United States
Environmental Protection
Agency
Office of Air Quality
Planning and Standards
Research Triangle Park, NC 27711
EPA-453/R-94-077b
Final Report
November 1994
EPA Hazardous Waste Treatment,
Storage, and Disposal Facilities
(TSDF) Regulatory Impact Analysis
for Promulgated Air Emission
Standards for Tanks, Surface
Impoundments, and Containers
-------
-------
EPA-453/R-94-077b
Hazardous Waste Treatment,
Storage, and Disposal Facilities (TSDF)
Regulatory Impact Analysis for Promulgated
Organic Air Emission Standards for Tanks,
Surface Impoundments, and Containers
Emission Standards Division
U.S. ENVIRONMENTAL PROTECTION AGENCY
Office of Air and Radiation
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
November 1994
-------
-------
DISCLAIMER
has been ^viewed by the Emission Standards Division
of the Office of Air Quality Planning and Standards, EPA, and
approved for publication. Mention of trade names or commercial
products is not intended to constitute endorsement or
recommendation for use. Copies of this report are available
through_the Library Services Office (MD-35), U.S. Environmental
Protection Agency, Research Triangle Park, NC 27711, or from
National Technical Information Services, 5285 Port Royal Road
Springfield, VA 22161.
-------
-------
PREFACE
This document constitutes the Final Regulatory Impact Analysis (RIA) for the Hazardous
Waste Treatment, Storage, and Disposal Facilities; Organic Air Emission Standards for Tanks,
Surface Impoundments, and Containers under Section 3004 (n) of the Resource Conservation
and Recovery Act (RCRA). the document is composed of two parts: (1) an addendum
consisting of revised chapters to the 1989 RIA; and (2) an appendix containing the 1989 RIA.
The addendum consists of rewritten chapters that discuss revised analyses of control options
considered for the final standards. The highlight of this addendum is a completely revamped
Benefit-Cost assessment (Chapter VII).
-------
-------
I. SUMMARY OF THE REGULATION
A. ALTERNATIVES EXAMINED
Five control options were selected for consideration of standards. These five control
options, labeled as A, B, C, D, and E, are summarized in Table III-l. In terms of complying
with the Resource Conservation and Recovery Act (RCRA), options A and B were considered as
providing the equivalent level of human health and environmental protection in terms of
maximum individual risk (MIR) and reduction of annual cancer incidence.
When no control options achieve acceptable levels of protection, EPA's approach
historically has considered cost under RCRA only among options that are equivalently
protective. Option B would be less expensive for the treatment, storage and disposal facility
(TSDF) industry to implement than option A because fewer units would be required to be
equipped with and operate organic emission controls. Because option B would be less
expensive, EPA selected option B as the basis for the final standard.
For further information on the rationale for the selection of the proposed standard, the
reader is referred to Section V of the Preamble.
B. CONTROL COSTS AND COST-EFFECTIVENESS ANALYSIS
The EPA gave notice at proposal that consideration of new results from revision to the
national impacts analysis could lead to selection of any one of the five control options considered
at proposal or possibly other control options (56 FR 33516). Since proposal, the EPA has
revised the national impacts model to incorporate new information obtained by the EPA. New
impact results were obtained using the revised national impacts model. Based on the new impact
results, the EPA expanded the control options considered for the final rule. A series of
preliminary runs was performed using the revised national impacts model for the original five
control options ultimately selected for evaluation at proposal plus an additional nine control
options.
New waste data were compiled from two nationwide surveys conducted in 1987, as well
as an updated Industry Studies Data Base and other sources. The costs were reviewed and
revised. As a result of the review, estimates of baseline emissions and control costs have been
revised directionally downward.
Based on cost-effective principles, dominant control options were identified for the
selection of the final rule for promulgation. In essence, those options that provide the best
health improvement at least cost are dominant. Table 1-1 summarizes the capital and annualized
cost of five control options for the selection of the standard for the final rule.
1-2
-------
-------
;,.'-V.^
-a _ -j ££
| | | |
fc .• •^
U
0
o
CN
1
O
<
O
&
o
o
OS
cs
1
o
o
tt
^o
*
o
Os
i
1
o
o
tJ
o
J
o
00
CN
o.
ex
o
0
»\
§
5*
1
o
VO
T-H
1
0 1
CD
en"
=^=
'
o
^
-------
-------
C. ECONOMIC IMPACT ANALYSIS
In the 1989 draft Regulatory Impact Analysis (RIA), it was stated that some 834 facilities
represented those that would incur the greatest portion of costs and thus were analyzed for the
economic effects. If the findings of the analysis for these 834 facilities could be couched in
terms of negligible impacts, then it seemed reasonable to extend the findings to the regulated
community of sources as well. That conclusion seems to hold in 1989 and still does now.
Scaling the costs for the revised control options, the most stringent option or control
option A, would, cost $ 190 million and approximate 1 percent of current hazardous waste
management costs for all but 3 sectors, and not exceed 2 percent in 'those sectors. Those 3
sectors are industrial chemicals (organic and inorganic); plastics and fibers; and assorted
chemical products. In the commercial hazardous waste management sector, the price of the
service supplied to generators of hazardous waste increases by less than one-tenth, or well less
than one-half of one percent; this price increase induces a minimal decrease in the quantity of
off-site hazardous waste management demanded. Facility closures and employment dislocations
are minimal.
D. REGULATORY FLEXIBILITY ACT ANALYSIS
A revised analysis of the costs for control option B estimates $ 7 million annually for
tanks and containers. The revised estimate is approximately 50 percent of the estimate for the
proposed rule (control option C), as reported in the August 1989 preliminary screening analysis
On a cost-effectiveness basis, the controls are $ 200 per Mg of emission reduction for 90-day
containers and $ 400 to $ 500 per Mg of emission reduction for tanks. In contrast controls for
control option B for TSDF cost approximately $ 1000 per Mg. If control cost-effectiveness can
serve as a proxy for impacts, then controls for 90-day tanks and containers do not produce a
significant burden on small quantity generators.
E. BENEFIT-COST ASSESSMENT
Based on an illustrative benefit-cost assessment which uses allocative efficiency
arguments, the findings are as follows:
• Regardless of the mortality risk reduction coefficient used, from an allocative
efficiency perspective, organic emission reductions should be at least as great as
those associated with option E. Even with the lower valuation coefficient and
incomplete coverage of benefits, positive partial net benefits are maximized at
option E.
• Using the higher valuation coefficient for mortality risk reduction, positive partial
net benefits are maximized at option D. Given a range of some breadth (i.e
mortality risk reduction benefits from $510 to $800 per Mg), reductions at least
to option D may be warranted on allocative efficiency grounds.
1-4
-------
-------
On occasion, the application of benefit-cost analysis focuses almost entirely on the
relationship between incremental benefits (quantified or inferred) and incremental costs. What is
lost in such applications is the difference the selected option choice may make in the resulting
potential net benefits. To determine this difference, a sensitivity analysis of the net benefits has
been prepared to identify the conditions under which each of the considered options would be
optimal and calculates the resulting net benefits. Instead of arbitrarily assigning a credit to
organic emission reduction, the analyses presumes several scenarios in which the point at which
incremental benefits equals incremental costs provides a value that may be used only for
comparing candidate control options. Two findings emerge:
• First, the difference in net benefits between the optimal option and the others is
not great in a relative sense. The potential loss in net benefits from not choosing
the optimal option ranges from approximately zero to 10 percent.
• Second, the range of relative differences in net benefits is reduced by half when
the considered options are limited to D, C, and B. Under those circumstances,
the range of potential loss is from approximately zero to 5 percent of the net
benefits for the optimal option.
1-5
-------
-------
II. THE NEED FOR AND CONSEQUENCES OF
REGULATORY ACTION
A. LEGISLATIVE REQUIREMENTS AFFECTING THE REGULATION OF AIR
EMISSIONS FROM TREATMENT, STORAGE, AND DISPOSAL FACILITIES
FOR HAZARDOUS WASTES
Section 3004(n) of the 1984 Hazardous and Solid Waste Amendments to the RCRA
requires standards for the monitoring and control of air emissions from hazardous waste TSDF
as necessary to protect human health and the environment.
B. THE NATURE OF THE AIR EMISSIONS PROBLEM
Hazardous waste facilities emit approximately 12 percent of all organic emissions from
stationary nationwide. Organic emissions contribute to tropospheric ozone formation, a
significant national problem for which EPA is assiduously pursuing significant controls.
Organic emissions from TSDF may also contain a variety of toxins such as carbon tetrachloride,
acrylonitrile, and methylene chloride. Accordingly, air emission regulations have been
developed for numerous source categories at TSDF, including tanks, containers, certain surface
impoundments, and fixation processes. Control of ozone precursors and reduction of the
toxicity potential of organic emissions are the goals of these standards.
C. THE NEED FOR REGULATORY ACTION
In the absence of government regulation, market systems have failed to deal effectively
with air emissions from TSDF for hazardous waste because these facilities do not internalize
damages caused by their emissions. For an individual facility, emissions are unusable
byproducts which can be disposed at no cost to the facility by release into the atmosphere.
Unfortunately, once in the atmosphere, emissions impose costs upon others in society.
The fact that the owner of the facility does not bear the full costs of his or her action
leads to a divergence between private costs and social costs. This divergence indicates a failure
of the unregulated market. The result is inefficiency or a disproportionate allocation of society's
resources: the polluting activity, i.e., the release of organic emissions at the hazardous waste
facility, occurs at too high a level in comparison to the optimal situation in which the polluter
bears all of the costs.
A variety of market and extra-market mechanisms are available to correct that situation.
Some of the market mechanisms are briefly described in Chapter III of this RIA. This section
discusses extra-market mechanisms.
In addition to government regulation, extra-market mechanisms included negotiations or
II-l
-------
-------
litigation under tort and common law. In theory, the latter approaches might result in payments
to persons to compensate for the damages which they incur.
Such resolutions may not occur, however, and a need for government regulation would
continue. Two major obstacles block the correction by the private market of pollution-based
inefficiencies and inequities. The first is high transaction costs when millions of persons are
affected by thousands of polluters. Transaction costs of compensating those adversely affected
by TSDF emissions arise and accumulate to a substantial amount because their current and
future injury must be appraised, the injury must be apportioned to each TSDF, and damage suits
or negotiations must be conducted. In an unregulated market, each owner of a TSDF and each
affected person would have to litigate or negotiate. The transaction costs would be so high as to
probably exceed the benefits of reduced air emissions. Therefore, another mechanism is
desirable for solving the air pollution problem caused by emissions from TSDF.
The second obstacle discouraging resolution by the private sector is due to the public
good nature of pollution reduction. That is, after emissions have been reduced, the benefits of
reduction can be enjoyed by additional persons at no additional cost. This results in the classic
"free rider" problem. Thus everyone would have an Incentive to be the last to contribute
resources to litigation or negotiation, thinking that he or she would freely benefit from the
efforts of others. Again, a need arises for an alternative approach to reducing air emissions.
II-2
-------
-------
III. ALTERNATIVES EXAMINED
A. INTRODUCTION
This section briefly presents potential alternatives of regulating air emissions from
TSDF. The outline for the section is adopted from Executive Order 12291 which requires that
at a minimum the following alternatives be examined:
• no regulation;
• regulation beyond the scope of present legislation;
• market-oriented alternatives; and
• alternative control options.
Although Executive Order 12291 requires that all alternatives be examined, only the most
promising ones need to be analyzed in detail.
B. NO REGULATION
Section 3004(n) of RCRA was added to the Act under the Hazardous and Solid Waste
Amendments of 1984 to require the Administrator of EPA to promulgate regulations for
monitoring and control of air emissions from TSDF of hazardous wastes management activities
as may be necessary to protect human health and environment.
C. REGULATIONS BEYOND THE SCOPE OF PRESENT LEGISLATION
Other regulatory approaches include: (1) regulation under the Clean Air Act,
particularly Sections 110 for criteria air pollutants, 111 for new source performance standards,
and 112 for national emission standards for hazardous air pollutants; and (2) and some
individual state hazardous wastes management programs. From an administrative point of view,
the regulatory and implementation processes of RCRA for permitting TSDF were already in
place and made regulating air emissions more expeditious for this source category.
Potentially, air emissions from TSDF are precursors to tropospheric ozone, and, to some
degree, particulate matter which are regulated under Sections 109 and 110 of the Clean Air Act.
Under these regulations, states have the responsibility to attain National Ambient Air Quality
Standards for ozone. However, the implementation program process (i. e., SIP process) for
attaining ozone air quality standards and state hazardous waste management programs may not
be sufficient to provide full health protection from potential risks posed by certain individual
chemical constituents, as air contaminants, of known toxicity to humans.
IH-1
-------
-------
D. MARKET-ORIENTED APPROACHES
There are several market-oriented approaches which can be considered as alternatives to
regulate air emissions from TSDF. These include pollution charges, marketable permits, and
subsidies and are briefly described below.
Charges
This policy would involve a charge, or tax, being set on each unit of pollutants emitted.
Firms would then choose the amount of abatement, in the form of hazardous waste reduction or
actual air emissions, including the pollution charge. Emissions are reduced until the marginal
cost of abatement is equal to the charge on emissions. The regulatory agency would have to set
the level of charge in a manner that would result in the desired level of emissions, or
conceivably health protection. Given the fact that the health and environmental impacts are
multifaceted (i.e., toxicity and ozone health related), it would be very difficult to assess the
appropriate charges. Presently, hazardous wastes generators in the chemical manufacturing and
petroleum refining industries are assessed charges based on the amount of wastes generated,
under SARA Title III, to pay for the clean-up of present and future Superfund sites. These
charges should provide incentive to reduce the amount of wastes generated. However, it is
difficult to predict the relationship between air emissions and the amount of wastes generated
because the distribution and processing of hazardous wastes from the point of origin to its final
disposition alters the character of the wastes.
Permits
A permit system would allow a TSDF to purchase a permit in order to emit a specified
amount of a pollutant over a specified period of time at a specified location. This is very
similar to the actual permit process administered under RCRA, Section 3005. A fixed number
of permits could be issued and auctioned off to the highest bidders. Alternatively, the permits
can be distributed among the sources, who could trade these permits or acquire firms that have
successfully obtained permits to operate an incinerator or another type of treatment facility under
RCRA. Under the present system (RCRA), trading is limited to acquiring regulated facilities
with operating permits. To use a marketable permit in its purest form (i.e., without any
environmental regulation) as the sole incentive to reduce air emissions would be effective only if
the emissions were homogeneous in character. Such is not the situation with TSDF emissions.
Subsidies
A subsidy system pays sources for each unit of pollution that they do not emit. This can
take the form of direct payments or tax credits. Subsidies and charges are similar in that both
increase the opportunity cost of pollution, the former by causing each source of emissions to
entail forgoing the subsidy which could be received if it were not emitting pollutants. Thus, the
subsidy is similar to a charge, except in two respects:
III-2
-------
-------
Administratively, there is the problem of determining the actual emissions of each
source, as was discussed above. There must be a determination of what level and
character of emissions were in the absence of the subsidy. For example, many
wastes streams rich in organic content are processed for recovery of valuable
chemicals (e.g., chlorinated solvents). The same chemicals in aqueous wastes
streams (high in water content) would not be economical for such recycling.
These determinations are difficult and may depend upon individual waste
sampling, provided by the waste generators, who may have the incentive to
misrepresent the nature of their wastes to the administrative agent for carrying
out the subsidy system.
The long-run effects of subsidies may be quite different than for permits or
charges, since the former increase profit levels for waste generating industries
and the latter decrease them. In the hazardous wastes management industry, the
subsidies accruing to recyclers of wastes help in minimizing wastes disposal and
air emissions associated with that practice. Subsidies, other than those presently
offered by the marketplace would probably encourage more waste generation and
hence, increase air emissions.
E. REGULATORY ALTERNATIVES WITHIN THE SCOPE OF PRESENT
LEGISLATION (RCRA)
As indicated earlier, Section 3004(n) of RCRA requires regulations for the monitoring
and control of air emissions from TSDF to protect human health and the environment. The
regulatory analysis that was conducted took into account reduction of risk of mortality as
measured by a facility-specific composite risk factor modeled for several potencies of individual
chemical constituents, and explicitly recognized other effects associated with organic emissions
and transformation products (tropospheric ozone and paniculate matter).
Many emission control strategies are available to reduce organic emissions from TSDF.
In fact, due to the variations in waste streams, emission sources, and control options, potential
control strategies number in the thousands. With further analysis, it is possible to identify
inferior control strategies. Many potential control strategies are inferior because at least one
other strategy would achieve the same organic emission reduction (or reduction in cancer
incidence) but at a lower cost or, for the same cost, provide a higher reduction. Chapter IV of
the 1989 Draft RIA discusses the Least-Cost Model used to identify the dominant control
strategies to reduce organic emissions from TSDF.
Five control options were selected for consideration of standards. These five control
options, labeled as A, B, C, D, and E, are summarized in Table III-l. For all control options,
tanks, containers, and surface impoundments must have suppression controls (e.g., covers). In
addition, controls vented to control devices (e.g., carbon adsorbers) must be installed if certain
combination of action level, waste vapor pressure, and handling capacity criteria are met.
Control options B, C, D, and E are all the same except for the volatile organic concentration
III-3
-------
-------
action level. For control option A, the action level is 0; that is, controls are required on all
organic waste streams managed in tanks with capacity greater than 20,000 gallons and organic
vapor pressure greater than 0.75 pounds per square inch absolute (psia), or 40,000 gallon, if
organic waste vapor pressure is greater than 4.0 psia. For control options B, C, D, and E, the
concentration action levels are 100 parts per million by weight (ppmw), 500 ppmw, 1500 ppmw,
and 3000 ppmw. •
F. RATIONALE FOR THE PROPOSED REGULATION
In terms of complying with the RCRA, options A and B were considered as providing
the equivalent level of human health and environmental protection in terms of MIR and
reduction of annual cancer incidence. Options C, D, and E are estimated to provide less
protection in terms of MIR and annual cancer incidence. Options A, B, C, and D, provide
approximately the same level of nationwide emission reduction, while option E provides
somewhat less than the others, but within the same general range. The estimated MIR is an
order-of-magnitude higher for options C, D, and E (2 x 10~2 for option C, 3 x 10"2 for options D
and E) compared to options A and B (4 x 10"3). However, none of the options is estimated to
reduce MIR to the target risk levels for other promulgated RCRA standards, which have been in
the range of 1 x 10^ to 1 x 10"6. Therefore, EPA concluded that options A and B are equally
protective of human health and the environment, and are more protective than options C, D, or
E. The impacts for the control options and baseline and summarized in Table III-2.
When no control options achieve acceptable levels of protection, EPA's approach
historically has considered cost under RCRA only among options that are equivalently
protective. Option B would be less expensive for the TSDF industry to implement than option
A because fewer units would be required to be equipped with and operate organic emission
controls.
New waste data were compiled from two nationwide surveys conducted in 1987, as well
as an updated Industry Studies Data Base and other sources. The costs were reviewed and
revised. As a result of the review, estimates of baseline emissions and control costs have been
revised directionally downward, and operate organic emission controls. Because option B would
be less expensive, EPA selected option B as the basis for the final standard.
For further information on the rationale for the selection of the proposed standard, the
reader is referred to Section V of the Preamble.
III-4
-------
-------
a-
,
1 B
1 ,3
1 B
.6
||I
Quiescent^
Surface
Impoundment
1
O
CO ij
,2 -S
• f'H
B
O
55
•78
"S
o c o
8 £ x-
5 I
Xj WJ
c
8 3 S
s/ °
y
.2 ^
|j
'— ' S '
4-> *-C
o o
"
CO
O
U
co
U
CO
,_,
O
co
0
CO
CO
1,
ex
o
^
o
o.
o
CO
u
CO
CO
u
CO
s
U
CO
o
co
CO
£
d,
ex
o
o
pa
§
•4— »
0
CO
U
CO
CO
U
CO
S
U
CO
o
CO
CO
c.
ex
o
0
in
U
0
•4— »
o.
O
CO
O
CO
CO
U
CO
^
U
CO
o
CO
CO
ex
ex
O
O
Q
O
ex
O
CO
U
CO
CO
CJ
CO
en*
U
CO
o
CO
CO
ex
ex
O
O
O
CO
a
o
ex
O
2 a
« §
a i
|
I
-8
!!
•g 'i
-------
-------
3 to Q
^ °,', 1,
*c3 § ^ •
.•ti S to • §
5 1 ° 1
o S ' £
•*-* 5 ^
c3 w ^5
V-H "^" 'M^
O c o
sn
ro *ri *-"
Uw <1>
^— < . JJr
H-(
E "S
!•§••*
a a
C ^— C-
o w o
•r^ >«^ 'i ^
O ^ Q-
<; nJ o
O
ON
-»— i
O
cs
o
CO
cs
to
o
X
•<;
0
^ i
o
Ox
CS
•"3-
N
CO
0
X
pg
ON
Q
•^*
cs
oo
•*
„
o
X
cs
•H
U
o
oo
§•
cs
in
„
M
X
A
o
o
**3*
t— <
0
oo
ON
o
X
en
a
Sr
<^J
^ —
Q
"
00
0
X
m
_c
to
PQ
C/3
w
H
O
to
ID
k-<
•4—*
to
13
C
«2
fi
*-•
^o
CO
J
•s
•a
c
tU
g
(D 0
1 !
^ -s
§* .to
o M
Z c
o
II -s
a.
< O
CO
T3
cd
•a
1
CO
•a
to
O
D.
O
D.
•1
l—<
o
^N
CO
1
1
c§
^
u
c
o
o.
0
-------
-------
IV. CONTROL COST AND COST^EFFECTIVENESS ANALYSES
BACKGROUND
Chapter IV of the draft RIA presents a lengthy discussion on the Least Cost Model
(LCM) and the process of selection of the five control options for the proposed rule. The
following discussion summarizes the results and conclusions of the cost-effectiveness
analysis.
"Some 2,718 distinct control strategies examined in the draft RIA. This number
represents some 144 combinations of control options for 6 different waste
management processes for each of 19 different concentration levels. The processes
examined were:
container storage,
quiescent tanks,
quiescent impoundments,
aerated tanks and impoundments,
fixation processes, and
drum and truck loading.
In this modeling exercise, the no-controls category is repeated 19 times. Replacing it
with a single strategy (baseline level of controls but no additional control) gives a
total of 2,718 potential control strategies. (Mathematically, 144 combinations time 19
yields 2736 possible control options.)
The dominant strategies were identified as those strategies that were least cost both
for emission reductions and incidence reduction. The calculations of cost use a 10%
real discount rate; sensitivity analyses indicated that the dominance did not change in
response to variations in the discount rate.
Of 2,718 control strategies, approximately 100 are dominant under both the emissions
and incidence criteria. Thus the Least-Cost Model successfully reduces the number of
strategies that should be examined in more detail. However, many of these dominant
strategies produced similar cost-effective characteristics that they appeared clustered
together in groups. Thus the 100 dominant options were reduced to a select group of
four dominant options plus the baseline for a regulatory analysis of five options."
The Least Cost Analysis Model was not used in the analysis of options for final
standard selection. Rather, the national impacts model1 was used to develop the national
costs and impacts for the process of selecting the five control options for the final rule. Both
the LCM and the national impacts model were used as complementary analytical tools to
develop the five control options at proposal.
IV-1
-------
-------
DISCUSSION
The EPA gave notice at proposal that consideration of new results from revision to
the national impacts analysis could lead to selection of any one of the five control options
considered at proposal or possibly other control options (56 FR 33516). Since proposal EPA
has revised the national impacts model to incorporate new information obtained by EPA.
New impact results were obtained using the revised national impacts model. Based on the
new impact results, EPA decided to expand the control options considered for the final rule.
A series of preliminary runs was performed using the revised national impacts model for the
original five control options ultimately selected for evaluation at proposal plus an additional
nine control options. The following discussion briefly describes the analytical process of
winnowing down the field of fourteen control options to four dominant control options plus
the control option presented for the proposed rule.
New waste data were compiled from two nationwide surveys conducted in 1987, as
well as an updated Industry Studies Data Base and other sources. The costs were reviewed
and revised. As a result of the review, estimates of baseline emissions and control costs
have been revised directionally downward. More detailed information can be found hi the
Docket2. Control options 2 (with action levels of 500 ppmw, 1500 ppmw, and 3000 ppmw)
and 3 (with an action level of 500 ppmw) hi the proposal were modified and expanded to fine
tune concentration action levels. Table IV-1 presents the emission reduction and incidence
reductions for the expanded group of potential options. For comparison purposes, the Table
presents the emissions and incidence levels of the pre-control baseline and revised estimates
of emissions and incidence levels for the action levels that were retained from the Proposed
Rule.
Table IV-2 presents the capital and annualized costs for the same group of potential
options as those listed in Table IV-1. Like Table IV-1, Table IV-2 provides an useful
comparison of cost and impact measures since proposal. The primary reasons for the lower
costs in the RIA Addendum are the following:
• a significant number of surface impoundments have been converted to tanks,
which result hi less surface area for generating emissions, as well as reduction
hi scale for sizing control equipment (less costs);
• the quantity of wastes fixated has been reduced significantly, for which
controls were very expensive; and
• pollution prevention practices toward generation of hazardous waste have
resulted hi reduction of total wastes quantities stored and treated, thus resulting
hi lower air emissions.
IV-2
-------
-------
The capital costs are in 1986 dollars; and, the annualized costs have an imputed discount rate
of 10 percent in real rate terms in the annualized costs. These are the same assumptions
used for the benefits assessment in Chapter VH. The reader is encouraged to refer to the
Background Information Document3 for more detailed discussion on the procedures of
estimation of capital and annualized costs.
Based on cost-effective principles, dominant control options were identified for the
selection of the final rule for promulgation. Basically, those options that provide the best
health improvement at least cost are, dominant. All fourteen control options were examined
by comparing total annualized costs using annual emission reductions and annual incidence
reductions independently as surrogates for health improvements. Figure IV-1 illustrates
graphically the process of identification of the least cost envelope of the dominant control
options. Note that only 4 control options identified with the action level in Figure IV-1
(solid triangle) are dominant control options. These are identified as the control options with
action levels of 3000 ppmw, 1500 ppmw, 100 ppmw, and 0 ppmw. Control option C with
the action level of 500 ppmw is not a dominant control option, but is retained as it represents
the proposed option. Previous analyses had indicated that control option C was a dominant
control option.
Table IV-3 summarizes the capital and annualized cost of five control options for the
selection of the standard for the final rule. The information in Table IV-3 represents the
descriptive information for the benefit-cost assessment presented hi Chapter VLL
IV-3
-------
-------
fc
o
o
CO
Q
111
DC
LLJ
O
UJ
Q
O
z
cc
LLJ
O
<
O
UJ
cc
12
g
LL
o.
Q.
O
§
9
?
5!
§
8
o
00
8
S
o
CO
s
CO
m
t
c
O
8 f
Q.
O D
k.
(D
6
uon|!i/\|) ISOQ
-------
-------
!
E
o
o
u
a
•
111
^
••^ >o
K fe
CM
oo vo
vo
OS '—''—* ON CX)
AH
O
c<
en
I
13 en
cd
PQ
-------
-------
H
02
^
i
&
CO
NTROL OPTION
O
u
^
FOR POTENT
H
O
U
£
W
J
1 £*
^|||
5 O Js fe
^•4 - *^$
NNUALIZED
COSTS
'Million $/Yr)
PROPOSED
^ ~
CAPITAL
COST
(Million $)
REVISED
S *£^
lill
^^ ^5 w^
ACTION
LEVEL
(ppmw)
IE
\
000008222 gg^g
o o o o o
i—1 vo ON ^ «<
CN en CM o ON
ooooooooooooo
in ON vo » '-j
T— 1 fV}
Il!§l§ii8.8io
-------------
-------
-------
t3 **i. ef)'
'S 11s a
I § ? i
"•8 _ ^ 5?
fi ^S IB' O
O & O pES
1 ° ° 1
yi "— j
o "3
33 >
Q O
^^ PH
"® §
J3 «H
(S •*"*
S £J^
u
1
o
S '
S-
ex
0
„
C3
.2
a,
0
o
T— «
T— (
O
ON
CO
H
T—H
PQ
c
.2
Q-
O
0
ON
O
S
a,
D-
o
o
U
c
^o
a,
O
o
oo
0
O
S
a,
p-
o
o
^^
Q
c
0
•«-!
S,
O
o
vo
o
T— 1
S
p-
p-
o
o
0
en
W
c
0
p-
O
o
I
W)
"S
oo
O
c o
ex -a
^ 00
U
c
1
I
o
a
o
00
£
T3
I
'8
i
c3 *O
~
(U
' W3
^ (D
-------
-------
REFERENCES
1. National Impacts Model.
2. Responses to Comments on Chapter 4, Impact Analysis Methodology, of the
Background Information Document.
3. Cost Chapter, Background Information Document,
IV-8
-------
-------
CHAPTER V. REVISED ECONOMIC IMPACT ANALYSIS
The revised economic impact analysis is an extension of the analysis performed for
the August 1989 Draft RIA. Chapter VI of the RIA presents a lengthy discussion on the
industry profile, as well as methodology used to estimate price and quantity adjustments,
employment effects, and facility closures for the TSDF air regulation. The reader is advised
to refer to this document for an understanding of the economic analysis. The following
conclusions of the earlier analysis were as follows:
"The analysis of the most stringent option, option 1, which has a 0 ppmw action level
and the highest compliance cost, provides a benchmark for judging the severity of the
economic effects of regulating air emissions from TSDF. In the absence of market
adjustments, the model projects compliance costs (annualized capital and operating
costs) of $892 million per year for the 834 affected facilities. Those costs are less
than 6% of current hazardous waste management costs for aU but three sectors and do
not exceed 12% in any sector. Price and quantity adjustments for the goods and
services produced by hazardous waste generators are negligible because hazardous
waste management costs are a very small portion of production costs; when allowing
for those market changes, compliance costs are $888 million. In the commercial
hazardous waste management sector, the price of the service supplied to generators of
hazardous waste increases by less than one-half of one percent; this price increase
induces a minimal decrease in the quantity of off-site hazardous waste management
demanded. Facility closures and employment dislocations are minimal."
Some comments should be noted concerning the coverage of facilities (834) mentioned
above and the known population of 2300 TSDF, which represents processing (treatment)
facilities and storage facilities, including many storage-only facilities. Once again, Chapter
VI from the August 1989 RIA is quoted as follows:
"For the economic analysis, the 834 directly affected facilities in the 20 generator
sectors and 1 commercial hazardous waste management sector were analyzed. The
1,098 storage-only facilities were excluded from detailed economic analysis because
they represent less than 4 percent of the total compliance cost of all TSDF and less
than 3 percent of the quantity of hazardous waste managed by all the TSDF."
The 834 facilities represented those that would incur the greatest portion of costs and thus
were analyzed for the economic effects. If the findings of the analysis for these 834 facilities
could be couched in terms of negligible impacts, then it seemed reasonable to extend the
findings to the regulated community of sources as well. That conclusion seems to hold in
1989 and still does now. •
Scaling the costs for the revised control options, the most stringent option or control
option A, same as control option 1 cited above, would cost $ 190 million and approximate 1
percent of current hazardous wastes management costs for all but 3 sectors and do not exceed
2 percent in those sectors. Those 3 sectors are industrial chemicals (organic and inorganic);
V-l
-------
-------
plastics and fibers; and assorted chemical products. In the commercial hazardous waste
management sector, the price of the service supplied to generators of hazardous waste
increases by less than one-tenth, or well less than one-half of one percent: this price increase
induces a minimal decrease in the quantity of off-site hazardous waste management
demanded. Facility closures and employment dislocations are minimal.
V-2
-------
-------
CHAPTER VI. REVISED REGULATORY FLEXIBILITY ANALYSIS
The revised Regulatory Flexibility Analysis (RFA) addresses two issues raised during
the public comment period for the proposed rule. First, the revised RFA reflects changes in
the costs and impacts, as a result of updating the hazardous waste data base. Second, the
revised RFA addresses concerns raised in the public comment concerning disproportionate
impacts incurred by small entities in the population of accumulators and small quantity
generators.
As background, the Regulatory Flexibility Act requires Federal agencies to analyze
the effects of their regulations on small entities and to involve these entities more actively in
developing and reviewing regulations.1 "Small entities" here includes small businesses, small
governmental jurisdictions, and small organizations. The purpose of the Regulatory
Flexibility Act is to minimize any significantly adverse effects of environmental regulations
on small entities. The methodology for the revised RFA is based on Agency guidelines
preceding the April 1992 Agency guidelines for conducting regulatory flexibility analyses.
The revised RFA extends the methodology presented in Chapter VI of the 1989 Draft RIA
and Chapter Vm in the Background Information Document.2
A "significant economic impact" is said to occur whenever any of the following
criteria are satisfied:
• Annual compliance costs (including annualized capital, operating, and
reporting costs) increase as a percent of total costs of production for small
entities for the relevant process or product by more than 5 percent.
• Compliance costs as a percent of sales for small entities are at least 10 percent
higher than compliance costs as a percent of sales for large entities.
• Capital costs of compliance represent a significant portion of capital available
to small entities, considering internal cash flow plus external financing
capabilities.
• The requirements of the regulation are likely to result in closures of small
entities.
Chapter VI of the August 1989 draft RIA summarized the results of the RFA for
TSDF as foUows:
"The compliance cost increases as a percent of total costs of production for small
businesses are less than 3.6 percent for all small businesses. The compliance costs as
a percent of sales for small businesses are less than 2 percent. The estimated ratio of
compliance costs to total sales for the 16 small businesses is 0.28 percent. For the
VI-1
-------
-------
larger businesses, the estimated ratio of total compliance costs to total sales is 0.26
percent. The compliance costs as a percent of sales for small businesses are less than
10 percent higher than the compliance costs as a percent of sales for large businesses.
The capital costs as a percent of sales for small businesses are less than 2 percent.
Because the compliance capital costs represent a small portion of the total amount of
sales, it is reasonable to conclude that the capital costs of compliance represent an
insignificant portion of the capital available to small businesses."
The RIA did not address the impacts on small quantity generators and accumulators, who
may be impacted by the promulgated rule for 90-day, tanks and accumulators. Note the quote
from Chapter VI, "...the regulation of TSDF affects the hazardous waste generators who
supply on-site waste management services (captive facilities), and the suppliers of
commercial hazardous waste management services (commercial facilities)."
A preliminary regulatory flexibility screening analysis of cost impacts was prepared
in late August 1989 for the proposed rule for the 90-day tanks and containers.3 This
analysis relied on a 1987 survey of hazardous waste generators conducted by the Research
Triangle Institute.4 The results are summarized as follows. Additional control costs, for
control option C, of $14 million annually for tanks, containers, and equipment leaks for the
90-day accumulators would result in price increase of 7.2 percent for waste management
services for 20 2-digit SIC sectors. The key finding was that adverse effects on any facility
were unlikely. It should be noted that the report cited that waste management services
constituted a minor percent of the total cost of production of materials in generating facilities
for all the sectors studied. Consequently, the increase in waste management service cost as a
percent of total cost for the 2 digit SIC industries is small.
A revised analysis of the costs for control option reveals an estimate of $ 7 million
annually for tanks and containers for control option B. The revised estimate is
approximately 50 percent of the estimate for the proposed rule (control option C), as
reported in the August 1989 preliminary screening analysis. On a cost-effectiveness basis,
the controls are $ 200 per Mg of emission reduction for 90-day containers and $ 400 to $'
500 per Mg of emission reduction for tanks. In contrast, controls for control option B for
TSDF cost approximately $ 1000 per Mg. If control cost-effectiveness can serve as a proxy
for impacts, then controls for 90-day tanks and containers do not produce a significant
burden on small quantity generators.
VI-2
-------
-------
REFERENCES
1. This chapter is based on § 8.3.6, "Small Business Effects," in Hazardous Waste
TSDF-Background Information for Proposed RCRA Air Emission Standards.
2. See Reference 1.
3. Preliminary estimates of the Economic Impacts of Emission Controls on 90-Day Tanks
and Containers: Hazardous Waste Generating Industries, By Research Triangle
Institute. Prepared for the U. S. Environmental Protection.Agency, August 31, 1989.
4. Research Triangle Institute. National Survey of Hazardous Waste Treatment,
Storage, Disposal, and Recycling Facilities. Prepared for U.S. Environmental
Protection Agency, Office of Solid Waste. Research Triangle Park, NC, 1987.
VI-3
-------
-------
CHAPTER VH. REVISED BENEFIT-COST ASSESSMENT
The revised benefit-cost analysis reflects changes in the costs and emission reductions
since proposal of the Section 3004 (n) rule and extends the illustrative analysis in the August
1989 Draft RIA.
The concept of allocative efficiency is illustrated in Figure VH-1. There, the level of
organic emission reductions which maximizes positive net benefits is identified.
Consequently, a simplified concept of allocative efficiency would say that society is best off
with the Q* level of organic emission reductions from TSDF. That level occurs where the
incremental costs and benefits between options are equivalent to one another and where
incremental costs are increasing. However, it is not possible to fully implement such an
analysis for TSDF because data exist to monetize but one category of potential benefits.
Later in this Chapter, an attempt is made to illustrate this concept with a sensitivity analysis.
Table VH-1, which is a revision of Table VH-1 of the August 1989 Draft RIA,
presents the cost, emission reductions, cancer incidence reductions, and total mortality risk
reduction benefits for the 5 control options under consideration for the promulgated rule.
The willingness-to-pay for small reductions in mortality risk has been estimated to range
from $ 1.60 to $ 8.50 annually for a 1.0 x 10'6 reduction in mortality risk. These are values
based on a paper by Fisher et al, "The Value of Reducing Risks of Death: A Note on New
Evidence".1 The costs for the control options are based upon both engineering controls,
without market adjustments, and upon Chapter 7 of Hazardous Waste TSDF-Background
Information for Proposed RCRA Air Emission Standards.2 The costs, emission reductions,
and mortality risk reductions are all the same as incorporated in the preamble for the final
rulemaking.3
The partial net benefits presented in this Table, as well as the costs and benefits, are
measured from baseline emissions and cancer incidence. Because the coverage of benefits is
incomplete from an ozone perspective, this table cannot be used to identify the optimal
control level in an allocative efficiency sense. To reflect some of the uncertainty in the
analysis, the Table reflects a range of values for the mortality risk reduction benefits.
Table VH-2 presents the incremental assessment of benefits and costs underlying
Table Vn-1. The estimates presented for incremental costs and incremental benefits for each
control option are on a $ per Mg basis for that option relative to the contiguous option with
the lower health protection. Examination of the both Tables yields the following findings.
• Regardless of the mortality risk reduction coefficient used, from an allocative
efficiency perspective, benefits associated with organic emission reductions
should be at least as great as those associated with option E. Even with the
lower valuation coefficient and incomplete coverage of benefits, positive
partial net benefits are maximized at option E.
vn-i
-------
-------
• Using the higher valuation coefficient for mortality risk reduction, positive
partial net benefits are maximized at option D. Given a range of some breadth
(i.e., mortality risk reduction benefits from $510 to $800 per Mg), reductions
at least to option D may be warranted on allocative efficiency grounds.
As a general principle, the application of benefit-cost analysis focuses almost entirely
on the relationship between incremental benefits (quantified or inferred) and incremental
costs. In the example above, the value of organic emission reductions was assigned an
arbitrary value of zero. Instead of arbitrarily assigning a credit to organic emission
reduction, the analyses presumes several scenarios in which the point at which incremental
benefits equals incremental costs provides a value that may be used only for comparing
candidate control options. A sensitivity analysis of the net benefits between options has been
prepared to identify the conditions under which each of the considered options would be
optimal.
For example, for option A to be optimal, the incremental benefits would have to be
$7300/Mg of organic emission reduction. Assuming incremental benefits are constant, total
benefits are calculated and subtracted from total costs to yield net benefits for each option.
The difference that option choice makes in the resulting net benefits can then be observed.
The results are presented in Table VH-3. Two findings emerge:
• First, the difference in net benefits between the optimal option and the others
is not great in a relative sense. The potential loss in net benefits from not
choosing the optimal option ranges from approximately zero to 10 percent.
• Second, the range of relative differences in net benefits is reduced by half
when the considered options are limited to D, C, and B. Under those
circumstances, the range of potential loss is from approximately zero to 5
percent of the net benefits for the optimal option.
vn-2
-------
-------
iJ
3
CH
^P
(^
^1
H
CT^
cc
O
U
so
^
3
i
M
^ ^
Z >;
si
=i
a3 J
KH O
&dg
M S
2o
^ u
2 o
™Jj &^
<; |~-|
H ce
X H
||
^-5 t~j
ig
IB
I55
s
s
X
s
s
I
§
n
•
H
3
>
3
«A
§
*^ *£*
^J^ ^*'^
Sw *>2
^ ^. : .-•
fti ^O ^
^z o
^
-V
8 t
_.O Vj
o ^
. ^^
^?l
*^§
§
S
S 5^ "i^
PI
•~ S
i>§
Co &o *^
•u 6*5
tC^ "**•*
C
•S
. '§, '
2 '
s;
6
oo
o
cs
2
,_^
1
o
oo
co
£
00
vc5
oo
ON
s
ON
PQ
c
4^
oo
CN
ON
»— (
i
O
ON
jo
f^
.5
ON
U
_o
•4-^
&
i— i
ON
cs
o
1— (
1
o
00
r--
co
R
VO
co
S
ON
0
_o
1
oo
55
^J
s
00
CO
co
vo
oo
ON
co
ON
f=5
e
§•'
*O
O
T^
2 s
|rv>t CL(
•c °
»-i in
.S 06
W2 •CO
C
•I ©
"o «o
S3 ^2
"P rt
^ r
*§' 0
| ^
_5 CO
1 '*
en 2
C g
£ 1
•o c
"•e -a
o e
e o
c -a
en o
CQ j3
1 xT
2 • 2
1 fe
*^ s
S3 -° C>
^ X! ^
' . S 1 i
C i ^
•2 c ©
0 g c
1 i £
dJ tr-« ^
V^ *T^ ~
11^ ft
« ,n 45 4rf =
1 11 S Ǥ
o 8 o §^
S »^ ^ CO
§ — rt 1? 'c
gf> .S . S >,
*^ -J-* ^ \ *»^ . .
OT^ cj ^u "jS
Jr* *"* i-O '^
?-< OH ^ t/) ^
£P ' S 1" « S
"g en Jj (D c
UJ3 "^ ""
& |-if °.2
o js-g af
^T\ *-» •*-» C i^
Pn C
E^ CO
o %
Z, & ~ CM
co
-------
-------
|
Reduction
*
'a
1
J!
It
ft
11
o
, g
Incremental
1 :; •'=... ($/Mg)
R
O
S,
I***
1
.Q .
o
co
CM
O
T— 1
S
^
0
&
f-
a
o
CO
^.
»
o
%
o
o
1— 1
o
R
o
o
u
2
a
o
o
co
U
c
' -4—*
a-
o
o
00
o
o
r— (
„
0
w,
o
Q
4O
o
r-
o
ON
r— i
uo
g,
2
«O (O
13
en
03
W
0
1
>,
o
I
•o
o
X
rt
cx,
O
•4—>
|
.S
'^
rt
en
•g
CO
I
"O
I
I
1
O
6
o
Rj
D.
en
(D
M
t5
«1
en
•4-^
(D
en
£
I
to
S3
I
to
1
en
O
O
i—<• o
* S
o *
• o
o
o
in
00
•6Q-
en
en
S
W)
§
•o
O
en
'en
^ C
rt rt
C *-
•Bl
c3 en
M C
S Z.
2 g
o •—
§
O T-T
O*w5 •"•*
— *3 ±i
O
5 8
to p.
1.1
In ^
J£ en
"^ cC
i
C I
CT3
W)
J3 C *-'"
•» O v-
a, •-
W) en
OW) en
*~* **~;
c
c3
2
D.
.0
en = • S
fl8
° S'S
*™^ C^l
between
was eval
ative bas
-
•S O.g
to <0 jg
H H 'S
>—i CS
-------
-------
C/5
O
u
-Cb
SCENARI^
;*
:|
!
2:
t
i $3000 per
t
^
g
S
f
1
—.. "JS
i
>*^A
C
O
,0
»
.0
o
en
|
S
oo
CN
1
1
o
CN
C
«
S
I^^^^^H
C
o
5
K
»— (
en
oo
I>
CN
OO
en
O
mt^ammm
C
a,
O
o\
T— I
en
00
CN
r-
CN
o
o
•••••••
U
c
o
I
a\
en
oo
">.
CN
^
O
I^^BBMH
Q
a
o
1
XJ
o
en
S
^0
CN"
^
o
c
,0
•*- *
60
O
O
'I
I
a,
o
S
•4— >
§
o
"S
O
O
1
I
•»->
nj OJ 1> 4i .> > >, .>
'S « IS tS «
"S "S "S s 2
Q M pq U <1
c a c c c
o o o o o
'E 'O 'S3 -G 'O
A A A A A
i i i i i
to too bo two bo
p, a, ex a. ex
C^ ^^ C^ ^^
o o o o o
•<—i ON o m en
to CN co m t"*-
-------
-------
REFERENCES
1. Fisher, Ann; Chestnut, Lorraine; and Viblette, Daniel; "The Value of Reducing Risks
of Death: A Note on New Evidence", Journal of Policy Analysis and Management,
Vol.8, No. 1. January 1989.
2. U.S. Environmental Protection Agency, Hazardous Waste TSDF-Background
Information for Proposed RCRA Air Emission Standards Volume I-Chapters, Office of
Air Quality Planning and Standards, September 1989 Draft.
3. U.S. Environmental Protection Agency, Hazardous Waste Treatment, Storage, and
Disposal Facilities (TSDF) Organic Air Emission Standards, Draft Preamble for Final
Rulemaking, Office of Air and Radiation, (Date to be Appended)
VH-6
-------
-------
TECHNICAL REPORT DATA
(Please read Instructions on reverse before completing)
\. REPORT NO.
EPA-453/R-94-077b
2.
4. TITLE AND SUBTITLE
Hazardous Waste Treatment, Storage, and Disposal Facilities
(TSDF) - Regulatory Impact Analysis for Promulgated Organic
Air Emission Standards for Tanks, Surface Impoundments, and
Containers
7. AUTHOR(S)
9. PERFORMING ORGANIZATION NAME AND ADDRESS
U.S. Environmental Protection Agency
Office of Air Quality Planning and Standards
Research Triangle Park, NC 27711
12. SPONSORING AGENCY NAME AND ADDRESS
Director
Office of Air Quality Planning and Standards
Office of Air and Radiation
U.S. Environmental Protection Agency
Research Triangle Park, NC 2771 1
3. RECIPIENT'S ACCESSION NO.
5. REPORT DATE
November 1994
6. PERFORMING ORGANIZATION CODE
8. PERFORMING ORGANIZATION REPORT NO.
10. PROGRAM ELEMENT NO.
1 1 . CONTRACT/GRANT NO.
68-D1-0118
13. TYPE OF REPORT AND PERIOD COVERED
Final
14. SPONSORING AGENCY CODE
EPA/200/04
15. SUPPLEMENTARY NOTES
16. ABSTRACT
Standards for the control of organic air emissions from hazardous waste treatment, storage, and disposal
facilities (TSDF) are promulgated under the authority of Section 3004(n) of the Hazardous and Solid
Waste Amendments (HSWA) to the Resource Conservation and Recovery Act (RCRA). Also
promulgated is a new test method for determining the organic vapor pressure of waste, Reference
Method 25E. The final rules establish organic air emission control requirements for tanks, surface
impoundments, and certain containers in which hazardous waste is placed. This document presents the
costs and impacts associated with the final standard, and the basis for the selection of the controls.
17.
KEY WORDS AND DOCUMENT ANALYSIS
a. DESCRIPTORS
Action Level, Air Pollution, Benefit,
Container, Control Device, Hazardous Waste,
Impact, Inspection, Miscellaneous Unit,
Monitoring, Reporting, Recordkeeping, Surface
Impoundment, TSDF, Tank, Volatile Organic
18. DISTRIBUTION STATEMENT
Release Unlimited
b. IDENTIFIERS/OPEN ENDED TERMS c. COSATI Field/Group
Air Pollution control 13B
19. SECURITY CLASS (Report) 21. NO. OF PAGES
Unclassified 35
20. SECURITY CLASS (Page) 22. PRICE
Unclassified
EPA Form 2220-1 (Rev. 4-77) PREVIOUS EDITION IS OBSOLETE
-------
-------
-------
N.
------- |