation of Vaccinium spp. does not require drainage and may be grown with a minimal effect on the peat deposit (Moore and Bellamy, 1974). Reclamation of harvested peatland for agricultural purposes has been achieved in North Carolina. 6. Evaluation of Alternative Reclamation Options for South Central Alaska THe options for peatland reclamation of the bogs of South Central Alaska may only occur within the environmental contraints imposed by the physical and biological characteris- tics of the bogs. Some characteristics of the bogs of South Central Alaska relevant to reclamation options are discussed below. a. Climate 256 The amount of precipitation in this region ranges between 40 and 50 cm per year. Throughout the area, various factors combine to produce erratic temperatures during the growing season. On the whole, the average growing season is less than 100 days although the length varies considerably from place to place and frost free seasons ranging from 60-140 days have been reported. Long periods of daylight in summer compensate somewhat for the relatively short growing seasons (USDA-SCS, 1962). b. Soil The soils of the large muskegs of the Kenai-Kasilof area and Susitna River drainage fall within the Salamatof series which consisting of very poorly drained peat soils. The water table is consistently at or near the surface of the peat, and the depth of the peat ranges from a few inches to several feet in thickness. The peat near the surface is typically moss peat while deeper peat is moss peat mixed with fibrous peat. Other soils within the South Central Alaska bogs include the shallow Doroshin peat near the edges of some muskegs and Starichkof peat in the southern part of the area. Together, these soils belong to a soils management group which the Boil Conservation Service (1962) assigned the following management recommendations: These soils are waterlogged at all times. As a rule, drainage is not feasible because of their position in depressions. Even in the few isolated spots where artificial drainage is possible, it is unlikely that satisfactory crops could be produced. The peat is ordinarily strongly acid and very infertile, and would require much heavier applications of fertilizer than the nearby soils of the uplands. Limited grazing of the sedges and grasses growing naturally in the muskegs is possible, but the total yield of forage suitable for farm animals is usually quite low. 257 c. Vegetation The principal vegetation in the muskegs of this area is sphagnum moss. A dense growth of woody shrubs consisting of bog birch, dwarf willows and heaths grow on the moss mat. Black spruce is the tree species which grows in many of these muskegs. The rate of growth of black spruce in these bogs is very slow; trees more than 200 years old are seldom more than a few inches in diameter (USDA-SCS, 1962). Some of post-harvest reclamation alternatives suggested by the Department of Fnergy (1979) for U. S. peatlands include silvaculture, energy famns, agriculture and wildlife habitat. A review of these alternatives, including aspects of their applicability to the harvested bogs of South Central follows: d. Silvaculture Although large areas of peatland are prepared each year for afforestation in countries such as Finland, this practice May not be successful in all northern areas. In northem Sweden, for example, there are large areas of peatland and efforts have been made to initiate forest production on these areas using drainage and fertilization. However, experience has shown that commercial opportunities are very limited for most of Sweden's northern peatlands (Murray and Van Veldhuizen, 1980). Attempts at silvacultural development have begun only recently in South Central Alaska where foresters have begun tree planting on timber sale areas where Sitka spruce or white spruce had been harvested (George Hudak, personal communica- tion). It should be noted that these sites sustain ideal conditions for tree growth. In contrast, bog areas on the Kenai Penisula are treeless and support only a stunted 258 population of black spruce. Poor drainage, high acidity and lack of nutrients in these bogs make reforestation impractical here. e. Renewable Energy Farms The Institute of Gas Technology (1979) describes the establishment of renewable energy farms on harvested peatlands. Under this option, areas are prepared for the growth of high-yielding wetland species such as cattails, sedges, reeds, grasses, aspen and lowland brush. Biomass is produced very rapidly through photosynthesis and as a conse- quence locations having especially long photo periods (such as Alaska) may show significant promise for energy crop farming. Experimental results indicate that sustained yield of up to 20 dry tons of biomass per acre per year might be attain- able in a managed operation based on reed-sedge or cattails. This reclamation alternative would, however, only be viable in areas where plant biomass is accumulated at a rapid rate. Since bog areas in Alaska are generally characterized by low productivity native vegetation, this alternative is not recommended unless higher productivity revegetation is in- troduced into the existing bogs. f. Agriculture A relatively short growing season combined with soil characteristics such as strong acidity and infertility pre- clude the ready feasibility of cropland production in many of the muskegs of South Central Alaska. However, interviews with agronomists from the Plant Materials Center in Palmer indicate that some grass species should do well on these bog soils. Stoney Wright (personal communication) has recommended the commercially available grasses, meadow foxtail and Timothy for revegetation of peatlands in South Central Alaska. These 259 grasses have a high tolerance to the strong acidity and may be used for hay production. Harvesting techniques which would result in a water regime which is controlled and not too wet (i.e., techniques which require bog drainage) would favor the production of these species. For areas subject to flooding after harvesting, a recommended grass variety is Garrison creeping foxtail. This grass is more tolerant of flooding although it is not as tolerant to highly acid conditions as other grasses. A more speculative and development oriented option to be recommended for land reclamation is the cultivation of lingonberry (Vaccinium uitis-idaea L.). Crops of the lingonberry sometimes called the cowberry or partridgeberry, are one of the most important wild berry bearing plants in Fennoscandia. These berries have traditionally played an important role in the Swedish household where in 1976 total consumption was estimated to be 12 million kilograms kilograms (Fernquist, 1976). In Newfoundland, Canada, there is an increasing demand for lingonberries for use in jams, jellies, fruit juices, liquers, ice cream and yogurt. The quantity of berries harvested in Newfoundland during recent years has been less than 100,000 kilograms per year. One third of this crop has been retained for local consumption while the remainder is exported to Europe or the United States. In North America, this fruit is sought out by people of Scandinavian origin who enjoy its distinctive flavor (Hendrickson, 1978). The natural habitats of the lingonberry are continually decreasing in Scandinavia as a result of increasing afforestation. Due to the continued demand for lingonberries, cultivation experiments were begun in 1968 at the Institute of Horticulture, in Piikkio, Southwest Finland (Lehmushovi and Hiirsalmi, 1973). The purpose of these experiments was to develop good strains of lingonberry vines and to elucidate the extent to which growth and fruit yield are influenced by the 260 nature of the substrate and the application of lime and fertilizer. It was found that of all the factors studies, the substrate exerted the greatest influence on shoot growth. Shoot growth was most vigorous on a substrate of milled peat on which lingonberry cover was 93.5% after 5 growing seasons (Lehmushovi and Hiirsalmi, 1973). For many reasons, lingonberry production is a satisfac- tory alternative for peatland reclamation in South Central Alaska. This species is presently a member of the native vegetation of these bogs, thus suitable habitat already exists regarding pH and substrate. Appropriate harvesting techniques for this reclamation scheme would require leaving approximate- ly 0.5 m of peat for substrate and utilizing ground water control techniques which would maintain the mechanical and chemical water characteristics of the original bog. This alternative, however, remains a somewhat speculative one as the cultivation of lingonberry is still relatively new. Certain aspects of lingonberry is still relatively new. Certain aspects of lingonberry agriculture, such as the commercial availability of the plant materials, are still uncertain. g. Wildlife Habitat Refuge Habitat development has been suggested for harvested peat areas in other parts of the U. S. as well as Canada and is an option that fits well with the techniques of hydraulic peat harvesting. Since mich of the character of the original peat bog is preserved, this option provides for a short term return to the natural state of the bog. At present, the bogs of South Central Alaska are not considered to be very productive wildlife habitat, however, biologist Ted Spraker of the Alaska Department of Fish and Game in Soldotna has observed some important wildlife 261 utilization. Waterfowl such as trumpeter swans and Canada geese are known to nest in the area. Ducks such as mallard and pintails also occur in the bogs. Large mammals such as caribou have been steadily increasing their utilizing of the bogs during calving season (May through July) and the willows and dwarf birch in the bogs provide winter moose browse although moose do not frequent the bogs in summer. Small mammals which utilize the small ponds and lakes include mink, muskrat and beaver. Any relatively deep ponds created (3 meters or over) would provide favorable habitat for small mammals such as mink, muskrat and beaver. This option has been the subject of investigation in Canada (Moore and Bellamy, 1974). Increased small mammal production would enhance trapping opportunities in these areas. If the ponds resultant from hydraulic harvesting are comparatively shallow (less than three meters) waterfowl habitat could be enchanced (Ted Spraker, personal communica- tion). Leaving a sufficient amount of peat during harvesting would favor this option since this would improve the food productivity of the ponds. It should be noted that land reclamation options may be combined, for example, grass planting could produce food which could then be utilized by waterfowl. This alternative may ultimately be used to convert a relatively unproductive ecosystem to a productive one for waterfowl utilization. Further, this alternative provides increased recreational Opportunities and is a low-cost and low-maintenance option. Since maintaining drainage is not involved here, the area will more closely resemble the hydrological state of the pre-harvested bog. 7. Summary and Recommendations 262 There is a close interdependence between peat harvesting techniques, local hydrology, water quality, and land reclama- tion options (Smith, 1981). Harvesting methods may dictate land reclamation options and the time frame during which reclamation activities may occur. The control of water quality and hydrology in harvested areas may be accomplished through several readily available and proven techniques. Methods are generally chosen to create a hydrologic regime suitable for the preferred reclamation alternative. Land reclamation options are site-specific to the natural parameters of the area to be reclaimed. After a review of land reclamation methods in other countries and other parts of the United States, it appears that the two most readily adaptable options for the peatlands of South Central Alaska are the creation of waterfowl habitat and/or lingonberry agriculture. These alternatives are compatible with conditions of the peatlands under consideration and appear acceptable from a socioeconomic viewpoint. Waterfowl habitat is low-maintenance and not development intensive, but may provide great gains in recreational opportunities. Lingonberry agriculture would require more effort to develop and maintain but may provide a commercial agriculture option. For large scale peat development, it would be possible to utilize both options. Since lingonberry agriculture would require intense agricultural and water management, it may be used in relatively small portions of the harvest area. Waterfowl habitat would be compatible in large areas of the harvest site where ponding is a result of peat extraction. D. Permitability Assessment 263 Prior to the start of peat harvesting operations, various permits must be obtained. The granting of such permits is the responsibility of various state, federal and local agencies. 1. State Regulations Treatment of Peat The Alaska Department of Natural Resources has recently adopted regulations which will provide for competitive and non-competitive sales of peat on State-owned land. The regu- lations are codified in Chapter 71 of the 11 A.A.C. The regulations now classify peat as a material. Specifically, 11 A.A.C. 71.910(7) states: "Material" includes, but is not limited to, the common varieties of sand, gravel, stone, pumice, pumicite, cinders, clay topsoil, peat, and sod; Essentially, the State regulations will treat peat in exactly the same way as the federal government treats peat, i.e., as a material as opposed to a mineral. The significance of this is that a material is susceptible to sale whereas a mineral is susceptible to acquisition through staking or leasing. These regulations require that the Director of the Division of Lands determine the location and approximate volumes of material (i.e., peat) to be made available for sale pursuant to the regulations. Generally, the regulations provide that all sales of more than 25,000 cubic yards be competitive sales. Negotiated sales are permitted for less than 25,000 cubic yards of material. See, 11 A.A.C. 71 .035, .045 and .050. Competitive sale 264 procedures are governed by 11 A.A.C. 71.060 with the requisite public notice required by A.S. 38.05 and 11 A.A.C. 71.020. From a peat development project view point there are two major flaws in the current regulations which will have an impact on peat projects and peat development on State lands. First, under the proposed scheme the purchaser of peat re- sources does not automatically have the right to utilize the area from which the peat is taken during the post-mining period. This could impact the level of post-mining reclamation and, in addition, projects, the economics of which are predi- cated upon utilization of post-mined peat lands for agricul- ture, silva culture, etc., will be virtually impossible to plan for in any meaningful way. Second, since quantities of peat over 25,000 cubic yards must be sold by competitive sale, there is no guarantee that a peat development project sponsor will be able to obtain the resources needed for his or her particular project without facing the possibility of losing the bid at sale. 2. Federal Regulations Treatment of Peat As under the State system the Federal government treats peat as a material and not as a locatable or leasable mineral. The Secretary of Interior is authorized by 30 USC C0601 to set up rules and regulations governing disposal of mineral materials including but not limited to sand, stone, gravel, pumice, pumicite, cinders, clay and vegetative materials including but not limited to yucca, manzanita, mesquite, cactus and timber or other forest products. The only reference to peat in the Minerals Act occurs at 30 USC 604 in that section's title "Disposal of Sand, Peat 265 Moss, etc. in Alaska; Contracts". That section has been judicially interpreted as evidence that Congress intended to equate the term "peat moss" with the term "vegetative materials" as used elsewhere in the Act. See United States v. Toole, 224 F. Supp. 440(a) (c) (Mont. 1963). Corps of Engineers Permits The major concern in the area of federal regulation over development of peat reserves in the State of Alaska centers around the regulatory program of the Corps of Engineers and specifically whether the Corps of Engineers would be required to issue a so-called "Section 404 Permit" which allows project sponsors to dredge and fill wetlands. This requirement is derived from Section 404 of the Clean Water Act (33 U.S.C. 1344). That section provides that the Corps of Engineers may issue permits after notice and opportunity for public hearing for "discharges of dredge or fill material into navigable waters". Thus, in the first instance, a determination of whether a 404 permit is needed depends upon the definition of navigable waters. The Corps of Engineers defines navigable waters as follows: Navigable waters of the United States are those waters that are subject to the ebb and flow of the tide and/or are presently used, or have been used in the past, or may be susceptible for use to transport interstate or foreign commerce. A determination of navigability, once made, applies literally over the entire surface of the water body, and is not extinguished by later actions or events which impede or destroy navigable capacity. See, 33 U.S.C. 401, et. seg. and Section 329.4 of volume 42, Number 138 of the Federal Register A case by case 266 determination must be made before determining the applica- bility of the permit requirement. Judicial interpretation and Corps regulation brought wetlands next to navigable waters under the preview of the 404 program, In the past wetlands were defined to mean areas which were periodically inundated and which were characterized by the prevalence of vegetation requiring saturated soil con- ditions for vegetative growth and reproduction. 40 Fed. Reg. 31, 324 (1975). Today, however, the definition of wetlands is: Areas that are inundated or saturated by surface or ground water at a frequency in duration sufficient to support, and that under normal circumstances do support, a prevalence of vegetation typically adapted for life in saturated soil conditions. 33 C.F.R. C0323.2 (1981); 42 Fed. Reg. 37, 122, 37, 144 (1977). This definition suddenly broadens the jurisdiction of the Corps of Engineers over wetlands activities. The above noted definition has been judicially expanded to essentially include all vegetation except that which is intolerant of saturated soil conditions. See Aboyelles Sportsman's league _v. Alexander, 511 F. Supp. 278 (W.D. La. 1981). Section 404 applies only to the discharge of dredge or fill material. Dredge is material excavated or dredged from waters of the United States. 33 C.F.R. C0332.2(k). Fill 267 material is material of any type used primarily to replace an laquatic area with dry land or changing the bottom elevation of a water body. 33 C.F.R. 323.3(n). Unfortunately the question of whether a 404 permit is needed does not only touch upon the Corps of Engineers. Prior to passage of the Federal Water Pollution Control Act the Rivers and Harbors Appropriation Act of 1899 (33 U.S.C. COCO 401-418 (1976)) controls such activities. That Act gives the Environmental Protection Agency regulatory authority over certain dredge and fill activities. In September of 1979 then U.S. Attorney General Civilleti issued an opinion that the Environmental Protection Agency and not the Corps of Engineers had the final word as to what waters are navigable and what activities are exempt from 404 permit requirements. The Corps of Engineers and the EPA have subsequently entered into a memorandum of understanding on the subject (45 Fed. Reg. 45, 018 (1980)) to make initial jurisdiction findings. Usually the Environmental Protection Agency defers to the Corps of Engi- neers for 404 decisions. However, under C0404(c) of the FWPCA the EPA can prohibit discharge in any area or restrict such discharge if the discharge will have an adverse effect on shellfish beds, fishing areas, wildlife or recreational areas. See 33 USC C01344(c). There are certain exemptions to the 404 process. These statutory exemptions cover the discharge of dredge or fill material: (a) From normal farming, silva culture and ranching activities; (b) From maintenance of currently serviceable structure; 268 (c) For construction or maintenance of farm or stock ponds or irrigation ditches or the maintenance of drainage ditches; (a) For construction of temporary sedimentation basins on a construction site which does not involve a discharge into navigable waters; (e) For construction or maintenance of farm or forest roads or temporary roads for moving mining equip- ment; and, (£) Resulting from any activity covered by an improved state water quality management plan. See 33 USC C01344(f) (Supp. III 1979). One aspect of the dredge and fill permit program is the protection of wetlands and other aquatic habitats for fish and wildlife purposes. Thus fish and wildlife requirements are given careful consideration. In this regard the Corps must comply with the EPA's 404 (b) guidelines, many of which concern fish and wildlife. In addition, the United States Fish and Wildlife Service and the Alaska Department of Fish and Game are involved in the C0404 process and have become a large and powerful force which must be taken into consideration when developing Alaska's peat resources. The Corps of Engineers are required to give "great weight" to reports and recommendations of the USF&WS and the Alaska Department of Fish and Game. 33 C.F.R. C0320.4(c) (1981). In addition the Fish and Wildlife Coordination Act requires that Corps to give reports of the USF&WS and State agencies "full consideration". See 16 USC C0662(b) (1976). What generally happens is these agencies recommend support for the project but on occasion recommend mitigation measures be required. Permits issued by the Corps 269 may be conditioned to accomplish fish and wildlife purposes. See 33 C.F.R. C0320.4 (1981). Under the 404 permit procedures notice must be sent to the U.S. Fish and Wildlife Service and to the head of the Alaska Department of Fish and Game. 33 C.F.R. 325.3(c). Fish and Wildlife Service has 90 days to respond and the Corps of Engineers must also request information from the Department of Interior as to whether any species are listed or proposed to be listed under the Endangered Species Act which would be threatened or endangered in the project area. 16 USC C01535(c) (1) (1976). Where appropriate, State agencies responsible for Coastal Zone Management programs must also be consulted. 33 C.F.R. C0325,2(b) (2) (1981). A non-adjudicatory public hearing is held whenever a request has been made based upon substantial grounds or whenever it would otherwise aid the Corps decision making process. 33 C.F.R. C0327.4. A decision is constructed based upon the facts presented and if there is no objection a permit can be issued. Based upon past experience with obtaining a 404 permit: 1. The following plans must be mutually developed and approved by the U.S. Army Corps of Engineers, Alaska Department of Environmental Conservation and the appli- cant prior to initiating peat harvesting activities: a. Reclamation procedures to stabilize erosion and reestablish plant communities (may require that drainage ditches by plugged or filled in). b. A water quality monitoring plan be developed to document changes in water chemistry before, during, and after peat harvesting has begun. The net results 270 of this effort is to protect the water quality and fish/wildlife resources. c. A drainage ditch network must be designed to allow the settling of suspended solids and particulates. Use of settling ponds, meandering-plugged ditches and/or vegetation filter strips should be investi- gated. Contingency plans should include the possi- bility of adding lime to the drainage system to minimize the adverse effects of acid drainage. 2. A project schedule must be submitted to the U S. Fish and Wildlife Service, U.S. Amy Corps of Engineers and Alaska Department of Environmental Conservation. In addition, the Fish and Wildlife Service with the assistance of the Alaska Department of Environmental Conserva- tion would monitor the project's operation and conduct a follow-up study to document impacts on the area and surround- ing fish and wildlife resources. Many agencies are involved in reviewing and participating in the wetlands permit process. These agencies may include: Corps of Engineers; EPA - Alaska Operations Office; Fish and Wildlife Management - State DNR; Parks - State DNR; State DEC and Anchorage District Office; National Marine Fisheries Service; Fish and Wildlife Service - River Basin Study Team; Alaska Department of Fish and Game; and the Office of Coastal Management. The Alaska Dept. of Fish and Game would require a habitat permit if there is a marked change in stream water quality as a result of the project. Only one 404 permit has been required for a peat project in Alaska. The project applicant was the Bristol Bay Native Association and the project was located at Mile 13.5 Lake Road at Section 12, T. 12 S., R. 56 E., S.M., Dillingham, Alaska. 271 In this particular instance, the Bristol Bay Native Associa- tion wishes to remove and stockpile 6,500 cubic yards of peat material from and on designated wetlands. The peat would be removed by use of an extruder to a depth of -4 feet fram one acre of an area within a 2.3 acre tract. The purpose of the project is to demonstrate peat harvesting and to make peat available to members of the public as an alternate fuel source for home heating. The pemit is necessary because of the Bristol Bay Native Association's desire to stockpile the peat in the designated wetland. If there were no need for stockpil- ing under the plan submitted or if the stockpiling was to occur outside of the wetlands area, the Corps of Engineers advised no 404 permit would be needed. The above is an outline of the Federal 404 regulatory Program. The agencies which must be consulted include the Corps of Engineers, the Environmental Protection Agency, the United States Fish and Wildlife Service, the Alaska Department of Fish and Game and the Office of the Governor (Coastal Zone Management) . New Source Performance Standards (NSPS) New Source Performance Standards are air emissions limitations which apply to construction or modification of any source of air pollution for which standards have been issued. Standards have been issued and published in the Federal Register. The U.S. Environmental Protection Agency is respon- sible for enforcement of the NSPS. Research indicates that peat related facilities are not covered by NSPS because the definition of fossil fuels does not include peat. Part 60.41 of Title 90 Code of Federal Regulations defines fossil fuels as "natural gas, petroleum products, coal, and any form of solid, liquid or gaseous fuel derived from such materials for the purpose of creating useful 272 heat." Additionally, EPA personnel stated that peat does not fall under the individual definitions for coal or wood pro- ducts. As a result these definitions and their interpreta- tion, NSPS regulations do not apply to the usage of peat as a fossil fuel. Confirmation of these facts has been received from the EPA. That is, NSPS do not apply to peat-fired boilers and no immediate plans exist which would involve changing the regu- lation. It should be noted that exemption from NSPS does not exempt a facility from Federal Prevention of Significant Deterioration (PSD) regulations. However, these regulations apply only to facilities which emit over 250 tons of total stack pollutants per year. Other Federal Permits (To be supplied by Department of Environmental Conservation.) 3. Contacts for Various State, Federal and Local Permits Table X-4 lists a variety of State, Federal and local permits which may be required for peat related projects. The contact addresses and nature of the permits are also given. Federal,. Alaskan and local laws applicable to peat harvesting are also given in Table x-4. E. Socioeconomic Impact Socioeconomic impacts of large-scale peat development would be caused primarily by creation of local jobs; importa- tion of labor; infusion of new money into local economies; increased demand for local public services; loss of current 273 Figure X-l PERMITTING BAR CHART MONTHS TO ACHIEVE PERMIT 3 6 9 12 la+ TYPE OF PERMIT == FEDERAL — APPROVAL MAX. WETLANDS DATA ACQUISITION CLEAN AIR ACTS PERMITS DATA ACQUISITION NOPS PERMIT — STATE — COASTAL ZONE MANAGEMENT PROGRAM - ASSOCIATED PERMITS APPROVAL AIR QUALITY CONTROL DEPENDENT ON FEDERAL PERMIT PERMIT TO OPERATE (DEC) ea: Paar Ee = WATER QUALITY CERTIFICATE (DEC) _-S— PERMIT TO INTERFERE WITH SALMON SPAWNING STREAMS (DEC) APPROVAL ONLY SEWAGE AND SEWERAGE TREATMENT WORKS (DEC) SOLID WASTE MANAGEMENT PERMIT (DEC) APPROVAL WASTEWATER DISPOSAL DEPENDENT ON FEDERAL PERMIT ii eek las PERMIT (DEC) RIGHT - OF - WAY EASEMENT (ONR) -———————_______ — LAND USE PERMIT (DNR) (femme LEASE OPERATIONS APPROVAL (DNR) OEC ONR OEPARTMENT OF ENVIRONMENTAL CONSERVATION OEPARTMENT OF NATURAL RESOURCES 274 Table X-4 Contacts for Various Permits STATE AGENCIES OFFICE OF THE GOVERNOR Alaska Coastal Management Program Division of Policy Development & Planning Establishes coastal policies, Certificate of Consistency State Clearinghouse rules, responsibilities, and Pouch AP if no local program approved Juneau, Alaska 99811 State standards will apply for Phone: 465-3540 projects in the coastal zone. DEPARTMENT OF COMMERCE & ECONOMIC DEVELOPMENT Articles of Incorporation Dept. of Commerce & Economic Development Persons wishing to form a cor- Corporation Section poration or a cooperative must Pouch D register with the Department. < Juneau, Alaska 99811 Corporations: Filing fees are ‘J Phone: 465-2530 based on number and value of a shares. $100 biennial cor- poration tax required. Coop- erative: License fee is based on the number and par value of stock. Foreign Corporations Dept. of Commerce & Economic Development A Certificate of Authority is Certificate of Authority Corporation Section required of a corporation in- (Same address as above) corporatcd outside of Alaska that wishes to establish cor- porate existence in Alaska. It gives the authority for the corporation to transact business in Alaska. Weighing and Measuring Devices Dept. of Commerce & Economic Development Before weighing and measuring Certification of Accuracy Weights and Measures Section may be used commercially, P.O. Box 10-1686 they must be inspected by the Anchorage, Alaska 99511 Weights and Measures Section Phone: 279-3886 of the DCED. Table xX-4 Contacts for Various Permits (cont'd). Air quality Control Permit to Operate Air Quallty Control Permit to Open burn Certificate of Reasonable Assurance (Water Quality Certificate) bo \] Qn Food Service Permit DEPARTMENT OF ENVIRONMENTAL CONSERVATION Southcentral Regional Office 437 "E" Street, Suite 200 Anchorage, Alaska 99501 Phone: 274-2533 Southcentral Regional Office (Same address as above) Southcentral Regional Office 437 "E" Street, Suite 200 Anchorage, Alaska 99501 Phone: 274-2533 Dept. of Environmental Conservation (Contact appropriate District Office) Approval required for emis- sion of any air contaminant which may be injurious to human health or welfare, property, animal or plant life. Approval required for open burning of any materials in a manner which gives off black smoke or odors. A proposed activity will need 401 certification if a Federal permit or license is required for the activity and a dis- charge may result from the activity. (To comply with water quality standards). Approval required for all types of commercial food service operations. This applies to all permanent, temporary or mobile food service activities regardless of whether there is a charge for the food. (Work camps included). 4 Table xX-4 Contacts for Various Permits (Cont'd). Permit to Interfere with Salmon Spawning Streams & Waters Pesticide Permit Certification Required for Purchase or Use of Restricted- Use Pesticides LLZ DEPARTMENT OF ENVIRONMENTAL CONSERVATION (continued) Southcentral Regional Office 437 “E" Street, Suite 200 Anchorage, Alaska 99501 Telephone: 274-2533 Pesticide Use Specialist P.O. Box 1088 Palmer, Alaska 99645 Telephone: 745-4686 Pesticide Use Specialist (Address same as above) Permit required for any activity which may obstruct, divert, pollute, dam, barricade, conserve, impound or render the waters inaccesible or uninhabitable for salmon. Approval required for applying any pesticides to any waters of the State, or by aircraft or for public pesticide projects affecting two or more properties. Certification required for the use of any pesticides that are classified as "restricted use" by the U.S. Environmental Pro- tection Agency. NOTE: Custom, commercial or contract sprayers must furnish satisfactory evi- dence of liability insurance. Certification is issued after completion of an examination given by an officer of DEC. No public notice or hearing are re- quired. Examination given at the convenience of the applicant and the officer. Table x-4 Contacts for Various Permits (Cont'd). 8LzE Plan Review & Approval of Public Water Systems Plan Review & Approval of Sewerage or Sewage Treatment Works Solid Waste Management Permit Surface Oiling Permit Wastewater Disposal Permit Dept. of Environmental Conservation (Contact appropriate District Office) Dept. of Environmental Conservation (Contact appropriate District Office) Southcentral Regional Office 437 "E" Street, Suite 200 Anchorage, Alaska 99501 Telephone: 274-2533 Dept. of Environmental Conservation (Contact appropriate District Office) Southcentral Regional Office 437 "E" Street, Suite 200 Anchorage, Alaska 99501 Telephone: 274-2533 DEPARTMENT OF ENVIRONMENTAL CONSERVATION (continued) Engineering plans for the construction, installation. modification or operation of a public water supply system must be approved prior to construction. Plans for the construction. installation, modification or operation of sewerage or sewage treatment works must be approved prior to construc- tion. Permit’ required for the establishment, modification or operation of a solid waste disposal facility. Permit required for the dis- charge of oil, asphalt bitumen, or a residuary product of petroleum onto State lands. Approval required for the dis- posal of wastewater into or upon the waters or surface of the land or into a publicly operated sewerage system (does not apply to discharge of domestic sewage system.) Table X-4 Contacts for Various Permits (Cont'd). Disposal of Hazardous Waste Anadromous Fish Protection Permit Critical Habitat Area Permit bo XQ 2 Fishways for Obstruction to Fish Passage State Game Refuge Permit Dept. of Environmental Conservation Alan Boggs Pouch O Juneau, Alaska 99811 Phone: 465-2666 DEPARTMENT OF FISH & GAME Regional Supervisor Habitat Protection Division 333 Raspberry Road Anchorage, Alaska 99502 Phone: 344-0541 Dept. of Fish Game Habitat Protection Division (Same address as above) Dept. of Fish Game Habitat Protection Division (Same address as above) Dept. of Fish & Game Game Division (Same address as above) DEPARTMENT OF ENVIRONMENTAL CONSERVATION (continued) Approval must be granted prior to the disposal or discharge of any hazardous or toxic waste. Approval required for any work in a listed anadromous fish river, lake or stream. Approval requircd for any work or development in a critical habitat area. Approval needed for any obstruc- tions across a stream. Approval needed for any work or development in a refuge area. Table X-4 Contacts for Various Permits (Cont'd). Prevention of Accident & Health Hazards (Inspections) Foreign Labor Requirements 08 Unemployment Insurance Workmen's Compensation Insurance DEPARTMENT DF LABOR Voluntary Compliance Section/ or Compliance Section Division of Occupational Safety & Health 3301 Eagle Street Anchorage, Alaska 99510 Telephone: 264-2594 Dept. of Labor P.O. Box 3-7000 Juneau, Alaska 99811 also Immigration and Naturalization Service 701 "C" Street Room D 229 Lot Box 16 Anchorage, Alaska 99513 Phone: 265-4387 Dept. of Labor Employment Security Division P.O. Box. 3-7000 Juneau, Alaska 99811 Phone: 465-2787 Any Licensed Insurance Broker--or Dept. of Labor Worker's Compensation Division P.O. Box 1149 Juneau, Alaska 99811 Phone: 465-2790 Inspections conducted of work places, construction projects. The Department performs both mandatory and voluntary (con- sultative) inspections. The purpose is to reduce work re- lated injuries and illnesses. Employers wishing to hire foreign employees to work in Alaska must file an alien labor certification at the local State Employment Office. Individuals, companies, and or- ganizations who have one or more workers in covered employment for any part of a day must register with the Department. Any employer with one or more em- ployees working within the State must buy a worker's compensation insurance policy and submit proof of insurance to the Department. Table X-4 Contacts for Various Permits (Cont'd). 18% Burning Permit Right-of-Way Easement Land Use Permit Material Sale (Applies to sand, gravel, rock, peat, etc.) Access Route Permit Conditional Use Permit DEPARTMENT OF NATURAL RESOURCES Division of Forestry (Contact appropriate District Office) Director Division of Land & Water Management 555 Cordova Street Pouch 7-005 Anchorage, Alaska 99510 Phone: 276-2563 Division of Land & Water Management (Same address as above) Division of Land & Water Management (Same «address as above) Division of Parks (Contact appropriate District Office) Division of Land & Water Management 323 East Fourth Avenue Anchorage, Alaska 99501 Phone: 276-2653 Permit required for the burn- ing of any material in areas of the State designated by the Commissioner of DNR. The permit is issued in order to reduce the incidence of man- caused fires and subsequent expense to the State. Required for the construction of a road, trail, ditch, pipe- line, drill site, log storage site, telephone lines or simi- lar use or improvement on State land. Permit needed for temporary sur- face activities and the use of equipment on State owned land. Contact agency to obtain material from State land for use on pro- ject. Permit is required to gain an easement across State park lands or waters to privately owned property wholly or partially within a State park. Purpose is to authorize activi- ties that may be incompatible with zoning inposed by the State in homesite subdivisions. Table X-4 Contacts for Various Permits (Cont'd). Lease Operations Approval Disturbance of Natural Material Permit State Park Non-Compatible Use Permit Water Rights Permit & Certification of Appropriation G8 DEPARTMENT DF NATURAL RESOURCES (Continued) Dept. of Natural Resources Division of Mineral & Energy Management Director Division of Parks 619 Warehouse Avenue, Suite 210 Anchorage, Alaska 99501 Phone: 274-4676 Division of Parks (Same address as above) Division of Land & Water Management 555 Cordova Street Pouch 7-005 Anchorage, Alaska 99510 Phone: 276-2563 Any party that leases property from the State must submit a plan of operations to DMEM giving a detailed description of proposed activities. Persons proposing to remove certain materials for studies and interpretation purposes from State parks must obtain a permit from the Division. Permit required for a proposed project on State park lands and waters. Water Rights Permit required prior to taking any unappro- priated water and to commence appropriation; however, it does not secure rights to the water. When permit holder has begun to use the appropriated water, he may then notify the direct- or who will issue a Certifi- cate of Appropriation. The Certificate secures the holder's rights to the water. Table x-4 Contacts for Various Permits (Cont'd). Life/Fire Safety Plan Check for the Construction and Occupancy of Buildings Application and Permit for Oversize and Overweight Vehicles £86 Nonresident Affidavit and Tax Security Requirements DEPARTMENT OF PUBLIC SAFETY State Fire Marshall Division of Fire Prevention 5333 Fairbanks Street, Suite 11 Anchorage, Alaska 99502 Telephone: 272-2406 Bureau of Vehicle Enforcement 5700 Tudor Road Anchorage, Alaska 99507 Telephone: 269-5511 DEPARTMENT DF REVENUE Department of Revenue Tax Security & Business License Unit Pouch SA Juneau, Alaska 99811 Phone: 465-2329 Before starting construction, plans and specifications in regard to area, height, fire extinguishing systems, fire alarm systems, fire resistive construction, electical sys- tems, mechanical systems and number, size, type, location, and marking of exits for all buildings must be submitted to the State Fire Marshall, for examination and approval. Required to move overweight or oversized loads or vehicles over the Alaska Highway System and other designated highways. Permit applies only on State- owned or maintained roads, except where State-City agree- ments exist. Nonresidents transacting business in Alaska must submit an affida- vit and provide the following tax liability security: 1. A Tax Liability Security Bond; 2. proof of ownership of real property an twice the amount of estimated taxes; 3. prepayment of estimated taxes and license fees in advance. Security must be renewed annually. Table X-4 Contacts for Various Permits (Cont'd). U8 Encroachment Permit Utility Permit for Encroachment Within Highway Rights-of-Way Special Use Permit 2221 East Northern Lights Blvd. Suite 230 Anchorage, Alaska 99504 279-5541 Phone: Right-of-Way and Land Acquisition Agent Pouch 6900 Aviation Building Anchorage, Alaska 99502 Telephone: 266-1621 Regional Utilities Engineer Pouch 6900 Aviation Building Anchorage, Alaska 99502 Telephone: 266-1520 FEDERAL PERMITS U.S. DEPARTMENT OF AGRICULTURE Dept. of Agriculture U.S. Forest Service (Address Listed Below) Chugach National Forest DEPARTMENT OF TRANSPORTATION & PUBLIC FACILITIES This permit applies to persons wishing to construct, place, change or maintain an encroachment across or along a public highway or right-of- way. Permit required to construct, place or maintain utilities under, on, in or over the highway rights-of-way. All commercial use of, or on, National Forest lands, require permits. Permits are also required for all construction or placement of facilities on National Forest lands. This permit is geared more toward individual or smaller companies. Seward Ranger District Chugach National Forest Phone: P.O. Box 275 Seward, Alaska 99664 224-3019 Table x-4 Contacts for Various Permits (Cont'd). Cordova Ranger District P.O. Box 280 Cordova, Alaska 99574 424-7661 Phone: Phone: Discharge of Dredged or Fill Material into U.S. Waters (Department of the Army Permit) G8 Structures or Work in/or Affecting Navigable Waters Land Lease Authorization Indian Lands U.S. DEPARTMENT OF AGRICULTURE (Continued) Chugach National Forest Anchorage Ranger District P.O. Box 10-169 DEPARTMENT OF DEFENSE Chief, Regulatory Functions Branch Alaska District, Corps of Engineers P.O. Box 7002 Anchorage, Alaska 99510 Telephone 552-2554 U.S. Army Corps of Engineers (Address same as above) U.S. DEPARTMENT OF THE INTERIOR Dept. of the Interior Bureau of Indian Affairs Superintendent, P.O. Box 120 Anchorage, Alaska 99510 Phone: 271-4088 Anchorage, Alaska 99511 345-5700 Permit required in order to construct any structure in or over a navigable water of the U.S. Permission required for the excavation of material in such waters, or the accomp- lisment of any other work affecting the course, loca- tion, conditien or capacity of such waters. Permit needed for any work or placement of structures in U.S. Waters. Approval is required for leasing Indian lands. Table x-4 Contacts for Various Permits (Cont'd). Rights-of-Way (Indian Land) Purchase of Vegetative Mineral Material National Wildlife Refuge Lands Special Use Permit 986 Alaska Railroad Permit and Construction Agreement U.S. DEPARTMENT OF THE INTERIOR Bureau of Indian Affairs (Address same as above) Dept. of the Interior Bureau of Land Management District Office 4700 East 72nd Avenue Anchorage, Alaska 99502 Phone: 267-1246 Dept. of the Interior U.S. Fish & Wildlife Service 1011 East Tudor Road Anchorage, Alaska 99503 Phone: 276-3800 DEPARTMENT OF TRANSPORTATION Real Estate Office The Alaska Railroad Pouch 7-2111 Anchorage, Alaska 99510 Telephone: 265-2465 Must have consent of landowners to gain an easement over Indian lands. Applications for vegetative purchase are initiated through a letter of request. An Environ- mental Assessment Report may be conducted by the Bureau. Permit required for easements, roads, utilities, in Wildlife Refuge lands. Permit required for access to or passage through railroad rights-of-way or land. Table X-4 Contacts for Various Permits (Cont'd). National Environmental Policy Act (Environmental Impact Statements) Clean Air Act Prevention of Significant Deterioration of Air Quality Program L86 New Source Performance Standards (Air) FEDERAL BUREAUS AND AGENCIES U.S. Environmcntal Protection Agency 701 "C" Street, Box 19 Anchorage, Alaska 99501 &Telephone: 271-5083 EPA Air Coordinator 701 "C" Street, Box 19 Anchorage, Alaska 93513 Telephone: 271-5083 Air Coordinator U.S. Envnronmental Protection Agency 701 "C" Street, Box 19 Anchorage, Alaska 99513 Telephone: 271-5083 Insures that environmental information is available to officials and citizens before activities begin. Approval is necessary to pre- vent significant deterioration of air quality. Construction or modification of certain designated sources of air emissions which will emit more than 100 tons per year of any air pollutant and all other sources which will emit more than 250 tons per year of any air pollutant require permit approval. New Source Performance Stand- ards are air emission limita- tions wiich apply to construc- tion or modification of any source of air pollution for which standards have been issued. Standards have been issued and published in the Federal Register. Table x-4 Contacts for Various Permits (Cont'd). Permit to Discharge into Water U.S. Environmental Protection Agency Owner and/or operator of any National Pollutant Discharge 701 "C" Street Box 19 activity or wastewater system, Elimination System Anchorage, Alaska 99513 publicly or privately owned Telephone: 271-5083 which discharges from one or more point sources into a waterway, must obtain a permit for such discharges. This permit is a part of the EPA's National Pollutant Discharge Elimination System (NPDES). FEDERAL COMMUNICATIONS COMMISSION Radio and Wire Communications Engineer in Charge Must submit an application to Construction Permits and Licenses Federal Communications Commission the FCC to construct, install P.O. Box 2955 or engage in communications by Anchorage, Alaska 99510 wire and/or radio. Telephone: 276-5255 886 LOCAL GOVERNMENT If a project, or a portion of a project, is located within the boundaries of any local government, (city, borough, etc.), the developer should contact local authorities regarding their zoning and permit requirements. open spaces and other land uses during the life of the pro- ject; and local cost of planning and development. The degree of impact from these sources is highly dependent upon the pre-development population of the area. The higher the popu- lation, the better able the area is to absorb major changes, thereby maintaining the impact at an acceptable level. 1. Population and Economy The impact of peat harvesting operations on area popula- tion is dependent upon the number of workers required for each harvesting scenario. Estimates of the number of production personnel involved are shown in Table X-5. It should be noted that these figures represent only production employment with no allowance for supervision, maintenance and staff functions (Foster-Miller, 1982). Additional local employment will also be generated if the peat is processed at the bog site. Table X-5 Production Labor Requirements in Alaska (Foster-Miller, 1982). System Man Years Conventional Milling 291 Conventional Sod 454 Bridge Milling 296 Improved Sod 904 Deep Milling 13% BNE 181 Hydraulic Excavator 112 Slurry Barge 114 Of the dry harvesting methods, sod harvesting generates appreciably higher employment than milling methods. Wet harvesting methods apparently result in significantly lower employment, though it should be noted that the labor requirement of the necessary dewater- ing plant has not been calculated. 289 Based on the number of employees, improved sod harvesting will have the greatest impact in terms of population increases. Because peatlands are predominantly located in remote areas it is anticipat-— ed that workers will move into small communities in the general vicinity of the harvesting site. This could result in a slight to moderate impact on these communities depending on existing community size and services provided, the actual number of workers employed, and the ability of the area's infra-structure to provide the addi- tional services required. However, should the skill level required for harvesting process employees be compatible with those of citi- zens occupying small communities around peatlands, peat harvesting projects could be termed beneficial by reducing unemployment and improving regional economy. It is anticipated that impacts on population, economy, and infra-structure will occur during the time of bog preparation, peat harvesting, and reclamation activities being performed. On com- pletion of these activities, employees will likely be laid off or transferred to other project locations. Should former or transferred employees move from the community, population and employment within the community may decline to pre-harvesting levels. If population declines, the community may suffer from the economic burden imposed by the operation, maintenance, etc. of additional infra-structure services and facilities required to support the community popu- lations during the time of harvesting. A similar effect may occur on a regular basis during production due to the seasonal nature of peat production in higher latitudes. Seasonal employment will either require a migratory labor force or as a preferable alternative employment during the periods that bogs are not producing. The extent to which this time can be filled with "deadwork" is likely to be limited and this is one of the reasons that the cost per production employee used in the economic evalua- tion was not reduced to account for seasonal employment in higher latitude. 290 The preferred plan developed in Phase II, results in the direct employment of approximately 150 personnel. Skill categories are broken down in the Economic Analysis Section (XII). Agriculture Potential impacts of peat harvesting on agriculture include impacts on water resources vital to the agricultural community, increased ambient air pollution levels, and the displacement of wildlife communities from the bog areas to be harvested. Water is a vital resource to the agricultural community both in terms of quantity and quality. Adverse impacts on water resources may result in some impacts on agricultural operations utilizing this water. Displacement of wildlife which depended on native bog vege- tation for life support may turn to agricultural crops’ for nourishment. As stated these impacts are possible, but the severity is dependent on bog location and surrounding land-use. Wet harvest- ing operations will likely have a lesser impact than dry harvesting because of many reasons stated in previous sections. Future Land Use Potential impacts on future land use are primarily dependent on post-harvesting area reclamation. Harvested areas can be reclaimed in a manner to promote future land uses such as agriculture, forestry, recreation, etc. depending on the specific geographical location, available funds, and what activities the area would be most likely to benefit. 291 Figure X-2 PEATLAND RECLAMATION Agricultural Crop Test Plot on Reclaimed Minnesota Peatland 292 XI. Marketing of Primary Products A. Primary Product Slate The optimized plant utilizing commercially available technology is described in Section Ix. The principle products include 262,000 tons per year of low volatile granules plus 100,700 tons per year of fuel oil. The low volatile granules contain 0.18% sulfur, 30% ash and have a higher heating value of 9,544 BTU per pound. The oil product contains 0.12% sulfur, 0.1% ash and has a higher heating value of 16,452 BTU per pound, approximately the same as heavy fuel oil. It does have a higher oxygen and nitrogen content than heavy fuel oil and a somewhat lower viscosity and the viscosity is not low enough to be a substitute for light distillate oil. The high oxygen and nitrogen content might also cause some corrosion problems utilizing this oil as engine fuel (turbines and diesels). It should be readily usable by those utilities commercial and industrial firms, however, using heavy fuel oil in boilers. The low volatile char should be readily usable as a substitute for anthracite in space heating briquettes such as those popular in Korea and other Asian countries. Space heating briquettes are the primary means of domestic heating and cooking in Korea where over 25 million tons of briquettes are consumed annually. Briquette consumption in Japan has declined from over 2 million tons in 1965 to less than one-half million tons in 1981. This decline is due to rapid increases in Japan's living standard making more costly fuels of convenience such as oil and gas more affordable. Perhaps even more importantly, anthracite briquettes in Japan are twice as expensive as they are in Korea due to the lack of domestic anthracite supplies, 293 smaller less efficient producers, and inefficient multiple layers of distribution. B. Primary Markets for Peat Char Granules As described in Section XII, the concept of a single product plant producing high volatile solid fuel from wet excavated peat was rejected primarily because none of the systems identified in the first phase of the study could be cost competitive with coal from existing Alaskan mines or those likely to be developed (i.e. Usibelli mine Beluga fields). Prior work conducted on the devolatilization (coking) of peat in Finland had discovered that peat which was thermally pre-treated prior to dewatered had substan- tially higher condensible liquid yields upon coking then peats which were air or thermally dried without such pre-treatment (Reference Ekman Article in Appendix). Oil yields of up to 40% on a BTU basis were achieved. Despite the loss of some net BTU content upon coking (approximate- ly 19%) and the extra cost of coking and oil recovery systems (approximately 21% of total capital costs) the higher revenue available from the oil would allow a higher plant return. In fact, the extra revenues generated by oil production would permit the char to be sold at a slightly lower cost per million BTU then the high volatile product. Markets identified, however, are willing to pay a substantial premium for the char over the price of conventional steam coal despite it's high ash content. C. Primary Markets Identified for Low Volatile Peat Char Granules Table XI-1 identifies the primary markets for the two primary products, market sizes, and estimated F.O.B. Alaska prices for the products produced. 294 The largest market identified is the anthracite substitute market in Korea. Dai Han Coal Corporation, a Korean government owned company, purchases all of the the imported anthracite for Korea and also owns mines produc- ing about one-third of the domestic anthracite. Over 100 briquetting plants throughout Korea produce domestic space heating and cooking briquettes. Approximately, 25 million tons per year of briquettes are produced annually. Domes- tic anthracite production in Korea is gradually declining and is currently about 20 million tons per year. Dai Han forecasts that they will be importing at least 3.5 million tons of anthracite per year over the next 2 decades. The U.S., Canada, and China are their primary suppliers. The second largest market identified for the low volatile product is the wood charcoal substitute market. Wood charcoal is utilized to produce grill briquettes in the U. S. and Canada. Despite increase usage of bottled gas for outdoor grills, the use of charcoal briquettes has not declined in recent years. U. S. briquette manufactur- ers pay as much as $90 per ton for charcoal with less than 10% volatiles. Domestic charcoal briquettes are typically. less than 20% ash. Because wood charcoal has less than 10% ash, manufacturers often add 10% or more clay or ash which producers claim "makes the briquettes burn better" and, of course, lowers costs. Depending on the location of the briquette producer and transport charges from Alaska, F.O.B. Alaska of prices $70-80 per ton for a product which could compete with wood charcoal would not seem unreasonable. The substitute ability of peat char for wood char would have to be tested. It should also be noted that this market is quite small (1 million tons per year in the U. S.). One or two Alaskan peat char plants would, therefore, fully saturate this market. 295 Japan currently purchases approximately 400,000 tons per year of anthracite for space heating briquettes and perhaps 100,000 tons per year of wood charcoal. They pay approximately $10 per ton more for anthracite purchases than Korea because they do not have the centralized buying power of Dai Han Coal Company. They pay over $150 per ton for wood charcoal but once again the market size is quite limited. A potentially large but undefined market is the domestic space heating market in the Pacific Northwestern states. Coal from Utah reaches these states for $2.50-3.00 per million BTU. Smaller users, however, must use screened coal without fines which would reach the distributor for $3.00-3.50 per million BTU. A distributor of wood pellets in Washington sells some such pellets for over $4.50 per million BTU, which is competitive with natural gas in the area costing over $5.00. They indi- cated that they would be a ready market for at least 200,000 tons per year of material if delivered in the $3.50 per million BTU range where it could be competitive with screened Utah coal for stoker and domestic use. The Washington State Energy office has identified four state institutions capable of burning briquetted solid fuel, consuming 75,000 tons per year. About 15% of Washington and Oregon households use cord wood. Perhaps half of these users cut their own wood with the balance buying delivered cord wood at $70-80 per cord (about $4.00 per million BTU). Low volatile (or high volatile) briquettes reach distributors at $3.50 per million BTU could be delivered at $4.50 per million BTU slightly above the price of cord wood. The higher convenience and higher burning efficiency of peat briquettes should make it competitive with cord wood, however. It would be espe- cially attractive in rural areas not serviced by natural gas where home owners pay over $8.00 per million BTU for 296 distillate oil. Many of these residences do not have solid fuel burning appliances, however. It would take time and staying power to develop these markets success- fully. D. Anthracite Briquette Usage in Asia Anthracite briquette usage is well established in Asian countries especially Korea and China. Figure XI-1 shows the difference between Korean and Japanese briquettes. For detailed information on these briquette markets and other coal usage in Korea and Japan reference should be made in the appendix to the field trip reports prepared by John W. Rohrer based on the marketing trip to both countries. Both Korea and Japan import substantial quantities of steam coal and coking coal for utility, industrial, and metallurgical use. These coals are sub- stantially cheaper than the anthracite they buy for space heating and cooking briquettes. They prefer anthracite, however, because its low volatile content makes these fuels "smokeless". For the same reason wood charcoal is utilized for grill briquettes in the U. §S. rather than regular coal. Anthracite is also preferred over soft coal for space heating stoves in the U. S., especially in the Central Atlantic states near the Pennsylvania anthracite coal deposits. The slow clean burning properties of anthracite command a home delivered price of over $5.00 per million BTU home delivered in the northeastern U. S. which is still a bargain compared to No. 2 fuel oil cost- ing over $8.00 per million BTU. Figure XI-1 shows a simple anthracite/briguette stove typical of those used throughout Korea. The stove is less than 15 inches in diameter and about 30 inches high. Either one or two briquettes are placed in the stove from the top utilizing a simple wire tong which is inserted 297 into two of the 21 holes molded into the briquette to permit air flow through the briquette. These cylindrical briquettes are approximately 6 inches in diameter and 6 inches high, weighing approximately 7.75 pounds’ each. These stoves are extremely simple and sell for less than $100. The stoves are fitted with a 3 inch flue pipe’ but several people admitted that the briquette burns so clean- ly that often the flues are not vented outside but rather into open rooms. The top surface of the small stoves are often used for cooking. A small adjustable vent at the bottom controls the air flow and rate of burn. Korea imports anthracite with no more than 30% ash content. Much of their own anthracite, however, is over 40% ash. Ash content of their briquettes is probably averaging 40%. If ash content gets too low, the briquette will not burn down to a good solid one piece ash clinker. These clinkers are the same size and shape as the original briquette and slightly fused by heat. They can be removed in one piece with the tongs which were originally used to load the briquettes. These clinkers are often used for landscaping and walkways. E. Potential use of Smokeless Briguettes in Rural Alaska The low volatile ‘space heating briquettes used in Korea suggest themselves as a convenient clean inexpensive alternative to No. 2 fuel oil for rural Alaska communities and homes. The char granules would have to be briquetted into a shape similar to that used in the Korean briquettes. No binders are used in the Korean briquette. Because they are made at many decentralized briquetting plants, short transport distances are involved. For stronger briquettes a starch binder or pitch from the carbonizing furnace could be used. Smaller briquettes could also be produced and used with domestic heating 298 appliances designed for stoker coal. The Korean type stove, however, using large briquettes is very inexpen- sive. Coal stoves by contrast typically cost over $500. F. Smokeless Fuels The use of charcoal for space heating and cooking is well-established in Asia and Africa. This practice is rapidly depleting forest in these regions. In the U. S. cord wood and even soft coal is used extensively and increasingly as a space heating fuel as oil and gas prices continue to rise relative to solid fuels. Low volatile smokeless fuels have a major environmental advantage. Recent testing done by the Environmental Protection Agency and others has indicated that unburned hydro-carbons from wood and soft coal burning contain extremely high quanti- ties of PCB's and dioxins. Some recent studies have indicated that 30-50% of the particulate emissions found in rural communities during the winter heating season are produced by wood burning appliances. Another study found that the average wood burning stove produces approximately six times as much PCB and dioxins as is permitted from a single large hazardous waste disposal incinerator comply- ing with emissions regulations. G. Activated Carbon It is also possible that peat char could be utilized for activated carbon for purposes of water treatment or other uses. It is not known whether the high ash content of Alaskan peat char would restrict this application. To produce a highly active carbon, the carbonizing furnace would have to be operated at higher temperatures and under high steam partial pressure. Because water treatment carbons command a significant premium over solid fuels, and because the porous nature of peat char makes it an 299 attractive possible source of highly active carbon, this application should be investigated further. H. Markets for Co-Product Fuel Oil The 100,000 tons per year of fuel oil produced by devolatilizing wet carbonized peat represents less than one-tenth of the residual oil utilized in Alaska. It is also possible that this oil could be used as a turbine fuel. Significant turbine testing should be performed before this application could be given serious considera- tion. The relatively high nitrogen content of the oil (4%) could present some nitrogen emissions problems espe- cially in turbine -use. On the other hand the oil is significantly lower in sulfur content than most heavy fuel oils. In areas serviced by natural gas, natural gas tends to be a less expensive turbine fuel than oil in Alaska. If the suitability of this oil for turbine firing were established, it should be targeted for those areas lacking natural gas service when distillate oil is used as turbine fuel. Residual oil in Alaska is used primarily for fish processing facilities, district heating and space heating of large public and industrial buildings, and as a marine boiler fuel in those large vessels not utilizing diesels. Several large residual oil users in Alaska could probably consume the entire production volume of this peat derived oil. Chemical differences between this oil and petroleum residual oil are probably significant enough that it would not be possible to mix the two products. As long as several major residual oil users are offered a modest discount over their current residual oil price, they would probably be interested in using this product. Significant modification to users" boiler plants are not anticipated. Test burns would be required, however, before major fuel users would commit to the use of this alternative oil product. I. Product Pricing and Shipment In our economic analysis, we have assumed an, .F..0.B< plant gate price of $60 per ton for the solid low volatile peat granules or $3.14 per million BTU. The proposed plant is located at Tidewater. Rather than construct a finger pier sufficiently long to permit deep draft vessels it is deemed more advantageous to provide a ship channel anchorage and a smaller wharf for self-unloader barges. Ships of 50,000 to 100,000 in deaa weight tons could be utilized. For larger ships the loading and transit costs to Korea would be less than $15 per ton resulting in a C.I.F. Korea price of about $75 per short ton. This is competitive with prices being paid for anthracite in 1981 but about $10 per ton higher than C.I.F. prices for anthracite to Korea in 1982. We feel, however, that 1982 prices reflect the severly depressed condition of world coal and bulk shipping markets. U. S. anthracite ship- ments to Korea originating at East coast ports have more than three times the shipment distance versus south cen- tral Alaskan ports. Because of longer shipping distances and draft limitations imposed by U. S. harbors and the Panama Canal (50,000 tons maximum) anthracite freight costs from the U. S. to Korea have typically been over $40 per ton but were discounted by $15 per ton or more over the past year. Korea is limited by the amount of anthracite it can buy from China for political reasons (it does not officially trade with China, but buys through intermediates). Korea has terminated anthracite imports from South Africa due to unacceptable high sulfur content. 301 A major portion of Korean anthracite purchases, therefore, will be made from the U. S. and Canada. Should it be necessary to discount the price of this anthracite substitute in Korean trade, some offsetting premium might be obtainable from an initial plant for materials sold to U. S. wood charcoal briquetters for charcoal grill briquettes who pay up to $90 per ton for wood charcoal. Over the longer term it might be desirable to develop a space heating market in the Pacific Northwest for smoke- less briquettes using Alaskan peat char. Distributor's in the northeastern U. S. pay up to $4.00 per million BTU for screened anthracite which when home delivered is $5.00 per million BTU competitive with distillate oil costing $8.00 and more. Normal freight rates to northwestern U. S. from south central Alaska would be slightly under $10 per ton. More favorable rates may be obtainable, however, from container ships which return to this region empty after bringing various supplies to Alaska. Offsetting any freight savings, however, would be the necessity of briquetting this material to be acceptable for using existing wood and coal stoves and stoker boilers in the Pacific Northwest. Briquettes would cost an additional $5-10 per ton depending upon the size and shape of the briquette produced. The landed price of briquetted Alaskan peat char in the Pacific Northwest would, there- fore, be $70-80 per ton or $3.70-4.20 per million BTU. This price appears to be a bit high for rapid market penetration of this new fuel. J. Market Implementation Plan The capital intensive nature of the proposed plant would necessitate firm contractual obligations for fuel 302 output as a pre-condition to plant financing. Both pro- ject equity holders and lenders would insist on such fuel purchase contracts. It is doubtful that more than 100,000 tons per year of such multi-year commitment could be obtained in the U. S. Most of this would come from current producers of charcoal briquettes. It might also be possi- ble to obtain fuel purchase commitments for 50,000-100,000 tons of briquetted fuel in Alaska. Part of this fuel could be procured under funds from the Federal Fuel Assistance program. Procurement of this fuel for rural and remote towns and villages could prove more cost effec- tive than supplying these communities with distillate oil today. Approximately 50,000 tons of material might be contracted to wood/charcoal purchasers in Japan who cur- rently pay a very high premium for a relatively small quantity of this material. Any uncommitted balance of the 262,000 tons of production would have to seek contractual commitments from Korea through the Dai Han Coal Company, the only company authorized to procure foreign anthracite for local briquette mills. Normally, Dai Han does not procure anthracite with more than one or two years advanced for- ward commitment. Korean shipyards such as_ Hyundai, Samsung, and Daowoo are best equipped worldwide to provide a barge mounted processing facility. The depressed state of the Korean ship building industry over the next several years as international coal and oil trade remains slack might encourage these Korean shipyards to apply pressure on Dai Han Coal to consider the long-term contracts neces- sary for such a project. It would be pre-mature to expect such support, however, until the product has been produced in sufficient test quantities to satisfy Dai Han of its suitability for briquette manufacture. 303 The market plan for the oil co-product is somewhat simpler; namely to identify several major residual oil users, preferably in Alaska but alternatively in the northwest who could consume the 100,000 tons per year produced in dedicated boiler facilities. In the economic analysis a price of $27 per barrel is assumed for this product providing a $3-5 per barrel discount over very low sulfur residual oil. A major portion of this production might also be used in state building complexes in Fairbanks, Juneau and other areas without locally avail- able natural gas. The $27 per barrel F.O.B. plant price might have to be discounted an additional $1-2 per barrel to cover freight to Pacific Northwest markets if these markets must be tapped due to insufficient market demand in Alaska. 304 SOE Table XI-1 Alaska Peat Commercial Feasibility Analysis Phase II - Summary Target Market (s) Fuel Displaced Use Market Size Price (FOB Alaska) A. Semi-coke granule Korea Anthracite space heating 3.5 million TPY $60/ton briquettes U.S. (Lower 48) Wood charcoal 1 million TPY $60-80/ton briquettes Japan Anthracite space heating 1 million TPY $60/ton briquettes Alaska #2 01i1/wood/ space heating 0.1 million TPY $60/ton coal B. Co-product fuel oil Alaska (Lower 48) #6 Residual oil utility and 3 million barrels $27/barrel Economic Summary (in 1983 dollars) Total Plant Costs Semi-coke Production Fuel Oil Production Annual Plant Revenues Full-Time Direct Employment Outside Purchased Power Return on Investor's Equity industrial fuel per day oil $180 million 262,000 tons/year @ $60/ton 100,700 tons/year (552,000 barrels/year) @ $27/barrel $30 million/year 115 persons 8 megawatts 10-20% (depending on financing assumptions) Figure XI-1 Asian Anthracite Briquettes and Appliances Briquettes Weight 7.72 lbs Weight 3.09 lbs Holes 24 Holes 19 Binder none (water and ash) Binder Starch and/or Clay Ash 35% Ash : 30% Heating Value 8,100 BTU/# Heating Value 9,900 BTU/# Anthracite Cost Domestic $50/tonne Anthracite Cost Foreign $80-90/tonne Foreign $70-80/tonne Retail Price $8-10/mmBTU Factory Price $3.25/mmBTU Retail Price $4.25-4.75/mmBTU Briquette Stoves: Loading/Unloading Cover Plate Mi itll e 3 in. Flue Pipe Briquette Loading Clinker Removal Tongs —. Briquettes Outside Steel skin — 5S Molded Tile Liner es UY [pL LE LOL LLG Combustion Air Ports-Adjustable 306 XII. Economic Analysis A. Capital Costs We estimate that the total capital cost of this project would be $267.0 million (See Exhibit I). This cost estimate includes the total installed costs for the process plant including off-sites, the harvesting system and the slurry pipeline feedstock conveying system. It also includes appropriate contingencies, project management fees, site survey costs, permitting and legal costs, manpower relocation, training and start-up costs, and all other costs which we would expect to incur in the project. A three year con- struction period was assumed for the purposes of our analysis. Twenty-five percent of the total capital required for this project was assumed to be spent in year 1; 50% and 25% in years 2 and 3 respectively. During the period of construction, capital costs were escalated at 10% per year to protect against antici- pated inflation. This is in line with our recent experience in the capital equipment markets. Total installed capital costs would be about $224.8 million (See Exhibit II). The processing plant alone would cost approximately $187.6 million. This estimate was developed by Rust Engineering. Approxi- mately 70% of all equipment costs were estimated via US vendor quotations for a plant located on the U.S. Gulf Coast. For smaller components such as fire protection systems, materials handling equipment, air compressors, and buildings, cost estimates were factored from existing cost data on file at KRSI. Installation costs were estimated for each major equipment subsystem of the plant on a factored basis, and are based on the extensive industry experience of both our RUST 307 Engineering and M.W. Kellogg subsidiaries. All of these estimates were then adjusted to reflect differences in construction labor and freight rates between the Gulf Coast and Alaska. A provision for a 2% sales tax imposed by the Borough of Kenai was also included. Harvesting equipment costs were studied by J.P. Energy Oy and are projected to total about $20.6 million (see Exhibit II). At the site studied, there are three distinct peat bogs. The harvesting plan developed for this site would excavate the peat in the bogs closest to the processing plant first. The only harvesting costs not capitalized are those which would be incurred when pipe and power lines must be extended > to transport peat from the bog back to the process plant as harvesting operations become more remote. These costs would be expensed on an annual basis. Also included in our estimate of total installed capital costs are $2.1 million for siting, environ- mental and development costs, $6.9 million for con- struction management and operating personnel and $4.5 million for start-up costs. These estimates were developed by us and are in line with our previous experience with projects of this type. The balance of total installed costs ($3.1 million) includes provisions for the cost of land for the plant site and peat mineral rights. We have estimated that the total land required for processing plant and harvesting operations would be about 15,300 acres. We have estimated the cost of land and mineral rights to be about $200/acre. 308 In addition to total installed capital costs, our estimate of total capital cost includes net interest during construction ($33.9 million), financing costs and fees ($5.4 million), and a provision for initial working capital requirements ($1.5 million). Each of these has been estimated in line with accepted analyti- cal practices. Also included is a one-time royalty payment ($1.4 million) which would be due to J.P. Energy. B. Operating Cost Assumptions For the purposes of this analysis, we have assumed that the plant has an operating life of 20 years. Full plant capacity is achieved in year 6. The assumed capital utilization during years 4 and 5 is 80% and 90% of estimated capacity respectively. Operating costs are summarized in Exhibit III. -Power Approximately 5 MW of electric power would be self-generated via the plant's own turbines. The balance of electric power required to operate the harvesting and processing operations would be pur- chased. Power requirements for the slurry pipeline transport system supplying feedstock will increase over time as the pumping distance is increased. Detailed schedules of power consumption by year and by major equipment elements have been prepared and are available upon request. Our estimate of the cost of electric power in Kenai (based on discussions with local utili- ties) is $.05/KWH. -Administration Eight administrative personnel would be needed to operate the plant. The salaries used in this analysis 309 are in keeping with our own experience with plants of this type. -Operating Labor We estimate that 27 employees would be employed full-time in the processing plant. An additional 39 would be required for harvesting operations. Each employee in the processing plant would work approxi- mately 1,800 hours/year. Harvesting operations would only be conducted 7 months a year; harvesting employees would, therefore, only work about 1,400 hours/year. Wages for both groups of employees are in line with the prevailing rates in Alaska. -Maintenance Seventeen employees would be dedicated to maintenance. Maintenance materials are a factored estimate and are equal to approximately 1.5% of total installed capital. -Chemicals Chemicals include the estimated costs of water and waste water treatment chemicals. -Diesel Oil Diesel oil includes the estimated cost of fuel required to power the tug boats used in the harvesting operation. -Pipeline/Powerline Extension We estimate that an incremental 3,000m of pipeline and powerline would be required every year to replace worn out pipe and powerlines and to support peat harvesting operations as they become more remote from the processing plant. 310 -Property Taxes Our analysis assumes that all real and personal property (buildings and equipment) would be subject to a 2.83 mill property tax rate imposed by the Borough of Kenai. -Insurance An annual insurance premium of approximately $400,000 (in 1982 dollars) is included in our analysis. This would provide a comprehensive insurance package including: workmen's compensation, general liability, physical damage, and other miscellaneous (auto, crime, etc.) insurance. -Technology License Fee An annual fee, paid by the local operating company to the parent developer is included in our analysis. It is intended as a payment for the ongoing technical and management support provided by the parent to the operating company. This type of arrangement is in line with our experience with other projects of this type. -Shipping/Handling Liquid PDF would be sold locally; we have assumed there would be no shipping or handling cost incurred in the marketing of this product. Solid PDF would be sold in Korea and for the purposes of completeness we have included shipping and handling of $15/ton (in 1982 dollars) in our analysis. C. Pricing Assumptions As envisioned by us, a plant of this type would produce two forms of fuel -- liquid PDF and solid PDF. Liquid PDF should be sold at 90% of the price of No. 6 311 fuel oil. We estimate that this will be about $4.50/mm BTU in 1983. The most attractive market for solid PDF fuel appears to be in South Korea. We estimate that the cost of anthracite coal in Korea is about $70.00/ton ($3.14/mm BTU). D. Financing Assumptions We have assumed that a project of this type could be project financed. Our analysis assumes 75%/25% debt/equity financing. We have assumed that debt financing could be available at 12% interest per year payable over 15 years. Financial management and commitment fees would amount to 2% of total principal and 0.5% of uncommitted funds respectively. These terms are conditional on several items: Among them are: - successfully securing a guaranteed source of feedstock (i.e. raw peat) supply. - successfully securing off-take contracts for the bulk of plant output - a "good faith commitment" by the developer to stand behind the project and ensure that the technology works. The required equity investment under this scenario would be $70.2 million. Total debt would be $196.8 million (see Exhibit I). E. Tax Treatment Our economic analysis assumes that this project will qualify for a 10% investment tax credit (ITC) on 312 100% of anticipated equipment costs. An additional 102% energy tax credit (ETC) is assumed on anticipated plant process plant building and equipment costs up to the point at which the first substance usable as a salable fuel is produced. PDF does differ significantly in chemical composition from the raw peat used to produce it and a physical defiberization does occur during the process. We believe that this satisfies the criteria established to determine eligibility for the ETC after December 31, 1982. We have also assumed that the project qualifies for a depletion allowance. Our analysis includes the greater of cost depletion or percentage depletion as a tax deduction. We have depreciated equipment over 5 years for tax purposes using the appropriate ACRS formula. Building is depreciated using the 15 years ACRS formula. We have not assumed any residual value in our analysis. Interest during construction has been capitalized as part of the depreciable tax base. In Alaska all corporate taxable income over $90,000 is taxed at 9.4%. For analytical purposes a combined State and Federal overall corporate tax rate of 50% was applied to pretax income. We have also assumed that the Alaskan mining tax of 7% (on all net income over $100,000) will not apply to this project. F. Economic Return We estimate that the discounted cash flow rate of return on equity investment (after-tax) for a project of this type would be about 13% with a payback period 313 of between 5 and 6 years. The sensitivity of this return to debt financing costs and PDF price are shown in Exhibit IV. Exhibit V contains an analysis of estimated capital costs and return on equity investment for a barge mounted processing plant purchased in Korea. We estimate that this option would yield a discounted cash flow rate of return on equity invest- ment (after-tax) of about 23%. Given the "first-of-a-kind" nature of this pro- ject, we do not feel that the projected returns provide adequate compensation for the risk that a potential developer would be incurring. 314 EXHIBIT I ALASKA PEAT PROJECT SOURCES AND USES OF FUNDS DURING CONSTRUCTION (000) Year of Construction Use of Funds 1 2 3 Total Plant Capital Costs* (including $ 50,277 $110,610 $ 56,256 $217,143 allowances for escalation) Land 3,060 - - 3,060 Start-up Costs - - 4,580 4,580 _ Subtotal $ 53,337 $110,610 $ 60,836 $224,783 Other Uses - Net Interest During gs 2,802 § 11,029 § 20,034 §$ 33,865 Construction** - Financing Cost/Fees 4,803 524 149 5,476 - Royalty - - 1,370 1,370 - Working Capital *** - - 1,524 1,524 Subtotal $ 7,605 $§ 11,553 § 23,077 § 42,235 Total $ 60.942 $122,163 $ 83,913 $267.018 Sources of Funds**** Debt (15 year.maturity with $ 46,695 $ 90,420 $ 59,664 $196,779 level P&l payments, 10% assumed interest rate) Equity Contributions $ 14,247 $ 31,743 $ 24,249 . $ 70,239 Total Sources $60,942 $122,163 $ 83,913 $267,018 k* kK kK Includes process plant, harvesting equipment, siting, environmental and development costs, and construction management, operating personnel, re- location and other costs. Net of expected interest earnings of 12% on unused balances. Based on estimated inventory requirements. For analytical purposes, pro-rata equity contribution is assumed although debt drawdown convenants will govern the final timing of debt and equity infusion. 315 3/8/83 TOTAL Process Plant(See Att. I for additional detail) Havesting Equipment Costs (see Att. II for additional details) Siting, Environmental and Development Costs (See Att. III for additional details) Construction Management, Operating Personnel and Others* Subtotal-Plant Capital Costs Start-up Costs Land TOTAL ALASKA PEAT PROJECT INSTALLED CAPITAL COST (000) Base Capital SUMMARY bAnibil it Total Installe Cost Escalation Capital $154,712 $ 32,909 $187,621 16,962 3,609 20,571 1,678 357 23035 5,702 1,214 6,916 $179,054 $ 38,089 $217,143 $ 3,777 $ 803 $ 4,580 3,060 --- 3,060 $185,891 $_ 38,892 $224 ,783%* * Includes phase-in of operating personnel ($343K), relocation and travel ($172K), certain project related legal costs ($1,717K), construction management costs ($3,470K). KK 316 Includes $201,427K of equipment for tax purposes (5 years ACRS depreciation) and $28,143K of buildings (15 years ACRS depreciation). 3/8/83 Subsystem* Wet carbonization equip. Carbonizing and oil recovery Drying and filtration equipment Water treatment Boiler, turbine and utilities Buildings, storage, tanks, offsites and spares Site preparation Total ALASKA PEAT PROJECT PROCESS PLANT COSTS (000) Equipment Costs $ 17,181 7,935 17,333 11,486 13,357 26,190 $ 93,482 Installation $ 25,549 12,053 6,248 3,159 3,374 10,847 $ 61,230 Exhibit IIL Total $ 42,730 19,988 23,581 11,486 16,516 29,564 10,847 $154,712 *Subsystem equipment costs include applicable engineering, insurance, sales tax and freight charges, as well as appropriate contingencies. 317 3/9/83 Exhibit II ALASKA PEAT PROJECT HARVESTING CAPITAL COSTS (000) Subsystem* Equipment Costs* Installation Total Storage Pond $*75292 $ 332 $ 7,624 Barges 6,848 784 7,632 Pipeline 1,066 165 1,231 Powerline 333 66 401 Service Boats 69 5 74 Total $15,610 eS db O52. $16,962 ——eLES=—=_—— OO lke Cl lee *Subsystems costs include applicable engineering, spare parts and freight charges, as well as appropriate contingencies. 2/22/83 318 Task ALASKA PEAT PROJECT SITING, ENVIRONMENTAL AND DEVELOPMENT WORK (Pre-Construction KRSI Tasks) Siting (Selection & Acquisition): Resource Verification Negotiations & Legal Optioning Subtotal Environmental: Permit Identification, Planning and Legal Harvesting Environmental Plan and Assessment Process Plant Environmental Plan & Assessment Environmental Field Data Collection Permit Preparation & File Permitting Support & Legal Subtotal Harvesting System: On-Site Harvesting Equipment Testing Process Plant: Process Specification (J.P. Energy) Project Administration: Project Office Project Executive & Project Manager Fuel Marketing Project Environmental Coordinator (incl. above) Project Communications Coordinator Subtotal Total 319 Exhibit II Total (000) $ 28 28 219 92275 $. 55 55 110 329 28 83 $ 660 $ 110 $ 220 Ss”. 85 110 165 25 $ 413 $1678 2/22/83 SUMMARY OF OPERATING COSTS (From Sixth Year of Operations) Electric Power Administration(See Att. I) Operating Labor(See Att. II) Maintenance(See Att. III) Chemicals Diesel Oil Pipeline Extension Powerline Extension Property Taxes Insurance Technology License Fee Subtotal - FOB Plant Shipping and Handling Total - Delivered *Liquid PDF available for sale: Solid PDF available for sale: ALASKA PEAT PROJECT In 198 Per Ton* $9.71 0.93 8.50 14.80 0.47 0.03 4.24 0.63 1.57 1.22 1.52 43.62 11.99 $55.61 99,849 262,000 Total tons available for sale 361,849 Exhibit III Annual Operating Costs 2 Dollars Total (000) $ 3,515 335 3,076 5,356 171 ce 1,533 227 568 440 550 15,782 4,339 $20,121 tons/year tons/year 320 Memo: Total in 1989 Dollars (000)** $ 4,991 475 4,368 7,606 243 15 2,177 322 807 625 781 22,410 6,161 $28,571 2/22/83 ALASKA PEAT PROJECT ADMINISTRATION Base Pay Annual Base Total Number Per Person Pay Per Fringe Total Per Category Direct Charges Required ($/Hr) Person Benefits Per Person (1982$) Chief Engineer 1 = 63,800 19,140 82,940 82,940 Plant Engineer 1 - 56,100 16,830 72,930 72,930 controller 1 - 48,400 14,520 62,920 62,920 Records Clerk 1 8.10 14,460 4,337 18,797 18,797 Secretaries 2 8.97 16,012 4,804 20,815 41,630 w Purchasing Agent 1 11.99 21,414 6,424 27,838 27,838 i) Bt Subtotal 7 Indirect Charges Plant Manager 1 - 88,000 26,400 114,400 114,400 Total Administration 8 * Escalated at 6% per annum. Allocation to Administration 28,650 EXHIBIT IIL ATTACHMENT IL Total Per Category In Year 6* 117,422 103,249 89,234 26,611 58,938 39,411 434,865 40,490 475,355 2/18/83 SCE EXHIBIT III ATTACHMENT II Page 1 of 2 ALASKA PEAT PROJECT PROCESSING LABOR Base Pay Annual Base Total Total Number Per Person’ Pay Per Shift Fringe Total Per Category Per Category Direct Labor Required ($/Hrs) Person Premium Benefits Per Person (1982$) in Year 6* Process Engineer 1 12.10 21,611 6,483 8,428 36,522 36,522 51,706 Laboratory Technician 1 13.15 23,477 7,043 9,156 39,677 39,677 56,172 Unskilled Laborer 2 11.07 19,764 5,929 7,708 33,400 66,801 94,573 Control Room Operator 4 14.30 25,540 7,662 9,961 43,162 172,647 244,423 Wet Process Operator 4 14.30 25,540 7,662 9,961 43,162 172,647 244,423 Filter Operator 4 14.30 25,540 7,662 9,961 43,162 172,647 244,423 Dryer Operator 4 14.30 25,540 75662 9,961 43,162 172,647 244,423 Carbonized Operator 4 14.30 25,540 7,662 9,961 43,162 172,647 244,423 Product Stores Worker 3 9.27 16,562 4,969 6,459 27,990 83,969 118,877 Subtotal 27 1,543,443 Allocation to Processing Labor Indirect Labor Mechanics 4 12.10 21,611 6,483 8,428 36,522 146,088 73,044 103,412 Electrician 4 19.61 35,028 10,508 13,661 59,198 236,790 118,395 167,616 Shift Foreman 4 13.96 24,930 7,479 9,723 42,132 168,529 55,615 78,736 Plant Manager 1 + 88,000 - 26,400 114,400 114,400 28,600 40,490 Subtotal 13 275,654 390,254 Total Processing Labor 40 1,933,697 *Escalated at 6% per annum. 2/18/83 EXHIBIT III ATTACHMENT II ESE ALASKA PEAT PROJECT ee HARVESTING LABOR _ Base Pay Annual Base Total Total Number Per Person Pay Per Shift Fringe Total Per Category Allocated Direct Labor Required (S/Hrs) Person Premium Benefits Per Person (1982$) in Year 6* Foreman 1 13.96 19,947 6,094 7,779 33,711 33,711 47,726 Mechanics 2 12.10 17,291 5,188 6,743 29,222 58,444 82,741 Electrician 2 19.61 28,027 8,408 10,931 47, 366 94,732 134,115 Unskilled Workers 2 11.07 15,814 4,744 6,168 26,726 53,450 75,671 Clam Shell Operator 16 17.75 25,370 7,611 9,895 42,876 686,012 971,213 Pulper Operators 8 14.03 20,435 6,130 7,970 34,535 276,276 391,135 Unskilled Workers 8 11.07 15,814 4,744 6,168 26,726 213,802 302,686 Subtotal 39 2,005,287 Allocated to Harvesting Indirect Labor Labor Mechanics 4 12.10 21,611 6,483 8,428 36,522 146,088 73,044 103,411 Mechanics 8 12.10 21,611 6,483 8,428 36,522 292,176 146,088 206,823 Shift Foreman 4 13.96 24,930 7,479 9,723 42,132 168,529 55,615 40,490 Plant Manager 1 - 88,000 - 26,400 114,400 114,400 28,600 78,736 Subtotal i? 303,347 429,460 Total Havesting Labor 56 2,434,747 * Escalated at 6% per annum. 2/18/83 Direct Labor VGE Foreman Electrical Technician Instrument Technician Mechanics Instrument Mechanics Electrician Store keeper Unskilled Worker Subtotal Indirect Labor Shift Foreman Mechanics Mechanics Electrician Plant Manager Subtotal Total Maintenance Labor ALASKA PEAT PROJECT MAINTENANCE LABOR Base Pay Annual Base Total Number Per Person Pay Per Shift Fringe Total Per Category Required ($/Hr) Person Premium Benefits Per Person (1982$) 1 13.96 24,930 7,479 9,723 42,132 42,132 1 13.15 23,477 7 043 9,156 39,677 39,677 1 13.15 23,477 7,043 9,156 39,677 39,677 6 12.10 21,611 6,483 8,428 36,522 219,133 1 19.25 34,381 10,315 13,408 58,103 58,103 2 19.61 35,028 10,508 13,661 59,198 118,395 1 9.27 16,562 4,969 6,459 27,990 27,990 4 11.07 19,764 5,929 7,708 33,440 133,603 17 4 13.96 24,930 7,479 9,723 42,132 168,429 8 12.10 21,611 6,483 8,428 36,522 292,178 4 12.10 21,611 6,483 8,428 36,522 146,089 4 19.61 35,028 10,508 13,661 59,198 236,790 1 - 88,000 e 26,400 114,400 114,400 21 38 *Escalated at 6% per annum. 59,647 56,172 56,172 310,235 82,259 167,616 39,625 189,145 960,871 Allocation to Maintenance Labor 55,615 78,736 146,089 206,822 73,045 103,412 118,395 167,616 28,600 40,490 597,076 1,557,947 Exhibit III Attachment III Total Per Category In Year 6* 2/18/83 EXHIBIT IV Page 1 of 2 ALASKA PEAT PROJECT SENSIVITY OF RETURN ON EQUITY INVESTMENT TO DEBT FINANCING COSTS* DISCOUNTED CASH FLOW RETURN ON EQUITY BASE CASE INVESTMENT (AFTER TAX) Interest Rate on Debt Financing: 12% 13.1% Total Capital Cost: $267.0 Million CASE II Interest Rate on Debt Financing: 10% 17.0% Total Capital Cost: $260.9 Million * Holding Operating Costs, PDF Price, Operating Yield and Stream Factor Constant. Q90n ALASKA PEAT PROJECT SENSITIVITY OF RETURN ON EQUITY BASE CASE Liquid PDF Price (1983): Solid PDF Price (1983): CASE III Liquid PDF Price (1983): Solid PDF Price (1983): CASE IV Liquid PDF Price (1983): Solid PDF Price (1983): $4.50/mm $3.14/mm $5.40/mm $3.77/mm $3.60/mm $2.51/mm * Holding Capital Costs, Debt Financing and Stream Factor Constant. 326 TO PDF PRICE * BTU BTU BTU BTU BTU BTU EXHIBIT IV Page 2 of -2 DISCOUNTED CASH FLOW RETURN ON EQUITY INVESTMENT (AFTER TAX) 13.1% 24.8% Negative Costs, Operating Costs, Operating Yield ALASKA PEAT PROJECT TOTAL INSTALLED CAPITAL COST SUMMARY FOR BARGE MOUNTED PROCESSING PLANT OPTION (000) Base Capital bxnipit Vv Attachment I Total Installed Cost Escalation Capital Process Plant $126,861 $19,663 $146,524 Harvesting Equipment 16,962 2,629 195591 Siting, Environmental and Development Costs 1,678 260 1,938 Construction Management, Operating Personnel and Others* $5702 884 6,586 Subtotal-Plant $151,203 $23,436 $174,639 Capital Costs Start-up Costs $ 3,777 S$ 586 $ 4,363 Land 3,060 - 3,060 Total $158,040 $24,022 $182,062** * Includes Phase-in of operating personnel ($343K), relocation and travel ($172K), certain project related legal costs ($1,717K), construction management costs ($3,470k). *k ~~ Includes $159,694K of equipment for tax purposes (5 years ACRS Depreciation) and $28,134K of buildings (15 years ACRS Depreciation). 327 XIII. Economic Enhancements and Recovery of By-Products The technology selected for Phase II analysis utilizes only one of the characteristic differentiating peat from coal namely, the ability to recover high oil yields from wet carbonized peat. Peat has many other properties which could enhance the base process or modi- fications of the base process. Alternative process options are included in Figure XIII-1. The highest value added and the most cost effective process plant for peat will no doubt involve a true "peat refinery" where each product will be produced at its optimum level to maximize plant profitability. A. Harvesting By-Products and Co-Products 1. Agricultural and Horticultural Peat Prior to thermal treatment of peat several by-products and pre-processing options exist. The most obvious of these is the production of horticultural and agricultural peat. Less decomposed peats typical of the top two to four feet of Alaskan peat deposits have unique water and nutrient holding properties making them excel- lent soil conditioners. Some peats can hold 20 times their dry weight in moisture. They also have very high ion exchange capacities useful in the slow release of soil nutrients. Primary markets for large volumes of Alaskan agricultural/horticultural peat would include arid regions such as Southwestern U. S., Mexico, India, and the Middle East. Upper surfaces of horticultural quality peat could be harvested separately and transported in a separate pipeline or alternatively they could be co-harvested with fuel grade peat and screened out from finer fuel grade material at the dewatering plant. Once fines have been removed from this peat, mechanically pressing should be able to reduce moisture content down to 65%. It can either be subsequently shipped at this moisture content or further dewatered with low tempera- ture thermal drying down to about 35% moisture. Below 35% moisture the water retaining properties of the peat would be destroyed. In Northeastern U. S. and Canada, horticultural peat commands 328 approximately twice the market value obtainable for fuel grade peat ($120 per dry ton versus $60 per dry ton). Only certain types of peat are well suited for horticultural use, however, and East Coast markets for the material are quite limited (less than one-half million tons per year). 2. Ammoniated Peat Often it is advisable to increase the value added of horticultural peat by producing more specialized agricultural or horticultural products. One product which might be particularly well adapted to Alaska is ammoniated horticultural peat. Ammonia could be produced from Alaska's abundant shut-in natural gas supplies. Par- tially dehydrated horticultural peat could be saturated with ammonia based fertilizer to produce a granular product with both soil condi- tioning properties and high nutrient value. While the Near East can produce large quantities of cheap ammonia using their abundant natural gas supplies, they have no source of fibrous peat which could be utilized as a soil conditioner and slow the release of nutrients. An existing ammonia fertilizer plant is operating in the Kenai peninsula near the proposed plant site. This concept merits further discussion with fertilizer suppliers and firms owning significant supplies of shut-in Alaska natural gas. cs Insulation Board Dehydrated fibrous peat is also utilized by the Soviet Union for the production of insulation board. Peat fiber is dehydrated and mixed with various binders (sometimes resins derived from the peat itself) and pressed to form insulation board. Presumably peat fiber could also be fire proofed and utilized in competition with blown cellulose insulation which is gaining increase popularity in the U. S. 329 4. Wocd Pulp Supplement - Cardboard Grades In Sweden work is also being done on recovering peat fiber to utilize as a supplement in lower grades of paper products such as molded pulp products (i.e. egg cartons), cardboard, and corrugating medium. 5. Cattle and Poultry Litter Dried peat is also utilized in the Soviet Union and Europe as a poultry and cattle liter providing beding material in those locations where straw and dry wood waste is either unavailable or more expensive than fibrous peat. Peat has superior moisture and odor absorbent properties versus straw or wood waste. It also has a higher capacity for absorbing and retaining nutrients in animal waste and therefore is a better fertilizer and soil conditioner when spent liter is applied to agricultural fields. 6. Filtration and Water Treatment Media The ability of peat to absorb and retain organic and inorganic compounds in water make it an excellent filtration media. Experiments are now underway at the University of Maine to determine the effec- tiveness of peat in domestic septic field applications. B. Products Derived from Processed Peat 1. Animal Feeds The Soviet Union currently produces approximately 80 million tons per year of fuel peat and 120 million tons per year of agricultural peat. Several thousand people are currently employed at three major technical institutes on developing peat processing utilization tech- nologies. It has been reported that over 1 million tons per year of yeast used for cattle feed is produced from Russian peat utilizing a 330 relatively high technology process involving dilute acid hydrolysis’ (1) FOOINOTE BOTTOM: 1. Fuchsman, Bemidji State University, Bemidji, Minnesota. In the process, approximately 2 pounds of 50% protein yeast are produced for every ten pounds of dry peat. The undesolved (hydrolized) peat is utilized for fuel and the fermentation solids waste is utilized for organo merril fertilizer. 2. Wax Extraction In yet another process the Russians extract from 5-15% wax from young peats generally from depths of less than four feet. In this process, pre-dried peat fiber is autoclaved with gasoline for several hours and then distilled to separate the solvent from the waxes which are utilized for furniture and automotive polishes. 3. Thermal Treatment Under Alternative Conditions Peat at its in-situ moisture content of 90% or greater can be cooked without prior dewatering at higher temperatures and pressures under a variety of different atmospheres to yield a broad range of end products. Under the base case of this study, peat was cooked at approximately 400° F above water saturation pressure with no addi- tives to prove its dewaterability. Alternatively, peat can be cooked under other conditions (acid hydrolysis, alkaline conditions, oxidiz- ing conditions (partial or complete wet air oxidation), or reducing gas conditions (CO and/or H,) : 4. Wet Carbonization By-Products Cooking under wet carbonization (neutral) conditions limits soluabilization in the filtrate to 5-15% when performed under rela- tively mild conditions. Weight loss as gas from cooking under these 331 mild conditions is generally less than 10%, three-fourths of which is carbon dioxide the balance of which is organic compounds such as acetone, furfural and acidic acid. Table XIII-1 identifies those compounds recovered from cooking vessel off-gas when wet carbonizing Alaskan peat. Approximately 1.75% of the dry feed entering the wet carbonization process is potentially recoverable as organics in this vent gas. The quantity and make-up of recoverable compounds varies appreciably depending upon process conditions and initial peat characteristics. It is important to note that this table does not consider the technical feasibility, costs or yield, separation, and purification of those compounds identified in wet carbonization vent gas. It shows a maximum potential revenue impact on the plant of approximately $3.5 million dollars which would increase plant revenues by approximately 11%. Actual yields and separation and purification costs might result in little or no positive impact on profitability at these levels. On-the other hand alteration of process conditions and/or the use of alternative Alaskan peat feedstocks can result in significantly higher yields of these or other recoverable compounds. Those compounds which showed some recovery potential include: acetaldehyde, a compound used primarily for the production of acetic acid; acetic acid, utilized primarily for the production of synthetic fibers and film; methanol utilized as an industrial solvent and motor fuel additive; acetone, an industrial solvent used in plastics and paints; and furfural, an industrial resin utilized as a foundry sand binder and lube oil additive. 5. Alkaline Disolution Researchers such as Dynatech of Cambridge, Mass. have demonstrat- ed that cooking peat under alkaline conditions can result in disolution of virtually all peat solids into a fermentable liquor. They have successfully fermented such liquors to produce methane or produce C5 and C6 acids which were subsequently extracted and convert- ed into octane and decane motor fuels via an electrolitic cell. 332 ' 6. Hydrogenation/Direct Liquefaction Researchers in Canada and Sweden have thermally treated wet peat in reducing gas atmospheres producing high yields of a heavy bitumen type oil which could be subsequently decanted from water and possibly used as boiler fuel. Kellogg Rust Synfuels Inc. built and operated a continuous pilot plant for the Department of Energy utilizing this process on pulverized wood slurry. Extremely high oil yields were achieved. The primary economic limitation of the process was the high cost and limited supply of collecting, transporting, and preparing a pulverized wood slurry feed. Peat slurry feed is several times less costly, does not involve significant prior preparation, and does not have the scale limitations of a wood based plant. Unfortunately, DOE funding is not available to pursue this concept with peat feedstock although the plant in Albany, Oregon is available for such purposes should funding become available. 7. Acid Hydrolysis; Alcohol or Food Production Peat can also be cooked at low temperatures under acidic con- ditions to produce solutions of simple sugars and other biologically active compounds. Peat is a much more promising feedstock for the production of alcohols and other organic chemicals, synthetic natural gas, or animal foods via bio-conversion and genetic engineering techniques then grain crops or wood due to its much lower feedstock production, collection, and preparation costs. Table XIII-2 compares the relative costs of corn, wood, and peat as potential feeds for ethanol production via bio-conversion (fermentation). Table 2 is not presented to show that peat to ethanol is necessarily the most attrac- tive route to ethanol today and/or the best use of peat. It is intended to illustrate that peat is probably the cheapest feedstock available for bio-conversion processes including ethanol fermentation, yeast production, and others. Unhydrolysed residues can be utilized for fuel or other purposes. 333 ¢. Summary of Potential Economic Enhancements Effecting Alaskan Peat Utilization Section XII, Economic Analysis considers the economic impact of utilizing a Korean manufactured barge mounted plant versus a more conventional site constructed plant. Our preliminary analysis indi- cates that a potential savings of approximately 18% could be realized utilizing this plant concept. The addition of devolatilization of wet carbonized peat into fuel oil and semi-coke is in itself a major enhancement over the production of a high volatile peat derived fuel which would have to campete with Alaskan coal at $2.00 per mm/BTU or less. The semi-coke can command over $3.00 per mm/BIU and the by-product oil approximately $4.50 per mm/BTU. The effect of other potential project enhancements are enumerated in Table XIII-3. This table also shows the approximate economic impact of these enhancements based on the assumptions stated. These effects should be viewed in the context of a plant costing approximately $180 million (in current dollars) and generating approximately $30 million per year in revenue. The economic viability of a large-scale peat processing facility in Alaska or elsewhere in North America is dependent upon producing a product. slate which does not have to compete on a BTU basis with coal. For low-ash or de-ashed peats metallurgical coke and water treatment carbons represent promising products along with their by-product oil. For higher ash, young peats typical of thase in South Central Alaska, separation of and use of fibrous factions for wax extraction, agricul- tural use, or feedstock for biological processes may prove to be most promising. 334 Condensible Off-Gas (Furfural, Acetone) Figure XIII-1 Tob cth) ee Reet Lina! Os Peat Wet Carbonization Le be re Paci kal] Fiberous Fraction for Agricultural Use Carbonization PN i eee tetera ee Residue (Combustion) VU es rea 4 Bio-Convarsion of Clear Solubitized Fertilizer or Riera Pee bere Tar UCSC Mame Le) Pte’ ieee ber Lay an a Combustion Gasification Table XIII-1 Cooking Vessel Vent Gas Analysis - Wet Carbonized Alaska Peat Compound Estimated Assumed Annual Quantity Market Value (1) (Tons/yr) Price ($/Ton) Acetaldehyde 3,140 $500 $1,570,000 Acetic Acid 1,300 $500 650,000 Methanol 1,090 $150 163,500 Acetone 820 --- 410,000 2-Pentanone 820 --- seria Pentanones (ISO; 3-) 630 paren sivepniee Furfural 580 $1200 696,000 Methyl Furfural 450 --- eee Hydroxy Propanone 375 --- = ISO-Butanal 375 --- erases 2-Butanone 180 --- ee Hydroxy-Butanone 130 --- ae Methyl Pyrazine 75 -o- ooo Methoxy-Phenol 75 --- ives ee C3-Pyrazines 60 -—— ae Unidentified 45 hee! TOTAL 10,145 $3,489,500 Tons/yr Note:1. The feasibility of cost and yield separation and purification of these compounds has not been determined. ax It is probably not cost effective to consider recovery and purification of those compounds with no indicated value above. 336 Table XIII-2 Ethanol Feedstock Costs Feedstock Basis in End- Physical Feedstock Price $ /mmBTU Product (3) Form Corn $140/dry ton T15 10.50 unmilled grain Wood 40/dry ton 2.25 9.00 whole tree chips with bark Peat 10/dry ton 0.60 3.60 pulped slurry in storage 1. Adjusted for by-product DDG (distiller's dried grains) at $140/dry ton, corn feedstock is $5.25. 2. For wood and peat no net by-product value is assumed (i.e. by-product value as fuel equal to recovery and dehydration costs. 3. | Three tons corn/ton ethanol; 1 ton DDG/ton ethanol; 4 tons wood/ton ethanol; 6 tons peat fibre/ton ethanol. 337 1. 2. Table XIII-3 Potential Economic Enhancements Enhancement Korean built barge mounted plant By-Products per Table XIII-1 Wet Carbonization process improvements Suction dredging vs. floating clamshell Separation of fiberous faction for: a. agricultural use b. hydrolysis/ fermentation Cc. wax extraction Effect Impact $+3 million/yr 18% capital cost reduction Net 50% recovery of values $+1.75 million/yr Net 20% cost improvement in throughput, yields equipment costs $+4 million/yr $2/dry ton har- ested net savings $+1.4 million/yr Not quantified Unknown 338 XIV. Work Plan and Pre-Construction Scope of Work Before Alaska can realize the economic benefits from its huge peat resources, significant technical and market develop- ment efforts must be performed. It is in Alaska's interest that this development work be completed so that the huge peat re- sources can become the source for creating a revenue producing industry. Prior to initiation of final process design work it is recommended that certain activities be undertaken to better define the site, raw materials, product, process, etc. The transition from preliminary data to final data will be enhanced by the tasks enumerated below: A. Additional Resource Identification and Assessment Estimated Cost: $150,000 Under prior federal and state funded peat resource assess- ment programs, peat in the Railbelt Corridor has been well identified and characterized. Much less work has been done in the Beluga and Kenai areas. The Alaska Peat Feasibility Analy- sis suggests that it is probably more economical to utilize highly modularized and/or barge-mounted peat production facil- ities rather than incur the high costs of constructing plants at inland sites. Tidewater sites also substantially reduce trans- port costs allowing barges to shuttle finished products between the plant and offshore moored deep-draft vessels which can attain maximum transport economics. It would be highly desirable to identify, within the state, Major peat deposits containing low ash peat in deep (over five feet), large (over 1,000 acres), contiguous, tidewater accessi- ble (within ten miles) sites. By focusing the search for addi- tional quality peat resources on the above economic constraints, early identification of promising sites can be found. Resource 339 assessment should include a determination of the horticultural value of upper peat layers which would indicate whether co-production of horticultural and fuel peat is possible. B. Field Trials Wet Harvesting, Land Reclamation, Hydrological Impact Estimated Cost: $400,000 Suction dredging appears to be the most economical method of wet harvesting peat in large scale operations. To determine accurate suction dredging costs, dredging tests utilizing a small dredge (i.e. eight-inch pipe diameter) should be conduct- ed. Typically, the dredge output would be discharged into a primary holding pond. In this pond, water would be decanted until the peat was drained back to a dry solids content equal to or greater than in-situ peat. It is absolutely critical to determine the drainage characteristics of a particular type of suction-dredged peat. If the dredged peat does not drain well, then a more expensive alternate harvesting method might have to be utilized. After peat. removal from a test block of several acres, reclamation experiments can be done on this plot to demonstrate agricultural use (drained plot), wildlife habitat (partially drained and replanted with wild rice, cat tails, and water plants), or fisheries use (open water). The above excavation and reclamation trails also provide an opportunity to analyze and monitor the hydrological impact of both activities. Water acidity, terbidity, and settling charac- teristics in primary and secondary holding ponds can be assessed permitting large scale holding ponds to be designed. This program could be conducted in conjunction with state environ- mental agencies and the agricultural department of the state university. The demonstration would give these agencies a first-hand working knowledge of the likely impacts of a major 340 fuel peat harvesting operation. The information obtained will greatly facilitate the permitting process for potential develop- ers. C. Additional Dewatering Process Work Estimated Cost: $100,000 In the Alaskan Peat Commercial Feasibility Analysis, the major contending peat dewatering processes were evaluated. The wet carbonization process was selected because it showed compa- rable or improved economics versus other alternatives and is in a more advanced state of development and demonstration. Two other dewatering processes, however, showed promise, but could only be verified by physical testing. These processes could supplement the basic wet carbonization process if successful and improve overall dewatering economics. Sulzer, in Switzerland, has developed a press specifically designed for fuel peat dewatering. It is not possible to deter- mine its performance on Alaskan peat without running trials. The press can be utilized on raw peat or wet carbonized peat. The performance of this new generation press should be tested on both materials and may have a significant impact on overall plant economics. If horticultural peat is produced, it would not be. desirable to wet carbonize this material prior to dewa- tering. These press trials would also determine the dewatering ability of Alaskan horticultural peat. In the peat dewatering process, the final thermal drying step consumes the major portion of the dewatering plant's energy requirements. Multiple stage (or effect) evaporation increases the energy efficiency of this final drying several-fold over conventional single-stage drying operations. It would, there- fore, be desirable to perform trial runs utilizing a two-stage fluid bed system and a multiple effect system in which the peat is conveyed in a carrier oil which is mechanically filtered and 341 steam stripped from the peat. While the multiple effect ap- proach is clearly the most efficient, separation of the neces- sary carrying oil form raw or wet carbonized peat is a major unknown which can only be determined via experiments on Alaskan peat. D. Peat De-ashing Trials Estimated Cost: $100,000 Alaska peat in the South-Central region has substantially higher ash contents than most peats found in North America. The limited survey work done outside of this region has not de- termined whether this problem is universal throughout Alaska. Most of the ash is of volcanic origin. Significant work has been done on de-ashing of coal in recent years. Some prelimi- nary screening of coal de-ashing techniques on peat are being done in the Alaskan Peat Commercial Feasibility Analysis. The most promising system identified in that work should be verified on several tons of Alaskan material. This de-ashed material would then be utilized to produce samples of peat derived prod- ucts for evaluation by potential Alaskan peat customers. One of the most promising de-ashing processes is a system developed by OTISCA Industries in Syracuse, New York. They have a pilot facility which could process Alaskan peat for evaluation. Even if low ash peats are found in convenient Alaskan tidewater locations via the survey work suggested previously, it might prove desirable to de-ash this material (to perhaps below 1% or 2% ash) allowing it to be fired in large, oil-fired boilers which were not capable of burning coal thus placing the peat derived product in competition with oil rather than coal. A low ash content wet carbonized peat might also be utilized to pro- duce a wet carbonized peat/water slurry, again to displace fuel oil in large utility and industrial boilers. 342 E. Processing Verification and Production of Samples for Evaluation Estimated Cost: $150,000 To confirm conditions of the peat dewatering process and to produce samples of dewatered peat for customer evaluation and/or further processing, a sample of Alaskan peat from a promising site, should be dewatered. The Institute for Gas Technology (IGT) has a peat wet carbonization process development unit which was funded by the Gas Research Institute and the U.S. Department of Energy. The unit could process approximately five tons (dry bases) of material to determine final processing conditions and to prepare wet carbonized material for further processing trials and customer evaluation. The process develop- ment unit has a capacity of approximately one-half ton per day. The unit could process either a low ash peat or a de-ashed peat. A portion of the peat could be briquetted after final drying. F. Devolatilization Trials Estimated Cost: $150,000 It appears that a higher value added might be obtainable from Alaskan peat by devolatilizing wet carbonized peat into a low volatile char and a co-product fuel oil. Two methods of devolatilizing dehydrated peat should be considered, multi- ple-hearth furnace and fluid bed furnaces. Small scale testing of each type of unit should be accomplished to determine the effect of each approach on product yields and product attrition (creation of fine material). It is desirable to maximize the liquid yield in the process chosen. G. By-Products and Co-Products, Production and Recovery Estimated Cost: $150,000 The economic recovery of peat co-products and by-products 343 May prove essential to the commercial viability of Alaskan peat utilization projects. While this complicates an initial plant, and increases technical risk, it may be necessary to establish the economic viability of a project. During harvesting op- erations, co-production of horticultural peat may have a significant positive impact on initial fuel peat plants. During peat wet carbonization, the production of by-product chemicals such as furfural, furan, acetone, and waxes could significantly improve plant economics. The production of slurry fuel from de-ashed peat could also be economical. Finally, it appears that the devolatilization of wet carbonized peat can result in a significant increase in value added with the resulting low volatile char and by-product oil. The feasibility and economic impact of by-product and co-product production should be evalu- ated. Samples of by-products and co-products produced should be prepared for customer evaluation. H. Waste Water Treatment Tests Estimated Cost: $50,000 The treatability of waste water from the peat dewatering plant must be validated before application can be made for water discharge permits. The use of anaerobic water treatment methods is crucial to plant economics because a significant quantity of methane gas can be produced via this approach to lower overall plant fuel requirements. Several pilot facilities exist in the U.S. and Europe to treat raw waste water produced via the dewa- tering process work described previously. I. Additional Market Development Work Estimated Cost: $50,000 The Alaska Commercial Peat Feasibility Analysis provides sufficient funds to da exploratory marketing work on products produced from Alaskan peat. Before a commercial developer could justify the expenditure of significant funds towards a 344 commercial project, he would have to have assurances that commercial contracts for the major plant products could be obtained from Asian fuel users, U.S. West Coast markets, and in-state Alaskan users. It would be highly desirable to get firm commitments which could be used as a basis for plant fi- nancing. Sample quantities of plant products would be produced as a result of the testing outlined previously, and would be available for trials by serious potential customers. Korean anthracite purchasers, for example, might wish to test the use of Alaskan peat char as an anthracite substitute in their domes- tic heating briquettes. U.S. West Coast producers of charcoal briquettes would also have to test the substitution of peat char for wood char and its effect ‘on the production and performance of their briquettes. J. Combustion Testing Estimated Cost: $50,000 Combustion testing of low volatile and high volatile briquettes, pulverized fuel, and possibly slurry fuel produced from Alaskan peat should be tested such that these test results can be made available to potential fuel purchasers. Comprehen- sive testing of the fuel must also be accomplished to character- ize fuel proximate and ultimate analysis, slagging properties, etc: K. Site Specific Environmental Field Work Estimated Cost: $100,000 Perhaps the largest risk facing a potential developer in an initial Alaskan peat project is the risk of obtaining the neces- sary environmental permits. While it appears possible to exca- vate peat in a responsible, environmentally sound manner and to convert reclaimed peatlands into land of equal or greater eco- nomic or environmental value, Alaskan permitting agencies have little experience in these areas. It might be necessary, 345 therefore, for the state of Alaska to assist initial developers by demonstrating that environmentally responsible peat energy projects can, in fact, be permitted within the state. In this task, information on surface and subsurface hydrology, flora, and wildlife at a promising energy peat development site would be collected and assessed in conjunction with permitting agencies. L. Environmental Engineering Support Estimated Cost: $100,000 To prepare environmental permits, sufficient design engi- neering work must be done on the harvesting and reclamation plan, and water treatment facilities as well as identifying all plant effluents such that a detailed determination of permitability by permitting agencies and/or actual permit appli- cations could be prepared. M. Preliminary Engineering and Final Economic Assessment Estimated Cost: $200,000 Completion of the above tasks, followed by sufficient additional engineering work to produce a refined engineering cost estimate would be necessary before a developer would be in a position to make a go or no-go decision regarding an initial peat processing facility in Alaska. Upon completion of the research and development work, final design engineering can begin. It is expected that the engineer- ing and procurement activities will require a 16-month duration. This work will include development of process flow diagrams, heat and material balances, plot plans and equipment arrange- ments, piping and instrument diagrams, environmental engineer- ing, and equipment engineering. Detailed design engineering will produce civil, mechanical, piping, electrical, instrument, structural and architectural engineering drawings. 346 These drawing and project specifications will establish the quantities of material and equipment required for the project. Procurement of all materials and equipment will be based on the quantities established from the engineering drawings. N. Construction and Start-up of Work The construction activities are estimated to require twen- ty-four (24) months to complete. The construction effort is identified by the following major tasks: Barge Fabrication Harvesting Tug Boat Fabrication Excavation Barge Equipment Erection Crane Barge Equipment Erection Storage and Dock ARea On-Site Work Oo: 079 0:0 06 Note to John - You may want to add some words about the type of construction forces used in the estimate -- direct hire, sub-contract, etc., whatever the estimate has been based on. The start-up and check-out activities are estimated to require four (4) months to prepare the facility for initial operations. These activities will include: ° Electrical & instrument check-out on a unit-by-unit basis ° Piping system check-out ° Equipment check-out ° Hydrostatic testing on a unit-by-unit basis ° Flush and clean of systems ° Instrument calibration ° Utility systems check-out ° Chemical and feedstock charging ° Start-up on a unit-by-unit basis 347 As part of this task, an appropriate recommended schedule for the project is presented. This schedule consists of three parts. The first is the overall schedule for the project. This shows the duration of the recommended research and development work, the duration of the engineering activities, the major components of the construction portion of the work and the post-construction or start-up and check-out activities. The second schedule is the research and development schedule showing estimated durations and inter-relationship between various activities. The third and final schedule is a more comprehen- sive construction schedule. This schedule estimates the time required for purchasing as well as fabrication, erection and installation on a unit and commodity basis. 348 XV. Conclusions and Recommendations eae eee HOE NGATLONS A. Phase I Conclusions During Phase I alternative plant sites, end-products, harvesting and transport systems, and dewatering and processing technologies were considered. Table VII-1 describes the major alternatives considered during Phase I of the report. Section VII discusses the methodology utilized in selecting the project concept deemed most appropriate for Phase II indepth analysis. In the course of evaluating the alternatives presented in Table VII-1, the following conclusions were reached: 1. Siting a. Only two areas were located in South Cen- tral Alaska which could support a peat process- ing plant with an annual output of 500,000 dry tons of peat production per year. b. Peat resources in the Susitna Basin (near Trapper Lake) were slightly larger and perhaps marginally lower in ash content than those at the Kenai site finally selected (between Kenai and Cohoe). The Kenai site was preferable, however, because it permitted utilization of a pre-manufactured modular plant and because it eliminated inland transportation costs for export fuel produced at the facility. c. Peats in the South Central Alaska area are generally higher in ash content than other Alaskan and U. S. peat resources. Additional resource testing at the site selected might determine that South Central Alaskan peat is not 349 suitable for the process proposed thus neces- sitating either an alternative Alaskan project site or additional peat processing to remove ash (which may not prove economically viable). End-products a. Use of peat for electrical power generation via either a conventional steam boiler cycle or peat gasification with gas turbine combine cycle is comparable in cost to coal fired generation at equal fuel costs. Projected peat fuel costs, however, are higher than existing or projected Alaskan coal costs. The production of ammonia or methanol from peat would be comparable in costs to production of these materials from coal at comparable plant scale and feedstock costs. Peat resource limitations necessitate smaller more costly plant scale and as mentioned previ- ously resulting in higher feedstock costs making peat ammonia or peat methanol in south central Alaska non-competitive versus coal. There is some question whether coal methanol in south central Alaska can be competitive with methanol produced with excess or shut-in Alaskan natural gas. be High volatile peat briquettes cannot be produced at a price which is competitive with utility and industrial Alaskan steam coal. High volatile peat briquettes, being lower in sulfur and more convenient in fuel form, might command some market premium over utility steam coal for in-state and export space heating applications where it would compete primarily with stoker coal and cord wood. The low volatile 350 "smokeless" peat charcoal granules with co-product fuel oil can command a market premium over utility steam coal sufficient to compensate for the extra processing costs involved in their production. Peat harvesting and transportation systems a. Traditional field dried peat is expensive to produce under Alaskan climatic conditions and requires specialized combustion facilities, not justifiable by any fuel cost savings over coal or wood in large or small scale use. bs Suction dredging and pipeline transport of dredged peat slurry is the lowest cost method excavating and transporting peat in large scale. c. Mechanical (clamshell) excavation from floating barges is slightly more expensive than suction dredging but would provide superior quality control and less water dilution and thus be preferable, at least initially. Dewatering Technologies a. Low severity peat wet carbonization prior to filtration and efficient two-stage drying was the most attractive peat dewatering alternative investigated. The process is more commercially developed than alternatives available, is equal to or lower in costs at the one-half million ton per year plant scale alternative and produces a much higher co-product oil yield upon subsequent devolatilization then the alternative processes evaluated. 351 + Plant Scales and Project Concepts a. The most advantageous project concept identifying utilizing commercially developed technology, consists of producing 500,000 tons per year of dehydrated peat via wet carbonization and subsequently devolatilizing this material thus producing 262,000 tons per year of semi-coke (anthracite substitute) plus 107,000 tons per year of co-product fuel oil (residual fuel oils substitute) ina pre-constructed modular process plant built ina Korean shipyard and transported to a Tidewater Alaskan site. B. Phase II Conclusions 1. Products and Markets Table XI-1 indicates the potential market size for the two products proposed for manufacture from the plant selected. The Korean anthracite market represents the largest target market segment iden- tified. Production of "smokeless" space heating briquettes for Alaskan and Pacific Northwest markets are potentially more lucrative but will take signifi- cant time and effort to develop. A major portion of initial plant output might also be saleable to U. S. and Canadian charcoal briquette producers. mi Economics Projected economic return for an initial peat processing facility utilizing the best commercially demonstrated technology currently available are probably too low to justify private investment given 352 the market risks associated with current energy markets and the technological risks of any first-of-a-kind plant. 3. Plant Concept In modularized pre-constructed barge mounted plant built in a Korean shipyard would be somewhat cheaper than the site constructed plant utilized in our base case economic analysis. This plant concept would be preferable for the Kenai site and probably essential for other Alaskan Tidewater sites having little or no infra-structure for constructing process plants. It may be possible to negotiate long term purchase contracts for peat semi-coke with the Korean government (which buys all of their import anthracite) or through a major Korean trading and ship building company such as, Hyundi or Samsung as a pre-condition for their obtaining the plant con- struction contract (Korean built plant financed with Korean fuel purchase contract). It should be noted that there are other peat resources with lower ash content in Malaysia and Indonesia which may prove more attractive to Asian markets than Alaskan. 4. Possible Economic Enhancements There are a number of factors which could have a positive influence on project economics but these enhancements would require additional technical development. a. Promising concepts include the co-production of agricultural and horticultural peat from the upper, less decomposed layers of Alaskan peat. Many of these technologies are 353 commercially practiced in the Soviet Union but not available elsewhere worldwide at this time. b. The solvent extraction of waxes, prior to or subsequent to wet carbonization might provide added plant revenue. i Ce Acid hydrolysis or alkaline dissolution of biologically active components prior to wet carbonization and subsequent bio-conversion of these compounds for the production of animal feeds, fertilizers, alcohol fuels, and chemicals may be viable. dis Enhanced production and recovery of wet carbonization by-products such as acidic acid, methanol, acetone, and furfural is possible. C. Recommendations Recommendations resulting from the proposed project suggest three basic Alaskan peat policy alternatives: hs Provide financial incentives to stimulate early peat utilization using the commercially developed technologies identified in this analysis. Ba Support technology development efforts aimed at improving the economic prospects for Alaskan peat utilization. 36 Do nothing and hope that others will advance peat processing technologies and commercialize these technologies elsewhere, such that they might be used in Alaska. 354 It is not appropriate for the project team to deter- mine which of these basic policy directions is most appro- priate for Alaska at this time. More detailed recommenda- tions in each of these areas are described below. Le Promote commercialization of peat technology as currently developed. a. Financial Incentives There are many possible forms of state financial incentives which could enhance the economic return for an initial peat utilization project utilizing the proposed technology or other alternative peat technologies. Types of incentives could include: Ps Tax free government backed industrial revenue bonds. 2% Tax free project backed industrial revenue bonds. 3. Loan guarantees (not tax-exempt bonds). 4. Low interest state financing. 5% Market price supports. 6. State procurement of fuels produced for use in state facilities and/or dis- tribution through state or federal fuel assistance programs. 7. Extra investment tax credits. 355 Government backed low interest financing and some form of state procurement and/or market price supports would appear to be the most attractive incentives to commercialization of an initial peat processing facilities. It would be advisable to avoid forms of financing which do not place the major burden of cost over-runs, completion risks, technological and production risks on the developer. The developer should have sufficient real equity at risk to ensure project success. b. Market Development Assistance Developers are unlikely to commit major funds in structuring a project involving new technology, new products, and new markets. Potential customers must receive and test pilot samples before they would be willing to execute firm purchase contracts. In the case of the proposed project, Dia Han Coal Company of Korea would want to receive and test samples of peat char to determine its suitability for existing Korean anthracite briquette plants. Likewise the co-product oil should be fired in Alaskan or Pacific Northwest industrial boilers to deter- mine any problems in substituting this fuel for the residual oil currently utilized. Briquette samples might also be produced for consumer test and evaluation in the Alaskan and Pacific North- west domestic heating markets. Finally samples of peat char should be sent to U. S. and Canadian charcoal briquette manufactures to determine the suitability of this product as a substitute for wood charcoal in grille briquette use. 356 or Resource Identification Peat resources in the south central Alaska area are marginal with respect to both quality and quantity for the proposed project or any other major scale peat development project. The state should focus additional resource assess- ment work on those peat deposits exceeding 5,000 acres, containing over 5 million bone dry tons of peat with ash contents less than 15% located within 15 miles of a suitable Tidewater location where a barged mounted plant might be located. Improving the Economic Prospects through Addi- tional Technological Development Numerous technologies were identified in the course of the analysis which were not deemed to be commercially developed at this time, but nevertheless hold significant commercial promise if successfully developed. Major areas for additional research and development which we think would greatly enhance peat commercialization prospects in Alaska are identified and described below: a. Separation and use of Fibrous Peat for Agricultural Use Agricultural and horticultural quality peats tend to be younger and more fibrous than those peats typically used for fuel. The pro- cess recommended for Phase II of this project, however, can utilize either or both factions. Because agricultural peats command approximately twice the market value per dry ton as fuel, however, it might be worthwhile to screen 357 fibrous material from more decomposed material and to evaluate agricultural quality and market value of this screened material. Screened fibrous material can also be utilized for a number of specialty products including ammoniated peat (a granular mixture of peat and ammonia fertilizer), pre-fertilized seed and turf mats, insulation board for construction, wood pulp supplement for cardboard and corrugat- ed medium, and molded and shaped peat products such as dissolvable flower posts for horti- cultural use. Wet harvesting may still prove more cost effective for Alaska horticultural peat produc- tion than dry harvesting. Western Peat Moss Company in Vancouver, British Columbia uses a wet harvesting barge and screening plant to separate the fibrous peat from the more de- composed fine peat. This operation has been commercially successful inspite of the fact that the fine fuel grade peat has been discarded, the mechanical presses utilized do not achieve optimum dryness, and expensive natural gas is utilized to provide additional drying prior to shipment of horticultural peat. Most of the fibrous agricultural/ horticultural peat in south central Alaska is found in the upper four feet peat depth. It is recommended that tests be performed utilizing the Sulzer Bell press or an alternative high performance press on both the screened fibrous faction of typical Alaskan peats and the total unscreened faction of Alaskan peat to determine the feasibility of co-producing fibrous and 358 non-fibrous factions. While wet carbonization improves the dewaterability of Alaskan peats it cannot be used for agricultural or horticultural peat production because the thermal treatment destroys peat water and nutrient retaining properties. b. Wax Extraction and Market Evaluation Many peats harvested in the Soviet Union are utilized for wax extraction. Wax extraction is typically performed on those peats containing 5-15% wax yield. Peats containing high wax content are dried to approximately 20% moisture either in the field or by pressing and thermally drying. The peat is then autoclaved with a solvent (usually gasoline) and the solvent recovered via distillation. Many of the extracted waxes command high market value as furniture and automotive polishes. The dewaxed peat is subsequently used for fuel or further processed for metallurgical coke or water treatment carbon. It is not known whether wet carbonization increase or decrease wax yields. Cc. Alaskan Support of DOE Peat Wet Carbonization Enhancement Program The U. S. Department of Energy is funding a modest program to improve the economic performance of the wet carbonization process. Program objectives include increasing throughput, improving dewatering properties, process yields and by-product production and recovery via alteration of processing conditions. It is conceivable that a combination of process optimization and commercial experience can improve wet carbonization processing costs by as much as 25%. 359 It is also possible that the production and recovery of by-products from cooking vessel vent gas and filtrate water of certain wet carbonization by-products could enchance plant revenues by up to 25% on certain peats. It appears that this wet carbonization work will be done at the Institute of Gas Technology Peat Wet Carbonization Process Re- search Unit. It might be appropriate for the State of Alaska to consider some co-funding of this work under the pre-condition that Alaskan peat is utilized for a major portion of the research efforts. d. Higher Value Uses for Alaskan Peat Semi-Coke In the base case design it is assumed that the semi-coke produced will be sold as an anthracite substitute. If the feed peat contains 12-15% ash content the end-product will contain approximately 30% ash. It is conceivable that this product could command higher value as water treatment carbon for either potable or waste-water treatment. It is possible that the high ash content or physical prop- erties might not permit this use but the very high market value of granular activated carbon justifies at least a limited evaluation of this prospect. It might be necessary to raise the devolatilization temperature and add steam to the devolatilization furnace to maximize the activity of the granular carbon produced. e. Bio-Conversion of Alaskan Peat Perhaps peat's most distinctive feature differ- entiating it from coal is its organic nature. These properties make peat a candidate for biological 360 conversion into foods, fuels, and industrial chemi- cals. Biological conversion of peat into cattle and poultry feed is being commercially practiced in the Soviet Union where over 1 million tons of a high protein yeast are produced annually from acid-hydrolized peat. The un-hydrolized residue is then utilized as fuel. The hydrolized solution could also be utilized for the production of alcohol or other chemicals. Section XIII compares the cost of peat with wood and grain as potential feedstock for ethanol production. Even after making very conserva- tive assumptions with respect to alcohol yield from peat, it represents one-third the cost of grain feedstock and less than half the cost of wood feedstock. The peat wet carbonization process used in the base case is essentially a peat cooking plant incor- porating wet harvesting, slurry preparation, heat exchange, cooking, and filtration. In the base case, peat is cooked without any chemicals. Under these conditions, approximately 11% of the feed peat solids is dissolved into the filtrate and slightly less than 2% of the feed peat is converted into potentially recoverable chemicals vented from the cooking vessel. Slightly more than half of the energy value of the dissolved material is recovered via biological con- version of this material to methane in the anaerobic section of the water treatment plant. If the peat had been cooked under either acid or alkaline con- ditions a much greater portion of the feed peat would have dissolved into the filtrate producing inexpen- sive high concentration fermentable liquors. Many feel that bio-conversion technologies assisted by newly developed genetic engineering 361 methods will become one of the major areas of explo- sive technological growth in the coming decades. This can only occur if inexpensive inorganic feedstocks are utilized for such bio-conversion processes. Peat appears to be the cheapest organic feedstock available. A relatively high ash content of many Alaskan peats may limit .their utility in certain areas. Ash content should not, however, be an impediment to biological conversion processes with Alaskan peats. 362 Glossary of Technical Terms Relating to Peat Peat - Partially decomposed vegetation matter accumulating as surface deposits in wet areas. Also sometimes described as "young coal". Horticultural Grade Peat - Peat with high fibre content and high water absorption and retention capacity. Fuel Grade Peat - Peat having some specified maximum ash content and some minimum deposit depth and area. U. S. - DOE definition is less than 25% ash, over 5 ft. depth and more than 60 acres per square mile. Peat Dewatering Processes - Methods of removing part or all of the large water content found in peat either at the point of extraction or in a process plant. Semi-Coke - A partially devolatilized (coked) fuel which is smokeless when burned and similar to charcoal or anthracite. Coking Oil - Oil condensed from volatiles produced by coking or thermal devolatilization. In-Situ Moisture - Moisture content of peat in the ground, typically 85-95% water. Percent Moisture - Weight of moisture divided by weight of moisture plus dry solids. Suction Dredging - A high volume excavation method utilizing a floating excavator and a submerged suction pipe with a rotating cutter which loosens material to be removed. Dredged slurry is pumped via pipeline to the point of discharge. Continuous Belt Press - A device for removing water from wet fibrous or fine granular materials consisting one or more upper and lower endless belts. The feed material to be dewatered is distributed between the upper and lower belt and passed through one or more pairs of pressure rolls to express water in the feed material. Peat De-ashing Methods - Means of reducing the content of inorganic mineral matter found in raw or processed peat for purposes of increasing fuel quality. Char Granules - Small, Uniform shaped cylinder granules from processed peat approximately 2 millimeters in diameter with combustion properties similar to wood charcoal or anthracite coal. Wet Carbonization - Cooking a peat/water slurry to improved it's filterability. Multiple Effect Evaporation - A high efficiency drying method . where water vapor removed from the material to be dried in one ‘stage is condensed to recover its latent heat which is re-used to provide additional evaporation in a second drying stage at lower temperature (and pressure).