Document KRX7YR6o5rz4E3w9myeGbRVvx

. 4&aarc zy /in a mid Request For Capital Expenditures/Retirements DIVISION OR CDtVCiNV olymer Products Division ..OCATION Chicago JOTITLE Plant J.O. CONTROL. POI NT 097 Install dual oil and gas burner for large kiln. REPORTING CLASSIFICATION DATE APPROVED JOB ORDER NO. (A1 4/17/83 PP-5835 SUMMARY OF AMOUNTS DESCRIPTION LOCAL CURRENCY ESTIMATED PROJECT COST U.S. DOLLARS $10,099 DISMANTLEMENT EXPENSE TRANSFER EQUIPMENT GROSS AMOUNT, FOR APPROVAL $10,099 LESS TRANSFER EQUIPMENT TR^.^!if',,ALlp:W:4N-CE NET CASH REQUIRED (Gor-3027) \, $10.099 1 1 RETIREMENT DATA DISMANTLEMENT LESS SALVAGE TOTAL - CHARGE RESERVE DESCRIPTION AND REASONS REQUIRED ECONOMICS as called for in General Procedure Memo #3 Attachment C. (Attach calculations) ECONOMICS PERIOD NET SALES NAT (p r o ri t /s a v in g s ) TOTAL INVESTMENT % ROI (o n t o t a l in v e s t .) INTERNAL RATE OF RETURN; PAYOUT OF NEW FIXED CAPITAL 6 yrs> 2.078 21,4% 3.37 vrs REV.# i REVISION DETAIL (.GROSS AMOUNTS) CUM> AUTHORIZATION Funds of------------------------------------------------------------------------------------------------------------------------------$10,099 are requested to purchase and install a dual oil and gas fired burner for the large kiln. 3006 REV 5-77 PP-5835 Page 2 of "19 4/17/83 Proposed Work and Cost Funds of--------------------------------------------------------------------------------------------------------------$10,0 99 are requested to purchase and install a dual fired oil and gas burner for the large kiln. Present Situation Litharge, the major material used in the manufacture of all lead heat stabilizers, is produced by the oxidation of lead. First, partial oxidation in a ball mill, then completed in an oil fired kiln. At current production demands, 150 gallons per day of a low sulfur kerosene is used to heat the kiln. Sulfur is a contaminant in lead stabilizers, hence the need to burn a low sulfur fuel. The current price of oil is $1.37 per gallon with a BTU content of 14 x 10s per gallon. The cost of gas is $0.47 per therm with a BTU content of 1 x ID*5 per therm. Justification Per Mr. T. E. Necekas energy survey of April 20, 1981: Oil cost for running kiln Cost if kiln were run on gas Difference $46,373 $12,652 $33,721 Using a mixture of 3/4 oil and 1/4 gas, a savings of $8430 per year could be obtained. 1981 Data Oil cost for running kiln (1981) Cost if kiln were run on gas (1981) Difference $35,411.76 $17,009.30 $18,402.46 Using a mixture of 3/4 oil and 1/4 gas, a savings of $4600.61 per year could be obtained. Year 1979 1980 1981 Litharqe Produced 14,037,479 6,236,170 6,295,398 Safety and Loss Prevention The existing large kiln has no combustion safety controls. Potential explosion hazards will be greatly reduced. The new dual fuel burners (one oil, and one gas) shall be equipped with combustion safety controls in accordance with Cyanamid's Loss Prevention Standard No. 310.0 and The National Fire Protection Association (NFPA) Standard No. 85A--1982. The procurement of the dual fuel burner will be specified in accordance with these standards. N14600.01 CYWI 25-0007258 PP-5835 L 4 Page 3 of "i9- 4/17/83 Details of Proposal The present oil burner will be replaced by a dual fuel burner capable of using both oil and gas. This burner will burn a ratio of both oil and gas, the ratio of each depending on the length of flame desired. The kiln is a fire brick lined 6 foot diameter by 60 foot long rotating tube which must be heated its entire length. A gas burner alone cannot achieve a long enough flame to heat the entire length of the kiln to the required temperature. With the addition of oil to the gas burner, the ' entire length of the kiln can be heated much more economically than with oil alone, since gas is much cheaper to burn for equal amounts of BTU. Installation will be done by outside contractors. This burner system has been reviewed by corporate chemical group loss prevention and safety groups. . Production Factors This proposal will not alter product quality or production rates Contingent Future Commitments This proposal will not require additional funds to complete. Alternatives Considered Keep present system which burns oil only. Rejected as too costly. Risks No operating risks are involved. Concise Summary Install a combination oil and gas burner on the kiln to save on energy costs and improved safety. CYWI 25-0007259 10/22/82 PP-5835 L Page 4 of l$t 4/17/83 ECONOMIC JUSTIFICATION CHICAGO PLANT Gross Saving using Natural Gas Less: 3/4 mixture of Oil Net Annual Savings Less: Costing Depreciation @ 7 1/4% Taxes Net Savings Before Taxes Taxes @50% Investment Tax Credit Net Savings After Taxes Costing Depreciation Cash Flow 1st Year 18,402 13,802 4,600 705 378 3,517 1,759 972 2,731 705 3,436 Subsequent Years 18,402 13,802 4,600 705 - 3,895 1,948 - 1,947 705 2,652 Payout %Tll------ 3.436 = x + 2.37 (3.37) years 2,652 ROI 6 year average 2,078 9,.721 21*4% . 1 CYWI 25-0007260 COMMERCIAL FACTORS ctf> w o A </> in S o iH i--I O tH 0) e cn o td u c*P G cn H M Q) i--1 N td H G 1--1 H *H Cn X! M td td </> -M a cn T3 td <D --i o 4-t +J cn 0) 0) Cn i--i T3 td 3 Ui XI tn 4-1 XI G XI td i--i cu id in 44 u o Ck Cu 3 tn (D 3 L V to -- .,H x tn EH Xr, ~Iii NN. <0- r- in tH ro CM 1 os \D VO CM Cl CN . r^ ' tH ID r- CM in 1 ,--. KO ro 00 Cl CN in os ' CM T--l C\ in r^* vo fct in r-H o U5 o in os *p v VO CM n C-l rH tn u <D N H r-H H X 3 44 tn - i-H i--! 3 44 CD tncN Td oo 3 or Od '--1 tn n 0) N h cn rH XI H 44 XG 3O p e tn G rH flj i-H > td tu tn i--i 3 44 3 tn 44 M O -H < Cn 44 tn )h tn H x Cn 4J G cu o Cn g Sh 3G X CU X> H tu X tn PP-5835 & Page 5 of T9~ 4/17/83 CYWT 25-0007?61