1
1 STATE OF ILLINOIS ) )SS 2 COUNTY OF JO DAVIESS)
3
4
5 In the Matter of the Petition
6 of
7 Rentech Energy Midwest Corporation,
8 Jo Daviess County, Illinois
9
10 Testimony of Witnesses 11 Produced, Sworn and Examined on this 14th day 12 of February A.D. 2007 before the Jo Daviess County 13 Zoning Board of Appeals
14
15
16 Present: 17 William Tonne 18 Tom Heidenreich Nick Tranel 19 Susan Davis David Jansen 20 Melvin Gratton, Chairman
21 Linda Delvaux, Zoning Administrator
22
23
24
In Totidem Verbis, LLC (ITV)
(815) 453-2260
2
1 INDEX
2
3 WITNESS: JOHN DIESCH
4 Examination Page
5 Attorney Heaton (Direct)...... 16
6
7 WITNESS: MARK IBSEN
8 Examination Page
9 Attorney Heaton (Direct)...... 46
10
11 WITNESS: JOHN IWANSKI
12 Examination Page
13 Attorney Sanders (Direct) ...... 108
14
15 WITNESS: KEVIN BOYER
16 Examination Page
17 Attorney Sanders (Direct) ...... 154
18
19 EXHIBITS Exhibit Page 20 Petitioner's Exhibit No. 1...... 16 Petitioner's Exhibit No. 2...... 16 21 Petitioner's Exhibit No. 4...... 110 Petitioner's Exhibit No. 5...... 153 22
23 End ...... 170
24
In Totidem Verbis, LLC (ITV)
(815) 453-2260
3
1 MR. GRATTON: Good evening everybody and
2 welcome to this evening's proceedings. This is
3 the special meeting of the Jo Daviess County
4 Zoning Board of Appeals. I'm going to start by
5 calling roll so we can establish a quorum.
6 MS. SOPPE: Tom Heidenreich?
7 MR. HEIDENREICH: Present.
8 MS. SOPPE: Nick Tranel?
9 MR. TRANEL: Here.
10 MS. SOPPE: Bill Tonne?
11 MR. TONNE: Here.
12 MS. SOPPE: Susie Davis?
13 MS. DAVIS: Here.
14 MS. SOPPE: Mel Gratton?
15 MR. GRATTON: Here.
16 MS. SOPPE: Alternative Dave Jansen?
17 MR. JANSEN: Here.
18 MR. GRATTON: Okay. We have a quorum so
19 we can proceed. I'm going to dispense with the
20 approval of the minutes from our last regularly
21 scheduled meeting, and we'll take that up at our
22 February 28th regular meeting. We'll get right
23 into the business at hand this evening. We have
24 a request before us this evening, an application
In Totidem Verbis, LLC (ITV)
(815) 453-2260
4
1 by Rentech Energy Midwest Corporation, and they
2 are requesting a special use permit in an ag
3 district to allow for basic industry. They plan
4 to convert the existing plant into an integrated
5 fertilizer and Fischer-Tropsch fuels production
6 facility which will use coal gasification
7 technology to produce nitrogen fertilizer and
8 other products such as transportation fuels and
9 electricity. The address for this particular
10 request is 16675 U.S. Route 20 West in East
11 Dubuque.
12 I have a few items I'd like to just take
13 care of as far as housekeeping before we begin.
14 I would like to introduce some people. On the
15 staff, we have most of the people representing
16 staff over here in the jury box. And Linda
17 Delvaux, our zoning administrator. Linda, just
18 raise your hand so people know who I'm talking
19 about. And then normally we would have Terry
20 Kurt who is the legal counsel for the County,
21 and he has deferred to two people who have been
22 hired for this process who have expertise in not
23 only legal but environmental law. And the two
24 people representing Foley & Lardner, LLP are
In Totidem Verbis, LLC (ITV)
(815) 453-2260
5
1 Chris Zibart and Katie Licup, and -- sitting
2 over here, and they will be representing the
3 counsel from a legal standpoint. The County has
4 also retained a environmental engineer
5 corporation consulting group of URS. And we
6 have with us next to Linda over here Patty
7 Bryan, Michael Musial, and Bruce Dumdei. So
8 they are acting as consultants to County Staff
9 in this evening's proceedings. They will be
10 helping in the preparation of finding of fact
11 and things like that as we move forward, and
12 help us answer any environmental or other
13 engineering questions we might have.
14 The process -- or let me get the time line
15 out of the way, first of all. I'm not sure how
16 long this will take. I'm not sure how lengthy
17 the presentation might be on behalf of
18 petitioner, but we have set aside this evening
19 and again tomorrow night, and there are some
20 open dates in the courtroom next week if it
21 turns out that we have to, you know, take that
22 long. I hope it won't. I hope we can wrap this
23 up in a relatively timely manner. But tonight
24 and tomorrow night is open on the docket just in
In Totidem Verbis, LLC (ITV)
(815) 453-2260
6
1 case and this may be continued, so I'll just
2 tell you that up front just in case we don't
3 finish this evening. I would anticipate that we
4 will go no later than 9 o'clock this evening.
5 If it looks like we can see light at the end of
6 the tunnel and we can finish up tonight, then we
7 might go longer, but otherwise we will continue
8 until tomorrow evening.
9 We also will look at -- this might be --
10 there might be some lengthy requirements and
11 contingencies in here as far as permitting,
12 things like that, and I think what we'd like to
13 do, to make sure we get this as correct as
14 possible, make up -- put together the finding of
15 fact and have staff and counsel and everyone put
16 this together as far as the finding of fact, and
17 then make the final decision on this request on
18 our regular meeting date of February 28th, so
19 that's the plan as of now.
20 I would like to explain a little bit about
21 the request and how it will be viewed this
22 evening. Like I said, this is a special use
23 request. The purpose of the Zoning Board of
24 Appeals is to look at this special use in light
In Totidem Verbis, LLC (ITV)
(815) 453-2260
7
1 of special use standards which are delineated in
2 the Jo Daviess County Zoning Ordinance, and
3 there are six standards in there that we will be
4 considering as far as whether or not this is an
5 acceptable special use in Jo Daviess County as
6 far as basic industry in an ag district. And
7 just real briefly I'll touch on those, and maybe
8 as you do your presentations, gentlemen, and as
9 anyone here wants to be heard, if you would
10 direct yourself to those questions, or those
11 areas, those will be the areas we will be
12 considering as we make a determination on this
13 particular request.
14 The first one, and like I said, there are
15 six of those standards, the first one is whether
16 or not the project will -- how it will affect
17 the health, safety, and welfare of the people of
18 Jo Daviess County. Secondly, whether the
19 project will be injurious to the use and
20 enjoyment of the other property in the immediate
21 vicinity and whether it will impair property
22 values. Third, whether the project will impede
23 the normal and orderly development of
24 surrounding property. Fourth, whether the
In Totidem Verbis, LLC (ITV)
(815) 453-2260
8
1 applicant is proposing adequate utilities,
2 access roads, drainage, etcetera. Fifth, the
3 effect on traffic congestion on public streets
4 and highways. And six, whether the special use
5 otherwise conforms to the applicable County
6 regulations. So if everyone would address
7 those.
8 I'm going to swear everyone in in a few
9 minutes, and I want everyone to remember that
10 you will be under oath when you testify, so the
11 truth in your testimony is very important. I
12 would ask that everyone be as brief and concise
13 as possible so that we don't tire or wear anyone
14 out before the evening is totally over. If you
15 have a cell phone I would ask you to either turn
16 it off or put it on vibrate, if you would.
17 Otherwise we'll stop and listen while you talk.
18 Does anyone have any questions as far as
19 proceedings this evening? Okay. Hearing none,
20 we will begin then.
21 Normally at this time what we would do is
22 hear the staff report regarding this case. The
23 staff report today is about 11-plus pages long,
24 and I would probably dispense with having Linda
In Totidem Verbis, LLC (ITV)
(815) 453-2260
9
1 read that at this time. I think the petitioner
2 has received a copy of that report.
3 MR. HEATON: I don't think so.
4 MR. GRATTON: Linda, have they or not?
5 MS. DELVAUX: No, I guess they haven't.
6 It was lack of communication, I think,
7 between --
8 MR. GRATTON: I think probably you'll be
9 addressing most of the concerns that are in
10 there, but we will make a copy of that available
11 to you. And as you testify, anything that you
12 can get along with the standards and any
13 concerns that are addressed in there, why if you
14 would present those it would be helpful. So
15 we'll get you a copy. And I'm sorry that you
16 don't have one. Are there -- does anyone have
17 procedural questions before we begin? Okay. We
18 don't have too many thousands of people here
19 tonight, so what I think I'll do is instead of
20 swearing everybody in individually, I'm going to
21 ask that we all raise our right hand and get
22 sworn in together so that all of us when we
23 testify we will be under oath, and please
24 remember that in the future.
In Totidem Verbis, LLC (ITV)
(815) 453-2260
10
1 (Whereupon everyone was sworn.)
2 MR. GRATTON: Okay. At this point then I
3 think we're ready. And I would ask the
4 representatives from Rentech Midwest maybe to
5 make some introductions and begin the
6 presentation for us. We're here to learn. All
7 right.
8 MR. HEATON: Thank you, Mr. Chairman and
9 members of the Zoning Board of Appeals. We
10 first of all want to thank you for coming out on
11 Valentines night and giving us a special
12 hearing. We should be able, we think, to
13 present our case pretty much this evening and
14 then end within maybe the first hour tomorrow
15 evening. We have a witness coming from Chicago
16 tomorrow. My name is Jock Heaton. I'm a lawyer
17 in Sterling, Illinois. My partner Tom Sanders
18 is to my right, and my other partner Jim Reese
19 is in the first row here. They will be helping
20 Rentech this evening in presenting its case.
21 As you know, we represent Rentech Energy
22 Midwest Corporation. It's filed its application
23 requesting that it be granted a special use for
24 a basic industry within the County's Ag-1 zoning
In Totidem Verbis, LLC (ITV)
(815) 453-2260
11
1 classification. Its present plant is situated
2 on approximately 187 acres.
3 MR. GRATTON: Whenever you'd like to use
4 the wall, tell us and we'll dim the lights.
5 MR. HEATON: I think when Mr. Diesch
6 testifies we'll have -- he's got this thing, but
7 I would like to kind of explain what land is
8 involved here just from the start. Maybe Tom,
9 if you can hold it. As I indicated, the Rentech
10 plant was actually built in 1965. Rentech has
11 owned it since 2006. In its present facility --
12 this is a copy of the concept plan that was
13 submitted to your County Zoning Office. This is
14 the existing facility, and it's situated on
15 approximately 187 acres. What we are adding to
16 the site would be a 19-acre tract that Rentech
17 owns here, and then we are taking seven or eight
18 various tracts that are owned by the adjoining
19 owner, and that's Gary Newt. Mr. Newt owns this
20 parcel here, he owns miscellaneous other parcels
21 that surround this. And so when you add the
22 original 187 acres to the land that Mr. Newt
23 will also -- that we have an option to purchase
24 on -- or my client does, and the 19 acres that
In Totidem Verbis, LLC (ITV)
(815) 453-2260
12
1 Rentech will be adding to the project, it's
2 going to bring the total project to about 279
3 acres. It's also mentioned in the application
4 that a trust by the name of Wilma Hilby trust
5 which owns about 1.7 acres, Rentech has an
6 option to purchase this narrow strip which will
7 allow a second entrance to the plant. This will
8 lead to the existing Sandridge Township road
9 that will eventually lead to Route 20. So the
10 project is actually going to be 279 acres plus
11 or minus. We have given you the list
12 of witnesses that we intend to rely on. I think
13 there were ten, and I think we're actually going
14 to pear (sic) that down to about seven. John
15 Diesch will be our first witness. I'll have him
16 come up in a minute. John is the president of
17 Rentech Energy Midwest Corporation. John has
18 actually been on-site since 1998. He will give
19 you a Power Point presentation about the history
20 of the plant, the existing plant, and what the
21 new plant will entail, and also the benefits not
22 only to Jo Daviess County but to Northwest
23 Illinois.
24 Then we're going to have Mark Ibsen. Mark
In Totidem Verbis, LLC (ITV)
(815) 453-2260
13
1 is with Rentech, the parent company, which is
2 based in Denver, Colorado. Mark is the manager
3 of project engineering. He's been on this
4 project for a number of years and will stay to
5 the end. So he will talk about some of the
6 engineering issues, traffic issues, the railroad
7 issues, if any, and some other issues that I
8 think you will need to know about.
9 Then John Iwanski who is in the white
10 shirt off to my far left, John is with Trinity
11 Consultants which is an environmental management
12 consulting firm based out of Oakbrook, Illinois,
13 and he will talk about some of the air permit
14 issues that Rentech will have to go through
15 before it can build the plant.
16 Tomorrow evening we're going to have a
17 land use planner, Kon Savoy who is with an
18 outfit called Teska Associates from Evanston,
19 Illinois. Kon has done a lot of land use
20 planning around the northern part of the state,
21 and he will testify that in his opinion the
22 project will indeed meet the standards that your
23 chairman enunciated a few minutes ago.
24 Later this evening we will have Kevin
In Totidem Verbis, LLC (ITV)
(815) 453-2260
14
1 Boyer. Kevin is a -- there he is back to the
2 left. Kevin is a certified real estate
3 appraiser who has reviewed the property and the
4 surrounding properties, and he will testify that
5 the special use that's been requested will not
6 substantially diminish and impair property
7 values within the neighborhood.
8 We also have some letters of support from
9 Senator Todd Sieben and Representative Jim Sacia
10 which we will introduce into evidence. And then
11 we have three other individuals who would like
12 to speak. Mr. Ron Lawfer, if you could raise
13 your hand. Ron is a -- from Stockton, Illinois
14 and a farmer here. Many of you may know him.
15 He's going to talk about the benefits of keeping
16 this plant in this area and the benefits of cost
17 effective fertilizer to farmers. We have Kurt
18 Brunner way in the back. Kurt is with the
19 United States Brotherhood of Carpenters and
20 Joiners of America, the carpenter's union. He's
21 from Mount Carroll, Illinois, and he will talk
22 about the significant benefits that will come by
23 way of the construction jobs that will be needed
24 to build the new plant. And I think that's
In Totidem Verbis, LLC (ITV)
(815) 453-2260
15
1 everyone for the evening then. Is there anybody
2 here that I forgot? Okay.
3 Let me say at the outset that as is
4 mentioned in the special use application, it is
5 important that if you are willing to grant the
6 special use that the special -- that the
7 language that your board recommends to the
8 County -- to the County Board be that this
9 special use must be transferable to a third
10 party. We don't know how long Rentech will own
11 this facility. It's going to invest a
12 substantial amount of money in building this new
13 plant, and if the plant should be sold in the
14 future to a third party, obviously we don't want
15 to have to come back to the County and get
16 permission to be able to transfer that to a
17 third party.
18 So with that I would like to call our
19 first witness, John Diesch. John, you can stand
20 up. And John is going to, first of all, take
21 you through his Power Point presentation, and
22 then he's going to answer any questions that you
23 or anybody in the audience may have. And I
24 would like to hand out at the outset two
In Totidem Verbis, LLC (ITV)
(815) 453-2260
16
1 exhibits. The first is Petitioner's Exhibit 1,
2 which is a one-page summary of the overview and
3 of the plant and what the conversion process
4 will be, and also the benefits of shifting to
5 what he's going to refer to as coal
6 gasification. If you'd pass that out to your
7 committee. And then we have these available for
8 anybody in the audience that would like to
9 follow this to go along.
10 We'd also like to offer into evidence
11 Petitioner's Exhibit No. 2, which is a copy of
12 the Power Point presentation. I think it will
13 be a lot easier if you have the benefit of
14 following your own copy as John works through
15 this.
16 JOHN DIESCH,
17 being previously duly sworn, was examined and
18 testified as follows:
19 DIRECT EXAMINATION
20 BY MR. HEATON:
21 Q. First of all, would you again state your name.
22 A. My name is John Diesch.
23 Q. And John, tell us -- I mentioned you've been
24 with Rentech Energy Midwest Corporation since
In Totidem Verbis, LLC (ITV)
(815) 453-2260
17
1 1998. What is your position there?
2 A. I'm currently president of Rentech Energy
3 Midwest Corporation.
4 Q. Have you been in that position since 1998?
5 A. Well, the previous owners -- I've been
6 responsible for the plant site since 1998, but
7 under different actual titles with the different
8 owners.
9 Q. Okay, and what is your profession?
10 A. My background is I grew up on a farm in
11 Southeastern Minnesota. My hometown is a little
12 town called -- community called Blooming
13 Prairie, Minnesota so I've got quite a bit of an
14 agricultural background. Went to school at
15 Community State University. I have a degree in
16 environmental studies, and then from the
17 University of Minnesota a degree in chemical
18 engineering. I spent the last 25 years in this
19 industry working for companies like Monsanto. I
20 started my career with Monsanto down in
21 Louisiana, worked for a company called Columbian
22 Nitrogen Corporation, which is now PCSIS
23 Corporation, Saskatewan, IMC Global, and then
24 Royster Clark, and then now Rentech Energy.
In Totidem Verbis, LLC (ITV)
(815) 453-2260
18
1 MR. HEATON: If you then would start with
2 your Power Point and --
3 MR. DIESCH: The agenda for this, first of
4 all, I want to go over some of the history of
5 the facility, talk a little bit about the
6 current operations, how we produce the products
7 we make, our expansion plans and some of the
8 benefits that we'll see from this project
9 expansion. The plant itself was built in 1965
10 by Northern Illinois Natural Gas Company, today
11 known as Nicor. We currently have 123 employees
12 of which 87 are union, part of the UAW 1391 out
13 of Dubuque. Over the last -- as this project
14 has moved forward actually we've began the
15 process of hiring additional people. We've
16 added about 10 percent to the work force here in
17 the last year, both hourly as well as
18 engineering and technical and other types of
19 professions for the facility. We're probably
20 one of the highest paying for our hourly people
21 in the area. The average wage is about $60,000
22 per year plus full benefits. Major products we
23 produce are ammonia, urea, UAN solution. On an
24 annualized basis we produce roughly 670,000 tons
In Totidem Verbis, LLC (ITV)
(815) 453-2260
19
1 of fertilizer products which we sell to Midwest
2 farmers. The majority of it stays within a 200
3 mile radius of the facility. Companies like FS
4 -- some of our major customers are companies
5 like FS here locally, Swiss Valley are two or
6 three of the larger companies that we sell our
7 products to. Last year we had 125 million in
8 sales. And our current feedstock is natural
9 gas.
10 A little bit about the tax base. We are
11 the largest single payer of taxes in the County.
12 Last year 416 -- roughly $1,417,000 of taxes, of
13 which about 253,000 go to East Dubuque School
14 District. Again, we're the largest taxpayer in
15 the school district. Annual payroll, our
16 estimate for 2007 is just a hair under
17 $9 million for payroll for our facility.
18 Plant history, again, I mentioned it was
19 built in 1965. At that time it was just an
20 ammonia plant producing anhydrous ammonia.
21 Production rate of about 600 tons per day using
22 natural gas as feedstock. Over the years as
23 markets changed and agricultures changed we
24 began adding different newer product to our
In Totidem Verbis, LLC (ITV)
(815) 453-2260
20
1 product line. We had a number of expansions.
2 Ammonia expansions in '68, '75, '81, '88, and
3 when I say expansion, we added additional
4 capacity to the plant. In 1975 we added urea
5 production. We had that large prill tower.
6 That large tower that you see out there, that's
7 a prill tower which we're no longer using, but
8 that was producing a solid form of urea. And in
9 '78 we had UAN solution production, which a lot
10 of the farmers in the area use. And then
11 upgraded in 1992. We got away from the prill
12 tower and went to a granular product, which gets
13 us a very high quality product. And one of our
14 major customers is Scotts, so if you buy Scotts
15 Fertilizer there's a good chance you have our
16 urea in it. And the first carbon capture for
17 the plant, our CO2 plant was actually built in
18 '72, and we had a major expansion in 1980.
19 We've had a very safe operating history.
20 Been very active in the community, taking part
21 in sports teams, we've -- civic groups. We work
22 very closely with the local fire department. We
23 support them financially. We also train with
24 them. We have a hazardous materials team that
In Totidem Verbis, LLC (ITV)
(815) 453-2260
21
1 on occasion we'll go out and assist the County.
2 Actually we assisted all three states, the local
3 counties in all three states that surround us
4 with specific incidents. Paramedics emergency
5 responders, we have some folks on the local fire
6 department, members of the local emergency
7 planning commission, and then other business
8 organizations. We have excellent labor
9 management relations. In fact, we just
10 completed negotiating a collective bargaining
11 agreement, a six-year agreement which we
12 finalized this past fall.
13 Why did Rentech pick East Dubuque? Well,
14 first of all, we're located in the middle of the
15 corn belt on the western end of the Northwest
16 Illinois alternative energy corridor. This is a
17 key. We've got good railroad access, very good
18 barge access. We have the Mississippi River to
19 the heartland of the United States, excellent
20 road access to local farmers. We have a well
21 educated and trained work force. And 90 percent
22 of our products are sold within 200 miles, so it
23 significantly cuts down on our shipping costs.
24 Again, our major product's anhydrous
In Totidem Verbis, LLC (ITV)
(815) 453-2260
22
1 ammonia. About half of the ammonia produced is
2 used for direct application to agriculture. The
3 other half is upgraded in our other products,
4 the urea and the UAN solution. The urea
5 product, we both make the liquid and the solid
6 form. The solid form, again, I mentioned goes
7 to the lawn and garden industry such as Scotts.
8 One of our bigger customers that has begun to
9 grow over time has been the use of ammonia and
10 -- both ammonia and urea for nitric oxide
11 reduction systems in power plants. We sell
12 quite a bit to the power and pulp and paper
13 industry.
14 UAN solution is probably the largest
15 volume product we produce that goes for direct
16 ag application. And also liquid carbon dioxide
17 which we sell to the beverage industry.
18 That's an areal photograph of the plant.
19 You can see that's the Mississippi River. We
20 have a barge facility kind of off to the side
21 there where we can load some of our products by
22 barge. And that's Dubuque back up in the
23 background.
24 A little bit about our parent company,
In Totidem Verbis, LLC (ITV)
(815) 453-2260
23
1 Rentech Energy is a wholly owned subsidiary to
2 Rentech, Incorporated. Rentech was formed in
3 1981. It's our publicly traded company on the
4 American stock exchange. For the past 25 years
5 they've been working research and development
6 into the Fischer-Tropsch technology. We
7 currently own 23 patents in that technology.
8 And then in April they purchased the plant for
9 the purpose of utilizing their technology to
10 expand and actually to make the first world
11 scale Fischer-Tropsch fuels production facility
12 in the United States.
13 The reality of the plant. Since 2000 we
14 all feel it when we pay our utility bills,
15 natural gas prices are extremely high and
16 volatile. To produce ammonia using natural gas
17 as a feedstock it's roughly 90 percent of our
18 operating costs. So when natural gas prices go
19 up the farmer is going to pay more for his
20 fertilizer because of that. Prices have hit
21 historic highs. Last year at this time natural
22 gas was trading for nearly $15 per unit. Since
23 2000 because of these high and volatile natural
24 gas prices this industry has been shutting down.
In Totidem Verbis, LLC (ITV)
(815) 453-2260
24
1 22 percent of the U.S. fertilizer industry has
2 shut down since 2000 because of the high and
3 volatile natural gas prices. And because of
4 that we now import over 50 percent of our
5 nation's fertilizer to grow our corn crop.
6 The East Dubuque plant will not survive
7 without a feedstock change. This plant would
8 have been shut down three years ago if it wasn't
9 for this project going forward. We have been --
10 we've had one year in the black in the last six
11 years. That was in 2004 was the first year in
12 six years that we made money at this facility.
13 Why is it -- this is a comparison of natural gas
14 prices. The market today is trading between 7
15 and $8 in MMBtus if you look it up in the
16 futures market. The front month we traded in
17 the 7.50 range, and you compare that to other
18 parts of the world, Trinidad $1.25, Middle East
19 75¢, and so they can produce products that you
20 use as a farmer and ship it up into the
21 Mississippi -- up the Mississippi River right in
22 the middle of the corn belt cheaper than we can
23 make it, and that's been our problem having to
24 compete with offshore. We're paying ten times
In Totidem Verbis, LLC (ITV)
(815) 453-2260
25
1 the amount for natural gas than offshore
2 producers, so consequently as it shrinks -- the
3 industry shrinks in this country it's expanding
4 in the Middle East. All the new production
5 coming on line is taking place in the Middle
6 East or South America.
7 I'm going to go just briefly over to
8 process of the existing plant, how it's
9 producing anhydrous ammonia. It starts with
10 natural gas. About two-thirds of the gas that
11 we use, we use 31,800 MMBtus a day of natural
12 gas. We're one of the largest consumers in the
13 State of Illinois. That's enough gas to heat
14 150 thousand homes per day. So you can imagine
15 the amount of gas we use. Imagine our natural
16 gas bill. It's extensive. Natural gas, we
17 bring it into the plant, we have a large --
18 basically a furnace called a primary reformer
19 where we break the carbon and hydrogen bond. We
20 need the hydrogen to make ammonia. The nitrogen
21 from the ammonia comes from the air. We also
22 add water and steam, and the steam and the water
23 combine with the carbon and produce carbon
24 dioxide. The carbon dioxide, part of it goes to
In Totidem Verbis, LLC (ITV)
(815) 453-2260
26
1 producing urea, one of our products, and the
2 other part is liquified and we sell it in the
3 beverage industry.
4 About half the ammonia, like I said
5 before, goes for direct sales, half of it is
6 upgraded to produce products like urea, hydric
7 acid, ammonium nitrate fertilizer, so these are
8 the products that we produce in the plant. We
9 import -- we use 15 megawatts of power currently
10 off the grid to operate this facility.
11 Our plant location, this is the concept
12 plan. As you can see we're roughly just a
13 little over a mile off of U.S. 20. Kind of off
14 the beaten path. Unless you know we're there
15 you really don't see us except during cold
16 weather. During cold weather you can see the
17 steam or the water vapor coming off the
18 facility. Right along the Mississippi River we
19 have good barge access, rail access. It's a
20 good place to build a facility.
21 A little bit about the conversion project.
22 We're going to be using Illinois coal to gasify
23 or produce ammonia, anhydrous ammonia, all of
24 the existing products we currently use -- have.
In Totidem Verbis, LLC (ITV)
(815) 453-2260
27
1 Fischer-Tropsch fuels and electric power for
2 internal use. This ensures a continued
3 viability of the plant, will add about 120
4 additional jobs to the facility. During the
5 height of construction we'll have roughly a
6 thousand construction workers at the site. One
7 of the big positive things of this project is
8 reduced regulated emissions lower than the
9 existing facility is today, significantly lower
10 -- will be lower. Another positive thing will
11 be the low cost to produce nitrogen fertilizer
12 in the area which allows us to be more
13 competitive in the market, and that will have a
14 stabilizing effect on fertilizer prices for the
15 local farmer.
16 The project time line, the project is kind
17 of broken in a number of stages. The first
18 phase, Phase 1, is install the gasification
19 process and get the ammonia plant converted off
20 natural gas as quick as possible. Economically
21 that's the first thing we have to do. Phase
22 1-A, which will lag about six months behind, is
23 the first Fischer-Tropsch process. So about
24 two-thirds of the synthesis gas that comes off
In Totidem Verbis, LLC (ITV)
(815) 453-2260
28
1 the gasifier will go to ammonia production, and
2 about one-third will go to Fischer-Tropsch fuel
3 production. We're going to be using
4 ConoccoPhillips E-Gas gasification technology.
5 It's probably one of the most mature
6 technologies. It will be a duplicate of the
7 Wabash facility located just south side of -- at
8 Terre Haute, Indiana. That facility has been
9 operating -- that gasifier has been operating
10 for almost 10 years. Like I mentioned before,
11 the FT unit will be producing roughly 18 barrels
12 per day of Fischer-Tropsch fuels.
13 A second phase, which is going to be down
14 the road roughly, and we don't know exactly what
15 that time line is yet, but it will be sometime
16 after the start-up of the Phase 1 and Phase 1-A.
17 Currently our plan of construction will begin
18 this summer when we start moving dirt, roughly
19 two to two and a half years of construction. We
20 expect to begin the start-up process the fall of
21 2009 with commercial operations in early 2010.
22 The Fischer-Tropsch process, like I
23 mentioned before, construction is going to be
24 starting the latter part of 2008, would start
In Totidem Verbis, LLC (ITV)
(815) 453-2260
29
1 about six months behind the gasification. Phase
2 1 time line, first of all, of course, the
3 purchase of the plant, which took place last
4 April. Front end engineering design, which
5 we're into that process currently, that began in
6 June of last year. We made our air permit
7 submittal in June of last year. Of course we're
8 going through zoning now. We expect to have our
9 air permit issued in May of 2007. Front end
10 engineering design completion September of 2007.
11 We'll actually begin construction, moving dirt
12 before we finish the front end engineering
13 design. Close of construction financing, so
14 financing the major portion of the construction
15 project will take place as soon as the detail
16 cost estimates come out of front engineering,
17 which is in September, so that will be excepted
18 to be completed in October. Again, fall
19 start-up '09, and commercial operations in 2010.
20 A little bit about gasification
21 technology. The question is how can you make
22 coal clean. You know, everybody thinks of coal
23 as this black smokestack coming up. The
24 gasification technology is significant. It's
In Totidem Verbis, LLC (ITV)
(815) 453-2260
30
1 not combustion. You're not burning the coal.
2 You're using pure oxygen, so we'll have an air
3 separation unit. We'll take air, liquify the
4 air and separate the oxygen from the nitrogen.
5 The oxygen goes to the gasifier, the nitrogen
6 goes to the ammonia plant to produce ammonia.
7 The oxygen -- the coal comes in and it's ground
8 up into a fine powder and mixed with water to
9 produce a slurry which goes to the bottom of the
10 gasifier. This gasifier runs at very high
11 temperatures, close to 3000 degrees. You hear
12 about town gas, the old type of gasifiers and
13 the slubs and the tars and stuff. The reason
14 why you had that was because it operated at such
15 low temperatures. You operate at a high
16 temperature you create -- all those materials
17 aren't created, so you produce two products.
18 You get the right ratio of oxygen and coal and
19 you produce products of carbon monoxide and
20 hydrogen, and those are the two products, which
21 is called synthesis gas, synthetic gas. Again,
22 like I mentioned before, we need hydrogen to
23 make ammonia. That's a component we need, and
24 the carbon monoxide is what is used to make the
In Totidem Verbis, LLC (ITV)
(815) 453-2260
31
1 fuel. It comes off the top of the gasifier, and
2 that gas coming off there goes through a heat
3 exchanger to produce steam, and that steam will
4 drive a generator to produce power. The solids
5 are removed through what's called a candle
6 filter which are recycled back to the bottom of
7 the gasifier. So all the solids will come off
8 of the bottom of the gasifier, and because it's
9 such high temperatures it goes through a process
10 called rigification and basically creates a
11 glass. It will come out as a black glass. It
12 meets all the environmental requirements, so
13 there will be no leaching problems or anything.
14 So it's used as a building material to asphalt
15 and cover for landfills and things like that.
16 So that byproduct will be a product that we'll
17 sell in the marketplace. Gas comes off from
18 there and goes through an area called acid gas
19 removal. That's where we remove the carbon
20 dioxide, the sulfur, and the mercury. The
21 mercury is moved in carbon beds and the sulfur
22 can either be removed as a liquid or a solid,
23 pure sulfur product which will be sold in the
24 marketplace to make other products. For
In Totidem Verbis, LLC (ITV)
(815) 453-2260
32
1 instance, sulfur is a main component in a Tide
2 soap that you use to make laundry detergents.
3 It's one of the major products to make dimonium
4 phosphate, which is a phosphate a farmer puts on
5 his soil. So it has multi-product uses.
6 This on this particular diagram shows
7 what's called IGCC, which is a power plant. So
8 what it shows here is that this clean synthesis
9 gas is actually combusted in a combustion
10 turbine, and we won't be doing that. This will
11 then split apart, and part of it is going to go
12 to the Fischer-Tropsch plant to make the fuels
13 and part of it is going to go to the ammonia
14 plant to make ammonia.
15 This is an integrated design. The front
16 end of the ammonia plant, which we use so much
17 energy now for heat source, we'll no longer use.
18 All we need is the back end of the ammonia
19 plant, which is the conversion of the hydrogen
20 and nitrogen brought together to make ammonia.
21 Fischer-Tropsch, the gasification will go to the
22 Fischer-Tropsch process, upgraded to the fuels.
23 The steam is used to produce power. It will
24 produce roughly 80 megawatts of power at this
In Totidem Verbis, LLC (ITV)
(815) 453-2260
33
1 plant. But for the first phase, 1 and 1-A, all
2 that power will be used internally. And then
3 we'll continue to make the products we currently
4 do on the nitrogen side, plus we'll make
5 Fischer-Tropsch diesel, another fuel product
6 called Naphtha, and then the sulfur compound
7 products.
8 Again, this is a photograph of the project
9 location. I wanted to kind of point out, the
10 green area here is the existing facility. The
11 expansion is going to be somewhat to the south.
12 This area here is where the gasification
13 facility is going to be. Power generation,
14 utilities, that's water treatment, and then the
15 Fischer-Tropsch process is right in here. The
16 coal handling, this is a rail line coming -- the
17 coal cars will come in, drop into a coal pile,
18 plus coal handling, and the slurry plant will be
19 back in this area here. The whole surrounding
20 area, this is the property -- the way it will
21 look will be -- this bluff area here is all
22 planted with the trees and the whole surrounding
23 area will be planted with trees where we do the
24 construction. It's important for us to put
In Totidem Verbis, LLC (ITV)
(815) 453-2260
34
1 barriers around there, you know, to make it look
2 nice.
3 The project itself, $810 million is the
4 estimated -- is the cost estimate, which is
5 Phase 1, Phase 1-A. Phase 2 we don't have
6 enough information yet to do an estimate on the
7 cost of Phase 2. Ammonia production will go
8 from 830 tons per day to a thousand tons per
9 day. We'll produce 1800 barrels per day in
10 Fischer-Tropsch fuels by 80 megawatts of power
11 using 2600 tons per day of coal.
12 Phase 2 we'll be at additional
13 gasification trained, all of that will go to
14 produce Fischer-Tropsch fuels, which is an
15 additional 4000 barrels a day for a Phase 2
16 total of 1500 barrels. Ammonia production won't
17 change in the Phase 2. Double the power
18 production using 5200 tons per day of coal. We
19 think we will have a slight amount of export
20 power once Phase 2 is complete, somewhere around
21 10 or 20 megawatts of power. After conversion
22 production the plant will -- I mentioned -- this
23 is what I just said -- will go from 830 to a
24 thousand tons per day. We'll continue to
In Totidem Verbis, LLC (ITV)
(815) 453-2260
35
1 produce our urea, UAN solution, and all those
2 products, while we're constructing that plant,
3 we'll continue to operate while we do the
4 construction. Produce our own electric power
5 instead of importing power. We'll produce
6 ultra-clean Fischer-Tropsch fuels.
7 I have a sample of the fuel, which is the
8 fuel -- you can pull the top off it. What
9 you're going -- it doesn't smell like a standard
10 petroleum fuel. It will have a -- it smells
11 like candle wax because that's what it is. It's
12 paraffin. It's a carbon -- straight carbon
13 chain paraffin. Because it's a paraffin you can
14 use it on the standard diesel engine and you see
15 significant reduction in emissions from that
16 fuel.
17 The positive thing about the fuel, first
18 of all, it's biodegradable. You spill it on the
19 ground, the microbes on the ground will
20 decompose it, break it down. There's virtually
21 no sulfur because the gasification process moves
22 the sulfur out of the coal. It's got a very
23 high Cetane level, which is similar to octane in
24 gasoline. Very stable in long storage
In Totidem Verbis, LLC (ITV)
(815) 453-2260
36
1 capabilities. The standard diesel fuel, as you
2 know, you use diesel as a farmer, it's going to
3 gel over a period of time, and you also have
4 some cold weather concerns with fuel, when this
5 fuel has a very long storage life. We've had
6 samples that sat on a shelf for eight years with
7 no degradation in the properties of the fuel
8 itself, so which is -- that's extremely
9 important for both long-term storage of the fuel
10 as well as the other interesting party is the
11 Department of Defense, because in addition to
12 diesel fuel you can produce jet fuel using this
13 process. The combustion products are
14 significantly -- there's a significant reduction
15 in hydrocarbons emissions off the tailpipe,
16 42 percent, 33 percent less carbon monoxide
17 emissions from it. This is on a standard diesel
18 engine. These were government tests that were
19 done on a standard diesel. 9 percent less
20 carbon dioxide, 28 percent less particulate
21 matter, the black stuff that comes off of these,
22 and 3 percent less carbon dioxide emissions off
23 using the Fischer-Tropsch fuels.
24 I mentioned earlier about the emissions
In Totidem Verbis, LLC (ITV)
(815) 453-2260
37
1 reductions from the plant itself. We'll see
2 roughly a two-thirds reduction of total criteria
3 fluid emissions from the existing plant site
4 after the expansion. Those emission reductions
5 -- our particulate matter will stay roughly the
6 same, we'll see a reduction in volatile organic
7 compounds, we'll see a slight increase in carbon
8 monoxide. The largest reduction is nitric
9 oxides because we'll no longer be burning the
10 natural gas for a heat source in the new plant.
11 We'll also see a slight increase in sulfur
12 compounds. But overall a net reduction of about
13 two-thirds.
14 A lot of times you hear about the mercury,
15 concerned about mercury in coal. Illinois coal
16 contains roughly 70 parts per billion of
17 mercury, so with 2600 tons per day of coal that
18 corresponds to about 5 ounces of mercury that
19 will be in the coal that will feed into the
20 plant a day. Because of the gasification
21 process you get concentrated streams, you can
22 easily remove that mercury. We'll remove over
23 95 percent. Actually it's going to be
24 nondetectable based on the studies that have
In Totidem Verbis, LLC (ITV)
(815) 453-2260
38
1 come off the Wabash plant. The synthesis coming
2 in after mercury removal is basically
3 nondetectable, below detectable limits. The
4 other thing is we have to remove it because it's
5 a contaminant to the catalyst we use, both the
6 sulfur and mercury are contaminants, so we have
7 to remove it all. And so what we're -- what our
8 vendors for the mercury removal system say is
9 they can guarantee 95 percent, but we think it's
10 actually going to be better than that. This
11 will be utilizing a state-of-the-art dual bed
12 carbon filter removal system.
13 We hear a lot about greenhouse gases, what
14 are you doing with carbon. About one-third of
15 the carbon in the coal will be converted in the
16 products we produce, both the liquid CO2, the
17 urea, as well as the fuels. With this
18 technology, because you can get concentrated
19 streams, the technology is there to remove more.
20 Potentially up to 85 percent of the carbon can
21 be removed using this process. You got -- but
22 the technology as a nation is not there of how
23 -- what do you do with that carbon, you got to
24 have places to go with it. Currently it is
In Totidem Verbis, LLC (ITV)
(815) 453-2260
39
1 used, sequestered for enhanced oil recovery.
2 And enhanced oil recovery is where you inject
3 carbon dioxide into the ground, it displaces oil
4 that is caught in the cores of the rock, and
5 then it's easier to bring oil out of the ground.
6 So that's one of the possible uses that will be
7 coming off gasification facilities like this.
8 Rentech's strategy is to design and build
9 plants that will permit maximum carbon capture
10 and aggressively seek sequestration
11 opportunities. Sequester means taking the
12 carbon -- carbon dioxide and putting it in a
13 place where it won't go into the atmosphere. We
14 are also working to develop biomass utilization
15 in FT fuels. To make FT fuels it doesn't make
16 any difference what the carbon source is. It
17 can be coal, it can be natural gas, it can be
18 biomass. We believe the future is really going
19 to be biomass or a combination of coal and
20 biomass, because in order to reduce carbon into
21 the atmosphere biomass allows you to create a
22 carbon cycle. So it's a much better way to
23 handle the carbon issue with regards to
24 gasification. But the technology has not been
In Totidem Verbis, LLC (ITV)
(815) 453-2260
40
1 fully developed to sequester all the CO2 at this
2 point in time. But in order to get to that
3 point these plants have to be constructed in
4 order to continue to move the research and
5 development technology forward.
6 What are the benefits. First of all, it
7 ensures continued viability of the plant. As I
8 mentioned before, this project keeps this plant
9 operating. Maintain the tax base, and actually
10 add tax dollars into the Jo Daviess County and
11 East Dubuque School District as this plant
12 expands. Maintain a current 123 plant jobs,
13 create 120 new union salaried positions for the
14 facility, nearly a thousand union construction
15 jobs. This project will be done on a project
16 labor agreement. 150 coal mining jobs for the
17 amount of coal that we'll be utilizing at this
18 facility, and this is going to be Illinois coal.
19 Our reduced emissions of criteria pollutants,
20 we'll be capturing a portion of the carbon, and
21 providing competitive priced fertilizer to
22 Midwest farmers. Any questions?
23 AUDIENCE MEMBER: Is your pilot plant in
24 Colorado -- is your pilot plant in Colorado up
In Totidem Verbis, LLC (ITV)
(815) 453-2260
41
1 and running yet?
2 MR. DIESCH: No, it's under construction.
3 Our expectation right now is the Fischer-Tropsch
4 unit has been delivered. They are building
5 that. The gasifier is complete -- pretty close
6 to complete. We expect that to be delivered
7 within the next month or month and a half. And
8 so we'll have the construction complete and be
9 ready to begin start-up process probably
10 September or October of this year. Let me
11 explain what he's talking about. Rentech has
12 what we call a project -- product demonstration
13 unit to allow us to further do research like on
14 utilizing biomass, doing research on different
15 types of catalysts, reactor designs, so it's a
16 research facility, but it also allows us to
17 produce both diesel fuel and jet fuel, to be --
18 to utilize that and do more research. Because
19 the Department of Defense wants a fuel source to
20 do more research to utilize Fischer-Tropsch
21 fuels for jet fuel.
22 AUDIENCE MEMBER: You mentioned about the
23 increase in the use of coal. And is the
24 majority of the coal going to come in via barge
In Totidem Verbis, LLC (ITV)
(815) 453-2260
42
1 or via rail, the rail spur that goes to the
2 plant off the main track?
3 MR. DIESCH: All the coal is going to be
4 delivered by rail.
5 AUDIENCE MEMBER: All, 100 percent?
6 MR. DIESCH: 100 percent of the coal.
7 AUDIENCE MEMBER: Another question would
8 be, you talked about how clean everything is
9 going to be, and that sounds great, but I just
10 got a question about the current process. With
11 the manufacturer of the urea and its use in NOX
12 reduction, why hasn't the plant used its own
13 urea to lower the NOX of the existing facility?
14 MR. DIESCH: Economics for utilizing the
15 urea source. The way the plant is designed,
16 it's not economical to do that, to the -- to
17 further reduce those NOX emissions at the
18 present time. There are -- there is some
19 additional things that are being -- taking place
20 right now with regards to some of our
21 compressors to do -- to do exactly that. There
22 are different technologies. Some was using
23 urea, some was using a different type of
24 catalyst using ammonia as a source. For
In Totidem Verbis, LLC (ITV)
(815) 453-2260
43
1 instance, during our nitric acid process we do
2 use ammonia for NOX reduction emissions. It's
3 called selective catalytic reduction. So it
4 depends on the process unit and the capability
5 of the design of the unit itself and what we can
6 and can't do.
7 MR. HEATON: I have a question. Has this
8 been endorsed or supported by the State of
9 Illinois or --
10 MR. DIESCH: Yeah, the State of Illinois
11 through the Office of Coal Development, which is
12 part of the Department of Economic Opportunity,
13 we received a half a million in grant for the
14 initial phase of engineering study, and then
15 they've contributed two and a half million
16 dollars towards the front end engineering
17 design. So they've been extremely supportive of
18 the process and the project and to help us
19 develop the technology to be the first one in
20 this country to produce the fuel using this
21 gasification technology.
22 MR. HEATON: In your slide show you said
23 that the Phase 1 and Phase 1-A investment would
24 be 850 million.
In Totidem Verbis, LLC (ITV)
(815) 453-2260
44
1 MR. DIESCH: 810 million.
2 MR. HEATON: 810 million. Excuse me. Do
3 you have any estimate what Phase 2 would be as
4 far as an investment beyond that?
5 MR. DIESCH: Mark?
6 MR. IBSEN: It would be, I mean, very
7 rough numbers. It's going to be in a similar
8 magnitude of costs, because we won't have all
9 the same infrastructure, we'll be able to save
10 some costs on it, but it's still going to be in
11 the hundreds of millions of dollars for the
12 Phase 2 modification.
13 MR. HEATON: But it's safe to say that the
14 investment over the two -- Phase 2 would be well
15 over a million dollars?
16 MR. IBSEN: Easily.
17 MR. GRATTON: Excuse me just a minute. I
18 just want to interject something here. We want
19 to fully answer the public's questions on all
20 these things, but I understand in order to
21 follow the proper legal proceedings, that those
22 people who have an immediate interest in and
23 around this area are the people who get to do
24 the cross-examining of witnesses. And so if you
In Totidem Verbis, LLC (ITV)
(815) 453-2260
45
1 will, I would like you to state your name and
2 your address and your particular interest in
3 this case. If you just have a general knowledge
4 question and you live in Belvidere or something
5 like that, it doesn't have the standing in this
6 case. But we do want to clarify that. And I
7 think as Petitioners go forward with their
8 presentation a lot of these questions will -- I
9 hope will be answered so we don't have to, you
10 know, slow this down at this point. So yes,
11 sir, do you want to state your name?
12 MR. SHIBANK: My name is Tom Shibank. I
13 live at 3822 Lonergan in the Galena Estates
14 subdivision. The railroad spur goes right
15 through my property, so obviously if there's one
16 train a day now it's going to increase to what?
17 I have no concept of knowing -- you know, you
18 say how many millions of tons of coal, I don't
19 know what that equates to. I don't know how
20 many trains a day that is and what's it going to
21 do to myself and my neighbors who all are
22 adjacent to the spur. You look out all of our
23 windows, it's not even the point of it running
24 through out property, that's what we look at.
In Totidem Verbis, LLC (ITV)
(815) 453-2260
46
1 MR. DIESCH: We currently have one switch
2 -- on average one switch a day where the switch
3 engine will come in and pull cars out. With
4 regards to the coal there will be a unit train
5 of coal roughly every three days, which is about
6 -- there will be a 70 car unit train. And Mark
7 is going to talk a little bit more about
8 transportation issues and things like that as we
9 get into it. But for the increase in regards to
10 coal it's going to be one train every three days
11 for Phase 1 and 1-A, and it would be every day
12 and a half for Phase 2.
13 MR. GRATTON: Any other questions for
14 John? Thank you.
15 MR. HEATON: Thank you, John. I'd like to
16 call Mark Ibsen. I'd like you to address your
17 remarks to the board.
18 MARK IBSEN,
19 being previously duly sworn, was examined and
20 testified as follows:
21 DIRECT EXAMINATION
22 BY MR. HEATON:
23 Q. Would you please tell the board who you are and
24 who you work for and what is your profession?
In Totidem Verbis, LLC (ITV)
(815) 453-2260
47
1 A. My name is Mark Ibsen. I work for Rentech,
2 Inc., the parent company of Rentech Energy
3 Midwest. I've been with the company about seven
4 years. I have been a project engineer and now
5 manager of project engineering. In that period
6 of time worked on numerous projects for the
7 company in trying to commercialize and develop
8 Fischer-Tropsch technology for Rentech.
9 Q. And are you an engineer?
10 A. I am a degreed engineer, chemical engineer and
11 also a licensed professional engineer in the
12 State of Colorado.
13 Q. And as it now stands you will continue to be
14 the manager of this project through its
15 completion?
16 A. Well, excuse me, but I am not the project
17 manager. There is a project manager. I'm the
18 project engineer.
19 Q. Okay. I'm sorry. Not the manager, but you
20 will be --
21 A. I am scheduled to be on the project through its
22 completion, that's correct.
23 Q. Mark, I want to take you through a number of
24 issues and have you explain to the board some of
In Totidem Verbis, LLC (ITV)
(815) 453-2260
48
1 the things that I think are normal concerns of
2 any board such as this. John Diesch gave a
3 great explanation about all of the chemical
4 processes and whatnot, but I want to bring it
5 down to maybe some issues that maybe are a
6 little closer to all of us. And the first is,
7 tell the board how traffic is going to be
8 impacted by this new plant both during the
9 construction phase and thereafter. And how does
10 that compare -- and make your comparisons as to
11 traffic today with the plant.
12 A. Okay. Right now, and as John had presented in
13 his presentation, we're expecting that the
14 construction work force is going to peak at
15 around a thousand people. And I say peak
16 because there's going to be a ramp-up period of
17 time. You just don't drop a thousand workers
18 into an area and start building a facility.
19 There's a period of time where you start working
20 with the ground work. As John talked about, you
21 have some people doing -- moving dirt work,
22 getting the ground prepared. And then you start
23 ultimately building foundation, start laying
24 underground piping. And as that work progresses
In Totidem Verbis, LLC (ITV)
(815) 453-2260
49
1 the labor force is going to start building and
2 ultimately peak at around a thousand, 750 to a
3 thousand people. And with that work force we're
4 expecting that that's going to mean there's
5 about 450 cars per day going down the plant road
6 to a dedicated parking lot that will be used for
7 the construction traffic where there would be
8 security and things of that maintained during
9 that peak. And then that would start tapering
10 off as we got closer to start-up. And then we
11 would start adding some of those 120 jobs that
12 would be full-time jobs at the facility, some of
13 the full-time union jobs and then the salaried
14 positions as we brought additional operators
15 onto the facility to do that. That's what we
16 currently see for the construction traffic.
17 We have met and spoke with Illinois
18 Department of Transportation as well as the
19 sheriff and they are -- they very much want us
20 to do a more formal traffic study related to how
21 not only the construction traffic will move, but
22 as John said, the long-term movement of products
23 in and out of the facility. And so that is in
24 the process of getting started. It has not been
In Totidem Verbis, LLC (ITV)
(815) 453-2260
50
1 completed at this point in time. But we have
2 met with them and we do know that we'll be
3 utilizing the main road that currently exists
4 into the facility to move this traffic in and
5 out easy enough. It's a two-lane road with
6 ability to make expansions on either side for
7 turning lanes as they might be needed, making
8 the road over to the construction parking area
9 to hold that construction traffic. So that's
10 kind of getting us through construction. And
11 then you asked about normal operations of the
12 facility. So at this point in time now we're
13 talking about primarily the movement in terms of
14 vehicle traffic of the products out of the
15 facility that will be going by truck. And
16 currently the facility is moving about 40 to 50
17 trucks a day. There's about 40 to 50 trucks a
18 day that are moving in and out of the facility,
19 with the additional products going in and out,
20 so we're talking the slide that would be going
21 out, the sulfuric acid which will be used to
22 move -- get rid of the sulfur will be sold as a
23 product. We'll be expecting that those and then
24 the FT products will increase at Phase 1-A to
In Totidem Verbis, LLC (ITV)
(815) 453-2260
51
1 between 60 and 70 trucks a day going down the
2 plant road. And then as we move to Phase 2 in
3 the future, that would then increase in the 80
4 to 90 range for the number of trucks that would
5 go in and out of that facility a day. So
6 ultimately it would essentially double the
7 amount of trucks. But to date the plant has had
8 no issues with any of the truck traffic that has
9 been occurring at the facility. And that sounds
10 like well, how would I know if it's going to
11 double. But currently in the peak farming
12 season and in the peak planting season the
13 facility actually handles about 350 trucks a day
14 of ammonia that are loaded in and out to get the
15 fertilizer out to the market, because there's a
16 big peak season to do that, and there's also a
17 peak season for when the urea and the ammonium
18 nitrate gets loaded and is shipped off to the
19 farmer. So we are not aware of any problems
20 that any of this has caused. It's handled very
21 well. It's a very smooth transition in and out
22 of the area onto U.S. 20 where the products will
23 ship.
24 Q. So those 350 trucks a day, when you say the
In Totidem Verbis, LLC (ITV)
(815) 453-2260
52
1 peak season, that's in the spring when farmers
2 are spreading fertilizer on their fields?
3 A. That's correct, because it's -- ammonia is
4 applied prior to -- I believe prior to planting
5 -- right prior to planting so it does it's best
6 for the corn crop. And so it's a fairly short
7 window and the farmers watch very closely as to
8 when they want to put that nitrogen down. And
9 so the plant builds inventories, and then it's a
10 pretty hectic season for probably three or four
11 weeks while they are making those shipments.
12 Q. And you already started negotiations with the
13 Illinois Department of Transportation and the
14 County -- through the County Sheriff's
15 Department?
16 A. That's correct, we started the discussions with
17 them to get the traffic study going and
18 negotiating how best to handle this and cause
19 minimal impact to U.S. 20 and the rest of the
20 surrounding area.
21 Q. Let me use the easel for some of the rest of
22 your testimony. It would be helpful if we could
23 point to some things.
24 A. Okay.
In Totidem Verbis, LLC (ITV)
(815) 453-2260
53
1 Q. I don't want to block anybody out. Maybe I'll
2 set it right over here. And now I mentioned in
3 my opening remarks that -- that you're also
4 going to purchase some property from Wilma
5 Hilby, and I believe that's this short -- or
6 this rectangular piece here that's about
7 1.7 acres. It's my understanding that that is
8 going to be used for a second entrance to and
9 from the plant; is that right?
10 A. It would a secondary entrance to the plant, but
11 not a secondary entrance that's intended to be
12 used on a regular --
13 Q. On a regular basis.
14 A. It's really just a secondary entrance, be it
15 when we have some of the construction traffic.
16 If we had some other access -- you know, one of
17 the parts that I did want to talk about is that
18 when this facility is constructed there's a fair
19 amount of large equipment that's going to have
20 to be moved in and out of the facility. And
21 when I speak of large equipment I'm speaking of
22 columns that could be as long as 200 feet and
23 some reactors that are, you know, 100, 120 feet
24 high. Those are going to take special type of
In Totidem Verbis, LLC (ITV)
(815) 453-2260
54
1 permits that we will have to work with the
2 Illinois Department of Transportation, the
3 sheriff's office to get moved to make sure that
4 they don't impact the traffic flow on U.S. 20.
5 But they will have an impact on the traffic
6 getting into the plant because you don't move
7 those kind of -- pieces of equipment in a
8 hurried manner. You take your time to make sure
9 that there's no problems. So some of the other
10 traffic during construction will get moved, and
11 that's also an incentive to be able to have a
12 secondary entrance in those cases.
13 Q. Now, the main entrance, it comes off 20 and it
14 proceeds south to the existing plant, and that's
15 about a mile; is that right?
16 A. Correct.
17 MR. HEATON: Okay. If you have any
18 questions as we go along on any of these topics
19 feel free to jump in.
20 MR. TONNE: This is close to one subject
21 here. So if it were built and after it's
22 finished, the Fischer-Tropsch, FT fuels would
23 increase significantly, and would be leaving the
24 plant by truck?
In Totidem Verbis, LLC (ITV)
(815) 453-2260
55
1 MR. IBSEN: With the initial phase we
2 expect that the bulk of the Fischer-Tropsch
3 fuels will be going out in the form of truck.
4 And as we develop that market, because it is --
5 it's a new domestic market, we're going to have
6 to develop that market, we'll have a better
7 handle on it, and it would be our goal in Phase
8 2 more of the products would be moved by rail,
9 not by truck per se. Because we have a larger
10 capacity per rail car than you do per truck car.
11 MR. TONNE: So now ammonia goes out -- I
12 think it's ammonia, at these peak spring periods
13 of 30 trucks maybe?
14 MR. IBSEN: Correct.
15 MR. TONNE: How long is that peak period
16 roughly?
17 MR. IBSEN: I believe it's in order of
18 three to four weeks typically.
19 MR. DIESCH: Yeah, usually you'll see
20 ammonia applications begin in the latter part of
21 March, depending on weather conditions, March
22 through April.
23 MR. TONNE: Where I'm really going is,
24 will the trucks carrying the Fischer FT fuels
In Totidem Verbis, LLC (ITV)
(815) 453-2260
56
1 before you go to trains, if, in fact, you do
2 approach the 350 a day, or what would that be?
3 MR. IBSEN: No, I would expect the
4 Fischer-Tropsch fuels would be shipped more on a
5 consistent regular basis. The product, I mean,
6 diesel, like gasoline, is something that's
7 consumed on a fairly consistent basis throughout
8 the year. We would be expecting that this
9 product would be sold into a market where the
10 diesel could be blended for its high Cetane
11 value and some of its other properties. It can
12 also be used neat. Excuse the word neat, but
13 meaning that you don't do any blending with it.
14 It's an excellent fuel all by itself. But you
15 know, it would dictate the market and what was
16 most active at that time.
17 MR. TONNE: So not a lot of trucks in any
18 peak period so to speak?
19 MR. IBSEN: No, it would be fairly uniform
20 over a year as to how the product would be
21 shipped.
22 MR. TONNE: And that was in your 80 to 90
23 trucks a day estimate?
24 MR. IBSEN: Yes, in the Phase 2 estimate
In Totidem Verbis, LLC (ITV)
(815) 453-2260
57
1 that was in the 80 to 90. Phase 1-A is 60 to
2 70, that's correct.
3 Q. And right now you're 40 to 50 on the average a
4 day?
5 A. That's correct.
6 Q. Okay.
7 A. That's correct. Now, I haven't gone into the
8 rail shipments --
9 Q. I understand, but I think he has a question.
10 MR. IBSEN: I'm sorry.
11 MR. JANSEN: Along the same line as Bill's
12 questions there, if you're -- just so I
13 understand this clearly. If you peak three to
14 four week period now when farmers are using the
15 ammonia, it's 350 trucks a day, and you're
16 doubling the size of the plant, is it safe to
17 assume that you're going to peak trucks 700?
18 MR. DIESCH: No, that's our capacity for
19 loading. We actually see two peaks. We'll see
20 ammonia peak early in the season before
21 planting, and then you'll see a peak of roughly
22 the same 350 trucks a day in the May and June
23 time frame when they start putting down the UAN
24 solution, which is typically done as a side rest
In Totidem Verbis, LLC (ITV)
(815) 453-2260
58
1 after the corn is up. So -- but that's our
2 loading -- our capacity to load trucks. So it
3 will peak at that capacity. And so there are no
4 plans to expand the fertilizer capacity of the
5 plant at the present time, so that won't change.
6 MR. HEATON: So your peak of 350, which
7 you experience in those months you mentioned,
8 should remain about the same?
9 MR. DIESCH: Yes.
10 MR. HEATON: And because of the other
11 products you're now having 40 to 50 on the
12 average per day, again, outside the peak season,
13 and in Phase 1 and 1-A that would go up from 40
14 to 50 to 60 to 70 trucks a day.
15 MR. DIESCH: That's correct.
16 MR. HEATON: And then if you ultimately go
17 forward with Phase 2 it would go up to 80 to 90
18 a day?
19 MR. DIESCH: Correct.
20 MR. TONNE: Follow up here. Would -- and
21 you might want to think about this, but would
22 the Petitioner agree to a -- under the special
23 use for it to be granted that truck traffic
24 would be not to exceed certain levels? And we
In Totidem Verbis, LLC (ITV)
(815) 453-2260
59
1 might arrive at that at a later hour here. But
2 you know, such as these peak periods, pick a
3 number, you know.
4 MR. HEATON: Well, I think John said their
5 capability now is at 350. That's what you can
6 load out in a day.
7 MR. DIESCH: Right, I -- you know, I think
8 that would -- you know, my opinion is that would
9 need to be -- we're going to be doing a traffic
10 study and IDOT would be involved with that. And
11 so right now I've not heard of any concerns
12 about the traffic during a peak season affecting
13 U.S. 20. And I'd hate to limit what our
14 capabilities are without -- unless there was
15 some real reason why we had some concerns from
16 either the Department of Transportation or the
17 sheriff's department or stuff like that.
18 MR. TONNE: We can do this later, but you
19 know, you don't anticipate that ammonia
20 production would increase particularly?
21 MR. DIESCH: There will be --
22 MR. TONNE: But if you did decide to go
23 that way --
24 MR. DIESCH: I see what you're saying. If
In Totidem Verbis, LLC (ITV)
(815) 453-2260
60
1 we did a major expansion --
2 MR. TONNE: Yeah, as part of the special
3 use you'd be back, then would you stipulate
4 that?
5 MR. DIESCH: Stipulate --
6 MR. TONNE: Think about it. We can talk
7 later, yeah. Not too much later maybe.
8 MR. GRATTON: Any other questions?
9 MR. HEATON: Let's jump to the rail issue.
10 I didn't get Tom's last name, but it was a
11 legitimate question on his part.
12 Q. Right now, the way I understand it, the --
13 there are two railroad lines that -- they come
14 up along the Mississippi River, and you have an
15 existing rail spur -- you have an existing rail
16 spur that the location of that will remain the
17 same; is that correct?
18 A. That's correct.
19 Q. How many -- first of all, do you ship anything
20 out by rail right now? And if so, how many cars
21 a day are you shipping out through that spur?
22 A. On average there's four to five cars per day
23 that are shipped out as products right now.
24 Q. And when you complete Phase 1 and 1-A, how many
In Totidem Verbis, LLC (ITV)
(815) 453-2260
61
1 railroad cars will be shipped out per day?
2 A. As products going out we're anticipating it
3 will increase between five and ten. Some days
4 there will be fewer cars and some days there
5 will be ten to get the product out.
6 Q. But we're talking ten railroad cars per day?
7 A. That's correct.
8 Q. Okay, and then Phase 2, how many cars would be
9 shipped out on the average per day?
10 A. Well, as I said, our goal then is probably
11 going to be to increase the ability to ship the
12 FT products by rail, we're probably going to see
13 an increase to 15 to 20 rail cars per day, the
14 bulk of that being related to the FT products
15 going out and the fuels going out.
16 Q. So that shipment out. Okay. Now, you
17 mentioned that your coal is going to come in by
18 rail rather than barge?
19 A. That's correct.
20 Q. Okay. In Phase 1 -- or after Phase 1 and 1-A
21 is completed, how many cars would you expect to
22 come in? And you've mentioned -- somebody
23 mentioned unit train. Why don't you explain
24 that?
In Totidem Verbis, LLC (ITV)
(815) 453-2260
62
1 A. Well, a unit train is just a common term for a
2 train that's -- it's actually a unit train was
3 defined as a train that's a mile long. It's
4 roughly a hundred cars in a train, but there's
5 different sizes of unit trains. One size being
6 70, 90, all the way up to about a maximum length
7 of a unit train is 120 cars. So in this initial
8 phase we would anticipate using 70 car unit
9 trains, that is what we've been talking to our
10 railroad with about working with and their
11 ability to handle it. And which in that
12 scenario those unit trains would come in down
13 the main line and come up the existing rail spur
14 about once every three days, and then we
15 anticipate that they'll be brought up in two
16 different cuts; one 35 cars, engines will go
17 back down, grab the other set of 35 cars, and
18 then they would remain inside the plant
19 boundaries until they were unloaded and taken
20 back onto the main line. The transportation
21 time to and from the main line we don't
22 anticipate to be extensive, because the travel
23 time up the line is about -- they'll be moving
24 about 10 miles an hour up into the plant, and
In Totidem Verbis, LLC (ITV)
(815) 453-2260
63
1 then back down into the plant about the same
2 amount of time. And the length of that track is
3 about 4500 feet, so it shouldn't take very long
4 for the trains to get up and into the facility
5 where they are sited on specific siting for the
6 coal to handle the coal so we can then take it
7 and off load it in the facility itself.
8 Q. So when you said a 70-car unit train you're
9 talking one -- in my terms that's one train that
10 would have 70 cars.
11 A. That's correct, 70 full cars of coal, and then
12 the engines associated with that.
13 Q. And that will be broken up, 35 cars, it will be
14 pulled up to the plant, unloaded, and then the
15 locomotive will go down and get the other 35
16 cars?
17 A. Actually we'll bring both full sets up before
18 we start unloading it so that we can get
19 everything off of the main line and get it out
20 of the way. And then once it's unloaded we
21 would take the entire 70 car unit train down.
22 And the reason for that is that there is a fair
23 amount of grade going up into the plant. It's
24 about 2.2 percent grade in most areas. For a
In Totidem Verbis, LLC (ITV)
(815) 453-2260
64
1 railroad that's like climbing a huge mountain.
2 That's a difficult task for a train.
3 Q. We are talking from down in here up to the
4 plant?
5 A. We're talking from the main line where the
6 curve comes up, that's correct, and up into the
7 plant. Once it's in the plant the grade is very
8 flat and very uniform and we will maintain it
9 that way so --
10 Q. So to summarize then, Phase 1 and 1-A you will
11 have every three days, once every three days
12 those 70 cars passing up the plant and then
13 leaving?
14 A. That's correct.
15 Q. And then with Phase 2 what would you expect the
16 rail traffic to be on the spur?
17 A. Phase 2 of the coal consumption will double, as
18 John showed in his presentation, to 5200 tons a
19 day. We would anticipate moving to 90-car unit
20 trains. Again, because we can split that train
21 into smaller sections, about 45 cars and still
22 get them up into the plant through the grade,
23 and then unload them. The frequency would
24 increase to one unit train every other day.
In Totidem Verbis, LLC (ITV)
(815) 453-2260
65
1 Q. So in a 30-day period you would expect in Phase
2 1 this train would come every third day or 10
3 days during that 30-day period, and Phase 2 it
4 would be every other day?
5 A. Correct.
6 Q. Okay. Now, you're going to have to make some
7 improvements to the spur as it now exists,
8 right?
9 A. We're going to have to upgrade some of -- the
10 rail has been designed to handle -- in the past
11 there was different standards for the railroad.
12 The railroad has changed their standards. And
13 so for us to do this they are going to ask that
14 we upgrade the rail lines and some of the ties
15 to a little bit heavier grade of rail so that
16 the engines have a good grip getting up the
17 hill, and just to replace it. The rails are 40
18 years old, the bulk of it. So yes, we will be
19 upgrading some of that rail. But it will still
20 lay in the same bed that it currently lays.
21 Q. Now let's shift to barge traffic. That came up
22 earlier. How many barges now do you have?
23 A. Right now the plant ships about 25 barges a
24 year of products between ammonia and UAN
In Totidem Verbis, LLC (ITV)
(815) 453-2260
66
1 products.
2 Q. And with the new project, the new plant, how
3 many would you expect?
4 A. In Phase 1 and 1-A because of the slight
5 increase in ammonia production we're
6 anticipating that will go to 30 barges per year.
7 Q. So it's an increase from 20 to 30?
8 A. Right, 25 to 30.
9 Q. 25 to 30.
10 A. Uh-huh.
11 Q. Some other issues, what about the water source?
12 I mean, do you need water to operate this plant,
13 and if so, where are you going to get it from
14 and explain that?
15 A. We do. The water is needed for as a feedstock.
16 It's used in the slurry process for the
17 gasifier. It's also used as a water source for
18 cooling in enclosed cooling systems where it has
19 to be make-up and where there's water that's
20 rejected in that system. Currently the plant
21 uses well water that's sitting buried up to --
22 Q. The wells are up in this area; is that correct?
23 A. Correct, we have three operating wells up in
24 that area, but currently hold permits for an
In Totidem Verbis, LLC (ITV)
(815) 453-2260
67
1 additional three wells. So our current
2 preferred method of accessing the water for the
3 facility would be to increase the number of
4 wells up there and get the water from the well
5 permits that are currently in place but have not
6 been used. But to do that we also need to
7 verify that the geology of the -- providing the
8 water to the wells can sustain that. And so we
9 are in the process of kicking off a
10 hydrogeological study with a geologist and a
11 hydrogeologist to verify and to start working on
12 whether the formation can supply the water we
13 need and take a look at that, do that study.
14 And if it can provide it without affecting any
15 of the wells in the area detrimentally then we
16 would be able to get our water from that source
17 and that would be our preferred location.
18 Secondary choice would be to put an intake
19 structure on the river and you could take water
20 from the river. We have talked in past years to
21 Illinois EPA about that possibility. They were
22 not opposed to it. It does require some proper
23 engineering design of the intake structure,
24 because the EPA has some fairly strict
In Totidem Verbis, LLC (ITV)
(815) 453-2260
68
1 guidelines that were recently implemented on how
2 you build that structure to make sure you
3 protect the aquatic life so that the water
4 coming in is not too fast, you're not trapping
5 things, there's no problems, and you don't
6 affect the natural balance of what's going on in
7 the river. But right now that's our second
8 choice as far as a water source. To minimize
9 that water source within the plant we will do
10 everything we can to recycle the water. The
11 water that goes to the gasifier is not -- it has
12 to be of certain quality and it has to be of
13 limited mineral content. But much of the water
14 that we would take as reject water in other
15 sources in the plant can be used in that slurry
16 water, and we're going to maximize the use of
17 those recycled water sources within the plant.
18 Then there's other sources in the plant that we
19 won't be able to do that with, and so that's the
20 need for the make-up water.
21 MS. DAVIS: Is that being done now,
22 recycling?
23 MR. IBSEN: There is some recycling done
24 in the plant right now. The amount of recycling
In Totidem Verbis, LLC (ITV)
(815) 453-2260
69
1 that will be done with the conversion will be
2 extensively more. There will be a lot more
3 closed discharge systems for the steam
4 blowdowns, cooling tower blowdowns, so that we
5 can maximize the use of that water. And some of
6 the new processes that are added, the acid gas
7 removal to take the sulfur and CO2 compounds out
8 also has a discharge water stream that we'll be
9 able to recycle, and that's currently in the
10 plans. When you make Fischer-Tropsch products
11 you also as by-product make some water, and that
12 water will also be recycled back and won't be a
13 wastewater stream. So we're going to do
14 everything we can to maximize the water in the
15 facility.
16 MR. GRATTON: What did you say the amount
17 of water used today would be?
18 MR. IBSEN: Right now the Phase 1-A -- the
19 total make-up for the existing facility and
20 Phase 1-A will be about 4500 gallons a minute.
21 The bulk of that water consumption will go to
22 the cooling system, a lot of which is associated
23 with the power cycle to make the power, because
24 you need to condense the steam that you use to
In Totidem Verbis, LLC (ITV)
(815) 453-2260
70
1 make the power and --
2 MR. GRATTON: What happens -- this is a
3 tremendous amount of water. What happens to
4 that water? Is it all a vapor or waste or what
5 happens?
6 MR. IBSEN: A fair amount of it, what is
7 used in the cooling towers, so a cooling tower
8 is a closed system where the water is sent
9 through the pieces of equipment, comes back
10 warm, and then it's passed over what's called a
11 cooling tower. And just as John said, in the
12 winter you can see the plant because you see the
13 vapor of water coming off. When you pass water
14 through an airstream you evaporate the water and
15 it cools the water, so the source of cooling is
16 the evaporation of the water. So a large
17 portion of that water will go out as water in
18 that cycle.
19 MR. GRATTON: And then is there a
20 wastewater treatment that's --
21 MR. IBSEN: There's also a wastewater
22 component to that. You also have to -- you also
23 have to send a slip stream to wastewater from
24 the cooling tower cycle. You have to keep the
In Totidem Verbis, LLC (ITV)
(815) 453-2260
71
1 mineral content and the PH and some of those in
2 check in that circulating water system. And so
3 to do that you have to do what's called blowing
4 down or discharging some of that water, and that
5 water would then go to the wastewater treatment
6 system settling ponds, and then it would be
7 discharged. And then an NPDS permit, which is a
8 permit that's issued by the state of -- the
9 IEPA, and allows you to discharge water meeting
10 certain qualities to the rivers of the United
11 States.
12 MR. GRATTON: So you treat your water
13 on-site?
14 MR. IBSEN: Yes, that's correct.
15 Q. Since your feedstock is now going to be coal,
16 and John mentioned you're going to store your
17 coal on-site, which I think he described as
18 somewhere in this area here; is that right,
19 John, somewhere --
20 MR. IBSEN: Little bit further south of
21 that.
22 Q. Would you describe what plans you have in place
23 for coal dust?
24 A. When the trains come in, when they go to be
In Totidem Verbis, LLC (ITV)
(815) 453-2260
72
1 unloaded there'll be what's called bottom dump
2 trains, meaning that the bottoms open up and the
3 coal will drop through into an underground pit
4 that's going to be probably 50 percent longer
5 than the rail car and a little bit wider. It
6 will direct the coal onto conveyor belts which
7 will take it into another conveyer belt and
8 start bringing it over to the coal pile. On top
9 of that will be what's called a grizzly
10 structure or a steel structure to maintain the
11 integrity for safety, personnel protection,
12 something the people can't fall through. And
13 then there will also be baffles on them, and so
14 as the coal falls through any coal dust or coal
15 particles can't come back out and up into the
16 environment. So that would be the first one.
17 Then there will also be atomizing or water
18 sprays that would be able to be sprayed as
19 necessary to knock down any coal dust that might
20 be coming off of that area. It will be just
21 enough mist to knock the coal down, not enough
22 to make the coal wet where it's sticking to
23 anything. It's just enough to contemporate that
24 coal dust that's coming off. So now we've got
In Totidem Verbis, LLC (ITV)
(815) 453-2260
73
1 the coal in this big pile in the ground that's
2 going to go into some of the conveyers that then
3 will take it underground at first, and then it
4 will take it over to what's called a radial
5 stacker, which is a device that will come out of
6 the ground. It will go up to about 45 feet in
7 the air. It has the ability to pivot so we can
8 store the coal in kind of a semicircular area,
9 and then it will drop down to where we can build
10 a height of coal 40 to 45 feet of coal height
11 that will be established at that point in time
12 to store the coal. That pile creates something
13 that's called a direct pile. It's a pile that
14 we would have direct access to feed the
15 facility. And the nice thing is that we are
16 going to be putting the coal on top, but we're
17 going to have another structure underneath at
18 the bottom of the coal pile to then collect that
19 coal and send it to the plant where it would
20 actually be crushed into the fine coal and to be
21 mixed with the slurry and fed to the gasifier.
22 So we would be able -- we'll be doing the best
23 we can to minimize the amount of any kind of
24 coal moving equipment, front end loaders, those
In Totidem Verbis, LLC (ITV)
(815) 453-2260
74
1 kinds of things to move the coal around. Those
2 grates in the radial stacker will give us the
3 ability to place it where we can most
4 efficiently use it as quick as possible, sending
5 it up into the facility. So that will help with
6 the dust emission. We're going to minimize
7 driving as much as we can. And then at every
8 transfer point we will keep the atomizers on
9 that, so we maintain that just like we did in
10 the grizzly where we were unloading the coal.
11 When we get to the coal pile itself we'll have
12 probably something similar to a sprinkler
13 system, for lack of a better word, that can be
14 able to spray water on the coal itself to knock
15 the coal dust down to keep it moist so it
16 doesn't blow away. That's just enough water to
17 keep it moist. It's not going to make the coal
18 wet. But if we do find that we're having
19 problems with the coal dust there will also be
20 facilities in that sprinkler system to put a
21 crusting agent in there so that when it hits the
22 top of the coal will physically put a slight
23 crust on the coal so that the coal gets a
24 slightly hard surface to it. And it will then
In Totidem Verbis, LLC (ITV)
(815) 453-2260
75
1 be more resistant to any wind or any
2 transportation by wind and things blowing around
3 in the area. Another plus to the fact, we're
4 using Illinois coal. I mean, this -- as John
5 said, Illinois is supporting the project, is
6 very much for the project, the coal development
7 wants to see the project. But the Illinois coal
8 is not a real brittle coal, it's a strong coal,
9 so it doesn't want to break up like many of the
10 western coals, specifically Wyoming coal which
11 is a low sulfur coal because of its chemical
12 composition and characteristics, it more easily
13 breaks down, it's more dusty. And so it's one
14 of the pluses of Illinois coal, we have a little
15 bit less to do deal with in that situation.
16 MR. TONNE: Is this process, the misting
17 and the underground and the pile to 45 feet, is
18 that done at other plants now?
19 MR. IBSEN: It's done fairly common around
20 the United States. That's how they --
21 MR. TONNE: Using Illinois coal? Is it
22 done in other plants using Illinois coal?
23 MR. IBSEN: It is. In fact, the facility
24 that the gasifier will be patterned after, the
In Totidem Verbis, LLC (ITV)
(815) 453-2260
76
1 Wabash facility, initially started up on
2 Illinois No. 6 coal. It ran on Illinois No. 6
3 coal for a period of three to four years, and
4 now they have recently switched to petrol for
5 other reasons, but at the time it's a very
6 similar setup that they were using for the coal.
7 MR. TONNE: Is that the one near Terre
8 Haute?
9 MR. IBSEN: Yes, sir.
10 MR. GRATTON: How much coal will be stored
11 on-site at any given time?
12 MR. IBSEN: The active pile will be as
13 large as 34,000 tons, which is -- the active
14 pile is that direct pile that we have easy
15 access to. There will also be room put aside
16 for another about 80,000 tons of storage where
17 it could be pushed off with a dozer to maintain
18 it for long-term storage. And there's -- some
19 incentive to do that is if we're having trouble
20 with weather, snow and things and getting trains
21 in. Those can all have some impact. So the
22 goal would be to build up some form of long-term
23 storage there.
24 MR. GRATTON: Basically on the short term
In Totidem Verbis, LLC (ITV)
(815) 453-2260
77
1 that's about what, a seven-day supply?
2 MR. IBSEN: No, that would be more like a
3 15-day supply. 2600 so --
4 MR. GRATTON: And how big is a pile of
5 35,000 tons of coal?
6 MR. IBSEN: Boy, now you've got me,
7 because I'd have to go back and look at
8 something, so excuse me, because I can't
9 remember the size off the top of my head. It's
10 on the order of if you took a center radius, so
11 it's -- if you took 100 feet and came back about
12 50 percent, so about 75 feet wide and, you know,
13 around the circumference of half a circle,
14 40 feet high, that's how the radial stack would
15 operate. It's about 150 feet long and going
16 45 feet high, so it would make that kind of a
17 pivot. So it would be -- the circle, about
18 150 feet in the center of the radius and
19 300 feet across, probably about 75 to 80 feet
20 wide and 40 feet high.
21 MR. GRATTON: And that feeds into the
22 system underground then?
23 MR. IBSEN: That's correct, there would be
24 the grizzlies underground. Now, the grizzly
In Totidem Verbis, LLC (ITV)
(815) 453-2260
78
1 wouldn't cover that entire area, but it would
2 cover a part of the area where you were trying
3 to maintain the radial stacker or the bulk of
4 the time. So you might still have to push some
5 in with dozers for periods of time, but the goal
6 would be to minimize the amount of dozer work
7 required to get the coal over to the loading
8 facility.
9 MR. HEIDENREICH: Can you build a facility
10 to store the coal on so that it doesn't drain
11 off someplace else?
12 MR. IBSEN: The ground would be initially
13 dug out and then compacted and put a hard layer
14 of about 14 inches of material or other coal,
15 and then built up with some four level coal
16 that's then compacted. There would also be
17 stormwater drainage put around the system. It
18 will be peaked slightly in the center so the
19 stormwater runs off into collection trenches.
20 Those collection trenches then would go to two
21 settling ponds. The first one would be to get
22 any of the coal fines out of the water, take
23 those off. That water again could be
24 reprocessed by going back up to the gasification
In Totidem Verbis, LLC (ITV)
(815) 453-2260
79
1 system as feed water. And then the bulk of the
2 water would then go out into the rest of the
3 wastewater system and be treated as necessary to
4 make sure it met the requirements of our
5 discharge permit.
6 MR. JANSEN: Question back on the
7 transportation of coal. Could you give us a
8 brief explanation why you wouldn't bring the
9 coal in on a barge?
10 MR. IBSEN: I think the main -- there were
11 two factors. One of the main ones is the fact
12 that the Mississippi freezes up three months out
13 of the year.
14 MR. JANSEN: I understand that.
15 MR. IBSEN: We would have to develop
16 substantial coal reserves to make sure that we
17 could meet the three months of the freeze-up
18 period of time. The facilities -- and given
19 that it would freeze up over the time, you'd
20 never know that you would have a reliable
21 source, you would probably be forced to put both
22 rail and barge in at the same point in time. So
23 to be quite honest, it came down to an economic
24 decision of what was going to be most economical
In Totidem Verbis, LLC (ITV)
(815) 453-2260
80
1 at this point in time. It doesn't mean that
2 we've eliminated for any future projects that
3 that can't happen, you know, but at this point
4 in time for economic reasons that was the
5 selection.
6 MR. JANSEN: Another question unrelated.
7 With all the Southern Illinois coal fields so
8 many miles away, why wasn't this plant built
9 near your source of coal?
10 MR. IBSEN: The plant wasn't built near
11 the source of coal because the benefit that
12 Rentech saw to this facility is to come into and
13 establish an operating plant. Rentech as a
14 company has been a relatively small company.
15 It's grown a lot over the last two years. We've
16 added some excellent people in many areas of the
17 company. And part of the challenges in
18 operating the plant is how many people know how
19 to operate plants, you know. Designing a plant
20 and operating a plant you'd say well, they are
21 very similar, but they are not. They are very
22 different, very different functions. And so
23 being able to acquire a facility like the former
24 -- the REMC facility when it was Royster Clark
In Totidem Verbis, LLC (ITV)
(815) 453-2260
81
1 gives us A) a leg up on a stable base of
2 operating people, a stable base of experience to
3 do that. That would be number one. Number two,
4 RFT technology is still emerging. You know,
5 this is a project that's going to have to be
6 financed through Rentech, it's going to require
7 financing through banks, and to build a green
8 field facility that would just be -- half the
9 entire thing would be financed and be green
10 field would make that financing more difficult
11 because of the fact that we could obtain a
12 facility that's already existing, all of the
13 infrastructure is existing, it will help make
14 some of that financing easier. Likewise, by
15 producing ammonia we have a product that's
16 demonstrated and a plant that's demonstrated.
17 MR. GRATTON: Was there a staff question?
18 STAFF MEMBER: Mark, you talked about the
19 trains -- the unit trains coming into the plant,
20 and you also talked about doing a traffic study
21 as far as the roads. Have you looked or will
22 your traffic studies include the -- I mean, like
23 how many rail intersections does the main line
24 cross in the County, and will the traffic study
In Totidem Verbis, LLC (ITV)
(815) 453-2260
82
1 be evaluating that too?
2 MR. IBSEN: I think the answer to the
3 question -- and John can address this, because I
4 personally wasn't at the IDOT meeting, so I'll
5 chime in that we haven't finalized the coal
6 contract, so we can't tell you exactly where the
7 coal is coming from. So to tell you how many
8 it's going to cross in any county, tell you
9 exactly where it's going to come from would be a
10 best guess at this point in time. Okay, so with
11 that said that would be one reason. I don't
12 know whether the IDOT asked for that study to
13 include that or not.
14 MR. DIESCH: They have not mentioned any
15 concern about the rail or the number of trains
16 that we have. It's small. And they weren't
17 concerned about that; however, they did request
18 a traffic study with regards to the traffic in
19 and out of the facility. So that's what they
20 are concerned about.
21 MR. HEIDENREICH: How is coal transported?
22 I know on a train, but are the cars covered or
23 are they opened?
24 MR. IBSEN: No, they are open top cars.
In Totidem Verbis, LLC (ITV)
(815) 453-2260
83
1 Illinois coal, it can be open top cars.
2 STAFF MEMBER: Can I go back and ask you
3 about water again? You said that for Phase 1
4 and 1-A the water usage was calculated at 4500
5 gallons. What about Phase 2?
6 MR. IBSEN: We don't -- as a lot -- as the
7 costs are still developed and not well
8 developed, these numbers aren't well developed,
9 but you know, we would be in the 6 to 7,000
10 gallon a minute range for Phase 2. That's a
11 rough estimate. I would ask that you don't hold
12 me to that, because the engineering work hasn't
13 been done.
14 Q. (BY MR. HEATON) Another subject that you're
15 going to have to deal with is whether or not
16 there are any wetlands on the subject site. Are
17 you familiar with that?
18 A. Yes, and there was some initial work done by
19 the USDA Soil and Water District that their
20 initial evaluation is that there are no
21 certified wetlands in the project area or on the
22 existing facility. Now, having said that, we
23 realized that any future work as far as going
24 forward with some of the construction activities
In Totidem Verbis, LLC (ITV)
(815) 453-2260
84
1 and those things we'll be hiring a consultant to
2 do a more thorough evaluation to verify that the
3 initial evaluation that there are no wetlands in
4 the area that's going to be touched by this
5 construction would be impacted.
6 Q. And regardless, you're going to have to deal
7 with the Army Corps on that as well as the
8 Department of Natural Resources?
9 A. Right, we would expect --
10 Q. Need permitting on that?
11 A. -- that depending on where it is, the Corps of
12 Engineering or the Illinois Department of
13 Natural Resources would have to be consulted on
14 that, and it would be working with them to
15 identify any of those situations.
16 Q. Okay. You mentioned earlier cooling towers,
17 and I'm familiar with cooling towers at the
18 Byron Nuclear Plant which are really tall
19 structures. Tell the board, what will the new
20 phase -- what the new plant height structure
21 will be built on a new plant as compared to the
22 existing plant?
23 A. The new cooling towers will be very similar to
24 the cooling towers that exist in the existing
In Totidem Verbis, LLC (ITV)
(815) 453-2260
85
1 facility. They are all induced strapped cooling
2 towers. There's fans on top to draw out the
3 air. That's one of the big differences when you
4 talk about the nuclear industry and the large
5 cooling tower, those cooling towers don't have
6 fans. They are natural convection and that's
7 why they are so large. These towers will be
8 substantially lower, probably on the order of 20
9 to 30 feet up in the air to the peak. And
10 dimensionally they are probably 50 to 60 feet
11 wide, and then depending upon how many cells are
12 required, you know, they are 50 feet -- probably
13 50 feet square per cell, we're probably looking
14 at 10 to 12 cells to do this work, so probably
15 100, 150 by about 50 feet wide so --
16 Q. So go a minute to that tallest structure you
17 now have on the existing plant, and what would
18 the tallest structure be on the new plant? Are
19 they comparable?
20 A. Currently the existing plant has a prill tower
21 that's about 200 feet high. Original estimates
22 when we were doing some of the work with the
23 sulfur removal equipment we were anticipating
24 that the column was going to be -- that was
In Totidem Verbis, LLC (ITV)
(815) 453-2260
86
1 associated with what's called a Rectasol
2 (phonetic) unit was going to be 250 feet high.
3 As we said, the engineering continues to
4 develop. And I received word from some people
5 that are working with that group that we're
6 probably now looking at a column that's more in
7 the order of 200 to 220 feet tall. So that's
8 probably going to be the tallest column in the
9 process, about 200 to 220 feet tall. The flare,
10 for safety reasons and other reasons, will
11 probably be very similar in height. We would
12 expect it to be close to the height of the other
13 column and we would still expect it to be
14 maintained similar to the height of this column
15 as well.
16 Q. So the heights are comparable?
17 A. They are very comparable to what you would have
18 right now. And one of the pluses is the
19 existing prill tower is substantially larger in
20 width than the columns would be for the Rectasol
21 unit. The prill tower is probably 10 to 12 feet
22 wide, and we don't expect these columns to be
23 that wide, larger than that, probably 10 feet
24 wide, so not looking at anything of that size in
In Totidem Verbis, LLC (ITV)
(815) 453-2260
87
1 width.
2 MR. HEATON: I want to touch on one other
3 area, and that is noise. And maybe John can
4 join in with you here. Now, the Galena Estates
5 subdivision is down here, if I'm correct. John,
6 how far away is that from the new plant, and
7 what type of train are we talking about between
8 the new plant that you're proposing and the
9 subdivision?
10 MR. DIESCH: It's roughly 3,000 to
11 3500 feet, is the estimates. It's very rough
12 terrain. The Menominee River, I think that's --
13 it drops in grade about 60 to 70 feet, so it's
14 very rough terrain, very wooded, very hilly area
15 so --
16 MR. HEATON: Okay, so that -- and you
17 mentioned trees are going to be planted. And
18 isn't it true that Gary Newt now has -- I don't
19 know how many thousands of trees he already has
20 planted, but I've gone through the area once and
21 I was amazed at how many trees there are
22 existing, plus the trees that he has planted.
23 And then you also have plans to --
24 MR. DIESCH: We'll have multiple rows of
In Totidem Verbis, LLC (ITV)
(815) 453-2260
88
1 trees around the fence line, again, related to
2 minimize sound.
3 MR. GRATTON: Any other questions of
4 Mr. Ibsen?
5 AUDIENCE MEMBER: When there's a burn
6 going on now or whether the plant is running, we
7 can all pretty much hear it from our facility.
8 I don't think you answered the question about
9 noise. You said something about planting more
10 trees and doing a lot of different things, but
11 what is the noise going to be versus the
12 existing plant? And also, the prill tower, if
13 it's now defunct, is that going to be torn down,
14 or is that going to be left up?
15 MR. DIESCH: The future plan is to take
16 that tower down. It's not being utilized at the
17 present time.
18 MR. IBSEN: And then with regards to the
19 noise, I mean, the equipment that will be
20 utilized in this facility is of the similar
21 substance to what's used in the existing
22 facility. We're not anticipating any additional
23 -- we're not anticipating noise levels will be
24 any higher than what they are in the existing
In Totidem Verbis, LLC (ITV)
(815) 453-2260
89
1 facility. I mean, our first goal with the noise
2 is to protect the workers. We have an
3 obligation. They are the ones closest to the
4 equipment. We have to make sure that they are
5 not exposed to high noise, and OSHA makes sure
6 that we take care of that. So that's going to
7 be one of the first things.
8 The second thing then would be to make
9 sure that that noise level is not extensive at
10 the fence boundary, and we just don't expect
11 that's going to be an issue. And then with the
12 terrain in many cases, as John said, being very
13 rough, it helps -- it's to our advantage to keep
14 that from being a problem. Right now the -- all
15 the equipment hasn't been laid out to the extent
16 that we know where all the high voltage power
17 motors and some other things are, but when that
18 gets done then there will be an evaluation of
19 the noise levels, and that can be done on an
20 engineering study. You can take a look and
21 determine exactly what the noise levels will be
22 or anticipate at the plant boundary limits. And
23 I believe we've said that our -- the industry
24 standard we would apply is that that's not above
In Totidem Verbis, LLC (ITV)
(815) 453-2260
90
1 70 decibels at the property line. Does that
2 answer all of your questions?
3 AUDIENCE MEMBER: I believe so.
4 STAFF MEMBER: I've got a question. You
5 said 70 decibels is the, you know, industry
6 standard. Are you familiar with the Illinois
7 ambient noise regulations?
8 MR. IBSEN: I am not personally familiar
9 with it, no.
10 STAFF MEMBER: That divides the acceptable
11 noise from one kind of classification of
12 property to another classification, so industry
13 to industry, industry to agriculture, industry
14 to domestic and the -- or residential areas, for
15 example, and that can be as low as 30 decibels
16 for certain frequencies. It's actually
17 different decibels for different frequency
18 levels. Those regulations have been on the
19 books for a long time and were recently updated
20 in March of this last year. I guess the
21 expectation would be that you'd have design
22 values for your noise at the property line would
23 need to meet those Illinois regulations as well
24 as the OSHA levels on-site. Is that a plan, to
In Totidem Verbis, LLC (ITV)
(815) 453-2260
91
1 use those ambient levels as design criteria?
2 MR. IBSEN: At the present time the only
3 thing that we've shown is that the design
4 criteria is the 70 decibels at the fence
5 pattern. We will have to work with some other
6 people and take a look at what all these other
7 regulations are and how they would actually
8 affect us. And if they are absolutely
9 applicable, then we would comply with any rules
10 and regulations that would be applied against us
11 -- or applied to the facility, not against us.
12 So our goal is to be in compliance with those
13 areas.
14 STAFF MEMBER: And that's a commitment
15 that you can make as part of the zoning request?
16 MR. IBSEN: I think that we would have no
17 choice but to make the commitment to comply with
18 any regulations that we fell underneath as part
19 of the construction process of the project.
20 MR. GRATTON: Is it your understanding
21 that 70 decibels does not meet the current
22 requirement?
23 STAFF MEMBER: For certain frequencies it
24 does, very, very high pitch frequencies, for
In Totidem Verbis, LLC (ITV)
(815) 453-2260
92
1 example, but there's like 10 different frequency
2 levels. It's a very kind of complicated
3 regulation. And it depends on what -- the size
4 of the industrial to industrial, residential to
5 residential. For example, if you were a
6 resident you can't produce as much noise to a
7 nearby residential as industry would be allowed
8 to produce to a nearby industrial area. But
9 it's at the level -- since decibel scales, like
10 rhythmic scales, it goes up a lot faster than
11 just one to one. 30 decibels is a lot softer
12 than 70 decibels would be.
13 MR. IBSEN: Correct.
14 MR. GRATTON: Will the type of noise
15 change in any way?
16 MR. IBSEN: From the existing facility?
17 MR. GRATTON: With the new process
18 compared to existing?
19 MR. IBSEN: I would not expect that it
20 would be substantially different. There's
21 currently a compressor on the facility that
22 compresses air for the manufacturing of nitrogen
23 -- or for the ammonia. There will be a larger
24 air compressor in the facility to make -- for
In Totidem Verbis, LLC (ITV)
(815) 453-2260
93
1 the air separation unit to produce the oxygen
2 and nitrogen, but it's a very similar service.
3 We're talking compressors, similar compressors
4 to what they have now except they won't be
5 driven by gas fired engines, they will be driven
6 by electric motors, so that would be a plus.
7 But there's still a high pressure synthesis gas
8 compressor that will be used. There will be
9 numerous high pressure pumps which have the same
10 type of frequency given that they are running at
11 3,000, 3800 RPMs, they are going to have a very
12 similar frequency that's going to be generated.
13 So I would not expect it would be substantially
14 different, either higher pitched or lower
15 pitched, than what's currently there today.
16 MR. TONNE: Does EPA -- am I correct --
17 administer and police the noise issues?
18 STAFF MEMBER: Right now there's no
19 specific agency that either preapproves or that
20 actively enforces the noise regulations around
21 the state. They had an enforcement group a few
22 years ago but budget cuts kind of eliminated
23 that group. It was previously enforced by the
24 air group on the air enforcement division, but
In Totidem Verbis, LLC (ITV)
(815) 453-2260
94
1 they kind of gave it up. The way their
2 regulations work is that any enforcement agency
3 can enforce those rules.
4 MR. TONNE: Any enforcement agency, but
5 the regulation stipulates the levels that might
6 be enforced?
7 STAFF MEMBER: Yes.
8 STAFF MEMBER: Mike, you talked about the
9 cooling towers. We had talked a little bit
10 about fog and icing. Could you talk about that
11 a little bit?
12 MR. IBSEN: We talked about that
13 internally. And as I said, the cooling towers
14 that we'd be putting in in the new facility are
15 not substantially different than what is already
16 existing in the facility. A significant amount
17 of material in the top of them to avoid any
18 water from getting entrained and coming out,
19 which is called drift from the cooling tower,
20 we'll be avoiding that. But you can't avoid the
21 fact that you're evaporating water and you're
22 creating a saturated air space. And as a
23 temperature drops naturally that water starts to
24 condense when it gets out of the tower, and
In Totidem Verbis, LLC (ITV)
(815) 453-2260
95
1 that's why you see the white plumes coming off
2 of the cooling tower. The facility has been
3 operating over 40 years, and with the exception
4 of the road which is immediately adjacent to the
5 cooling towers in the facility there is enough
6 dispersion from the general air movement of the
7 facility that there's no problems with the fog
8 and/or icing moving off of the plot boundary to
9 date. It's only right immediately adjacent to
10 the cooling tower is where you'll get a little
11 bit of icing on the roads. Given that U.S. 20
12 is a mile to the north of the facility and
13 there's the roads -- there's no roads, you know,
14 immediately adjacent to around the facility, we
15 don't see that there's going to be any kind of a
16 problem with the fogging or any icing related to
17 the cooling tower operations whatsoever.
18 STAFF MEMBER: Mark, you talked about the
19 -- having a fence or a fenced area and then
20 trees around that fenced area. Can you explain
21 to the board approximately where that fence
22 would be? Is that out by the property line or
23 somewhere inside that?
24 MR. IBSEN: The fence will -- typically,
In Totidem Verbis, LLC (ITV)
(815) 453-2260
96
1 you know, in getting the additional land for the
2 facility, I mean, we've pretty much acquired the
3 land that's required, so yes, the fence line
4 within -- around the process areas will pretty
5 much surround the property as near the property
6 limits of it, and that's where the trees will be
7 placed. Now, when we get down further to the
8 south that fence might come in some from the
9 property line just because the property -- we
10 don't need as much property down in that area
11 that's down where the flare would be in that
12 area. So is that enough of an answer, or do you
13 need more?
14 STAFF MEMBER: That's not shown on the
15 concept plan? I'm just --
16 MR. IBSEN: No.
17 STAFF MEMBER: What's shown on the concept
18 plan is the property line, and I'm just trying
19 to get a thought for where --
20 MR. IBSEN: That's correct. And as far as
21 engineering goes, we haven't laid out the fence
22 line per se in the project itself. We're just
23 now finishing up some of the cut and fill
24 operations and getting a better handle on where
In Totidem Verbis, LLC (ITV)
(815) 453-2260
97
1 the plot is going to be, because there will be
2 some elevation shift steps in the plan itself to
3 minimize how much earth work and dirt work has
4 to be done on the project itself.
5 Q. (BY MR. HEATON) The plant line to the east is
6 right here, and you don't own this down here,
7 nor do you have an option to purchase it, so any
8 fence you have would have to be up in this area?
9 A. That's correct.
10 Q. Because all this is owned by Mr. Newt?
11 A. Correct.
12 STAFF MEMBER: Mike, I should have
13 followed up. I'm sorry. With the icing and the
14 fogging, do you plan on performing any studies
15 to look at that besides just the historical -- I
16 mean, the plant is changing. Are you planning
17 on --
18 MR. IBSEN: I guess if we can -- if we
19 would find reason that there's reason to believe
20 that it's going to move the distance that we're
21 talking about we would do a study. I don't want
22 to sound, you know, overconfident, but we just
23 don't see it as a problem -- in judgment we
24 don't see that's going to be a problem. Where
In Totidem Verbis, LLC (ITV)
(815) 453-2260
98
1 icing and fogging is a problem is where the
2 cooling towers get located 1500 feet away from
3 -- you know, 50 to 100 feet away from a road.
4 And then you will have the problem without
5 question. You know, being from Denver, in fact,
6 we had a plant that the cooling towers got shut
7 down because it iced up one of the major roads
8 over one of the major interstates, so at certain
9 periods of time of the year they had to switch
10 to using air cooling for that application. But
11 that was very close. And if you're out in the
12 facility, the water vapor it just -- it doesn't
13 travel off the plot area. It's all pretty much
14 disbursed by the time it gets to the plot area.
15 I just don't see it as an issue.
16 AUDIENCE MEMBER: When you refer to a
17 fence are you talking 6-foot chain link, barbed
18 wire fence, and where will it be located? Will
19 it be located, for example, between the Rentech
20 property and Mr. Newt's property?
21 MR. IBSEN: Yes.
22 AUDIENCE MEMBER: And what is the height
23 of the fence? And also, if there's anything as
24 far as what impact it may have on wildlife in
In Totidem Verbis, LLC (ITV)
(815) 453-2260
99
1 the area, the deer, fox, you know, whatever in
2 that area.
3 MR. IBSEN: Yeah, I would, you know --
4 AUDIENCE MEMBER: Because right now you'd
5 be fencing quite a large natural area.
6 MR. DIESCH: We will only fence really the
7 operating area. You know, even though our
8 expectations -- and again, we haven't done the
9 engineering work, but here's the property line,
10 and there will be construction and lay down area
11 for equipment, and so we'll need a fence
12 probably right along the property line up to
13 here. And then again, this is just my
14 expectation is it will come across here and then
15 up. And then that's the way it works -- it's
16 the way it's set up now. We just fenced along
17 the property. We're the operating area. We're
18 not fencing in the middle of a wildlife area or
19 trees. There will be no fences along the rail
20 spur. There will be a gate, you know, that the
21 railroad has a key to bring things in. So it's
22 just going to be in the improved area that we'll
23 fence off. And we have to do that under
24 homeland security because we're a highly
In Totidem Verbis, LLC (ITV)
(815) 453-2260
100
1 regulated access facility.
2 AUDIENCE MEMBER: So it will be a security
3 fence, barbed wire on top?
4 MR. DIESCH: It will be probably strands
5 of barbed wire. That's what the existing fence
6 is to meet the coast guard regulations, homeland
7 security.
8 Q. (BY MR. HEATON) Mark, I don't know if I asked
9 this, but this rail spur has been there since
10 the plant started 40 years ago; isn't that
11 right?
12 A. Correct.
13 Q. Okay, and with regard to water use, whether
14 it's Phase 1 or Phase 2, it's our understanding
15 that your permits that you receive, whether well
16 or some other source, require that there's no
17 impact on surrounding property owners; isn't
18 that right?
19 A. That's correct. I mean, we would not even --
20 to activate the permits of wells that we have to
21 use them and get them approved we would have to
22 show that we're not going to negatively impact
23 any surrounding property owner or any
24 surrounding well that might currently have
In Totidem Verbis, LLC (ITV)
(815) 453-2260
101
1 access to that aquifer or that water structure
2 in the ground. So that's part of why we're
3 doing the hydrogeological study, so we
4 understand what's called the radius of influence
5 of the wells, so we know when we pump that much
6 water we know how far out it's going to affect
7 that surrounding structure underground and where
8 it's going to affect any other wells in that
9 area.
10 MR. GRATTON: Mark, were you going to
11 address the storm detention areas and wastewater
12 runoff and things like that? Is that part of
13 your presentation or whether that come in
14 someplace else?
15 MR. IBSEN: I mean, I can, you know,
16 address some of it. I mean, we will have to
17 have a stormwater permit that, you know, John
18 can talk a little more about, but all those
19 waters will have to be collected and directed
20 into either the settling ponds so that all that
21 water can be sampled and tested before it goes
22 out through the MPDS permit. With regards to
23 the wastewater itself, any wastewater that was
24 contaminated above those limits would have to go
In Totidem Verbis, LLC (ITV)
(815) 453-2260
102
1 through a treatment system, which this it not
2 probably popular, but to be determined. We
3 haven't determined exactly what we're going to
4 use, be it settling, be it, you know, what kind
5 of active treatment will have to be required on
6 that wastewater. But that wastewater would be
7 treated before it goes out to the settling
8 ponds. Currently the facility has, you know,
9 two settling ponds that provide certain
10 resonance time before that water goes out to the
11 river. It does a couple of things. It
12 temperates it to closer to ambient conditions
13 and it also makes sure any particulates settle
14 out and allows them to sample it first. And we
15 would expect similar limitations would be
16 applied on the new revised facility.
17 MR. GRATTON: During the erosion control
18 process, during construction would you be using
19 those settling ponds for that purpose, or would
20 you be controlling in other ways?
21 MR. IBSEN: John, can you help out at all
22 on the construction process ponds that we have
23 now would be used similar to that to avoid
24 erosion control while we're doing construction
In Totidem Verbis, LLC (ITV)
(815) 453-2260
103
1 versus a separate type of pond, or do you think
2 it would be one of those cases where --
3 MR. DIESCH: For the construction?
4 MR. IBSEN: For stormwater, yes, during
5 the construction phase.
6 MR. DIESCH: We'll follow standard
7 procedures for construction purposes, follow
8 what's typical industry procedure during the
9 construction facility process, and file the
10 necessary application with the IEPA for the
11 stormwater construction process.
12 MR. IBSEN: We would expect that that
13 would be built into the construction permit, you
14 know, for the stormwater and we would follow
15 that, but I don't have the exact set.
16 MR. HEIDENREICH: Let's talk about
17 sanitary waste rather than stormwater. What
18 provisions do you now have for handling that?
19 Are you connected to the city? Do you have your
20 own facility?
21 MR. IBSEN: No, there's currently a septic
22 tank and a leach field that's in the existing
23 facility, but we are currently working on
24 looking at an active system that would then
In Totidem Verbis, LLC (ITV)
(815) 453-2260
104
1 replace that and be able to handle the
2 additional loads. And that would be installed
3 about as part of the project probably prior to
4 the start of the project to handle the sanitary
5 loads and take care of the sanitary sewer
6 demands.
7 MR. HEIDENREICH: And that will all be
8 on-site?
9 MR. IBSEN: Correct.
10 MR. HEIDENREICH: And during the
11 construction phase you're going to have houses
12 for workers or --
13 MR. IBSEN: That would be like the
14 portolets and the kind of stuff that you're
15 going to have to have somebody come out to pump
16 that stuff out and take care of those kind of
17 things. We would not be building a sanitary
18 system to handle that kind of a load.
19 MR. JANSEN: Question about flooding. Can
20 you give us a couple of sentences on the current
21 status of a floodplain. You're in the
22 Mississippi River basin. Is there any impact of
23 flooding? You made some reference to it in the
24 record at -- what is it, a small area that's in
In Totidem Verbis, LLC (ITV)
(815) 453-2260
105
1 the hundred-year floodplain. Could you talk a
2 little bit about that?
3 MR. IBSEN: Correct, and it's where the
4 rail spur comes off of the main line, right down
5 there, up to -- there's a trestle up probably, I
6 don't know, 250, 300 feet around the corner.
7 It's probably further than that because that's a
8 500-foot radius, so let's say 500 to a thousand
9 feet up, part of that is in hundred-year
10 floodplain, and there's a trestle there that
11 allows that water to drain back to the
12 Mississippi. That's the only portion of the
13 project that's in the floodplain. That's a
14 portion of it that's existed for 40 years in the
15 facility. There won't be any other
16 construction.
17 MR. JANSEN: What FEMA classification
18 would that be?
19 MR. IBSEN: I do not know the answer to
20 that question. Do you know?
21 MR. HEATON: Do you know, Larry? Larry
22 Boyer, he's the surveyor for this project.
23 MR. BOYER: Right here it says FEMA flood
24 zone A-9. Area of 100 year flood. FEMA flood
In Totidem Verbis, LLC (ITV)
(815) 453-2260
106
1 insurance rate map, and it gives a community
2 panel number. And it's this blue area, this
3 blue hatched area that goes up the Menominee
4 River. And the only part that's in the property
5 is down here where the rail spur turns and comes
6 around.
7 MR. JANSEN: So if we had an event like
8 1993, by example, everything with the exception
9 of that area would be safe?
10 MR. BOYER: Yes, uh-huh.
11 MR. SHAFT: My name is Martin Shaft. I
12 was just wondering, is it only H20 that comes
13 out of the cooling tower?
14 MR. IBSEN: Predominantly what you see is
15 water vapor. And it's true that any droplets of
16 water will have the same minerals and other
17 species in the water. So whatever is in the
18 cooling tower and is taken out as drifts, which
19 is the small droplets of particles that do come
20 out of the cooling tower, that would include
21 some mineral deposits. And so cooling towers do
22 have an emission of what's called a particulate
23 matter, PM 10 or just PM because of the solid
24 content of the water droplets that come off of
In Totidem Verbis, LLC (ITV)
(815) 453-2260
107
1 the cooling tower.
2 MR. SHAFT: Because that's straight well
3 water then basically.
4 MR. IBSEN: No, it's not. It's treated
5 water, the water will be softened and much of
6 the hardness taken out of it before it's put in
7 the cooling tower. If it were used to straight
8 well water they would foul up quite quickly. So
9 no, it is treated water that goes in there.
10 MR. GRATTON: Any other questions for
11 Mark?
12 AUDIENCE MEMBER: Just a quick question.
13 With the proximity to the little Menominee River
14 which runs through a bunch of our property and
15 the Mississippi, is there anything in place for
16 containment in case of a catastrophic failure
17 either with the rail or with the plant itself?
18 If there ever is a spill or something goes on in
19 the water, whatever comes out is going to go
20 somewhere and might eventually end up in the
21 river, and I'm wondering if there's anything in
22 the works.
23 MR. DIESCH: All the storage tanks are
24 diked to handle regulatory 110 percent of their
In Totidem Verbis, LLC (ITV)
(815) 453-2260
108
1 volume, so there's diking systems around there.
2 The new tanks that will be installed also have
3 containment systems on them.
4 MR. GRATTON: Thank you, Mark.
5 MR. HEATON: Mark, before you sit down, I
6 want to offer Mr. Chairman and the other members
7 any questions, but I should have given you this
8 when John was up here. This is the permit
9 letter from the Illinois Historic Preservation
10 Agency that we just got last week, and we'd
11 offer that into evidence. I think it's straight
12 forward. It's just the state agency's
13 permitting on that. I'd like to call John
14 Iwanski.
15 JOHN IWANSKI,
16 being previously duly sworn, was examined and
17 testified as follows:
18 DIRECT EXAMINATION
19 BY MR. SANDERS:
20 Q. State your name, sir.
21 A. John Iwanski.
22 Q. John, you are the regional director of Trinity
23 Consultants; is that right?
24 A. That's correct.
In Totidem Verbis, LLC (ITV)
(815) 453-2260
109
1 Q. What is -- what type of business is Trinity?
2 A. Trinity is an environmental consulting firm.
3 Trinity has been around since 1974. We're a
4 nationwide environmental consulting firm. I am
5 housed in our office in Oakbrook, Illinois.
6 Q. How many offices does Trinity have?
7 A. 22 offices around the country.
8 Q. What kind of work do you do for Trinity, John?
9 A. My title is regional director, but most of my
10 time is still spent managing projects, primarily
11 industrial customers. These projects range from
12 procuring the necessary permits to strategizing
13 with companies on ways to meet environmental
14 compliance given the complexity of regulations.
15 Q. John, will you briefly describe for us your
16 educational background and your training in this
17 environmental work that you do?
18 A. I graduated in 1985 from Penn State University.
19 I'm a meteorologist with a bachelor degree in
20 meteorology. I spent four years in the United
21 States Air Force and then joined Trinity in
22 1990. Trinity historically in the first 10
23 years of our existence in the 1970s and '80s
24 built its practice largely on air dispersion
In Totidem Verbis, LLC (ITV)
(815) 453-2260
110
1 modeling. When emissions are into the -- going
2 into the air, how do they disperse into the
3 atmosphere. Therefore we've always had the
4 practice of looking and hiring meteorologists.
5 They form about -- 15 percent of our -- of our
6 employees have a meteorology background. The
7 far majority of our consultants are engineers,
8 chemical, environmental, mechanical engineers.
9 Q. Thank you, John. Has Trinity been hired by
10 Rentech to assist Rentech in obtaining the
11 necessary environmental permits for this
12 expansion project?
13 A. That's our role on the project, is we are
14 working very closely with Mark, with John to
15 procure the plethora of environmental permits
16 and approvals that a project of this size
17 entails.
18 MR. HEATON: Mr. Chairman, we'd like to
19 offer Petitioner's Exhibit 4, which is Mark's
20 two-page report. That also includes his -- a
21 lot of the jobs that he has worked on prior to
22 this one, and also includes a matrix at the end
23 of the group exhibit regarding the permits and
24 approvals that will be needed.
In Totidem Verbis, LLC (ITV)
(815) 453-2260
111
1 Q. John, you have before you a copy of Exhibit 4.
2 The first two pages of that are your summary
3 report, right, of your involvement in this
4 project -- Trinity's involvement in this
5 project?
6 A. Right.
7 Q. That was prepared at our request as an aid for
8 the board to understand your role and the
9 processes involved in this; is that right?
10 A. That's correct.
11 Q. Okay. Your credentials and your work
12 experience are also attached in the several
13 following pages; is that right, John?
14 A. That's correct.
15 Q. And the final page is what I would call a
16 matrix of necessary permitting -- environmental
17 permitting for this expansion project?
18 A. Yes, it is.
19 Q. Can you provide us with a summary of what
20 permitting you perceive to be necessary and what
21 the processes are for those particular permits,
22 please?
23 A. You've got the listing in front of you there,
24 but I will briefly describe each one of them,
In Totidem Verbis, LLC (ITV)
(815) 453-2260
112
1 not necessarily in the order of the list, but in
2 the order that we're completing them. The first
3 piece that has been completed and been submitted
4 to the Illinois EPA is the application for an
5 air construction permit. The reason why we did
6 that one first is we know -- Rentech came to
7 Trinity, we know how long it takes to get a
8 construction permit of approval from the agency.
9 It's typically up to -- for a project of this
10 size we require the agency told us they are
11 going to need upwards of 270 days to a year's
12 time. It's a very complicated, it's a very
13 regulation-intense process. That process has
14 been, as I said, submitted to the agency.
15 There's a copy of it right here to the
16 application that was submitted of 2006. We are
17 working with the Illinois EPA in drafting some
18 of the conditions of the construction permit as
19 of this period right now. It's going to be a
20 very detailed permit. It's not something that
21 someone can sit down and write in one day.
22 There are various sections for the various
23 pieces of equipment that John Diesch described.
24 That process is underway and we're working very
In Totidem Verbis, LLC (ITV)
(815) 453-2260
113
1 closely with the Illinois EPA.
2 Q. John, excuse me. For the record, can you --
3 just so that the reporter can have an indication
4 here, how many -- approximately how many pages
5 is the application for the --
6 A. This is a standard format that Trinity will
7 follow to do an air construction permit. It
8 will lay out in executive summary to describe
9 what the project is, what the project entails,
10 what's the overall conclusion in the emissions
11 based on the project as proposed. It includes
12 some information about the plot as we know it,
13 the process flow diagrams simplified, much more
14 simple than what Mark's engineers are using.
15 These are simplified to understand major air
16 emitting processes. We then quantify the
17 emissions from all of the new equipment, all of
18 the modified equipment, all of the equipment at
19 the site that will not be modified but may
20 experience an increase in emissions due to the
21 project. That will be done in this section.
22 We then have to detail the regulatory
23 applicability. All federal, state and air
24 regulations that are required to be addressed
In Totidem Verbis, LLC (ITV)
(815) 453-2260
114
1 have to be laid out in the application, and the
2 appendices are actually the emission
3 calculations, and then a large girth of this is
4 going to be the IEPA's application forms, since
5 everything has to be done on the forms that they
6 have provided for industry to file applications
7 for. So that's the air construction permit
8 application.
9 Q. Okay, John. Thanks.
10 A. Probably the next one in chronological order
11 which will be touched on in a bit is the
12 stormwater construction permit application,
13 which will be the process where we have -- we
14 will have to develop a stormwater pollution
15 prevention plan during the process of the
16 construction process. We also have the
17 requirement to amend the existing water
18 discharge permit we have that was talked about
19 the water earlier as well. The facility largely
20 has one outflow to the Mississippi River right
21 now. They have an existing permit that will
22 have to be amended because the quantity of
23 discharge will change as well as the
24 constituency. Trinity is still working with
In Totidem Verbis, LLC (ITV)
(815) 453-2260
115
1 Mark very closely to arrive at some of those
2 numbers, so we have not yet submitted any
3 application to modify our water discharge permit
4 and we are working to begin the process of
5 applying for the stormwater construction permit
6 application process as well. Those are the two
7 main permitting programs.
8 There was some talk earlier as well with
9 regard to tanks and tank containment structures.
10 We will have to meet the requirements for the --
11 it's actually called the Oil Prevention Act.
12 We're not producing any oil, but the tankage
13 that we will store our FT products in will fall
14 under that regulation, so we will have to
15 develop a spill prevention control and counter
16 measure plan which will address the catastrophic
17 value of the vessel. We also will have to
18 address that storage of those -- that quantity
19 of FT products with the state fire marshall.
20 That's a concurrent process. The same plan will
21 be used to satisfy both the elements there. The
22 whole question of where we're getting the water
23 from is indeterminate yet as well, so we really
24 haven't been able to go to formally talk to the
In Totidem Verbis, LLC (ITV)
(815) 453-2260
116
1 U.S. Army Corps of Engineers with regard to
2 withdrawal out of the Mississippi River, if
3 we're going to do that or not. But that is a
4 process, that's an approval process. It's a
5 coordinated approval process with the Army Corps
6 of Engineers down in Rock Island and the
7 Illinois Department of Natural Resources. And
8 we will obtain the necessary approvals if we --
9 if we're going to pull more water out of the
10 wells -- the existing wells or additional wells.
11 Finally the other -- not really
12 environmental approval process, but which we've
13 been tasked and will be tasked to do is to
14 address any federal aviation administration
15 height requirements with regard to the tall
16 structures that Mark had mentioned. That's
17 pretty much a synopsis of what you see here on
18 this listing.
19 Q. John, Rentech is presently operating under
20 permits as well; is that right?
21 A. Yes, they are.
22 Q. And what would those be just in a nutshell?
23 A. In a nutshell they are currently operating
24 under their Clean Air Act permit -- program
In Totidem Verbis, LLC (ITV)
(815) 453-2260
117
1 permit. It's called -- in my language these
2 acronyms just flow off of our tongues easily.
3 It's called a CAP permit. It's the ability for
4 that plant to operate. This is the entire
5 permit. It's not one or two pages, this
6 document is over a hundred pages long. This is
7 their ability to operate the plant in
8 conformance with all Clean Air Act requirements.
9 Trinity actually had some history with the
10 facility even prior to the Rentech days. We
11 assisted the facility in procuring this original
12 CAP permit back in 2003, is when this was
13 issued. Just to give you a little bit of an
14 idea of that process, this original CAP permit
15 was applied for in 1996. It took the agency, by
16 my math that's seven years to issue this permit
17 -- this operation permit. Granted that was a
18 new operating permit program that every industry
19 in the state had to go through, but that --
20 these are very complex permits. But we have
21 history with this facility. We know what the
22 emission points are, we know where the emissions
23 are coming from. And that logically led into a
24 very understanding relationship of how we're
In Totidem Verbis, LLC (ITV)
(815) 453-2260
118
1 going to permit this new plant through the air
2 permit.
3 The other permit that the facility does
4 have and has to comply with is the water
5 discharge permit. It's not as thick of a permit
6 obviously, as you can clearly see. This governs
7 the outflows, as I said, that one outflow into
8 the Mississippi River. It governs the outflows
9 of what are the allowances for discharges into
10 that outflow both on a contaminant or
11 constituent basis as well as how does that
12 impact the water temperature of the river, the
13 mixing zones, so there is very specific
14 limitations here of what the temperature of the
15 discharge is allowed to be in the river over the
16 course of various months. These are the two
17 main permits the facility is governed by right
18 now in the environmental arena.
19 Q. John, are there any monitoring requirements for
20 operation under those permits?
21 A. Absolutely, that's -- that's what keeps folks
22 like me in business, the consultants, is because
23 there is a plethora of monitoring requirements
24 in this permit, the air, and in the water. The
In Totidem Verbis, LLC (ITV)
(815) 453-2260
119
1 water has monthly, quarterly, and annual
2 monitoring requirements that have to be
3 submitted. The air permit has quarterly,
4 semiannual, and annual requirements, including a
5 requirement on an annual basis to self-certify
6 that they are in compliance with this permit.
7 So that's one thing that's quite unique about
8 the air permit. It is a self-certifying permit.
9 John has to sign a certification every year that
10 the plant is in compliance with this permit.
11 Q. Thanks, John. You mentioned earlier that you
12 had already applied on behalf of Rentech for an
13 air construction permit. Is there a distinction
14 between a construction permit and, say, an
15 operating permit?
16 A. The construction permit and the operation
17 permit in the State of Illinois, the IEPA
18 maintains a dual permitting system. Before
19 Rentech can construct or modify an air emission
20 unit they have to go get the approval from the
21 IEPA for that construction process. That's
22 called the construction permit. That's what
23 this was the application for. Once the IEPA
24 issues that construction permit Rentech will
In Totidem Verbis, LLC (ITV)
(815) 453-2260
120
1 have -- in the case of this construction permit
2 that will be issued here, given the fact that
3 this is a facility expansion and modification,
4 they will have to roll the requirements of that
5 construction permit into the operating permit.
6 So Rentech will have to file another application
7 with the State of Illinois once the facility
8 starts operating to update the construction
9 permit elements into their operating permit. So
10 yeah, there's a lot of paperwork involved here,
11 but that's just the way Illinois system is set
12 up. You got to get the construction permit
13 first, then you have an obligation to modify
14 your operation permit afterward.
15 Q. Thanks, John. In the process that you went
16 through to prepare this air construction permit,
17 this encyclopedic air construction permit, did
18 you arrive at any overall conclusion as to the
19 operation of the proposed expansion as to air
20 emissions?
21 A. The statement that I have put in there, and you
22 saw a preview of that on John Diesch's slide
23 earlier where he had the bar graph about the
24 various pollutants, on a regulated pollutant
In Totidem Verbis, LLC (ITV)
(815) 453-2260
121
1 basis this project is reducing emissions of
2 upwards of 2,000 tons per year on an aggregate
3 basis of all pollutants. The reason being is we
4 can -- part of this project, like Mark said,
5 we're going to remove some of that front end of
6 the existing ammonia plant. The high emitting
7 ammonia, the high emitting front end. These
8 emissions have all been documented with the
9 Illinois EPA. It's not as if the Illinois EPA
10 does not know of these emissions. They were
11 permitted in the operating, and annually John
12 Diesch certifies the annual emissions report
13 that certifies this higher level of emissions
14 that will be removed as a result of the
15 construction permit. It is going to be a
16 technically complex construction permit. They
17 are in a very highly regulated industry. There
18 will be some new regulations that will apply to
19 them that have not applied before. Organic
20 liquids distribution, leak detection and repair
21 requirements, some additional steam generation
22 capacity will be more regulated that they are
23 going to construct so that there will be new
24 requirements to this permit that the facility
In Totidem Verbis, LLC (ITV)
(815) 453-2260
122
1 does not have, so it will be a complex permit.
2 Q. Thanks, John. John, can you tell us, what is a
3 fugitive dust plan?
4 A. A fugitive dust plan is just what it sounds
5 like. It's -- fugitive dust is that dust that
6 is caused by either the effect of a mechanical
7 action or wind. Fugitive dust is caused when a
8 truck drives down a road and releases a cloud of
9 dust. I saw it this morning driving in on U.S.
10 20. The salt that we all appreciate to melt the
11 roads then becomes fugitive dust when it dries
12 on a nice dry day like today. That's a fugitive
13 dust. The coal pile that we're going to be
14 using in this process will be a source of
15 fugitive dust. The Illinois EPA in their
16 regulations has specific regulations in Part 212
17 that identify when a facility has to have a
18 fugitive dust plan. In the Illinois regulations
19 most of the areas that need a fugitive dust plan
20 are located in the metropolitan Chicago area,
21 East St. Louis, and then some select
22 metropolitan areas throughout the state.
23 Jo Daviess County is not on the list where a
24 fugitive dust control plan is required. As part
In Totidem Verbis, LLC (ITV)
(815) 453-2260
123
1 of this effort though we're going to develop,
2 implement, and maintain a fugitive dust control
3 plan as part of our construction permitting
4 process. And then the permit that the Illinois
5 EPA issues us will make that plan enforceable
6 and it will be part of the certification that
7 John will have to sign that we are doing these
8 measures that we lay out. Typical measures in a
9 fugitive dust plan, roadways, you're going to
10 wet them to prevent the dust from becoming
11 airborne, or you're going to occasionally sweep
12 them. As Mark mentioned we're going to put up a
13 sprinkler system around the pole pot (phonetic).
14 If necessary we'll add a surfactant to that to
15 make the crusting material. And each one of
16 those plans will be spelled out, as well as how
17 will we know we're doing this. We're going to
18 have some sort of monitoring frequency that
19 we're going to go out and verify this is being
20 done.
21 Q. If I understand this correctly then, John, even
22 though Rentech in your view is not obliged by
23 law to have a fugitive dust plan because it is
24 in Jo Daviess County, once it agrees to submit
In Totidem Verbis, LLC (ITV)
(815) 453-2260
124
1 one as part of its application, then it becomes
2 enforceable as to Rentech and must maintain
3 it --
4 A. It will become enforceable upon the issuance of
5 the construction permit which allows us to start
6 the construction process. We're going to have
7 to begin maintaining that fugitive dust plan;
8 otherwise, we would not be subject to it here in
9 Jo Daviess County, because the way that's
10 developed by the regulation is that it -- has
11 there been a history of particulate attainment
12 problems in that county, and historically
13 Jo Daviess County has not had that problem.
14 Q. Is there any recordkeeping requirement with
15 respect to a fugitive dust plan?
16 A. Yes, there will be. That's the element of the
17 plan. It has to spell out how are your going to
18 say you're doing these things. It's one thing
19 to have the plan, but you also have the proof
20 that you're implementing the plan. So we will
21 have to work very closely with Rentech to say
22 how are we going to prove that we are minimizing
23 fugitive dust through our water spraying or road
24 sweeping or our water applications to the pile
In Totidem Verbis, LLC (ITV)
(815) 453-2260
125
1 as well as some of our coal handling, the water
2 fog application that Mark talked about. There
3 will be a recordkeeping component and that will
4 have to be certified that we're following that.
5 Q. John, I want to finish with a couple of just
6 very general questions. Is there any
7 requirement that Rentech have communications
8 with or apply for anything with respect to the
9 United States Environmental Protection Agency?
10 A. The Illinois EPA has authority and has the
11 delegated authority and has the state
12 implementation approval authority to implement
13 all of the requirements of the Clean Air Act as
14 well as the national pollutant discharge
15 elimination system, which is NPDS, or the water
16 discharge. We're going to be interfacing
17 directly with Illinois EPA on all environmental
18 matters. As these permits come up for public
19 notice, USEPA has the ability to comment on
20 these permits as anyone else has the ability to
21 comment on them.
22 Q. Thank you. And finally, John, this may be
23 self-evident, but say for example if Rentech
24 were to fail to secure a valid air construction
In Totidem Verbis, LLC (ITV)
(815) 453-2260
126
1 permit or a valid air operating permit, what
2 would be the consequence to the company?
3 A. I'm obviously not a lawyer, but I counsel my
4 clients it says you can't do that. You will not
5 be able to construct or start construction
6 without the construction permit issued. You
7 will not be able to operate your facility
8 without your operation permit properly modified
9 and updated.
10 MR. SANDERS: Thank you very much.
11 Mr. Chairman, that's all questions I have for
12 John. I certainly invite questions from the
13 board or from the public.
14 MR. GRATTON: Okay. Maybe this question
15 could be for both Johns, since the other John
16 has a little more history here. What has been
17 your experience with obtaining and maintaining
18 proper compliance with all the regulations that
19 you operate under now? Will you tell us a
20 little bit about your history with that?
21 MR. DIESCH: Well, the plant has always
22 been -- we operate in compliance. It's
23 extremely important for us we have a very good
24 close relationship with the regulators. We work
In Totidem Verbis, LLC (ITV)
(815) 453-2260
127
1 with them very closely. We've worked with them
2 on design issues relating to how do we meet
3 these compliance requirements when we see
4 different regulatory changes coming forward.
5 With new laws, as you know, typically what
6 you're going to see is reductions in emissions
7 as time goes on, so when we hear about a permit
8 change or a regulatory change, many times we'll
9 sit down with the regulators and kind of
10 brainstorm how can we make this fit. Because
11 they know our facility extremely well. I mean,
12 they are in there on a routine basis to do
13 walk-throughs and to talk to our environmental
14 people, environmental health and safety people,
15 so we have a very close relationship. We work
16 with them very closely. And this plant has had
17 consistent record over the 40 years it's been
18 there of being in compliance, otherwise we
19 couldn't operate if we didn't operate in
20 compliance.
21 MR. JANSEN: Is it safe to say you've
22 never been fined or cited?
23 MR. DIESCH: If you go -- there was a
24 citation back in the early '80s, I believe,
In Totidem Verbis, LLC (ITV)
(815) 453-2260
128
1 before my time. It was related to a nitric gas
2 plant. There was a problem with a piece of
3 equipment, and we had a higher level than the
4 regulation at that time emitted on the nitric
5 oxide emissions. And the fact that they were
6 above that and they didn't notify the agency
7 quick enough, they got a fine for that. And
8 that was in the early '80s, I believe.
9 STAFF MEMBER: Along those lines, you say
10 before the CAP permit, the Title 5 permit
11 required you to self-certify against all the
12 regulations that are in your permit, a long list
13 of them. Could you provide to the board the
14 last few years of compliance certification
15 reports just to show the compliance over the
16 last few years?
17 MR. DIESCH: We can. They are public
18 documents, so absolutely.
19 MR. IWANSKI: I've got one here. The copy
20 that I brought just because I wanted to be sure
21 of what was done and make sure it's filed. But
22 here's the most recent one for year 2005.
23 MR. DIESCH: How far back?
24 STAFF MEMBER: I think the board would
In Totidem Verbis, LLC (ITV)
(815) 453-2260
129
1 just like to see, you know, since Rentech has
2 owned it, and maybe the past three years or so
3 would just be a good indication of all the
4 little details that go into that. It's pretty
5 reassuring when that thing comes up nice and
6 clean, wouldn't you say?
7 MR. GRATTON: Any other questions for
8 John?
9 STAFF MEMBER: Yeah, I've got a couple.
10 During the previous presentations we were
11 talking about Phase 1 and Phase 1-A and Phase 2.
12 I guess it's our understanding that the permit
13 right now is only being submitted for Phase 1
14 and Phase 1-A. The zoning request is being
15 questioned for Phase 2 as well. Could you
16 describe for the board any additional emissions
17 or any additional procedures that will be
18 required for Phase 2 of this project when it
19 occurs, and explain how that circumvention is
20 not going to -- kind of comes into play.
21 Circumvention is kind of defined as it's illegal
22 to split a project into smaller projects to
23 avoid a major source modification project. So
24 you can't arbitrarily divide it up and permit
In Totidem Verbis, LLC (ITV)
(815) 453-2260
130
1 little pieces to avoid getting a big permit
2 that's required. So if you could explain to the
3 board why that's not an issue here, the Phase 2
4 part of this project.
5 MR. IWANSKI: Right, you're correct. The
6 application as submitted is for Phase 1 and 1-A.
7 This air construction permit application is
8 Phase 1 and 1-A. That's all the engineering
9 data that the environmental consultant has been
10 provided with at this point in time, so we
11 couldn't provide an application for Phase 2 at
12 this time. We do not have anywhere near the
13 engineering to determine what the calculations
14 are. So we couldn't address that now. With
15 regard to is the project being split into two
16 separate pieces, I've had numerous conversations
17 with John Diesch as well as Rentech ENC or the
18 project development folks, and I made sure to
19 understand that Phase 1 and 1-A is technically
20 economically viable on its own as a project.
21 And if that can be said affirmatively, that is
22 what USEPA and the Illinois EPA has used as the
23 determination of whether or not this project can
24 be permitted in a construction permit, and then
In Totidem Verbis, LLC (ITV)
(815) 453-2260
131
1 we can apply for a Phase 2 construction permit.
2 If Phase 2 requires additional control based on
3 levels of emission, then Rentech will apply the
4 necessary additional control in Phase 2. But my
5 understanding is that Phase 1 and 1-A is
6 technically economically viable as a project on
7 its own and therefore can be permitted
8 independently of Phase 2.
9 STAFF MEMBER: I guess the follow-up on
10 that is is Phase 2 then going to also be
11 submitted as a minor modification to the
12 existing project or as possibly a major
13 modification that won't have these thresholds to
14 keep it negative or from increasing to a certain
15 amount?
16 MR. IWANSKI: Yeah, Bruce, we don't have
17 -- we don't know. I don't know if it's a minor
18 or a major yet because we haven't done the
19 emission calculations to be able to say that,
20 but we're not going -- if, in fact, it's a major
21 modification we will look to see are there
22 existing processes at the plant that we can
23 control better or in addition to make additional
24 emission reductions to process that in a more,
In Totidem Verbis, LLC (ITV)
(815) 453-2260
132
1 as Bruce was saying, a minor modification. But
2 if there are not then we will permit Phase 2
3 accordingly. This is getting into some very
4 technical air lingo, and when we're saying minor
5 and major, this construction permit application
6 and that terminology would be called minor.
7 This is not a major federal prevention of
8 significant deterioration application. And the
9 reason why it is not is because the existing
10 project has so many emission reductions
11 associated with it that the emission levels
12 don't trigger that level. Again, we don't have
13 any data on Phase 2, so we can't permit -- I
14 can't answer the question at this time.
15 STAFF MEMBER: Maybe something you can
16 explain to the board is the offsets. You know,
17 the reduction in emissions from the facility
18 come from what sources, and those reductions --
19 the reason this is a net decrease in emissions,
20 even though you're increasing the amount of net
21 energy that comes into the plant, because not
22 only are you making more product and more
23 feedstock, but you're also generating
24 electricity now at the plant from the coal as
In Totidem Verbis, LLC (ITV)
(815) 453-2260
133
1 well.
2 MR. IWANSKI: Right.
3 STAFF MEMBER: Maybe explain how you can
4 use more energy and have more combustion but
5 still have fewer emissions starting with natural
6 gas, which is thought to be a nice clean fuel to
7 begin with.
8 MR. IWANSKI: Okay. I'll do my best.
9 I'll probably get some help from our team here.
10 The primary pieces of equipment are on the front
11 end of the existing ammonia plant, and I did
12 hear the term mentioned tonight primary reformer
13 where we take the natural gas and put it into --
14 and in my terms a big box where you can open up
15 a window and you see a bunch of flames going on
16 in this huge box. That's going to all go away.
17 That is a fairly large source of nitrogen oxides
18 emission. The other large -- actually three
19 large pieces of equipment that will be removed
20 are some old 1965 vintage natural gas fired very
21 large compressor engines that the company has
22 chosen not to continue to invest in, but remove.
23 And actually this is where I'm going to turn it
24 over to probably Mark here. Instead of using
In Totidem Verbis, LLC (ITV)
(815) 453-2260
134
1 those compressor engines we're going to use a
2 different technology that will have no emissions
3 associated with it.
4 MR. IBSEN: We're going to convert those
5 to electrically driven compressors, so we're
6 going to take some of the energy that we've used
7 to create electricity and provide those
8 compressors with electricity. So rather than
9 having natural gas fired engines, which have a
10 large stacking emission of nitrogen oxides and
11 other combustion products from the combustion
12 process, we're going to use electricity to drive
13 those engines. The bulk of the energy to make
14 the electricity is coming from steam which is
15 generated from waste heat in the process. So as
16 John was talking about, the gasifier runs very
17 hot, but we're going to get the benefit of that
18 heat by generating high pressure steam, turn
19 high pressure steam into electricity, and then
20 the electricity is going to drive these engines.
21 So that's where the bulk of this is coming from.
22 MR. DIESCH: And those emissions from
23 those removed pieces of equipment have been
24 documented in this application through site
In Totidem Verbis, LLC (ITV)
(815) 453-2260
135
1 specific tests that have been done, so those are
2 -- we're not using some emission factor out of a
3 book. We're using actual test data that's been
4 performed at the facility to determine what are
5 the actual emissions exhausted into the
6 atmosphere. And the Illinois EPA has that as
7 part of our application, that test result data.
8 I guess the larger part Mark addressed
9 with regard to how can we use coal to generate
10 additional ammonia and additional FT product and
11 make power and have emission reductions.
12 Largely efficiency improvements and fundamental
13 changes in design of how you make that synthetic
14 gas that's necessary for the ammonia plant and
15 is necessary for the FT fuels plant. In 1965 it
16 probably was not a viable technology to even
17 consider, but gas fired compressors work as --
18 was primary former structures that were fairly
19 typical in the industry. There's nothing -- in
20 my understanding of the ammonia plant there's
21 nothing at this plant that's unusual with regard
22 to how ammonia plants were built and operated.
23 They have the same equipment, it's just the
24 useful life of that equipment has -- has or is
In Totidem Verbis, LLC (ITV)
(815) 453-2260
136
1 nearing its useful life and we're going to
2 replace it with a different technology.
3 STAFF MEMBER: With regard to the question
4 came up from the audience before about
5 nonroutine releases and how they are going to be
6 dealt with, start-up, shutdown, malfunctions.
7 Trinity specializes in modeling. Have you done
8 any modeling of those nonroutine releases as far
9 as impacts downwind, or how do you characterize
10 those emissions?
11 MR. DIESCH: We have characterized the
12 emissions as start-up, shutdown, and malfunction
13 events in terms of a qualitative nature in the
14 application. We've quantified them based on
15 what we expect our normal start-up procedures,
16 normal shutdown procedures, and a reasonable
17 amount of time when there is an unanticipated
18 malfunction. A malfunction is just that, it's
19 an unanticipated event. So they have been
20 quantified. We have not done any air dispersion
21 modeling as part of this application. There's
22 not a requirement to do that with the Illinois
23 EPA based on the level of emissions we have. So
24 there have been no air dispersion studies done
In Totidem Verbis, LLC (ITV)
(815) 453-2260
137
1 either for the start-up, shutdown malfunction
2 events or the operation as proposed. It's not a
3 requirement as part of the application.
4 MR. GRATTON: Does anybody else have a
5 question?
6 MR. TONNE: I've got a question for our
7 people there. If the petitioner for purposes of
8 this special use application stipulates that
9 they would comply with all permitting
10 requirements and IEPA regulations, does that
11 satisfy Jo Daviess County on that subject?
12 STAFF MEMBER: I guess it's -- it should
13 be said that the complexity of their air
14 permits, for example, that have hundreds of
15 underlying requirements, and to get a permit you
16 need to show that you can comply with all of
17 those, the one caveat, I guess, to answer your
18 question, is that the way the permit is proposed
19 to be submitted right now, it's a minor
20 modification. It has certain safeguards as far
21 as the maximum emissions they can emit to stay a
22 minor modification. If for whatever reason this
23 permit gets turned down as a minor modification
24 because the EPA does not like the netting
In Totidem Verbis, LLC (ITV)
(815) 453-2260
138
1 analysis for some reason, doesn't like the
2 mapping, there's all kinds of arbitrary reasons
3 sometimes from my experience too that they turn
4 these things down. And they have to go and
5 perform this as a prevention of significant
6 deterioration permit or a major modification
7 permit, there is no then limit to how much
8 emissions are allowed under an NPSD permit. You
9 just have to meet other kinds of technology
10 controls, modeling impact requirements and
11 secondary emission impact studies. But there's
12 no safeguard on how much total emissions they
13 can release from any kind of project in the
14 future. For example, Phase 2, if that went
15 through a PSD permit instead there wouldn't be a
16 limit on the type -- the total amount of
17 emissions increases compared to a minor
18 modification. So I guess I would conclude that
19 if it gets submitted as a minor modification and
20 it passes all the requirements and there's a
21 limit to those emissions as expressed and that
22 decrease in emissions is good, it should meet
23 all of the concerns someone should have about
24 the air quality impacts from this kind of site.
In Totidem Verbis, LLC (ITV)
(815) 453-2260
139
1 If it was a PSD permit it might meet all the
2 technical requirements of getting a permit, but
3 it might have a huge impact on the emissions
4 from the site, and the board might want to look
5 at the qualitative analysis such as modeling
6 result and everything else before making a
7 determination of whether it is acceptable for
8 this local population and the surrounding areas.
9 MR. TONNE: So at this point in our
10 hearing process here, and they are anticipating,
11 you know, it could be a year or longer before we
12 get an answer on the second part of that
13 scenario, from a legal zoning point of view this
14 is a question for the lawyers that have zoning
15 experience, would we want to stipulate that so
16 as to trigger a review of this special use
17 should that second scenario happen? Is that
18 typically --
19 MR. ZIBART: Yeah, typically, I think
20 that's certainly a possibility for the board to
21 consider. You know, the board is -- the County
22 is -- can grant, deny, or grant with conditions
23 a special use, as you know. And so certainly a
24 condition on what kind of -- you know, the kind
In Totidem Verbis, LLC (ITV)
(815) 453-2260
140
1 of permitting that the applicant would get from
2 another agency could be part -- could be one of
3 the conditions. And that's traditionally done.
4 MR. TONNE: And then through the Chair to
5 the petitioner, would you so stipulate and would
6 you want to think about that, we can talk about
7 it later, but you know, like I say, unless you
8 like it too.
9 MR. HEATON: I'm not sure I understood --
10 MR. TONNE: Well, I'm not sure I can
11 explain it.
12 MR. HEATON: -- what the question was?
13 MR. TONNE: We're worried that your
14 process of application yet for which you're
15 going to self-regulate to IEPA over that, as I
16 see it, until 2010, perhaps 2009, anyway for
17 Phase 2, but that whole process could trigger
18 something you called major. So does that, as he
19 seems to say, change the threat to the air
20 quality in Jo Daviess County, and would that
21 then correctly bring you back before us? Or is
22 that not a concern of the County?
23 MR. IWANSKI: Even in a major permit, if
24 Phase 2 were to be a major permit, the IEPA can
In Totidem Verbis, LLC (ITV)
(815) 453-2260
141
1 only grant that permit if it is demonstrated
2 that there will be no threat to the air quality
3 standards in Jo Daviess County. And some
4 additional requirements as a result of a major
5 permit are has the technology and some of the
6 additional impacts been addressed accordingly by
7 the applicant. So there is full protection if a
8 Phase 2 permit is a PSD permit, that air quality
9 will not be degradated to the point where air
10 quality standards are compromised; the IEPA
11 can't issue us that permit.
12 MR. TONNE: Do you agree with him?
13 STAFF MEMBER: Just one caveat. There's a
14 different criteria for requiring a minor source
15 permit and a major source permit. The limits on
16 a minor source permit for the amount of
17 emissions you can emit are much lower than the
18 amount of emissions you can reach. So it's a
19 different qualitative test on what types of
20 emissions are allowed under a major source, a
21 minor source. There's modeling requirements to
22 limit the ambient impact, but those are based on
23 criteria pollutant standards or national
24 standards that may or may not be acceptable to
In Totidem Verbis, LLC (ITV)
(815) 453-2260
142
1 the County itself, even though it passes the
2 national standard. And you can't say what those
3 are until you actually perform the modeling and
4 see how close they are to the limits or how
5 insignificant they are going to be. That's my
6 only point on that.
7 MR. TONNE: So don't worry about it now.
8 We'll litigate it later. Is that --
9 STAFF MEMBER: Well, I mean, if you grant
10 them permission for the Phase 2 right now you
11 aren't going to have a say later on in
12 determining that factor. You have to trust
13 basically the modeling and stuff that's done and
14 IEPA to do that for you.
15 MR. HEATON: Wouldn't they do that job --
16 I mean, that's what we rely on them to do
17 though.
18 MR. TONNE: So what's everyone's -- all
19 the experts' experience with this?
20 MR. DIESCH: The PSD permit, just as this
21 permit is going to go to public notice, so the
22 County will certainly have an opportunity at
23 that time to comment on that permit if they felt
24 that the air quality was not adequately
In Totidem Verbis, LLC (ITV)
(815) 453-2260
143
1 protected. That's one instance where there will
2 be County input availability at that time. Just
3 as this permit is going to be public notice and
4 you're going to have an additional opportunity
5 to comment if you so feel it necessary as a
6 County entity.
7 STAFF MEMBER: That's true. You have --
8 there will be public hearings if requested,
9 there's public comment. There's more public
10 comment generally for a major modification than
11 for a minor modification. But it will be the
12 IEPA making the final decision on it rather than
13 the board making a final decision on it.
14 MR. GRATTON: Let me just clarify
15 something. We're being asked to probably
16 approve here both Phase 1 and Phase 2. I think
17 that's part of your request; is that correct?
18 MR. DIESCH: Right.
19 MR. GRATTON: And we don't know air
20 quality standards and what model will be used
21 for Phase 2 yet, is what you're telling us. How
22 can we best ensure that the County will be
23 protected going forward once the best avenue to
24 proceed with approval with the major
In Totidem Verbis, LLC (ITV)
(815) 453-2260
144
1 modification, or the minor -- it sounds like the
2 minor process here allows less emissions; is
3 that correct?
4 STAFF MEMBER: That's correct, less
5 emissions.
6 MR. GRATTON: Less particulate matter.
7 STAFF MEMBER: Yes, less total emissions.
8 The major source would allow more emissions but
9 would still have limitations on impacts and
10 other kinds of things to mitigate those
11 increases. But it's a kind of apples and
12 oranges kind of thing as far as what you think
13 is important to the air shed and to the general
14 public. Even when it comes to air toxics and
15 other things there aren't necessarily air toxic
16 ambient limits, for example, for modeling.
17 That's a result that could be a major source of
18 toxics and not necessarily have the amount to
19 show minor impacts. But you have to have
20 certain control technologies that reduce it to a
21 certain effect that are nationally based and may
22 or may not be more important to you locally.
23 Generally the air pollution control things
24 protect the public, and the levels of protection
In Totidem Verbis, LLC (ITV)
(815) 453-2260
145
1 have been developed for thousands of man years
2 of research and everything else, and in my
3 opinion shouldn't be second guessed on whether
4 they are good enough or not. But it's a
5 different kind of permit that you're saying that
6 you're going to get and that is going to be good
7 for Jo Daviess County between a minor and a
8 major permit.
9 MR. TONNE: So if we just stipulate this
10 special use, if they will apply and achieve all
11 the necessary permits and observe regulations,
12 we're covered?
13 STAFF MEMBER: You're covered, and you're
14 kind of trusting them that the Phase 2 is going
15 to be -- the character of those emissions is
16 going to be similar to or --
17 MR. TONNE: Well, as monitored by EPA
18 then. And we're going to accept that.
19 STAFF MEMBER: You're going to defer it to
20 the IEPA to protect you in that sense, right?
21 MR. TONNE: And it's your advice to us
22 that that's okay?
23 STAFF MEMBER: The ambient standards do a
24 good job for that on a national basis and a
In Totidem Verbis, LLC (ITV)
(815) 453-2260
146
1 general public kind of condition.
2 MS. DAVIS: I mean, if we did not go with
3 their recommendations where would you go for
4 input? What do we know?
5 STAFF MEMBER: Well, that's the thing.
6 Without any data to look at we can't even advise
7 you on whether that's a good increase, big
8 increase, rational, nonrational, whether the
9 offsets are of like and kind emissions, any of
10 those kind of issues, you know, we can't do, you
11 know, if the project isn't laid out or far
12 enough developed to kind of give you those
13 answers, and I'm sure John would love to give
14 you those answers if he had the data for it, but
15 it's not available at this time.
16 MR. DIESCH: The only thing we looked at
17 was what would be the particulate emissions if
18 we did 5,000 tons per day of coal. That's a
19 very small number, because it's well controlled.
20 We did not look at what are the emissions from
21 additional FT production, additional steam
22 production, additional flaring opportunities.
23 We just don't have enough engineering data to
24 even take a shot at that. One of the criteria
In Totidem Verbis, LLC (ITV)
(815) 453-2260
147
1 -- one of the requests we have is to get a
2 special use from the County to allow us to do
3 both phases, and the reason for that is to
4 finance this project we're looking at borrowing
5 $600 million. And if there's any potential that
6 the County could pull away our opportunity to
7 operate, we'll never get the financing and this
8 project -- nothing will take place. This plant
9 won't survive. So it really rests in your hands
10 for this project to move toward.
11 Now EPA, I have all the faith that EPA is
12 going to protect the environment around us, and
13 we have no -- we're going to operate in
14 compliance and protect the environment around
15 us. We all have the same goal, is to protect
16 our lives and the people that live around us.
17 So we are going to operate that plant -- and
18 we're spending probably hundreds of millions of
19 dollars in additional money into this plant to
20 have -- to meet state-of-the-art, significantly
21 below what the standards are today.
22 Significantly below what current operating
23 plants are operating with emissions of sulfur --
24 MR. IBSEN: The sulfuric acid plant
In Totidem Verbis, LLC (ITV)
(815) 453-2260
148
1 specifically, it's state-of-the-art, and we are
2 -- we have got guaranteed limits from our
3 licensures that are substantially below those
4 that are required by the EPA.
5 MR. DIESCH: So you know, it's our intent,
6 we're going to operate in compliance.
7 MR. TONNE: Well, I'm sure you appreciate
8 our need to ask the questions.
9 MR. DIESCH: I understand.
10 MR. GRATTON: Before we let you off the
11 hook here, I think John indicated earlier that
12 carbon dioxide sequestration is -- control of it
13 is not mandated. In other words, you don't have
14 to sequester at this time. And you talked
15 about, you know, some of it being infused into
16 the oil wells, places like that. You're going
17 to produce a tremendous amount of CO2, and you
18 have a market for some of it, but if a
19 tremendously larger amount is being produced, do
20 you envision continuing to have a market for
21 that larger amount, if you do fine? If not,
22 what would your plan be to try to control some
23 of the release of CO2?
24 MR. DIESCH: Well, there's some -- there's
In Totidem Verbis, LLC (ITV)
(815) 453-2260
149
1 some things going on in the State of Illinois at
2 the present time. The governor came out with an
3 energy policy or proposal. The State of
4 Illinois wants to continue to develop its coal
5 technology, and they have realized to develop
6 that coal technology there's additional research
7 that needs to be done on how to handle the CO2.
8 So the technology is not there yet. But to get
9 there we're going to have to begin building
10 these plants in order to confer the development.
11 This will be the first one. Now, part of his
12 goal or part of his recommendations is run a CO2
13 pipeline. There's some old oil wells in
14 Southern Illinois that aren't producing very
15 well. They are virtually nonproducing.
16 Enhanced oil recovery using CO2 is a good way to
17 further produce oil out of those old wells plus
18 a place to go with the carbon dioxide. So one
19 of his proposals was a CO2 pipeline. And it
20 would be a regional CO2 pipeline. In fact,
21 there's discussions going on right now between
22 the State of Illinois and the State of
23 Wisconsin. The State of Wisconsin right now is
24 looking at building a power plant up near
In Totidem Verbis, LLC (ITV)
(815) 453-2260
150
1 Casper. If that's a gasification plant, if that
2 ends up being gasification you can collect that
3 carbon dioxide. You could collect it and inject
4 it in a pipeline and you could send it to
5 Southern Illinois. Now, where that's going to
6 go, it's very early on, but it's going to take
7 some governmental help on both the federal level
8 and at the state level in order to continue to
9 move forward with those technologies. Rentech
10 is going to move forward with its own research
11 and development, mainly looking at gasification
12 of biomass. Because then if you can gasificate
13 biomass or a combination of biomass plus coal
14 you can reduce the overall impact on the
15 environment if you can sequester it. So the
16 technologies aren't there yet, but Rentech has
17 made it their direction, and I put that up
18 there, that's part of their goals is to continue
19 to develop CO2 sequestration in working with the
20 State of Illinois in doing that, and the federal
21 government as well. So our plan, I can't tell
22 you what exactly is going to happen in the
23 future, but there's going -- my expectation is
24 there's going to be regulations on carbon
In Totidem Verbis, LLC (ITV)
(815) 453-2260
151
1 emissions over time. And so we're -- as a
2 carbon producer, we all produce carbon dioxide
3 every time -- all these power plants, every time
4 you combust fuel in your gasoline engine you
5 produce carbon dioxide. So I can't tell you
6 exactly where it's going to go, but we're going
7 to be part of it. I can tell you that.
8 MR. GRATTON: Any other questions? Okay.
9 This looks like our point in time has arrived.
10 Jock, how many more people do you have to
11 present?
12 MR. HEATON: We have one expert tomorrow
13 night. We have Kevin Boyer, our real estate
14 appraiser. We have Mr. Brunner and Mr. Lawfer.
15 And I'm sorry, John Schultz who came. I didn't
16 see him here earlier. So those three
17 individuals, Mr. Brunner, Mr. Schultz, and
18 Mr. Lawfer are going to be relatively short. I
19 see Kevin. Can you be here tomorrow night,
20 Kevin?
21 MR. BOYER: Yeah.
22 MR. HEATON: Then we probably would --
23 unless you want to get these three short
24 witnesses out of the way, they wouldn't have to
In Totidem Verbis, LLC (ITV)
(815) 453-2260
152
1 come back.
2 MR. SANDERS: In all honesty, I don't
3 think Kevin is going to be all that lengthy.
4 You've got a written report from him. It's a
5 question of the values of the surrounding
6 property. I think that would be relatively
7 brief.
8 MR. GRATTON: What I'm trying to ascertain
9 is how much time we have to allow or should
10 allow this evening, and then we need to allow
11 some additional time for public testimony.
12 Could I see a hand of the number of people who
13 would like to present testimony? Is that going
14 -- other than the ones who have been mentioned.
15 So it does not appear like it's a lengthy list.
16 So I would say if we could wrap up and if you
17 could shorten your presentations to say five
18 minutes each -- and I don't want to cut you off.
19 If you feel you need more time then let's do it
20 tomorrow night.
21 MR. HEATON: Certainly Mr. Schultz,
22 Mr. Brunner, and Mr. Lawfer will be under five
23 minutes each.
24 MR. GRATTON: I'm not limiting the time.
In Totidem Verbis, LLC (ITV)
(815) 453-2260
153
1 What I'm trying to do is use our time wisely.
2 MR. HEATON: I think they each have some
3 short comments about their feelings.
4 MR. GRATTON: Is there anybody who won't
5 be able to be here tomorrow night that -- who we
6 may want to hear from this evening? Maybe
7 that's a good way to --
8 MR. BOYER: If I can't be heard tonight I
9 have no choice but to come back tomorrow.
10 MR. GRATTON: How long is your
11 presentation?
12 MR. BOYER: I don't expect it to be long.
13 MR. SANDERS: I would guess five to 10
14 minutes, Mr. Chairman.
15 MR. GRATTON: Why don't we proceed with
16 his testimony and, you know, if it gets too late
17 we're just going to have to continue until
18 tomorrow night. But let's hear one more real
19 quick.
20 MR. SANDERS: Mr. Chairman, I would like
21 to call Kevin.
22 MR. HEATON: This is Exhibit 5, which is
23 Mr. Boyer's report.
24 MR. TONNE: We received that.
In Totidem Verbis, LLC (ITV)
(815) 453-2260
154
1 KEVIN BOYER,
2 being previously duly sworn, was examined and
3 testified as follows:
4 DIRECT EXAMINATION
5 BY MR. SANDERS:
6 Q. State your name, sir.
7 A. Kevin Boyer.
8 Q. What's your occupation?
9 A. I'm a certified general real estate appraiser
10 licensed in the State of Illinois and the State
11 of Wisconsin.
12 Q. How long have you been an appraiser, sir?
13 A. Nine years this month.
14 Q. Are you -- and you're licensed with Illinois
15 and Wisconsin, correct?
16 A. Yes.
17 Q. Generally speaking, Kevin, where is your
18 practice concentrated?
19 A. I work in 10 counties in the State of Illinois
20 and I work in four counties in the State of
21 Wisconsin predominantly.
22 Q. What did you do before becoming a real estate
23 appraiser?
24 A. I was actually a dairy farmer.
In Totidem Verbis, LLC (ITV)
(815) 453-2260
155
1 Q. Where?
2 A. Where I live now, in Stephenson County on a
3 farm in Winslow.
4 Q. Thank you, Kevin. At our request did you
5 review the Rentech property and the surrounding
6 properties with an eye toward forming an opinion
7 as to any impact on surrounding properties?
8 A. Yes.
9 Q. Can you tell us what you did to formulate your
10 opinion that's set forth in your report?
11 A. Sure. Often I'm asked questions from different
12 individuals regarding impact of land values on
13 specific different properties or projects that
14 are coming into the area. I've worked with
15 individuals that have been concerned about their
16 property values and that wind towers are going
17 to be constructed or have been constructed, high
18 voltage power transmission lines, ethenol
19 plants, some other miscellaneous things
20 throughout the years that I've been an
21 appraiser. I approached this project with the
22 same philosophy that I did with any other
23 project. Typically the first question that's
24 asked of me is how much will the value of my
In Totidem Verbis, LLC (ITV)
(815) 453-2260
156
1 property be diminished if, whatever that
2 scenario would be. So I would go to the market
3 and research the data -- available sales data in
4 the area trying to discern if there is a
5 difference, any kind of an impact, either
6 positive or negative. One of the first cases
7 that I dealt with was on a wind tower farm. I
8 had opportunity to do some appraisal work in Lee
9 County adjacent to the wind tower farm that's on
10 Interstate 39 south of Rockford. The property
11 that I was appraising was adjacent, actually
12 contiguous to the end of wind farm. I was very
13 curious to know if there was a difference in
14 value, if I needed to make an adjustment in the
15 value because of its location to the wind
16 towers. Searched the entire perimeter of the
17 wind farm, determined that there was no data --
18 sales data that could confirm to me through
19 match sales analysis that there was a difference
20 in value. Same type of scenario on high voltage
21 power transmission lines throughout various
22 counties that I've worked on. A property on one
23 side of the road has a high voltage power
24 transmissions line, the other side doesn't, is
In Totidem Verbis, LLC (ITV)
(815) 453-2260
157
1 there a difference in value, should there be a
2 reason for me to make an adjustment on that. No
3 conclusive data that would lead me to that
4 conclusion.
5 Ethenol plants are one of the more recent
6 projects that come in, and my office is in Lena
7 so if anyone is familiar with Athens Energy,
8 it's right on the edge of Lena, so I'm very
9 familiar with that plant and some of the
10 problems that they had when they first sited the
11 plant. And of course, many individuals
12 contacted me, wanted to know how much, again,
13 the value of their property would be diminished
14 if the ethenol plant was sited and operational
15 there. So I go to places that are -- first of
16 all, there's a network of appraisers. I talk to
17 people throughout the state and nation, see if
18 they have come up with documented sales that
19 would indicate something. I look at the
20 14-county area I work in to see if there's any
21 reason for me to make an adjustment on land
22 values, and determine that there wasn't. There
23 are -- a lot of people make statements that
24 property will be diminished by a certain
In Totidem Verbis, LLC (ITV)
(815) 453-2260
158
1 percentage. The problem is there's never any
2 data that I have seen to support that.
3 Q. How about in this case, Kevin, as to the
4 Rentech proposed expansion?
5 A. As a litmus test I would assume that the
6 residential properties would be impacted first.
7 If there was any impact on value in the larger
8 area it would probably likely first be
9 predominantly available for me to discover in a
10 densely populated residential area. So
11 obviously Galena Estates was the closest most
12 densely populated area. I started to research
13 the area to find out what's going on. As my
14 report states there are at least 30 lots in that
15 subdivision. I looked at the history of the --
16 the most recent history, within the last 15
17 years of -- or so of sales transferred. My
18 first obvious observation was that there were
19 sales of properties in Galena Estates. Vacant
20 lots have been sold. There is a new
21 construction house that's just recently been
22 finished completion. And my report states also
23 that there's another vacant lot presumably that
24 will be constructed within the next 12 or 18
In Totidem Verbis, LLC (ITV)
(815) 453-2260
159
1 months. So one of the first tests that I would
2 look at in a subdivision like that if something
3 were going on in the neighborhood I very likely
4 would not see any transfers of property. Those
5 people would shy away from that area and
6 potentially go somewhere else if there was a
7 reason for the value of those properties to be
8 diminished by whatever else outside influence
9 that might be. So I did not assume that that
10 was going on in the area because I saw actually
11 more sales than what I was expecting to find
12 compared to similar subdivisions in rural parts
13 of the counties that I work in. So I looked at
14 the transfer sale prices. The sale prices
15 tended to -- limited sales documentation,
16 there's not enough for me to do an in-depth
17 analysis of a percentage increase a year or any
18 of that type of thing, but generally the values
19 have remained stable to slightly increasing,
20 which is also what I would have expected to
21 find.
22 Q. Kevin, do you have an opinion based on what
23 you've just explained as to whether or not the
24 special use requested by Rentech would
In Totidem Verbis, LLC (ITV)
(815) 453-2260
160
1 substantially diminish or impair values of
2 property within that general area?
3 A. I do have an opinion.
4 Q. What is it?
5 A. Based on my research for me to say that the
6 property values would be diminished or actually
7 increase in value, I'd have to have some
8 documentation in the market to justify that. I
9 don't see any documentation in any concrete
10 sales data that that would lend me to that
11 conclusion, so therefore I don't have any reason
12 to suspect that the property values would be
13 impacted at all by this construction.
14 Q. Kevin, do you also -- did you form an opinion
15 as to whether or not the special use requested
16 by Rentech would be injurious to the use and
17 enjoyment of other property in the immediate
18 vicinity for the purposes already permitted?
19 A. I noticed that discussions have gone on this
20 evening. I rely heavily too on regulations,
21 whether it's EPA or whatever governing body is
22 in control of any of the impact in the area.
23 And if there's -- if the facility is in
24 compliance with all regulations that are in
In Totidem Verbis, LLC (ITV)
(815) 453-2260
161
1 place, the local, state, federal, however you
2 want to determine it, there would be no reason
3 for me to assume that there would be any impact
4 on the use or enjoyment of the property.
5 MR. SANDERS: Okay. Thank you, Kevin.
6 Mr. Chairman, that's all the questions I have of
7 Mr. Boyer.
8 MR. GRATTON: Thank you. Are there others
9 who would like to question Mr. Boyer?
10 AUDIENCE MEMBER: I've got a couple
11 questions. What about pieces of property that
12 are located near railroad tracks? Are they less
13 in value than similar properties that are
14 located away --
15 MR. BOYER: For me to say that I would
16 have to find match pair sales that would
17 indicate that to me. Again, I mentioned -- I'll
18 talk about the ethenol plant in Lena. It
19 increased significantly the semi truck traffic
20 and the rail traffic through the Village of
21 Lena.
22 AUDIENCE MEMBER: But to talk about Lena
23 versus this, the people that buy in Lena have
24 that type of area -- and it's a very nice area,
In Totidem Verbis, LLC (ITV)
(815) 453-2260
162
1 but there's a little bit of difference than the
2 recreational use and the properties and use of
3 Jo Daviess County. We all bought in Galena
4 Estates to have a nice rural setting, to have
5 nice views, to be able to possibly hunt and fish
6 in our own backyards. I just had my house
7 appraised just a few months ago, and it always
8 has gone up in value. And one of the things is
9 just wow, what a fantastic view you have. And
10 that's pretty much the same as everybody in our
11 area. Also to say you haven't found anything,
12 there's been -- let's say the last 10 years
13 there's probably been at least two new homes
14 built every year. So when you said you can't
15 find a history of something going on in there, I
16 really question that.
17 MR. BOYER: What's the question then? I
18 guess I'm not following.
19 AUDIENCE MEMBER: I guess the question is
20 you're saying -- you saying you can't determine
21 one way or the other if the -- this plant is
22 going to effect the property value.
23 MR. BOYER: I don't see any data that the
24 expansion of Rentech would alter the pattern
In Totidem Verbis, LLC (ITV)
(815) 453-2260
163
1 that's already happening.
2 AUDIENCE MEMBER: If something would alter
3 -- no matter what the area is, if something will
4 alter the view of and area will it affect the
5 property value? If something will affect the
6 noise will it affect the property value?
7 MR. BOYER: In the areas that I've
8 researched that the increased rail traffic or
9 semi truck traffic through the Village of Lena,
10 for example, I'll come back to that --
11 AUDIENCE MEMBER: You can't compare Lena
12 to an area like Galena. You look at the taxes,
13 you look at the property value, you -- Galena --
14 what did you look at in Lena? Was it a
15 subdivision? Was it rural farmhouses? What was
16 it?
17 MR. BOYER: All, all sales of properties
18 to see if there was any difference.
19 AUDIENCE MEMBER: And did you average
20 those?
21 MR. BOYER: I don't have average --
22 AUDIENCE MEMBER: I guess the average is
23 did you lump together, let's say agricultural
24 properties with residential properties or
In Totidem Verbis, LLC (ITV)
(815) 453-2260
164
1 subdivisions?
2 MR. BOYER: No, they are all independent
3 properties. When I'm appraising agricultural
4 property I'm looking at agricultural sales.
5 AUDIENCE MEMBER: What is the property
6 value in the Lena area versus in the Galena area
7 or in Jo Daviess County where we're located;
8 higher or lower?
9 MR. BOYER: I suppose it would depend on
10 the quality of the individual homes. I've not
11 been asked to do an analysis of that.
12 AUDIENCE MEMBER: If I -- okay. I guess
13 what I'm saying is, you said you haven't found
14 anything one way or the other, but then you're
15 saying you don't think it will impact it. It
16 doesn't seem to be based on anything. I don't
17 know if I'm making myself clear.
18 MR. BOYER: I'm not following you.
19 AUDIENCE MEMBER: You say you can't find
20 anything in the Galena area that either showed
21 that it affected the property value positive or
22 negative; is that a correct statement?
23 MR. BOYER: Let me cite for you another
24 example of a property. The Byron Nuclear Plant
In Totidem Verbis, LLC (ITV)
(815) 453-2260
165
1 was mentioned earlier. Up in Ogle County there
2 was a 40-acre parcel that was adjacent to the
3 edge of the property near Exelon. I would have
4 expected my own human (sic), I would not want to
5 live there. I would not pay -- if it was given
6 to me I'm not sure I would take the property.
7 But if I put my own emotion and my own feelings
8 out of that, that property sold for above market
9 value. Somebody bulldozed a driveway and built
10 a house in the center of the property because
11 they wanted to be in that location. Those are
12 the types of examples that I'm talking about
13 when I'm looking at this facility. That Lena
14 continues to grow. In fact, their assessed
15 value continuing to climb. There's a new
16 subdivision that lots are continuing to build.
17 There's development around the Byron Nuclear
18 Plant. That has not halted that development.
19 In fact, there's more population in that area
20 than --
21 AUDIENCE MEMBER: But nobody goes to Byron
22 for the view. It's pretty flat land. What
23 would happen to Galena territory if they were
24 going to put a plant next to Galena territory?
In Totidem Verbis, LLC (ITV)
(815) 453-2260
166
1 MR. BOYER: What type of plant are you
2 talking about?
3 AUDIENCE MEMBER: A Rentech type of plant.
4 MR. GRATTON: Mr. Boyer, maybe if we
5 could, you know, keep the relevance issue intact
6 here and maybe -- I heard you, I think, say that
7 you researched property values in the Galena
8 Estates Subdivisions; is that correct?
9 MR. BOYER: Yes.
10 MR. GRATTON: And I think what you said,
11 and I'm paraphrasing you here, is that property
12 values did not decline, and in some instances
13 increased in value; is that a fair statement?
14 MR. BOYER: A general trend increased in
15 value, yes.
16 MR. GRATTON: During the, you know, period
17 of time that --
18 MR. BOYER: At least the past 15 years.
19 MR. GRATTON: Okay, but the chemical plant
20 has been in existence.
21 MR. BOYER: Yes.
22 MR. GRATTON: And is it your opinion that
23 any addition or expansion of this plant would be
24 in any way detrimental to property values?
In Totidem Verbis, LLC (ITV)
(815) 453-2260
167
1 MR. BOYER: That is my opinion, that the
2 expansion of Rentech would not be detrimental to
3 the impact of the values of the surrounding
4 area.
5 STAFF MEMBER: One more question back
6 here. It's hard to predict the future because
7 plants change, so you can't really look at
8 anything in the area because it's all history
9 not looking forward. This isn't the first
10 gasifier though that's been built. Have you
11 looked at property values around gasifiers to
12 see what property values did after the gasifier
13 went in?
14 MR. BOYER: No, I have not.
15 MR. TONNE: And that -- I have the same
16 question actually to the petitioner. Do you
17 offer -- or isn't the Wabash process similar and
18 has been there 10 years, or did I -- have I
19 misstated that?
20 MR. DIESCH: Yeah, it will be a duplicate.
21 We're basically duplicating that technology.
22 MR. TONNE: Does the petitioner offer any
23 testimony about property values?
24 MR. DIESCH: That's another thing --
In Totidem Verbis, LLC (ITV)
(815) 453-2260
168
1 there's a standard coal fire power plant there
2 as well. What they did was took one of the coal
3 fire units and installed the gasifier next to
4 it.
5 MR. TONNE: So it's apples and oranges. I
6 understand what you're saying but -- has any
7 peer review data been published with regard to
8 residential property values?
9 MR. DIESCH: What I can say on the
10 environmental side, that the total environmental
11 emissions for that site were dropped
12 dramatically. It's the cleanest power plant
13 operating today. I can't say unequivocally.
14 There's data and information on the USEPA's
15 website. You can look that up. I can tell you
16 that. I don't think that it would have effect
17 on property values.
18 MR. GRATTON: Do we have other questions
19 for Mr. Boyer? Thank you very much. I think at
20 this point our time has come and gone, and I
21 think it's time that we look toward tomorrow
22 night, if we can. If you don't have a copy of
23 the staff report, I would like you to review
24 that part for tomorrow night. I know that some
In Totidem Verbis, LLC (ITV)
(815) 453-2260
169
1 of the questions that were in that report have
2 been answered this evening, there may be some
3 that have not been answered. If you could
4 review that and try to address those. And we'll
5 hear the rest of the testimony that you've
6 prepared plus any public input that we may
7 receive tomorrow night.
8 MR. HEATON: We want to start at 6 again,
9 Mr. Chairman?
10 MR. GRATTON: And we'll hope to wrap up at
11 9 or shortly after tomorrow night. So do I have
12 anything from staff before we -- do I have a
13 motion to continue tonight's meeting until
14 tomorrow evening?
15 MR. HEIDENREICH: Moved.
16 MR. GRATTON: We have a motion by Tom,
17 second by Nick to continue this proceeding until
18 tomorrow evening, February 15th at 6 o'clock
19 p.m. in this building in this room. All those
20 in favor signify by aye.
21 (By voice vote six ayes.)
22
23
24
In Totidem Verbis, LLC (ITV)
(815) 453-2260
170
1 Now on this 14th day of February, A.D.
2 2007, I do signify that the foregoing testimony was
3 given before the Jo Daviess County Zoning Board of
4 Appeals.
5
6
7
8
Melvin Gratton, Chairman 9
10
11
12
13 Linda Delvaux, 14 Zoning Administrator
15
16
17
18 Kara M. Sullivan 19 Certified Shorthand Reporter Registered Professional Reporter 20 IL License No. 084-004482 8991 South Prairie Road 21 Ashton, Illinois 61006
22
23
24
In Totidem Verbis, LLC (ITV)
(815) 453-2260