PERMIT APPLICATION REVIEW SUMMARY

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1 PERMIT APPLICATION REVIEW SUMMARY New Hampshire Department of Environmental Services Air Resources Division P.O. Box 95, 29 Hazen Drive Concord, NH Phone: Fax: Phone #: (603) AFS #: Application #: Date: 10/07/2009 Page 1 of 6 PROJECT DESCRIPTION Anheuser-Busch, Inc. (ABI) filed a Temporary Permit application for a change in sulfur content of the liquid fuel oil combusted in Boilers 1, 2, and 3 from less than or equal to 1.0% sulfur, by weight, to less than or equal to 0.3% sulfur, by weight. The reason the facility is changing the maximum sulfur content of fuel oil combusted is to assure compliance with the National Ambient Air Quality Standards (NAAQS) for sulfur dioxide. Previous modeling with their proposed new wood-fired boiler project with interactive sources showed the facility could contribute to a violation of the sulfur dioxide NAAQS in this area in the Town of Merrimack under a worst-case scenario. The applicant receives deliveries of a blend of No. 1, 2, 4, and/or 6 fuel oils at varying sulfur contents, which meet the 1.0% sulfur, by weight content limit of the permit. This practice has been ongoing since the facility received its original Title V Operating Permit TV-OP-044 on August 26, The brewery has not purchased any No. 6 fuel oil since April 2007, and will only purchase 0.3% or lower sulfur fuel in the future. As of October 29, 2008, approximately 560,000 gallons of fuel oil at 1.0% sulfur remains on site as the back-up to natural gas in the event of curtailment, emergency, or in limited quantities for boiler testing. As stated in the letter from the applicant dated October 30, 2008, if scenarios requiring fuel oil combustion do not arise, the brewery intends to slowly combust the fuel oil along with natural gas to minimize emissions. In any event, the remaining oil will be burned no later than December 31, Anheuser-Busch will notify DES once the current fuel oil inventory of 560,000 gallons has been combusted. The facility has a maximum annual gross heat input rate limitation for Boilers 1, 2, and 3 combined of 2.56 X Btu/consecutive 12 month period. See the attached spreadsheet for the calculation of the net change in maximum potential emissions from changing the sulfur content from less than or equal to 1.0%, by weight, to less than or equal to 0.3% sulfur, by weight. Table 1 below is a summary of the net change in the maximum permitted emissions for Boilers 1, 2, and 3 combined. Table 1 Change in Maximum Permitted Emissions for Boilers 1, 2, and 3 Combined Pollutant 1.0% Sulfur (tons/yr) 0.3% Sulfur (tons/yr) Difference (tons/yr) VOC CO NOx PM 10 (F+C) SO 2 1, CHANGES FROM PREVIOUS PERMIT Change in maximum sulfur content of liquid fuel oil burned in Boilers 1, 2, and 3 from less than or equal to 1.0% to less than or equal to 0.3% sulfur, by weight. FACILITY DESCRIPTION The Anheuser-Busch, Inc. (ABI) Merrimack Brewery produces beer from barley, malt, cereal grains (adjuncts), water, hops, and yeast. The Brewery has 4 process unit areas; grains handling, malt beverage production, utilities operations (steam plant), and a Bio Energy Recovery System (BERS) process. The BERS process is a primary stage, anaerobic wastewater treatment process with biogas production for combustion in either Boiler 2 or 3, or a Flare as an emergency backup, in case one or both of the Boilers are unavailable for service. Regulated pollutants are emitted from the grains handling area, the malt beverage production area (brewing, fermenting, finishing, packaging), utilities operations (Boilers 1, 2, 3), and the BERS process (biogas, mostly methane that is combusted in Boilers 2 or 3 or the Flare (emergency

2 AFS #: Application #: Date: 10/07/09 Page 2 of 6 backup) and small amounts of hydrogen sulfide from the Off-Gas Scrubber). PERMITTING HISTORY Table 2 Permitting History EU Device Permit Permit Permit Status Number Issued Expires Facility Wide TV-OP /27/ /31/2007 Admin. Amendment, change in responsible official and one alternate responsible official, operating under application shield, EU02, EU03, & Flare provision Facility Wide TV-OP /05/ /31/2007 Admin. Amendment, addition of alternate responsible officials, operating under application shield provision BERS Process, Flare and Off-Gas (Packed- Bed) Scrubber BERS Process, Flare and Off-Gas (Packed- Bed) Scrubber Boilers 1, 2, & 3, and the Flare BERS Process, Flare and Off-Gas (Packed- Bed) Scrubber 3 Cooker Stacks, Hops Strainer Stack, & Hot TP-BP /08/ /30/ year extension to complete testing TP-BP /26/ /30/2006 Administrative Amendment ARD /09/2005 n/a NOx RACT Order issued TP-BP /09/ /30/2006 Temporary Permit for BERS Process TV-OP /01/ /31/2007 Off-Permit Change Change in termination geometry of 5 process stacks Wort Receiver Stack Facility Wide TV-OP /26/ /31/2007 Initial Title V Operating Permit issued, filed a renewal on Feb. 26, 2007, operating under application shield provision Brewing & Packaging Operations Brewing & Packaging Operations ARD /15/2002 n/a VOC RACT Order revised ARD /20/2000 n/a VOC RACT Order issued

3 AFS #: Application #: Date: 10/07/09 Page 3 of 6 PROCESS/DEVICE DESCRIPTION In that this Temporary Permit involves changing the fuel oil sulfur content for the three Boilers at the facility, only the three Boilers will be discussed in this section of the Engineering Summary. Table 3 below is a summary of information concerning the three Boilers: Table 3 - Significant Activities Emission Unit ID Description of Emission Unit Installation Date Maximum Design/Permitted Capacity Boiler 1 Babcock & Wilcox Model # FM-1766 Serial # Todd Combustion Burner Burner Model Number Dynaswirl Burner Serial Number A EU02 Boiler 2 Babcock & Wilcox Model # FM-1766 Serial # Todd Combustion Burner Burner Model Number Dynaswirl Burner Serial Number A EU03 Boiler 3 Babcock & Wilcox Model # FM-1766 Serial # Todd Combustion Burner Burner Model Number Dynaswirl Burner Serial Number A MMBtu/hr Blended fuel oil 0.3% S, equivalent to 986 gal/hr 142 MMBtu/hr Natural gas 2, equivalent to Mcf/hr MMBtu/hr Blended fuel 0.3% S, equivalent to 986 gal/hr 142 MMBtu/hr Natural gas, equivalent to Mcf/hr 18 MMBtu/hr Biogas 3, equivalent to 24 Mcf/hr MMBtu/hr Blended fuel 0.3% S, equivalent to 986 gal/hr 142 MMBtu/hr Natural gas, equivalent to Mcf/hr 18 MMBtu/hr Biogas, equivalent to 24 Mcf/hr 1 Assumed heating value of blended fuel oil at 0.3% sulfur = 140,000 Btu/gal 2 Heating value of Natural gas = 1,020 Btu/scf 3 Heating value of Biogas = 750 Btu/scf. Biogas can be co-fired with either natural gas or blended fuel oil at 0.3% sulfur, and/or on-site, on-spec used oil.

4 AFS #: Application #: Date: 10/07/09 Page 4 of 6 STACK INFORMATION Emission Unit # Table 4 Stack Information Stack # Description Max. Exit Min. Diameter Stack (ft) Height Above Ground Level (ft) Exhaust Flow Actual Cubic Feet Per Minute (ACFM) Exhaust Temperature ( F) Stack Configuration ST01 Boiler # , Vertical Unobstructed EU02 ST02 Boiler # , Vertical Unobstructed EU03 ST03 Boiler # , Vertical Unobstructed LIST OF INSIGNIFICANT ACTIVITIES Not applicable POLLUTION CONTROL EQUIPMENT None EMISSION CALCULATIONS See the attached spreadsheet for detailed calculations and assumptions that went into the calculations. Note that the facility has a maximum annual heat input rate limit of 2.56 X 10E+12 Btu/consecutive 12 month period for Boilers 1, 2, and 3 combined. Emissions for Boilers 2 and 3 include burning biogas from the BERS process. Boilers 1, 2, and 3 combined are major sources of SO2 and NOx and the brewing operations are greater than 50 tons/year of VOC emissions, making the facility a major source of VOCs. The facility is not a major source of federal hazardous air pollutants (HAPs). Table 5 - Emission Summary (tons/yr) Device/Process PM 10 SO 2 NOx CO VOCs HAPs Potential (Boiler 1) EU02 (Boiler 2) EU03 (Boiler 3) Boilers 1, 2, and 3 Combined MODELING Modeling was previously performed for a wood-fired boiler project at ABI and showed that the facility and other interactive sources combined were contributing to non-compliance with the sulfur dioxide National Ambient Air Quality Standards (NAAQS). It was later determined that stack heights at the Kohlman facility were actually 7 feet taller than modeled. In addition to this change, ABI was required to either raise its boiler stack heights or take a lower sulfur content in fuel oil limit in order to meet the sulfur dioxide NAAQS. DES remodeled the ABI facility at maximum operating rates for the boilers with a maximum fuel oil sulfur content of 0.3% sulfur, by weight, and found the facility and surrounding interactive sources to be in compliance with the NAAQS for sulfur dioxide.

5 AFS #: Application #: Date: 10/07/09 Page 5 of 6 EMISSION TESTING There is no testing required in this Temporary Permit. SITE VISITS/INSPECTIONS Date Description 05/12/06 Onsite Full Compliance Evaluation The Compliance Bureau of the NHDES Air Resources Division did not note any deficiencies on this onsite full compliance evaluation. REPORTS/FEES Annual Emission Reports/Fees The annual emissions report and emissions-based fees for 2008 were paid in full and received on April 13, 2009, for the facility. The previous 5 years of annual emissions reports and emissions-based fees have been submitted to DES. Below is a summary table of the previous five years of facility wide emissions totals for all criteria pollutants plus regulated toxic air pollutants (RTAPs) and federal hazardous air pollutants (HAPs): Year Particulates SO 2 NOx CO VOCs HAPs & Total RTAPs REVIEW OF REGULATIONS (Note that this review of regulations is only for the fuel change proposed by the facility.) State Regulations Env-A 600 Permitting (a) Applicable All 3 Boilers are capable of firing natural gas and No. 2 fuel oil at a rate greater than or equal to 10 MMBtu/hr (b) Applicable All 3 Boilers are capable of firing No. 4 fuel oil at a rate greater than or equal to 4 MMBtu/hr (c) Applicable All 3 Boilers are capable of firing No. 6 fuel oil at a rate greater than or equal to 2 MMBtu/hr (g) Applicable Facility Wide Facility wide total actual VOC emissions are greater than or equal to 10 tons per year (n) Applicable All 3 Boilers The facility has chosen to limit its potential to emit by taking a restriction on total combined heat input to the three Boilers of 2.56 X Btu per consecutive 12-month period (x) Applicable All combustion devices are subject to NOx RACT requirements in Env-A 1211 and the brewing operations are subject to VOC RACT requirements (y) Applicable All 3 Boilers Based on modeling performed in accordance with 40 CFR 51, Appendix W, the facility has a significant impact on the air quality where a permit is required to ensure that ambient air quality standards are achieved and maintained , Ambient Air Dispersion Modeling Analysis and RSA 125-C:6 Applicable All 3 Boilers Sulfur content of fuel oil burned in Boilers 1, 2, and 3 must be less than or equal to 0.3% sulfur, by weight. Total combined heat input to the three Boilers combined is restricted to less than or equal to 2.56 X Btu per consecutive 12-month period.

6 AFS #: Application #: Date: 10/07/09 Page 6 of 6 Env-A 900 Recordkeeping and Reporting Requirements 910, Additional Reporting Requirement Applicable The facility must notify DES once all of the 560,000 gallons of 1.0% sulfur fuel oil is used up. They indicated they would consume all of it by December 31, Federal Regulations 40 CFR 60 Subpart Db, Standards of Performance for Industrial-Commercial-Institutional Steam Generating Units Not applicable to Boilers 1, 2, and 3. Each of these three Boilers was constructed in 1969, which is prior to the Subpart Db applicability date of June 19, 1984.

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