United States Environmental Protection Agency Industrial Environmental Research Laboratory Research Triangle Park NC 27711 Research and Development EPA-600/S7-84-019 Aug. 1984 Project Summary Marketing of Byproduct Gypsum from Flue Gas Desulfurization W.E. O'Brien, W.L Anders, R.L Dotson, and J.D. Veitch The 1985 marketing potential of byproduct gypsum from utility flue gas desulfurization (FGD) was evaluated for the area east of the Rocky Mountains using the calculated gypsum production rates of 14 selected power plants. The 114 cement plants and 52 wallboard plants in the area were assumed to be the potential market for FGD gypsum sales. Assuming use of an in-loop, forced- oxidation, limestone FGD process, results showed that producing market- able gypsum was less expensive than disposal by chemical fixation and landfill for many power plants in the area, including all those used in the study. With this savings to offset freight costs, the power plants could market 4.35 million ton/yr of gypsum (92% of their production), filling 63% of the cement plant requirements and 20% of the wallboard plant requirements. Cement plants are a geographically disperse market available to most power plants, but able to absorb the production of only a few power plants; wallboard plants are a larger market but, for them, power plant location is a more important marketing factor. Other variations on the marketing model indicated that: (1) drying and briquettirfg had little effect on the marketing potential; (2) sales were reduced 25% when the savings in FGD cost were not used to offset freight costs; and (3) relocation of wallboard plants to sources of byproduct gypsum appeared eco- nomically feasible in some cases. This Project Summary was developed by EPA's Industrial Environmental Research Laboratory, Research Triangle Park. NC. to announce key findings of the research project that is fully docu- mented in a separate report of the same title (see Project Report ordering information at back). Introduction This study investigated the marketing of byproduct gypsum as a more economical means of operating flue gas desulfuriza- tion (FGD) processes at utility power plants. In the past few years, prospects for marketing FGD gypsum have improved. Simple and effective variations on low- cost limestone FGD processes that incorporate forced oxidation to produce gypsum have been developed and have become economically competitive with the more conventional limestone process- es that have increasingly expensive waste treatment costs. Forced oxidation processes, now offered by several ven- dors, are being adopted by utilities seeking to reduce waste treatment and handling problems or, in some cases, to produce marketable gypsum. Rapidly increasing transportation costs have also improved the prospects for FGD gypsum because of the nonuniform distribution of natural gypsum, which sometimes requires the shipment of natural gypsum or gypsum products over long distances. FGD gypsum is one of the better candidates among byproduct gypsums for replacement of natural gypsum because of its chemical and physical properties. Wallboard is commer- cially produced from FGD gypsum in Japan and West Germany. It has also been evaluated in several wallboard manufacturing tests in the U.S. that were reportedly successful, an important factor since wallboard manufacture has the most stringent quality requirements and is the largest use of gypsum. The manufacture of Portland cement, which contains a small percentage of gypsum, is the only other market that utilizes enough ------- gypsum to support the marketing of FGD gypsum. In 1981, about 19 million tons of gypsum was used in the U.S.: 3.6 million tons for the manufacture of portland cement, 1.5 million tons in agriculture, and most of the rest to manufacture wallboard and plaster products. About 11.5 million tons was produced at 70 mines in 22 states; the rest was imported. The unusually large import trade is largely the result of a lack of gypsum deposits in the eastern U.S. It is more economical to import gypsum by sea from Canada than to ship it overland from domestic mines, a situation with impor- tant implications for marketing byproduct gypsum in the eastern U.S. In the 37 states east of the Rocky Mountains, the study area of this investi- gation, gypsum deposits occur in the inland coastal plains from Arkansas to eastern Texas, in a broad belt from western Texas into Iowa, and in the area around the lower Great Lakes. Except for a mine in southwestern Virginia, there are no gypsum mines east of the Miss- issippi River and south of the Ohio River. In 1981, an estimated 8 million tons of gypsum was produced at 36 mines in 12 of the 37 states. An additional 6.2 million tons was imported through 13 ports of entry on the Eastern Seaboard and Gulf Coast. Marketing Model The marketing model used in this study was based on the premises that utilities that use FGD to meet S02 emission control requirements would adopt FGD gypsum production and marketing if this were the lowest cost FGD option, and that cement and wallboard manufacturers would use the byproduct gypsum if it cost less than their natural gypsum supply. The study area was limited to the 37 states east of the Rocky Mountains, and sales were limited to cement and wall- board plants. All of the costs, quantities', power plant conditions, and marketing structures were projected to 1985 using information available through mid-1982. Gypsum Market The cement plant market consisted of 114 cement plants projected to be in operation in 1985. The geographic distribution of the plants is quite uniform and bears little relationship to natural gypsum sources, as shown in Figure 1. The total cement plant gypsum require- ments were projected to be 3.42 million ton/yr. The requirements of most indi- vidual plants ranged from 10,000 to • Gypsum Mines » Gypsum Import Points • Cement Plants Figure 1. Locations of gypsum mines, gypsum import points, and cement plants in the 37 eastern states. 60,000 ton/yr; the average for all plants was 30,000 ton/yr. The wallboard plant market consisted of the 52 wallboard plants projected to be in operation in 1985. The geographic distribution of the plants is almost entirely related to sources of gypsum, either mines or import points, as shown in Figure 2. The total wallboard plant gypsum requirements were projected to be 10.4 million ton/yr. Most wallboard plants have requirements of 100,000 to 500,000 ton/yr, with an average of about 250,000 ton/yr. Since individual wall- board plant requirements are proprietary information, the requirements used in this study were determined and verified by indirect methods. Power Plants To provide an accurate representation of the production of FGD gypsum by utilities, the fuel, operating conditions, and emission regulations of 14 power plants were used to determine the gypsum production rates and FGD costs used in the marketing model. Their locations, relative to cement and wallboard plants. are shown in Figures 3 and 4, respective- ly. These were screened from all coal- fired power plants in the study area with boilers over 100 MW in size that were, or are scheduled .to be, started up between 1960 and 1985 (104 power plants). The 14 power plants selected were among those best suited economically for use of gypsum-producing FGD strategy. All 14 power plants were calculated to have lower FGD costs for a gypsum-producing FGD process than for a waste-producing FGD process. The screening process consisted of comparing computer-gen- erated costs of two limestone FGD systems based on the individual power plant fuel, boiler design, and emission regulations. One FGD system was a conventional limestone process produc- ing a high-sulfite waste that was fixed with fly ash and lime and disposed of in a landfill. The other was an adipic-acid- enhanced limestone process incorpora- ting in-loop forced oxidation in which the gypsum produced was washed and filtered to 90% solids. The process included stockpiling and loading facilities for 85% of the gypsu m produced. Costs for ------- * Gypsum Mines • Gypsum Import Points tWallboard Plants Figure 2. Locations of gypsum mines, gypsum import points, and wallboard plants in the eastern 37 states. • Cement Plant Power Plant Figure 3. Geographic relationship of study power plants to cement plants. landfill disposal of the remaining gypsum (representing off-quality production) and all of the fly ash (to make disposal costs comparable with the waste-producing process) were included. The cost differ- ences, expressed as an "incremental cost" in $/ton of gypsum, were used in most of the evaluation as an important economic factor in the marketability of the FGD gypsum. The incremental costs was negative (i.e., the gypsum process was less expensive) for the power plants used in this study. Gypsum Costs Almost without exception, wallboard manufacturers control the source of their gypsum (rather than purchase from independent producers) whether domes- tic or foreign. The cost of gypsum is re- garded as an opening cost passed on as a portion of the total manufacturing costs. Consequently, the cost of gypsum used in wallboard manufacture is low. Cement plants more commonly purchase gypsum from suppliers at a higher cost. The 1985 cost of domestic gypsum at the mine was projected to be $8.20/ton for wallboard plants and $15.607ton for cement plants. The 1985 cost of imported gypsum for wallboard was projected to average $15.15/ton at the port of entry and ranges from $10.50 to $18.00/ton for individual ports. The same port-of-entry cost for cement plant gypsum, increased by estimated brokerage fees, was pro- jected to average $19.71/ton and range from $18.00 to $21.00/ton. Freight Costs Freight costs for both natural and FGD gypsum are based on shipments by truck as far as 250 miles and by railroad farther than 250 miles. Truck freight rates of $1.30/ton were used as far as 10 miles, and $0.13/ton-mile for farther than 10 miles, based on a 23-ton load. Beyond short distances, truck freight rates do not differ greatly in terms of ton-miles, so no adjustment for the distance shipped was made. Railroad freight rates decrease with distance, however. The railroad freight rates used varied from $0.13 to 0.10/ton-mile between 250 and 500 miles. In contrast to those from bulk gypsum, freight rates for wallboard differ consid- erably for the six railroad rate territories in the study area. For the evaluation of wallboard shipments, therefore, freight rates based on rates developed by TVAfor the various intra- and interterritory shipments were used. These differ by a maximum of 125%, depending on the source and destination of the shipments. ------- * Wallboard Plant Jt Power Plant Figure 4. Geographic relationship of study power plants to wallboard plants. Marketing Evaluations The primary evaluation consisted of a determination of the extent to which the FGD gypsum could be marketed to cement and wallboard plants as a lower cost replacement of their natural gypsum supplies. A delivered cost of natural gypsum was established for each cement and wallboard plant. This served as the basis for an "allowable cost" for delivered FGD gypsum. If the FGD gypsum could be delivered at a cost less than the allowable cost, it was regarded as successfully replacing the natural gypsum supply. Several variations of this model were evaluated. In most, the delivered cost of the FGD gypsum was based on the premise that the objective of producing and marketing FGD gypsum was to reduce FGD costs and that the savings in using the gypsum-producing FGD process could be used in part to ensure sale of the gypsum, thus making use of the lower- cost process practical. The variations of this model evaluated are summarized below. Also listed is a different evaluation in which an aspect of the economic feasibility of manufacturing wallboard at sources of FGD gypsum was examined. Marketing of as-produced gypsum containing 10% water, with the incremental cost offsetting the freight costs and an allowable cost equal to 90% of the cost of the natural gypsum supply (to account for possible resistance to the water content). The individual marketing potential of each power plant (with- out competition from other FGD gypsum) and the marketing potential of all 14 power plants when marketing simultaneously were evaluated for three marketing conditions: sales only to cement plants, sales only to wallboard plants, and sales to both cement and wallboard plants. Marketing under all of the conditions above but without the incremental cost offsetting freight costs. This assumed that the gypsum-producing FGD process had no cost advantage over the waste-producing process. In this case, freight costs alone deter- mined the delivered cost of the FGD gypsum. Marketing of gypsum dried to a water content of 2.5%, with the incremental cost offsetting the freight costs and an allowable cost equal to the cost of the natural gypsum supply. The cost of drying was added to the FGD costs, reducing the incremental costs by $4-6/ton, depending on the quantity dried. Only the marketing potential of all 14 power plants marketing simultaneously to both cement and wallboard plants was evaluated. • Marketing of dried gypsum as above but with the portion of the gypsum sold to cement plants pressed into briquettes (to simulate natural lump gypsum). The briquetting costs were added to the FGD costs, further reducing the incremental costs. • A different marketing model in which a stochastic array of distribution cen- ters in wallboard marketing areas was used to represent wallboard marketing in the study area. The freight costs of wallboard from exis- ting wallboard plants and from the power plant locations were com- pared to examine the economics of locating wallboard plants at sources of FGD gypsum. Discussion of Results In contrast to most byproduct FGD processes, the gypsum process used in this study was less expensive than the alternate waste-producing process for many power plants, a result of advances in forced-oxidation limestone FGD tech- nology, the improved handling properties of gypsum, and the reduced disposal costs resulting from marketing the gypsum. The lower cost of the gypsum process greatly enhanced the marketabil- ity of the gypsum. Conditions that favored the adoption of a gypsum marketing strategy were a high flue gas SO2Content and high SOa removal rates—typified by boilers with stringent emission limits that burn high-sulfur coal. FGD process- es incorporating fixation and landfill were generally more economical for boilers with less-stringent emission limits or that burned lower-sulfur coal. Market Characteristics The cost of gypsum to cement plants averaged about twice that to wallboard plants. There were also wide differences in gypsum costs among different geo- graphical areas. These differences were an important factor in the marketability of the FGD gypsum. The inland trans- Mississippi and Great Lakes areas had the lowest gypsum costs, the Eastern Sea- board and Gulf Coast had higher costs, and the Appalachian area had the highest costs. In general, using incremental cost to offset freight costs, gypsum could be ------- marketed to cement plants as far away as 500 miles, with little difference in marketability between power plants in different areas. Gypsum could be marketed to wallboard plants under the same conditions as far away as 250 miles, with the longer distances representing power plants with access to wallboard plants with higher gypsum costs. Marketing Model Results A summary of the gypsum marketing model and study results is shown in Table 1. Without competition, each power plant could market all of its product to cement plants. Together, all plants could reach almost the entire cement plant market. However, the cement plant market has a limited capacity to absorb FGD gypsum; 10 power plants typical of those used in this study could supply the entire cement plant market. This is evident in the marketing model of the 14 power plants marketing simultaneously: gypsum was marketed to 95 cement plants, supplying 83% of the total cement plant requirement, but only 4 power plants could market all of their production, 2 had Table 1. Summary of Gypsum Marketing Results no sales, and only 60% of the total power plant production was marketed. Without competition all power plants also had sales to wallboard plants, but only 11 could market all of their produc- tion. In contrast to the cement plant market, only a portion of the wallboard plant market could be reached; the power plants could market to only 20 of the 52 wallboard plants in the study area because of the shorter economical trans- portation distance. With the 14 power plants marketing simultaneously to wallboard plants, 12 power plants had sales to 17 wallboard plants, and 6 were to market all of their production. Compe- tition was less important in limiting sales, but location was more important than in the cement plant market. With incremental cost off setting freight costs and the 14 power plants marketing simultaneously to both cement and wall- board plants, the results were largely additive, compared to the individual markets; 4.35 million ton/yr of gypsum was marketed to 79 cement plants and 14 wallboard plants at a savings of $110 mil- lion/yr. Twelve plants marketed all of Sales with incremental cost, kton*/yr their production, and only one had insignificant sales. The sales met 63% of the cement plant requirements and 20% of the wallboard plant requirements, with both volume and savings divided almost equally between the markets. Without the incremental cost to offset freight costs, sales to distant cement plants and wallboard plants were sub- stantially reduced. Without competition only about half of the power plants were able to market all of their production to either the cement plant market alone or the wallboard plant market alone. In the combined market, 3.23 million ton/yr of gypsum was marketed to 52 cement plants and 10 wallboard plants at a savings of $30 million/yr. All power plants had sales, and seven marketed all of their production. The primary effect of the elimination of incremental cost was to eliminate the more distant markets, particularly in the cement plant market. Location became much more important in marketing success since proximity to a wallboard plant was necessary to market all of the production of most of the power plants. Sales without incremental cost, kton'/yr Power plant location County, State (Gypsum production/" Pleasants. WV (307 kton/yr) Coshocton, OH (483 kton/yr) Monroe, Ml (7OO kton/yr) Boone, KY (197 kton/yr) Trimble, KY (166 kton/yr) Jefferson. KY (577 kton/yr) Muhlenberg, KY (544 kton/yr) Pike. IN (254 kton/yr) Sullivan. IN (282 kton/yr) Randolph, MO (363 kton/yr) Atascosa, TX (222 kton/yr) Hillsborough. FL 1160 kton/yr) Putnam. FL (271 kton/yr) Duval. FL (182 kton/yr) Total (4.708 kton/yr) % of total market Incremental cost, $/ton -19 -20 -18 -13 -23 -24 -18 -20 -21 -16 -22 -20 -26 -22 Ce/Tnf"' Wan£nt*d Cement and wallboard plants only 292 483 357 None 53 206 165 None 235 363 222 160 242 60 2.838 83 only None 128 700 None 85 163 170 254 282 170 153 160 271 182 2.718 25 Cement 307 355 156 29 81 334 186 None 80 302 222 89 28 None 2.169 63 Wallboard None 128 544 None 85 243 170 254 202 61 None 71 243 182 2.183 20 Total 307 483 700 29 166 577 356 254 282 363 222 • 160 271 182 4.352 31 Dried* 307 483 700 None 166 577 444 254 282 363 222 160 271 182 4.411 31 Cement Wallboard Dried and plants plants briquetteo" only only 307 483 700 None 166 577 356 254 282 363 222 160 271 182 4.323 30 108 162 156 32 51 53 243 32 too 273 222 89 None 63 1.584 46 None 128 452 None None None 170 254 282 None None 160 271 182 1.899 18 Cement and wallboard plants Cement 108 162 156 32 51 53 271 32 54 273 222 89 None None 1.503 44 Wallboard None 128 452 None None None 170 222 228 None None 71 271 182 1,724 16 Total 108 290 608 32 51 53 441 254 282 273 222 16O 271 182 3.227 23 * All gypsum quantities are dry weight, 100% gypsum Except as noted, all sales are as-produced gypsum containing 1O% water, and the allowable cost is 90% of the cost of the natural gypsum supply "Sales of gypsum (dried to 2 5% water) to cement and wallboard plants with an allowable cost equal to the cost of the natural gypsum supply. c Sates of gypsum (dried to 2 5% water) to wallboard plants and dried and briquetted gypsum to cement plants with an allowable cost equal to the cost of the natural gypsum supply ------- Drying the gypsum produced had little effect on sales or total savings. Drying reduced freight costs, which for the more distant markets sometimes offset the drying costs. Similarly, briquetting the dried gypsum sold to cement plants had little effect on sales volume although it reduced the savings. Location of Wallboard Plants at Power Plant Gypsum Sources Locating wallboard plants at power plant sources of gypsum is appreciably more complicated and hypothetical than marketing gypsum in the conventional marketing structure evaluated in the foregoing studies. It depends on, for example, not only the economics of the gypsum supply but also the economics of marketing the finished product, which need not be a part of a gypsum marketing study. Only one aspect of the potential for relocation of wallboard plants to power plant gypsum sources was investigated in this study: the freight costs for wallboard from power plants to marketing areas were compared with those from existing wallboard plant locations to the same marketing areas. This was accomplished by developing a model using the 14 power plants and a system of 43 hypothetical regional wallboard distribution centers, shown in Figure 5. The model results, shown in Table 2, indicate that in some cases the manufac- ture of wallboard at power plant locations has the potential for substantial reduc- tions in freight costs. About half of the total power plant production could be used to manufacture wallboard competi- tive with wallboard from existing wall- board plant locations. In most cases, the power plant wallboard replaced wall- board from distant wallboard plants, either because there were no wallboard plants in the marketing area or because the local supply was inadequate. The re- sults appear to indicate a moderate economic potential for the relocation of wallboard plants, but it is apparent that they were influenced by the power plant locations—which in some cases were not particularly well suited to serve as gypsum sources in areas without natural gypsum deposits (note, in Figure 4, the absence of gypsum producing power plants in the inland Southeast). Nor do the results indicate the full potential for wallboard plant relocation since they do not reflect the possible additional advan- tages of a more economical gypsum supply. * Wallboard plants Power plants Distribution centers Figure 5. Geographic relationship of existing wallboard and power plants to regional distribution centers. Conclusions Advanced limestone FGD gypsum- producing processes are economically competitive with processes that produce a chemically fixed waste. These processes have enhanced the prospects for marketing FGD gypsum, because the gypsum process does not necessarily require sales revenue, to make it economically competitive with other FGD processes for which waste disposal is difficult and expensive. The sales revenue—and savings from the use of the gypsum process itself in some cases—can be an added economic inducement to gypsum marketing or used in part to offset marketing costs. The only gypsum markets capable of supporting a general production of FGD gypsum are the port land cement and wallboard industries. The 114 cement plants east of the Rocky Mountains could consume the production of about 10 power plants typical of those used in this study, and the 52 wallboard plants in the same area could consume the production of about 32 similar power plants. With the FGD cost savings offsetting freight costs, gypsum could be marketed to cement plants within a radius of about 500 miles and to wallboard plants within a radius of about 250 miles. All of the marketing model evaluations in this study can be regarded as success- ful. With the FGD cost savings offsetting freight costs and without direct competi- tion, all the power plants could market all their production. With all power plants marketing simultaneously, all but two of the power plants were able to market all of their production in spite of extensive competition. Drying and briquetting had little effect on the marketability of the gypsum. Without FGD cost savings offsetting freight costs, total sales were reduced by about 25% and savings by about 75%, but seven power plants were able to market all of their production. As an alternate to marketing to existing wallboard plants, relocation of wallboard plants to sources of power plant gypsum would, in some cases, reduce the costs of shipping wallboard to marketing areas. Without competition from other power plants, most of the power plants in the study area for which a gypsum process is more economical than a waste-producing process could successfully market to ------- cement plants, regardless of the power plant location, and some could market successfully to wallboard plants, al- though power plant location would be a factor in marketing to wallboard plants. In a competitive situation with several power plants marketing FGD gypsum, competition would limit sales in some cases. The cement plant marketing structure would be quite fluid, subject to the activities of other, often distant, power plants. Competition in the wall- board plant market would be more localized and, in some cases, less severe because of the large gypsum requirements of wallboard plants and the tendency in some cases for wallboard plants to be clustered at sources of gypsum, creating very large localized gypsum requirements. FGD gypsum marketing differs from the marketing of other FGD byproducts such as sulfur and sulfuric acid. For example, gypsum-producing FGD processes do not depend on sales revenue for their economic justification. In many cases, simple removal of the gypsum at no cost is sufficient to justify adoption of the process; in some cases, the savings in FGD costs by adopting a gypsum-pro- ducing process could be used to supple- ment freight costs, thus enhancing the marketability of the gypsum. On the other hand, other FGD byproduct processes usually involved much higher costs, to the point that sales revenue is an integral and important factor in their economics, making them more vulnerable to market conditions. However, even widespread adoption of byproduct processes that produce sulfur and sulfuric acid would supply only a small portion of the market requirements. This is in contrast to the situation which could exist by a similar adoption of gypsum processes. In this case the FGD gypsum supply would saturate the market (exceed the market requirements) and would result in intense competition. rower plant location County, State (Gypsum production) Pleasants. WV (307 kton/yr) Coshocton, OH (483 kton/yr) Monroe, Ml (700 kton/yr) Boone, KY (197 kton/yr) uypsur kton/yr 203 483 94 None n equivalent snippea Distribution center Pittsburgh, PA Roanoke, VA Charleston. SC Pittsburgh, PA Columbus, OH Detroit, Ml Freight Savings, $1000/yr 2,415 4.629 489 Jefferson. KY (577 kton/yr) Muhlenberg. KY (544 kton/yr) Pike. IN (254 kton/yr) -Sullivan. IN (282 Kton/ys} Randolph, MO (363 kton/yr) Atascosa, TX (222 kton/yr) Hillsborough, FL (160 kton/yr) Putnam. FL (271 kton/yr) Duval, FL (182 kton/yr) Total (4.708 kton/yr) 135 207 None 148 275 222 160 271 None 2,198 Louisville, KY Knoxville, KY Nashville, TN Birmingham, AL Chicago, IL St. Louis, MO Springfield, MO San Antonio, TX Tampa, FL Tampa, FL Miami, FL 1,020 3,748 385 1.926 5.484 3.536 884 24.516 W. E. O'Brien, W. L. Anders, R. L. Dotson. andJ. D. Veitch are with TVA's Office of Power, Muscle Shoals. AL 35660. Julian W. Jones is the EPA Project Officer (see below). The complete report, entitled "Marketing of Byproduct Gypsum from Flue Gas Desulfurization," (Order No. PB 84-215 805; Cost: $16.00, subject to change) will be available only from: National Technical Information Service 5285 Port Royal Road ~~ Springfield. VA 22161 Telephone: 703-487-4650 The EPA Project Officer can be contacted at: Industrial Environmental Research Laboratory U.S. Environmental Protection Agency Research Triangle Park. NC 27711 *U9SeO: 1984-759-102-10651 ------- United States Environmental Protection Agency Center for Environmental Research Information Cincinnati OH 45268 ••AID Official Business Penalty for Private Use $300 C^S tA-VIK' PWUTbCTlUN AGfcNCY ^rbluN 5 LJ^*AKY i>!) ) S DEMKttU^N STRfcb T ------- |