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HomeMy WebLinkAboutCoal To Methanol Feasibilty Study Beluga Methanol Project 1981Alaska Energy Authority LIBRARY COPY Cook Inlet Region, Inc. COA 050 AUTHOR Coal to Methanol Fegerbills _Strdy~ Be luge 3 Tarne nbd COA | 050 Property of State of Alaska ; Senate Advisory Council COAL TO METHANOL FEASIBILITY STUDY BELUGA METHANOL PROJECT Ae cote rs ey ‘9, DRIFT RIVER Oln TERMINAL / Belugo Loke BELUGA = ee CAPPS ; AREA < a cake ra Area vad BELUGA POWER STN. COOK MWLET PIPELINE PUMPING STATION ~* Pipeline Offshore’, Pla tforms, N\ BW PENKIsK! B™e-o1l REFINERIES LNG PLANT FERTILIZER PLANT A KENAI * © arn MAP 130° 1 SEWARDY X\ Sot! TTIER \ He BELUGA METHANOL PROJECT COOK INLET REGION, INC. AND PLACER AMEX INC. Mr. Stephen J. Michelsen Contracting Officer U. S. Department of Energy Office of Procurement Operations Forrestal Building 1000 Independence Avenue, S. W. Washington, D. C. 20585 RE: The Beluga Methanol Project DOE Grant DE-FGO1-80RA-50299 Dear Mr. Michelsen: Final Report In accordance with the reporting requirements of the grant, attached is one (1) copy of our Final Report, which consists of the following six (6) volumes: Executive Review Volume I : Technical--Coal Reserve, Mining, and Reclamation Volume II : Technical--Coal-to-Methanol Plant Volume III : Geotechnical, Site Evaluation, Railroad, Dock, Bus System, Infrastructure, and Product Transportation Volume IV : Environmental, Site Evaluation, Socioeconomic, Health, and Safety Volume V : Commercial, Capital Costs, Economic Analysis, Marketing, and Trade-Off Studies To complete the grant requirements, we are transmitting one (1) complete Final Report to Mr. Robert L. Gall of the DOE. In addition, we are transmitting to Mr. Gall, at his request, six (6) additional complete Final Reports for placement in reading rooms. Very truly yours, COOK INLET REGION, INC., AND PLACER AMEX INC. zune Cole E. McFarland . Project Director CC: Mr. Robert L. Gall--w/Attachment U. S. Department of Energy CEF:ss Morgantown Energy Technology Center P. 0. Box 880 Attachment Morgantown, West Virginia 26505 .BELUGA METHANOL PROJECT COOK INLET REGION, INC. AND PLACER AMEX INC. Mr. Stephen J. Michelsen Contracting Officer U.S. Department of Energy Office of Procurement Operations Forrestal Building 1000 Independence Avenue, S.W. Washington, D.C. 20585 RE: The Beluga Methanol Project DOE Grant DE-FG0O1-80RA-50299 Final Report Dear Mr. Michelsen: Cook Inlet Region, Inc. (CIRI) and Placer Amex Inc. (Placer) intend to de- velop a coal-to-methanol plant utilizing Winkler gasifiers and the ICI meth- anol synthesis process. The plant is to be constructed in the vicinity of ‘substantial coal reserves in the Beluga district on the west side of Cook Inlet, approximately 60 miles from Anchorage, Alaska. These low-sulfur, high-volatile, sub-bituminous coal reserves will be used to produce fuel grade methanol at a rate of 54,000 barrels per day. CIRI and Placer have completed a year-long analysis of the economic, envi- ronmental, and technical feasibility of this project. The results are sum- marized in succeeding sections. Detailed results are presented in separate volumes. However, the most significant findings can be abstracted as follows: “ 1. It is technically feasible to construct a 7,500 ton/day plant using commercially proven equipment and process technologies. The only de- parture from existing commercial applications incorporated in the de- sign is the use of higher pressure (4-atmosphere) gasifiers. However, this modification is supported by extensive analysis, pilot operating tests, and commercial operation in a related technology. 2. The final design includes one 10-atmosphere coal gasifier test unit. If, prior to ordering components of the plant, tests performed with gasifiers at 10-atmosphere pressure verify anticipated results, a total of four (4) gasifiers for 10-atmosphere operation will be installed rather than eight (8) gasification trains. Net capital cost reduction is estimated at $100MM, and synthesis gas production cost is expected to be reduced as a result of improved efficiency. The use of gasifiers at 10 atmospheres could, thereby, reduce unit costs of the product by about $10/ton of methanol. ‘ee Mr. Stephen J. Michelsen Page 3. 9 e The baseline environmental study indicates that air, water, and ecolog- ical impacts can be kept within state and federal regulatory limits. Mine reclamation and other restoration activities will be aided by favorable seasonable growing conditions. The impact on the life-style of the Tyonek Native Village may be substantial. Phase Two of the project will include development of an area-wide plan to address these cultural concerns. All basic resource inputs, including land, water, and coal, are avail- able. CIRI and Placer jointly control more than 500 million tons of coal reserves. Sufficient land and water are available from CIRI and public lands. The availability of construction labor will depend upon the timing of major Alaskan development projects. However, many of the larger projects may be delayed indefinitely; and sufficiently skilled labor should be obtainable. The project design also incorporates modu- larization techniques to reduce onsite labor needs. There appears to be more than sufficient markets for the planned metha- nol production. Several large, West Coast utilities have expressed strong interest in an assured supply of methanol. The use of methanol for motor vehicle fuel, either neat or as gasoline blend, is receiving strong interest, particularly in California. It is anticipated that by-product C02 will be sold locally for use in enhanced crude oi] re- covery. Marketability will be affected by federal and state fuel use and air quality regulations, as well as delivered price. The total cost of the synthetic fuel complex, including the process plant, infrastructure, and employee facilities, and the two coal mines is estimated at $2.3 billion (1981). The accompanying financial analysis shows a strong likelihood that the project will achieve positive cash flows. However, project returns re- sulting from the methanol prices used may not offer sufficient incen- tive to private investors due to the risks involved in a project of this magnitude. The proposed product transportation system utilizing existing pipeline and tanker facilities is technically, economically, and environmentally acceptable. Based upon the results of this feasibility study, CIRI and Placer have de- veloped an overall work plan and schedule for the construction and opera- tional phases of the Beluga Coal-to-Methanol Project. The object of the next phase is to advance the project to the point where a production decision can be made. Mr. Stephen J. Michelsen Page 3 Specific tasks to be accomplished during this phase include the preparation of an Environmental Impact Report, acquisition of major regulatory permits, preparation of a “definitive” cost estimate, development of an infrastruc- ture plan, confirmation of marketability, and development of a financial plan. Progress on these tasks and the overall objective will depend upon the re- sults of discussions with additional equity investors, as well as with the U.S. Synthetic Fuels Corporation. A tangible commitment by the U.S. Synthe- tic Fuels Corporation in support of national energy goals will be necessary to make the project a reality. Very truly yours, COOK INLET REGION, INC. AND PLACER AMEX INC. Cole E. McFarland Project Director CEF/jn-1997Z Attachment cc: Mr. Robert L. Gall - w/attachment U.S. Department of Energy Morgantown Energy Technology Center P.0. Box 880 Morgantown, West Virginia 26505 n - = uu - 2 Qo Oo mw ° EXECUTIVE REVIEW S "TABLE OF CONTENTS Subject Page Nos. Technical Viability 1 to 6 Management Plan for Phase II 7 to. 32 Objectives 7 to 9 Management Organization 9 to 16 Summary of Phase II Work Plan 17 to 23 Overall Timetable and Schedule 23 to 30 Land Acquisition Plan 31 to 32 Summary of Phase I Feasibility Study 33 to 89 Introduction 33 to 41 Coal Mining 42 to 43 Geotechnical Overview 43 to 46 Coal-to-Methanol Plant 46 to 52 Railroad 52 to 53 Dock . 54 Camp, Airstrip, Town, and Bus System 54 to 57 Product Transportation and Handling 57 to 61 Environmental 61 to 64 Site Selection 64 to 66 Marketing 66 to 70 Capital Costs 70 to 75 Financial 76 to 81 Construction 82 Trade-Off Studies 82 to 89 Appendices Appendix A--Detailed Work Plan for Phase II A-1 to A-32 Appendix B--Overall Table of Contents, Volumes I B-1 to B-43 through V, and Task Cross Reference Appendix C--Overall Plot Plan and Flow Diagrams C-1 G TECHNICAL VIABILITY There are no major questions unanswered as to the technical viability of the Beluga Coal-to-Methanol Project. The plant detailed in the Phase I study uses only commercially avail- able technologies which have been fully demonstrated and proven. The major unit selections provide an integrated process plant with maximum reliability. The design incorporates multiple trains, the sparing of critical items, and the use of equipment within presently available size ranges. Particular attention has been given to optimal integra- tion of all utilities and heat recovery systems and the control of en- vironmental impacts in accordance with regulatory requirements. Ad- herence to these conditions results in an efficient configuration for the 7,500 tons per day, methanol producing complex. The overall design concept is similar to those of well established coal-based chemical plants, differing only to the extent of incorpor- ating demonstrated innovations and refinements which have since become available. There is but one departure from commercial technology -- a minor one, which raises the pressure of the Winkler gasifier about 2.5 atmospheres of pressure, absolute (ATA). The detail design minimizes risk while taking full advantage of the present state-of-the-art with respect to commercial operability, efficiency and safety. Brief descriptions of the technologies, by major plant sections, are given below. 0 Coal Handling and Preparation All coal handling and preparation equipment is standard coal in- dustry hardware. Final specification of crushing and drying equipment is deferred pending results of large-scale testing of Beluga coals. Presently available data has been used in a con- servative manner to specify equipment for study purposes. 1090R 1 - 0 Gasification The introduction to Volume II explains in detail the selection of fluid bed gasification using Winkler technology. In summary, for the Beluga project, this technology is judged the best choice for the following reasons: - Excellent suitability to feedstock. - Optimum raw gas for methanol production. - Contaminants in effluent streams can be economically treated to environmentally acceptable levels with conventional technology. - Best combination of capital, operating and maintenance economy. - Longest history of successful commercial operation in the production of synthesis gas for chemicals. The gasification system designed for the Beluga plant is a third generation Winkler system, incorporating the refinements of — nearly 60 years of development. (Laboratory and pilot plant testing from 1922 to 1926, and commercial operating experience with continuing technical development and refinements’ since 1926.) A list of Winkler fluid bed gasification plants is given in Table 1. ° 10 Atmosphere Gasification One of the eight trains in the gasification section has been de- signed for 10-ATA operation, a further advancement of the Winkler system. Demonstration of the process and mechanical advantages of this unit will permit future plant expansion with a reduced number of gasification trains for a given volume of syngas pro- duction. The components in the design of the 10-ATA train will also be capable of operation at 4-ATA. G& 1090 2 Latest Advances in Gasification Technology Vigorous research and development effort is yielding further im- provements in coal conversion technologies. Many advanced pilot systems are showing promise. Members of the Beluga Project have been closely monitoring the progress of this R&D work, often with direct participation. As the Beluga Project develops through detail design and procure- ment, certain demonstration plants of advanced designs could be brought into successful operation. Final gasification system selections could be influenced by the work in such pioneer units. Methanol Production All process design and components in the methanol synthesis, dis- tillation and purge gas reforming units are based on fully demon- strated technology. The ICI (Imperial Chemical Industries) low pressure process for methanol synthesis will be used. The basic ICI low-pressure catalyst has been in use since 1967. A partial list of ICI low-pressure methanol plants now in opera- tion or under construction is given in Table 2. A single distillation column per train will be used. The steam reformer will be of a standard design and will contain 312 re- former tubes. Reformer furnaces with as many as 600 tubes have been designed and built. Air Separation Plants Air separation units of the type.and size selected for Beluga are identical with units now operating in the Sasol facility in South Africa. The individual modules are capable of producing 2500 1090R 3 a tons per day of.99.5% oxygen. A recent survey of large air sepa- ti: &; ration plants, involving several hundred plant years of opera- tion, indicates an average plant on-stream factor of 98%. 0 Steam and Power Generation The primary steam and power production facility for this plant will be a pulverized coal/char fired system with a steam turbine generation system. The utilization of char blended with raw coal has been demonstrated in Winkler facilities in Merseburg and Wesseling in Germany, Neyveli in India, and Kutahya in Turkey. The ratio of raw coal to char for the Beluga Project does not ex- ceed the demonstrated successful combustion experience. The possible application of fluidized bed combustion (FBC) will be explored prior to the final selection of boilers for this sec- tion. Proven FBC, if applicable to the Beluga complex, could of- fer significant thermal efficiency and economic advantages. For flow sheet of process trains, see Coal-to-Methanol Plant sec- tion, Summary of the Phase I Feasibility Study. Cm 1090R 4 PLANT NUMBER PLANT 1 10 iB 12 13 14 15 16 17 18 19 20 21 22 TABLE | WINKLER COAL AND COKE FLUID BED GASIFICATION PLANTS BASF, Ludwigshaven, West Germany Leuna—Werke, Merseburg, East Germany BRABAG, Bohlen, East Germany BRABAG, Magdeburg, East Germany Yahagi, Japan Dai-Nihonyinzo-Hiryo, Japan Nippon Tar, Japan Toyo Koatsu, Japan Fushun, Mandschukuo, Japan BRABAG, Zeitz, East Germany Treibstoffwerke, Brux (now Most), Czechoslovakia Salawad, USSR Baschkirien, USSR Dimitroffgrad, Bulgaria Stara Zagora, Bulgaria Fabrika Azotnih, Jendinjenja, Gorazde Yugoslavia Calvo Sotelo |, Puertollano, Spain Calvo Sotelo II UKW, Wesseling I, West Germany UKW, Wesseling I, West Germany Azot Sanayii TAS, Kutahya, Turkey Neyveli Lignite Corp. India {As of September, 1981) CAPACITY PER . GASIFIER NUMBER OPERATING PRODUCT 1000 SCFH GASIFIERS DATES Pilot Plant 75 1 1925-58 LBTU Fuel Gas & 3,730 5 1926-70 Synthesis Gas for 2,240 MeOH and NH3 Hydrogen 1,120 3 1938—Present . Hydrogen 1,230 3 1938-45 Ammonia 330 1 1937-60 Ammonia 520 2 1937-59 Ammonia 520 2 1937-60 Ammonia 750 2 1938-69 Syn. Gas for F.T.Fuel 750 4 1939—? Hydrogen * 850 3 {941—Present Hydrogen 1,120 5 1943-72 1,200 2 1954-73 Medium BTU Gas 860 v ?—Present Medium BTU Gas 860 4 ?—Present Medium BTU Gas 860 4 1951—Present Medium BTU Gas 1,120 5 1962—Present Ammonia 260 1 1952-Present Ammonia 350 1 1956-70 Ammonia 350 1 1959-70 Synthesis Gas for 630 1 1958-67 MeOH and NH3 Synthesis Gas for 630 1 1962-67 MeOH and NH3 Ammonia 450 2 1959—Present Ammonia 785 3 1965-79 22 8 Total (Including Pilot Plant) IN OPERATION AT PRESENT a 63 Total (Including Pilot Plant) 29 IN OPERATION AT PRESENT TABLE 2 PLANTS USING THE ICI LOW PRESSURE METHANOL PROCESS TECHNOLOGY CAPACITY STATUS/ LICENSED PLANTS LOCATION STPD ICI LICENSEE START-UP Taesung Lumber Company Korea 165 Davy McKee Onstream Georgia Pacific Corpn. USA 1200 Davy McKee Onstream Chang Chun Petrochemical Taiwan 165 Davy McKee Onstream Monsanto Company USA 1000 Chemico Onstream Nishi Nihon Japan 1100 Kellogg Onstream Dor Chemicals Middle East 165 Humphreys Onstream & Glasgow Elf Oil, Speyer W. Germany 900 Humphreys Onstream & Glasgow Celanese Corporation USA 2100 Davy McKee Onstream (Expansion 1976) Methanol Chemie Nederland Holland 1100 Davy McKee Onstream PCUK (Ugine Kuhimann) France 660 Davy McKee Onstream Metanor SA Brazil 200 Davy McKee Onstream Indiquimica, Algeciras Spain 660 Davy McKee Onstream Taesung Methanol Company Korea 1100 Davy McKee Onstream Rumanian Ministry Rumania 660 Davy McKee Onstream . China National Technical China 330 Humphreys Onstream & Glasgow National Methanol Company Libya 1100 Uhde Onstream Techmashimport, Gubaha USSR 2750 Davy McKee 1982 Techmashimport USSR 2750 Davy McKee 1982 scT Saudi Arabia 2300 Davy McKee 1983 Borden USA 2000 Davy McKee 1980 (Revamp) Aimer Arzew Algeria 330 Humphreys Onstream & Glasgow AE & Cl Modderfontein South Africa 60 Uhde Onstream Gujarat SFC India 70 Linde 1982 MSK Kidinda Yugoslavia 330 Technip 1983 cPOC Taiwan 140 Lummus 1983 Ocelot Canada 1340 Davy McKee 1983 ARCO Chemical USA | 2000 Davy McKee 1983 Au Products USA 500 Davy McKee 1982 (Revamp) Mobil R & D Corporation New Zealand. 4850 Davy McKee 1984 ICt PLANTS Billingham England 300 Onstream Billingham England 1200 Onstream PLAN FOR PHASE II pata S MANAGEMENT PLAN FOR PHASE II The management plan is designed to provide an easy transition from Phase II studies to the actual procurement, construction and start-up of operations. 1.0 1213R 1. 2. The plan consists of these five principal parts: Definition of Phase II Objectives Management Structure Detailed Work Plan for Phase II Overall Timetable and Schedule for Execution of the Project Completion of the Land Acquisition Plan PHASE II] OBJECTIVES The overall objective is to develop all study and planning elements of the project to the level which will provide a sound basis for a "go-no go" decision, and to advance detail engineering to the point of permitting award of subcontracts and placement of orders for long lead time equipment and materials. This will require completion of the following tasks: 1.1 Technical Advance all design and engineering work to the degree necessary to determine project impacts for preparation of permit applications; confirm availability of all re- quired resources; prepare appropriation type capital and operating cost estimates; and be in a position to place orders for "long-lead" subcontracts, equipment, and process-related items. 1213R 1.2 Tes 1.4 Environmental Complete environmental analyses in all areas, prepare all required Environmental Impact Statements, and apply for regulatory permits. Marketing Confirm the certainty of presently existing markets for methanol as a power generation fuel; review in depth the market potential for methanol as a motor vehicle fuel; determine market diversification in terms of geography and end use; and establish an optimum mix of price, stability and growth with appropriate attention to the national energy policy. Develop penetration of the utility market to the point of obtaining preliminary commitments, subject if and where necessary to appropriate incentives that may be required in the early years of operation. Investigate fully the sales potentials for by-product sulfur and carbon dioxide. Financial Find an equity partner or partners with ability to take full advantage of tax benefits and to supply such finan- cial support as may be required to make the operation viable. Prepare a final Financial Plan under which the "go-no go" decision may be made to proceed with the project. This plan will include the amount of support to be re- quested from the Synthetic Fuels Corporation. ag Gj ds a 2.0 2.1 1213R 1.5 Infrastructure Prepare a Beluga area development plan in conjunction with the Kenai Peninsula Borough and other area land- owners to assure conformance with Coastal Zone Manage- ment policies and to avoid undesirable environmental, socioeconomic, and health and safety impacts. 1.6 Land Acquisition Proceed with negotiations for the purchase and/or lease of lands required for the project. All agreements must be firm prior to the start of the final project phase. 1.7. Environmental Permits All major permits required for construction must be ob- tained prior to start of Phase III. MANAGEMENT STRUCTURE Phase II and future phases of the Beluga Methanol Project will be under the direction of the Overall Project Director, who will report to the Project Directorate, which consists of representatives of the project partners. This group will provide the overall project objectives and guidelines to the Overall Project Director. Organization The project organization will utilize the basic strengths of CIRI/Placer, equity partner(s), Davy McKee, and the various consultants and participants in the Phase I study. The man- agement organization is shown in the chart on Page 16. This basic organization for Phase II will be expanded below the Deputy Director level for work beyond Phase II. : eae 252 1213R This organizational approach provides for management con- tinuity in the subsequent phases of detail engineering, pro- curement, construction, and operation of the coal-to-methanol plant, including marketing and finance. The responsibilities of the management team members are de- fined below. Overall Project Director The Overall Project Director, with the help of his immediate staff, will be completely responsible to the Project Direc- torate for organizing, directing, planning, and controlling the execution of Phase II work. His immediate staff will consist of: Project Director--Operations Project Director--Community Relations Project Director--Marketing and Finance Staff Consultants Deputy Project Director--Controls ooo Oo Oo eae Project Director--Operations Will be responsible to the Overall Project Director for all engineering, procurement, and construction of the project. This role is typically filled by the project management contractor. fhe Project Director--Operations will be fully re- sponsible for organizing, directing, and managing the execution of the design, engineering, procure- ment, and construction of the project. He will ad- minister and supervise all requirements of the agreement entered into for the work and will be the primary contact with the Overall Project Director 10 1213R on all matters. He will be fully responsible for the performance of the work in a timely and effi- cient manner within established schedules and bud- gets and will control the assignment of manpower required for the project from the onset of the work. He will draw upon the most qualified spe- cialists and expertise in the Davy McKee organi- zation for the performance of all phases of the work. Zaicell'e | Deputy Project Director--Engineering and Procurement Will report to the Project Director-- Operations and will be responsible for the performance of all process engineer- ing and design engineering for the proj- ect. Further, he is directly responsible for the procurement activities of buying, expediting, inspection, and delivery to the module yard and construction site. It will be his duty to see that his areas of responsibility comply with project re- quirements and that engineering and pro- curement are carried out in an efficient manner, economically and on schedule. He will direct and coordinate a team of Engineering Managers who will be assigned specific areas of responsiblity. During Phase II, this would include finalizing the mine and plant design basis, environ- mental and permitting work, and identify and be prepared to place orders upon com- mencement of the next phase for long-lead equipment and subcontract services. : | Leal 1213R 2.2.1.2 A Procurement Manager, reporting to the Deputy Director, will direct the activi- ties of buyers, expeditors, inspection, and traffic personnel and will assemble equipment and materials from all areas to insure the best possible unit prices for the volume of equipment/materials re- quired. In Phase II, procurement activities will be directed at long-lead equipment and materials and provide support for the Appropriation Cost Estimate. Deputy Project Director--Construction The Deputy Project Director--Construc- tion, reporting to the Project Director-- Operations, will be responsible for all construction-related tasks, including the module yard, transportation from the module yard to the site, and all site construction. He will manage and coor- dinate the individual Area Construction Managers and the team of specialists necessary to fulfill the construction re- quirements of the project. Specialty areas include labor relations (module yard and Alaska), camp operation, construction subcontracts, module trans- portation, and operation of an Anchorage, Alaska, construction operations office. 12 £ 1213R 2262 During Phase II, he will be involved in defining and scheduling all aspects of construction required for this project. This definition will be such that the ac- curacy of the Appropriation Cost Estimate is achieved. Further, he will fix the basis for the actual construction work by holding discussions with labor, fully es- tablishing the module yard and site camp requirements, and be in a position to place long-lead critical subcontracts at the start of Phase IIi. 2.2.1.3 Deputy Project Director--Environmental The Deputy Project Director--Env ironmen- tal will be responsible for completing the environmental analysis of all project elements iam order to apply for all regu- latory permits and to submit an Environ- mental Impact Statement. An additional duty will be to develop and pursue all major permits which are required to start construction. Project Director--Community Relations The Project Director--Community Relations will re- port directly to the Overall Project Director and will be responsible for the key functions of all Alaskan public relations and land acquisitions. He will be heavily involved in the Beluga Area devel- opment plan along with Alaskan authorities. He and his staff will work closely in matters of permit- ting with the Deputy Project Director--Environmen- tal. They will be located in Anchorage, but will 13 8a 1213R ZaceS maintain intimate contact will all other project groups. This intimate contact will provide local input to the project groups and assure completion of the Project Director--Community Relations' func- tions in a totally satisfactory manner. Project Director--Marketing and Finance The Project Director--Finance and Marketing will be responsible for planning and directing the imple- mentation of the marketing plan and the financial plan. He will work very closely with the Overall Project Director and the Project Directorate to as- sure marketing and financial feasibility of the project. 2.2.3.1 Deputy Project Director--Marketing The Deputy Project Director--Marketing will be responsible for marketing the product and by-products on a worldwide basis to the proper consumers at the most favorable pricing structure, as developed in conjunction with the financial ad- visors. 2.2.3.2 Deputy Project Director--r inance The Deputy Project Director--Finance will be responsible for establishing budgets, maintaining a proper cash flow, preparing financial reports and projections, and all aspects of relationships with the financial community. . 14 2.3 2.4 1213R Staff Consultants The Staff Consultants report to and provide the Overall Project Director with the specialized expertise required to meet the goals and objectives of the project with respect to managerial, technical, marketing, and financial matters. Their advisory roles are independent of the Project Direc- tors, but they would assist the Project Directors as required for special tasks to aid the Overall Project Director. The advisory nature of their work allows for continuous updating of project goals and objectives without diluting the prime directives of the Project Directors. Deputy Project Director--Controls Reporting directly to the Overall Project Director, the Deputy Project Director--Controls will supervise and coordi- nate the estimating, cost control, scheduling, accounting, and reporting efforts required for the project. His initial responsibilities will include the development of detailed schedules and cost standards for the Pnase II work. He will then monitor the actual progress and the cost against these standards, his prime objective being to identify problems early and report such to the Project Director. When problems are defined, he will work with the Project Director to imple- ment corrective actions and will then follow up to assess the overall impact of the problem and correction action on proj- ect cost and schedule. During Phase II, estimating activity will center around the development of an Appropriation Cost Estimate and trade-off studies required to finalize the design basis. Cost Engineering and Scheduling will monitor the performance of Phase II work. Scheduling will develop detailed plans for the subsequent phases of the project, working with all appro- priate participants. 15 OPERATIONS DEPUTY PROJ: [‘ Biaceooail DEPUTY PROJECT DEPUTY PROJECT ENGINEERING & DIRECTOR DIRECTOR PROCUREMENT i CONSTRUCTION ENVIRONMENTAL PROJECT DIRECTOR PROJECT DIRECTORATE SPONSORS OVERALL PROJECT DIRECTOR STAFF CONSULTANTS : PROJECT PROJECT i S TECHNICAL DIRECTOR DIRECTOR e@ MARKETING COMMUNITY MARKETING & @ FINANCIAL RELATIONS FINANCE @ MANAGEMENT @ PROCESS DESIGN @ ENGINEERING @ PURCHASING @ TESTING @ INSPECTION @ QUALITY ASSURANCE @ SHIPPING LOGISTICS @ PERMITS e “EIS” STATEMENT @ BASE LINE DATA @ TESTING & MONITORING @ CONSTRUCTION GEOTECHNICAL STUDIES , @ MODULE YARD e OCEAN SHIPMENTS MODULE YARD TO SITE @ LABOR RELATIONS @ CAMP OPERATION @ SUBCONTRACTS @ PUBLIC RELATIONS @ BELUGA DEVELOPMENT PLAN 9 LAND ACQUISITION @ ANCHORAGE | OFFICE | e LEGAL | DEPUTY PROJECT DIRECTOR MARKETING @ UTILITY @ OTHER @ TRANSPORTATION e@ LETTERS OF INTENT FOR PRODUCT @ MOTOR FUELS DEPUTY PROJECT DEPUTY PROJECT DIRECTOR DIRECTOR FINANCE CONTROLS @ CASH FLOW @ ESTIMATING @ FINANCIAL @ SCHEDULING . RT @ COST CONTROL @ ACCOUNTING PURCHASES S GAOGRESE REPORTS © COMPUTER UTILIZATION @ PROCEDURES @ INTERFACE DOCUMENTS COOK INLET REGIO! PLACER AMEX INC, BELUGA METHANOL PROJECT COAL—TO—METHANOL PLANT FUNCTIONAL ORGANIZATION CHART SEPTEMBER, 1981 oz 3.0 3.1 3.2 1213R SUMMARY WORK PLAN FOR PHASE II The work plan for Phase II is outlined in considerable detail by subject and project area in Appendix A of this Executive Review. The plan is summarized as follows: Coal Mining The Phase II work progran will further confirm .the technical and economic feasibility of mining coal from the Chuitna and/or Capps Area(s) of the Beluga coal field for use as raw material feedstock to the methanol plant. A secondary use will be as fuel for direct burning in onsite steam boilers producing process steam and electric power. In-depth resource and hydrological drilling programs refined or supplemented by using test pit hydrological data will form the basis for detailed design and environmental provisions. Considerable additional work will be done on the mining and reclamation plans and the coal haulage system. All environmental monitoring and design considerations neces- sary for surface mining permits will be identified and re- solved. Permits will be obtained prior to the start of Phase TET. Procurement will be sufficiently advanced to permit placement of orders for long-lead equipment and machinery early on in Phase III. Geotechnical Significant geotechnical investigations and structural de- signs will be required prior to final design. These in- clude: detailed groundwater evaluations, a study of avail- able construction materials, determination of till and rock 7 G Nn 3.3 3.4 1213R characteristics, study of the seismicity and tidal wave po- tential of the site, study of the hydrology of the area, and a review of the past history of major landslides and earth- quakes in the site area. Railroad--Roadway--Dock Phase II work will include additional field surveys, geotech- nical terrain analyses, test drilling, surface hydrology -studies, laboratory analyses, and establishment of foundation requirements. Environmental, health, safety, and socio- economic requirements will be defined and included in all de- sign bases. Railroad equipment, operation, and maintenance will be re- viewed in-depth with updated information. A firm of railroad specialists will participate in development of the final de- sign requirements prior to start of engineering. A marine architect and barge-tug operators will provide input necessary for the design and operational requirements of the barge dock. Field testing along the shoreline will be per- formed in the dock area. Coal-to-Methanol Plant Coal properties will be defined in further detail based on additional drilling, sample analysis, and tests early in Phase II. A final design basis will be established using up- dated coal properties, environmental and permitting require- ments, a comprehensive water resource survey, and further in- vestigations on utility sources such as electric power, oxy- gen and natural gas. 18 3.5 3.6 1213R The design of the plant from coal receiving through process- ing, methanol storage, and transport will be optimized. En- gineering will progress sufficiently to allow award of sub- contracts for engineering and procurement of long-delivery equipment and materials early in Phase III. Required early construction-related subcontracts (module yard, barge and transporters, etc.) will also be developed and evaluated to the point where placement of orders can proceed early in Phase III. Engineering subcontracts will consist of the dock, barge unloading area, railroad, bridges, oxygen plant, sulfur plant, acid gas removal system, buildings, and other major specialty civil and structural items. Product Transportation Shipping alternatives, including the use of the Cook Inlet Pipe Line facilities, will be further evaluated to determine if substantial costs savings are possible. Conceptual de- signs will be developed and comparative cost estimates pre- pared for a permanent off-shore tanker loading facility and shoreline berthing facilities. Shoreline berthing possibili- ties will be studied at several locations, including use of the construction, operation, and maintenance dock studied in Phase I. The shoreline berthing facilities noted will take into consideration the tide changes and mud flats. Environmental The environmental effort early in Phase I1 will encompass monitoring and data gathering required for permit applica- tion. Major approvals and construction permits will be pur- sued and obtained. 19 Sef 3.8 3.9 1213R The major areas of permitting include, but are not limited to, Prevention of Significant Deterioration (PSD), National Pollutant Discharge Elimination System (NPDES), Department of the Army Corps of Engineers, Office of Surface Mining, State Anadromous Fish Permits, and the Environmental Impact State- ment. Site Selection The final site selection will be accomplished early in Phase II. At this point it appears that the primary factor in the site location will be the specific soils conditions. The more favorable climate and shorter period of snow cover favor the Cook Inlet site over the higher elevations at the mine areas. Broad areas within the preliminary site area (near Cook Inlet) have been found to have greater depths of organic overburden than anticipated, and relocation of the plant in a northwesterly direction would avoid these areas and reduce capital costs. Further engineering soils exploration will precede the final site selection decision. Camp, Airstrip, Town, and Bus System Site selection will be confirmed and finalized, based on de- tailed physical, land use and socioeconomic trends in the area. Campsite and town site size and cost will be adjusted according to the manpower and schedule needs of the project. The camp development subcontract package will be prepared, issued for inquiry, and awarded at the start of Phase III. Appropriation Estimate The Phase II plan will increase the level of estimating ac- tivity by placing emphasis on equipment and material costs, additional engineering development, construction planning, 20 3.10 3.11 1213R and refined cost evaluations of the barge-mounted plant mod- ules. This will result in an Appropriation Estimate of high- er accuracy and confidence than the Capital Cost Estimate submitted in Phase I. Construction During Pnase II, a more detailed construction program will be developed, including assessment of the manpower split between site work and the modular shop. A subcontract plan will be developed, the project craft man- power requirement will be compared with availability, and a plan for recruiting the necessary labor will be developed. A project labor agreement will be drafted in conjunction with the various labor organizations. Marketing Work conducted prior to, and as part of, the work in Phase I has confirmed three principal West Coast markets for methanol (power generation, vehicle fuel, and the chemical industry). In Phase II, the following additional tasks will be pursued to insure the marketability of methanol: 1) Exploration of potential uses of methanol will be expanded to include industrial (as distinct from utility) power generation applications. 2) Although several West Coast utilities have express- ed tentative interest, a more intense effort will be focused on four specific potential customers in the public utilities area. 21 352 1213R 3) Environmental concerns in market areas related to large-scale distribution and use will be identified and studied to insure marketability. 4) Specific methanol performance data and operating parameters will be established to ascertain the practicality of use. 5) The potential sale of carbon dioxide and nitrogen for enhanced oi] recovery will be pursued. A determination will be made of market diversification in terms of geography and end use that will provide the best mix of price, growth, and stability, with appropriate attention to national energy policy. Finally, the second phase study will include market development to the point where prelimin- ary commitments can be negotiated. Financial A time profile of committed funds will be developed from the total capital requirement Appropriation Estimate. The treat- ment of assets under the Accelerated Cost Recovery System will also be quantified. Financial advisors will develop the capitalization structure of the project to be patterned to the cash flow dynamics to provide suitable coverage of financial obligations. Invest- ment tax incentives will be utilized to their fullest to ben- efit the capital structure. The financial advisors will also draft the general terms of covenants required in the financing instruments. The recep- tiveness of the financial community will be assessed early in the course of this task. 22 4.0 4.1 1213R The extent of support required of, and agreed to by, the Syn- thetic Fuels Corporation will be identified from the cash flow analyses. Their participation, along with equity spon- sors from the private sector, will form the nucleus for fi- nancing the project. OVERALL TIMETABLE AND SCHEDULE Strategic Plan and Schedule The bar chart schedule in this section displays the overall strategic plan and schedule for execution of the project. The plan will be implemented by sequentially developing more detailed plans and schedules at the tactical and operational levels. Tactical schedules (area, discipline, major work package) will be in Critical Path Method format. These schedules will provide effective time control at the project management level and provide milestones to guide planning, scheduling, and time control at the operational level. Var- jous operational schedules will be prepared in the form of bar charts and work lists. These schedules, prepared by those responsible for execution of the work, are based upon parameters established by the tactical schedules and are used to plan and control day-to-day operations. : The first task at the start of Phase II will be the develop- ment of a Tactical Plan (CPM) followéd by Operational sched- ules and control tools for all work relating to the Environ- mental Impact Statement, major permit work, financial plans, and cost estimates. Time control of this phase then begins with continuous monitoring and periodic updating of these plans and schedules. 23 4.2 1213R The next major task will be a further review of the overall strategic plan and schedule. These activities will then be included, at the strategic level of detail, in the previously developed CPM schedule, which will then serve as the overall plan and schedule for the project until tactical level sched- ules can be developed for detail engineering, procurement, and construction. As information becomes available (Process and Instrumentation Diagrams, Plot Plans, etc.) near the end of this phase, de- velopment of the tactical schedules for detail engineering, procurement, and construction will begin. Project Timetable Phase IIA: The current project schedule projects the plant to be fully operational in 1988. This is based on the assumption that front-end work, in addition to that required for permits, will be performed during Phase IIA. One of the main areas in which work must be performed during the permitting process is the construction support period shown on the attached schedule. The main critical path to achieving tne construction support target is the regulatory permitting process and associated engineering, which culminates in the receipt of necessary permits by the First Quarter of 1984 prior to the start of construction. This is followed by completion of critical in- frastructure construction work and the start of onsites con- struction in the spring of 1985. The key project decision point, critical subcontracts and equipment purchase order awards occur in the Third Quarter of 1983. This is after 24 1213R completion of: the Appropriation Cost Estimate and financial plan, but before all major permits are obtained. There is a risk involved with this approach; therefore, purchase orders will be placed on a limited basis, with cancellation charges established at key milestones. These main critical items set the overall schedule for the project. Program support re- quires some overlapping of the various project phases. Spe- cifically, the start of engineering to develop critical in- frastructure subcontract packages must begin in the Third Quarter of 1982, which is prior to completion of the Appro- priation Cost Estimate. Award of these subcontracts is re- quired prior to receipt of major permits in early 1984. Phase IIB: The Phase IIB start of front-end and detailed engineering, along with procurement of major equipment, must also commence prior to permit receipt. This is required to support the construction of modules and the 28-month field construction program for onsite facilities. Phase III: Finally, Phase III, camp development, is also scheduled to start in the field before receipt of all major permits. 4.2.1 Phase I Phase I, the feasibility study, was completed in October, 1981. 4.2.2 Phase IIA - Environmental Impact Statement This phase begins after completion of Phase I and is defined as completion of the Environmental Im- pact Statement and major permit work. As shown in 25 ee) 1213R 4.2.3 4.2.4 Table 3, Environmental Program, Phase IIA engineer- ing for environmental work, permitting, and the fi- nancial plan, is scheduled for completion during the First Quarter of 1984. Following completion of the Appropriation Estimate in the First Quarter of 1983, a decision will be made on committing the re- maining Phase IIA work dependent on the permitting progress and completion of the financial plan. Phase IIA - Construction Support In order to support plant start-up in the Third Quarter of 1987, some critical subcontracts and purchase orders must be awarded prior to the com- pletion of Phase IIA. The first critical milestone occurs during the Third Quarter of 1982, prior to completion of the Appropriation Estimate. At this time, the engi- neering necessary to develop the critical subcon- tract packages and evaluation of major equipment is scheduled to begin. The next critical mitestones are the Fourth Quarter, 1983, and the First Quarter, 1984, award of the camp development, rail- road, dock, site preparation, concrete (aggregate and batch plants), module yards, transportation, and buildings subcontracts. The schedule for this Phase is based on the need to begin construction in the spring of 1984. Phase IIB - Front-End Engineering Although purchase orders will not be issued prior to the Third Quarter, 1983, front-end design must 26 =2 1213R 4.2.5 begin during the Fourth Quarter of 1982 in order to support the scheduled project completion. Detailed engineer ing and procurement (quotations and bid analysis) will commence three and six months later so that purchase orders for critical equipment can be awarded to support construction of modules. Based upon favorable permitting progress, purchase orders will be placed on a limited basis, with can- cellation charges established. Detailed engineer- ing is scheduled for 30 months, with procurement completing nine months later. The schedule for this phase is based on the critical requirements of the modular construction program. Phase IIT Phase III, construction, begins after receipt of permits and completion of infrastructure work in the spring of 1984. Construction of modules begins in the First Quarter of 1984, with completion in November, 1986, being a critical milestone. With completion of critical infrastructure work .{rail- road, dock, site preparation, and concrete batch and aggregate plants) by the spring of 1985, con- struction of onsite facilities can commence. Com- pletion of these units will be sequenced based upon start-up requirements, with mechanical completion of the last unit scheduled for July 1, 1987. The overall project then culminates with a six-month start-up program scheduled for the final two quarters of 1987, resulting in a fully operational plant in January, 1988. 27 MEF Task TABLE 3 ENVIRONMENTAL PROGRAM MONTH 1 IS OCTOBER 1981 ]. . PSD Permit: Prepare monitoring plan and get agency approval Required engineering design available Monitoring period Finalize permit application EPA review of application Probable submittal of supplementary permit application information Receive EPA determination of completeness EPA process and issue permit 2. NPDES Permit: Engineering data available Prepare permit application Submit permit application (plant and mine) EPA determination that mine NSPS will require an EIS Prepare DEIS and FEIS Environmental (fisheries and hydrology mainly) field studies necessary for (e) EPA issue NPDES permit with State certification 3. Environmental Impact Statement, EIS: (See No. 2 NPDES) 1213R 28 Month 1-4 10 5 -16 7 18-19 19 20 21-29 0 1 2 3 4 -29 4 -29 3h 4 -29 4. Corps of Engineers 404 and Section 10 Permit: a. Engineering data available b. Submit permit application c. COE process and issue permit (the COE may choose to wait until after FEIS to issue permit) 5. State Anadromous Fish Permit: a. Necessary additional fisheries field work (same effort as 2 (f) under NPDES) b. Permit application (could be anywhere up to month 24) Co Permit issued 6. Surface Mining Permit: (There is no state program at present) a. Necessary hydrology and soils field work b. Prepare permit application Co Issue permit Abbreviations PSD - Prevention of Significant Deterioration NPDES - National Pollutant Discharge Elimination System EPA - Environmental Protection Agency NSPS - New Source Performance Standard EIS - Environmental Impact Statement DEIS - Draft Environmental Impact Statement FEIS - Final Environmental Impact Statement COE - Corps of Engineers 1213R 29 0 2 3-8 4 -29 24 29 1 -24 22-25 29 Davy NicKee ENGINEERS ANO CONSTRUCTORS PHASE I PRELIMINARY FEASIBILITY STUDY 1931 PRELIMINARY PROJECT SCHEDULE 982 1983 1984 SEPTEMBER 1, 1981 1987, | 1988 | 1989 1}2)3];4}1]2 oe > n w FRONT END ENGINEERING-PERMITS PHASE ITA ENGINEERING SUPPORT-PERMITS & ESTIMATE ENVIRONMENTAL & MAJCh PERMITS F APPROPRIATIONS COST ESTIMATE | CORPORATE FINANCE ENGINEERING SUPPORT-SUBCONTRACTS. RAILROAD SUBCONTRACTS CAMP DEVELOPMENT SUBCONTRACT DOCK SUBCONTRACTS f SITE-PREP_SUBCONTRACTS CONCRETE SUB (AGGREGATE & BATCH PLANTS) i BUILDINGS SUBCONTRACTS CONSTRUCTION SUPPORT | FRONT END ENGINEERING DETAILED ENGINEERING PROCUREMENT SECONDARY PERMITS PHASE IIB |_MODULE YARD & TRANSPORTATION SUBCONTRACTS all —_—|—+ —H CAMP DEVELOPMENT RAILROAD CONSTRUCTION DOCK CONSTRUCTION SITE PREPARATION CONCRETE CONSTRUCTION BUILDING CONSTRUCTION MODULE CONSTRUCTION | FIELD CONSTRUCTION MINE SUPPORT CONSTRUCTION MINE DEVELOPMENT POWER TIE-IN TO BELUGA START-UP_& OPERATION COOK INLET REGION, INC, AND PLACER AMEX, INC. PHASE IIT BELUGA METHANOL PROJECT - COAL TO METHANOL FEASIBILITY STUDY i] B DOE GRANT DE-FGO1-80RA 50299 CONTRACT NO. PC-5531 5.0 1213R LAND ACQUISITION WORK PLAN The pattern of land ownership in the project area is rela- tively simple and should pose no barrier to the assemblage of land parcels required for the transportation routes, staging areas, temporary construction facilities and operating facil- ities, such as the coal to methanol conversion plant complex, airfield and employee housing units. With the exception of a few very small isolated parcels, land in the general project area is held in large blocks by only four owners, as noted below: 1. State of Alaska - 200,000 acres 2. Cook Inlet Region Inc. - 320,000 acres 3. Tyonek Village - 40,000 acres 4. Kenai Peninsula Borough - 6,000 acres The total acreage to be acquired by the project, broken down by facility and current owner, is shown below with approxi- mate owner areas. Facility Area Project Owners (Acres) Plant Use 1,000 CIRI (25%) Kenai Borough (50%) : State of Alaska (25%) Townsite 1,000 State of Alaska Airstrip 150 State of Alaska Railroad and Roadway 1,100 CIRI (20%) Kenai Borough (10%) State of Alaska (70%) Barge Loading/Unloading etZS: State of Alaska Total 3020 31 1213R Approximately 450 acres will be acquired from CIRI, 250 for plant site and 200 for the railroad and service road. The remainder will be acquired from the public landowners. Land values in the area vary substantially, depending upon loca- tion and physical characteristics. CIRI has cited an approx- imate sale price of $3,000 per acre, or $1.41 million for the total CIRI land required. Alternatively, this land may be leased at a rate of $250 - $300 per acre per year. The terms for the acquisition of State and Borough lands are generally unknown at this time. However, previous public land leases in similar situations usually specify lease rates corresponding to 2-6% of the market value per year. Data on land sales for comparable lands (generally inferior to CIRI lands) are very limited. However, discussions with a number of knowledgeable people indicate an approximate market value of $1,500 per acre. Using a 5% of market value figure, the total yearly cost of acquiring State and Borough lands will be approximately $214,000. Placer Amex Inc. currently has an industrial land lease ap- plication before the State of Alaska. -This application covers approximately 3,000 acres in the vicinity of the pro- posed plant site location. The State of Alaska has also stipulated a "floating" public easement across its lands, linking the Capps and Chuitna West mine sites with the plant and temporary dock sites. Owners of the lands remaining to be acquired have expressed interest in entering into negotia- tions for purchase or lease at the appropriate time. 32 SUMMARY OF THE PHASE I FEASIBILITY STUDY INTRODUCTION Cook Inlet Region, Inc. (CIRI) and Placer Amex Inc. (PLACER) propose to develop a commercial scale coal-to-methanol operation located close to coal deposits in Kenai Peninsula Borough, Alaska, on the west side of Cook Inlet. The plan of the sponsors provides for participation in the venture by additional equity partners and financial assistance from the U.S. Synthetic Fuels Corporation. The overall concept consists of the utilization of low-sulfur, high- volatile sub-bituminous coal from Alaska's Beluga coal field as feed for a process plant which will produce fuel grade methanol at the rate of 54,000 barrels per day, and distribution of the product to existing and potential markets on the U.S. West Coast. The Beluga Area is estimated to contain over one billion tons of coal recoverable by surface mining methods. For the purposes of the feasi- bility study, two areas, containing approximately 500 million tons of recoverable, low-sulfur coal, have been planned for surface mining. These two deposits of sub-bituminous coal are located in the Beluga Area on State and CIRI coal lands held under lease by Placer Amex Inc. An extremely low average sulfur content of less than 0.2% and a location adjacent to deep coastal waters make the Beluga Area unique among known world coal deposits. A total of 8.5 million tons of coal annually is proposed from two mines, each mine with sufficient reserves to produce 4.25 million tons per year for more than 30 years, the period covered by the current study. 1187R 33 C) Both are surface mines. Capps would use shovels and trucks plus drag- lines to remove overburden. Chuitna West would use shovels and trucks, excavating in benches down to a maximum depth of about 600 feet. Mining plans and estimates are based upon current geologic data plus assumptions regarding certain items, such as continuity of coal seams, slope stability, other geotechnical factors anda governmental regula- tions. Additional data is required to support a more comprehensive study and for final mine design. The process plant will be located on the west side of Cook Inlet at a point approximately 60 miles southwest of Anchorage and 25 miles southeast of the coal mines. An adequate volume of process and cool- ing water is available from subsurface and surface water supplies in the near vicinity, and the processing complex will be in close proxin- ity to an existing oi] pipeline and marine tanker transport system which, with planned terminal modifications and provisions for storage, can be used for loading and shipment of the methanol product to the markets. The project encompasses development of the mines; construction of a railroad from mines to plant; a construction camp, town site, air strip, and related infrastructure; construction of the process plant proper; construction of a barge dock; and installation of all required processing and ancillary facilities, auxiliaries, and utilities. The principal processes involved in the production of methanol from coal are coal gasification, syngas upgrading and methanol synthesis. For these processing stages, it is intended to use only commercially proven technology and equipment with demonstrated potential for fur- ther improvement in efficiency; namely, Winkler fluid-bed gasifiers, Allied Chemical's “Selexol" process for acid gas removal, Air Re- source's "Lo-Cat" process for sulfur recovery, and the ICI low-pres- sure process for methanol synthesis. The selection of these processes 1187R 34 and the guidelines established for design of the plant are ained at maximizing the possibility for future increases in production capacity with minimum additional capital investment. The methanol complex is planned to come onstream in late 1987 and to achieve its rated capacity in 1988. This feasibility study, which constitutes Phase I of the project, has been carried out by CIRI/PLACER pursuant to the terms of Department of Energy Grant DE-FGO1-80RA-50299. The objectives of the study are to resolve questions of plant design; establish estimates of capital costs, operating costs, and working capital requirements; survey fuel prices and markets; assess the marketability of the proposed methanol product; and confirm the economic viability of the project. These tasks are to be done at sufficient levels of accuracy to provide a basis for decision with respect to proceeding with the further phases of the project. The work to be done is divided into nine principal tasks as detailed in the April 25, 1980, CIRI/PLACER proposal to the Department of Energy. These are listed under the heading "Task Cross Reference," which indicates those parts of this report in which each specification is fulfilled. To provide the range of specialized expertise required to address the above tasks with authority, a study team was organized and responsi- bilities were assigned to the team members as follows: MAIN PARTICIPANTS CIRI/PLACER (Project Sponsor) Overall responsibility for adminis- tration and coordination of the study; direct responsibility for all marketing and financial aspects. 1187R 35 DAVY McKEE CORPORATION (Principal Process & Project Engineer) PAUL WEIR COMPANY (Mining Engineer) DOWL ENGINEERING/CCC/HOK (Environmental ) CIRI/HOLMES AND NARVER (Engineers) BANKERS TRUST COMPANY (Financial Consultant) LEHMAN BROTHERS KUHN LOEB (Financial Consultant) 1187R Responsibility for the marketing and transportation, including pipeline studies from plant to ship loading terminal, marine transportation, and terminal handling. Management responsibility for studies of the mine, railroad, process plant onsites and offsites, pipeline and terminal modifications, townsite and airstrip; direct responsibility for conceptual design, engineering de- sign, trade-off studies, and capital cost estimates for the _ railroad, process plant onsites and process plant offsites and environmental, health and safety, and socioeconomic assessments. Evaluate quality and quantity of coal resources; prepare capital and oper- ating cost estimates for mining and reclamation; determine minesite fa- cility requirements, mine power re- quirements, coal haulage, and ash disposal. Preparation of the overall environ- mentai and permitting plan for the project, including an environmental baseline monitoring program and an environmental assessment report. Provide conceptual design, engineer- ing, trade-off studies, and capital cost estimates for the townsite, construction camp and airstrip. Together with Lehman Brothers Kuhn Loeb, investigate possible financing sources for project execution. De- velop relevant data and analyze the economic viability of the project. Prepare the financial plan. In conjunction with Bankers Trust Company, investigate possible fi- nancing sources for project execu- tion. Develop relevant data and an- alyze the economic viability of the project. 36 CB GS and WILLIAH D. BAKER CO. (Estimating Specialist) BOOZ, ALLEN, AND HAMILTON (Marketing Consultant) COOK INLET PIPE LINE CO. (Operator Pipeline Co.) DR. P. N. D'ELISCU (Environment) R. A. FISK AND ASSOCIATES, LTD. (Railroad Consultant) GREEN CONSTRUCTION COMPANY (Construction Consultant) 1187R CONSULTANTS Review of mine facilities and capital cost estimates. Provide market research data, primar- ily for the potential use of metha- nol as motor vehicle fuels (blends and neat), and make projections of expected prices of fuels which are, or could be, competitive with metha- nol on the West Coast for electric power generation. The survey of West Coast utilities for potential use of methanol was principally performed by Placer Amex Inc. Confirm the technical feasibility of and provide a tariff for utilizing the existing Cook Inlet Pipeline for transport of both crude oil and methanol, taking into account the conceptual engineering design, trade-off studies ana modifications required to permit use of this pipe~ line and terminal for transporting, storing, and loading methanol. Provide assistance as required by CIRI/Placer with respect to biologi- cal. and environmental impacts of methanol handling, pipeline trans- portation, storage, and ship loading in Cook Inlet. This includes ma- rine, freshwater, and _ terrestrial habitats. Analyses, evaluations, and reporting concerning routing and construction of the railroad. Provide installa- tion and operating costs. Collaboration with R. A. Fisk and Associates, Ltd., in providing data for estimating the cost of grading and constructing the selected rail- road right-of-way. 37 G KLOHN-LEONOFF, LTD. (Geotechnical) ‘ C. PRESTON LOCHER (Construction Consultant) D. A. SHOCK (Consultant) DRi...6s_ A.. STOKES (Process and Marketing) Provide consulting services as re- quired in the area of mine and rec- Jamation planning, particularly with respect to geotechnical criteria for the design of pit slopes, waste dis- posal piles, and drainage and sedi- mentation pond systems. Consulting services as required con- cerning transport logistics and labor and construction methods in the Cook Inlet area. Assist CIRI/Placer on methanol prod- uct quality specification, trans- port, and handling with respect to the pipeline. Provide technical services for the market study, primarily in the areas of motor vehicle fuels (applica- tions, technical limitations, and potential quantities salable), chem- ical industry requirements, and price and economic verification. The areas of responsibility for each of the above participants is indicated in the following tabulation of Tasks 1.00 through 9.00: 1187R 38 Task -00 01 02 -03 04 +05 -00 2.0] 02 203 -04 205 2.06 wwww w -07 -00 -01 02 -03 04 05 3.06 3.07 TASK CROSS REFERENCE Title CONCEPTUAL DESIGN Mine Railroad Process Plant Onsites Process Plant Offsites Camp, Town, & Airstrip ENGINEERING DESIGN Mine Railroad Process Plant Onsites Process Plant Offsites Camp, Town, & Airstrip Overall Plant Layout Exe Pipeline Transport, Storage, Handling, and Ship Loading TRADE-OFF STUDIES Mining Operation Alternate Shipping Coal Alternates Coal Drying Alternates Gasification Alternate with Various Qualities of Coal Construction Approach Alternates Product Shipping Alternates Ash Disposal Studies Volume Ill II Il II! Lt Il II LUT cutive Review Ill <_< < <= 39 Section All Sections Railroad All Sections All Sections Camp, Town, & Airstrip All Sections Railroad Coal Preparation Methanol Synthesis and Distillation Emergency & Safety Systems Buildings and Vehicles Dust Collection Oxygen-Nitrogen-Air and Utilities Wastewater Treatment Storage Facilities Camp, Town, & Airstrip Summary of Study Product Transportation Trade-Off Studies Trade-Off Studies Trade-Off Studies Trade-Off Studies Trade-Off Studies Trade-Off Studies Trade-Off Studies Participant Paul Weir Davy McKee, Fisk, Green Davy McKee Davy McKee CIRI/H&N Paul Weir Davy McKee, Fisk, Green Davy McKee Davy McKee Davy McKee Davy McKee Davy McKee Davy McKee Davy McKee Davy McKee CIRI/H&N Davy McKee DA. Shock Paul Weir Davy McKee Davy McKee Davy McKee Davy McKee Davy McKee Davy McKee Task 3.08 3.09 3.10 4.00 4.01 4.02 4.03 4.04 5.00 5.01 5.02 6.00 6.01 6.02 6.03 6.04 Title Volume Natural Gas Alternate for v Power Generation Comparison of Cooling Water V Systems Hydrogen Sulfide Removal v CAPITAL COST ESTIMATE Obtain Vendor Costs (Included “Obtain Subcontract Costs (Included Prepare Individual Cost Estimates a) Mine I b) Railroad III c) Camp, Town, & Airstrip Ill d) Process Plant v Prepare Overall Capital Cost V Estimate MARKETING Evaluate Market Requirements Develop Marketing Methods SITE EVALUATION Site Data Collection IV Site Data Evaluation IV Applicable Construction Codes IV and Ordinances Plans for Acquiring Executive Permits & Licenses Review 40 Section Trade-Off Studies Trade-Off Studies Trade-Off Studies in 4.03) in 4.03) Tables Railroad Camp, Town, & Airstrip Capital Cost Capital Cost Marketing Marketing Site Evaluation Site Evaluation All Sections Work Plan for Phase II Participant Davy McKee Davy McKee Davy McKee Paul Weir Davy McKee, Fisk, Green CIRI/H&N Davy McKee Davy McKee, CIRI/Placer, CIRI/H&N, W.D. Baker, C.P. Locher, Fisk, Green C.A. Stokes; CIRI/Placer; Booz, Allen, & Hamilton CIRI/Placer, DOWL CIRI/Placer, DOWL, Klohn Leonoff DOWL CIRI/Placer, DOWL . ee Task 7.00 7.01 7.02 7.03 8.00 8.01 8.02 8.03 8.04 8.05 9.00 9.01 9.02 9.03 Title Volume Section Participant ECONOMIC ANALYSIS Basic Definition v Financial CIRI/Placer, ' P a . Bankers Trust, Economic Analysis V Financial alan’ Brothers Financial Plan V Financial Kuhn Loeb Executive Work Plan for Phase II Review ENVIRONMENTAL Environmental Iv Baseline Data DOWL Soc ioeconomics Iv Baseline Data P.N.D'Eliscu Site Evaluation IV Site Evaluation CIRI/Placer, OOWL Health Iv Safety and Risk DOWL Safety Iv Safety and Risk DOWL TECHNICAL SUPPORT PLANS Project Management Plan Executive Management Plan for Phase II CIRI/Placer, Review Davy McKee Project Manual (Issued at start of Phase I; to be expanded for each additional phase.) Reports (Quarterly reports issued during Phase I. Progress reports will be issued as required in future phases.) 4] © COAL MINING The total coal requirement for the project will be §,500,000 tons per year. This includes the raw material input to the methanol plant (ap- proximately 6,500,000 tons) plus tonnage to be used for generation of steam and electric power for the plant (approximately 2,000,000 tons). The coal will be produced from two deposits of subbituminous coal, designated as the Capps Area and Chuitna West Area, which are located in the Beluga Coal Field on State of Alaska and CIRI lands which are held under lease by Placer Amex Inc. The Capps and Chuitna West Mines each contain sufficient reserves to produce 4.25 million tons annually for more than 30 years, the period covered by this study. Together they contain 490,442,000 tons which is considered to be potentially recoverable. For the purposes of this study, portions of these reserves are not considered as minable. At Chuitna West there are 163,111,000 tons considered to be minable, with a waste-to-recoverable-coal ratio of 7.1 BCY (bank cubic yards) per ton. Five minable seams occur at Chuitna West, of which "M” bed is the most prominent, containing over 50 percent of the total ton- nage. Coal reserve estimates for the Chuitna Area were made with use of computer modeling methods. The Capps Mine contains an estimated 223,527,000 recoverable tons of coal, with a waste-to-coal ratio of 6.9 BCY per ton. The minable ton- nage at Capps is contained in two seams. The lower of the two (Water- fall Seam) accounts for more than 80 percent of the total reserve. Both the Waterfall and the overlying Capps seams contain clay partings that must be removed during mining. Manual modeling methods were used to prepare estimates of minable coal in the Capps Area, which were then checked by computer. 1187R 42 Additional drilling in both areas is needed to raise the confidence level of the tonnage estimates and to extend the reserve area for Chuitna West. Additional exploratory data could expand the reserve tonnage as well as confirm presently estimated reserves. Both mines will employ surface methods; no underground mining is pro- posed. Shovels and trucks plus draglines will remove overburden in the Capps Mine. In the Chuitna West Mine it is planned to use shovels and trucks, excavating in benches down to a maximum depth of about 600 feet. Wheeled scrapers will be used at both mines to remove topsoil and (at Capps) shallow overburden and partings. Overall stripping ratios are approximately the same at the two deposits; namely, 7 bank cubic yards (BCY) of overburden per recoverable short ton of coal. Mining plans and estimates are based upon current geologic data plus assumptions regarding certain geotechnical factors and governmental regulations. In the early years of mining, Capps will produce up to 7.5 million tons annually, gradually reducing to 4.25 million tons in Year Five. During that period, Chuitna West would build up from 1.0 million tons in Year One to 4.25 million tons in Year Five. During the 30-year period the total estimated mine work force ranges from 700 employees at start-up to 1,174 in Year Five. GEOTECHNICAL OVERVIEW Klohn Leonoff, a Vancouver, Canada-based geotechnical firm with exten- sive experience in assessing hydrology and soils stability on large projects located around the world, was retained to provide consulta- tion with respect to geotechnical aspects of the project. Their scope of work included the mine and waste disposal plan, railroad and access road construction, and process site selection. They were specifically requested to address the need to contain and minimize any sedimenta- tion that might adversely affect the Chuitna River Salmon Fishery. 1187R 43 a The Klohn Leonoff study provides a general geotechnical overview of the project area and comments on the design work carried out to date. It also outlines the additional necessary work to bring the project to the final design stage. This additional geotechnical work is summa- rized in the Work Plan for Phase II. Bedrock in the area is comprised of sedimentary rock of Tertiary age overlain by a discontinuous mantle ‘of glacial till varying in thick- ness from 0 to 100 feet at an estimated average depth of 30 to 40 feet. The rock types are poorly indurated, essentially non-cemented, and considered to be weak. A major fault strikes through the project area, separating the Chuitna and Capps pits. Upwards of 2,000 feet of throw is suggested on the fault, although subsequent erosion and glaciation have levelled the rock surface across the fault. In the Chuitna pit the bedrock is es- sentially level, but in the Capps pit it dips 6-12° to the north. From the highlands area of the pits the landscape falls to the south over the Nikolai escarpment, which is a moderate-to-gentle, generally stable slope. To the north, the downcutting Chuitna River has result- ed in generally unstable slopes along the entire river valley within the project area. The area is one of strong seismicity, with numerous recent shocks of Magnitude 6 or greater on the Richter scale. Seismicity will be a topic for consideration in final design. Pit slopes at the Chuitna Mine will encounter glacial till within the upper 100 feet, overlying soft sedimentary rocks. Final pit slopes, benches and intermediate slopes will need to be developed prior to final design. 1187R i 44 i Drainage and pore pressure control of pervious aquifers may require vertical pump wells from benches. Drainage ditches around the edge of the pit and along the coal seam will control surface drainage. It will be necessary to control the access of water into the waste dumps and restrict the development of pore pressures to acceptable levels. For surface waste dumps, it is recommended that compacted dikes of glacial till be constructed to confine the waste. Relatively high groundwater tables are anticipated in the Chuitna pit. Drainage will be necessary to ensure slope stability. Overburden materials in the Capps Pit and behavior of the pit slopes is similar to the conditions at Chuitna. The control of surface and groundwater at the plant and town sites will be most important. The sites appear to be in areas of dense and stable foundation conditions. Construction design practices should avoid charging and trapping groundwater in the foundations. Recent drilling in the barge dock area indicates that the foundation here consists of dense, granular material, probably glacial. till, delta gravels, or tertiary bedrock. If it is, in fact, tertiary bed- rock, the pier foundations should consist of high-capacity steel piles or equivalent. These piles should penetrate a reasonable depth, have low relative displacement, and have a high bearing capacity and resis- tance to uplift. Present plans are to carry the ash by train to the West Chuitna pit area for disposal in the pit backfill. The ash, spread in layers, can have a deleterious effect on the seismic stability of the backfill. Therefore, the ash must be incorporated into the backfill so that con- tinuous weak layers are not developed. An alternate solution would be 1187R 45 EY to store the ash, ina slurry behind containment dikes, near the meth- anol plant. A suitable location may be north of the railroad loop. The environmental aspects of such a scheme would have to be considered. COAL-TO-METHANOL PLANT Overall Plant Description The process plant is designed to be self-sufficient, importing coal feedstock and fuel coal, raw water, and small amounts of treatment chemicals. The product is 7,500 tons per day of fuel grade methanol, with the capability of producing chemical grade methanol. In the present design, carbon dioxide is vented to the atmosphere, and the only by-product recovered is a small amount of sulfur. The simplified block flow diagram (Figure 1-1) presents a graphic indication of the major processing steps and the number of operating units in each step. The processing plant and major ancillary systems include the following sections: Coal Handling and Preparation Gasification Synthesis Gas Upgrading Methanol Synthesis, Distillation and Purge Gas Reforming Air Separation o¢ G2 Oo 6 8S Steam and Power Generation The plant being designed for self-sufficiency, all necessary ancillary systems are included. 1187R 46 le ELECTRIC POWER TO PLANT ROM COAL | PRIMARY CRUSHING/SCREENING 2 TRAINS AIR SEPARATION PLANT 3 TRAINS — PURGE GAS REFORMING ONE TRAIN Lira. PROCESSING TRAINS | FIGURE 7-1 1 r per T } 1 1 y 1 ' iB 1 | } SECONDARY CRUSHING/SCREENING T 1 T T eT 5 TRAINS | } steamro ¥ ie U t my y PLANT : t q See seis oe eon on Ease ree : f -—'- COAL DRYING STEAM AND POWER GENERATION i | 2 TRAINS 3 TRAINS 7 ! t — GASIFICATION { i “iw. r 1 } r t i 1 } f Y WASTE HEAT it JoL eae a | j RECOVERY 4 PARTICULATE OXYGEN TO { ! 1 t t REMOVAL __] GASIFICATION RAW GAS COMPRESSION SHIFT ACID GAS REMOVAL MAKE-UP GAS’ COMPRESSION METHANOL SYNTHESIS METHANOL DISTILLATION PURGE GAS BECORMING ~{ METHANOL STORAGE | COAL HANDLING AND PREPARATION GASIFICATION SECTION 8 TRAINS SYNTHESIS GAS UPGRADING 3 TRAINS METHANOL SECTION 3 TRAINS PRODUCT STORAGE eel NT PRODUCT METHANOL ENGINEERS AND CONSTRUCTORS 3 TRAINS PC-5530 Davy McKee PLACER AMEX INC. COOK INLET REGION, INC. FEASIBILITY STUDY FOR ALTERNATIVE FUELS PRODUCTION 9/7/81 Designs for each of the major plant sections are briefly described as follows: Coal Handling and Preparation A blend of 70% Capps and 30% Chuitna coals, 6" x O" run-of-mine is re- ceived by rail, unloaded, stacked, and stored in 15-day capacity stor- age piles. The coal is retrieved from active storage and transferred to either the process plant or the utility boilers. Coal for the boilers is crushed to 1-1/2" x 0" in this area and transferred to the boiler area for final pulverizing. Coal to be used in gasification is crushed to 3/8" x 0"; dried to 8% moisture; and sent to active, closed storage ready for transfer to the gasification section. Gasification The gasification section consists of the gasifiers, waste heat re- covery systems, and particulate removal systems. There are eight fluid bed gasifiers operating at four (4) ATA and 2100°F. The coal is fed into the gasifiers by means of a lock hopper system. The coal feed rate is controlled by variable speed screw conveyors. During gasification, the carbon in the coal reacts with oxygen and steam to form carbon oxides, methane, and hydrogen. The oxygen is supplied by three large-tonnage air separation plants which also sup- ply nitrogen for process and utility use. The hot raw gas exits the top of the gasifiers. Larger residue solids are removed from the bottom of the gasifier, and finer particles exit with the gas. The ash exiting from the bottom is lock hoppered to atmospheric pressure and pneumatically conveyed to storage for eventual disposal to the mine. 1187R 48 aaeed The hot gases leaving the top of the gasifier enter the waste heat re- covery system (one unit for each gasifier train). These units use the heat in the gas to generate high pressure, superheated steam which is used throughout the plant. The solids entrained in the raw gas are a combustible char, approximately 30% carbon and 70% ash, which is used as fuel in the utility boilers. A portion of the char is collected at the bottom of the waste heat recovery unit, but the greater part is removed in a dry cyclone immediately following the waste heat recovery system. The dry char collected from the waste heat sections and cy- clones is conveyed to the boiler for blending with raw coal for use as fuel. Fine particles that may still be entrained in the gas are removed via a direct quench Venturi-type scrubber (one scrubber per gasifier train). The particle-laden water is sent to settling ponds where the particulate is concentrated and filtered. The water purge is sent to wastewater treatment for water recovery. The raw gas, now cooled and clean of particulate, is delivered to the synthesis gas upgrading section for production of a gas suitable for methanol synthesis. Synthesis Gas Upgrading Four (4) major gas processing steps are included in the synthesis gas upgrading section: Compression from 40 psia to 1390 psia (methanol loop pressure). Adjustment of Ho to CO ratio. Removal of all sulfur compounds and other catalyst poisons. Reduction of CO, content. oool[6°8 The synthesis gas preparation area consists of three (3) parallel trains. 1187R 49 Cwm a] The first step in this section is raw gas compression which increases the pressure of the gas from 40 psia to 770 psia. Turbine-driven centrifugal, multi-body compressors are used. From compression, the gas is saturated, preheated, and sent through a CO shift reactor, where the ratio of hydrogen to carbon monoxide is adjusted with sulfur-resistant catalyst to the required level for methanol synthesis. The reactor is a packed bed of catalyst. From COS hydrolysis, the raw gas goes to the Selexol acid gas removal unit. The purpose of this unit is to remove the sulfur components in the gas and to adjust the CO, level in the gas to the required per-. centage for methanol synthesis. This process is selective in that it removes HS from the raw gas in the first absorber, and CO, re- moval is done with a second absorber. Since the solvent is recircu- lated, it must be continually regenerated by flashing. The absorbers are packed columns in which the gas streams are contacted with the liquid solvent. The purge gas stream leaving the HjS flash system is sent to the sulfur recovery unit. The gas leaving the CO, vent is 99%+ CO, and, hence, is simply vented. Since large amounts of COg are released, consideration has been given to collection and possible sale for use in secondary re- covery of crude oil. The synthesis gas leaving the Selexol unit con- tains only trace levels of Ho and COS and has the proper ratios of CO, CO, and Hp for methanol synthesis. Guard beds are provided for removal of any trace sulfur compounds and other catalyst poisons. The final stage in this preparation area is make-up gas compression. The synthesis gas is compressed to the level required for methanol synthesis, which is 1390 psia. Turbine-driven, centrifugal type com- pressors are used. 1187R 50 Methanol Synthesis Distillation and Purge Gas Reforming The ICI low-pressure methanol process is used in this section of the plant. In order to produce 7,500 STPD of product methanol, three syn- thesis and distillation trains are required. Each train consists of one converter, one circulator, a distillation column and a set of heat recovery units. The circulator is a steam-driven, single-stage, cen- trifugal compressor. The methanol converter is a pressure vessel of single-wall design con- structed of low-alloy steel holding a single continuous bed of cata- lyst. Temperature control is achieved by injecting feed gas at appro- priate levels directly into the bed, using specially developed distri- butors. The converter exit gas is split for optimum heat recovery; one part heats the feed gas to the top of the converter, and the second heats the CO shift saturator water and reboils the distillation column. The streams are combined to heat all of the circulating gas and then cool- ed. The crude methanol is separated and let down from loop pressure to 60 psia. The non-reactive components, mainly CHy and No, in the make-up gas are purged from the synthesis loop between the separator and the point of make-up gas addition. This purge gas and the flash gas from the letdown vessels are used as feed to a steam reformer. Seventy-five (75%) percent of this gas is used as process feedstock, and 25% is utilized as fuel for the reformer furnace. The reformed gas is recom- pressed and blended with the main synthesis gas stream. A one-column-per-train distillation system is provided to produce the required product purity. The crude methanol from the letdown vessel flows to the preheater and then to the column. The reboiler heat is provided by part of the converter exit gas. The purpose of the 1187R 51 distillation column is to remove water and the light ends from the crude methanol. The column overhead is completely condensed and returned to the column as reflux. Product methanol is withdrawn three trays below the reflux tray and is cooled prior to passing to the methanol product storage tank. The distillation column bottom, which is essentially water, is cooled and pumped to the wastewater treatment area. Product storage facilities have also been provided in this section. Storage tanks for crude methanol and methanol product storage tanks are provided. Major Support Facilities o Air Separation This section produces all the oxygen required for gasification. The normal production is 7,500 STPD at 99.5% purity and 90 psia. Three (3) units are required for this capacity. Air and oxygen compressors are turbine-driven. o Steam and Power Generation The remaining import coal not used in the gasification process is used in the boiler house for steam and power generation. Coal is blended with gasification char and is used as fuel for the three boilers to generate 1,200 psig steam. This steam is used both for process requirements and power generation from turbo-generators. RAILROAD The functions of the railroad are to haul coal from the mines to the plant; ash and sludge back to the Chuitna mine; and commodities be- tween the dock, the plant, and the mines. 1187R 52 The railroad system.is a twenty-two mile long, single-track network with turnaround loops at the Capps Mine and the plant, a four-mile ex- tension to the dock, sidings at the plant and the mines, two emergency passing sidings along the main route, and yard tracks at the plant. The system includes facilities for loading and unloading coal, ash, and sludge; for servicing locomotives; and for locomotive and car re- pair. The rolling stock consists of eight 3,500 hp diesel electric locomotives, 138 coal cars, 39 ash cars, 46 sludge cars, 7 flat cars, 7 box cars, and 11 tank cars. Two coal trains make three round trips each for five days a week. Each train has three 3,500 hp locomotives, 60 coal cars, 11 ash cars, and 12 sludge cars. Forty-two coal cars are loaded at Capps; and the remaining 18 coal cars are loaded at the Chuitna mine, where 11 empty ash cars and 12 empty sludge cars are attached. The train continues downhill from the Chuitna mine to the plant, where all sixty coal cars are unloaded. On weekends, two trains make three trips each day hauling ash and sludge to the Chuitna Mine. These trains consist of two 3,500 hp lo- comotives, 11 ash cars and 12 sludge cars. Commodities are delivered by one train twice a week. This train consists of one 3,500 hp loco- motive, 3 box cars, 3 flat cars and 5 tank cars. R. A. Fisk & Associates Ltd., a Canadian consulting firm with consid- erable experience in sub-arctic railroad construction, was engaged to provide an independent estimate of construction and operating costs. Their conclusions were that the preliminary rail planning yielded rea- sonable results and that with minor adjustments the railroad alignment is acceptable. 1187R 53 DOCK A barge dock and slip with ramp and staging area is located at Granite Point on the west shore of Cook Inlet, about 3 miles from the methanol plant. The slip will accommodate 400 ft by 100 ft barges. The maximum tide deviation is some 30 feet. All barge traffic in and out is at high tide, and barges are ballasted and beached for loading and unloading. A single track extension of the railroad provides rail access between the dock, plant and all points along the main rail corridor. A 40- foot wide roadway parallel to the railroad provides for truck and module transporter traffic from dock to plant, town, camp and mines. The dock facilities will handle all incoming and outgoing barge cargos of equipment, materials, fuels and supplies. CAMP, AIRSTRIP, TOWN & BUS SYSTEM The conceptual plan provides guidance for the initial consideration and eventual development of 1) a camp for 3,000 construction workers; 2) an airstrip capable of serving Lockheed Hercules aircraft; and 3) a permanent townsite for 2,600 to 4,200 persons (mine and plant workers and their families). On reviewing available information regarding relevant socioeconomic factors, physical and land use characteristics, etc. of the project area, the following general conclusions have been drawn. Each of these is described more fully in Volume IV. 1187R 54 Ui CAMP DEVELOPMENT The most appropriate method of camp development for support of the Beluga Methanol Project is believed to be the use of prefabricated and preinstalled modules which are readily available from local contrac- tors and manufacturers in Alaska, as well as from larger camp manu- facturers in the Gulf Region of the United States. The development of a 3,000-man camp in the project area will cost ap- proximately $25,120,700 (midpoint, 1981 dollars). This preliminary estimate includes costs associated with construction mobilization, fa- cility erection and assembly, and utility development and installation. Camp operation and maintenance costs will vary with the size of the camp. For example, a 50-man camp in the project area can be operated for approximately $70 per person per day; and for a 3,000-person camp, approximately $32 per person per day. Preferably, the water source for the campsite would be the existing aquifer in the vicinity of the townsite utility complex; and the same supply could eventually be used for the permanent townsite. This ap- proach, however, will be cost-effective only if the campsite is locat- ed within 1.5 miles of the permanent townsite. AIRPORT DEVELOPMENT One general transport aircraft, the Lockheed Hercules, has proven suc- cessful in the transport of construction materials and equipment, gen- eral cargo, and passengers to remote camps and communities in Alaska. An airport capable of serving these aircraft under normal and cross- wind conditions can be developed in the project area for approximately $6,078,000. This preliminary estimate assumes the use of construction equipment already mobilized for camp development, as well as the local availability of gravel. 1187R 55 Given the limited quantity of potable water required, potable water and fire water supply at the airport can be delivered by truck on a weekly basis from the townsite water treatment and storage facility. TOWNSITE DEVELOPMENT The townsite is highly significant to the overall project in terms of its potential impact on employee morale and efficiency, work force continuity, and the general perception of the project by adjacent Cook Inlet Basin communities. Given the preliminary assumptions regarding potential financial parti- cipation by the project and other investors, the estimated levels of financial responsibility for townsite development will be as follows. Project $ 18 million Other Investors 85 million Total $103 million Basic commercial, educational, and community service facilities will be centralized in the townsite in order to gain the advantages of re~ duced construction, operation and maintenance costs, and personal con- venience to future town residents. These facilities, as well as some limited multiunit housing, will comprise the central core of the town- site, which will be financed and constructed incrementally by the project and other investors. Surrounding the central core of the townsite will be the development of single-family, townhouse, and multiunit residential neighborhoods. The neighborhoods will be devel- oped and financed by private residential builders. Individual housing units will be marketed by a local real estate sales organization. Circulation within the townsite will initially be accomplished primar- ily with use of small 20- and 45-passenger buses, as well as pedes- trian and combination bicycle/cross-country ski trails throughout the town. The use of private automobiles may eventually be permitted. 1187R 56 As in other rural Alaskan communities, school facilities will serve as community centers for community education, indoor and outdoor recre- ation, and social activities. Access to nearby recreational opportun- ities such as fishing, hiking, hunting, and camping will also be pro- vided. BUS SYSTEM A fleet of 13 diesel-powered, 47-passenger buses will be provided to transport mine workers between the town and the mines via the roadway paralleling the railroad. The facilities will include terminals at the town and at each of the mines and a garage for bus storage. The garage will be equipped for handling routine maintenance and minor repairs. Major repairs and scheduled maintenance services will be provided by the general maintenance shop at the methanol plant. PRODUCT TRANSPORTATION & HANDLING The Cook Inlet Pipe Line report (Section 6.0 in Volume III) finds that, with certain system modifications and product storage provi- sions, the existing CIPL crude oi] pipeline can handle the transporta- tion of both crude oil and methanol from Granite Point to ship loading facilities at the Drift River Terminal. The methanol plant will be located within about two miles from Granite Point, and the distance from Granite Point to Drift River Terminal is about 40 miles. Pipeline Transportation and Shiploading Methanol will be pumped from the product storage tanks at the plant to the CIPL facilities at Granite Point. The CIPL facilities currently have excess capacity, and the future throughput volume of crude oi] to be handled by this system is projected to decrease (see Figure 1-2, Page 59). Thus, there is assurance, subject only to the discovery of 1187R 57 large new oi] fields. in the area, that there will be capacity avail- able in the CIPL pipeline and shiploading system to handle the entire production of the methanol plant over the life of the project. The report prepared by the Cook Inlet Pipe Line Co. covers the engi- neering design requirements for transporting methanol through the CIPL system, additional storage at the Drift River Terminal if chemical grade methanol is produced, and loading of the methanol into tankers. Also included is a laboratory study performed for CIPL which discusses the equilibration and settling of methanol/Cook Inlet crude oil mix- tures. The CIPL work establishes the feasibility of batching methanol with crude oi] in the pipeline at a cost comparable to the present cost of transporting crude. Mr. D'Arcy Shock was retained by CIRI/Placer as a consultant to work with CIPL on the laboratory portion of their work to ascertain the compatibility of crude oi] and methanol in the pipeline. Mr. Shock has 35 years experience in research problems of this nature. As con- firmed by him, the laboratory studies indicate that the methanol will not be contaminated by such substances as heavy metals, water, or sodium, nor will there be substantial loss of oil in methanol or vice versa in the proposed concept of pipeline operation. 1187R 58 6S = pei bat x Shy at COOK INLET PIPE LINE COMPANY THROUGHPUT VOLUMES 50 n = a ee LEGEND > ACTUAL lJ Coeneceerens Po PROJECTED - a %e, =o "46 ESTIMATED THROUGHPUT ey “ey, BASED ON APC DOCKET 26 moe P-79-4, xo - oO r Oo oO ie = 20 + — 4 & a 10 0 . 1975 \977 1979 1981 1983 i985 i987 ~—.:1989 1991 199: 11-20-80 FIGURE 1-2 aan, ap Marine Transportation Methanol will be loaded aboard tankers at the existing all-year marine terminal at Drift River. As methanol is routinely transported in ships and barges, no innovative technology or equipment is required. The economies and flexibility of marine transport enhance the shore- side location of the Beluga Project with important advantages in serv- ing markets. The major population and industrial centers in each of the Pacific Coast States of California, Oregon, Washington, Hawaii and Alaska can all be served by ocean-going vessels, with many of the ports being able to berth the largest vessels that could be accommo- dated at the Drift River loading terminal, approximately 70,000 DWT. Terminalling At marine terminals in the market areas, methanol will be stored in fixed or floating roof tanks according to well established practice. In general, these tanks will be owned by customers or by established bulk terminal operators. In many cases, tanks will be converted from fuel oil service. Especially with floating roof tanks, vapor emis- sions will not be significant because the vapor pressure of methanol is relatively low (e.g., lower than for gasoline). With large, fixed- roof tanks, it is already established practice to vent the air space to atmosphere or, in sensitive air quality areas, to use catalytic fume combustors on the emitted vapors. Local Transportation to Ultimate User From the terminal to such users as utilities, transport will be by existing pipeline systems to tanks at their generating plants. In the case of smaller isolated power units, methanol will be trucked from terminal to plant as is now done in the chemical methanol industry. 1187R 60 Safety Aspects The safe handling of methanol has long been established by industry. Customers will be instructed in handling of methanol following exist- ing practices. A typical industry safety manual, included in Volume III, describes proper handling of methanol with reference to possible fire, explosion, and health hazards. ENVIRONMENTAL The objectives in this study were to define the major Environmental, Health, Safety and Socioeconomic (EHS&S) issues relevant to develop- ment of the Beluga Coal-to-Methanol Project. In performance of the study, the following five-step procedure was followed: 1. Review of all existing data and published environmental and socio- economic information relative to the project area. 2. Supplement the published information with the findings of recent and ongoing state and federal land resource projects. 3. Identify specific areas where the environmental data base is in- sufficient to make meaningful appraisals of the environmental ef- fects and permit requirements of this project. Following this identification, develop, plan and conduct specific field investi- gations in the highest priority areas. 4. Review the total project design and consider its effect on each major EHS&S$ attribute. 1187R 61 5. Summarize the conclusions and make preliminary findings regarding permit requirements and environmental factors (data gaps) perti- nent to the next stage of planning and development and general en- vironmental acceptability of the project. Briefing meetings were conducted with the various agencies at both the state and federal levels. Representatives of the U.S. Army Corps of Engineers, Alaska Department of Fish and Game, Federal Fish and Wild- life Service, Environmental Protection Agency and Department of Energy visited the project site to review the general project concept and observe the environmental field activities. The intention of this study is to present the findings in a systematic format compatible with the National Environmental Policy Act outline for an Environmental Impact Statement, that can be utilized efficient- ly in preparing an EIS, which would be the next major step in the orderly progression of project permitting. The field program was initiated in the fall of 1980. Under the gen- eral environmental program, preliminary work was undertaken to perform reconnaissance surveys of aquatic habitats and determine the presence or absence of fish in the numerous streams in the area; perform.recon- naissance surveys of big game distribution; and a reconnaissance sur- vey of the intertidal habitat near the proposed dock location. Other tasks included, but were not limited to, vegetation mapping, wetlands determination, and socioeconomics. The hydrology and geotechnical programs included drilling two test water wells and an observation well; drilling six test holes; digging thirty-two test pits; and collection of six grab samples from existing road cuts. The principal environmental issues were grouped into four categories which are discussed in general in the remainder of this summary. 1187R 62 The Beluga area, although not one of the major salmon fisheries in Alaska, has three principal drainage systems containing relatively productive fish habitats. A key environmental issue concerns the fish populations in each of these three areas; primarily, the Chuitna River system due to its immediate proximity to the Chuitna mine area. Any water discharges to this river system or development activities near it would involve particularly close scrutiny by the Alaska Departments of Fish and Game and Environmental Conservation. Several permits are required to get approval for development activities near a fishery. The methanol plant process and cooling concept requires water of ap- proximately 15,000 gpm. Present freshwater surface sources have been ruled out as insufficient, and desalination of Cook Inlet water to fill the freshwater requirement is unfeasible due to extraordinary power requirements. This study confirmed that deep groundwater is available in limited quantities, far short of anticipated needs. An infiltration gallery system in the lower reaches of Nikolai Creek ap- pears to be the most viable alternative for large volumes of fresh- water. Although wetland areas constitute major portions of the general Beluga area, the plant site avoids standing bodies of water and appears rela- tively dry. There is a fairly high water table, and the plant site supports types of vegetation representative of a wetland; for this reason, a portion of the plant site may be considered a wetland. A preliminary determination by the Corps of Engineers, however, indi- cates that plant development in this area may not require a permit. The potential sedimentation from mining activities and runoff during the construction and operation phases of the plant remain an issue relative to fisheries. The Environmental Protection Agency requires an Environmental Impact Statement for these areas. New Source Perfor- mance Standards exist for a point wastewater (drainage) discharge from a coal mine, and these discharges would require a National Pollution Discharge Elimination System (NPDES) Permit under the Clean Water Act. 1187R 63 (=) Due primarily to likely cultural changes and the changes in the pres- ent subsistence level life-style, the neighboring Village of Tyonek generally does not welcome the inevitable growth that would accompany the proposed development in the Beluga area. Special consideration must be given to reducing potential socioeconomic conflicts with vil- lage residents. The primary air pollutant emitted from the mining operation would be suspended particulates, and from the plant operation it would be the products of combustion. The Beluga area is considered virtually pris- tine, being relatively unaffected by industrial activities. Because this project would constitute an introduction of air emissions into a clean air shed, there would be air quality impacts. However, prelimi- nary computer modeling indicates emissions will be within the limits of the air quality regulations under the Clean Air Act. In conclusion, based on the present level of environmental knowledge of the project area, and with prudent construction and operation prac- tices, all required permits should be obtainable. The information gathered in the field, previous assessments of the issues in the Beluga area and the occasional involvement and comments of state and federal agency personnel during the environmental studies revealed no single environmental or permit issue which could preclude proceeding with this project. SITE SELECTION The coal reserves available to the project as feedstock are in a 450 square mile area, bounded on the north by the Beluga River, on the south by Nikolai Creek, on the west by Capps Glacier, and on the east by the shore of Cook Inlet. Eliminating those tracts and stretches of land that are clearly unavailable or unsuitable, the area remaining for selection of the plant site is reduced to about 150 square miles. 1187R 64 The procedure followed from this point on was to narrow the alterna- tives from which to make a preliminary site selection as part of this Phase I Feasibility Study. The final site selection will be made in Phase II. The alternatives in the preliminary site selection were to place the plant at or near the feedstock source (the mines); or convenient to product transportation (a tidewater plant with a dock on Cook Inlet); or in a location remote from the feedstock, but closer to markets. With these considerations in mind, four possible areas were reviewed: 1. The Vicinity of Granite Point on Cook Inlet This is an approximately ten square mile area on the shoreline be- tween Granite Point and the mouth of Nikolai Creek. Outstanding advantages here are proximity to an existing 20-inch pipeline which can transport methanol product to a tanker terminal at Drift River, and proximity to the shore, which would facilitate unload- ing and movement of large prefabricated modules, other construc- tion equipment and materials, and operating and maintenance supply shipments. The principle disadvantage here is the need for a mine-to-plant coal transportation system. 2. Capps Mine The advantage of being near the feedstock source and also near the first coal to be mined, is outweighed by many disadvantages (e.g., difficulty of transporting modules, need for a product pipeline to Cook Inlet, and higher elevation with more severe winter weather) and, therefore, was ruled out of consideration. 3. Chuitna Mine At approximately 15 miles from the shore of Cook Inlet, the advan- tages are nearness to feedstock; coal to be supplied from Capps 1187R 65 to. EN “ Field would be transported downgrade, instead of uphill as from Chuitna to Capps; and a shorter pipeline than would be required from Capps. This option is retained for further study in Phase II. 4. Remote Location To complete the examination of alternatives, the possibility of an area away from Beluga or even outside of Alaska was briefly considered and then dismissed as unfeasible. The two most likely alternatives, Granite Point and Chuitna, were then compared using evaluation criteria relevant to both. The comparison favored Granite Point, and that area is designated in this review as the base case for the Phase I Feasibility Study. MARKETING The logical market area for methanol from the Beluga Project is com- prised of the population and industrial centers of the Pacific Coast states. Anticipated markets for this methanol extend from Puget Sound, Washington, to Los Angeles and Long Beach, as well as Hawaii. Potential receivers are concentrated in areas that have, or are close to, harbors, enabling these users to benefit from the economies and flexibility of having fuel delivered by marine transport. The market for methanol as fuel for electric power generation already exists. The utilities' need for clean fuels like methanol is such that the entire projected Beluga plant production could be consumed in currently operating generating plants in California, Oregon, and Hawaii, where costly, low-sulfur petroleum fuels are mandated. The only concerns of the utilities are those of assured supply and compet- itive price; i.e., a price that does not substantially exceed that of such premium petroleum products as distillate fuels during the life of the fuel contract. 1187R 66 a wa (le In contrast, methanol as a motor vehicle fuel is already roughly com- petitive in price with the existing fuel, namely, gasoline. Methanol can be used in additives or blends with gasoline or in pure form. The potential demand arising from these uses is enormous, but has thus far been limited because vehicles capable of utililzing neat (pure) meth- anol are not yet mass-produced and because, until recently, methanol blends were severely limited by EPA regulations. Whereas utilities could contractually be committed to long-term, take-or-pay purchases, motor vehicle fuel distributors would not be as amenable to such con- tracts which are necessary to finance a large synthetic fuels venture. Although methanol cannot yet be commercially used in diesel engines, its use in place of gasoline in spark ignition engines and in place of distillate fuels in combustion turbine power generation will release “middle distillates" for other uses. This product displacement mecha- nism can thereby make available more of the jet and diesel fuels which are of greatest concern to the Department of Defense. Electric Utility Market A single 1,000 Mw plant, operating at a heat rate of 10,000 Btu/Kwh and a 60% load factor, would consume the entire production of the Beluga plant. Existing generating units of five utilities, Southern California Edison Company, Los Angeles Department of Water and Power, Portland General Electric Company, Puget Sound Power and Light Com- pany, and Hawaiian Electric Company, could already provide a market sufficient to take more than the total Beluga plant production. For reasons of air quality, premium-priced, low sulfur petroleum fuels or, when available, natural gas, have been mandated for plants of these utilities--evidence that clean fuels which are clean-burning are im- portant. Commercial-scale tests using methanol have been successfully conducted by utilities in both combustion and steam turbine units. Except for 1187R 67 substitution of burners and provision for the additional storage ca- pacity required for methanol, there are no major technological nor regulatory impediments, whether in plants built for and using other fuels or in new plants. Emissions from methanol-fueled units will not have any particulates or sulfur-containing gases, and tests in commercial units have confirmed that nitrogen oxide emissions are even lower than when the units are gas-fired. Air quality regulations already imposed in California, Oregon, and Hawaii favor the use of methanol over other fuels. As a result, methanol could enable large, existing generating facilities, currently severely limited by air quality regulations to one-half or less of their rated capacities, to be fully utilized. Motor Vehicle Fuel Market There are large potential markets for methanol in motor vehicle fuels as gasoline blends, as a replacement for gasoline, as a component of chemical additives which are themselves blended with gasoline, and as feedstock for "synthetic" gasoline. Unleaded gasoline blends of 6-8% methanol show octane enhancement and efficiency benefits, and it can be conservatively concluded that mile- age per gallon of blend in recently made automobiles is at least equal to that for unleaded gasoline alone. The market for methanol in un- leaded gasoline blends has been severely restricted by the EPA, al- though the basis of the regulation does not pertain to products of combustion. Industry has challenged these regulations, the result be- ing a recently granted waiver (October, 1981) to permit fuel suppliers to use up to 12% methanol in gasoline blends. With an 8% blend of methanol in gasoline, 25% of the five-state market would require 3,000 tons of methanol per plant operating day; and the price would be ap- proximately that for gasoline on a volume basis. 1187R 68 Fe For neat methanol, no technical limitations exist; and availability of this fuel would promote use of high-compression, lean-burning engines, superior to those now designed for gasoline. However, large-scale production of automobiles suitably equipped to utilize neat methanol has not started and will be required to provide economies in manufac- ture necessary to develop the enormous market potential. Methyl tertiary butyl ether (MTBE) and other additives are used as volume extenders and octane enhancers for gasoline. About 0.37 ton of methanol is required for each ton of MTBE. The EPA has approved amounts of MIBE up to 7% in blends, as well as the use of certain other methanol-containing additives; and approvals of higher concen- trations and additives are expected. MTBE production potential on the West Coast is equivalent to about 500 tons of methanol per day. Chemical Markets The Beluga plant could also produce chemical grade methanol for the West Coast chemical industry, primarily for manufacture of formalde- hyde. It is expected that from 1,000 to 1,500 tons/day of Beluga methanol could be sold to chemical markets at prices higher than those obtainable on the basis of fuel value. Because of freight and tariff advantages, Beluga chemical grade methanol could have a lower deliv- ered price on the West Coast than Canadian imports. Moreover, meth- anol that is currently being produced is derived from natural gas and, therefore, will sustain price increases as natural gas becomes deregu- lated in the coming years. Beluga methanol will have the advantage of not being tied to the rising price of deregulated natural gas. The list price of chemical grade methanol delivered on the West Coast is already about $0.90/gallon, about $14/million Btu. Much of the West Coast market could be obtained as a result of the savings of consider- able transport costs from the U.S. Gulf Coast. 1187R 69 ran (as Carbon Dioxide and Nitrogen Markets About 172 million cubic feet per day of carbon dioxide will be a by- product of the Beluga plant. It is expected that the entire quantity of this gas can be sold to petroleum producers in the area for use in “enhanced oi] recovery," enabling the production of oil which would otherwise remain in the ground. The four oil fields in Upper Cook Inlet are within fifteen miles of the plant; and, thus, the nearby Beluga source of high-purity carbon dioxide is an attractive commer- cial opportunity. A price of $1.00 per thousand cubic feet is believ- ed to be conservative for high-purity gas close to a location where it would be used; this would amount to revenues of $58,000,000 per year (equivalent to about $23.00 of carbon dioxide per ton of methanol pro- duced), available at little or no added cost to the plant. In addition, a much larger quantity of nitrogen will be available for sale as a by-product of the oxygen plant. Although a small portion of the nitrogen produced will be consumed in the methanol plant operaton, up to about 700 million cubic feet per day will be available for such use as pressurization in adjacent oil fields to improve recovery of petroleum. CAPITAL COST The total Project Cost Estimate is shown in Table 3. The values shown were independently generated by Davy McKee, Paul Weir Company, CIRI Holmes & Narver (H & N), and R. A. Fisk & Associates. The following descriptions outline the responsibilities of each party. o Davy McKee - responsible for generating (i.e., directly or thru subcontractors) all costs directly relat- ed to the onsite process units, onsite support facilities, and infrastructure. 1187R 70 a) ae ° CIRI H & N and R. A. Fisk & Associates provid- ed cost data for the infrastructure and rail- road, respectively, which are incorporated in the Davy McKee estimate. Paul Weir Co. - responsible for generating all costs directly related to mine support facilities and ini- tial operating equipment costs for both mine operations (i.e., CAPPS and CHUITNA) including mine development costs. The costs generated by Davy McKee were developed with use of a variety of techniques, some of which are as follows: Material take-offs were performed to establish equipment and mate- rial quantities, which, in turn, were priced using vendor quotations and in-house sources. Labor costs were generated by applying to the quantities Davy McKee Base 1.0 labor man-hour units with appropriate productivity multipliers, in order to establish total man-hours. These man- hours, both direct-hire and subcontract, were priced using wage rates developed for this project. Semi-rigorous material take-offs were performed to establish mate- rial quantities, which, in turn, were priced using in-house sources. Material costs and associated labor man-hours were factored using historical relationships from a variety of similar projects, for those areas where limited engineering information was available. The labor man-hours were then adjusted using appropriate produc- tivity multipliers and priced using wage rates developed for this project. 1187R 71 my ey! o Independent analyses were performed in order to evaluate what work would be done in the module yard and at-site. o Davy McKee personnel visited the principal module yards, naval ar- chitects, and maritime transporting companies in the Seattle, Washington, area and obtained first-hand information on construc- tion techniques, labor rates, productivity and barge costs. o Alaskan’ factors and working conditions were provided by Mr. Preston Locher, who acted as a consultant to Placer Amex Inc. The input provided by Mr. Locher included data on manpower avail- ability, productivity, labor rates and construction techniques suitable for the selected site. o An independent review of Davy McKee's estimate was conducted by Mr. W. D. Baker, acting as a consultant to Placer Amex Inc. Major categories of work were analyzed by Mr. Baker, including man-hour units and productivity, and deemed acceptable. A complete delineation of the manner in which Davy McKee generated costs for all areas will be found in Volume V under the tab titled “CAPTTAL COST.” A complete delineation of the Paul Weir estimate will be found in Volume I. 1187R 72 cs, . TABLE 3 ay oF OVERALL PROJECT CAPITAL COST August 1981 Price Levels TRS) Davy McKee Estimate - Process and Support Facilities, ‘Infrastructure, Field Indirects, Services, etc. $1,956,216 (a) Paul Weir Estimate - Premining Costs 20,467 (b) Mine Support Facilities 195,732 (b) Mine Equipment 78,066 (b,c) Contingency 29,427 (b) Sub-Total, Mines 323,692 Escalation: Process Plant 847,180 (a) Mines 200,495 Sub-Total, Escalation 1,047,675 TOTAL PROJECT COST $3,327,583 (a) Davy McKee calculated values as shown in Table 4. (b) Paul Weir calculated values as shown in Volume I. (c) Does not include continuing capital requirements after 1987. 1187R 73 TABLE 4 DETAIL OF DAVY McKEE COST ESTIMATE 8/13/81 Cost Estimate fee) SEL ONSITE PROCESS Coal Receiving, Storage and Reclaiming 45,233 Coal Preparation 22,772 Coal Dryer 61,286 Process Coal Conveying 11,437 Gasification, Waste Heat Recovery & Particulate Removal 89,873 Gas. Char & Coal Dryer Part. Removal, Settling & Filt. 24,527 Raw Gas & Make-up Gas Compression 96,885 Raw Gas Shift & Acid Removal 103,047 Sulfur Recovery Plant 15,396 Methanol Synthesis & Distillation 139,782 Reforming 48,770 Air Separation Plant 116,651 Nitrogen Plant 4,139 Dry Char & Ask System 14,777 Subtotal 794,575 ONSITE SUPPORT FACILITIES Chemical Storage 2,242 Fuel Storage 768 Product Storage 23,450 Cooling Water System 64,215 Raw Water System 4,201 Boiler Feed Water 8,387 Wastewater System 25,535 Fire Water System 8,133 Steam & Power Generation 204,898 Electrical Distribution 19,933 Interconnecting Pipeway, Utility Distribution, Relief & Flare Systems 50,590 General, Buildings, & Major Maintenance Equipment 121,474(a) Subtotal . INFRASTRUCTURE Railroad & Access Road 127,679 Dock Facilities 23,742 Townsite 17,479(b) Airstrip 6,087 Pipeline 5,310 Powerline ="i(c) Subtotal 180,257 Overtime Premium —49,250 Subtotal Direct Costs 1,559,848 1187R 74 sj) TABLE 4 (Cont.) FIELD INDIRECT COSTS At-Site F.I.C. & O/H Module Yard F.1.C. Labor Camp & Subsistence Subtotal Field Indirects Barges Professional Services Environmental Impact Royalties & Commissions Start-Up Costs Catalysts Spare Parts Insurances Taxes Total Current Day Cost Escalation Contingency TOTAL PLANT COST 109,758 29,006 90,152 228,916 (d) (e) 144,121 9,755 847,180 2,803, 396 EXCLUSIONS: Land Cost Future escalation beyond the 2nd Quarter of 1987 Interest during Construction Coal Mine Development Costs & Coal Loading Equipment Costs (included in Paul Weir estimate) Operating and Maintenance Costs for Start-up NOTES Financing Costs Sales Tax (none required) Contingency Cost of equipment, materials, and associated labor at the Drift River terminal is not included in this estimate, but is covered by the CIPL pipeline tariff (a) Values include barges, spare parts, and vendor supervision. (b) Includes CIRI/Placer portion of townsite, only. (c) Included with “Electrical Distribution" in the amount of $5,600N. (d) Included in the Direct Costs in the amount of $30,304M. (e) Included with Professional Services. (f) Estimated man-hours are included with Professional Services. (g) Included in the Direct Costs in the amount of $19,831M. (h) Included in the Direct Costs in the amount of $10,318. (i) No state sales tax is included, assuming possession takes place in Alaska. 1187R FINANCIAL The financial analysis consists of six cases. These cases present the financial impact of varying assumptions for both the project entity and the investors. The major assumptions which form the basis of the analysis are as follows: 1. Projections for the price of methanol 2. Projections for the economic environment and the potential for significant price escalation 3. Assumptions concerning the capitalization structure of the Project Case 1 The selling price for the project's methanol production is based on 110% of the current selling price of No. 2 distillate fuel. This re- lationship of methanol to distillate is adjusted so that the dollar value of higher Btu distillate and lower Btu methanol is equivalent. 100% of the methanol produced by Beluga is sold at this price. In this case, price, as well as other revenues and costs associated with the project, is held constant in 1981 dollar terms. Moreover, all the financing for the capital spending for Beluga is assumed to come from investors; the financing plan does not include an intention- al raising of long-term debt in the capital markets. Combining this set of conditions with the production schedule and capital cost estimates provided by the engineers to the project, pro- vides the means to develop the project's income statement, balance sheet, cash flow statement, and partnership returns. The revenues for Case 1 total approximately $9.2 billion, and total net profit is ap- proximately $487 million over the life of the project. The after-tax rate of return to the investor is approximately 4.9%. These calcula- 1187R 76 G tions are shown in Table 1A on page 80. For more detail, see Volume V, Financial Appendix A. Case 2 The National Energy Policy Plan (NEPP), published by the Department of Energy, forecasts that energy prices will undergo "“real-growth" in price for 20 years through the Year 2000 (see Appendix H in Volume V, Financial). This second case replaces the constant base price of $161.63 per ton and instead substitutes a price structure that re- flects NEPP's projected real growth. Using this pricing schedule, the total revenues increased from $9.2 billion (Case 1 total revenues) to approximately $15.2 billion. Total net profit before tax equals ap- proximately $6.3 billion, and the after-tax internal rate of return becomes 11.5%. The calculations for Case 2 are shown in Table 1A on page 80. For more detail, see Volume V, Financial Appendix B. Case 3 While continuing to utilize the real growth in price as forecasted by NEPP to determine the price for methanol, an additional assumption is incorporated into the third case. As in all cases, the construction period for the project is assumed to begin in 1982 and to last for more than five (5) years. Partial revenue production is expected to begin in 1987, with full revenue production starting the following year. In light of the long lead time between the beginning of con- struction and the commencement of full production, an escalation fac- tor is used to calculate the associated revenues and costs for case 3. Under this assumption, total net revenues over the life of the project equal approximately $19.6 billion, total net losses are $20.1 billion, and the after-tax rate of return is 12.0%. Due to the esca- lation of costs as well as the revenues, total net capital investment increases from $1.7 billion to $2.4 billion. See Table 1A on page 80. For more detail, see Volume V, Financial Appendix C. 1187R 77 G Case 4 As indicated in Volume V, Section 2, Marketing, methanol can be used as an additive or a blend with gasoline. Management believes that the emergence of a motor fuel market for methanol is a reasonable poten- tial alternative. Consequently, the fourth case examines the sales of 50% of the project's methanol to this market. The price for the meth- anol that is sold to the motor fuel market is calculated as 90% of the gasoline price as derived from the NEPP report. Escalation of costs and revenues are also included. Based on these assumptions, the fol- lowing financial results are obtained for Case 4. Total revenues are approximately $26.5 billion, net losses are $3.4 billion, and the after-tax rate of return is 7.8%. Selling to the motor fuel market reduces the losses significantly from $20.1 billion in the preceding case to $3.4 billion. However, since the investor derives tax bene- fits from the losses continually sustained by the project, the net after-tax cash returns for the case using 100% sales to utilities ap- pear to be better than that for this case. Consequently, the after- tax rate of return for this fourth case is lower than that for the third case; 7.8% as opposed to 12.0%. Calculations for this case are shown in Table 1A on page 80. For more detail, see Volume V, Finan- cial Appendix D. Case 5 One major change in the assumptions takes place in this case. Instead of 100% of the financing being provided by investors, 25% of the capi- tal requirements are financed by a long-term debt issue. The propor- tion of sales to utililties and to the motor fuel market remains the same, aS well as the escalation of the resulting revenues and costs. The effect of leverage leads to total net revenues equalling approxi- mately $26.5 million, total net losses equalling approximately $7.2 billion, and net after-tax rate of return equalling approximately 10.8%. The calculations are in Table 1B on page 81. For more detail, see Volume V, Financial Appendix E. 1187R 78 Case 6 The level of debt is increased for the sixth case to equal 75% of the capital requirements. Although the investor always receives positive cash returns, the level of debt grows to such a large amount to make the project inoperable. By the year 2007, borrowings necessary to cover interest expense and long-term debt repayment are over $40 bil- lion. As a consequence, the investors would not receive the positive returns as indicated in Table 1B on page 81. For more detail, see Volume V, Financial Appendix F. Volume V, Financial, provides the detail background, while this sum- mary provides only an overview. In addition, all the other elements that constitute the assumptions used for the financial calculations are presented in Volume V, Financial. Finally, the potential involvement of the government in the project is considered; and various alternative means by which such an involvement can be accomplished are explained in Volume V, Financial. 1187R 79 08 ($ millions) Selected Life of Project Statistics Total Revenues Total Net Profit Total Cash Distribution* Long-Term Borrowing** Amount Peak Borrowing Year Peak Borrowing Latest Year Borrowing Outstanding Partnership Returns*** Total Net Investment( 1982-1987) **** Table IA Selected Financial Statistics Total After Tax Cash Return (1988-2007) 2,680 After Tax Internal Rate of Return * Designated as Dividends Common in financial statements. ** In the financial statements Long Term Borrowing (as opposed to LTD) indicate the financing shortfalls. *k*k ~Rounded. NEPP 50% of NEPP Forecast for Sales to Forecast for Distillate #2 Motor Fuel with Base Case Distillate #2 with Escalation Escalation {Appendix A) “(Appendix B) (Appendix C) (Appendix_D) $9,265 $15, 184 $19,626 $26,488 487 6,293 (20, 120) (3,414) 2,654 8,364 0 2,471 34 - 17,093 60 1987 - 2007 1987 1988 - 2007 1988 1,704 15705 2,444 2,444 4,983.63 11,615 5,447 4.94% 11.54% 12.03% 7.8% of cash **kk =Total Net Investment equals Equity Investment Minus the positive tax benefits derived from ITC, Depletion and Losses taken the same year of the equity investment. 1322R . TABLE 1B SELECTED LEVERAGE CASE FINANCIAL STATISTICS 50% Sales to Motor Fuel with Escalation ($ millions) F ED = 75% F 20s = yasyA Equity = 25% Equity = 75% Selected Life of Project Statistics Total Revenues $26,488 $26,488 Total Net Profit Before Taxes (49,877) (7,241) First Year Report Net Profit Before Taxes N/A 1,993 Total Cash Distribution* 0 255 Long-Term Borrowing** Amount Peak Borrowing 49,297 Susoe Year Peak Borrowing 2,007 2,007 Latest Borrowing Outstanding 2,007 2,007 Partnership Returns*** Total Net Investment (through 1987) 0 1,506 Total After Tax Cash Return (1988-2007) 26,774 5,081 After Tax Internal Rate of Return N/A 10.79% * Designated as Dividends Common in the financial statements. ** In the financial statements Long Term Borrowing (as oppeane to LTD) indicate the financing of cash shortfalls. *** Rounded. 1187R 81 CONSTRUCTION Construction in a remote area can be very expensive, especially if large numbers of craftsmen are required; therefore, offsite modular construction will be maximized. Modular construction consists of building sections of the plant in the Lower 48, loading them on barges, and shipping them to Beluga where they will be installed on prepared foundations. Modularization will transfer labor from the field site to modular shops, where there is manpower available and improved working condi- tions, which will provide an improved schedule along with cost savings. The effect of the modular construction approach on the construction camp will be to reduce the construction work force from approximately 4,000 to approximately 3,000 workers. Please note that these numbers are based on our information as of mid-1981. When the Phase II effort commences, a detailed assessment of the manpower split between site work and the modular shop will be determined. The main input from the construction group during the feasibility study was the input on labor rates, productivity and project site con- ditions. - C. Preston Locher was hired as an Alaskan construction consultant to develop the labor considerations for the State of Alaska and the Pacific Northwest. He concluded that the next 5-10 years will be a boom period in Alaska and the modular shops of the Pacific Northwest, and there may be a shortage of skilled labor in these areas. TRADE-OFF STUDIES As part of the work required to be done in Phase I, various systems, methods of operation, technical processes, and processing facilities 1187R 82 were examined with respect to their cost, efficiency and suitability for the Beluga Project. In those areas where alternate choices were available, technical and economic comparisons were studied to arrive at the selections which have been incorporated in the plant for the purposes of the study. Task 3.01 -- Mining Operation Alternates Stripping Alternates The use of large bucket wheel excavators for major overburden strip- ping at both mine sites was considered during the mining study. While the majority of the material to be removed appears to be suitable for this excavation method, there is some degree of uncertainty on some of the harder material. For the purposes of this study, the more conser- vative truck-shovel excavation method was chosen. However, any future study should include geotechnical work for the purposes of determining bucket-wheel excavator suitability. Conveyor transport of waste and coal was also considered during the course of the study. Since the size of material to be transported is one of the major limits in conveyor transportability, insufficient in- formation was available to determine the suitability of this method. Actual excavation tests will be required in future studies in order to determine average material breakage size. However, potential cost savings from conveyor transport are sufficient to justify the investi- gation of in-pit, portable waste crushers as a method of obtaining conveyor maximum size limitations. Task 3.02 -- Coal Shipping Alternates The need in this area is for means of transporting coal from the Capps and Chuitna mines over distances of up to 23 miles to the methanol 1187R 83 “oad plant, and returning ash and sludge to the Chuitna mine area for dis- posal. Three general methods are available for handling material volumes of the magnitudes involved; namely, a system of slurry pipe- lines, a conveyor system, or a railroad system. Of these methods, the slurry pipeline carrying coal in water was ruled out after brief consideration of the problems and costs of dewatering, ash disposal, and the varying particle size requirements of plant processing and power generating units. The remaining alternatives, conveyor and railroad, present a number of possible equipment arrangements and combinations, each of which was studied and evaluated. On the basis of comparative costs, it was concluded that a railroad system using diesel electric locomotives is the best choice among the alternatives examined. Task 3.03 -- Coal Drying Alternates The Winkler gasification process requires that the moisture content of prepared coal feed to the gasifier section does not exceed a maximum of 8% by weight. The Beluga coals received at the plant have an aver- age moisture content of 23.9%. Thermal drying is required to remove the excess 15.9 wt. percent of moisture during coal feed preparation. A brief investigation of the various commercial drying processes nar- rowed the choice to fluid bed or flash type dryers. Further investi- gation of these two types, for drying the high inherent moisture Beluga coals, led to the choice of two fluid bed dryers for this ser- vice. 1187R 84 No drying tests have..been performed on these coals for this Phase I study. While past coal industry experience indicates that the fluid bed type is the most reasonable choice, testing will be esseritial in the next phase to evaluate the process and economic advantages of fluid bed drying. Task 3.04 -- Gasification with Various Qualities of Coals The characteristics of coal feedstock which affect plant processes are: Reactivity Ash content and its melting behavior Sulfur content Nitrogen content Volatile matter and fixed carbon anPrP won . 8 6 A study was made to show how these characteristics affect the Pi) cation process. Task 3.05 -- Construction Approach Alternates { In view of the remote location and the construction environment. of the Beluga plant site area, maximum modularization with fabrication of modules in the Seattle/Tacoma area has been selected as a means to bie prove project cost and schedule. The Beluga plant site lacks support facilities for labor, but is accessible by water, making it conducive to modular type construction. Modularization will transfer the labor requirement from the field site to shops using assembly line methods, thereby, reducing labor costs, improving working conditions, and permitting parallel fabrication and improved schedules. 1187R 85 Q Modularization is most effective for sites in non-industrial areas with good water access and where a large percentage of labor must be imported and camp-supported. A greater advantage accrues where site weather conditions hamper construction. These conditions are present at the Beluga plant site. : An overall schedule reduction is attained since not only complete pre- assembly is used, but also pre-testing and pre-commissioning in the fabrication yard will insure a shorter start-up time period. Task 3.06 -- Product Shipping Alternate Study In view of the existing facilities of Cook Inlet Pipe Line Company (CIPL), primary emphasis was placed on utilizing this transportation system for delivering methanol from the plant to storage and ship loading installations located at Drift River on Lower Cook Inlet. CIPL has the capacity to transport the methanol product in its pipe- line which passes close to the proposed plant and which extends about 42 miles to a tank storage area and ship loading terminal at Drift River. The feasibility of using this transport system for methanol has been confirmed. Due to time and budget limitations it was not possible to compare use of the pipeline with a new dock. This will be done in Phase II. Task 3.07 -- Ash Disposal Study In this study, alternatives were evaluated for the disposal of the large quantities of ash and char generated and/or collected within the plant process area. The disposal method chosen must accommodate 6.36 acre-feet per day of solid material based upon the 10,253 cubic yards of char/ash generated per day. Because of the remote location of the char/ash source, 1187R 86 Cu transportation of this large quantity of char/ash would also have to prove environmentally feasible. Disposal should also demonstrate min- jmal environmental impact, thereby, reducing regulatory and permitting activity. « Based upon the above restrictions, it was concluded that the Mine Rec- lamation Plan provides an environmentally acceptable disposal scheme, while being economically feasible. Therefore, primary consideration has been given to the Mine Reclamation Plan. The alternatives considered were (1) Mine Reclamation, (2) Landfill, (3) Commercial Use/Sale. Task 3.08 -- Natural Gas Alternate for Power Generation This study was conducted to reduce capital costs of the project by the substitution of natural gas for coal energy in the power production section of the plant. A system designed to burn all of. the char pro- duced by the process and use natural gas for the remainder of the fuel input to the power production facility has been prepared. This option will include two nominal 70-Mw, gas turbine generator sets with sup- plementary fired heat recovery boilers and two char boilers with sup- plemental natural gas firing to insure complete char combustion. A cost savings is realized as a result of the lower capital investment required for natural gas turbines as compared to steam turbine boiler combinations. Additional capital costs savings are realized through the elimination of the coal feeding portion of the Base Case power plant, as well as reductions in size of the ash handling system. Op- erating costs will be reduced due to substantial decreases in the pumping of cooling water required for condensing turbines which are not part of the alternate case, as well as reduction in operating and maintenance manpower. However, these operating savings are reduced by 1187R 87 the incremental cost of. natural gas over coal. In summary, the gas turbine alternate becomes the economical choice for the project, if natural gas can be procured at a delivered price of $2.60 per million Btu's. Task 3.09 -- Comparison of Cooling Water Systems This study covers the possible use of various alternative cooling water systems. Such considerations as cooling towers, seawater, air fins, or combinations of the above were developed to determine which alternative would be the most economical. Congahbuna Lake was also studied for possible use as a natural cooling pond. An all-cooling-tower system has been selected because it requires the least capital investment. The cooling water system will be reviewed and re-evaluated during Phase II using updated data which will be available at that time. Task_3.10 --"H,S Removal Before or After CO Shift and Optimum CO Shift Pressure Level This trade-off study was conducted to obtain the optimum pressure level for upgrading H,/CO ratio (CO-Shift) and to select the se- quence of units for the acid gas removal operation. The pressure studies were conducted at 250, 750, and 950 psig levels, with both se- lective and non-selective acid gas removal systems using Selexol and Rectisol units. In all cases, both operating and capital cost re- quirements were considered for the process blocks starting from the raw gas compression to the acid gas removal units. This detailed analysis resulted in the conclusion to proceed with the following process sequence for this study report: 1. "Raw gas compression to 750 psig 1187R 88 f Vay?" 1187R CO shift and COS hydrolysis Selective H,S removal for sulfur recovery followed by con- trolled C05 removal by the Selexol System so as to achieve the required methanol synthesis gas composition. 89 a SS APPENDIX A mali? DETAILED WORK PLAN FOR PHASE II Study Area Page 1. Mines 1 2s Geotechnical 2 33 Railroad, Roadway and Dock 4 4. Coal-to-Methanol Plant 7 5: Product Shipping Alternatives 10 6. Environmental 12 We Site Selection 15 8. Camp, Airstrip, Town and Bus System 7 9. Appropriation Estimate 18 10. Construction 26 11. Marketing 27 its 1221R APPENDIX A DETAILED WORK PLAN FOR PHASE II COAL MINES Essentially, the work in this area will be to confirm the technical and economic feasibility of mining coal from the Chuitna and/or Capps deposits in the Beluga coal field as raw material feedstock to the methanol plant. A secondary use (possibly for such lower quality coal as may be produced) will be as fuel for direct burning in onsite boilers to ‘pro- duce process steam and electric power. Considerable emphasis will be placed on the mine plans, re- clamation plans, and coal handling systems. An extensive resource and hydrological field drilling program will form the basis of a detailed mine and reclamation plan. The plan will then be refined with results of pit tests for accurate assessment of slope stability, soil characteristics, and other soil and hydrological parameters. Detailed aerial pho- tography, interpretive mapping, soil and hydrologic samples, and the results of other field programs will be used for de- tailed design and for environmental assessments. All environmental monitoring and design considerations neces- sary for surface mining permits will be identified and re- solved. Permit applications will be submitted, pursued and obtained to allow start of Phase III on schedule. Mine Planning and Engineering will develop specifications, iden- tify and evaluate all "“long-lead" equipment and machinery A-1 2.0 1221R requiring early purchase to permit start of mining activi- ties, and assure start-up of the plant in the 3rd Quarter of 1987. Further study will be pursued of conveyor transport in the mine areas as an alternative to trucking spoil and coal. Mine aquifers will be defined; and mine waste pumping, treat- ment, and discharge will be reviewed in detail. Ongoing fishery and surface hydrology studies will be considered in water discharge plans. Results of the drilling program will be used to review the possibility of mining the deposit by advancing up dip or on the strike. The alternative of tracked backhoes working on coal in lieu of front-end loaders for coal loading will be studied. Additional studies will be conducted on the use of bucket wheel excavators as a primary excavation method. Mine support facilities will be refined and optimized as up- dated data and plans are developed. GEOTECHNICAL WORK Additional geotechnical information will be required prior to the start of final design. The main subjects to be investi- gated are: eel 252 23 2.4 2.5 2.6 Qed 1221R Detailed groundwater evaluation including installation of piezometers to determine groundwater conditions, and pump wells to determine permeability of mass rock and aquifers, for both Capps and Chuitna Pits. Study of locally available construction materials, particu- larly of glacial till for foundations and containment dykes, and of granular material for road surfacing and concrete aggregate. Determination of till and rock characteristics for shear strength in the design of pit slopes, waste dumps, and al] other temporary and permanent slopes. Study of the seismicity and tidal wave potential of the site and determination of appropriate design methods and param- eters for geotechnical structures and foundations. Study of the hydrology of the area and determination of de- sign approaches and parameters to ensure water handling arrangements are compatible with project, state, and federal guidelines. This work will include flood diversion, érosion control, and sedimentation management. Determine geotechnical design requirements for dumps, pit slopes, roads and railbeds, bridges, dock, townsite, plant- site, coal dumps, coal ash disposal, water diversions and sedimentation ponds. Study the development and behavior of major landslides in the area to assess their significance relative to stability of coal pit walls, railroad and roadway cuts and fill areas, etc., particularly with respect to seismicity. A-3 330 SI 1221R RAILROAD, ROADWAY AND DOCK Conceptual design of the railroad, dock, and access roadway has been based on current data such as existing topographic maps, preliminary railroad studies, limited data on barge and dock requirements, as well as preliminary geotechnical, sur- face hydrology, and environmental, health, safety, and socio- economic requirements. , Work in Phase II, including completion of current surveys and investigations, will form the basis for the start of detailed design for the dock, railroad and roadway facilities. RAILROAD AND ROADWAY The design of railroad and roadway alignments, bridge struc- tures and drainage structures will be refined in accordance with the data obtained from the following additional work: A geotechnical terrain analysis will be conducted to identify types of materials to be excavated in cuts, foundation conditions for fills, sources of borrow, potential areas of instability, etc. Confirmation of terrain analysis by field observation, test drilling and laboratory analysis. Gravel pits will be located and’ evaluated as to quantity; and samples will be tested to determine ac- ceptability for use as fill, subgrade, concrete aggre- gate, etc. “uP 1221R Railroad and roadway alignments will be run in the field, quantities will be recalculated based on field rather than map measurements, and adjustments made to achieve the most economical design and/or to avoid probelem areas. Interceptor and offtake ditches will be designed. Expected runoff in drainage channels will be studied in order to size and locate drainage structures. Detailed drilling will be done at each bridge site to determine the most economical bridge design for each site. A detailed analysis will be made to determine if the high first costs of electric locomotives can be offset by operating efficiencies. Once the type of locomo- tives is determined, the operational plan for the railroad will be finalized. Use of conveyors will also be reviewed for use in place of certain sections of the railroad. Railroad track design will be reviewed, and subballast and ballast will be analyzed. The types of ties and fastenings will be investigated based on perfonnance records under similar conditions. Railroad rolling stock sizing, train make-up, and schedules will be optimized. Also, the possible use of a passenger train for plant-to-mine transportation of personnel will be reviewed. A-5 e Sse 1221R DOCK Equipment maintenance requirements will be re-evaluat- ed as to centralization and/or work which can best be transported to Anchorage for repair. Railroad and roadway bridge and culvert drawings, sub- contract specifications and equipment specifications will be prepared and issued for bids. Equipment and subcontract bids will be analyzed, conditioned and brought to the point where purchase orders and sub- contracts can be awarded in Phase III. The dock design requirements will be finalized on the basis of data developed in the following additional work: Towed sea-going barge sizing, plant module unit, and other barge cargo unloading requirements will be es- tablished employing the services of a Marine Architect. A subcontract package for overland transporter, in- cluding module setting on prepared foundations and barge and tug services, will be prepared; bids analyz- ed; and an optimum barge, tug, and transporter operat- ing plan will be developed. This work will be coordi- nated with the dock design outlined above. The sub- contract bids will be processed to the point where a subcontract can be let in Phase III. A-6 4.0 4.1 4.2 4.3 1221R The tug and barge approach and dock area will be sur- veyed and geotechnical investigations conducted to establish the optimum location for the barge dock. Maintenance of the approach channel and barge basin will be considered in this review. COAL-TO-METHANOL PLANT Process and utility flow sheets, major equipment duty, facil- ity and equipment layouts, electrical single-lines and motor lists have been prepared based on data available during the Phase I study. Work in Phase II will include the use of detailed information on Beluga coal properties, site surveys, geotechnical data, in-depth construction planning, and environmental and per- mitting requirements. Data obtained from the following will form the basis for the detailed design of the methanol process plant: Review, re-evaluate and select the best possible plant site location. Sizing, location and number of coal handling and crushing units and drying facilities will be finalized in view of large-scale coal sample analyses and tests. Number and size of gasifier trains will be reviewed based on more extensive coal sample analysis and testing. 4.4 4.5 4.6 AT 4.8 4.9 4.10 4.11 4.12 1221R Study the pernissibility and economics of in-plant use of natural gas, including use for power generation. Review space requirements, operational requirements, and functional and construction components for all buildings. All utility and communication systems will be reviewed based on updated project criteria, including: water supply, treat- ment, and distribution; wastewater collection, treatment, and disposal; fire protection; internal telephone communication system; UHF radio systems; etc. Update dust collection system flow sheets. Update motor lists with HP estimates based on final selected equipment quotations. Study the options of purchased power and oxygen versus onsite production. Optimize power generator sizing, substation configuration, transmission line voltages, motor horsepower voltage split, 15-KV cable routing method, etc. Geotechnical investigations will be conducted to obtain addi- tional data including: test pits, laboratory tests, pile load tests (if required), etc. Resolve water sources; in addition, water pump tests will be conducted to better define groundwater characteristics. 4.13 1221R During Phase-II the following items will be completed to the point where subcontracts for engineering and procurement of long-delivery equipment/materials can be pursued early in Phase III: oooooe9eoe ooo 8 8 oooooaoeeoeaoe oo oo 8 8 8 Site preparation and grading drawings Underground sewers and firewater system drawings Product storage and pumping drawings Insulation, refractory,and fireproofing specifications Piping specifications Piping line index Control and instrument drawings Control panel layout drawings Instrument lists HVAC flow sheets for buildings Obtain soils data and establish overall civil design criteria In-plant road drawings In-plant pipe racks Preliminary design of major foundations Preliminary design of major structures Preliminary design of modular bases Layout model of plant facilities Subcontract drawings and specifications Equipment and subcontract bid analysis Electrical hazard classification, grounding plan System and subsystem single-lines Lighting plans will be started Communication plans will be started Control room layout Logic diagrams will be started Electrical schematics will be started A-9 5.0 Sal 1221R PRODUCT SHIPPING ALTERNATIVES Background The feasibility study investigated the use of the existing Cook Inlet Pipe Line system for the transport, storage, and shiploading of the methanol product. This system comprises such important components as the 20-inch diameter pipeline which extends from Granite Point adjacent to the plant to Drift River; storage tanks at the Drift River terminal on Cook Inlet; and the offshore ship loading platform at Drift River. Laboratory studies confirmed the capability of this system to transport both methanol and crude oi] between Granite Point and the Drift River loading terminal. The compatibility of batching crude oi] and methanol through the pipeline was established, and an engineering/design evaluation developed technical information on modifying the system to enable both liquids to be handled. A cost analysis, conducted concurrently with the engineering study by the pipeline owners and operators, has indicated that even with quantities of methanol equivalent to those of crude oi] being pumped through the pipeline, the estimated tariff for methanol would be about the same, or possibly greater, per unit of volume, as that now paid by the shippers (producers) of the crude. In other words, the larger volumes transported would not greatly affect the pipeline tariff despite the larger throughput, which theoretically should amortize the pipeline company's costs for modifying the system. A-10 Dae 1221R Possible Alternatives A review of possible shipping alternatives to use of the Cook Inlet Pipe Line system will ascertain whether such other alternatives could provide significant economic savings in comparison with the substantial accumulated cost of pipeline tariffs over the plant's anticipated operating life. Se 2l 5.262 A conceptual design study will be performed in suf- ficient detail to produce a construction cost estimate for a tanker-loading facility at one or more selected dock locations close to the methanol plant site. A permanent off-shore mooring and liquid-loading ter- minal will be investigated, as will up to three shore- line berthing facilities. Possible dock locations for shoreside loading terminals include: 1. Extension of existing dock at Tyonek 2. New dock approximately 3,000 feet west of Tyonek 3. New dock at Granite Point The conceptual design study of the shipping facility will focus on use of the dock for shiploading of meth- anol. Secondly, the study will consider use of the shiploading facility for receiving supplies and equip- ment for the plant and mine operation and the townsite. Since the export of coal as a dry bulk commodity from the Beluga coal field to foreign markets is also being actively pursued, an investigation is currently being made for a dock or pier in the Granite Point - North Foreland area, close to the proposed methanol plant. A-11 6.0 1221R The construction of a marine port equipped for ship- ping dry bulk cargoes could enable liquids as well as coal to be loaded at this site on ocean-going ves- sels. Such a port would, accordingly, provide a sub- stitute to the existing pipeline and shiploading ter- minal at Drift River. Lower direct transportation costs for the methanol could be expected, and amorti- zation of the pier cost could be shared by the metha- nol and coal which would both be shipped from the same marine terminal. ENVIRONMENTAL The Environmental Work Plan under Phase II of the Beluga Methanol Project will focus on obtaining the major regulatory approvals; i.e., the Prevention of Significant Deterioration (PSD), National Pollutant Discharge Elimination System (NPDES), Department of the Army Corps of Engineers (Sections 404 and 10), Office of Surface Mining (OSM), and State Anad- romous Fish Permits, as well as the Environmental Impact Statement (EIS) and the Environmental Protection Agency (EPA). The PSD permit is necessary to prevent significant deteriora- tion of air quality in areas cleaner than required by the National Ambient Air Quality Standards (NAAQS); ji.e., the Beluga-Tyonek area, and to fulfill the requirements of the Federal Clean Air Act. The first step in securing the PSD permit is to get agency approval of a prepared air monitoring program. Once the monitoring period is complete and all required engineering design data is available, the permit application can be A-12 1221R finalized and submitted to the EPA. Notification of whether or not the application is complete will be given by the EPA within 30 days of receipt. Final determination is statutor- ily required within one year of receipt of a completed appli- cation. There is a 30-day public comment period, and the opportunity for a public hearing must be provided. On receiving the PSD permit, construction must start within a reasonable period of time (typically within 18 months of approval) and stay on a continuous construction schedule. Normally, long delays will invalidate the permit. The NPDES permit is required in order to curb water pollution by monitoring and controlling the discharge of waste, e.g., the disposal of process waters, mine drainage, sanitary sewage, leachate from coal pile storage, on-site surface drainage, etc. Once the engineering data is available; e.g., flows, sources of pollution and treatment technologies, the permit applica- tion is prepared and submitted to the EPA (at least 180 days prior to commencing the discharge). : There is a 30-day review by the State of Alaska for certifi- cation, which may include a public hearing if it is detemined to be in the public interest. Finally, the EPA will issue the NPDES permit state certifi- cation. The EIS is generally required in order to insure that envi- ronmental information is available to public officials and citizens before decisions are made and before activities begin. A-13 cs 1221R Actually, an Environmental Impact Assessment (EIA) is first prepared, drawn largely on the data and results obtained from environmental field studies (e.g., fisheries and hydrology). The lead agency, likely the EPA, will then determine if the environmetal impact is significant or controversial. If not, no further action on the part of the applicant is required; if so, the applicant must prepare a Draft Environmental Impact Statement (DEIS). The DEIS is reviewed by federal and state agencies and commented upon by the public. If the review and comments are favorable, the Final Environmental Impact Statement (FEIS) is issued. The Department of the Army Corps of Engineers' permits are required pursuant to Section 404 of the Federal Water Pollu- tion Control Act Amendment of 1972 and Section 10 of the Rivers and Harbors Act of 1899 because of the possibility that the proposed project will discharge dredged or fill material into waters of the United States and/or affect the course, location, condition or capacity of such waters. After the engineering data is available, the permit applica- tions can be submitted to the Army Corps of Engineers. Although the permits can usually be issued within 90 days after receipt of a completed application, the Corps may choose to wait until after the FEIS is reviewed before issu- ing the permits. A state program for the OSM permit has not been established for Alaska. Therefore, it is expected that the permit appli- cation will conform to federal requirements as dictated by the Office of Surface Mining Reclamation and Enforcement, A-14 i at 7.0 1221R Department of the Interior. The permit application can be prepared once the following types of field work data are assembled: (1) geology description; (2) groundwater in- formation; (3) surface water information; (4) alternate water supply information; (5) climatological information; (6) vege- tation information; (7) fish and wildlife resources informa- tion; (8) soil resources information; (9) land-use informa- tion; and (10) cross-sections, maps, and plans. It can be assumed that the OSM permit will not be issued until after the publication of the FEIS. The State Anadromous Fish Protection permit is required if the proposed activity will affect the natural flow or bed of a specified anadromous river, lake, or stream, or use equip- ment in such waters of Alaska. Fisheries field work data is necessary in order to prepare the permit, which is issued on an annual basis. The majority of the schedule work plan for Phase II will be comprised of securing the above major permits. This effort is significant due to the great amount of monitoring and data gathering that is required for the completion of the permit applications. The remainder of the Phase II Environmental Work Scope will be devoted to obtaining all other necessary, minor permits and approvals. SITE SELECTION The final stage of site selection involves adjusting the pre- liminary site location to make it most compatible with the actual conditions and constraints identified in the feasibil- ity study. This final site selection step will be accom- plished under Phase II of project development. At this point, A-15 3 it appears that the primary factor that will influence some adjustment of the site location will be specific soils condi- tions. Broad areas within the preliminary site area have been found to have greater depths of organic overburden than originally anticipated. Indications are that some relocation of the plant site in a northwesterly direction would avoid some deep overburden and reduce capital costs through reduced site preparation work. Further soils exploration will pre- cede the final site selection decision. Considerations to be taken into account during Phase II for the plant site located at Granite Point will be: (1) A distinct advantage of this location would be realiz- ed in the transportation of the finished product due to close proximity to the existing 20-inch diameter Cook Inlet pipeline, which currently transports crude oi] to a tanker terminal at Drift River, approximately 40 miles to the south. Production of oil from fields served by the pipeline is continuing to diminish, pro-~ viding certainty of pipeline availability. (2) A plant near the shore would ease the movement of large prefabricated plant modules, allowing more flex- ibility in planning and construction. It would also reduce operating and maintenance commodity transport cost when the plant is operable. (3) Other positive factors include a more favorable cli- mate and shorter period of snow cover than at the higher elevations of the mine areas. 1221R A-16 8.0 1221R (4) (5) (6) Selection of this location would avoid the natural hazards associated with being near the shoreline at seal level, but also would remove the option of being able to barge large, prefabricated plant units into place. However, it would still be possible to receive and install large, prefabricated interplant modules using a coordinated barge and surface transportation network. Portions of this candidate site area are considered wetlands by definition; however, it is believed that these wetland areas fall under the jurisdiction of the Corps of Engineers' nationwide permit authority, a classification which avoids complications that may be associated with obtaining permits for a tidewater lo- cation. Environmental and geotechnical constraints all appear reasonable for this location, and indications are that necessary permits could be granted. CAMP, AIRSTRIP, TOWN AND BUS SYSTEM Selected available information on physical and land use, as well as relevant socioeconomic trends for the Cook Inlet Region, have been used in Phase I conceptual plans. The following will be finalized in Phase II: lis Site selections will be finalized for the camp, town- site and airstrip following a detailed study of area site characteristics. A-17 (« 9.0 9.1 1221R Relevant socioeconomic trends of the surrounding Cook Inlet Region will be reviewed in-depth and considered in the selection of the final locations for the camp, townsite and airstrip. Appropriate agencies concerned with general design criteria for the airport, utility systems and educa- tional facilities will be contacted. Appropriate criteria will be incorporated in final plans for these facilities. When the estimate and schedule for the total project are finalized, the campsite and townsite size and cost will be adjusted to suit manpower and schedule needs. Financial backers and developers will be found for appropriate portions of the townsite. Prepare and issue the construction camp subcontract packages for inquiry, evaluate bids, and be ready to award at the time funding becomes available. The number of buses will be fixed according to man- power requirements. APPROPRIATION ESTIMATE Introduction The estimating activity to date has resulted in an estimate of the Total Plant Cost for the proposed coal-to-methanol facility. A-18 O52 1221R The Phase II“plan is to increase the level of estimating activity by placing emphasis on equipment and material costs, additional engineering development, construction planning and refined cost evaluations of the barge-mounted plant modules. This will result in an Appropriation Estimate of higher accuracy and confidence than the Phase I Capital Cost Esti- mate. Basis of Estimate The proposed Appropriation Estimate will be based on the following data: Process, Utility and Instrumentation Diagrams Equipment List Equipment Data Sheets Catalyst & Chemical Summary Utility Summaries & Layouts Facility Layouts Equipment Layouts Equipment Specifications Equipment Inquiries oo olcoOmUCcOWUlUCcCUOUCUOUCOlCUCOlCUCO Equipment Weights Soils Analysis Site Development Plans Building Layouts oo 9 8 Railroad Layouts A-19 eed 9.3 9.4 1221R Module Studies, Layouts & Typical Structural Designs Motor Lists Electrical Single-Line Diagrams Electrical Equipment Specifications Instrument Specifications Control Room and Panel Layouts Professional Services Man-Hour Estimate Detailed Schedules Shipping Costs & Schedules from West Coast to Plant Site Construction Plans 0 Field Indirect Cost Estimate Co 'o.'o 6 oo © oO | 2 ° Estimate Staffing At the outset of the estimating effort, a Cost Supervisor and Project Estimator will be assigned to this project for the duration of all estimating activities. It will be their responsibility to insure consistency in the estimating ap- proach for all participants' estimating disciplines, includ- ing method of material take-off, pricing technique, quality control and accuracy. To insure this consistency, the Proj- ect Estimator will prepare a detailed work plan and schedule. Estimates By Others For certain proprietary process systems, installed cost esti- mates will be provided by the selected technology licensor. For infrastructure elements, such as the railroad, airstrip, offsite pipelines, etc., the cost estimate will be provided by the consultant engaged for that element. A-20 O95) Major Equipment Approximately 80% of the major equipment dollar value, in- cluding electrical equipment, will be priced from vendor quo- tations, following a review for technical and commercial acceptance. Equipment pricing will also include weights, shipping costs to the module fabrication yard, and overseas crating and shipping costs, if shipped direct to the site. The balance of the equipment will be priced from telephone quotations or in-house data from recent similar equipment purchases. Developmental allowances will be added to major equipment costs to cover increases due to normal design changes and purchase order extras based on previous expe- rience. 9.6 Bulk Materials Detail quantity tabulations will be prepared for all major elements in the project. These include material take-offs for piping, electrical equipment, instrument devices, civil and structural components. Bulks: ji.e., electrical, instru- mentation, fireproofing, insulation and painting quantities will be factored using relationships. established from similar projects. Material costs will be generated from established in-house Davy McKee information, supplemented by sample pric- ing on major items such as concrete, pipe and structural steel in the West Coast and/or Anchorage, Alaska, markets. Resolution and surplus factors will be added to the "neat" material take-offs to approximate final design quantities. Proratable material and labor will be added to cover items, not estimated in detail, but as percentages of measurable material and labor. Proratables cover labor items such as unloading, shake-out, hauling, scaffolding, welder qualifica- tion, hydrotesting and flushing. 1221R A-21 Oar 9.8 1221R Subcontract and Direct Field Labor The construction plan will define the extent of participation by subcontract versus direct-hired field labor. Labor man- hours will be established by applying Davy McKee Base 1.0 man-hour units to the take-off quantities. Man-hours will then be adjusted by applying productivity factors for either the plant site area or the West Coast, depending on whether the specific work is to be performed at the site or in the module production plant. Field man-hours, for the plant site and West Coast work, will then be priced utilizing estab- lished local wage rates and fringe benefits. Subcontract wage rates will be adjusted based on historical experience to reflect the subcontractor's indirect costs, overheads and fees. Productivity Evaluation Productivity is evaluated on the basis of information de- veloped from four (4) sources. The first source is based upon industry surveys. This includes the result of surveys provided to Davy McKee by major companies with whom Davy McKee participates in continuously monitoring labor condi- tions. The second source is the result of labor surveys prepared by Davy McKee's Construction Services Group. These contacts with area business and labor leaders provide current produc- tivity information. The third source is from subcontractor surveys. Subcontrac- tor quotations on a unit-price basis are compared to Davy McKee's standard man-hour units to develop productivity factors based on subcontractors' anticipated conditions. A-22 929 1221R The fourth source is a productivity factor analysis. This method employs a subjective analysis of the effect of condi- tions in the specific area of the project on productivity. Such factors as weather, labor availability, distances from storage areas to work areas, hazardous activities, and others are evaluated. Field Indirect Cost Based on detailed plans for construction staffing and se- quencing, and a specific breakdown of subcontract versus direct-hire participation, the Construction and Estimating Departments will prepare a detailed estimate of Field In- direct Costs for both module fabrication and plant sites, and will include the following: Construction Supervision Field Office Labor Auxiliary Field Labor Temporary Construction Construction Equipment Small Tools Consumables oo omUCcOUCOUCOUUCUCOUUCUCO Field Office Expenses Additional areas which will require special attention in the Field Indirect Cost estimate include the construction labor camp, temporary roads and docks, -and temporary utility sys- tems. A-23 et 1 9512 9.13 9.14 1221R Professional Services A definitive estimate of Professional Services man-hours required to complete detailed design of the plant will be prepared by the specific engineering disciplines and assen- bled by Engineering Management. Other home office estimate man-hours, such as, print services, scheduling, clerical, procurement, construction management, cost engineering, ac- counting, computer services, etc., will be prepared by the respective department heads. Man-hours will be priced from current composite discipline rate schedules. Insurance and Taxes For the final Definitive Cost Estimate, a detailed analysis of insurance and tax requirements will be made using rates obtained by the Davy McKee Insurance and Tax Departments working with the client's experts and State of Alaska offi- cials. Escalation All cost estimates will be subjected to an Escalation Analy- sis in order to identify and cover anticipated increases in cost through the project duration. The Escalation Analysis will be prepared using Davy McKee's computerized escalation systems (MPET and MEC) and will establish minimum and prob- able escalation figures. Accuracy and Contingency Three (3) different methods of analyzing project risk will be employed to develop a contingency recommendation. The first A-24 9.15 1221R Risk Analysis will be performed using Davy McKee's Contin- gency Checklist. This tool provides consideration for plant cost increases resulting from such elements of risk as pro- ductivity deterioration, second bidder risk and schedule stretchout. The following four steps are involved: Determine the Components subject to Risk Identify the Risk Elements Evaluate the Risk Level for each Element Calculate the resultant total Risk by component and in total at three levels: Minimum, Probable, and Maximum. ooo °o The Davy McKee Accuracy Calculation (MAC) computer program will be employed as the second assessment of Project Risk. Quantity and pricing techniques employed to prepare each estimate will be analyzed, and the potential plant cost vari- ance will be calculated. Line item variances established by the MAC program will be used to establish a preliminary con- tingency. Davy McKee Reconciled Estimate Contingency Accuracy Probabil- ity (RECAP) provides the third tool used to aid in evaluating estimated investment risk and exposure. Preliminary Contin- gencies recommended after the above analyses will be plotted on a composite "Cost/Probability" graph, and the probability of overrunning the "Target" Estimate before and after the inclusion of the recommended Contingency will be shown. Trade-Off Studies The Estimating Department, working with the engineering dis- ciplines, will develop trade-off studies, as required for such subjects as alternate materials handling schemes and docking facilities. A-25 10.0 1221R CONSTRUCTION. Total project construction plans and schedules will be de- veloped and finalized to permit start of module yard and site activities early in Phase III. This activity is critical in that engineering and procurement must be geared to meet the requirements of the project in an orderly and efficient man- ner. Temporary field facilities, major lifts, execution plans, man-power loading and subcontract work packages will be developed. Construction labor considerations are also a very important part of the overall plant costs; therefore, during Phase II, a detailed assessment of the manpower split between site work and the modular shop work will be determined. As part of the Phase II effort, the total subcontract plan will be developed and selected critical infrastructure, site development, railroad, dock, concrete, buildings and module yard subcontracts will be inquiried and evaluated for award early in Phase III. Availability of local subcontractors will be explored and evaluated for possible utilization on specialized units of work such as refractories, electrical, instrumentation, com- munications, insulation, painting, etc. Based on this evalu- ation, the direct-hire versus subcontract work split will be determined. Utilizing data provided by other project par- ticipants, plans for gravel pits, concrete aggregate plants, concrete batching facilities, etc., will be developed. A-26 11.0 Veo 1221R The project craft manpower will be reviewed against avail- ability and a plan for obtaining the necessary labor develop- ed. Construction camp plans will be finalized. Project labor contract discussions will commence with appro- priate labor organizations in order to firm up the project labor agreement. Items covered will include: nature of project, major facilities and equipment, manpower require- ments, hiring and timekeeping requirements, work rules, ac- cident prevention, security and methods of operation. Safety requirements will be developed including: need for state and local safety permits; plans for ambulance services, first aid, hospital, physicians, police protection and fire protection. Record-keeping requirements by federal, state and local agencies will be determined. MARKETING General Work conducted prior to, and as part of, the work program un- der the DOE grant has strongly confirmed three principal West Coast markets for methanol (power generation, vehicle fuel, and chemical industry). However, this work has led to a nunm- ber of additional tasks being suggested to insure early mar- ketability of methanol: (1) Potential uses of methanol should be expanded to include such transportation fuel mar- kets at MTBE production, fuel cell applications which may be developed by the mid-1980's, and industrial (as distinct from utility) power applications; (2) Although all West Coast utilities have expressed tentative interest, four, specifi- A-27 11.2 1221R cally, should be the focus of a more complete, immediate ef- fort to establish Beluga methanol in their fuel supply mix; (3) Environmental concerns in market areas related to the po- tential large-scale distribution and use of methanol should be identified and studied to insure marketability is not un- duly restricted; and (4) Specific methanol performance data and operating parameters should be established to ascertain the practicality of methanol use if marketability and early financial feasibility are to be established. A determination will be made of market diversification in terms of geography and end use that will provide the best mix of price, growth, and stability, with appropriate attention to the national energy policy. Further, the Second Phase study will include market development to the point where pre- liminary commitments are obtained for purchase, subject, if and where necessary, to appropriate incentives that may be required in early years of production. To achieve this stage at an early date, the following marketing tasks are to be performed to assure technical and commercial acceptability: Fuel for Power Generation In a potential major market area, Southern California, assessments will be made of possible constraints which could impede prompt, large-scale use of methanol as a fuel for electric generation. The proposers will work with recognized authorities in both atmospheric emissions and effects of alcohols upon terrestial and aquatic habitats. Effects of such emissions or possible accidental spills which result from handling, transport, or use of methanol will be report- ed; and the means to avoid or mitigate any adverse results will be presented. Compliance with federal and state regula- tions and those of the South Coast Air Quality Management District (California) will be assessed in detail. A-28 o> er GS 11.3 1221R The investigation will have particular value because this district probably has the most stringent regulations in the nation, the area is a major potential methanol market, and substitution of methanol for currently used fuels should at least reduce ambient concentrations of the following: S05; NOY; and particulates. Assistance will be provided by the Southern California Edison Company, which has tested methanol as fuel in both commer- cial-size combustion turbine and steam turbine units. The utility will provide data, where available, on air quality and emissions associated with these tests. Information to be sought from manufacturers of generating equipment will in- clude costs of converting boiler equipment to burn methanol, thermal efficiencies (heat rates), and possible load limita- tions. Commercial assessment of a methanol-fueled, combined cycle plant will be ascertainable from this information. This is important to projected West Coast applications for both utility and industrial use. Applicability of methanol will be investigated for commercial development of fuel cells that may be expected within the next 5-6 years. Attention will be directed to those modular power units which are scheduled for near-term ‘demonstration in commercial situations. Transportation Fuels It is increasingly clear that methanol has its best chance to be competitive without subsidy in the transportation fuel market. A-29 Nw? CG 11.4 1221R The study will investigate markets for methanol in the manu- facture of MTBE (a methanol-based gasoline additive) on the West Coast. This market was not pursued earlier due to lack of i-butene supplies from ethylene plants in this area. It has now been found that butenes from catalytic cracking streans of refineries can be used with methanol to produce MTBE. A major western railroad interested in fuel sources for loco- motives, has recently inquired about the status of Beluga methanol. This railroad is resuming research and development work at a U.S. research institute, with the goal of achieving a methanol fuel appropriate for powering diesel locomotives. It is understood that such work is also underway overseas, and marketing activities will include monitoring of progress in this field. The development of this application would be of significance to Beluga mine operating costs inasmuch as methanol could be an attractively priced fuel for locomotive operation. Developments occurring in commercialization of fuel-cell- powered motor vehicles will be monitored. As methanol has been considered to be the optimum fuel for this application, projections will be made of this potential market. Carbon Dioxide Sales Because of the demonstrated interest in use of by-product CO, for enhanced oil recovery by the petroleum producers in Upper Cook Inlet Fields, more specific assessment of interest will be obtained, such as quantities of CO, potentially usable by the individual operators. The quantity of Co, that may be required for a unit of incremental oi] to be A-30 11.5 11.6 1221R produced will’ be estimated in order that an approximate mea- sure of value can be determined. Some determination of CO, pipeline logistics will be attempted, and current sales prices for C0. in other areas will be obtained in order to arrive at the potential revenues attainable. Chemical Industry It is necessary to work with the principal suppliers of meth- anol to the Pacific Northwest and West Coast and, in some cases, methanol users, to establish whether take-or-pay con- tacts can be arranged. Although there is no question of interest, there is a need to convince such customers to count on a certain amount of Beluga methanol in their advanced planning. Other Activities to be Pursued Possible constraints, including regulatory controls, to large-scale use of methanol in the projected marketing area will be identified and analyzed. These include: ° Atmospheric Emissions The means to minimize during transfer operations and in methanol storage will be determined. Special attention will be given to interpollutant emission offset policy for volatile organic compounds, as use of methanol produces no SO, or particulates and lower NO, emissions than conventional fuels. Also to be considered is assessment of emissions during the arrival and departure of methanol carrier vessels, as well as in cargo discharge. A-31 1221R State. and federal impediments to use of methanol as blends and as neat fuel in the transportation section will be evaluated. Assessment of Possible Spills Complementing the work performed in the Cook Inlet area which assessed the potential impact on biotic systems from an accidental spill of methanol from the pipeline and shiploading system, a determination will be made of the risks, if any, involved in the dis- charge of methanol cargoes from vessels and in its transport and handling to the ultimate receivers. A-32 G APPENDIX "B" OVERALL TABLE OF CONTENTS Volume I Coal Mining Volume II Coal to Methanol Plant Volume Ill Geotechnical and Infrastructure Volume IV Environmental Volume V Commercial Task Cross Reference Pages B-1 to B-3 B-4 to B-8 B-9 to B-12 B-13 to B-34 B-35 to B-40 B-41 to B-43 E? 1314R APPENDIX "B" VOLUME I COAL MINING TABLE OF CONTENTS INTRODUCTION TO THE PHASE I FEASIBILITY STUDY GEOLOGY OF THE COAL DEPOSITS Summary Location General Geology Methods of Investigation Topographic Mapping Drilling Geophysical Logging Data Processing Results of Investigation Chuitna West Area Capps Area COAL QUALITY ESTIMATES Chuitna West Area Capps Area MINING - CAPPS AREA Coal Reserves General Mining Plan and Possible Alternatives Alternative Mining Methods Nining Plan Chosen B-1 Page No. vii won nonrF FP wWRDrD — a p _ @ 18 19 20 20 20 20 22 Page No. Mining Sequence 25 Land Reclamation 31 Support Facilities for Mining 31 Coal Handling 31 Mine Building 32 Electric Power Distribution at Capps Mine 36 Capital Costs 37 Items Covered 37 Items Excluded 37 Initial Capital 38 Expansion and Replacement Capital 38 Capital Contingencies 39 Operating Costs 39 Mining Personnel 40 4. MINING - CHUITNA WEST MINE 4) Coal Reserves 4) General Mining Plan and Possible Alternatives 4) Alternative Mining Methods ~4y Mining Plan Chosen 42 Mining Sequence 44 Ash Disposal 49 Land Reclamation 49 Support Facilities for Mining 51 Coal Handling 51 Mine Buildings 51 Electric Power Distribution at Chuitna West Mine 55 Capital Costs 57 Items Covered 57 Items Excluded 58 Initial Capital 58 Expansion and Replacement Capital 59 Capital Contingencies 59 Operating Costs 59 Mining Personnel 60 1314R i B-2 Page No. Le TABLES 1 Drill Hole Density 2 Coal Resource Estimate - Chuitna West Area 3 Coal Resource Estimate - Capps Area 4 Average Coal Characteristic Values - Capps Area 5 Beluga Methanol Project Production Projections Personnel Requirements Capital and Operating Cost Estimates Capps and Chuitna West Mines Combined 6. ANCILLARY FACILITIES Introduction Flow Diagrams © Equipment List Drawing List Conceptual Design Drawings EXHIBITS Figures List Exhibits List Figures Exhibits 1314R B-3 20 ae Zee 23 2.4 2.0) 2.6 3.0 331 See 363 1314R APPENDIX "B" VOLUME II COAL-TO-METHANOL PLANT TABLE OF CONTENTS INTRODUCTION General Methanol Product Process Selection Coal Handling and Preparation Synthesis Gas Upgrading Selection of Methanol Synthesis Process Overall Plant Description Technical Viability CONCEPTUAL DESIGN BASIS General Design Considerations Site and Climatic Data Raw Materials and Utilities Product Specifications Drawings Overall Plant Area Plan COAL PREPARATION Design Basis Process Description Engineering Design Data Process Flow Diagrams Equipment List Drawings B-4 Page No. W/ WV Val 1/3 1/15 1/15 1/16 1/19 1/28 2/) 2/1 2/2 2/2 2/7 2/9 2/10 3/1 3/1 3/4 3/6 ff 3/6 3/7 ff 3/23 4.0 4.1 4.2 4.2.1 4.2.2 4.2.3 4.2.4 4.2.5 4.2.6 4.3 5.0 5.1 5.2 §:2.1 Se2ee e223 5.3 6.0 6.1 6.2 6.2.1, 1314R COAL GASIFICATION Design Basis Process Description Gasification Waste Heat Recovery Particulate Removal Gasification at 10 Atmospheres Dry Char Systems Ash System Engineering Design Data Process Flow Diagrams Equipment List Drawings SYNGAS UPGRADING Design Basis Process Description Raw Gas Compression, Shift and Hydrolysis Acid Gas Removal, Makeup Gas Compression Sulfur Recovery Engineering Design Data Process Flow Diagrams Equipment List Drawings METHANOL SYNTHESIS AND DISTILLATION Design Basis Process Description Methanol Synthesis B-5 Page No. ff ff a ff 4/] 4/) 4/2 4/2 4/4 4/4 4/5 4/5 4/6 4/7 4/7 4/8 4/31 5/1 5/1 5/2 ‘5/2 - 5/3 5/3 5/4 5/4 5/5 5/21 6/1 6/1 6/1 6/1 6.2.2 6.2.3 6.3 7.0 te dee Tee) deeee dies 8.0 8.1 8e2..] 8.1.2 823) 8.1.4 822 Baeul 852.2 8.3 8.4 8.5 8.6 1314R Reforming Distillation Engineering Design Data Process Flow Diagrams Equipment List Drawings OXYGEN, NITROGEN AND COMPRESSED AIR Design Basis Process Description Air Separation Plants Nitrogen and Plant Air System Engineering Design Data Process Flow Diagrams Equipment List Drawings UTILITIES Plant Steam System -Power Plant Reforming Gasifier Waste Heat Boilers Condensate Electrical Power System Design Basis Electrical System Description Raw Water Treatment Cooling Water System Natural Gas Engineering Design Data Process Flow Diagrams Equipment List Drawings B-6 Page No. 6/3 6/5 6/7 ff 6/7 6/8 ff 6/20 7M 7 7/1 1 TA 7/2 fF 7/2 7/3 ff 7/6 8/1 8/1 8/) 8/2 8/3 8/4 8/4 8/4 8/5 8/8 8/10 8/11 8/11 ff 8/11 8/12 ff 8/31 Page No. 9.0 WASTEWATER TREATMENT 9/1 9.1 Design Basis 9/1 Jaz Process Description 9/1 9.2.1 Railroad Maintenance Area 9/1 9.2.2 Process Area Stormwaters 9/2 9.2.3 Boiler Cleaning Wastewaters : 9/3 9.2.4 Coal Storage Area Stormwaters 9/3 9.2.5 Process Wastewater Treatment Facilities 9/3 9.2.6 Miscellaneous Wastewaters 9/5 9.2.7 Cooling Tower Blowdown 9/5 9.2.8 Effluent Storage Pond 9/5 9.2.9 Effluent Diffuser 9/6 9.2.10 Clean Stormwater Runoff 9/6 9.2.11 Construction Runoff 9/6 Gs 9.3 Engineering Design Data 9/6 7 Tabulated Data on Wastewater Characteristics 9/7 Process Flow Diagrams ff O/IT Equipment List 9/12 Drawings ff 9/32 10.0 EMERGENCY AND SAFETY SYSTEMS 10/1 10.1. Relief and Flare Systems - Design Basis 10/1 10.2 General Description 10/1 10.3. Fire Water System 10/3 10.4 Engineering Design Data 10/4 Drawing List 10/4 Equipment List 10/5 Drawings ff 10/6 1314R B-7 e 11.0 11.1 We2 11.3 11.4 12.0 12.1 122. 12.3 13.0 13.1 322 W3!53 14.0 1314R STORAGE FACILITIES FOR METHANOL PRODUCT, PLANT FUELS AND CHEMICALS Methanol Storage and Pumping Storage of Diesel Fuel, No. 2 Fuel Oi1, Gasoline Storage of Chemicals Engineering Design Data Drawing List Equipment List Drawings BUILDINGS, VEHICLES, MAJOR MAINTENANCE EQUIPMENT Design Basis Building Descriptions Engineering Design Data Drawing List Equipment List Drawings DUST COLLECTION SYSTEMS Design Basis Locations and Descriptions of Systems Engineering Design Data Drawings DRAWING LISTS Process Flow Diagrams Dust Collection/Suppression Flow Diagrams Electrical Single Line Diagrams Buildings - Layout Drawings Plant Arrangements B-8 ff ff ff Page No. Wf mf ns 11/2 11/3 11/3 11/4 11/9 12/1 12/1 12/3 12/7 12/7 12/8 12/9 13/1 13/1 13/2 13/5 13/6 14/1 14/1 14/4 14/5 14/5 14/5 1314R APPENDIX "B" VOLUME III GEOTECHNICAL AND INFRASTRUCTURE TABLE OF CONTENTS INTRODUCTION 1.0 GEOTECHNICAL OVERVIEW lied Introduction and Terns of Reference V2 Geology and Hydrology BS Key Geotechnical Features Chuitna Pit Capps Pit Transportation Corridor Granular Borrow Townsite and Plant Site Coal Stockpile Area Pier Coal Ash Disposal 1.4 Future Geotechnical Work Required IES Conclusions and Recommendations Appendix I = Scope of Work II - Beluga Coal Field III - References Drawing B-2806-1 - Layout of Project 2.0 RAILROAD SYSTEM Za General a2 Route 2.3. Train Operations Table 3-1 - Rolling Stock B-9 Page No. viii PP NM — 19 23 25 27 “29 30 31 2/1 2/1 2/2 2/2 2/4 2.4 a0 2.6 Qed 2.8 209 2.10 Zell Catie 2.13 3.0 3.1 Se 1314R Train Control System Loading and Unloading Car Positioner Design Conditions Locomotive Servicing Locomotive Service Data Rolling Stock Maintenance and Repair Thaw Shed Summary of Davy McKee Study Table 3-2 - Capital Cost Estimate Engineering Design Data Equipment List Drawings R. A. Fisk & Associates Report Introduction Background Data Scope Study Method Design Criteria Cost Estimates Further Engineering Requirements Review of Proposed Operational Plan Summary and Conclusions Appendix A - Drawings. Appendix B - Route Description Appendix C - Earthwork Appendix D - Bridges Operating Costs BARGE DOCK Design Basis Engineering Design Data Equipment List Drawings B-10 Page No. 2/5 2/5 2/7 2/8 2/8 2/11 2/12 2/12 2/15 2/16 2/17 ff 2/18 3/1 3/1 3/3 3/4 ff 3/4 il (i) 4.0 4.1 4.2 4.3 4.4 4.5 5.0 6.0 1314R BUS SYSTEM General Operations Bus Terminal and Garage Maintenance and Repair Personnel Requirements CAMP, AIRPORT AND TOWNSITE Executive Summary Introduction Camp Development Camp Construction Costs Airport Development Airport Construction Costs Townsite Development Townsite Construction Costs PRODUCT TRANSPORTATION CIPL Report Introduction Scope of Work Case Description Operating Criteria Concept of Operation Product Quality Control System Modifications Economic and Tariff Summary Appendix A - Engineering Design Criteria Appendix B - Economic Criteria Appendix C - System Schematics Appendix D - Project Schedule Appendix E - Laboratory Test Report B-11 Page No. 4 4/) 4/2 4/2 4/2 4/3 13 34 43 55 59 83 N OP WD — 10 eS Page No. 6.1 Introduction 6/1 6.2 Pipeline Transportation and Shiploading 6/1 6.3 Marine Transportation 6/2 Shiploading at Draft River Terminal 6/2 Shoreside Handling at Receiving Terminals 6/3 Marine Transport Economics 6/4 Calculation of Freight Rates 6/5 Barge Shipment 6/11 Cargo Stowage, Terminal Handling 6/12 Safety Aspects 6/13 DuPont Safety Manual . ff 6/19 1314R B-12 Ais, sf cE aN sig} pt) “ait APPENDIX "B" VOLUME IV ENVIRONMENTAL, HEALTH, SAFETY AND SOCIOECONOMIC ASSESSMENTS INTRODUCTION Page No. 1.0 PURPOSE OF REPORT 1-1 Project Location 1-2 Project Description 1-2 2.0 SUMMARY OF THE STUDY 2-1 METHODOLOGY 2-1 General , 9-1 Field Programs 2-2 SUMMARY OF MAJOR ISSUES 2-7 Fisheries . 2-7 Water Sources ‘2-8 Wetlands : 2-8 Erosion and Sedimentation 2-9 Tyonek Village 2-9 Air Quality 2-9 ENVIRONMENTAL ACCEPTABILITY OF THE PROJECT 2-10 1314R B-13 C: AFFECTED ENVIRONMENTAL (BASELINE DATA) Page No. 3.0 GEOTECHNICAL =) THE COOK INLET REGION ga] Geologic History 3-1 Formation of Coal Bearing Units 3-4 SURFICIAL SOILS 3-7 THE BELUGA AREA 3-8 Topography 3-8 Geology 3-10 SITE CHARACTERIZATION 3-14 Methanol Plant Site : 3-14 © Topography 3-14 o Surface Conditions 3-16 o Groundwater 3-22 o Plant Site Conditions 3-93 Town Site 3-26 0 Topography -3-26 o Subsurface Conditions 3-26 o Groundwater 3-28 o Construction Feasibility 3-28 Dock Site 3-31 o Topography 3-31 o Subsurface Conditions 3232 o Dock Construction 3-32 Transportation Corridor and Mine Areas 3-36 0 Topography of Mine Areas 3-36 o Surficial Conditions at Mine Areas 3-36 o Transportation Corridor 3-38 (o. Trafficability 3-38 1314R B-14 4.0 1314R Construction Materials o Surficial Geology Concrete Aggregates Asphalt Concrete Aggregates Crushed Base Course Railroad Ballast oie coc co GEOLOGIC HAZARDS Seismicity Aleutian HMegathrust Castle Mountain Fault Bruin Bay Fault Lake Clark-Lone Ridge Fault Border Ranges Fault oo oc o S 28 Seismic Design Considerations Ground Failure Landslides Volcanos Tsunamis Permafrost Additional Geologic Hazards HYDROLOGY GROUNDWATER Introduction Available Supply o Nikolai Creek Flats o Plant Site Existing Uses B-15 Page No. 3-38 3-38 3-43 3-48 3-49 3-50 3-52 3-52 3-52 3-55 3-55 3-56 3-56 3-57 3-60 3-60 3-61 3-62 3-63 3-63 4-1 4-1 4-1 4-3 4-5 4-9 (x ip SURFACE WATER Existing Sources o Lakes o Streams and Rivers Possible Use of Surface Waters 5.0 ECOSYSTEMS FRESHWATER AQUATIC ECOLOGY Existing Habitats (Populations) o Habitat Characterization - Beluga Drainage - Chuitna Drainage - Nikolai Drainage - Congahbuna Drainage o Fishes o Invertebrates TERRESTRIAL ECOLOGY Existing Vegetation Wetlands Existing Mammal Populations Brown Bear Denning Brown Bear Movement and Activity Patterns Black Bears Moose Other Mammals oo ol Oo oO Oo General Sensitivity to Changed Conditions Existing Avian Populations Amphibians 1314R B-16 Page No. 4-9 4-9 4-9 4-14 4-31 5-2 5-2 5-2 5-2 5-9 5-18 5-21 5-22 5-28 5-28 5-28 5-38 5-40 5-43 5-46 5-47 5-48 5-49 5-53 5-54 5-55 6.0 7.0 1314R MARINE ECOLOGY Inter-tidal and Shallow Subtidal Habitats o Mud Flats Gravel and Cobble Substrate Granite Point Intertidal and Shallow Subtidal Marine Species o Fisheries - Commercial Fisheries - Sport Fishery - Subsistence Fishery o Birds o Mammals o Trading Bay State Game Refuge CLIMATOLOGY AND AIR QUALITY CLIMATIC CONDITIONS EXISTING AMBIENT AIR QUALITY ATMOSPHERIC EMISSION SOURCES OCEANOGRAPHY PHYSICAL OCEANOGRAPHY OF COOK INLET Tides and Currents CIRCULATION Upper Cook Inlet Middle Cook Inlet Lower Cook Inlet B-17 Page No. 5-61 5-61 5-61 5-63 5-66 5-66 5-66 5-75 5-78 5-79 5-80 5-83 5-89 6-1 6-1 6-6 6-7 7-1 7-3 7-4 7-4 7-6 7-6 Fo Page No. cae — WATER CHEMISTRY 7-6 Salinity 7-7 Temperature 7-7 Suspended Sediments 7-7 Nutrient 7-8 SEA ICE 7-11 PORTS 7-13 8.0 ARCHAEOLOGIC & HISTORIC SITES 8-1 ETHNOHISTORY AND SETTLEMENT PATTERNS 8-1 Settlement Patterns 8-1 Dwellings 8-2 Caches 8-3 Burial 8-4 Material Culture 8-4 European Contact and Trade 8-6 Historic and Prehistoric Sites 8-8 ARCHAEOLOGIC SITES 8-10 9.0 OTHER FRAGILE LANDS 9-1 FRAGILE OR HISTORIC LANDS 9-1 NATURAL HAZARD LANDS 9-2 RENEWABLE RESOURCE LANDS 9-3 “LAND PLANNING 9-3 1314R B-18 re 10.0 1314R EXISTING SOCIAL AND ECONOMIC ENVIRONMENT WEST COOK INLET DEVELOPMENT Employment Activities and Population Land Ownership, Status and Use Restrictions Land Ownership and Status State of Alaska Resource Management Lands Industrial Lands Reserved Use Lands — Material Lands Cook Inlet Region Inc. Tyonek Native Corporation ooo oloOmUmUCUMUlUlUCOUCUCO Kenai Peninsula Borough Land Development Planning Authority o Governor's Coal Policy Group o Beluga Interagency Task Force o Kenai Peninsula Borough o Tyonek Village Council Transportation and Power Infrastructure Existing Roads and Easements Airports Docks ooo o Power Kenai Peninsula Borough Services Other West Cook Inlet Coal Development B-19 Page No. 10-1 10-1 10-1 10-2 10-3 10-3 10-5 10-6 10-6 10-6 10-7 10-7 10-8 10-8 10-9 10-9 10-9 10-10 “10-11 10-11 10-13 10-14 10-15 10-15 10-16 1314R TYONEK VILLAGE Background Community Facilities and Infrastructure o Housing and Utilities o Education o Public Safety Employment Community Attitudes Towards Development CONSTRUCTION AND OPERATIONS REQUIREMENTS Background Direct Labor Force Requirements Indirect Employment and Total Population OVERALL PROJECT DEVELOPMENT Construction Camp o Concept o Camp Facilities o Housing and Support Facilities o Utilities Airport o Concept o Facilities Permanent New Town Concept Housing, Education and Commercial Facilities Transportation Utilities ooo °o B-20 Page No. 10-17 10-17 10-19 10-19 10-20 10-21 10-22 10-24 10-25 10-25 10-25 10-26 10-26 10-28 10-28 10-30 10-30 -10-33 10-35 10-35 10-35 10-38 10-38 10-39 10-41 10-42 11.0 12.0 13.0 1314R ACOUSTIC ENVIRONMENT INTRODUCTION GENERAL OVERVIEW NOISE SENSITIVE LAND USES ENVIRONMENTAL IMPACT GEOLOGY AND SOILS CONSTRUCTION EFFECTS LONG-TERM EFFECTS MAJOR REGULATORY REQUIREMENTS ENVIORNMENTAL ACCEPTABILITY OF PROPOSED ACTION HYDROLOGY CONSTRUCTION EFFECTS Groundwater o Construction Water Source o Effects on Water Table o Appropriation of Water Rights Surface Water o Siltation During Construction o Accidental Petroleum and Hazardous Substance Spills o As a Water Source for Construction B-21 Page No. 11-1 W-1 11-3 11-3 12-1 12-1 12-1 12-3 12-3 13-1 13-1 13-1 13-1 13-1 13-1 13-2 13-2 13-3 13-4 14.0 15.0 1314R LONG-TERM EFFECTS Groundwater o Plant Water Source o Effects on Water Table and Marshes o Appropriation of Water Rights Surface Water © Wastewater Discharges and Treatment o Projected Effluent Charcteristics o Effects to Surface Waters MAJOR REGULATORY REQUIREMENTS ENVIRONMENTAL ACCEPTABILITY OF PROPOSED ACTION ECOSYSTEMS CONSTRUCTION AND LONG-TERM EFFECTS MAJOR REGULATORY REQUIREMENTS ENVIRONMENTAL ACCEPTABILITY OF PROPOSED ACTION AIR QUALITY CONSTRUCTION EFFECTS EMISSIONS AND LONG-TERM EFFECTS Process Plant Area Emissions o Coal Preparation Process Coal 0 “o Coal Gasification 0 Fugitive Emissions B-22 Page No. 13-4 13-4 13-4 13-5 13-6 13-6 13-6 13-21 13-23 13-27 13-27 14-1 14-1 14-9 14-10 15-1 15-2 15-3 15-3 15-3 15-4 15-4 15-5 16.0 17.0 1314R Power Plant o Start-up and Shutdown o Emergencies Mining Area Emissions Air Emission Effects Models Used MAJOR REGULATORY REQUIREMENTS ENVIRONMENTAL ACCEPTABILITY OF PROPOSED ACTION OCEANOGRAPHY CONSTRUCTION EFFECTS LONG-TERM EFFECTS MAJOR REGULATORY REQUIREMENTS ENVIRONMENTAL ACCEPTABILITY OF PROPOSED ACTION ARCHAEOLOGIC AND HISTORIC SITES CONSTRUCTION EFFECTS LONG-TERM EFFECTS MAJOR REGULATORY REQUIREMENTS ENVIRONMENTAL ACCEPTABILITY OF PROPOSED ACTION B-23 Page No. 15-5 15-6 15-7 15-7 15-8 15-9 15-15 15-16 16-1 16-1 16-1 16-2 16-3 17-1 17-1 17-1 17-2 17-2 C$ | : Page No. 18.0 SOLID WASTE 18-1 CONSTRUCTION EFFECTS 18-1 Clearing Debris 18-1 Construction Refuse 18-1 LONG-TERM EFFECTS 18-2 Ash and Sludge 18-2 Methanol Process Solid Waste , 18-4 Hazardous Substances 18-5 Fugitive Coal Dust 18-5 Refuse 18-5 Sanitary Waste Solids 18-6 MAJOR REGULATORY REQUIREMENTS 18-6 a RCRA of 1976 (Federal) 18-6 18 ACC 60 (State of Alaska) 18-7 ENVIORNMENTAL ACCEPTABILITY OF PROPOSED ACTION 18-7 19.0 SHORT- AND LONG-TERM SOCIOECONOMIC EFFECTS 19-1 COOK INLET IMPACTS 19-1 Population and Employment 19-1 Growth-Inducing Effects 19-2 Land Use, Transportation and Ownership Changes 19-3 o State Lands 19-4 o Borough Lands 19-6 o Cook Inlet Region Inc. (CIRI) Lands 19-6 o Tyonek Native Corporation Lands 19-7 1314R B-24 e . Page No. Borough Services Impacts 19-7 o Options for Town Management and Governance 19-8 o Borough Planning of the Town Site 19-9 o Impacts if Growth Occurs in the Kenai Peninsula 19-9 TYONEK VILLAGE IMPACTS 19-10 Village Impacts 19-11 Culture and Life-style Changes 19-11 Economic Impacts 19-13 20.0 ACOUSTIC ENVIRONMENT 20-1 CONSTRUCTION EFFECTS 20-1 Construction Activities , 20-1 Vehicular Traffic 20-1 : LONG-TERM EFFECTS 20-2 MAJOR REGULATORY REQUIREMENTS 20-3 ENVIRONMENTAL ACCEPTABILITY OF PROPOSED ACTION 20-3 21.0 METHANOL IN THE ENVIRONMENT (SUMMARY) 21-1 METHANOL IN THE ENVIRONMENT (GENERAL) 21-1 Environmental Hazards, Aquatic and Marine 21-1 Marine and Estuarine 21-1 Comparison of Marine Environmental Impact Costs: Methanol/0il : 21-4 Fresh Water 21-8 Terrestrial - Direct Exposure 21-12 Emissions 21-14 1314R B-25 © 22.0 1314R METHANOL IN THE ENVIRONMENT (SPECIFIC) Introduction Fish Crustaceans Molluscs Birds and Mammals Summary SAFETY AND RISK SAFETY AND RISK ANALYSIS INTRODUCTION ASSESSHENT PROCEDURES Program Characteristics Regulatory Assessment SAFETY OVERVIEW Health Effects Process Down Time Start-up On-stream Operation Shutdowns co 2 .¢o PROCESS HAZARDS Coal Storage Coal Preparation Coal Feeding Methanol Distillation ’ Gasification Ash Removal and Disposal B-26 Page No. 21-15 21-15 21-16 21-17 21-18 21-19 21-10 22-1 22-1 22-1 22-1 22-3 22-4 22-4 22-5 22-7 22-8 22-9 22-9 22-9 22-10 22-10 22-13 22-11 22-11 Cp Page No. Venturi Scrubber 22-12 Shift Conversion 22-12 Acid Gas Removal 22-12 Methanol Synthesis 22-12 Utilities 22-13 MONITORING THE PROCESS ENVIRONMENT 22-13 Industrial Hygiene 22-13 Monitoring 22-13 Medical 22-14 Education and Training 22-14 Compliance 22-15 Regulated Areas 22-15 Emergency Procedures 22-15 FIRE SAFETY 22-15 Conclusion 22-16 SITE EVALUATION SUMMARY 23.0 SITE SELECTION 23-1 INTRODUCTION 23-1 Level 1 - Screening Analysis 23-2 o Granite Point on Cook Inlet 23-2 o Capps Coal Field Area 23-2 o Chuitna Coal Field Area 23-3 o Remote Location 23-4 o Comparison of Alternatives 23-4 1314R bo B-27 1314R Level II - Preliminary Site Selection o Near Tidewater o Upland Location Level III - Final Site Selection BIBLIOGRAPHY PARTICIPANTS B-28 Page No. 23-6 23-6 23-7 23-8 DP Za ae 3.1 3.2 3.3 3.4 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 5.1 Soe oss 5.4 5.5 5.6 Sed 1314R LIST OF TABLES Beluga Field Program, Summary of Principal Activities, 1980-81 Beluga Field Program, Agencies Contacted or Briefed by DOWL in 1981 Fine Concrete Aggregates, #4 Minus Typical Asphalt Concrete Surface Course Typical Base Course Typical Railroad Ballast Test Well #1, Summary of Driller's Log Test Well #2, Summary of Driller's Log Lakes of the Beluga Region j Selected Data on Stream and River Systems Strean Flow Data (Selected Stations) Selected Discharge Data Summary Data on Suspended Solids Selected Water Quality Data, November 1980 Selected Water Quality Data, May 1981 Selected Water Quality Data, June 1981 Selected Water Quality Data, July 1981 Water Quality Comparison, Groundwater & Chuitna River Sediment Sample Analyses Life History Data for Five Species of Pacific Salmon Page No. 2-3 2-6 3-45 3-48 3-5] 3-5] 4-4 4-11 4-16 4-18 4-21 4-22 4-25 4-26 4-27 4-28 4-33 4-34 5-25 Selected Fish Trapping Data, Nikolai Drainage (June 1981) 5-26 Checklist of Freshwater Fish of Beluga Area Chinook Salmon Aerial Survey Benthic Invertebrate Community ‘Moose/Bear Observations (Aerial) June 1-4, 1981 1980 Moose Survey B-29 5-27 5-30 5-31 5-50 5-51 ayeiats 538. 539 5.10 Saul Deoile Tot 10.1 125) @ 13.1 ee i333 13.4 13.5 13.6 14.1 15.1 1532 eS 13 1314R Terrestrial Birds Pacific Salmon of Alaska - Life Features General Salmon Timing Information for Northern Cook Inlet Streams Cook Inlet Fisheries, 1973-1977 Waterfowl, Shorebirds and Seabirds Cook Inlet Tidal Ranges Anticipated Construction and Operation Work Forces, Beluga Methanol Project Preliminary List of Construction Activities Associated with Development in the Beluga Region Summary of Estimated Flows & Characteristics of Process-Related and Sanitry Wastewater Discharges Summary of Coal Area Wastewater Characteristics Summary of Boiler Cleaning Wastewater Characteristics Estimated Contaminated Process Area Runoff Characteristics Summary of Projected Effluent Characteristics Possible Interaction of Project Activities with Surface Vater Outline of Potential Environmental Impacts and Relevant Pollutants Resulting from Site Preparation and Construction Practices New Source Performance Standards & Anticipated Emission Rates Accepted & Anticipated Emission Levels Emission Inventory B-30 Page No. 5-56 5-69 5-70 5-76 5-84 7-3 10-27 12-2 13-9 13-14 13-16 13-17 13-22 13-26 14-2 15-10 15-12 15-13 18.1 18.2 18.3 20.1 Glee 21.3 23.) 1314R Construction Refuse Combined Solid Waste Expected Lives of Catalysts Cost Comparison of Selected Crude 0i1, Diesel Fuel, and Methanol Spills Freshwater Organisms -- Methanol Toxicology Organismic Recolonization of Surface Saturated Soils -- Methanol Toxicology Qualitative Comparison of Sites B-31 Page No. 18-1 18-3 18-4 21-7 21-9 21-13 23-5 2.1 3.3 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 3.18 3.19 3.20 3.21 1314R LIST OF FIGURES General Location - Beluga Methanol Plant Project Location Map (Beluga Methanol Plant) Simplified Block Flow Diagram of a Typical Coal to Methanol Plant Field Program Participants Stratigraphic Column, Upper Cook Inlet Basin Proposed Stratigraphic Nomenclature for Kenai Group Generalized Physiography and Geology of the Beluga Area, Alaska Preliminary Geologic Map of the Congahbuna Area, Cook Inlet Region, Alaska Vicinity Map, CIRI/Placer-Amex, Methanol Plant Soil Samples and Well Locations, CIRI/Placer-Amex, Methanol Project Locations of Soils Test (CIRI/Placer-Amex Plant Site) Idealized Peat Distribution Methanol Plant Area Log of Test Hole, Plant Site Area Log of Test Pit, Plant Site Area Grain Size Distribution - Gradation Curve Locations of Soil Test (CIRI/Placer-Amex Townsite) Log of Test Hole, Town Site Area Log of Test Pit, Town Site Area Dock Site Test Hole Locations Idealized Soil Profile, Dock Site Area Dock Site Idealized Soil Profile Log of Test Hole, Dock Site Area Typical Soil Profile of Capps Area, Alaska Typical Soil Profile of Chuitna Area Grain Size Distribution - Gradation Curve Abrasion Test Results B-32 Page No. 1-3 1-6 2-5 3-2 3-11 3-12 3-15 3-17 3-18 3=19 3-20 3-21 3-23 3-27 3-29 3-30 3-33 3-34 3-35 3-37 3-39 3-42 3-44 3.22 3.23 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 Beil 4 5.3 5.4 Ded) 526 Ser 5.8 5.9 5.10 5511 S12 5.13 1314R Major Faults in Southcentral Alaska Cumulative Magnitude/Frequency Relationship, Anchorage Region Well Locations, Granite Point Area Groundwater Quality Granite Point Area, Bedrock Outcrops and Depth to Bedrock in Wells Pump Test of Well #2 Lakes of Beluga Area Staff Gauge Locations - Beluga Region Rating Curve for Nikolai Creek (Bridge) Typical Data Recovered From DATAPOD Experiment (Nikolai Creek) Typical Surface Water Quality Analysis General Location Sampled by Trapping and by Angling (May-Aug. '81) Species Distribution and Spawning Areas Areas Where Adult King Salmon Were Observed (July - August '81) General Vegetation Nap Preliminary Photo Interpretation Vegetation Map Preliminary Determination of Wetlands Seasonal Concentrations of Moose Bear Feeding and Denning Areas Known Nesting Sites (Active, 1981) Habitat Types, Cook Inlet Shoreline Distribution of Organisms in Mud Flats Generalized Food Web for Mud Flat Granite Point Intertidal and Shallow Subtidal Species ‘Assemblages B-33 Page No. 3-53 3-58 4-2 4-6 4-8 4-10 4-13 4-16 4-29 4-30 4-32 5-23 5-29 5-33 5-37 5-39 5-4] 5-42 5-60 5-62 5-64 5-65 5-67 C23 5.14 5.15 5.16 5.17 6.1 6.2 6.3 el dct 7.3 8.1 10.1 10.2 10.3 10.4 10.5 10.6 10.7 10.8 11.1 14.1 20.1 1314R Life Cycle of King Salmon Life Cycle of Silver Salmon Resource Use in the Cook Inlet. Area Trading Bay State Game Refuge Representative Climatic Conditions for Project Area Locatons of Weather Monitoring Stations Wind Rose Division of Cook Inlet Net Surface Circulation Bottom Sediments in Cook Inlet Archaeologic and Historic Sites Existing Land Status Existing Roads and Easements Overall Site Plan Camp Siting Considerations Camp Plan Airport Siting Considerations Airport Plan Town Land Use Plan Levels of Noise in Terms of a Weighted Sound Levels, dB(A) A Possible Perturbation Matrix for Considering Enviornmental Impacts of the Methanol Project Levels of Noise, dB(A) - Beluga Methanol Plant B-34 Page No. 5-71 5-72 5-81 5-90 6-4 6-5 7-2 7-5 7-9 8-9 10-4 10-12 10-29 10-31 10-32 10-36 10-37 10-40 11-2 14-6 20-4 VOLUME V COMMERCIAL TABLE OF CONTENTS Section 1.0 INTRODUCTION 250 POTENTIAL MARKETS FOR BELUGA METHANOL Zi) Introduction General Considerations Utility Market Motor Vehicle Fuels Chemical Markets Carbon Dioxide Market Summary eat Matching Project Needs to Sales Contracts Type of Customers Required Type of Contract Proposed for Utilities 25 The Utility Market Technical Base for Utility Use of Methanol Utility Market Overview Specific Utility Market Prospects The Southern California Edison Company Los Angeles Department of Water and Power Pacific Gas and Electric Company San Diego Gas and Electric Company Burbank Public Service Department Glendale Public Service Department Pasadena Water and Power Department Supplies and Forecasts of Power in the Pacific Northwest 1314R B-35 Page No. val 2/1 2/1 2/1 2/1 2/2 2/4 2/4 2/5 2/6 2/6 2/8 2/10 2/10 2/13 2/20 2/20 2/27 2/37 2/41 2/42 2/42 2/42 2/44 o8 Section “ Page No. = oO 2.3 The Utility Market (Continued) Portland General Electric Company 2/51 Puget Sound Power and Light Company 2/55 Hawaii: Hawaiian Electric Company 2/61 (Hawaii, Honolulu, and Maui Counties) Citizens Utilities Co. (Kauai County) Molokai Electric Company (Maui County) Summary of Potential Demand for Methanol in 2/63 Pacific States Utilities 2.4 The Potential Market for Motor Vehicle Fuel Use 2/66 The Use of Methanol in Motor Vehicle Fuel 2/67 Economic Perspective on Methanol as a Motor Fuel 2/74 Potential Markets for Methanol as a Motor 2/75 Vehicle Fuel 2.9 Chemical Market Opportunities 2/87 2.6 Independent Verification of Prices and Economics 2/90 Price of Competing Fuels 2/90 Value of Methanol in Motor Fuel 2/96 2.7 Production and Potential Sales of Carbon Dioxide 2/97 and Nitrogen Uses 2/97 Anticipated Quantitites and Purity of Carbon 2/99 Dioxide Economics of Carbon Dioxide 2/99 1314R B-36 Section 3.0 4.0 1314R TOTAL PROJECT COST ESTIMATE Executive Summary Scope Schedule Estimate Approach Labor Field Indirect Costs Professional Services, Royalties, Commissions Duties, Taxes, Insurance Catalysts Escalation Contingency Exhibits, Tables Professional Services Summary Accuracy Summary Direct Cost Summaries FINANCIAL ANALYSIS Summary : Table 1A Selected Financial Statistics Table 1B Selected Leverage Case Financial Statistics Introduction Basis of Economic Analysis General Constant 1981 Dollars Real Growth in 1981 Dollars Estimated Price Escalation Growth in Motor Fuel Market B-37 Page No. 41-51 54-308 -o WO wDWwowoowown & tS Section Project Estimates Capital Costs Background Nine and Proces Plant Costs Potential Impact of Cost Escalation Operating Costs General Projected Costs Coal Costs Severance and Royalty Costs Catalysts Consummables Maintenance Materials Payroll Ad Valorem Taxes and Insurance Transportation Depletion Projected Revenue and Expenses Revenues Interest Rate Depreciation Commitment Commission Financial Projections and Analysis General Financial Model Development 1314R B-38 Page No. ‘3 i iB 12-14 15 16 16 16 16-18 18-19 19 19-20 20 21 22 22 23 23 23-25 26 26 27 27-28 28 ps Section 1314R Projections General Analytic Cases Summary Table 4A Selected Financial Statistics Appendix A - Constant 1981 Dollar Case Appendix B - NEPP Forecast for Distillate #2 Appendix C - NEPP Forecast for Distillate #2 with Escalation Appendix D - 50% Sales to Motor Fuel Base Case Sensitivity Analysis Life Cycle Cost Analysis Leverage Summary of Leverage Case Need for Government Assistance Government Synthetic Fuels Program Loan Guarantees of the SFC Price Guarantees Made by the SFC Direct Loan Authority Purchase Agreements Made by the SFC Joint Ventures by the SFC Project Need for Financial Assistance APPENDICES Explanatory Notes Appendix A Financial Statements - Constant 198] Dollars Appendix B Financial Statements - NEPP Forecasted Price for Distillate #2 Appendix C Financial Statements - NEPP Forecasted Price for Distillate #3 with Escalation Appendix D Financial Statements - 50% Sales to Motor Fuel with Escalation B-39 Page No. 29 29 29-30 30 31 32-33 33-34 35-36 36-37 37 37-39 40-4] 42-43 43-44 44-45 45-46 46-47 48-49 49- 49-50 50-52 1-3 VN % Sections 5.0 1314R Page No. Appendix E Financial Statements - Leveraged Case (75% Debt; 25% Equity) 50% Sales to Motor Fuel with Escalation Appendix F Financial Statements - Leveraged Case (25% Debt; 75% Equity) 50% Sales to Motor Fuel with Escalation Appendix G Partners Statements - Life Cycle Costs G-1 - $350 per ton Methanol Price G-2 - $500 per ton Methanol Price G-3 - $650 per ton Methanol Price Appendix H Selections from The National Energy Policy Plan A Report to the Congress July 1981 Appendix I Operating Cost and Working Capital TRADE-OFF STUDIES 5/1 Mining Operation Alternates 5/2 Coal Shipping Alternates 5/11 Coal Drying Alternates 5/24 Gasification with Various Qualities of Coal 5/29 Construction Approach Alternates 5/42 Product Shipping Alternates 5/47 Ash Disposal Studies 5/49 Natural Gas Alternate for Power Generation 5/55 Comparison of Cooling Water Systems §/71 Hydrogen Sulfide Removal Alternates 5/85 B-40 (EX ™~ : C ty TASK CROSS REFERENCE The organization of this report does not follow the sequence of Tasks 1.00 through 9.00 in the Statement of Work and Study Schedule stipulated in the CIRI/Placer Pro- posal of 25 April, 1980. the subject matter as now presented in Volumes I through V. It has been found more convenient and orderly to arrange To enable those concerned to review the study findings with respect to the associ- ated assigned tasks, the following cross referenced tabulation is provided. Task 1.00 1.01 1.02 1.03 1.04 1.05 2.0 2.01 2.02 2.03 2.04 2.05 1314R Title CONCEPTUAL DESIGN Mine Railroad Process Plant Onsites Process Plant Offsites Camp, Town, & Airstrip ENGINEERING DESIGN Mine Railroad Process Plant Onsites Process Plant Offsites Camp, Town, & Airstrip Volume Ill LI II II! III Tl II III B-41 TASK CROSS REFERENCE Section All Sections Railroad All Sections All Sections Camp, Town, & Airstrip All Sections Railroad Coal Preparation Methanol Synthesis and Distillation Emergency & Safety Systems Buildings and Vehicles Dust Collection Oxygen-Nitrogen-Air and Utilities Wastewater Treatment Storage Facilities Camp, Town, & Airstrip Participant Paul Weir Davy McKee, Fisk, Green Davy McKee Davy licKee CIRI/H&N Paul Weir Davy McKee, Fisk, Green Davy McKee Davy McKee Davy McKee Davy McKee Davy McKee Davy McKee Davy McKee Davy McKee CIRI/H&N © CH Task 2.06 2.07 3.05 3.06 3.07 3.08 3.09 3.10 4.00 4.01 4.02 4.03 4.04 5.00 5.01 5.02 1314R Title . Volume Overall Plant Executive Layout Review Pipeline Transport, III Storage, Handling, and Ship Loading TRADE-OFF STUDIES Mining Operation Alternate Shipping Coal Alternates Coal Drying Alternates Gasification Alternate with Various Qualities of Coal Construction Approach Alternates Product Shipping Alternates Ash Disposal Studies Natural Gas Alternate for Power Generation Comparison of Cooling Water Systems Hydrogen Sulfide Removal =< <<<< << <<< CAPITAL COST ESTIMATE Obtain Vendor Costs Section Summary of Study Product Transportation Trade-Off Studies Trade-Off Studies Trade-Off Studies Trade-Off Studies Trade-Off Studies Trade-Off Studies Trade-Off Studies Trade-Off Studies Trade-Off Studies Trade-Off Studies (Included in 4.03) Obtain Subcontract Costs (Included in 4.03) Prepare Individual Cost Estimates a) Mine I b) Railroad EEI c) Camp, Town, & Airstrip III d) Process Plant V Prepare Overall Capital V Cost Estimate MARKETING Evaluate Market V Requirements Develop Narketing Methods V SITE EVALUATION Site Data Collection IV B-42 Tables Railroad Camp, Town, & Airstrip Capital Cost Capital Cost Marketing Marketing Site Evaluation Participant Davy McKee CIPL, D.A. Shock Paul Weir Davy McKee Davy McKee Davy McKee Davy McKee Davy McKee Davy McKee Davy McKee Davy McKee Davy McKee Paul Weir Davy McKee, Fisk, Green CIRI/H&N Davy McKee Davy McKee, CIRI/PLACER, CIRI/H&N, W.D. Baker, C.P. Locher, Fisk, Green C.A. Stokes; CIRI/Placer; Booz, Allen, & Hamilton CIRI/Placer, DOWL Task 6.02 1314R Title Volume Site Data Evaluation IV Applicable Construction IV Codes and Ordinances Plans for Acquiring Executive Permits & Licenses Review ECONOMIC ANALYSIS Basic Definition V Economic Analysis V Financial Plan V Executive Review ENVIRONMENTAL Environmental IV Socioeconomics IV Site Evaluation IV Heal th IV Safety IV TECHNICAL SUPPORT PLANS Project Management Executive Plan Review Section Site Evaluation All Sections Work Plan for Phase II Financial Financial Financial Work Plan for Phase II Baseline Data Baseline Data Site Evaluation Safety and Risk Safety and Risk Management Plan for Phase II Participant CIRI/Placer, DOWL, Klohn Leonoff DOWL CIRI/Placer, DOWL CIRI/Placer, Bankers Trust, Lehman Bros. Kuhn Loeb DOWL P.N.D'Eliscu CIRI/Placer, DOWL DOWL DOWL. CIRI/Placer, Davy McKee Project Manual (Issued at start of Phase I; to be expanded for each additional phase. ) (Quarterly reports issued during Phase I. Reports will be issued as required in future phase.) B-43 Progress reports APPENDIX C DRAWINGS Title Overall Plant Area Plan Mass Block Flow Diagram Utility Block Flow Diagram C-1 Drawing Number 5530-001-P-001 5530-Y-001 5530-Y-002 comme ‘eI HILL! ' | | STRtary NA ® © j|_st#8ar7 vescemmrion BFTER Guan Te | consonant - | caeaon. { _HYOROG EN ’ RITROGEN ey ’ i Ce cecteantn WATER wy gle area, ran gon w we =BULFY ToiAnva, | GER ALG © | -forac e fore 5333 )iRay i eotitton ba E-TPERATORE | % re bai ! atooed trata | C2 se" - BOUER STACK . 4 sucrue ' Rawr werek MAKE UO WATER actcrascity [\cooumne Tower & -) | e Zaotne | Process + evarcrarion 5 My fAik Fower EONDENSATES STEAMY toss ee “ i venr & TO PLANT TO PLANT ® bed PROCESS ‘STEA FLARE ¢ SEPARATION] “er . ¢ - paw eoner ‘ano cooune ano ap fon @ rive sas pn irianr so waren rico waren powse | vomren neuer SALE, le Sttoatton qo SPAR ; | — ae TREATING TREATHENT GENERATION Sreren svstan ee srs. soe [a sor_fo oo far sos [aa 404 [23 sos [ia PURGE . | ; fa t tl a a arcane _| CS — | Congus TION REFORMER REFORMER PROCESS _* ! VENT an CONOENSATE s eailectiow _ venr SEAL Losses 7a FLARE weAT RAW CO SHIFT ACIO MAKE-UP — PARTICULATE METHANOL METHANOL prooucr — RECOVERY -—m LQ cas bp cos fm cas mca a OW 1 cemacgl fcvccone eee COMPRESSION) |WroRoLYSIS REMOVAL COMPRESSI srvrNesS ONSTALLATION sroance tor [3] zov_[a] ze fo] au_ [ra] aa [7] ea _{7a] ae fa] as [ie srans-on f rt process conaus rion WAT i 8 aa To swier Ae CONOENSATE B O cases 0 process peocess shiwe Conoensare conosnsare | 2 FUTRATE RETURN TO . am cwan. POEL aE ScavagEAS (204) | was7e mae Q ENO. fant GAS oe race xan oer SETTLING scauaaer (207) J TREATOENT aPHRUENT CHAR Ano et UE NANOLING FILTRATION. oe 2a “és Me a 208 7 f=} {7} FIA a x WATER Pind OPO SAL erstan Tan Done mopern monet | ome CIRI / PLACER Conromatvon Wow toes vet mr mae cwae S$iU0GE TO = soa [5 rod wy monn mr oan se caranede 1 SELUGA METHANOL PROS, Davy McKee fang para SaienUraewemed moon: CDOATINCET AALASKA) *l sx.cuues siccoie HICIORS nn dogo fried Oyo =~ TEE = MASS BLOCK fiow DiacRam = |5530-Y-001 cogent s | . | 10 : pir ks eth Be ag PLANT UTMITY TAGLE UTnsTY coon ULoOTlOlLloOloe AREA Zor, 208, vor | toa [zepzo4| eos | 206 | zor COOLING WATER err [eo,0c0| aso [320 [300 82,980) 7370 | 12,370 | F500 > 74,599 | 1976 2aio | 160 | 50d |32,796 | e05 f996 | 4980 foe. HE is__[iste | "seo eres 870 Psin, 84 + ca 929,779) 784,320) 117, 000 iF PSia, SAT. $35,006 4 $7, 640 64,3514 492 | 4SS,S23 | 114,350 STEAM GENERATED ince voes = 1315 PSIA, 2007 (236,700) or 7270 ASA, 9507 Tt t rac IMG) CIEXTH O PSIA, 840°F zea, = THiS PSiAn, SAT. S937 i. yay @Fw REQUIRED UT 246,968 (90,753 T 244,000] 12767500] AIR FOR C! SCF T esa 2a 5,780,784 135,002) . E | wirRoGEN i Se7H 27,000 [447,97 57E, S50} ~~ watunas Gas | 8c f 7360 wT. * Ps a4 Om eai/oar 128 sivoce 70 WING DISPOBAL BOER STACK oO 8 Seasun (ComING TOWER MAKE-UP WATER fan WATER ee process |G cuscreesrr WARORATION i ae ime | Eee rane Qa me To PLANT fre Plane ai . o * AR ‘ STEAM SLARE FLUE GAS atari] a ane tat Raw Ano cooing AND sur ogee es warer rower WATER rewier RECOVERY Penn! TREATING GENERATION srstEr arsran k#— 2/8 ror naar ae - poy it al 304 aos Sxioarion purse STEAM 70 eae wig rue on Ain 08 . REPORTER RETORMER comaveriow process ASH VENT CONDENSATE. ra ye coucacrionw ; SEAL Losses. . TO FLARE come WASTE aacaiving IFICATION| MEAT Raw co swirr cio MANE -UP aa ASIPICATION| _gleecovenry panricueare) ol cas cos cas Haas SO sorrnasis Sronnce a FEPARATION| © fcrcLone aarrowns lcomane ssi NYOROLYSIS REMOVAL ConPRessi ; i zor, 208, eos 406 Lie’ _fe £09 20 2" rel et : if 7 i F Sonraus rion ee process waren TO Mane -up CONDENSATE y Saree waren 8 Peocess process 8 conoswaare ConDENSare casks 70 FLARE war FU TR ATE AETURN TO COML Mn Cave Scrvagent (204) wastes ney senrcine! AND haw G46 £CAU8BE8 (£07) waree ~ sete nee cuAR a TREATMENT TFLUERT D/SP ORAL coucec rion! dandtin’ Pu TRATION ae [a] <a soar ieee sivoee ro ; geeheie Find DiEPOTAL a 308 fs] Tort Dehmaneeperyeoavveatt Lam CIAL /PLACER Cuan SLu0CE TO + _ Ye: CORPORATION. Mom nate Weed Ree re os D. M K ‘ Sat GrePOEAT ~& sitenne attest Jeeves rermavor rool Davy McKee So iae rt wyetneect meres | COO! ‘ ENGINEERS ANO CONSTRUCTORS, on Spe ohare yo pe WSS ETE EEE SyiBL Dei = uries “Ye FLOW DIAGRAM 5530-Y-002 K) wear ONL s0 00 3 | 4 2 . | . | . \ 7 sine 1908 sine shove amso Bieo vine ts009 vse seamece el, 1 Eyton ease cation © AT oes SAR TE neAT RECOVERY 4 DRY CYCLONE ARTE sitar exuovenev4 08 OCLOME OATH = RRETUCATE REMOVAL, PAT WEOSOWRL OATH 2 EASIrICATIOn Crk 4 COAL DRYER RTEMATE |g METTONG § FTRATION eS Ty Ree Town oe pare of DAVY # (On Mam not ba Wom ma re cigs /PLACER BELUGA PETHANOL PROVECT COOK 4 ET ALASKA, OVERALL PLANT AREA PLAN eens £2 290___ sano Davy McKee ENGINCERS ANDO CONSTRUCTORS: 5530 -001-P-001 0