EPA 905/5-78-003
December 1978
ECONOMIC IMPACT OF
IMPLEMENTING RACT
GUIDELINES IN THE
STATE OF OHIO
U.S. ENVIRONMENTAL PROTECTION AGENCY
Region V
Air Programs Branch
Air & Hazardous Materials Division
230 South Dearborn
Chicago, Illinois 60604
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EPA 905/5-78-003
FINAL REPORT
ECONOMIC IMPACT OF IMPLEMENTING RACT
GUIDELINES IN THE STATE OF
OHIO
Task Order Number 3 Under:
Basic Ordering Agreement Number 68-02-2544
RESEARCH AND DEVELOPMENT SERVICES FOR ASSISTANCE
TO STATES AND EPA CARRYING OUT REQUIREMENTS
OF CLEAN AIR ACT AND APPLICABLE FEDERAL
AND STATE REGULATIONS
Prepared for:
U.S. ENVIRONMENTAL PROTECTION AGENCY
REGION V
AIR 6 HAZARDOUS MATERIALS DIVISION
CHICAGO, ILLINOIS 60604
EPA Project Officer: Rizalino Castanares
?> P
to
m
Prom:
BOOZ, ALLEN 6 HAMILTON Inc.
December, 1978
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This air pollution report is issued by Region V of the
U.S. Environmental Protection Agency (EPA), to assist state and
local air pollution control agencies in carrying out their
program activities. Copies of this report may be obtained, for
a nominal cost, from the National Technical Information Service,
5285 Port Royal Road, Springfield, Virginia 22151.
This report was furnished to the EPA by Booz, Allen &
Hamilton Inc. in fulfillment of Task Order Number 3 of Basic
Ordering Agreement Number 68-02-2544. This report has been
reviewed by EPA Region V and approved for publication. Approval
does not signify that the contents necessarily reflect the views
and policies of the EPA, nor does mention of trade names or
commercial products constitute endorsement or recommendation
for use. x
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V
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TABLE OF CONTENTS
CHAPTER TITLE
1.0 EXECUTIVE SUMMARY
2.0 INTRODUCTION AND APPROACH
3.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR SURFACE COATING OF CANS IN
THE STATE OF OHIO
4.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR THE SURFACE COATING OF COILS IN
THE STATE OF OHIO
5.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR THE SURFACE COATING OF PAPER
IN THE STATE OF OHIO
6.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR THE SURFACE COATING OF FABRICS
IN THE STATE OF OHIO
7.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR THE SURFACE COATING OF AUTOMOBILE.'
IN THE STATE OF OHIO
8.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR THE SURFACE COATING OF METAL
FURNITURE IN THE STATE OF OHIO
9.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR THE SURFACE COATING FOR INSULATI01
OF MAGNET WIRES IN THE STATE OF OHIO
10.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR THE SURFACE COATING OF LARGE
APPLIANCES IN THE STATE OF OHIO
11.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR SOLVENT METAL DECREASING IN THE
STATE OF OHIO
12.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR REFINERY VACUUM PRODUCING SYSTEMS
WASTEWATER SEPARATORS AND PROCESS UNI
TURNAROUNDS IN THE STATE OF OHIO
ill
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TABLE OF CONTENTS
CHAPTER TITLE
13.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR TANK TRUCK GASOLINE LOADING
TERMINALS IN THE STATE OF OHIO
14.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR BULK GASOLINE PLANTS IN THE
STATE OF OHIO
15.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR STORAGE OF PETROLEUM LIQinS IN
FIXED-ROOF TANKS IN THE STATE ^ OHIO
16.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR STAGE I FOR GASOLINE SERVICE
STATIONS IN THE STATE OF OHIO
17.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR USE OF CUTBACK ASPHALT IN THE
STATE OF OHIO
IV
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LIST OF EXHIBITS
Exhibit Following Page
1-1 LISTING OF EMISSION LIMITATIONS THAT
REPRESENT THE PRESUMPTIVE NORM TO BE
ACHIEVED THROUGH APPLICATION OF RACT
FOR FIFTEEN INDUSTRY CATEGORIES 1-3
1-2 SUMMARY OF IMPACT OF IMPLEMENTING RACT
GUIDELINES IN 15 INDUSTRIAL CATEGORIES
—OHIO 1-7
1-3 ESTIMATED CHANGE IN ENERGY DEMAND
RESULTING FROM IMPLEMENTATION OF RACT
GUIDELINES IN OHIO 1-11
1-4 - SUMMARY EXHIBITS OF THE FIFTEEN RACT
1-18 CATEGORIES 1-19
2-1 LISTING OF EMISSION LIMITATIONS THAT
REPRESENT THE PRESUMPTIVE NORM TO BE
ACHIEVED THROUGH APPLICATION OF RACT
FOR FIFTEEN INDUSTRY CATEGORIES 2-5
3-1 DATA QUALITY 3-5
3-2 LIST OF METAL CAN MANUFACTURING
FACILITIES POTENTIALLY AFFECTED BY
RACT IN OHIO 3-6
3-3 SHEET BASE COATING OPERATION 3-9
3-4 SHEET PRINTING OPERATION 3-9
3-5 CAN END, AND THREE-PIECE BEER AND
BEVERAGE CAN FABRICATING OPERATION 3-10
3-6 TWO-PIECE ALUMINUM CAN FABRICATING
AND COATING OPERATION 3-11
3-7 EMISSIONS FOR TYPICAL COATING OPERATION
USED IN THE MANUFACTURE OF TWO-PIECE CANS 3-12
3-8 COATING AND PRINTING OPERATIONS USED IN
THE MANUFACTURE OF THREE-PIECE CANS
(Sheet Coating Operation) 3-12
3-9 EMISSIONS OF TYPICAL COATING OPERATIONS
USED IN THREE-PIECE CAN ASSEMBLY 3-12
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Exhibit Following Page
3-10 RACT GUIDELINES FOR CAN COATING OPERATIONS 3-13
3-11 PERCENTAGE OF CANS MANUFACTURED USING
EACH ALTERNATIVE 3-14
3-12 EMISSIONS FROM COATING TWO-PIECE ALUMINUM
BEER AND SOFT DRINK CANS 3-22
3-13 EMISSIONS FROM COATING THREE-PIECE CANS 3-22
3-14 COST OF IMPLEMENTING RACT ALTERNATIVES
FOR REPRESENTATIVE CAN MANUFACTURING
PLANTS ($1,000) 3-24
3 15 COST OF COMPLIANCE TO RACT FOR THE CAN
MANUFACTURING INDUSTRY IN OHIO 3-25
3-16 SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR CAN MANUFACTURING
PLANTS IN THE STATE OF OHIO 3-28
4-1 SURFACE COATING OF COILS DATA QUALITY 4-4
4-2 DIAGRAM OF A COIL COATING LINE 4-6
4-3 TYPICAL REVERSE ROLL COATER 4-6
4-4 ESTIMATED TONNAGE OF METAL COATED IN THE
U.S. IN 1977 WITH COIL COATING TECHNIQUES 4-8
4-5 SUMMARY OF EMISSION CONTROL COSTS 4-9
4-6 COIL COATING OPERATIONS IN OHIO 4-10
4-7 SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR COIL COATING
FACILITIES IN THE STATE OF OHIO 4-11
5-1 DATA QUALITY—SURFACE COATING OF PAPER 5-5
5-2 1976 INDUSTRY STATISTICS—SURFACE COATING
OF PAPER SIC GROUPS IN OHIO 5-6
5-3 HISTORICAL TRENDS IN VALUE OF SHIPMENTS
OF U.S. PLANTS ENGAGED IN PAPER COATING
($ millions) 5-7
5-4 EMISSION DATA FROM TYPICAL PAPER
COATING PLANTS 5-9
VI
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Exhibit Following Page
5-5 TYPICAL PAPER COATING LINE 5-10
5-6 KNIFE COATER 5-10
5-7 REVERSE ROLL COATER 5-11
5-8 SUMMARY OF DATA USED FOR ESTIMATION OF
PAPER COATING EMISSIONS IN OHIO 5-12
5-9 ACHIEVABLE SOLVENT REDUCTIONS USING LOW
SOLVENT COATINGS IN PAPER COATING INDUSTRY 5-13
5-10 INCINERATION COSTS FOR A TYPICAL PAPER
COATING OPERATION 5-19
5-11 CARBON ADSORPTION COSTS FOR PAPER
COATING INDUSTRY 5-19
5-12 SUMMARY OF ASSUMPTIONS USED IN COST
ESTIMATE 5-21
5-13 SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR PAPER COATERS
IN THE STATE OF OHIO 5-24
6-1 DATA QUALITY—SURFACE COATING OF FABRICS 6-5
6-2 INDUSTRY STATISTICS FOR PLANTS IN SIC
CATEGORIES WHERE FABRIC COATING MAY BE
USED IN OHIO 6-6
6-3 FIRMS EXPECTED TO BE AFFECTED BY FABRIC
COAT REGULATIONS 6-6
6-4 U.S. ANNUAL VALUE OF SHIPMENTS OF COATED
FABRICS ($ millions) 6-6
6-5 U.S. ANNUAL SHIPMENTS OF BACKING MATERIALS
FOR COATED FABRICS (in millions of
pounds) 6-6
6-6 TYPICAL FABRIC COATING OPERATION 6-8
6-7 KNIFE COATING OF FABRIC 6-11
6-8 ROLLER COATING OF FABRIC 6-11
6-9 CAPITAL COST FOR DIRECT FLAME AND
CATALYTIC INCINERATORS WITH PRIMARY
AND SECONDARY HEAT EXCHANGE 6-19
Vll
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Exhibit Following Page
6-10 ESTIMATED INSTALLED ADSORBER SYSTEM COST 6-19
6-11 SUMMARY OF ASSUMPTIONS USED IN COST
ESTIMATE 6-19
6-12 SUMMARY OF ESTIMATED COMPLIANCE COSTS
FOR FABRIC COATING IN OHIO 6-19
6-13 SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR FABRIC COATERS
IN THE STATE OF OHIO 6-22
7-" SURFACE COATING OF AUTOMOBILES DATA
QUALITY 7-4
7-2 LIST OF FACILITIES POTENTIALLY AFFECTED
BY THE RACT GUIDELINE FOR SURFACE
COATING OF AUTOMOBILES — OHIO 7-5
7-4 OHIO VOC EMISSIONS — SURFACE COATING OF
AUTOMOBILES AND LIGHT DUTY TRUCKS 7-10
7-5 SELECTION OF THE MOST LIKELY RACT
ALTERNATIVES UNDER SCENARIO I (RACT
COMPLIANCE BY 1982) 7-14
7-6 SELECTION OF THE LIKELY RACT ALTERNATIVES
UNDER SCENARIO II (MODIFIED RACT TIMING
AND POSSIBLY LIMITATIONS) 7-14
7-7 ESTIMATED COST FOR MODEL PLANT TO MEET
AUTOMOBILE RACT REQUIREMENTS 7-19
7-8 STATEWIDE COSTS TO MEET THE RACT GUIDELINES
FOR AUTOMOBILE ASSEMBLY PLANTS 7-19
7-9 SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT SCENARIO I FOR AUTOMOBILE
PLANTS IN THE STATE OF OHIO 7-24
7-10 SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT SCENARIO II FOK AUTOMO-
BILE ASSEMBLY PLANTS IN THE STATE OF OHIO 7-24
8-1 SURFACE COATING OF METAL FURNITURE
DATA QUALITY 8-6
viii
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Exhibit Following Page
8-2 LIST OF METAL FURNITURE MANUFACTURERS
POTENTIALLY AFFECTED BY RACT IN OHIO 8-7
8-3 COMMON TECHNIQUES USED IN COATING OF
METAL FURNITURE PIECES 8-8
8-4 1977 VOC EMISSIONS FROM SURFACE COATING
OF METAL FURNITURE IN OHIO 8-9
8-5 EMISSION LIMITATIONS FOR RACT IN SURFACE
COATING OF METAL FURNITURE 8-9
8-6 RACT CONTROL OPTIONS FOR THE METAL
FURNITURE INDUSTRY 8-9
8-7 ESTIMATED COST OF CONTROL FOR MODEL
EXISTING ELECTROSTATIC SPRAY COATING LINES 8-11
8-8 ESTIMATED COST OF CONTROL OPTIONS FOR
MODEL EXISTING DIP COATING LINES 8-11
8-9 STATEWIDE COSTS FOR PROCESS MODIFICATIONS
OF EXISTING METAL FURNITURE COATING LINES
TO MEET RACT GUIDELINES FOR VOC EMISSION
CONTROL 8-12
8-10 SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR SURFACE COATING
OF METAL FURNITURE IN OHIO 8-17
9-1 MAGNET WIRE COATERS IN THE STATE OF OHIO 9-1
9-2 EMISSION LIMITATIONS FOR RACT IN THE
SURFACE COATING FOR INSULATION OF MAGNET
WIRE 9-1
9-3 SUMMARY OF APPLICABLE CONTROL TECHNOLOGY
FOR CONTROL OF ORGANIC EMISSION FROM THE
SURFACE COATING FOR INSULATION OF MAGNET
WIRE 9-1
9-4 RACT CONTROL OPTIONS FOR THE SURFACE
COATING FOR INSULATION OF MAGNET WIRE 9-1
10-1 SURFACE COATING OF LARGE APPLIANCES
DATA QUALITY 10-5
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Exhibit Following Page
10-2 INDUSTRY STATISTICS—SURFACE COATING OF
LARGE APPLIANCES OHIO 10-6
10-3 COMPARISON OF LARGE APPLIANCE STATISTICS
WITH STATE OF OHIO ECONOMIC DATA 10-6
10-4 HISTORICAL U.S. SALES FIGURES—SELECTED
MAJOR HOUSEHOLD APPLICANCES FOR 1968-
1977 10-7
10-5 FIVE-YEAR U.S. SALES FORECAST FOR
SELECTED MAJOR HOUSEHOLD APPLIANCES
(1978-1982) 10-7
10-6 PRESENT MANUFACTURING TECHNOLOGY
DESCRIPTION 10-8
10-7 DIAGRAM OF A LARGE APPLIANCE COATING LINE 10-8
10-8 EMISSION LIMITATIONS FOR RACT IN THE
SURFACE COATING OF LARGE APPLIANCES 10-9
10-9 SUMMARY OF APPLICABLE CONTROL TECHNOLOGY
FOR COATING OF LARGE APPLIANCE DOORS, LIDS,
PANELS, CASES AND INTERIOR PARTS 10-9
10-10 RACT CONTROL OPTIONS FOR THE LARGE
APPLIANCE INDUSTRY 10-9
10-11 MOST LIKELY RACT CONTROL ALTERNATIVES FOR
SURFACE COATING OF LARGE APPLIANCE IN
STATE OF OHIO 10-10
10-12 ESTIMATED COST FOR PROCESS MODIFICATION
OF EXISTING LARGE APPLIANCE COATING LINES
TO MEET RACT GUIDELINES FOR VOC EMISSION
CONTROL 10-10
10-13 STATEWIDE COSTS FOR PROCESS MODIFICATIONS
OF EXISTING LARGE APPLIANCE COATING LINES
TO MEET RACT GUIDELINES FOR VOC EMISSION
CONTROL OHIO 10-12
10-14 SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR SURFACE COATING
OF LARGE APPLIANCES IN THE STATE OF OHIO 10-16
11-1 DATA QUALITY 11-10
X
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Exhibit Following Page
11-2 ESTIMATED NUMBER OF VAPOR DEGREASERS
IN OHIO 11-11
11-3 ESTIMATED NUMBERS OF COLD CLEANERS IN OHIO 11-11
11-4 ESTIMATE OF AFFECTED SOLVENT METAL CLEANERS
IN OHIO 11-11
11-5 SOLVENTS CONVENTIONALLY USED IN SOLVENT
METAL DECREASING 11-12
11-6 CONTROL SYSTEMS FOR COLD'CLEANING 11-16
11-7 EPA PROPOSED CONTROL SYSTEMS FOR OPEN
TOP VAPOR DEGREASERS 11-16
11-8 EPA PROPOSED CONTROL SYSTEMS FOR
CONVEYORIZED DEGREASERS 11-16
11-9 AVERAGE UNIT EMISSION RATES AND EXPECTED
EMISSION REDUCTIONS 11-19
11-10 ESTIMATED CURRENT AND REDUCED EMISSIONS
FROM SOLVENT METAL CLEANING IN OHIO
(TONS/YEAR) 11-16
11-11 CONTROL COSTS FOR COLD CLEANER WITH
5.25 FT.2 AREA 11-20
11-12 CONTROL COSTS FOR AVERAGE-SIZED OPEN TOP
VAPOR AND CONVEYORIZED CLEANERS 11-20
11-13 ESTIMATED CONTROL COSTS FOR COLD CLEANERS
FOR THE STATE OF OHIO 11-20
11-14 ESTIMATED CONTROL COSTS FOR OPEN TOP
VAPOR DEGREASERS FOR THE STATE OF OHIO 11-20
11-15 ESTIMATED CONTROL COSTS FOR CONVEYORIZED
DEGREASERS FOR THE STATE OF OHIO 11-20
11-16 ESTIMATED NUMBER OF COLD CLEANERS NEEDING
CONTROLS IN THE STATE OF OHIO 11-20
11-17 ESTIMATED NUMBER OF OPEN TOP VAPOR
DEGREASERS NEEDING CONTROL IN THE STATE
OF OHIO 11-20
XI
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Exhibit Following Page
11-18 ESTIMATED NUMBER OF CONVEYORIZED DEGREASERS
NEEDING CONTROLS IN THE STATE OF OHIO 11-20
11-19 SUMMARY OF DI.1ECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR SOLVENT METAL
DECREASING IN THE STATE OF OHIO 11-23
12-1 DATA QUALITY 12-5
12-2 PETROLEUM REFINERIES IN OHIO 12-6
12-3 INDUSTRY STATISTICS FOR REFINERIES IN OHIO 12-6
12-4 VACUUM PRODUCING SYSTEM UTILIZING A TWO
STAGE CONTACT CONDENSER 12-9
12-5 VACUUM PRODUCING SYSTEM UTILIZING BOOSTER
EJECTOR FOR LOW VACUUM SYSTEMS 12-9
12-6 ESTIMATED HYDROCARBON EMISSIONS FROM
SELECTED REFINERY OPERATIONS IN OHIO 12-10
12-7 INSTALLED CAPITAL COSTS OF VAPOR CONTROL
SYSTEMS FOR VACUUM PRODUCING SYSTEMS,
WASTEWATER SEPARATORS AND PROCESS UNIT
TURNAROUNDS 12-14
12-8 STATEWIDE COSTS FOR VAPOR CONTROL SYSTEMS
FOR REFINERY WASTEWATER SEPARATORS AND
PROCESS UNIT TURNAROUND 12-15
12-9 SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR REFINERY VACUUM
PRODUCING SYSTEMS, WASTEWATER SEPARATORS
AND PROCESS UNIT TURNAROUNDS IN THE STATE
OF OHIO 12-18
13-1 DATA QUALITY 13-5
13-2 INDUSTRY STATISTICS FOR TANK TRUCK
GASOLINE LOADING TERMINALS IN OHIO 13-6
13-3 GASOLINE DISTRIBUTION NETWORK 13-6
13-4 DISTRIBUTION OF TANK TRUCK GASOLINE
LOADING TERMINALS BY AMOUNT OF THROUGHPUT
IN THE UNITED STATES 13-7
Xll
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Exhibit Following Page
13-5 VOC EMISSIONS FROM TANK TRUCK GASOLINE
LOADING TERMINALS IN OH10 13-10
13-6 VOC EMISSION CONTROL TECHNOLOGY FOR TANK
TRUCK GASOLINE LOADING TERMINALS 13-10
13-7 FACTORY COSTS OF ALTERNATIVE VAPOR
CONTROL SYSTEMS 13-13
13-8 DESCRIPTION AND COST OF MODEL TANK TRUCK
GASOLINE LOADING TERMINALS EQUIPPED WITH
VAPOR CONTROL SYSTEMS 13-13
13-9 STATEWIDE COSTS OF VAPOR CONTROL SYSTEMS
FOR TANK TRUCK GASOLINE LOADING TERMINALS 13-14
13-10 SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR TANK TRUCK
GASOLINE LOADING TERMINALS IN OHIO 13-18
14-1 DATA QUALITY 14-5
14-2 INDUSTRY STATISTICS FOR BULK GASOLINE
PLANTS IN OHIO 14-6
14-3 GASOLINE DISTRIBUTION NETWORK 14-6
14-4 NATIONAL DISTRIBUTION OF BULK GASOLINE
PLANTS BY AMOUNT OF THROUGHPUT 14-7
14-5 VOC EMISSIONS FROM BULK GASOLINE PLANTS
IN OHIO 14-10
14-6 VOC EMISSION CONTROL TECHNOLOGY FOR BULK
GASOLINE PLANTS 14-10
14-7 ALTERNATIVE CONTROL METHOD FOR VAPOR
CONTROL AT BULK GASOLINE PLANTS 14-11
14-8 COSTS OF ALTERNATIVE VAPOR CONTROL
SYSTEMS 14-13
14-9 DESCRIPTION AND COST OF MODEL BULK PLANTS
EQUIPPED WITH VAPOR CONTROL SYSTEMS 14-14
14-10 STATEWIDE COSTS OF VAPOR CONTROL SYSTEMS
FOR BULK GASOLINE PLANTS 14-14
Xlll
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Exhibit Following Page
14-11 STATEWIDE COSTS OF VAPOR CONTROL SYSTEM
BY SIZE OF BULK GASOLINE PLANT 14-15
14-12 SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR BULK GASOLINE PLANTS
IN OHIO 14-21
15-1 DATA QUALITY 15-4
15-2 TYPICAL FIXED ROOF TANK 15-6
15-3 SCHEMATIC OF TYPICAL FIXED ROOF TANK WITH
INTERNAL FLOATING COVER 15-6
15-4 TYPICAL FLOTATION DEVICES AND PERIMETER
SEALS FOR INTERNAL FLOATING COVERS AND
COVERED FLOATING ROOF 15-7
15-5 DISTRIBUTION OF FIXED-ROOF TANKS IN OHIO
BY CAPACITY AND COST 15-8
15-6 INSTALLED COST OF SINGLE SEAL FLOATING
ROOF TANKS (prices Approximate) 15-9
15-7 VOC EMISSIONS CONTROL COSTS FOR STORAGE
OF PETROLEUM LIQUIDS IN FIXED-ROOF TANKS
IN OHIO 15-10
15-8 SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR STORAGE OF
PETROLEUM LIQUIDS IN THE STATE OF OHIO 15-11
16-1 DATA QUALITY 16-4
16-2 INDUSTRY STATISTICS FOR GASOLINE
DISPENSING FACILITIES IN OHIO 16-5
16-3 GASOLINE DISTRIBUTION NETWORK 16-6
16-4 CLASSIFICATION OF GASOLINE DISPENSING
FACILITIES 16-6
i
16-5 VOC EMISSIONS FROM GASOLINE DISPENSING
FACILITIES IN OHIO 16-9
16-6 VOC EMISSION CONTROL TECHNOLOGY FOR
TYPICAL GASOLINE DISPENSING FACILITY 16-10
XIV
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Exhibit Following Page
16-7 STAGE I VAPOR CONTROL SYSTEM - VAPOR
BALANCING WITH SEPARATE LIQUID-VAPOR
RISERS 16-11
16-8 STAGE I VAPOR CONTROL SYSTEM - VAPOR
BALANCING WITH CONCENTRIC LIQUID-VAPOR
RISERS 16-11
16-9 STAGE I VAPOR CONTROL COSTS FOR A
TYPICAL GASOLINE DISPENSING FACILITY 16-13
16-10 STATEWIDE COSTS IN OHIO FOR STAGE I VAPOR
CONTROL OF GASOLINE DISPENSING FACILITIES 16-14
16-11 STATEWIDE COSTS OF VAPOR CONTROL SYSTEMS
BY SIZE OF GASOLINE DISPENSING FACILITY
IN OHIO 16-14
16-12 SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT FOR GASOLINE
DISPENSING FACILITIES IN THE STATE OF
OHIO 16-18
17-1 DATA QUALITY 17-4
17-2 PETROLEUM ASPHALT FLOW CHART 17-5
17-3 HISTORICAL NATIONAL SALES OF ASPHALT
CEMENT, CUTBACK ASPHALT AND ASPHALT
EMULSIONS 17-6
17-4 ESTIMATED HYDROCARBON EMISSIONS FROM THE
USE OF CUTBACK ASPHALT IN OHIO 17-11
17-5 STATEWIDE COSTS FOR RACT FOR USE OF
CUTBACK ASPHALT 17-13
17-6 SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTATING RACT FOR USE OF CUTBACK
ASPHALT IN THE STATE OF OHIO 17-15
LIST OF FIGURES
Figure Following Page
11-1 TYPICAL COLD CLEANER 11-13
11-2 TYPICAL OPEN TOP VAPOR DEGREASER 11-14
11-3 TYPICAL CONVEYORIZED DEGREASER 11-15
XV
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1. EXECUTIVE SUMMARY
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1. EXECUTIVE SUMMARY
This chapter summarizes the major elements and most
significant findings of the study to determine the economic
impact of implementing Reasonably Available Control Tech-
nology (RACT) guidelines in the state of Ohio. Further
discussion and data are presented in detail in the subsequent
chapters of the report. This Executive Summary is divided
into three sections:
Objectives, Scope and Approach
Statewide Aggregate Economic Impact for the
Fifteen RACT Guidelines
Economic Implications of Each RACT Guideline.
1-1
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1.1 OBJECTIVES, SCOPE AND APPROACH
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1.1 OBJECTIVES, SCOPE AND
APPROACH
The Clean Air Act Amendments of 1977 required the states
to revise their State Implementation Plans (SIPs) to provide
for the attainment and maintenance of national ambient air
quality standards in areas designated as nonattainment. The
Amendments require that each state submit the SIP revisions
to the U.S. Environmental Protection Agency (EPA) by January
1, 1979. These proposed regulations should contain an oxidant
plan submission for major urban areas to reflect the applica-
tion of Reasonably Available Control Technology (RACT) to
stationary sources for which the EPA has published guidelines.
The Amendments also require that the states identify and analyze
the air quality, health, welfare, economic, energy and social
effects of the plan provisions.
1.1.1 Objectives
The major objective of the contract effort was to
determine the direct economic impact of implementing RACT
standards for industrial categories in four states (Illinois,
Wisconsin, Ohio and Michigan) of Region V of the U.S. Environ-
mental Protection Agency. These studies will be used pri-
marily to assist EPA and state decisions on achieving the
emission limitations of the RACT standards.
1.1.2 Scope
The scope of this project was to determine the costs
and direct impacts of control to achieve RACT guideline
limitations. The impact was addressed for each industry
and for each state so that the respective studies are ap-
plicable to individual state regulations. Direct economic
costs and benefits from the implementation of the RACT
guidelines were identified and quantified. While secondary
(social, energy, employment, etc.) impacts were addressed,
they were not a major emphasis in the study. In summary,
direct economic impact analysis of each industrial category
was aggregated on a statewide basis for the RACT categories
studied.
In Ohio, the economic impact was assessed
for the following 15 RACT industrial cate-
gories :
Surface coating of cans
Surface coating of coils
Surface coating of paper
Surface coating of fabrics
1-2
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Surface coating of automobiles and light
duty trucks
Surface coating of metal furniture
Surface coating for insulation of
magnet wire
Surface coating of large appliances
Solvent metal cleaning
Bulk gasoline terminals
Refinery vacuum producing systems,
wastewater separators and process
unit turnarounds
Bulk gasoline plants
Storage of petroleum liquids in
fixed roof tanks
Service stations—Stage I
Use of cutback asphalt.
In the determination of the economic impact of the
RACT limitations, the following are the major study guidelines:
The emission limitations for each industrial
category were studied at the control level
established by the RACT guidelines. These
are presented in Exhibit 1-1, at the end of this
section. (In addition an alternate scenario for the
surface coating of automobiles is presented in
this report.)
The timing requirement for implementation of
controls to meet RACT emission limitations
was January 1, 1982.
All costs and emission data were presented
for 1977.
Emission sources included were existing
stationary point sources in most of the applicable
industrial categories with VOC emissions
greater than 3 pounds in any hour or 15
pounds in any day.l
IFor some industrial categories (i.e., solvent metal cleaning
and fixed roof tanks) size characteristics are used as the
basis for inclusion, rather than emissions.
1-3
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The guidelines were assumed to be adopted
statewide (including all nonclassified
and attainment ozone areas as well as
rural areas).
The following volatile organic compounds were
exempted:
Methane
Ethane
Trichlorotrifluorethane (Freon 113)
1,1,1-trichloroethane (methyl chloroform) . •*•
The cost of compliance was determined from the current
level of control (i.e., if an affected facility already
had control in place, the cost of compliance and the
resulting VOC emissions reduction are not included in this
analysis).
1.1.3 Approach
The approach applied to the overall study was: a study
team with technology and economic backgrounds utilized avail-
able secondary sources to estimate the emissions, statistics
and costs for each RACT industrial category; then, the study
team completed, calibrated and refined these estimates based
on approximately 60 interviews with a cross-section of industry
representatives in the four states. Because of the number
of point sources and the data available in the state emission
inventory, the methodology was specific for each RACT industrial
category studied. However, the general methodology applied
for two major classes of industrial categories was:
Surface coating RACT industrial categories
(cans, coils, fabrics, paper, automobiles and
light duty trucks, metal furniture, magnet wire
and large appliances)—the potentially
affected facilities, emissions and emission
characteristics were studied by Booz, Allen
with assistance from the Ohio EPA. Therefore,
the following generalized methodology was
applied:
A list of potentially affected
facilities was compiled from
secondary reference sources.
Data from the emission inventory
was categorized and compiled for
some of the affected facilities
in each RACT industrial category
by the Ohio EPA.
The exemption status of methyl chloroform under these
guidelines may be subject to change.
1-4
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Firms not substantiated in the
emission inventory were identified.
A sampling of these facilities were
then interviewed by telephone when
there was doubt concerning their
inclusion.
Emissions, emission characteristics/
control options and control costs
were studied for relevant firms.
Interviews were conducted to determine
applicable control options and potential
control costs.
The study team then evaluated the con-
trol cost to meet the RACT requirements
and the potential emission reduction.
Nonsurface coating RACT industrial categories (bulk
gasoline plants, bulk gasoline terminals and
refineries service stations, fixed roof tanks
and solvent metal cleaning)—each category either
represented an exhaustive list of potentially affected
facilities or emissions data were not available
(or categorized) for these types of sources.
Therefore, the following generalized methodology
was applied:
Industry statistical data were collected
from secondary reference sources.
Statewide emissions were estimated by
applying relevant factors (e.g., emissions
per facility or throughput).
Control options and estimated costs
to meet the RACT guidelines were re-
viewed.
Interviews were conducted to determine
applicable associated control options
and the cost of control.
1.1.4 Quality of Estimates
The quality of the estimates that are presented in this
report can be judged by evaluating the basis for estimates
of the individual study components. In each of the chapters
that deal with the development of estimated compliance cost,
the sources of information are fully documented.
1-5
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In the determination of the economic impact for each
industrial category studied, the estimated compliance cost
is subject to variations due to inherent variations in
procedures for estimating:
Engineering costs
The number of sources affected.
Engineering cost estimates, when performed for an individual
modification with specific equipment sized at the desired capacity,
are typically subject to variations of 25 percent. When engineering
cost estimates are performed on technologies not commercially
proven for a specific facility, the variations are much greater,
many times over 100 percent.
Many of the RACT categories studied (such as solvent metal
cleaning) represent an exhaustive list of potentially affected
facilities that have not been previously identified or categorized.
Therefore, the actual number of facilities affected by a given
RACT industrial category had to be estimated from available data
sources.
If a study with unlimited resources were performed, to
estimate the specific cost to each individual facility affected
within the state, the study would be subject to a 25 percent to
50 percent variation because of the inherent variability of
engineering estimates and the uncertainty involved in the selection
and demonstrated capabilities of the control alternatives. Fur-
thermore, a study of this type would take years to perform.
Therefore, to put a perspective on the estimates presented
in this report, the study team has categorically ranked by quali-
tative judgment the overall data quality of the major sources and,
therefore, of the outcomes. These data quality estimates were
ranked into three categories:
High quality ("hard data")—study inputs
with variation of not more than + 25 per-
cent.
Medium quality ("extrapolated data")—study
inputs with variation of + 25 to + 75 percent.
Low quality ("rough data")—study inputs with
variation of + 50 to +^ 150 percent.
Each of these data quality estimates is presented in
the individual chapters. The overall quality ranking of the
study inputs for each RACT industrial category was generally
in the medium quality range.
1-6
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Category
EXHIBIT 1-1(1)
U.S. Environmental Protection Agency
LISTING OF EMISSION LIMITATIONS THAT REPRESENT
THE PRESUMPTIVE NORM TO BE ACHIEVED THROUGH
APPLICATION OF RACT FOR FIFTEEN INDUSTRY CATEGORIES
RACT Guideline Emission Limitations3
Surface Coating Categories Based on
Low Organic Solvent Coatings (Ibs.
solvent per gallon of coating, minus
water)
Surface Coating Of:
Cans
. Sheet basecoat (exterior and interior)
Overvarnish
Two-piece can exterior (basecoat and overvarnish)
. Two and three-piece can interior body spray
Two-piece can exterior end (spray or rollcoat)
. Three-piece can side-seam spray
. End sealing compound
Coils
. Prime and topcoat or single coat
Paper
Fabrics and vinyl coating
. Fabric
. Vinyl
Automobiles and Light Duty Trucks
. Prime application, flashoff and oven
. Topcoat application, flashoff and oven
. Final repair application, flashoff and oven
Metal Furniture
. Prime and topcoat or single coat
Magnet Wire
Large appliance
. Prime, single or topcoat
Solvent Metal Cleaning
Cold cleaning
. Conveyor!zed degreaser
. Open top degreaser
•
Petroleum Refinery Sources
. Vacuum producing systems
2.8
4.2
5.5
3.7
2.6
2.9
2.9
3.8
1.9
2.8
4.8
3.0
1.7
2.8
Provide cleaners with: cover; facility
to drain clean parts; additional free-
board; chiller or carbon absorber.
Follow suggested procedures to minimize
varryout.
Provide cleaners with: refrigerated chillej
or carbon adsorption system; drying tunnel
or rotating basket; safety switches; cover:
Follow suggested procedures to minimize
earryout.
Provide cleaner with: safety switches;
powered cover; chiller; carbon absorber.
Follow suggested procedures to minimize
earryout.
No emissions of any noncondensible VOC
from condensers, hot wells or accumulators
to a firebox, incinerator or boiler.
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EXHIBIT 1-1(2)
U.S. Environmental Protection Agency
Category
RACT Guidelines Emission Limitations3
Wastewater separators
Process unit turnaround
Bulk Gasoline Terminals
Bulk Gasoline Plants
Storage of Petroleum Liquids in Fixed
Roof Tanks
Service Stations (Stage I)
Minimize emissions of VOC by providing
covers and seals on all separators and
forebays and following suggested operating
procedures to minimize emissions
Minimize emissions of VOC by depressurizatic
venting to vapor recovery, flare or firebox.
No emissions of VOC from a process unit
or vessel until it's internal pressure
is 136 kilo pascals (17.7 psia) or less
Equipment such as vapor control system
to prevent mass emissions of VOC from
control equipment to exceed 80 milligrams
per liter (4.7 grains per gallon) of gaso-
line loaded
Provide submerged filling and vapor bal-
ancing so that VOC emissions from control
equipment do not exceed 80 milligrams
per liter (4.7 grains per gallon) of
gasoline loaded
Provide single seal and internal floating
roof to all fixed roof storage vessels
with capacities greater than 150,000
liters (39,000 gal.) containing volatile
petroleum liquids for which true vapor
pressure is greater than 10.5 kilo
Pascals (1.52 psia)
Provide submerged fill and vapor balance
for any stationary storage tank located
at a gasoline dispensing facility
Use of Cutback Asphalt
The manufacture, mixing, storage, use
or application may be approved where:
long-life stockpile storage is necessary;
the use or application is an ambient tem-
perature less than 10°C (50°F) is necessary;
or it is to be used solely as a penetrating
prime coat
Note:An alternative scenario to the recommended RACT guidelines for surface coating
of automobiles is also studied. It assumes that requirements are modified
to neet specific technologies.
a. Annotated description of RACT guidelines
Source; Regulatory Guidance for Control of Volatile Organic Compound Emissions fr >m 15
Categories of Stationary Sources, U.S. Environmental Protection Agency, EPA-9Q512-
78-001, April 1978.
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1.2 STATEWIDE AGGREGATE ECONOMIC IMPACT
FOR THE FIFTEEN GUIDELINES
-------
-------
1.2 STATEWIDE AGGREGATE ECONOMIC IMPACT
FOR THE FIFTEEN RACT GUIDELINES'
The implementation of RACT emission limitations for fifteen
industrial categories in Ohio involves an estimated $383 million
capital cost and $63 million annualized cost per year. The net
VOC emission reduction is estimated to be 186,000 tons annually.
Exhibit 1-2, on the following page, presents a quantitative
summary of the emissions, estimated cost of control, cost indi-
cators and cost effectiveness of implementing RACT guidelines
for fifteen industrial categories.
Approximately 43,440 facilities are potentially
affected by the fifteen RACT guidelines in Ohio.
Approximately 98 percent of the
potentially affected facilities
are represented by the solvent
metal cleaning 20,000 facilities
and service station (22,600 facili-
ties) industrial categories.
Less than 1 percent (108 facilities)
of the potentially affected facilities
are represented by the eight surface
coating industrial categories (cans,
coils, paper, fabrics, automobiles,
metal furniture, magnet wire and large
appliances).
In 1977, the estimated annual VOC emissions (in-
cluding those already controlled) for the fifteen
RACT industrial categories totalled approximately
264,000 tons.
Three gas marketing categories (tank truck
loading terminals, bulk gas plants and service
stations) represented 31 percent of the total
VOC emissions.
Eight surface coating categories repre-
sented 24 percent of the total VOC
emissions.
Use of cutback asphalt represented 20
percent of the total VOC emissions.
1. An alternative scenario for the surface coating of automobiles
is also presented ~n the text of the next section. The EPA
recommended RACT limitations for automobile assembly plants
represent a waterborne topcoat system which would require
extensive modification of the current production lines. Under
the alternate scenario it is assumed that RACT requirements
are modified to meet specific technologies that are more
cost and energy effective.
1-7
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EXHIBIT 1-2
U.S. tnvirofewntal rrouction Agency
SUNJiAKT Of IMPACT CT UVUMBITING MCT
GUIDELINES IN IS INDUSTRIAL CUTtOOWIS—OHIO
Number of
Facilities
Potential 1 i
Surface coating 23
of cans
Surface coating 16
of coils
Surface coating 30
of paper
Surfece coating 6
of fabrics
Surface coating 5
of automobiles
Surface coating of 16
metal furniture
Surface coating for 2
magnet wirec
Surface coating of 10
large appliances
Solvent metal 20,000
cleaning
Refinery vacuum 7
wastewater
separators and
turnarounds
loading terminals
Bulk gasoline 670
plants
Storage of , roleu^ 6
liquids i ' fixed
rocf tanks
Service stations 23,600
(Stage I)
Cutback Asphalt e
Total
43,440
Emissions
Estimated
VOC Emissions
After met voc
1977 VOC Implementing (mission
Emissions KACT Reductions
(tons/yr.) (tons/yr.) (tons/yr.)
3,400 1,100 2.300
4.400 IK 3,615
30.000 6.000 24,000
7,500 1,500 6,000
13,700 2,800 10,900
1 , 500 1 , 100 300
218 116 100
3,500 1,000 2,500
46,000 36,700 11,400
15,000 700 14,300
17,400 1.700 15.700
19,400 5,300 14,100
1,200 120 1,080
45,500 19,000 26.500
53,100 0 53.1001
264,000 76,000 186,000
Note Figures presented in this exhibit are rounded and approximated for
Cost
Annualiiad
Cost as Annualized Annualized
Percent of Cost Per Cost (credit)
Capital Annual ised Value of Unit Per Ton of voc
Cost* Cost (credit) Shipewjnts15 chipewnt Reduction
($ millions) ($ millions) (percent) (coat per unit) (S per tons/yr.)
2.7 (0.11)9 0 0 247
2.5 0.75 HA HA 207
2S.O * 1.3 Increase of 1.3* 300
10 1 0.3 - 170
260 44 0.8 |38/Vehlcle 4,040
0.93 0.04 0.014 - 32
000 - 0
4.0 0.92 0.04 S0.2/Household 374
Appliance
9.2 1.1 0.002 0.01* 105
0.6 (0.4) 0 0 (26)
15.3 (1.4) (0.1) - (32)
10.0 2.6 0.7 SO.OO14/gallonl) 186
0.76 0.007 NA 0 64
21.5 5.2 0.2 S0.002/gallon 195
0.2 0 0 0 0
383 63
comparison purposes.
a. Includes one time costs
b value of shipments represents the total value in the specific industry category for the state being studied.
c. All magnet wire coating facilities have implemented controls prior to the KACT guidelines and axe assumed with compliance.
d. This represents the industrywide increase: email operations will be subject to a $0.003 gallon increase
t. Estimate use of cutback asphalt in 1977 was 265,000 tons.
f. Based on replacing all cutback asphalt with evulsions.
g. This credit includes an anticipated savings of ((00,000 that is attributable to materials savings from fewer coatingi
on two-piece cans. Excluding this credit the ennualited cost is estimated to be $785,000.
Boor, Allen t Hamilton Inc.
-------
Solvent metal cleaning represented 18
percent of the total VOC emissions
(from the fifteen RACT categories
studied).
Fixed roof tanks represented less than
one percent of the total VOC emissions.
The net emission reduction achievable by implementing
the fifteen RACT guidelines is estimated to be
186,000 tons annually. The approximate percent of the
total VOC emissions reduced by implementing RACT
by industrial category group is:
Gas marketing categories—30 percent of VOC
emission reduction
Use of cutback asphalt—29 percent of VOC
emission reduction
Surface coating categories—27 percent of
VOC emission reduction
Refinery vacuum systems—8 percent of VOC
emission reduction
Solvent metal cleaning category—6 percent
of VOC emission reduction
Fixed roof tanks—less than 1 percent of
VOC emission reduction
The capital cost for the fifteen industrial categories
to achieve the RACT guidelines is estimated to be
$383 million. Approximately 73 percent of the total
estimated capital cost is for control of automobile
assembly plants.
The capital required to meet RACT guidelines
for automobile surface coating is estimated
to be $280 million. (An alternative scenario
to the recommended RACT limitations for
automobiles is also developed. This alterna-
tive scenario would represent an estimated
capital cost of $34 million.)
The four industrial categories dealing with
petroleum (bulk 9asoline plants, bulk gasoline
terminals, service stations and fixed roof tanks)
account for approximately $48 million (or 13
percent of the total) of the estimated capital
cost.
1-8
-------
The paper coating category is estimated
to require $25 million in capital (or 7
percent of the total).
The solvent metal cleaning category is
estimated to require $9.2 million
in capital (or 2 percent of the total).
The fabric coating category is estimated
to require $10 million in capital (or
3 percent of the total).
The other seven RACT categories collectively
represent a estimated capital cost of
$10.9 million (or 3 percent of the total).
The annualized cost of the fifteen RACT industrial
categories to achieve the RACT guidelines is
estimated to be $63 million. The control of
automobile assembly plants is estimated to be
$44 million annualized cost (the alternate
scenario for auto assembly has an estimated
annualized cost of $5 million). In terms of
cost indicators, the annualized compliance cost
per value of shipments will have the largest effect
on the following industrial categories:
Paper coating—The annualized costs rep-
resent approximately 1.3 percent of the
1977 statewide value of shipments.
Bulk gasoline plants—The annualized
compliance costs represent approximately
0.7 percent of the 1977 statewide value
of shipments.
Technology developments and delivery of equipment
could present problems in achieving the 1982
timing requirements of the RACT guidelines.
The recommended RACT guidelines for
automobile assembly plants would require
a waterborne top coating. Manufacturers
could not convert facilities on a nation-
wide basis to waterborne top coat systems.
Low solvent coating technology requires
further development for cost- and energy-
effective implementation of the RACT guide-
lines in the following industrial categories:
1-9
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Surface coating of automobiles
Surface coating of large appliances
Surface coating of cans (end sealing
compound).
Equipment delivery and installation of control
equipment were identified as potential problems
in the following industrial categories:
Surface coating of paper
Solvent metal degreasing
Tank truck gasoline loading terminals
Bulk gasoline plants
Surface coating of fabrics
Gasoline service stations.
With the exception of bulk gasoline plants the
implementation of the RACT guidelines are not
expected to have major impact on statewide
productivity or employment. Capital cost re-
quirements for bulk gasoline plants could
further concentrate a declining industry. Many
small bulk plants today are marginal operations
and further cost increases may result in additional
plant closings.
The implementation of the RACT guidelines is ex-
pected to create further concentration for some in-
dustrial sectors requiring major capital and annual-
ized cost increases for compliance. RACT requirements
may have an impact on the market structure and trends
of the following RACT industrial categories:
Bulk gasoline plants
Service stations
Surface coating of paper.
The implementation of the RACT guidelines for the
fifteen industrial categories is estimated to represent
a net energy savings of approximately 38/000 equivalent
barrels of oil annually; or 0.03 percent of the state-
wide energy demand for all manufacturing. Assuming a
value of oil at $12 per barrel, this is an equivalent
energy savings of $0.5 million annually. Exhibit 1-3,
following the next page, presents the estimated change
in energy demand from implementation of the RACT
guidelines in Ohio.
1-10
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RACT compliance requirement for the eight
surface coating industrial categories (cans,
soil, paper, fabrics, automobiles, metal
furniture, insulation of magnet wire and
large appliances) represent a net energy
demand of approximately 456,000 equivalent
barrels of oil annually.
RACT compliance requirements for refinery
systems represent a net energy savings of
approximately 102,000 equivalent barrels of
oil annually.
RACT compliance requirements for the four
industrial categories dealing with petroleum
marketing (service stations, fixed roof tanks
bulk gasoline terminals, bulk gasoline plants)
represent a net energy savings of approximately
392,000 barrels of oil annually. However, the
control efficiency has not been fully demonstrated
and these estimates are likely to overstate
the achievable energy savings for bulk gasoline
plants and service stations.
In 1977, the statewide value of shipments of the fifteen
industrial categories potentially affected by RACT was $16.1
billion, which represents approximately 18 percent of Ohio's
total value of shipment of manufacturing goods. The esti-
mated annualized cost of implementing the RACT guidelines
($63 million) represents 0.3 percent of the value of shipments
for the fifteen RACT industrial categories affected. The
annualized cost represents 0.06 percent of the statewide total
value of shipment of all manufactured goods.
1-11
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EXHIBIT 1-3
U.S. Environmental Protection Agency
ESTIMATED CHANGE IN ENERGY DEMAND RESULTING
FROM IMPLEMENTATION OF RACT GUIDELINES IN OHIO
Industry Category
Surface coating of cans
Surface coating of coils
Surface coating of paper
Surface coating of fabrics
Surface coating of automobiles
Surface coating of metal furni-
ture
Surface coating for insulation
of magnet wire
Surface coating of large
appliances
Solvent metal cleaning
Refinery systems
Tank truck gasoline loading
terminals
Bulk gasoline plants
Storage of petroleum
liquids in fixed
roof tanks
Service stations (ST.,GE I)
Use of cutbaks asphalt
TOTAL
Energy Demand Change
Increased (Decrease)
(Equivalent barrels of oil)
5,000
NA
175,000
34,000
250,000
None
None
(8,000)
Negligible
(102,000)
(107,000)
(97,000)
(7,500)
(181,000)
Noneb
Energy Demand Change
Cost/(Savings)a
($ million)
0.07
NA
2.3
0.40
3.2
None
None
(0.10)
Negligible
(1.3)
(1.4)
(1.3)
(0.10)
None
(38,500)
(0.5)
NA = Not available
a. Based on the assumption that the cost of oil is $13 per barrel.
b. There is not anticipated to be any energy demand change at the user level. However, if all cutback asphalt was
replaced with emulsions a maximum energy savings could be over 500,000 barrels per year. This savings would accrue
to manufacterers (not users) and this represents the difference in total energy associated with the manufacturing,
processing and laying of cutback asphalt (50,200 BTU/gallon) versus emulsions (2,830 BTU/gallon).
Source: Booz, Allen & Hamilton Inc.
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1.3 ECONOMIC IMPLICATIONS OF EACH RACT GUIDELINE
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1.3 ECONOMIC IMPLICATIONS OF EACH RACT GUIDELINE
This section presents a summary of the economic impact
for each of the fifteen RACT industrial categories studied.
Following this section is a series of summary exhibits which
highlight the study findings for each industrial category.
1.3.1 Surface Coating of Cans
Currently there are 23 major can coaters in the state
of Ohio. The industry-preferred method of control to meet
the RACT requirements is to convert to low solvent (water-
borne) coatings. However, low solvent coatings for end sealing
compounds are presently not available and may not be available
by 1982. To meet the RACT requirements, can manufacturers may
convert some facilities to waterborne two-piece can lines (where
commercially feasible) and install thermal incineration for
controlling high solvent coatings. It is possible that some
precoated stock will be manufactured out of state for cost-
effectiveness, in addition to meeting RACT requirements. Emis-
sion controls are expected to cost $2.7 million in capital and
represent a savings of $150,000 in annualized costs in meeting
the RACT guidelines. This savings includes a credit of $900,000
for reduced material and energy savings that are anticipated
from reducing the number of coatings on two piece cans. Excluding
this credit, the annualized cost of compliance is estimated to
be $785,000.
1.3.2 Surface Coating of Coils
Currently there are an estimated 23 coil coating facilities
in the state of Ohio. Most of those firms currently control VOC
emissions and for purposes of this study are assumed to require
minimal cost to meet the RACT guidelines. For those firms re-
quiring VOC control, the capital requirements is estimated to
be $2.5 million and the annualized costs is approximately $750,000,
No major market structure, employment or productivity impacts are
anticipated.
1.3.3 Surface Coating of Paper
This study covered 25-30 plants expected to be affected
by the RACT guideline. Excluded from this study are facilities
engaged in publishing, who may coat paper as a segment of the
processing line. The study assumes that these facilities would
fall under other RACT guidelines currently being developed, such
as Graphic Arts. Further definition of the paper coating cate-
gory needs to be established prior to regulatory implementation.
The retrofit situations and installation costs for
add-on controls are highly variable. Based on these variations,
the estimated capital cost to the industry is between $18
million and $33 million, with an annual operating cost of $6
million to $11 million (approximately 1.3 percent of the
statewide value of shipments).
1-12
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The smaller firms have indicated they may not be able to
secure the necessary capital funding for add-on systems.
The effect on employment will be a function of the number of
firms that may opt to cease production rather than invest in
retrofit equipment for control.
Assuming 70 percent heat recovery, the annual energy
requirements are expected to increase by approximately
175,000 equivalent barrels of oil per year. Energy consumption
may decrease if further efficient recovery of incinerator
heat is possible.
Incinerator equipment manufacturers have stated that
there may be significant problems in meeting the anticipated
demand for high heat recovery incinerators on a nationwide
basis.
1.3.4 Surface Coating of Fabrics
There are six firms in Ohio identified as coaters of
fabric and affected by the proposed RACT guidelines. Most
of these firms potentially affected by the proposed guidelines
were not fully aware of their inclusion in this category.
These facilities will be required to invest an estimated $10
million in capital and approximately $1.0 million in annualized
cost to meet RACT limitations.
No significant productivity, employment or market
structure dislocations should be associated with the im-
plementation of the RACT guideline.
Assuming a 70 percent heat recovery, about 34,000 barrels
of additional fuel oil per year would be required to operate
the control equipment.
1.3.5 Surface Coating of Automobiles
There are three major companies operating five automobile
assembly plants in Ohio. Ohio is the third largest state in
terms of automobile production in the U.S. and the value of
shipments of automobiles represents approximately 6 percent
of the statewide value of manufacturing shipments. The EPA
recommended RACT guidelines would require conversion to
waterborne paints. However, the EPA is currently considering
some modifications of the RACT requirements for automobile
assembly plants. Therefore, there are two scenarios of RACT
guidelines studied:
1-13
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Scenario I—Current RACT limitations implemented by 1982.
Under this scenario, it is assumed that automobile assembly
plants will convert facilities to the following available
paint technologies to meet the RACT requirements:
Cathodic electrodeposition for prime coat
Waterborne enamels for topcoat
High solids enamels for final repair.
The implementation of these technologies would require
extensive modification to all five facilities in Ohio. The
capital required would be approximately $280 million or 340
percent of the estimated current annual capital appropriations.
The estimated annualized compliance cost is $44 million and
would represent an increased energy demand of approximately
250,000 barrels of oil annually. If this increased cost
were passed on directly it would represent an increase in
price of $38 per automobile manufactured. These major
modifications would require approximately three to four
years for completion and although possibly achievable in
Ohio, all assembly plants in the U.S. could not convert to
these technologies by 1982.
Scenario II—RACT requirements are modified to meet
specific technologies. Under this scenario it is assumed
that automobile assembly plants will develop and apply the
following paint technologies:
Cathodic electrodeposition for prime coat
High solids enamels, urethane enamels, powder
coating or equivalent technologies for topcoat
High solids enamels for final repair.
The major area of modification in this scenario is the
technology applied for topcoat paints. It is assumed that
manufacturers currently using enamel paints would develop
higher solids enamels that would approach or achieve the
emission reduction of waterborne paints. At General Motor's
facilities (which use lacquer paints) the conversion to
other technology developments is still likely to require
major plant modifications. The capital requirements for
Scenario II are estimated to be $34 million or 40 percent
of the current annual capital appropriations in the state. The
estimated annualized compliance cost is $5 million. If this
increased cost were passed on directly, it would represent
an increase in price of $4 to $5 per vehicle manufactured.
1-14
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1.3.6 Surface Coating of Metal Furniture
There are 16 facilities in Ohio identified as manufac-
turers and coaters of metal furniture and potentially affected
by the proposed RACT guidelines. These facilities will be
required to invest an estimated $1 million in capital and
approximately $40,000 in annualized costs (approximately
0.01 percent of the value of shipment) to meet the RACT
limitations.
No significant productivity, employment or market
structure dislocations should be associated with the im-
plementation of the RACT guideline.
1.3.7 Surface Coating for Insulation of Magnet Wire
This study has identified two facilities currently
coating magnet wire for insulation in the state of Ohio.
Both of these facilities have already implemented controls
which for the purpose of this study are assumed to be in accordance
with the RACT guidelines. Therefore, in Ohio, the implementation
of RACT guidelines for magnet wire coating is not expected
to have any substantial economic impact or to reduce emissions.
1.3.8 Surface Coating of Large Appliances
There are ten facilities identified as major coaters of
large appliances in Ohio. The industry statewide is esti-
mated to invest approximately $4.0 million in capital and incur
additional annualized cost of $920,000 (approximately 0.04
percent of industry statewide value of shipments) to meet the
emission limitations.
Assuming a "direct cost pass-through," the cost increase
for household appliances relates to a price increase of
approximately $0.2 per unit. Certain manufacturers could
incur disproportionate compliance costs, which could further
deteriorate the profit position of a marginally profitable
operation. Of the firms with marginally profitable operations
that may be affected, none of the companies contacted indicated
that they might be forced out of business. No major productivity,
employment or market structure dislocations appear to be associated
with implementation of the RACT guidelines.
1-15
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The high solids (greater than 62 percent by volume)
topcoat application technique preferred by the industry has
not been proven under normal operating conditions, although
it appears to be technically feasible.
1.3.9 Solvent Metal Cleaning
This category includes equipment to clean the surface
for removing oil, dirt, grease and other foreign material by
immersing the article in a vaporized or liquid organic
solvent. The cleaning is done in one of three devices: a
cold cleaner, an open top vapor degreaser or a conveyorized
degreaser. This type of cleaning is done by many firms in
many different types of industries.
Implementation of the proposed RACT guidelines for an
estimated 20,000 facilities is expected to have a negligible
economic effect on industry because of the relatively minor
changes required. Statewide, the many facilities potentially
affected represent a capital cost of $9.2 million and an
annualized cost of $1.1 million (less than 0.01 percent of
industry value of shipments).
Because of the large number of degreasers that require
retrofit to meet RACT and the inability of manufacturers to
provide equipment on such a large scale, it is doubtful if
all degreasers nationwide can be retrofitted within the 1982
timeframe.
No major productivity, employment and market structure
dislocations will result from RACT implementation.
1.3.10 Refinery Vacuum Systems, Wastewater Separators
and Process Unit Turnarounds
There are seven refinery facilities in the state of
Ohio, potentially affected by the proposed RACT guidelines.
All the refinery operations were reported to have systems
that are compatible with the RACT requirements except for
five uncovered wastewater separators and ten process units.
Achieving the equipment requirements represents a capital
investment of approximately $600,000 and an annualized credit
of approximately $400,000. The annualized credit is due to
the projected recovery of gasoline equivalent to approximately
100,000 barrels annually.
No significant productivity, employment or market
structure dislocations should be associated with the implementation
of the RACT guideline.
1-16
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1.3.11 Tank Truck Gasoline Loading Terminals^
There are 50 facilities identified in the state of Ohio
as tank truck gasoline loading terminals. Emission control
of these facilities is expected to require a capital investment
of $15.3 million. Product recovery of gasoline will be accrued
to bulk terminal operations, not only from bulk terminal emission
control installations, but also from the recovery of vapors from
service stations and bulk gasoline plants. This recovery
represents approximately 46,000 tons of emissions. Based
on this savings, the annualized credit for implementation
of RACT for bulk gasoline loading terminals is estimated
to be $1.4 million.
No significant productivity, employment or market structure
dislocations should be associated with implementing the RACT
guidelines.
1.3.12 Bulk Gasoline Plants
This industry is characterized by many small plants.
Of these plants, only a few percent are either new or modernized.
The majority of the plants are over 20 years old. Most bulk
plants are located in rural areas where implementation of
RACT to stationary sources may not be required. However, the
economic analysis presented includes all bulk gas plant facilities,
regardless of location.
To meet the RACT requirements, bulk gas plants must be
equipped with vapor balance and submerged fill systems.
This recommended control system is not cost-effective for
the bulk plant operator as most of the economic credit (for
recovered vapors) would be accrued to a bulk terminal or refinery.
The estimated capital cost and annualized cost to meet
compliance requirements for the 670 facilities in the state
of Ohio represent $10 million and $2.6 million (approximately
0.7 percent of industry statewide value of shipments),
respectively. Industrywide, the price of gasoline (assuming
a "direct cost pass-through") would be increased $0.0014 per
gallon, but the smaller volume operators would be more
severely affected, with costs increasing between $0.005 per
gallon and $0.01 per gallon. Because of the competitiveness
and low profit structure in the industry, further cost increases
could force some marginal operations out of the business, thus
further concentrating the market structure. In urban areas,
the bulk gasoline plant markets have been declining because of
competition from retailers and tank truck terminals, and are
expected to continue to decline regardless of the RACT guidelines.
1-17
-------
Those bulk gas plants that close would represent an
average loss of 4.6 jobs per plant.
The implementation of the RACT alternatives of bottom
filling and vapor balancing could produce an energy saving
equivalent to 97,000 barrels of oil per year assuming a
control efficiency as defined by the RACT guidelines. This
assumed control efficiency has not been fully demonstrated.
1.3.13 Storage of Petroleum Liquids in Fixed Roof Tanks
There are approximately 100 fixed roof tanks, each of
which is greater than 40,000 gallons and used for storing
petroleum liquids. With the exception of six tanks, all
are located in priority I areas and are reportedly equipped
with floating roof tanks because of current regulations.
These tanks are owned by major oil companies, large
petrochemical firms and bulk gasoline tank terminal companies.
The capital cost to equip these six fixed roof tanks with a
single-seal floating roof is estimated to be $0.8 million. The
estimated annualized cost is approximately $7,000.
No significant productivity, employment or market
structure dislocations will be associated with the implementation
of the RACT guidelines.
1.3.14 Service Stations
Of the estimated 22,000 gasoline disposing facilities
located in Ohio, 5 percent are considered small gasoline stations
(throughput less than 10,000 gallons per month). These
stations will experience a cost increase less than $0.0046
per gallon to implement RACT; larger -stations will experience
a much smaller unit cost 'increase. Statewide, the industry
capital cost is $21.5 million and annualized cost is $5.2
million (approximately 0.2 percent of the statewide value of
gasoline sold) for implementing submerged fill and vapor
balancing. The service stations could experience some loss
of business while vapor control systems are being installed.
Implementation of the RACT guidelines may accelerate
the trend to high throughput stations because of the in-
creasing overhead costs. However, the RACT guidelines will
not cause major productivity and employment dislocations to
the industry as a whole.
It is estimated that implementing RACT guidelines for
service stations in Ohio will result in a net energy savings
equivalent to 181,000 barrels of oil per year. The assumed
control efficiency has not been fully proven. The economic
benefit of the recovered gasoline vapors will not accrue to
the service stations.
1-18
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1.3.15 Use of Cutback Asphalt
In 1977, it is estimated that 265,000 tons of cutback
asphalt was utilized in the state of Ohio. Replacement of
the solvent based asphalt with asphalt emulsion will cause
no dislocation in employment or worker productivity. Capital
investment is estimated at $200,000.
It is anticipated that sufficient lead time is available
to assure an adequate supply of asphalt emulsion to meet the
increased demand and provide training for municipal employees.
A summary of the direct economic implications of
implementing RACT in each of the 15 industrial categories
studied is presented in Exhibits 1-4 through 1-18, on the
following pages.
1-19
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EXHIBIT 1-4
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR CAN MANUFACTURING PLANTS
IN THE STATE OF OHIO
Current Situation
Number of potentially affected
facilities
Indication of relative importance
of industrial section to state
economy
Current industry technology trends
VOC emissions
Industry preferred method of VOC
control to meet RACT guidelines
Assumed method of control to meet
RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized credit (statewide)
Price
Energy
Productivity
Employment
Market structure
Problem area
VOC emission after RACT control
Cost effectiveness of RACT control
Discussion
There are about 23 can manufacturing facilities
The 1977 value of shipments was about $360
million
Beer and beverage containers rapidly charging
to two-piece construction
3,400 tons per year (Booz, Allen estimate);
theoretical uncontrolled level is 4,600 tons
per year
Low solvent coatings (waterborne)
Low solvent coatings (waterborne)
$2.7 million from uncontrolled state
(0.4 million above 19"" ir.-placc- level).
Current investments are $15 million to $30
million
$0.15 million credit — less than 0.1 percent
of current direct annual operating costsl
No price increase
Increase of 5,200 equivalent barrels of oil
annually to operate incinerators (virtually
no increase from 1977 level)
No major impact
No major impact
Accelerated technology conversion to
two-piece cans
Further concentration of sheet coating
operations into larger facilities
Low solvent coating tech--1o<-y for end
sealing compound
1,100 tons per year (29 percent of current
emission level)
$247 annualized cost/annual ton of VOC
reduction from theoretical level attributed
to implementation of RACT
This savings includes a credit of $900,000 for reduced material and energy costs that arise
from reducing the number of coatings on two-piece cans. Excluding this credit, meeting the
RACT limitations would represent an annualized cost of $785,000 (approximately 0.2 percent
of the value of shipments). v* 3 v~
Source: Booz, Allen t Hamilton Inc.
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EXHIBIT 1-5
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR COIL COATING FACILITIES IN
THE STATE OF OHIO
Current Situation
Number of potentially affected facilities
Current industry technology trends
l<3~5 VOC --issior.s 'actual)
Industry preferred method of VOC control
to meet RACT guidelines
Assumed method of control to most RACT
guidelines
Discussion
There are 16 coil coating facilities
potentially affected by the coil coating
RACT guideline in Ohio. Five firms
currently meet RACT emission limitations
Due to the pressures of energy availability
as well as environmental protection, most
firms have or are installing regenerative
type incinerators
4,400 tons per y-ar
Regenerative thermal incineration
Regenerative thermal incineration
Affected Areas in Meeting RACT
Capital Investment (statewide)
Annual ize-" ~^t (statewide)
.-", ;-JcctivLt y
Employment
Market structure
RACT timing requirements (1982)
Problem area
VOC emission after control
Cost effectiveness of control
Discussion
$2.5 million incremental capital required by
eight firms if they were to install controls
on 10 processing lines
i,T\ption for re-
S.75 mi' r
Small increased i •
generative incineration
No major impact
No major impact
The captive coil coating operations not
meeting the RACT limitation may opt to
purchase coated material in lieu of in-
vesting significant capital requirements
Since most coil coating facilities in
Ohio meet the RACT limitations, timing
requirements should be met
Low solvent coating technology is currently
inadequate to meet product requirements
785 tons per year (18 percent of 1975 VOC
emission level)
$207 annualized cost/annual ton of VOC re-
duction.
Source;Booz, Allen 4 Hamilton Inc.
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EXHIBIT 1-6(1)
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR PAPER COATERS
IN THE STATE OF OHIO
Current Situation
Number of potentially affected facilities
Indication of relative importance of
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC control
to meet RACT guidelines
Assumed method of control to meet RACT
guidelines
Discussion
Approximately 25-30 plants in the state are
expected to be affected by these regulations.
However, if this category is interpreted to
include all types of paper coating, including
publishing, far more firms would be affected
The 1977 value of shipments of these is
estimated to be 5600 million. These plants
are estimated to employ 8,000-10,000 employees
Gravure coating replacing older systems
Approximately 28,000-35,000 tons per year were
identified from the emission inventory. Actual
emissions are expected to be higher
Though low solvent coating use is increasing,
prjogress is slow. Add-on control systems will
prjobably be used
Thermal incineration with primary and secondary
he,at recovery
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity
Employment
Market structure
Discussion
Estimated to be $18 million to $33 million
depending on retrofit situations. This is
likely to be more than 100 percent of normal
expenditures for the affected paper coaters
$61.0 million to $11.0 million annually. This
may represent 1.1 to 1.6 percent of the 1977
annual sales for the affected paper coaters
Assuming a "direct cost pass-through" —1.1 to 1.
percent
Assuming 70 percent heat recovery, annual energy
requirements would increase by approximately
175,000 equivalent barrels of oil annually
No major impact
No major impact
Smaller firms may be unable to secure capital
funding for add-on systems
RACT timing requirements (1982)
Problem areas
RACT guideline needs clear definition for
rule making
Equipment deliverables and installation of in-
cineration systems prior to 1982 may present
problems
Retrofit situations and installation costs are
highly variable
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EXHIBIT 1-6(2)
U.S. Environmental Protection Agency
Affected Areas jr. Meeting RACT
VOC emissions after control
Cost effectiveness of control
Discussion
5,000-7,000 tons/year (20 percent of 1977
VOC emission level)
$250 - $350 annualized cost/annual ton of VOC
reduction
Source; Booz, Allen t Hamilton Inc.
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EXHIBIT 1-7
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR FABRIC COATERS
IN THE STATE OF OHIO
Current Situation
Number of potentially affected facilities
Indication of relative importance of
industrial section to state economy
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC
control to meet RACT guidelines
Assumed method of VOC control to
meet RACT guidelines
Discussion
Six firms were identified as being affected
by the proposed regulation
Total value of shipments by the plants
identified could not be determined. These
plants employ about 2,600 persons
Newer plants are built with integrated coating
and emission control systems; older plants are
only marginally competitive now
Current emissions are estimated at about 7,500
tons/year
Direct fired incineration or carbon adsorption
for short range; low solvent coatings are a
long range goal
Direct fired incineration with primary and
secondary heat recovery and carbon adsorption
with distillation
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized operating cost (statewide!
Price
Energy
Productivity
Employment
Market Structure
RACT timing requirements (1982)
Problem areas
VOC emissions after RACT control
Coat effectiveness of RACT control
Discussion
Study team estimate is about $10 million
Approximately $1.0 million
Assuming a "direct pass-through of costs"
prices of coated fabrics will increase by abou
0.3 percent
Assuming 70 percent heat recovery about 34,000
equivalent barrels of additional fuel oil woul>
be required per year
No major impact
No major impact
No change in market structure within the state
is anticipated; firms affected have different
product lines or are about the same size
Plants may have problem in control equipment
deliveries
Additional capital and operating costs may mak
the plants uncompetitive with more modern and
efficient ones
Capital and operating costs can only be approx
mated because of unknown retrofit situations
1,500 tons/year 'V20 percent of 1977 VOC emissi
$170 annualized cost/annual ton of VOC reducti
Source: Booz, Allen t Hamilton Inc.
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EXHIBIT 1-8(1)
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT SCENARIO I FOR
AUTOMOBILE ASSEMBLY PLANTS IN THE
STATE OF OHIO
SCENARIO I
(RACT Limitations
Implemented By 1982)
Current Situation
Number of potentially affected facilities
Indication of relative importance of indus-
trial section to state enconomy
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC control
to meet PACT guidelines
Assumed method of control to meet RACT
guidelines
Affected Areas in Meeting RACT
Scenario I
Discussion
Three companies operating five assembly plants
1977 value of shipments was approximately
$5.6 billion which represents approxi-
mately 6.2 percent of the state's manu-
facturing industry. Of all states,
Ohio ranks third in automobile
production
Prime coat—cathodic electrodeposition
Topcoats—high solids enamels for
manufacturers using enamel systems
Approximately 13,700 tons per year
Cathodic electrodeposition for prime
coat. High solids enamel for topcoat.
Cathodic electrodeposition for prime coat
Waterborne enamels for topcoat
High solids enamels for final repair
Discussion
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity and employment
$280 million (approximately 340 percent
of current annual capital expenditures
for the industry in the state)
$44 million (approximately 0.8 percent
of the industry's 1977 statewide value
of shipments)
Assuming a "direct cost pass-through"
approximately $38 per automobile manu-
factured
Increase of 250/000 equivalent barrels
of oil annually primarily for operation
of waterborne topcoating systems
Conversion to waterborne systems would
require total rework of existing pro-
cessing lines. Major modifications
would probably increase efficiency and
line speed in some facilities.
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EXHIBIT 1-8(2)
U.S. Environmental Protection Agency
SCENARIO I
(RACT Limitations
Implemented By 1982)
Current Situation
,.Market structure
"RACT timing requirements (1982)
Problem areas
VOC emission after RACT control
Cost effectiveness of RACT control
Discussion
No major effect
Conversion of all automobile assembly
plants to topcoating waterborne systems
cannot be achieved by 1982
Prime coat RACT limitations are based
on anodic electrodeposition systems
and need to be modified to reflect
cathodic processing. Topcoat RACT
limitations are based on waterborne
coatings, which is not a cost or energy
effective alternative. Final repair
RACT limitations are based on high
solids enamel technology which would
require major modifications for man-
ufacturer 's using lacquer systems
2,750 tons per year (20 percent of 1977
emission level)
$4,040 annualized cost/annual ton of
VOC reduction
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EXHIBIT 1-9(1)
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT SCENARIO II FOR
AUTOMOBILE ASSEMBLY PLANTS IN THE
STATE OF OHIO
SCENARIO II
RACT Requirements Are
Modified To Meet Specific
Technologies
Current Situation
Number of potentially affected facilities
Indication of relative importance of indus-
trial section to state economy
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC control
to meet RACT guidelines
Assumed method of control to meet RACT
guidelines
Affected Areas in Meeting RACT
Scenario II
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity and employment
Discussion
Three companies operating five assembly
plants.
1977 value of shipments was approximately
$5.6 billion which represents approximately
6.2 percent of the state's manufacturing
industry. Of all states, Ohio ranks
third in automobile production
Prime coat—cathodic electrodeposition
Topcoats—high solids enamels for
manufacturers using enamel systems
Approximately 13,700 tons per year
Cathodic electrodeposition for prime
coat. High solids enamel for topcoat.
Cathodic electrodeposition for prime coat
High solids enamels for topcoat. High
solids enamel for final repair.
Discussion
$34 million (approximately 40 percent
of current annual capital appropriations
for the industry in the state)
$5 million (approximately 0.1 percent of
the industry's 1977 statewide value of
shipments)
Assuming a "direct cost pass-through"
approximately $4 to $5 per automobile manufac-
tured
Dependent on technology applied
No major effect
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EXHIBIT 1-9(2)
U.S. Environmental Protection Agency
SCENARIO II
Current Situation
Market structure
RACT timing requirements
Problem area
VOC emission after RACT control
Cost effectiveness for RACT control
Discussion
No major effect
Primer and final repair ."imitations could
be implemented at most facilities by 1982
Topcoat limitations could be set at a 40
percent to 62 percent solids by 1985
dependent on technology developments
Limitations for topcoat are dependent
on technology development
2,750-5,000 tons per year (20 percent to
37 percent of 1977 emission levels dependent
on limitations)
$460-$580 annualized cost/annual ton
for VOC reduction
Source: Booz, Allen & Hamilton Inc.
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EXHIBIT 1-10
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR SURFACE COATING OF
METAL FURNITURE IN OHIO
Current Situation
Number of potentially affected
facilities
Indication of relative importance of
industrial section to state economy
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC
control
Assumed method of control to meet
RACT guidelines
Discussion
There are 16 metal furniture manufacturing
facilities
1977 value of shipments was $284 million
Trend is towards the use of a variety of colors
1,532 tons per year
Low solvent coatings
Low solvent coatings
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity
Employment
Market structure
RACT timing requirement (1982)
Problem area
VOC emissions after RACT
Cost effectiveness of RACT
Discussion
$929,000
$41,000 (approximately 0.014 percent of
current value of shipments)
Varies from a few cents to more than $1 per
unit of furniture depending upon surface area
coated
No major impact
No major impact
No major impact
No major impact
Companies using a variety of colors may face
a problem
Low solvent coating in a variety of colors
providing acceptable quality needs to be
developed
249 tons per year (16 percent of current
emissions level)
$32 annualized cost/annual ton of VOC
reduction
Source;Booz, Allan 6 Hamilton Inc.
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EXHIBIT 1-11
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR SURFACE COATING OF LARGE
APPLIANCES IN THE STATE OF OHIO
Current Situation
Number of potentially affected
facilities
Indication of relative importance
of industrial section to state
economy
1977 VOC emissions (actual)
Industry preferred method of VOC
control to meet RACT guidelines
Assumed method of VOC control to
meet RACT guidelines
Discussion
There are ten major large appliance manufacturer
and coaters
1977 statewide value of shipments was estimated
at 52.4 billion and represents 10 percent of
the estimated $15 billion U.S. value of shipment
of the major appliance industry
3,500 tons per year
Waterborne primecoat and high solids topcoat
Waterborne primecoat and high solids topcoat
Affected Areas in Meeting RACT
Capital investment (statewide)
Annaalized cost (statewide)
Price
Energy
Productivity
Employment
Market structure
RACT timing requirements (1982)
Problem area
VOC emission after RACT control
Cost effectiveness of RACT control
Discussion
$4.0 million
$920,000 which represents 0.038 percent of the
industry's 1977 statewide value of shipments.
Assuming a "direct cost pass-through"—increase
of $0.21/unit for household appliances (based on
a price of $230 per unit appliance)
Reduced natural gas requirements in the curing
operation (equivalent to 8,000 barrels of oil
per year)
No major impact
No major impact
No major impact
Possible problems meeting equipment deliveries
and installation are anticipated
Commercial application of high solids (greater
than 62% by volume) has not been proven
1,050 tons/year (30 percent of 1977 emission
level)
$374 annualized cost/ton VOC reduction
Source:Booz, Allen t Hamilton, Inc.
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EXHIBIT 1-12
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR SOLVENT METAL DECREASING
IN THE STATE OF OHIO
Current Situation
Number of potentially affected
facilities
Indication of relative importance
of industrial section to state
economy
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC
control to meet RACT guidelines
Assumed method of VOC control
meet RACT guidelines
Discussion
About 20,000 plants
Value of shipments of firms in SIC groups af-
fected is in the range of $55 billion, about
one-half of the state's 1977 value of
shipments.
Where technically feasible, firms are sub-
stituting exempt solvents
48,100 tons/year (of which 20,000 tons are
subject to RACT}
Substitution. Otherwise lowest cost option
as specified by EPA will be used.
Equipment modifications as specified by the
RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized operating cost (statewide)
Price
Energy
Productivity
Employment
Market Structure
RACT timing requirements (1982)
Problem Areas
VOC emission after RACT control
Cost effectiveness of RACT control
Discussion
$9.2 million
$1.1 million, (less than 0.002 percent of the
1977 statewide value of shipments)
Metal cleaning is only a fraction of manu-
facturing costs; price affect expected to
be less than 0.01 percent
Less than a 1500 equivalent barrels of oil
per year in reduction
5-10 percent decrease for manually operated
degreasers. Will probably not affect conveyorize
cleaners.
No effect except a possible slight decrease
in firms supplying metal degreasing solvents
No change
Equipment availability—only a few companies
now supply the recommended control modifications
No significant problem areas seen. Most
firms will be able to absorb cost.
36,700 tons/year (76 percent of 1S77 VOC emission
level—however, this does not include emission
controls for exempt solvents)
$105 annualized cost per ton of emissions reduced
Source;Booz, Allen fc Hamilton Inc.
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EXHIBIT 1-13
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF IMPLEMENTI
RACT FOR REFINERY VACUUM PRODUCING SYSTEMS, WASTEWAT
SEPARATORS AND PROCESS UNIT TURNAROUNDS
IN THE STATE OF OHIO
Current Situation
Number of potentially affected
facilities
Indication of relative impor-
tance of industrial section to
state economy
Current industry technology
trends
1977 VOC actual emissions
Industry preferred method of
VOC control to meet RACT
guidelines
Estimated method of VOC
control to meet RACT guidelines
Discussion
1977 industry sales were S3 billion. The
estimated annual crude oil throughput was
215million barrels
Most refineries have installed controls equi
alent to RACT with the exception of 5 uncove
wastewater separators and 10 uncontrolled
process units
15,000 tons per year
Vapor recovery of emissions by piping
emissions to refinery fuel gas system or
flare and by covering wastewater separators
Vapor recovery of emissions from process
unit to refinery fuel gas system, cover
wastewaster separators and piping emissions
from process units to flare
Affected Areas ir. Meeting RACT
Capital investment (statewide)
Annualized credit
(statewide)
Price
Energy
Productivity
Employment
Market structure
VOC emission after control
Cost effectiveness of control
Discussion
5573,000
$383,000
No major impact
Assuming full recovery of emissions
—net savings of 101,600 barrels annually
Mo major impact
No major impact
No major impact
764 tons per year
$26 annualired credit/annual ton of
VOC reduction
Source; Booz, Allen £ Hamilton Inc.
-------
Current Situation
Number of potentially affected
facilities
Indication of relative importance
of industrial section to state
economy
Current industry technology trends
1977 VOC actual emissions
Industry preferred method of VOC
control to meet RACT guidelines
EXHIBIT 1-14
J U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR TANK TRUCK GASOLINE
LOADING TERMINALS IN OHIO
Discussion
50
1977 industry sales were $1,480 million, with
annual throughput of 3.484 billion gallons.
The primary market is rural accounts.
New terminals will be designed with vapor
recovery equipment
17,378 tons per year
Bottom or submerge fill and vapor recovery
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized credit (statewide)
Price
Energy
Productivity
Employment
Market structure
Problem area
VOC emissions after control from
terminal operations only
Cost effectiveness of control
Discussion
$15.3 million
$1.494 million (approximately 0.1 percent of
value of shipments)
No change in price
Assuming full recovery of gasoline from
terminal emissions only—net savings of
106,830 barrels annually from terminal
emissions
No major impact
No direct impact
No direct impact
Gasoline credit from vapors from bulk gasoline
plants and gasoline service stations require
uniform RACT requirements throughout the state
1,738 tons per year
$32 annualized credit/annual ton of VOC con-
trolled from terminals, and emissions returned
from bulk gasoline plants and gasoline service
stations (i.e., 46,308 tons per year).
Source: Booz, Allen & Hamilton Inc.
-------
Current Situation
Number of potentially affected
facilities
Indication of relative importance
of industrial section to state
economy
Current industry technology trends
1977 VOC actual emissions
Industry preferred method of VOC
control to meet RACT guidelines
Affected Areas in Meeting
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity
Employment
Market structure
Problem area
VOC emission after control
Cost effectiveness
EXHIBIT 1-15
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS C
IMPLEMENTING RACT FOR
BULK GASOLINE PLANTS IN OHIO
Discussion
670
1977 industry sales were $693 million, wit
annual throughput of 1.631 billion gallons
The primary market is rural accounts
Only small percent of industry has new/
modernized plants
19,440 tons per year
Top submerge or bottom fill and vapor
balancing (cost analysis reflects top
submerge fill, not bottom fill)
Discussion
$10.1 million
$2.66 million (approximately 0.36
percent of value of shipment)
Assuming a "direct cost passthrough"
Industrywide—$.0014 per gallon incre
Small operations—$. 003 per
gallon increase
Assuming full recovery of gasoline—net
savings of 96,800 barrels annually
No major impact
No direct impact; however for plants closii
potential average of 4.6 jobs lost per
plant closed
Regulation could further concentrate a de-
clining industry. Many small bulk gas plai
today are marginal operations; further cosl
increases could result in some plant closir
Severe economic impact for small bulk plan;
operations. Regulation could cause further
market imbalances. Emission control effi-
ciency of cost effective alternatives has
not been fully demonstrated
5,26^ tons per year (27 percent of current
level)
$188 annualized cost/annual ton of VOC
reduction
Source: Booz, Allen & Hamilton, Inc.
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EXHIBIT 1-16
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR STORAGE OF PETROLEUM LIQUIDS
IN THE STATE OF OHIO
Current Situation
Number of potentially affected Six
storage tanks
Indication of relative importance
of industrial section to state
economy
Current industry technology trends
VOC emissions
Preferred method of VOC control to
meet RACT guidelines
Discussion
The annual throughput was an estimated
214 million gallons
Internal floating roof tanks utilizing
a double seal have been proven to be
more cost effective
1,217 tons per year
Single seal and internal floating roof
Affected Areas in Meeting RACT
Capital investment (statewide) $780,000
Annualized cost (statewide) $70,000
Price
Energy
Productivity
Employment
Market structure
Problem area
VOC emission after control
Cost effectiveness of control
No change in price anticipated
Assuming 90 percent reduction of
current VOC level, the net energy
savings represent an estimated savings
of 7,479 equivalent barrels of oil
annually
No major impact
No major impact
No major impact
No problems anticipated
122 tons per year
$64 annualized cost/annual ton
of VOC reduction
Source: Booz, Allen & Hamilton Inc.
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EXHIBIT 1-17
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR GASOLINE DISPENSING
FACILITIES IN THE STATE OF OHIO
Current Situation
Number of potentially affected
facilities
Indication of relative impor-
tance of industrial sector to
state economy
Current industry technology
trends
1977 VOC actual emissions
Discussion
22,600
Industry sales are $2.6 billion with a yearly
throughput of 5.116 billion gallons
Number of stations has been declining and throughput
per station has been increasing. By 1980, one-half
of facilities in U.S. will be totally self-service
45,506 tons per year from tank loading operation
Industry preferred method of VOC Submerged fill and vapor balance
control to meet RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost
(statewide)
Price
Energy
Productivity
Employment
Market structure
Problem area
VOC emissions after control
Cost effectiveness of control
Discussion
$21.46 million
$5.18t million (approximately 0.2 percent of the
value of gasoline sold)
Assuming a "direct cost pass-through"—less than
$0.002 per gallon increase
Assuming full recovery of gasoline—net savings of
181,000 barrels annually
No major impact
No major impact
Compliance requirements may accelerate the industry
trend towards high throughput stations (i.e., mar-
ginal operations may opt to stop operations)
Older facilities face higher retrofit costs—potential
concerns are dislocations during installation
18,983 tons per year from tank loading operation tank
breathing, vehicle refueling and spillage
$195 annualized cost/annual ton of VOC reduction
Source; fiooz, Allen & Hamilton Inc.
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EXHIBIT 1-18
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTATING RACT FOR USE OF CUTBACK ASPHALT
IN THE STATE OF OHIO
Current Situation
Use potentially affected
Indication of relative importance
of industrial section to state
economy
Current industry technology trends
1977 VOC actual emissions
Industry preferred method of VOC
control to meet RACT guidelines
Discussion
In 1977, estimated use of cutback asphalt was
265,000 tons*
1977 sales of cutback asphalt were estimated
to be $24.3 million
Nationally, use of cutback asphalt has been
declining
53,100 tons annually
Replace with asphalt emulsions
Affected Areas in Meeting RACT
Capital investment (statewide)
Annjalized cost (statewide)
Price
Energy
Productivity
Employment
Market structure
Problem area
VOC emission after control
Cost effectiveness of control
Discussion
$0.2 million
No change in paving costs are expected
No change in pavings costs are expected
No major impact to the user*5
No major impact
No major impact
No major impact
Winter paving
Short range supply of asphalt emulsions
Net VOC emission reduction is estimated to be
up to a maximum of 53,100 tons annually0
$0 annualized cost/annual ton of VOC reduction
a. All of this use may not be affected by the regulations because of likely exemptions.
b. If all cutback asphalt were replaced with emulsions, up to 530,000 equivalent taxiwis
of oil savings might accrue to the manufacturer, not user. This is based on the
difference in total ene.-gy associated with manufactuiing, processing and laying of
cutback asphalt (50,200 BTU p«r gallon) and emulsions (2,830 BTU p«r gallon).
One ton of cutback asphalt or «nulsion contains 256 gallons and one barrel of
oil contains 6.05 million BTUs.
c. Based on replacing all cutback asphalt with emulsions.
Source: Booz Allen fc Hamilton Inc.
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2.0 INTRODUCTION AND APPROACH
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2.0 INTRODUCTION AND OVERALL STUDY APPROACH
This chapter presents an overview of the study's purpose,
scope, methodology and quality of estimates. This chapter
is divided into six sections:
Background
Purpose of the contract effort
Scope
Approach
Quality of estimates
Definitions of terms used.
The approach and quality of the estimates are discussed
in detail in the respective chapters dealing with the speci-
fic RACT industrial categories (Chapters 3 through 18).
2-1
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2.1 BACKGROUND
To reduce volatile organic compound (VOC) emissions from
stationary sources, the U.S. Environmental Protection Agency
(EPA) is developing a series of emission limitations based
on application of control technology. These regulations are
meant to guide the states in revising their State Implementa-
tion Plan (SIP) to achieve the mandated National Ambient Air
Quality Standards for oxidants. The Clean Air Act Amendments
of 1977 require that each state submit a SIP revision to EPA
by January 1, 1979 for approval by July 1, 1979.
Specifically, the EPA requires that the oxidant plan
submissions for major urban areas should contain regulations
to reflect the application of Reasonably Available Control
Technology (RACT) to stationary sources for which the EPA
has published guidelines. Recommended VOC limitations repre-
sentative of RACT have been prepared for the following indus-
trial categories.
Control Of Volatile Organic Emissions From Existing
Stationary Sources—Surface Coating Of:
Cans
Coils
Paper
Fabrics
Automobiles
Light-Duty Trucks
Metal Furniture
Insulation Of Magnet Wire
Large Appliances
Control Of Volatile Organic Emissions From Solvent
Metal Cleaning
Control Of Refinery Vacuum Producing Systems,
Wastewater Separators And Process Unit Turnarounds
Gasoline Marketing—Control Of:
Tank Truck Gasoline Loading Terminals
Volatile Organic Emissions From Bulk
Gasoline Plants
Volatile Organic Emissions From Storage
Of Petroleum Liquids In Fixed-Roof Tanks
Service Stations—Stage I
Control Of Volatile Organic Compounds From Use Of
Cutback Asphalt.
2-2
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Under the direction of Region V, the EPA commissioned Booz,
Allen and Hamilton Inc. (Booz, Allen) to determine the economic
impact of implementing RACT standards in four states:
Illinois
Michigan
Ohio
Wisconsin.
The assignment was initiated on June 1, 1978, and the
research stage of the project was completed over a three-month
to four-month period, depending on the individual state require-
ments. A report was issued for each of the four states being
studied.
2-3
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2.2 PURPOSE OF THE CONTRACT EFFORT
To determine the economic impact of implementing RACT
standards for industrial categories in four states (Illinois,
Michigan, Ohio and Wisconsin) of Region V of the U.S.
Environmental Protection Agency. These studies will be used
primarily to assist EPA and state decisions on achieving the
emission limitations of the RACT standards.
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2.3 SCOPE
The primary task of this project is to determine the costs
and impact of control to achieve RACT guideline limitations. The
impact must be addressed for each industry and for each state so
that the respective studies are applicable to individual state
regulations. Direct economic costs and benefits that can be
realized from RACT implementation shall be identified and quan-
tified. While secondary (social, energy and employment) impacts
are to be addressed, they are not to be the major emphasis in
the study. In summary, an economic impact will be analyzed for
each of the industry categories in each state and the economic
impact of the RACT guidelines will be aggregated statewide.
In Ohio, the economic impact is assessed for the following
fifteen RACT industrial categories:
Surface coating of cans
Surface coating of coils
Surface coating of paper
Surface coating of fabrics
Surface coating of automobiles and light
duty trucks
Surface coating of metal furniture
Surface coating for insulation of magnet wire
Surface coating of large appliances
Solvent metal cleaning
Refinery vacuum producing systems, wastewater
separators and process unit turnarounds
Bulk gasoline terminals
Bulk gasoline plants
Storage of petroleum liquids in fixed roof tanks
Service Stations—Stage I
Use of cutback asphalt.
In the determination of the economic impact of the RACT
guidelines, the following are the major study guidelines:
The emission limitations for each industrial
category were studied at the control level
established by the RACT guidelines. These are
presented in Exhibit 2-1, on the following page.
2-5
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Category
EXHIBIT 2-1(1)
U.S. Environmental Protection Agency
LISTING OF EMISSION LIMITATIONS THAT REPRESENT
THE PRESUMPTIVE NORM TO BE ACHIEVED THROUGH
APPLICATION OF RACT FOR FIFTEEN INDUSTRY CATEGORIES
RACT Guideline Emitsion Limitations8
Surface Coating Categories Based on
Low Organic Solvent Coatings (Ibs.
solvent per gallon of coating, minus
water)
Surface Coating Of:
Cans
. Sheet basecoat (exterior and interior)
Overvarnish
Two-piece can exterior (basecoat and overvarnish)
. Two and three-piece can interior body spray
Two-piece can exterior end (spray or rollcoat)
. Three-piece can side-seam spray
. End sealing compound
Coils
. Prime and topcoat or single coat
Paper
Fabrics and vinyl coating
. Fabric
. Vinyl
Automobiles and Light Duty Trucks
. Prime application, flashoff and oven
. Topcoat application, flashoff and oven
. Final repair application, flashoff and oven
Metal Furniture
. Prime and topcoat or single coat
Magnet Wire
Large appliance
. Prime, single or topcoat
Solvent Metal Cleaning
Cold cleaning
. Conveyorized degreaser
Open top degreaser
Petroleum Refinery Sources
. Vacuum producing systems
2.8
4.2
5.5
3.7
2.6
2.9
2.9
3.8
1.9
2.8
4.8
3.0
1.7
2.8
Provide cleaners with: cover; facility
to drain clean parts; additional free-
board; chiller or carbon absorber.
Follow suggested procedures to minimize
carryout.
Provide cleaners with: refrigerated chillers;
or carbon adsorption system; drying tunnel
or rotating basket; safety switches; covers.
Follow suggested procedures to minimize
carryout.
Provide cleaner with: safety switches;
powered cover; chiller; carbon absorber.
Follow suggested procedures to minimize
carryout.
No emissions of any noncondensible VOC
from condensers, hot wells or accumulators
to a firebox, incinerator or boiler.
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EXHIBIT 2-1(2)
U.S. Environmental Protection Agency
Category
RACT Guidelines Emission Limitations3
Wastewater separators
Process unit turnaround
Bulk Gasoline Terminals
Bulk Gasoline Plants
Storage of Petroleum Liquids in Fixed
Roof Tanks
Service Stations (Stage I)
Minimize emissions of VOC by providing
covers and seals on all separators and
forebays and following suggested operating
procedures to minimize emissions
Minimize emissions of VOC by depressurizatic
venting to vapor recovery, flare or firebox.
No emissions of VOC from a process unit
or vessel until it's internal pressure
is 136 kilo pascals (17.7 psia) or less
Equipment 'such as vapor control system
to prevent mass emissions of VOC from
control equipment to exceed 80 milligrams
per liter (4.7 grains per gallon) of gaso-
line loaded
Provide submerged filling and vapor bal-
ancing so that VOC emissions from control
equipment do not exceed 80 milligrams
per liter (4.7 grains per gallon) of
gasoline loaded
Provide single seal and internal floating
roof to all fixed roof storage vessels
with capacities greater than 150,000
liters (39,000 gal.) containing volatile
petroleum liquids for which true vapor
pressure is greater than 10.5 kilo
Pascals (1.52 psia)
Provide submerged fill and vapor balance
for any stationary storage tank located
at a gasoline dispensing facility
Use of Cutback Asphalt
The manufacture, mixing, storage, use
or application may be approved where:
long-life stockpile storage is necessary;
the use or application is an ambient tem-
perature less than 10°C (50°F) is necessary;
or it is to be used solely as a penetrating
prime coat
Note:An alternative scenario to the recommended RACT guidelines for surface coating
of automobiles is also studied. It assumes that requirements are modified
to meet specific technologies.
a. Annotated description of RACT guidelines
Souice; Regulatory Guidance for Control of Volatile Organic Compound Emissions from 15
Categories of Stationary Sources, U.S. Environmental Protection Agency, EPA-90512-
78-001, April 1978.
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The timing requirement for implementation of
controls to meet RACT emission limitations was
January 1, 1982.
All costs and emission data were presented
for 1977.
Emissions sources included were existing
stationary point sources in the applicable
industrial categories with VOC emissions greater
than 3 pounds in any hour or 15 pounds in any day.
The impact of each of the RACT guidelines
was studied statewide (i.e., attainment areas,
nonclassified areas and other areas that
might not be regulated to the guidelines
stated above are included in this analysis).
The following volatile organic compounds were
exempted:
Methane
Ethane
Trichlorotriflorethane (Freon 113)
1,1,1-trichloroethane (methyl chloroform).!
The cost of compliance was determined from the
current level of control, (i.e. if an affected
facility currently had an incinerator in place,
the cost of compliance and resulting VOC emission
reduction are not included in this analysis.)
iThe exemption status of methyl chloroform under these
guidelines may be subject to change.
2-fi
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2.4 APPROACH
This section describes the overall approach and methodology
applied in this assignment. In general, the approach varied
for each state and also for each industrial category studied.
This section specifically describes the overall approach that
was applied for the state of Ohio. The methodology applied
to determine the economic impact for each of the fifteen RACT
industrial categories in Ohio is described in further
detail in the first section of each chapter dealing with the
specific RACT category.
There are five parts to this section to describe the
approach for determining estimates of:
Industry statistics
VOC emissions
Process descriptions
Cost of controlling VOC emissions
Comparison of direct cost with Selected Direct
Economic Indicators.
2.4.1 Industry Statistics
The assembly of economic and statistical data for each
industrial category was an important element in establishing
the data base that was used for projection and evaluation of
the emissions impact. Some of the major variables for each
industrial category were:
Number of manufacturers
Number of employees
Value of shipments
Number of units manufactured
Capital expenditures
Energy consumption
Productivity indices
Current economics (financial) status
Industry concentration
Business patterns (small vs. large; downstream integration)
Age distribution of facilities
Future trends and developments.
Some of the industrial categories studied cover a large
number of potentially affected facilities. For these cate-
gories, industry statistical data were collected by applying a
categorical approach ra :her than by attempting to identify all
the individual firms likely to be affected. The industrial
categories studied by this approach included:
Solvent metal cleaning
Bulk gasoline plants
Storage of petroleum liquids in fixed roof tanks.
2-7
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For these industrial categories, secondary data sources
and nonconfidential Booz, Allen files served as the primary
resources for the data base. Industry and association
interviews were then conducted to complete, refine and
validate the industry statistical data base.
For the eight surface coating RACT industry categories
studied (cans, coils, paper, fabrics, automobiles and light
duty trucks, metal furniture, magnet wire and large appliances)
the number of facilities potentially affected was in a manageable
range (generally less than 30 facilities per RACT industrial
category); therefore, a more deliberate approach was applied:
As a first step, the facilities potentially af-
fected by the RACT guidelines were identified from
secondary data sources.
This compiled list was then corre-
lated to identify the facilities
potentially affected but not listed as VOC
emitters in the Ohio emission data.
The Booz, Allen study team then performed
telephone interviews with a sampling of the
facilities identified where there was doubt
concerning inclusion. (For industrial
categories where only a few facilities were
identified, such as coil coating, all the
potentially affected facilities were contacted.)
Industry category statistical data were compiled
using secondary sources such as:
Department of Commerce
Census of Manufactures
Trade associations
Bureau of Labor Statistics
- National Technical Information Services.
The industry statistical data were refined by two
mechanisms:
Assessing the statistical data for reason-
ableness in comparison to the list of po-
tentially affected facilities
Using industry and association interviews for
completion and validation.
2-8
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2.4.2 VOC Emissions
An approach to make maximum utilization of the existing
Ohio emission inventory was explored.
State EPA representatives were interviewed to
determine the completeness and validity of emis-
sion data available for each RACT industrial
category. It was determined that:
VOC emission data for major industrial
sources appeared to be missing a signifi-
cant number of potentially affected facili-
ties.
The emission inventory did not provide
relevant data that could be utilized
for economic evaluation, i.e., air flow
rate, type of process, the input and
emission factors. That data had to be
estimated from industry interviews.
The data base would not provide a baseline
for economic impact analysis.
Therefore, a project task was established by the
Ohio EPA to collect emission data for the
surface coating industrial categories. These
RACT industrial categories were:
Cans
Coils
Fabrics
Paper
Automobiles
Metal furniture
Large appliances
- Magnet wire
- Fixed roof tanks.
For some of these RACT categories, Ohio could
not complete the updating of the emission in-
ventory in a timely fashion and Booz, Allen had
to estimate the emissions from these categories
by utilizing other techniaues. For instance,
some emission estimates were based solely on in-
dustry interviews, such as the automobile RACT
category.
2-9
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For the other RACT categories to be studied/ the
emissions were estimated by applying relevant
factors (VOC emissions per facility, throughput,
etc.) that had been developed by EPA studies.
Although this categorical approach cannot be
validated to the degree of a point source by point
source approach, the emissions can be reasonably
estimated on a statewide basis because of the
large number of sources in each RACT industrial
category. Emissions were estimated by this
approach for the following RACT industrial categories;
Bulk gasoline plants
Bulk gasoline terminals
Solvent metal cleaning
Service stations
Cutback asphalt
Miscellaneous refinery sources.
The emission estimates for each of the fifteen RACT
industrial categories studied were refined during
industry interviews.
2.4.3 Process Descriptions
For each of the industrial categories, the basic
technology and emission data were reviewed and summarized
concisely for subsequent evaluation of engineering alter-
natives. In this task, the RACT documents that had been
prepared for each industrial category and other air pol-
lution control engineering studies served as the basis for
defining technological practice. Additional alternatives to
control that met the requirements of the RACT guidelines were
identified from literature search. The most likely control
alternatives were assessed and evaluated by:
Technical staff at Booz, Allen
Interviews with industry representatives
Interviews with EPA representatives
Interviews with equipment manufacturers.
2.4.4 Cost of Controlling VOC Emissions
The cost of control to meet the requirements of the
RACT guidelines had been presented in the RACT documents,
other technical EPA studies and trade journal technical docu-
ments and by industry representatives. The approach applied
in developing capital and annualized cost estimates was to:
Utilize available secondary source information as
the primary data source.
Validate the control alternatives industry is
likely to apply.
Calibrate these cost estimates provided in tech-
nical documents.
2-10
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It was not within the purpose or the scope of this
project to provide detailed engineering analyses to estimate
the cost of compliance.
Cost data presented within the body of the report were
standardized in the following manner:
All cost figures are presented for a base year,
1977.
Capital cost figures represent installed equipment
cost including:
Engineering
Design
Materials
Equipment
Construction.
The capital cost estimates do not account for costs
such as:
Clean-up of equipment
Lost sales during equipment downtime
Equipment startup and testing
Initial provisions (spare parts).
Capital related annual costs are estimated at 25
percent of the total capital cost per year (unless
explicitly stated otherwise). The estimation pro-
cedure applied was built up from the following factors
Capital recovery factor for interest and
depreciation of 16.3 percent, based on a
10 percent interest rate and 10 year life
of equipment.
Maintenance--4 to 5 percent
Taxes and insurance—4 percent.
The capital-related annual costs do not account
for investment costs in terms of return on invest-
ment parameters (i.e., the "opportunity cost" of
money is not included).
Annual operating costs of compliance with the
RACT guidelines were estimated for each of the
control alternatives studied. The annual oper-
ating costs included were:
Direct labor
Raw material costs (or savings)
2-11
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Energy
Product recovery cost (or savings)
Other types of costs, not included in this analysis,
involve compliance costs, such as:
Demonstration of control equipment
efficiency
Supervisory or management time
Cost of labor or downtime during
installation and startup.
The annualized cost is the summation of the
annual operating costs and the capital related
annual costs.
2.4.5 Comparison of Direct Cost with Selected Direct
Economic Indicators
In each of the industrial categories studied, after the
costs (or savings) of compliance had been determined, these
costs were compared with selected economic indicators. This
comparison was performed to gain a perspective on the com-
pliance costs rather than to estimate price changes or other
secondary effects of the regulation. Presented below are
typical comparisons of direct costs with indicators that are
presented in this study.
Annualized cost in relation to current price-To
gain a perspective on the compliance cost in re-
lation to current prices of the manufactured items
at the potentially affected facilities the annu-
alized cost is presented in terms of a price in-
crease assuming a direct pass-through of costs to
the marketplace.
This analysis was based on the average cost
change (including those facilities that may
have little or no economic impact associated
with meeting the proposed standards) divided
by the average unit price of goods manufac-
tured.
For this reason as well as many others (that
might be addressed in a rigorous input-output
study to estimate eventual price increase),
this analysis should not be interpreted as
forecast of price changes due to the proposed
standards.
2-12
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Annualized costs as a percent of current value of
shipment-The annualized costs applied are for all
those facilities potentially affected divided by
the estimated value of shipments for the statewide
industrial category (i.e., including those facili-
ties which currently may meet the proposed stand-
ard) . This approach tends to understate the effect
to those specific firms requiring additional ex-
penses to meet the proposed standard. Therefore,
when available, the compliance cost is also pre-
sented as a percent of the value of shipments for
only those firms not currently meeting the pro-
posed regulation.
Capital investment as a percent of current annual
capital appropriations—Estimated statewide capital
investment for the potentially affected facilities
divided by the estimated capital appropriations for
the industry affected as a whole in the state (in-
cluding those facilities that may not require any
capital investment to meet the proposed standard.)
2.5 QUALITY OF ESTIMATES
The quality of the estimates that are presented in this
report can be judged by evaluating the basis for estimates
of the individual study components. In each of the chapters
that deal with the development of estimated compliance cost,
the sources of information are fully documented. In addition,
the study team has categorically ranked the overall data qual-
ity of the major sources and, therefore, of the outcomes. These
data quality estimates were ranked into three categories:
High quality ("hard data")—study inputs
with variation of not more than + 25 per-
cent
Medium quality ("extrapolated data")—study
inputs with variation of +.25 to + 75 percent
Low quality ("rough data")—study inputs with
variation of +_ 50 to + 150 percent.
Each of these data! quality estimates are presented in
the individual chapters. The overall quality ranking of the
study inputs for each HACT industrial category was generally
in the medium quality range.
2-13
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2.6 DEFINITIONS OF TERMS
Listed below are definitions of terms that are used
in the body of the report:
Capture system—the equipment (including
hoods, ducts, fans, etc.) used to contain,
capture, or transport a pollutant to a
control device.
Coating applicator—an apparatus used to
apply a surface coating.
Coating line—one or more apparatuses or
operations which include a coating appli-
cator, flash-off area and oven, wherein
a surface coating is applied, dried and/
or cured.
Control device—equipment (incinerator,
adsorber or the like) used to destroy
or remove air pollutant(s) prior to dis-
charge to the ambient air.
Continuous vapor control system—a vapor
control system that treats vapors displaced
from tanks during filling on a demand basis
without intermediate accumulation.
Direct cost pass-through—the relationship
of the direct annualized compliance cost
(increase or decrease) to meet the RACT
limitations in terms of units produced
(costs per unit value of manufactured goods.)
Emission—the release or discharge, whether
directly or indirectly, of any air pollutant
into the ambient air from any source.
Facility—any building, structure, installa-
tion, activity or combination thereof which
contains a stationary source of air contam-
inants .
Flashoff area—the space between the appli-
cation area and the oven.
Hydrocarbon—any organic compound of carbon
and hydrogen only.
2-14
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Incinerator—a combustion apparatus designed
for high temperature operation in which solid,
semisolid, liquid or gaseous combustible
wastes are ignited and burned efficiently
and from which the solid and gaseous residues
contain little or no combustible material.
Intermittent vapor control system—a vapor
control system that employs an intermediate
vapor holder to accumulate vapors displaced
from tanks during filling. The control
device treats the accumulated vapors only
during automatically controlled cycles.
Loading rack—an aggregation or combination
of gasoline loading equipment arranged so
that all loading outlets in the combination
can be connected to a tank truck or trailer
parked in a specified loading space.
Organic material—a chemical compound of
carbon excluding carbon monoxide, carbon
dioxide, carbonic acid, metallic carbides
or carbonates, and ammonium carbonate.
Oven—a chamber within which heat is used
to bake, cure, polymerize and/or dry a
surface coating.
Prime coat—the first film of coating
applied in a two-coat operation.
Reasonably available control technology
(RACT)—the lowest emission limit as defined
by EPA that a particular source is capable
of meeting by the application of control
technology that is reasonably available
considering technological and economic
feasibility. It may require technology
that has been applied to similar, but not
necessarily identical, source categories.
Reid vapor pressure—the absolute vapor
pressure of volatile crude oil and volatile
nonviscous petroleum liquids, except liqui-
fied petroleum gases, &s determined by
American Society for Testing and Materials,
Part 17, 1973, D-323-72 (Reapproved 1977).
Shutdown—the cessation of operation of
a facility or emission control equipment.
2-15
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Solvent—organic material which is
liquid at standard conditions and which is
used as a dissolver, viscosity reducer or
cleaning agent.
Standard conditions—a temperature of 20°C
(68°F) and pressure of 760 millimeters of
mercury (29.92 inches of mercury).
Startup—the setting in operation of a source
or emission control equipment.
Stationary source—any article, machine,
process equipment or other contrivance from
which air pollutants emanate or are emitted,
either directly or indirectly, from a fixed
location.
Topcoat—the final film of coating applied
in a multiple coat operation.
True vapor pressure—the equilibrium partial
pressure exerted by a petroleum liquid as
determined in accordance with methods described
in American Petroleum Institute Bulletin 2517,
"Evaporation Loss from Floating Roof Tanks,"
1962.
Equivalent barrel of oil—energy demand is
converted into barrels of oil at the conver-
sion rate of 6,000,000 BTU per barrel of
oil.
Vapor collection system—a vapor transport
system which uses direct displacement by the
liquid loaded to force vapors from the tank
into a vapor control system.
Vapor control system—a system that prevents
release to the atmosphere of at least 90
percent by weight of organic compounds in
the vapors displaced from a tank during
the transfer of gasoline.
Volatile organic compound (VOC)—any compound
of carbon that has a vapor pressure greater
than 0.1 millimeters of mercury at standard
conditions excluding carbon monoxide, carbon
dioxide, carbonic acid, metallic carbides
or carbonates and ammonium carbonate.
2-16
-------
3.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
CAN MANUFACTURING PLANTS
IN THE STATE OF OHIO
-------
-------
3.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
CAN MANUFACTURING PLANTS
IN THE STATE OF OHIO
This chapter presents a detailed economic analysis of
implementing RACT controls for can manufacturing plants in the
State of Ohio. The chapter is divided into five sections:
Specific methodology and quality of estimates
Industry statistics
The technical situation in the industry
Cost and VOC reduction benefit evaluations for
the most likely RACT alternatives
Direct economic implications.
Each section presents detailed data and findings based
on analyses of the RACT guidelines, previous studies of can
manufacturing plants, interviews and analysis.
3.1 SPECIFIC METHODOLOGY AND QUALITY OF ESTIMATES
This section describes the methodology for determining
estimates of:
Industry statistics
VOC emissions
Processes for controlling VOC emissions
Cost of controlling VOC emissions
Economic impact of emission control
for can manufacturing plants in Ohio.
The quality of the estimates is described in detail in
the latter part of this section.
3-1
-------
3.1.1 Industry Statistics
Industry statistics on can manufacturing plants were
obtained from several sources. All data were converted to
a base year 1977 based on specific scaling factors. The
number of establishments for 1977 was based on a review of
the 1976 County Business Patterns and supplemented by inter-
views with selected can manufacturing corporations. The
number of employees was obtained from the 1976 County Business
Patterns and refined based on information supplied by the Can
Manufacturers Institute.
The number of cans manufactured was based upon scaling up
1972 published data to 1977.
The 1972 Census of Manufactures reported a total
U.S. volume of shipments of 78 billion units with
a value of $4.5 billion.
The value of shipments in the East North Central
Region was reported as:
Value of Percent of
State Shipments, 1972 U.S. Total
($ Million)
Ohio 236.5 5.24
Illinois 465.9 10.33
Michigan 74.0 1.64
Wisconsin Withheld! 7.76
Indiana Withheld
TOTAL 1,126.5 24.97
The value of shipments for 1976 in the U.S. was reported
to be $6,357 million. Based upon the same ratio of
state production to total U.S. production as in 1972,
the 1976 production in the states was estimated to
have been:
1976 Value of Units Produced
State Shipments 1976
($ Million) (Billion)
Ohio 333.3 4.4
Illinois 656.7 8.6
Michigan 104.3 1.4
Wisconsin 304.8 4.0
3-2
-------
For 1977, the U.S. Industrial Outlook, 1977 indicates
that the increase in production is 3 percent, with a
10 percent increase in value of shipments. This factor
was used to estimate 1977 can production and the value
of shipments.
The product mix of the types of cans currently produced
in the state was estimated using the national average
and refined using data obtained from the Ohio emis-
sions inventory and from interviews.
3.1.2 VOC Emissions
The data for determining the current level of emissions
was estimated by the study team because the Ohio emissions
inventory was incomplete at the time this study was undertaken.
The estimate was based upon the Wisconsin Point Source Emission
inventory and the relative can production by each can type (two-
piece beer and beverage, three-piece beer and beverage, three-
piece food) in the states of Ohio and Wisconsin. Most can manu-
facturing plants employ similar technology to produce the same
product, so that there is a good correlation between can produc-
tion and coating consumption once the type of can manufactured
is known.
3.1.3 Processes for Controlling VOC Emissions
Processes for controlling VOC emissions for can manufacturing
plants are described in Control of Volatile Organic Emissions
from Stationary Sources, EPA-450/2-77-008.The data provide
the alternatives available for controlling VOC emissions from
can manufacturing plants. Several studies of VOC emission con-
trol were also analyzed in detail, and the industry trade
association and can manufacturers were interviewed to ascertain
the most likely types of control techniques to be used in can manu-
facturing plants in Ohio. The specific studies analyzed were
Air Pollution Control Engineering and Cost Study of General
Surface Coating Industry, Second Interim Report, Springborn
Laboratories, and informational literature supplied by the Can
Manufacturers Institute to the state EPA programs.
The alternative approaches to VOC control as presented in
the RACT document were supplemented by several other approaches.
The approaches were arrayed and the emissions to be reduced from
using each type of control were determined. This scheme forms the
basis of the cost analysis, for which the methodology is described
in the following paragraphs.
3-3
-------
3.1.4 Cost of Control Approaches and the Resulting Reduction
in VOCs
The costs of VOC control approaches were developed by:
Separating the manufacturing process into discrete
coating operations:
- By can manufacturing technology
By type of can manufactured; i.e., beer vs. food
Determining the alternative approaches to control
likely to be used for each type of coating operation
Estimating installed capital costs for each
approach
Estimating the probable use of each approach to
control considering:
Installed capital cost
Annualized operating cost
Incremental costs for materials and energy
Technical feasibility by 1981
(This estimate was based on discussions with
knowledgable individuals in the can manufacturing
industry.)
Aggregating costs to the total industry in Ohio.
Costs were determined from analysis of the previously
mentioned studies:
Control of Volatile Organic Emissions from
Stationary Sources, EPA-450/2-77-008
Air Pollution Control Engineering and Cost
Study of General Surface Coating Industry,
Second Interim Report, Springborn Laboratories
and from informational data supplied by the Can Manufacturers
Institute and from interviews with major can manufacturing
companies.
The cost of compliance and the expected emission reduction
in Ohio were developed based on can industry operational data
and refined using interviews with can manufacturers. Based
upon the assessment of the degree and types of controls currently
in place, the cost of VOC emission control and the net reduction
in emissions were estimated.
3-4
-------
3.1.5 Economic Impact
The economic impact was analyzed by considering the lead
time requirements needed to implement RACT, assessing the
feasibility of instituting RACT controls in terms of available
technology, comparing the direct costs of RACT control to
various state economic indicators and assessing the secondary
impacts on market structure, employment and productivity from
implementing RACT controls in Ohio.
3.1.6 Quality of Estimates
Several sources of information were utilized in assessing
the emissions, cost and economic impact of implementing RACT
controls on can manufacturing plants in Ohio. A rating
scheme is presented in this section to indicate the quality of
the data available for use in this study. A rating of "A"
indicates hard data, "B" indicates data were extrapolated from
hard data and "C" indicates data were estimated based on inter-
views, analyses of previous studies and best engineering judg-
ment. Exhibit 3-1, on the following page, rates each study
output and overall quality of the data. However, emission
data are only as good as the assessment of the 1977 technical
approach to emission controls, particularly the degree of
usage of "exempt" solvents and the percentage of solvent
that is actually incinerated.
3-5
-------
EXHIBIT 3-1
U.S. Environmental Protection Agency
DATA QUALITY
A B C
Hard Extrapolated Estimated
Study Outputs Data Data Data
Industry statistics X
Emissions X
Cost of emissions
control
Statewide costs of
emissions
Overall quality of X
data
Source: Booz, Allen & Hamilton Inc.
-------
3.2 INDUSTRY STATISTICS
Industry characteristics, statistics and business trends
for can manufacturing plants in Ohio are presented in this
section. The source of industry statistics was the Ohio
emissions inventory, The Can Manufacturer's Insitute and the
individual can manufacturing companies. Data in this section
form the basis for assessing the impact of implementing RACT
to VOC emissions from can manufacturing plants in the state.
3.2.1 Size of the Industry
There are approximately 23 major can manufacturing facilities
in Ohio. The Columbus area is becoming the most important
can manufacturing center in the state.
Exhibit 3-2, on the following page, presents a
summary of can manufacturing facilities in the
state.
Approximately 4.6 billion cans were shipped in 1977.
The value of industry shipments in 1977 is estimated
at about $360 million.
The estimated number of employees in 1977 was 4,100. Can industry
capital investments in Ohio are estimated to have been $15
million to $30 million in 1977. (Based upon an extrapolation
of 1972 data—which reported that 7.1 percent of total, industry
capital expenditures, were in Ohio—the total 1977 expenditures
would be about $15 million. Since Ohio's share of total industry
expenditures has not been determined, the $10 million to $20
million range was used.)
3.2.2 Comparison of the Industry to the State Economy
The Ohio can manufacturing industry employs 0.2 per-
cent of the state labor force, excluding government employees.
The state is one of the largest producers of cans in the nation.
3.2.3 Characterization of the Industry
The can industry is composed of independent and captive
manufacturers. Nationwide, about 70 percent of all cans are
produced by independent manufacturers and about 30 percent by
captive producers. The majority of captive can producers use
the cans to package canned food/soup and beer.
The independent can producers generally operate on a "job
shop" basis, producing cans for several customers on the same
production facilities. In addition to differences in can
size and shape, there are differences in coatings resulting
from:
3-6
-------
EXHIBIT 3-2 (1)
U.S. Environmental Protection Agency
LIST OF METAL CAN MANUFACTURING FACILITIES
POTENTIALLY AFFECTED BY RACT IN OHIO
Name of Firm
American Can Company*
Continental Can Company
Continental Can Company
National Can Company
National Can Company
National Can Company
National Can Company3
Heekin Can Company3
Metal Container Corp.3
(Anhausser Busch)
Crown Cork and Seal
Crown Cork and Seal
Ball Metal Container3
Buckeye Stamping Co.
Cambell Soup Company
Central States Can Company3
Location
Whitehouse
Columbus
Cincinatti (Bedford Hts.)
Marion
Warren
Archbold
Columbus (Obetz)
Cincinatti (Anderson)
Columbus
Cleveland
Perrysburg
Findlay
Columbus
Napoleoun
Massillon
Product
2-piece beer cans
3-piece beer and soft
drink assembly
3-piece beer and soft
drink cans
3-piece food cans
General purpose cans
assembly
Food can assembly
2-piece beer cans
3-piece beer and soft
drink cans
3-piece food cans
3-piece beer and soft
drink cans
3-piece food cans
2-piece beer cans
Notes
Steel cans
Assembly only
Sheet coating and sealing, assembly
The plant is a major coating facility
supplying coated atock to other plants
2 production lines
The plant is a major coating facility
supp ying coated atock to other plants
2 production lines; steel cans
3-piece beverage cans
-------
EXHIBIT 3-2 (2)
U.S. Environmental Protection Agency
Name of Firm
Davis Can
Libby McNeil and Libby
Owens Illinois
Pet Inc.
Robertson Can
Ross Labs
Sherwin Williams
Stolle Corporation
Location
Solon
Lime
Perrysburg
Byran
Springfield
Columbus
Hubbard
Sidney
Product
Notes
Paint cans
a. Emission data supplied by Ohio EPA.
Source: Booz, Allen & Hamilton Inc. assessment of data provided by the Ohio Environmental Protection Agency and
the Can Manufacturers Institute. Organizations on the Ohio EPA VOC--RACT listing that are totally or
primarily involved with the production of metal barrels, drums and pails (SIC 3412) have been excluded
from this inventory.
-------
The need to protect different products with vary-
ing characteristics from deterioration through
contact with the metal can
The decoration requirements of customers and
requirements for protection of the decoration.
Nationally, the can industry produces more than 600 dicfer-
ent shapes, types and sizes to package more than 2,500 products.
A relatively few can sizes and coating combinations employed for
packaging beverages and food represent about 80 percent of the
market. The approximate percentage of total can production
represented by the major groups follows.
Percent of
Type of Can Total Production
Beer and soft drink 54
Fruit and vegetable 18
Food cans in the category
that includes soup cans 8
Other 20
TOTAL 100
In Ohio, the can industry is focused on meeting the
needs of the brewing, soft drink and canning industries in
the state.
2.0 billion beer and soft drink cans were produced
using two-piece construction.
0.8 billion three-piece beer and soft drink cans
were produced.
1.8 billion food, general cans and aerosol cans
were produced almost entirely of three-piece
construction.
Of the 4.6 billion cans produced in Ohio in 1977, 2.8
billion (61 percent) were beer and soft drink cans with the
balance beer, food and general purpose cans.
The can industry in Ohio, as well as nationally, has
experienced rapid technological changes since 1970 caused by
the introduction of new can making technology—the two-piece
can. These changes in can manufacturing technology have
resulted in the closing of many can plants producing the
traditional three-piece product and replacing the capacity
3-7
-------
with two-piece cans. An above-average amount of two-piece
capacity has been installed in Ohio as compared to the other
states. There is evidence that the technological trend will
continue, so that by 1981 about 80 percent of the beer and
beverage cans and a relatively small but growing percentage
of other cans will be of two-piece construction.
3-8
-------
3.3 THE TECHNICAL SITUATION IN THE INDUSTRY
This section presents information on can manufacturing
operation, estimated VOC emissions, the extent of current
emission control and the likely alternatives which may be
used for controlling VOC emissions in Ohio.
3.3.1 Can Manufacturing Operations
The can industry produces cans using two fundamental
technologies, the traditional three-piece method and the
newer two-piece technology.
The three-piece can technology consists of two separate
operations: sheet coating and can fabrication (assembly). Sheet
coating and can assembly operations are frequently performed in
separate facilities. The major can manufacturers operate cen-
tralized facilties for the coating and decorating of flat sheets.
These centralized plants are often called "feeder plants." Sheets
are coated at a rate of about 2.5 base boxes per minute, which
is equivalent to approximately 1,250 twelve-ounce cans per
minute. The specific operations in three-piece can manufacture
are summarized below.
Sheets of metal are coated and decorated with
28 or 35 can bodies (outs). This is accomplished
in two steps.
The sheets are base coated on the interior
side and then passed through a wicket oven.
Food cans, as well as some beer and soft drink
cans, are given an exterior base coat.
In the case of beer and soft drink cans,
the base coated sheets are decorated (printed),
over coated with varnish and then cured in a
smaller wicket oven.
Exhibits 3-3 and 3-4, on the following page,
present flow diagrams of the base coating
and decorating operations.
3-9
-------
EXHIBIT 3-3
U.S. Environmental Protection Agency
SHEET BASE COATING OPERATION
•MUM
Source; U.S. Environmental Protection Agency
-------
EXHIBIT 3-4
U.S. Environmental Protection Agency
SHEET PRINTING OPERATION
•MITIftAHl
•VfftVAMNM
CM1U
MClfftVU
II
Source; U.S. Environmental Protection Agency
-------
Can bodies are formed from the coated sheets.
The printed sheets are slit into individual
body blanks and fed into the "body maker."
The blank is rolled into a cylinder and
soldered, welded or cemented.
The seam is sprayed (striped) on the
inside and outside with an air dry lacquer
to protect the exposed metal. Sometimes
this is done only on the inside surfaces.
Can ends are formed from coated sheet stock and
fed to the end seamer where final fabrication is
completed.
Can ends are stamped from coated stock and
perimeter coated with synthetic rubber com-
pound gasketing.
Solvent-based compounds are air-dried and
water-based compounds are oven-dried.
The can is fabricated from the body and the end in an
"end sealer," leak tested and palletized for shipment.
Exhibit 3-5, on the following page, presents a schematic
of can end and three-piece can fabricating operations.
Two-piece cans are generally manufactured in an integrated
high-speed process capable of producing 600 or 800 cans
per minute.
Coil stock is formed into a shallow cup.
The cups are drawn and ironed into the form
of a can.
The cans are washed to remove the lubricant.
An exterior base coat is applied (if required)
by reverse roller coating and cured in a con-
tinuous oven.
The cans are printed and then coated with a
protective varnish. The coating is then baked
in an oven. Steel cans are sometimes given two
separate interior coatings.
3-10
-------
EXHIBIT 3-5
U.S. Environmental Protection Agency
CAN END, AND THREE-PIECE BEER AND BEVERAGE
CAN FABRICATING OPERA1J.ON
UMVtfllft
Source; U.S. Environmental Protection Agency
-------
The cans are necked, flanged and tested.
The interior of the cans are spray coated
and baked in the oven.
An exterior end spray coating is applied:
For aluminum cans to prevent blocking
For steel cans to prevent rusting.
Exhibit 3-6, on the following page, is a process
diagram of a two-piece can fabricating and coating
operation.
Two-piece cans are largely made from aluminum.
- Virtually all aluminum cans are of two-piece
construction.
Aluminum lends itself to two-piece construction,
yet offers no advantage to warrant converting
three-piece can lines to aluminum.
Although there are a limited number of two-piece
steel can production facilities, two major plants
are located in Ohio:
American Can, Whitehouse
Metal Container Corp., Columbus .
3-11
-------
EXHIBIT 3-6
U.S. Environmental Protection Agency
TWO-PIECE ALUMINUM CAN FABRICATING AND COATING
OPERATION
MMCMffMf
•ASfCMTM
Mf f MM •••» SMIAV
II1IMMI IM iniAf
M1LCM1III
IIAH
fltflM
MCMIIAM
HMMIII
Source; U.S. Environmental Protection Agency
-------
3.3.2 Emissions and Current Controls
The can industry is moving toward products with inherently
lower VOC emissions during manufacture. Differences in the
manufacturing process between two-piece and three-piece cans
allow for a 50 percent to 60 percent reduction in emissions in
converting from a three-piece beer can to a two-piece beer can
decorated in a similar manner. This is caused by a greater
number of interior coating operations for three-piece cans, as
well as a tendency to eliminate certain exterior coatings on
two-piece beer and soft drink cans. The exhibits, on the
following pages, present the emissions from typical can coating
operations based upon average coating properties, can production
rates and annual hours of operation. They present data for
conventional systems, as well as for low solvent systems. It is
important to note that, in most instances, can manufacturing
does not require all the coatings.
Exhibit 3-7 presents VOCs resulting from coating
operations used in the manufacture of two-piece
cans.
Exhibit 3-8 presents VOCs resulting from sheet
coating operations used in the manufacture of
three-piece cans.
Exhibit 3-9 presents VOCs resulting from typical
three-piece can assembly operations.
The emissions from the industry, developed through the
analysis of typical coating operations and the assumed product
mix, total an uncontrolled level of 4,600 tons. Emissions from
producing typical products are included in Exhibits 3-12 and 3-13
under the 1978 base case alternatives.
Can Type Quantity VOC Total VOC
(million) (tons/million) (tons)
2-piece beer and 2,000 0.67 1,340
soft drink
3-piece beer and 800 1.79 1,432
drink
3-piece food and 1,800 0.99 1,782
other
TOTAL 4,554
3-12
-------
EXHIBIT 3-7 (1)
U.S. Environmental Protection Agency
EMISSIONS FOR TYPICAL COATING
OPERATION USED IN THE MANUFACTURE
OF THO-PIBCE CAMS
Coating Properties
Operation,
Organic Systems
Print and varnish
Size and print
White base coat and
print
Interior body spray
End coating Al
End coating steel
Low Solvent Systeas
Haterbome
Print and varnish
Size and print
White base coat and
print
Interior body spray
End coating Al
End coating steel
UV Cure High Solids
Print and varnish''
Organic
Density
(Ib./gal.)
8.0
8.0
11.0
7.9
8.0
8.0
8.5
8.5
11.7
8.55
8.5
8.5
8.0
Solids
(wt. %)
45
40
62.5
26
45
45
35
30
62
20
35
35
95
Solvent
(wt. %)
100
100
100
100
100
100
20
20
20
20
20
20
100
(Ib./gal.)
4.40
4.80
4.13
5.85
4.40
4.40
1.11
1.19
0.89
1.37
1.11
1.11
0.40
Water
(gal ./gal.
coating)
0
0
0
0
0
0
0.53
0.57
0.43
0.66
0.53
0.53
0
VOC
( Ib . solvent/
gal. less water)
4.40
4.80
4.13
5.85
4.40
4.40
2.36
2.76
1.55
3.99
2.36
2.36
0.40
VOC
(Ib. solvent/
gal . incl . water)
4.40
4.80
4.13
5.85
4.40
4.40
1.11
1.19
0.88
1.36
1.11
1.11
0.40
Yield
(1000 can/
gal.)
12
20
9
6*
200
40
11
17
a
5«
200
40
25
-------
EXHIBIT 3-7 (2)
U.S. Environmental Protection Agency
Operation
Production
(cans/min. )
Organic Systems
Print and varnish
Size and print
White base coat
and print
Interior body
spray
End coating Ai
End coating steel
Low Solvent Systems
Waterborne
Print and varnish
Size and print
White base coat
and print
Interior body
spray
End coating Al
End coating steel
UV Cured High solids
Print and varnish b
650
650
650
650
650
650
650
650
650
650
650
650
650
(Hillion
cana/yr.)
253
253
253
253
253
253
253
253
253
253
253
253
253
.5
.5
.5
.5
.5
.5
.5
.5
.5
.5
.5
.5
.5
a. Assuming 75 percent beer cans, all givan a
b. Booz, Allen & Hamilton Inc. estimate based
document 450/2-77-008
Source: Booz, Allen & Hamilton Inc. estimates
(gal.
3.
1.
4.
6.
Coating Consumed
/hr. )
25
95
33
50
0.20
0.
3.
2.
4.
7.
0.
0.
1.
98
55
29
88
80
20
98
56
(1000 gal./yr.)
21.
12.
28.
42.
1.
6.
23.
14.
31.
50.
1.
6.
10.
1
7
1
3
3
4
1
9
7
7
3
4
1
VOC
(Ib./hr.) (tons/yr.)
14.3
9.4
17.8
38.0
0.9
4.3
3.9
2.7
4.3
10.6
0.2
1.1
0.6
46
30
57
123
2
.5
.6
.9
.5
.9
14.0
12
8
14
34
0
3
2
.7
.8
.0
.5
.7
.6
.0
(Ib. /Billion cans)
364
241
457
974
23
110
100
69
110
272
6
28
15
single coat, and 25 percent soft drink cans, given a double coating
on data supplied by CMI, individual can manufacturers and the EPA
based on data supplied by Can Manufacturers Institute and interviews
with can companies.
-------
EXHIBIT 3-8 (1)
U.S. Environmental Protection Agency
COATING AND PRINTING OPERATIONS USED IN
THE MANUFACTURE OF THREE-PIECE CANS
(Sheet Coating Operation)
Operation
Conventional Organics Systems
Sizing and print
Inside basecoat
Outside white and print
Outside sheet printing and
varnish
8.0
8. OS
11.0
8.0
Coating Properties
Density
(Ib./gal.)
Solids
(wt %)
Organic
Solvent
(wt %) (Ib./gal.)
Water
(gal/gal
coating)
voc
(Ib. solvent/
gal. less
water)
VOC
(Ib. solvent/
gal . including
water)
40
40
62.5
45
100
100
100
100
4.80
4.83
4.13
4.40
0
0
0
0
4.80
4.83
4.13
4.40
4.80
4.83
4.13
4.40
Dry Coating Thickness
(_Mg
4inZ)
5
20
40
10
( Ib.
basebox)
0.086
0.346
0.692
0.172
Low Solvent Systems
Sizing (waterborne)
Inside basecoat
High solids
Waterborne
Outside white
High solids
Waterborne
Outside sheet print and
varnish (waterborne)
8.5
8.0
8.8
12.0
11.7
8.5
30
20
1.19
0.57
2.76
80
40
80
62
35
100
20
100
20
20
1.60
1.06
2.40
0.89
1.11
0
0.51
0
0.43
0.53
1.60
2.15
2.40
1.55
2.36
1.19
60
05
2.40
0.88
1.11
20
20
40
40
10
0.086
0.346
0.346
0.692
0.692
0.172
-------
EXHIBIT 3-8 (2)
U.S. Environmental Protection Agency
Operation
Conventional Organics Systems
Sizing and print
Inside basecoat
Outside white and print
Outside sheet printing and varnish
Production
(base box
hr.)
150
150
150
150
(1000 base boxesa
year)
240
240
240
240
(gallon
basebox)
.027
.107
.100
.048
Coating Consumption
VOC
(gallon
hour)
4.1
16.1
15.0
7.2
(1000 gal.
year)
6.6
25.7
24.0
11.5
(Ib.
hour)
19.7
77.8
62.0
31.7
(tons
y«»r)
15.8
62.2
49.6
Ibs
1000 base boxes)
130
517
413
211
Low Solvent Systems
Sizing (waterborne)
Inside basecoat
High solids
Waterborne
Outside white
High solids
Waterborne
Outside sheet print and varnish
(waterborne)
150
150
150
150
150
150
240
240
240
240
240
240
.034
5.1
8.1
054
098
072
095
057
8.1
14.7
10.8
14.3
8.6
13.0
23.5
17.3
22.9
13.8
6.1
4.9
41
13.0
15.4
25.9
12.6
9.5
10.4
12.3
20.7
10.1
7.6
87
103
172
841
63
a. Assuming 1,600 hours per year of operation.
Source: Booz, Allen & Hamilton Inc. estimates based on data supplied by CHI and individual can companies.
-------
EXHIBIT 3-9 (1)
U.S. Environmental Protection Agency
EMISSIONS OF TYPICAL COATING
OPERATIONS USED IN THREE-PIECE
CAN ASSEMBLY
Operation Density
(Ib./gal.)
Organic Systems
Interior body spray
(beer)
Inside stripe
(beer & bev.)
(food)
Outside stripe
(beer)
End sealing compound
(beer & bev.)
(food)
Low Solvent Systems (water
Interior body spray
(beer)
Inside stripe
(beer & bev.)
(food)
Outside stirpe
(beer)
End sealing compound
(beer & bev.)a
(food)a
7.9
8.0
8.0
8.0
7.1
7.1
borne)
8. 55
8.55
8.55
8.55
9.00
9.00
Solids
(wt. %)
26
13.5
13.5
13.5
39
39
20
36
36
36
40
40
Organic
Solvent
(wt. %) (Ib./gal.)
100
100
100
100
100
100
20
20
20
20
3
3
5.85
6.9
6.9
6.9
4.3
4.3
1.37
1.09
1.09
1.09
0.16
0.16
Water
(gal. /gal.
coating)
0
0
0
0
0
0
0.66
0.53
0.53
0.53
0.63
0.63
VOC
(Ib. solvent/
gal. less water)
5.85
6.92
6.92
6.92
4.33
4.33
3.99
2.30
2.30
2.30
0.43
0.43
VOC
(Ib. solvent/
gal. incl. water)
5.85
6.92
6.92
6.92
4.33
4.33
1.36
1.08
1.08
1.08
0.16
0.16
Yield
(1000 can/
gal.)
4
70
70
50
10
10
5
70
70
45
10
10
-------
EXHIBIT 3-9 (2)
U.S. Environmental Protection Agency
Operation
Production13
Coating Consumed
(cans/Bin.)
Organic Systems
Interior body 400
spray (beer)
Inside stripe
(beer C bev.) 400
(food) 400
Outside stripe 400
(beer)
End sealing
compound
(beer & bev.) 400
(food) 400
Low Solvent Systems
(Waterborne)
Interior body 400
spray (beer)
Inside stripe
(beer f. bev.) 400
(food) 400
Outside stripe 400
(beer)
End sealing
compound
(beer c bev.)a 400
(food)" 400
(Million
cans/yr.)
120
120
72
120
120
72
120
120
72
120
120
72
(gal./hr.)
6.00
0. 30
0.30
0.48
2.40
2.40
4.8
0.30
0.30
0.53
2.40
2.40
(1000 gal./yr.)
30.0
1.5
0.9
2.4
12.0
7.2
24.0
1.5
0.9
2.6
12.0
7.2
voc
(Ib./hr.)
35.1
2.1
2.1
3.3
10.4
10.4
6.5
0.3
0.3
0.6
0.4
0.4
(tons/yr. )
87.8
5.3
3.2
8.3
26.0
15.6
16.3
0.8
0.5
1.5
1.0
0.6
(Ib. /million cans
1,463
88
88
138
433
433
272
13
13
25
17
17
a. Waterborne systems are currently only used on aerosol and oil cans.
b. Assumes 4,000 hours per year, as an average of 3,000 hours for food cans and 5,000 hours for beer and beverage cans.
Source: Booz, Allen & Hamilton Inc. estimates based on data supplied by CHI and individual can companies
-------
An analysis of the interview notes and the partially completed
Ohio emissions inventory indicates that emissions in 1977 were about
25 percent below the theoretical level or about 3,400 tons. This
reduction was achieved by the wide-spread usage of waterborne coat-
ings in two-piece can plants.
3.3.3 RACT Guidelines
The RACT Guidelines for VOC emission control are specified
as the amount of allowable VOC, in pounds per gallon of coating,
minus any water in the solvent system. To achieve this
guideline, RACT suggests the following options:
Low solvent coatings
Waterborne
High solids _
Powder coating
Ultraviolet curing of high solids coatings
Incineration
Carbon adsorption.
The RACT guidelines have established different limitations
for each of four groups of can coating operations. Exhibit
3-10, on the following page, presents the recommended VOC
limitations, compared with typical, currently available, conven-
tional coatings.
3.3.4 Selection of the Most Likely RACT Alternatives
Projecting the most likely industry response for control
of VOC emissions in can manufacturing facilities is complicated
by the thousands of different products offered by the can
industry. Based on industry interviews, several general assump-
tions can be made regarding the industry in Ohio as well as nation-
ally.
The industry preferred response will be to use low
solvent coatings (primarily waterborne) wherever
technically feasible because of their low cost—see
incremental cost comparisons on Exhibits 3-12 and
3-13.
The choice between thermal incinerators
and catalytic incinerators will be based
on the availability of fuel and the pref-
erence of the individual companies.
3-13
-------
EXHIBIT 3-10
U.S. Environmental Protection Agency
RACT GUIDELINES FOR CAM COATING OPERATIONS
Coating Operation
Recommended Limitation
kg. per liter
of coating
(minus water)
Sheet basecoat (exterior) 0.34
and interior) and over-
varr.isr.; two-piece can
exterior (basecoat and
overvarnish)
Tvc- and three-piece car. 0.51
interior bod; spray,
two-piece can exterior
er.c (spray or roll coat)
Three-piece can side-sean 0.66
spray
E.-.c sealing compound 0.44
IDS. per gallon
of coating
(minus water)
2.6
4.2
5.5
3.7
Typical Currently
Available
Conventional Coatings
Ibs.per gallon
of coating
(minus water)
4.1-5.5
6.0
7.0
4.3
Source: U.S. Environmental Protection Agency
-------
Incinerators with primary heat recovery
will be used in preference to those with
secondary recovery or no heat recovery.
The industry will not install carbon adsorption
systems because of the very poor performance record
established to date in sever; 1 can plants that have
evaluated this control approach.
Ten likely control alternatives, as well as the three
base cases, are discussed in the paragraphs below.
The percentage of cans likely to be manufactured by
each of the control option alternatives, by 1982, is
summarized in Exhibit 3-11, on the following page.
The resulting emissions are summarized in Exhibits
3-12 and 3-13, at the end of this section. For
cases involving incineration, the following assump-
tions were made.
Energy cost is $2.25 per million BTUs.
Capital cost is $20,000 per CFM.
Incinerators operate at 10 percent of the lower
explosive limit.
90 percent of the roller coating emissions are
collected and incinerated.
30 percent of the interior spray coating emissions
are collected and incinerated.
The assumptions on cost operating parameters and likely in-
dustry response to each control alternative were based upon dis-
cussions with knowledgeable industry sources and on Air Pollution
Control Engineering and Cost Study of General Surface Coating
Industry, Second Interim Report,Springborn Laboratories.
3.3.4.1 Two-Piece Beer and Soft Drink Cans—1978 Base Case
At the present time, the majority of beer and soft drink
cans produced in Ohio are produced with one exterior coating,
a procedure defined as print and varnish.
The can is printed directly over the base metal
and then varnished using a low solids organic-
borne varnish—eliminating the base coat.
The interior of the can is sprayed, using a non-
comforming interior body spray.
3-14
-------
EXHIBIT 3-11
U.S. Environmental Protection Agency
PERCENTAGE OF CANS MANUFACTURED
USING EACH ALTERNATIVE
Low Solvent
Water- Coatings
borne or Thermal Except uv Cured
Other Low Incineration Print Only, End Sealant Outside Varnish
Solvent with Primary All Low Solvent Which Is Waterborne
Can Type Coatings Heat Recovery Coatings Incinerated Inside Spray
2-piece beer 40 0 60 — 0
and soft
drink
3-piece beer 25 20 — 55
and soft
drink
3-piece food 25 20 — 55
and other
cans
Sheet coating 60 40
and end com-
pounding in
feeder plants
of material
to be shipped
for assembly
elsewhere
Note: The percentage of cans produced using each control alternative is based
upon interviews with individuals in the can industry.
Source; Booz, Allen & Hamilton Inc.
-------
The end of the can is spray coated, using a non-
comforming body spray.
In this base case alternative, no incineration is assumed
although, in fact, most of the operations in Ohio currently
incinerate some of th^ emissions. The coating consumption is
approximately 250 gallons per million cans, resulting in emis-
sions of 0.67 tons per million cans.
3.3.4.2 Two-Piece Beer and Soft Drink Cans—Waterborne
Coatings as Proposed in RACT
In this alternative, all the coating operations currently
employed in the base case have been converted to waterborne
coatings. The cost of converting to waterborne systems was
assumed to be minimal.
The capital cost for converting each of three
coating operations was estimated to be $10,000.
This results in an annualized cost of $30 per
million cans—assuming that the annualized cost
of capital is 25 percent of the total installed
capital cost and that 250 million cans are
produced annually on the coating line.l
The cost of the coatings is the same as for con-
ventional coatings—industry sources believe that
by 1980 this will be the case.
The energy consumption is the same—this would
appear reasonable since most energy consumed is
used to heat the belt and the metal cans.
The yield (spoilage) is the same—it appears that
the industry will continue to encounter significant
spoilage in changing over to new coatings. However,
as the technology is established, it is assumed
that spoilage will decline to currently acceptable
levels.
The total incremental annualized compliance cost of using
waterborne solvents is estimated to be about $30 per mil1ion
cans. This represents a direct cost increase of less than 0.05
percent. The emissions would be reduced to 0.19 tons per million
cans—a 75 percent reduction at a cost of about $62 per ton
of VOC removed.
1Annualized capital cost includes depreciation, interest, taxes,
insurance and maintenance.
3-15
-------
It is estimated that 40 percent of the two-piece beer
and soft drink cans would be produced using this alternative
by 1981—primarily for steel cans.
3.3.4.3 Two-Piece Beer and Soft Drink Cans—Base Case with
Thermal Incinerators and Primary Heat Recovery
This alternative assumes that all coating operations cur-
rently employed in the base case are retrofitted with thermal
incinerators. This alternative is presently employed on several
two-piece can lines in Ohio.
The capital required for three incinerators would be
about $66,000—at $20,000 installed cost per CFM.
The annualized capital cost would be about $66
per million cans.
The energy costs to operate the incinerators would
be about $62 per million cans, at $2.25 per million
BTUs.
Material cost would be comparable to the base
case.
The total incremental cost to incinerate emissions from
conventional coatings would be about $128 per million cans.
This represents a cost increase of approximately 0.2 percent,
to reduce emissions by about 42 percent to 0.39 tons per million
cans. The reason for the low overall efficiency is that a
considerable portion of the VOC escapes as fugitive emissions
prior to incineration.
90 percent of the exterior coating emissions reach
the incinerator.
30 percent of the interior spray coating emissions
reach the incinerator.
The cost of incineration is about $441 per ton of emission
removed. It is estimated that no two-piece can production will
utilize this alternative by the end of 1981—incinerators currently
in use will be shut down.
3.3.4.4 Two-Piece Beer and Soft Drink Cans—Supplemental
Scenario I
This alternative is based upon combining low solvent coatings
with industry product trends that lower the product cost. It
includes:
3-16
-------
Print only, eliminating all coating operations—
this is used for some aluminum cans at the present
time
Waterborne interior body spray as proposed by
RACT
End coatings using a low solvent varnish—either
waterborne or high solids.
The elimination of one coating operation would result
in a net saving of about $750 per million cans, comprised of
a material savings of about $540 and an energy saving of
about $230 per million cans. The incremental capital cost
would be $20 per million cans. Emissions are reduced by 79
percent to 0.14 tons per million cans, at a saving of about
$1,450 per ton of emissions reduced or about $1,300 per ton
of emission controlled. It is estimated that 60 percent of
the cans produced in 1982 will utilize this method.
However, it is questionable whether, in determining the
economic impact of VOC regulations, the implementation of RACT
can be given credit for market driven changes in product con-
figuration. Without the credit, the annual!zed cost would be
$20 per million cans.
3.3.4.5 Two-Piece Beer and Soft Drink Cans—Supplemental
Scenario II
This scenario is based upon the use of an experimental
UV cured varnish, a waterborne interior body spray and an end
coating using a low solvent varnish.
Because of the current high cost of UV cured varnishes,
this approach is only experimental. Based on today's
prices of about $6.50 per gallon for conventional varnishes
and $16.25 for UV cured varnishes, this is the most expensive
approach to emission reduction, about $734 per million cans.
The incremental varnish cost is about $810 per
million cans.
The energy saving is about $105 per million cans.
The annualized capital cost for converting the
coating systems to UV cured and waterborne coatings
is about $30 per million cans.
3-17
-------
This scenario provides a 78 percent reduction in emissions
from the base case, to 0.15 tons per million cans at a cost
of about $1,400 per ton of emission reduced. Because of the
high cost, it is not expected that this approach will be
implemented by 1982.
3.3.4.6 Three-Piece Beer and Soft Drink Cans—Base Case
At the present time, the majority of three-piece beer
and soft drink cans are produced by the following coating
operations:
Interior base coat
Decoration and over varnish
Interior and exterior stripe
Interior spray coating
End sealant.
The production of beer cans differs from the production of
soft drink cans in some respects, the impact of which has not been
considered in this study.
Beer cans almost always have an exterior stripe,
but soft drink cans frequently do not.
Beer cans always have an inside spray coating but
soft drink cans usually do not. However, soft
drink cans frequently have a heavier inside base
coat to offset the elimination of the spray
coating.
Consideration of these differences has been elminated to reduce
the complexity of the study. Because of the declining importance
of three-piece beer and beverage cans, the impact will be smaller
in 1982 than it would be currently.
The total emissions from this alternative are 1.79 tons
per million cans (2.5 times the emissions from a similar two-
piece can) .
3.3.4.7 Three-Piece Beer and Soft Drink Cans—Waterborne
Coatings as Proposed in RACT
In this alternative, all the coating operations currently
employed in the base case have been converted to waterborne
coatings. The cost of converting to waterborne systems was
assumed to be minimal.
3-18
-------
The capital cost for converting each of five
coating operations was assumed to be $10,000.
This results in an annualized capital cost of
$104 per million cans—assuming that the cost of
capital and maintenance is 25 percent of the total
installed capital cost and that 120 million cans
are produced annually on the coating line.
The raw material cost of coatings is the same as
for conventional coatings.
The energy consumption is the same—this would
appear reasonable since most of the energy is
consumed to heat the wickets and belts and also
the can metal.
The yield (spoilage) is the same—it appears that
the industry will continue to encounter signi-
ficant spoilage in changing over to new coatings.
However, as the technology is established, it is
assumed that spoilage will decline to currently
acceptable levels.
The total incremental cost to convert to waterborne
coatings is estimated to be about $100 per million cans.
This represents a cost increase of about 0.15 percent. The
emissions would be reduced to 0.34 tons per million cans, an
80 percent reduction at a cost of about $72 per ton.
It is estimated that 25 percent of all beer and soft
drink facilities will employ this option. The acceptance of
this technology will be retarded by the lack of a complete
line of available coatings.
3.3.4.8 Three-Piece Beer and Soft Drink Cans—Base Case with
Thermal Incinerators and Primary Heat Recovery
This alternative assumes that all coating operations
currently employed in the base case are retrofitted with
thermal incinerators. Several thermal incinerators
are currently being employed on coating lines in Ohio.
The capital required for five incinerators would be
about $320,000—assuming an installed cost of $20,000 per CFM.
The annualized capital cost would be about $668
per million cans.
The energy cost to operate the incinerators would
be $166 per million cans.
3-19
-------
The material costs would be the same as the base
case.
The total incremental cost of adopting thermal in-
cineration is estimated to be about $834 per million cans.
This represents a cost increase of about 0.2 percent. The
emissions would be reduced by 59 percent to 0.74 tons per
million cans at a cost of $794 per ton of emissions
removed. Because of the prohibitively high costs of this
alternative, it is estimated that it will be employed only
on 20 percent of all three-piece beer and soft drink cans
manufactured in Ohio in 1982.
3.3.4.9 Three-Piece Beer and Soft Drink Cans—All Waterborne
Except End Sealant, Which Is Thermally Incinerated
It is likely that the can industry will adopt a hybrid
system which will focus on waterborne or possibly other
low solvent coatings and thermal incineration of the end
sealant and which probably will not be universally available
by 1982. Because end sealing compounds represent approximately
12 percent of the VOC from three-piece beer and soft drink can
manufacture, this case was developed under the assumption that
technology-based exceptions will not be granted.
The capital cost of converting four coating
operations and adding one incinerator would be
about $340 per million cans.
The additional energy costs of one incinerator
would be about $93 per million cans.
Material cost would be the same.
The total incremental cost of this scenario would be
about $171 per million cans. This represents a cost in-
crease of about 0.2 percent, to reduce emissions by 80
percent. It is estimated that about 55 percent of the beer
and soft drink cans will be produced using this technology.
3.3.4.10 Three-Piece Food Cans—Base Case
Three-piece food cans are currently produced
utilizing the following coating operations:
Interior base coat
Exterior base coat
Interior stripe
End sealant.
The emissions from this case are estimated to be 0.99
tons per million cans.
3-20
-------
3.3.4.11 Three-Piece Food Cans—Waterborne as Proposed in RACT
In this alternative, all the coating operations
currently employed in the base case have been converted to
waterborne coatings.
The total incremental cost to convert to waterborne
coatings is estimated to be $113 per million cans. A 76
percent reduction in emissions is achieved, to 0.24 tons per
million cans. It is unlikely that a complete spectrum of
waterborne coatings will be available to meet industry
requirements by 1982 because:
The focus of research is on two-piece beer and
soft drink cans, which is the most rapidly
growing market segment.
The need to achieve FDA approval for the broad
spectrum of products required has caused coating
manufacturers to focus on the large-volume coatings
required for beer and soft drinks.
As a result, it is estimated that only 25 percent of
the cans will be produced using this control approach.
3.3.4.12 Three-Piece Food Cans—Base Case with Thermal
Incinerators and Primary Heat Recovery
This alternative assumes that all coating operations
currently employed in the base case are retrofitted with thermal
incinerators.
The total incremental cost of adopting this approach is
estimated to be about $690 per million cans; about $595
in capital cost and $95 in energy costs. Emissions
would be reduced by 81 percent, to 0.19 tons per million
cans. An estimated 20 percent of the cans would be produced
using this approach.
3.3.4.13 Three-Piece Food Cans—All Waterborne Except
End Sealant, Which Is Thermally Incinerated
Because waterborne and other low solvent coatings
are not available, it is likely that the industry will
develop a hybrid approach utilizing waterborne coatings
where available and incinerating the balance of the emissions.
The end sealing compound appears to be the coating most likely
to be unavailable in low solvent form by 1982—end sealing
compounds release about 18 percent of the VOC emissions from
food can manufacturing operations.
3-21
-------
The total incremental cost of this scenario is about
$200 per million cans; $500 in capital cost and $100 in
energy costs. The emissions are reduced by about 79 percent
to 0.25 tons per million cans. It is estimated that 55 percent
of the cans would be produced using this approach.
3.3.4.14 Sheet Coating Feeder Plant—Low Solvent As
Proposed in RACT
In this alternative all the sheet coating and end
compounding operations will be converted to waterborne. The
total incremental cost to convert to waterborne is estimated
to be about $15 per million cans. It is unlikely that a
complete spectrum of waterborne coatings will be available
to meet industry requirements by 1982; as a result, 60 percent
of the stock will be coated with waterborne coatings.
3.3.4.15 Sheet Coating Feeder Plant—Thermal Incinerators
And Primary Heat Recovery
This alternative assumes that all sheet coating
and end compounding lines are retrofitted with incinerators.
At the present time a significant number of sheet coating lines
in Ohio already are operating incinerators. Because of the
already installed incinerators and the lack of a complete
spectrum of coatings, it is estimated that 40 percent of the
stock will be coated using thermal incinerators for VOC control.
3-22
-------
EXHIBIT 3-12
U.S. Environmental Protection Agency
EMISSIONS FROM COATING TWO-PIECE ALUMINUM
BEER AND SOFT DRINK CANS
Alternative
Capital
(5/million
cans)
Annualized Incremental Costs ($/million cans)
Annualized
Capital Cost Materials Energy Total
Emissions
Coating
Input
(gals./million
cans)
VOC
Emissions
VOC
Decrease
(tons/million (tons/million
cans) cans)
Incremental
Cost
-------
EXHIBIT 3-13
U.S. Environmental Protection Agency
EMISSIONS FROM COATING THREE-PIECE CANS
Case
Capital
(S/million
cans)
Annualized Incremental Costs ($/roillion cans)
Annual!zed
Capital
Cost/Millions Materials Energy Total
Coating And Emissions
Coating VOC
Input Emissions
VOC
Decrease
Incremental
Cost
(gals./million(tons/million (tons/million ($/ton)
cans) cans) cans)
1978 BASE CASE 0
Interior base coat
Decoration and/or
varnish
Interioring and
exterioring stripe
Interior spray
End sealant
HATERBORNE AS PROPOSED 416
IN RACT
BASE CASE WITH THERMAL 2670
INCINERATORS AND HEAT
RECOVERY PRIMARY
SUPPLEMENTAL SCENARIO I 686
Naterborne except end
sealant which is incin-
erated
1978 BASE CASE 0
Interior base coat
Exterior base coat
Interior stripe
End sealant
HATERBORNE AS PROPOSED 453
IN RACT
BASE CASE WITH THERMAL 2380
INCINERATORS AND
PRIMARY HEAT RECOVERY
SUPPLEMENTAL SCENARIO 4 768
All waterborne except
end sealant which is
incinerated
BEVERAGE CANS
0 0
894
1.79
104
668
171
113
595
192
0 104
166 834
20 191
FOOD CANS
0 0
0 113
95 687
17 209
720
694
715
424
439
424
435
0.34 1.45 81
0.74 1.05 59
0.35 1.44 80
0.99
0.24 0.75 76
0.19 0.80 81
0.23 0.76 77
72
794
133
151
859
275
a. Not'Applicable
Source: Booz, Allen & Hamilton Inc. estimates
-------
3.4 COST AND VOC BENEFIT EVALUATIONS FOR THE MOST LIKELY
RACT ALTERNATIVES
Costs for alternative VOC emission controls are presented
in this section based upon the costs per million cans developed
for each alternative in the previous section. The extrapolation
is based upon can production and emission for actual can
manufacturing processes and not upon the representative plants.
3.4.1 Costs for Alternative Control Systems
Although there is no typical can manufacturing facility,
the following four representative plants describe the situation
in most can manufacturing facilities.
Representative Plant A produces two-piece beer and
soft drink cans on two lines. Each line operates
at 650 cans per minute for 6,500 hours annually,
to produce approximately 250 million cans—total
plant production is 500 million cans.
Representative Plant B produces 80 percent three-
piece beer and soft drink cans and 20 percent three-
piece food cans using three assembly lines. The
sheet coating lines operate at 2.5 base boxes per
minute for about 4,000 hours per year, to support
the three assembly lines. Each can assembly line
operates at 400 cans per minute, the beer lines
for 5,000 hours annually and the food can lines
for 3,000 hours annually.
Representative Plant C coats and decorates flat
stock for use in satellite assembly plants. The
plant coats at 2.5 base boxes per minute. Its
operating rate is approximately 1,000 hours per
satellite plant production line. Assuming the
plant supports four lines, its operating rate would
be 4,000 hours annually.
Representative Plant D produces food cans from
precoated stock. It contains two can assembly
lines, each of which operates at 400 cans per
minute for 3,000 hours annually. The total plant
production is 144 million cans.
3-23
-------
Capital and annual operating costs for each of the repre-
sentative plants are presented for each applicable alternative on
Exhibit 3-14, on the following page. In summary, the capital cost
to adopt the alternative controls to the four representative plants
ranges from $20,000 to convert the can assembly plant to waterborne
coatings) to more than $400,000 (to retrofit the three-piece
coating and assembly plant with incinerators). The incremental
operating costs (energy plus 25 percent of capital) range from
a savings of $375,000 (for the two-piece beer and soft drink
plant that was converted to "print only") to a cost of $387,000
(for operating incinerators at the three-piece coating and
assembly plant).
3.4.2 Extrapolation of the Costs to the Statewide Industry
The costs developed are incremental costs based on the
production volume and mix estimate for 1977. Industry changes
related to plant closings, conversion to two-piece lines, con-
sumption patterns or other areas not directly related to RACT
implementation were not included. One exception is that the
trend to print-only on existing lines was addressed and the
portion allocated to RACT was estimated and included in the
final figures.
The can manufacturing industry in Ohio is part of an
integrated nationwide network (the greatest volume of cans are
produced by firms with nationwide operations for customers who
source their products nationwide), of facilities using established
and nonproprietary technology. Therefore, Ohio costs can be
readily estimated from data developed on a nationwide bases.
Extrapolation of the costs to the statewide industry requires,
first, segmenting the industry in Ohio according to the types and
number of major cans produced, quantifying emissions from each
type of can production and identifying the 1977 level of controls,
if any, to develop a 1977 baseline case. Second, the likely
industry response to the regulations must be developed; and
finally, the cost of implementing this response must be calculated.
The data and estimates necessary to perform this extrapolation
have been presented in previous sections.
Can production (in units) by type was presented in
section 3.2.3.
Emissions (per million cans) from the production of
cans using the various coating operations was pre-
sented in Exhibits 3-7, 3-8 and 3-9 and combined
on Exhibits 3-12 and 3-13, for several control
alternatives for the major types of cans (including
print only).
3-24
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EXHIBIT 3-14
U.S. ENVIRONMENTAL PROTECTION AGENCY
COST OP IMPLEMENTING RACT ALTERNATIVES FOR
REPRESENTATIVE CAN MANUFACTURING PLANTS ($1.000)
Representative Plant
A. 2-plece beer t soft
drink can
2 lines
500 Billion can*
Waterborne
Trier ma I Incinerators
Print Only/Materborne
Capital Annual
Expense
UV Cured/Naterborne
Capital Annual
Eapense
Watarborna
Incinerate End Sealant
Capital Annual
Expense
60
15
132
64
40
(375)
60
367
B. 3-piece beer t soft 100
drink and food can
coating and assembly
plant
1 coating lina
1 sheet varnish lin«
3 •••••hip lines
310 million cans
C. SbMt coating facility 30
for 50% tear cans t
50% food cans
1 sheet coating line
1 sheet varnishing line
1 end confounding line
Supplies stock for 290
•illion cans
O. Pood can assembly plant 20
2 assembly lines
with inside striping
144 Million cans
25
415
387
138
106
255
143
82
34
60
20
a. Hot applicable
b. Not considered to I* a likely
by
Sourcei Booz, Allen fc Hamilton Inc. estimates
-------
Theoretical uncontrolled emissions were calculated
by multiplying the number of cans of each type by
the 1977 least case alternative on Exhibits 3-12
and 3-13. This estimate of 4,554 tons was presented
in section 3.2.2.
Because the data in the Ohio emissions inventory
were incomplete and had several inaccuracies (e.g.,
total coating consumption at Metal Container Corpora-
tion and fraction of emissions to the control equip-
ment) , the assessment of the current situation was
based primarily on the data collected from the inter-
views and the work completed for other states in EPA
Region V. Net emissions were reduced 1,200 tons in
1977 to the 1977 base line of 3,400 tons:
600 tons through incineration
600 tons through waterborne and other low
solvent coatings.
The industry response in 1982 to the RACT alternatives was
presented in section 3.3.4 and summarized on Exhibit 3-11. It
included a discussion of the cost and emission reductions from
the theoretical level of uncontrolled emission. Exhibit 3-15,
on the following page, shows that likely industry capital expen-
ditures of $2.7 million will be required to comply with RACT.
The annual compliance cost is estimated at $785,000, excluding
a credit of $900,000 for reduced material and energy costs that
arise from reducing the number of coatings on two-piece cans
to enhance their cost effectiveness against other packages. It
is estimated that emissions will be reduced by 3,200 tons from
the theoretically uncontrolled level of 4,600 tons, excluding an
additional 300 ton reduction that is expected to result through
the increased usage of print o"ny
Based on the above assumptions, the compliance costs are
estimated at $2.68 million in capital expenses. Because of the
annual cost savings involved, the industry will probably take
the steps indicated for two-piece cans whether or not the regu-
lation is in place. The capital cost applicable to the regula-
tion is estimated at $2.68 million. It would be $2.73 million
without the conversion to print only.
Annual average unit cost of emission reduction is estimated
to be $247 per ton. Three-piece food and other cans have the
highest unit cost, $360 per ton.
3-25
-------
EXHIBIT 3-15(1)
U.S. Environmental Protection Agency
COST OF COMPLIANCE TO RACT FOR THE
CAN MANUFACTURING INDUSTRY IN OHIO
CAN TYPE
Can Production
(millions of unita)
Water-
borne or
Other Low
Solvent
Coatings
Thermal
Incineration
with Primary
Heat Recovery
Print Only,
All Low Solvent
Coatings
Low Solvent
Coatings
Except
End Sealant
Which Is
Incinerated
Total
Capital Investment
(thousands of $)
Water-
borne or
Other Low
Solvent
Coatings
Thermal
Incineration
with Primary
Heat Recovery
Print Only,
All Low Solvent
Coatings
Low Solvent
Coating*
Except
End Sealant
Which Is
Incinerated
Total
2-piece
beer and
soft drink
800
1200
2,000
96
96
192
3-piece
beer and
soft drink
200
160
440
800
83
426
246
755
3-piece
food and
other cans
Subtotal
450
360
990 1,800
4,600
856
292
1,282
a
96
759
1.005
Amount Not
Resulting
Fro» RACT
Total
Applicable
To RACT
292
1,282
96
1,005
(100)
2,675
-------
EXHIBIT 3-15(2)
U.S. Environmental Protection Agency
CAN TYPE
Annual Compliance Coat
(thousands of S)
Emission Reduction
(tons)
Low Solvent
Hater- Coatings
borne or Thermal Except
Other Low Incineration Print Only, End Sealant
Solvent with Primary All Low Solvent Which Is
Coatings Heat Recovery Coatings Incinerated Total
2-piece
beer and
soft drink 24 0 (900) a (876)
3-piece
beer and
soft drink 21 133 a 75 229
3-piece
food and
other cans 51 247 a 198 496
Subtotal 96 380 (900) 273 (151)
Aaount Not
RACT a a 936 a 936
TOTAL
RACT 96 380 36 273 785
Low Solvent
Water- Coatings
borne or Thermal Except Unit
Other Low Incineration Print Only, End Sealant Cost of
Solvent with Primary All Low Solvent Which Is Emission
Coatings Heat Recovery Coatings Incinerated Total Reduction
(S per ton)
384 0 636 a 1,020 (858)
290 166 a 634 1,090 209
337 288 a 752 1,377 360
1,011 454 636 1,386 3,487 (43)
a a (313) a (313)
1,011 454 323 1,386 3,174 247
I
a. Not applicable.
Source: Booz, Allen & Hamilton Inc.
-------
The substantial cost of developing, testing and obtaining
FDA approval of low solvent coatings has not been included in
this evaluation, because it is outside the scope of this study
and the bulk of it will probably be incurred at the national
level. An evaluation of these costs and the degree to which they
should properly be allocated to each state must be undertaken
on a national basis.
A factor that should be taken into account is that the
analysis assumes that production lines will be converted in
proportion to the number of cans made by each production mode.
Where a single line makes several types of cans, a portion of
which can be converted to low solvent systems, the production
line might still require installation of afterburner control
under RACT requirements, though its use would only be intermit-
tent. The potential effect of this on the cost estimates is
difficult to quantify. It is discussed below.
If we assume that all sheet coating and three-piece
assembly lines were required to install incinerators, to main-
tain capability to utilize both conventional and low solvent
coatings, the projections would be changed as follows:
Capital expenditure would be increased by $3.1
million or 115 percent.
Annual cost would increase by $775,000. This
represents the capital related costs only.
Emissions reduction estimates would be unchanged.
The figures presented above represent outside limits with
actual experience likely to fall somewhere between the two
figures. Since most of the can fabrication facilities in Ohio
are dedicated to beverage cans, for which low solvent coatings
systems are likely to be developed by 1982, the effect of
this capability maintenance factor will be felt on relatively
few production lines.
Assuming that 1977 baseline emissions were 3,400 tons,
implementation of RACT will reduce emissions by approximately
2,000 tons to the same 1,380 tons (excluding the additional
300 ton reduction for conversion to print only. The 1982
reduction is expected to emphasize waterborne coatings rather
than incineration. Assuming that no new incinerators will be
constructed, the capital cost for converting from the existing
level of control in 1977 to meet the RACT guidelines would be
about $400,000.
3-26
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3.5 DIRECT ECONOMIC IMPLICATIONS
This section presents the direct economic implications
of implementing RACT controls to the statewide industry, in-
cluding: availability of equipment and capital; feasibility
of the control technology; and impact on economic indicators
such as value of shipments, unit price, state economic variables
and capital investment.
3.5.1 RACT Timing
RACT must be implemented statewide by January 1, 1982.
This implies that can manufacturers must have either low
solvent coatings or VOC control equipment installed and
operating within the next three years. The timing of RACT
imposes several requirements on can manufacturers including:
Obtaining development quantities of low solvent
coatings from their suppliers and having them
approved by their customers
Having coating makers obtain FDA approval where
necessary
Obtaining low solvent coatings in sufficient
quantity to meet their volume requirements
Acquiring the necessary VOC control equipment
Installing and testing incinerators or other VOC
control equipment to insure that the system
complies with RACT.
The sections which follow discuss the feasibility and the economic
implications of implementing RACT within the required timeframe.
3.5.2 Feasibility Issues
Technical and economic feasibility issues implementing
RACT controls are discussed in this section.
The can manufacturing industry, in conjunction with coating
suppliers and incinerator vendors, has extensively evaluated
most of the approaches to meeting RACT. The feeling in the
industry is that, but for one notable exception, RACT can be
achieved by January 1, 1982, using low solvent coatings—
primarily waterborne. The coating most likely to be unavailable
in 1982 is the end sealing compound. The physical characteristics
of this material, as well as its method of application, do not lend
themselves to incineration. Currently, the coating is air dried
over a period of 24 hours.
3-27
-------
The can manufacturers have shut down a significant number
of three-piece can manufacturing facilities. It appears likely
that the implementation of RACT will accelerate this trend
because of the lower cost of compliance with two-piece cans and
the probable reluctance on the part of can manufacturers to
invest capital in facilities producing products with declining
demand. •
3.5.3 Comparison of Direct Cost with Selected Direct
Economic Indicators
This section presents a comparison of the net increase
in the annualized cost of implementing RACT with the total
value of cans sold in the state.
The net incremental annualized cost from the uncontrolled
level to can manufacturers is estimated to be a savings of
$0.115 million (less than 0.1 percent) of current manufacturing
costs. However, this savings includes a credit of $900,000 for
reduced material and energy costs that arise from reducing the
number of coatings on two piece cans. Excluding this credit
meeting the RACT limitations would represent an annualized cost
of $785,000 (approximate i \. 0 ? perce':t of the value of shipments)
3.5.4 Ancillary Issues Relating to the Impact of RACT
This section present two related issues that were developed
during the study.
The can manufacturers are seeking to have the guidelines
altered to encompass a plantwide emissions basis. This would
allow a credit from one operation, where emissions were reduced
to below the RACT recommended level, to be applied to another
operation that is not in compliance. The plant would be in
compliance if the total emissions were reduced to the level
proposed in RACT. It appears that the impact of this proposed
regulation, if accepted, would be to further concentrate the
difficult-to-control emissions, such as end sealing compounds,
into the largest facilities and to reduce further the number of
can assembly plants.
High solvent coatings represent a considerable fire hazard.
The conversion to low solvent coatings has reduced fire insurance
costs for at least one can manufacturing facility.
Exhibit 3-16, on the following page, presents a summary
of the current economic implications of implementing RACT
for can manufacturing plants in the State of Ohio.
3-28
-------
EXHIBIT 3-16
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING PACT FOR CAN MANUFACTURING PLANTS
IN THE STATE OF OHIO
Current Situation
Number of potentially affected
facilities
Indication of relative importance
of industrial section to state
economy
Current industry technology trends
VOC emissions
Industry preferred method of VOC
control to meet RACT guidelines
Assumed method of control to meet
RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized credit (statewide)
Price
Energy
Productivity
Employment
Market structure
Problem area
VOC emission after RACT control
Cost effectiveness of RACT control
Discussion
There are about 23 can manufacturing facilities
The 1977 value of shipments was about $360
million
Beer and beverage containers rapidly changing
to two-piece construction
3,400 tons per year (Booz, Allen estimate);
theoretical uncontrolled level is 4,600 tons
per year
Low solvent coatings (waterborne)
Low solvent coatings (waterborne)
$2.7 million from uncontrolled state
(0.4 million above 197~ ir.-place level).
Current investments are $15 million to $30
million
$0.15 million credit—less than 0.1 percent
of current direct annual operating costs!
No price increase
Increase of 5,200 equivalent barrels of oil
annually to operate incinerators (virtually
no increase from 1977 level)
No major impact
No major impact
Accelerated technology conversion to
two-piece cans
Further concentration of sheet coating
operations into larger facilities
Low solvent coating tech-"1ory for end
sealing compound
1,100 tons per year (29 percent of current
emission level)
$247 annualized cost/annuaJ ton of VOC
reduction from theoretical level attributed
to implementation of RACT
This savings includes a credit of $900,000 for reduced material and energy costs that arise
from reducing the number of coatings on two-piece cans. Excluding this credit, meeting the
RACT limitations would represent an annualized cost of $785,000 (approximately 0.2 percent
of the value of shipments).
Source: Booz, Allen t Hamilton Inc.
-------
BIBLIOGRAPHY
Control of Volatile Organic Emissions from Stationary Sources,
EPA-450/2-77-008, May 1977.
Air Pollution Control Engineering and Cost Study of General
Surface Coating Industry, Second Interim Report, Springborn
Laboratories, Enfield, CT, August 23, 1977
Private conversations at the following companies
American Can Company, Greenwich, Connecticut
Continental Can Company, Chicago, Illinois
Heekin Can Company, Augusta, Wisconsin
National Can Company, Chicago, Illinois
Libby McNeil & Libby, Baraboo, Wisconsin
Joseph Schlitz Brewing Company, Oak Creek, Wisconsin
Carnation Company, Waupam, Wisconsin
Campbell Soup Company, Napoleun, Ohio
Green Giant Company, Ripon, Wisconsin
Fall River Canning Company, Fall River, Wisconsin
Miller Brewing Comapny, Miller, Wisconsin
Ocononowoc Canning Company, DeForest, Wisconsin
Diversified Packagers, Howell, Michigan
Can Manufacturers Institute, Washington, D.C.
-------
4.0 THE ECONOMIC IMPACT OF IMPLEMENTATION
OF RACT GUIDELINES TO THE SURFACE COATING
OF COILS IN THE STATE OF OHIO
-------
-------
4.0 THE ECONOMIC IMPACT OF IMPLEMENTATION
OF RACT GUIDELINES TO THE SURFACE COATING
OF COILS IN THE STATE OF OHIO
As will be shown in this chapter, the coil coating business
in the state of Ohio will be affected by the implementation of
RACT standards. The economic impact, although signif'.cant to
some of the individual firms affected, is minor relative to the
overall industry capital investment and operating cost.
This chapter is divided into four sections:
Specific methodology and quality of estimates
Applicable RACT guidelines and control technology
Coil costing operations in the state of Ohio
Direct economic implications
4-1
-------
4.1 SPECIFIC METHODOLOGY AND QUALITY OF ESTIMATES
This section describes the methodology for determining
estimates of:
Industry statistics
VOC emissions
Processes for controlling VOC emissions
Economic impacts
for the surface coating of coils in Ohio.
An overall assessment of the quality of the estimates is
detailed in the latter part of this section.
4.1.1 Industry Statistics
The coil coating is listed under Standard Industrial
Classification (SIC) 3479. Our methodology to gather statewide
statistical data on coil coating in Ohio was as follows:
A list of potentially affected facilities was
compiled in conjunction with state EPA authori-
ties and trade association sources.
Interviews were performed with those companies
appearing on the list of emitters to validate
their participation in this industry sector (this
list was not 100 percent validated).
4.1.2 VOC Emissions
In the state of Ohio, 16 coil coating facilities with at
least 29 coating lines were identified. The following sources
were utilized to identify VOC emitters in this industry category:
Ohio EPA emission inventory
National Coil Coaters Association
Thomas Register
Direct industry contact
4.1.3 Processes for Controlling VOC Emissions
Processes for controlling VOC emission for the surface
coating of coils are described in Control of Volatile Organic
Emissions From Existing Sources, Volume II; Surface Coatings
of Cans, Coils, Paper/ Fabrics, Automobiles and Light Duty
Trucks, EPA-405/2-77-008, May 1977.
4-2
-------
4.1.4 Cost of Control of VOC Emissions for Surface
Coating of Coils
The costs of control of volatile organic emissions for
surface coating of coils were developed by:
Determining the alternative types of control
systems likely to be used
Estimating the probable use of each type of control
system
Defining system components
Defining a model plant
Applying the costs developed by Springborn
Laboratories (under EPA contract number 68-02-2075,
August 23, 1977) to the most likely alternative
types of control:
Installed capital cost
Direct operating cost
Annual capital charges
Energy requirements
Extrapolating model costs to individual industry
sectors
Aggregating costs to the total industry for the state.
4.1.5 Economic Impacts
The economic impacts were determined by analyzing the
lead time requirements to implement RACT, assessing the
feasibility of instituting RACT controls in terms of capital
availability and equipment availability, comparing the direct
costs of RACT control to various state economic indicators and
assessing the secondary effects on market structure, employment
and productivity as a result of implementing RACT controls in
Ohio.
4-3
-------
4.1.6 Quality of Estimates
Several sources of information were utilized in assessing
the emissions, cost and economic impact of implementing RACT
controls on the surface coating of coils in Ohio. A rating
scheme is presented in this section to indicate the quality of
the data available for use in this study. A rating of "A" indicates
hard data (data that is published for the base year), "B" indicates
data that was extrapolated from hard data and "C" indicates data
that was not available in secondary literature and was estimated
based on interviews, analysis of previous studies and best
engineering judgment. Exhibit 4-1, on the following page, rates
each study output listed and the overall quality of the data.
4-4
-------
EXHIBIT 4-1
U.S. Environmental Protection Agency
SURFACE COATING OF COILS
DATA QUALITY
Study Outputs
Industry statistics
Hard Data
B
Extrapolated
Data
Estimated
Data
Emissions
Cost of emissions control
Economic impact
Overall quality of data
X
Source: Booz, Allen & Hamilton Inc.
-------
4.2 APPLICABLE RACT STANDARDS AND CONTROL TECHNOLOGY
This section includes a review of:
Applicable RACT standards
The technology of coil coating
Commercial aspects of the business
Approved control technologies
Estimated capital and operating costs to control
VOC emissions.
4.2.1 Approved RACT Standards
As indicated in the EPA guidelines Article XX.9204, subpart
(d) (1):
...no owner or operator of a coil coating line...
may cause, allow or permit discharge into the
atmosphere of any volatile organic compounds in
excess of 0.31 kilograms per liter of coating
(2.6 pounds per gallon), excluding water,
delivered to the coating applicator from prime
and topcoat or single coat operations.
Thus, of the approximately 4 to 6 pounds of VOC contained
in a gallon of paint to be applied with coil coating techniques,
the operator must not allow emission of more than 2.6 pounds.
The reduction in emissions may be achieved by utilization of
low solvent content coating technology, thermal incineration
or other approved methods.
4.2.2 The Technology of Coil Coating
Coil coating is the coating of any flat metal (aluminum
or steel typically) sheet or strip that comes in rolls or coils.
This process consists of taking the coil through a series of
steps in one continuous process. Generally, these steps include:*
Cleaning—removal of mill-applied protective oils,
dirt, rust and scale
Rinsing—removal of the products of the cleaning
process
Pretreating—with chemicals such as iron and zinc
phosphates, chromates and complex oxides to prepare
the metal for coatings
Rinsing—after the pretreatment
* Source;' National Coil Coaters Association brochure
4-5
-------
Painting—commonly by application of primer and finish
coats with a "reverse" roller technique in which
the roll applying the coating turns in the opposite
direction of the metal being coated
Curing—all coatings are cured in seconds as they
pass through ovens, mostly of the convention or
heat air type. At the end of the curing operation,
the coated metal is recoiled for shipment.
Configurations of coil coating lines differ. On some
lines, the metal is uncoiled at one end of the line and recoiled
at the opposite end. On other lines, called "wrap around"
lines, the metal is uncoiled and recoiled at about the same
point on the line. Some coil coating lines have a single coater
and one curing or baking oven; others, called "tandem" lines,
have several successive coaters each followed by an oven, so that
several different coatings may be applied in a single pass.
Exhibit 4-2, on the following page, is a schematic of a "tandem"
coil coating line.
The metal on the coil coating line is moved through the
line by power-driven rollers. It is uncoiled as the process
begins and goes through a splicer, which joins one coil of meta.
to the end of another coil for continuous, nonstop production.
The metal is then accumulated so that, during a splicing operation,
the accumulator rollers can descend to provide a continuous
flow of metal throughout the line. The metal is cleaned at
temperatures of 120°F to 16QOF, brushed, and rinsed to remove
dirt, mill scale, grease and rust before coating begins. The
metal is then treated for corrosion protection and for proper
coating adhesion with various pretreatments, depending on the
type of metal being coated and the type of coatings applied.
The first coat or primecoat may be applied on one or both
sides of the metal by a set of three or more power-driven rollers.
The pick-up roll, partially immersed in the coating, transfers
the coating to the applicator roll. The metal is coated as
it passes between the applicator roll and the large back-up
roll. The metal is typically reverse roll coated. Exhibit 4-3,
following Exhibit 4-2, is a schematic of a typical roll coater.
A third roll, called a "doctor" roll, may be used to control
film thickness when applying a high viscosity coating, by making
contact with the pick-up roll.
4-6
-------
EXHIBIT 4-2
U.S. Environmental Protection Agency
DIAGRAM OF A COIL COATING LINE
ACCUMULATOR
SPLICER
U
UNCOILING
METAL
ACCUMULATOR
PRIME
COATFR
METAL CLEANING
PI
^TREATMENT
D
PRIME
OVEN
PRIME
QUENCH
SHEAR
TOPCOAT
COATER
TOPCOAT
OVEN
TOPCOAT
QUENCH
U
RECOILING
METAL
Source:Control of Volatile Organic Emissions from Existing Stationary Sources-Volume II; Surface
Coatings of Cans, Coils, Paper, Fabrics, Automobiles and Light Duty Trucks (EPA,
405/2-77-000, May 1977).
-------
EXHIBIT 4-3
U.S. Environmental Protection Age
TYPICAL REVERSE ROLL COATER
APPLICATOR ROLL
INTO OVEN
PICKUP ROLL
HCKUPROLL
FLOW OF METAL INTO COATER
Source: Control of Volatile Organic Emissions from Existing Stationary
Sources-Volume II; Surface Coatings of Cans, Coils, Paper,
Fabrics, Automobiles and Light Duty Trucks (EPA, 405/2-77-008,
May 1977).
-------
The applied coating is usually dried or baked in a
continuous, catenary or flotation or a double-pass oven that
is multizone and high production. The temperatures of the
preheat, drying or baking zones may range from 100°F to
1000°F depending on the type and film thickness of coating
used and the type of metal being coated. The flow rates of
the ovens' exhausts may vary from approximately 4,000 scfm
to 26,000 scfm. Many of these ovens are designed for
operation at 25 percent of the room-temperature lower explosive
level when coating at rated solvent input. As the metal
exits the oven, it is cooled in a quench chamber by either a
spray of water or a blast of air followed by water cooling.
A second coat or topcoat may be applied and cured in a
manner similar to the primecoat. The topcoat oven, however,
is usually longer than the primecoat oven and contains more
zones.
Another method of applying a primecoat on aluminum coils
or a single coat on steel coils is to electrodeposit a water-
borne coating to either one or both sides of the coil. The
coil enters a V-shaped electrocoating bath that contains a roll
on the bottom. As the metal goes around the roll, electrodes on
each side can be activated and permit the coagulation of the paint
particles on either one or both surfaces of the coil. The coated
coil is then rinsed and wiped by squeeges to remove the water and
excess paint particles. For steel coils, the electrodeposited
coating must be baked in an oven. For aluminum coils, however,
the primecoat is stable enough to go over rolls immediately to
the topcoat coater without destroying the finish, and then be
baked as a two-coat system.
After cooling, the coated metal passes through another
accumulator, is sheared at the spliced section, usually waxed
and finally recoiled. The accumulator rolls rise during the
shearing process, collecting the coated metal to ensure
continuous production.
Organic vapors are emitted in three areas of a coil
coating line: the areas where the coating is applied, the oven
and the quench area. The oven emits approximately 90 percent
of the organic vapors and a majority of the other pollutants.
Of the remaining 10 percent of hydrocarbons emitted, approxi-
mately 8 percent are emitted from the coater area and approxi-
mately 2 percent are emitted from the quench area.
4-7
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4.2.3 Commercial Aspects of the Business
Coil coating was first practiced in the 1930s as a
technique to coat metal for Venetian blinds. As the tech-
nical, operating and economic advantages became apparent,
the industry experienced remarkable growth. Since 1962, for
example, estimated shipments have shown an average annual
growth rate of some 16.5 percent. By 1977, as shown in
Exhibit 4-4, on the following page, more than four million
tons of aluminum and steel were coated using this method.
In terms of dollars, the four million tons of coated
coil produced in the U.S. in 1977 represented a total product
value of some $3.5 billion. Other pertinent indicators of
the scale of this business include the following:
Approximately 13 billion square feet of coated
coil were produced.
Organic coatings of several types currently
utilized by the coil coaters in North America
represent 19 million gallons. These, coupled
with various types of film laminates, represent
a total estimated value of $140 million in
coatings.
Chemical pretreatment for coil coaters is es-
timated at a value of $10 million.
It requires approximately 12.8 billion cubic feet
of natural gas and 4.1 million gallons of propane
to cure these coatings. To coat the equivalent
metal by "post painting" would require approxi-
mately five times this amount of energy.
Today, there are 182 coil coating lines in North
America, ranging in maximum coil width capacity
from 2 to 60 inches and capable of running at
maximum speed from 100 to 700 feet per minute.
If all these lines were running at full capacity,
it is estimated that they could coat more than 20
billion square feet of metal per year.
4.2.4 Approved Control Technologies
Per the Environmental Protection Agency Guidelines in
Article XX.9204, subpart (d)(2), the emission limit shall be
achieved by:
The application of low solvent content coating
technology; or
4-8
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EXHIBIT 4-4
Environmental Protection Agency
ESTIMATED TONNAGE OF METAL COATED IN THE
U.S. IN 1977 WITH COIL COATING TECHNIQUES
Market
Building products
Transportation
Appliances
Containers, packaging
Furniture, fixtures
and equipment
Other uses
Steel
Shipments
(tons)
1,100,000
1,400,000
140,000
80,000
110,000
220,000
3,050,000
Aluminum
Shipments
(tons)
610,000
100,000
25,000
200,000
15,000
50,000
1,000,000
Source: National Coil Coaters Association statistics.
-------
Incineration, provided that 90 percent of the
nonmethane volatile organic compounds (VOC measured
as total combustible carbon) which enter the
incinerator are oxidized to carbon dioxide and
water; or
A system demonstrated to have control efficiency
equivalent to or greater than provided under
the preceding paragraphs. . .and approved by
the Director.
4.2.5 Estimated Capital and Operating Costs to Control VOC
Emissions
Estimates of capital and operating costs to control VOC
emissions from coil coating operations were prepared by
Springborn Laboratories, Inc., for the Environmental Protection
Agency (Contract No. 68-02-2075, August 23, 1977). These
estimates are discussed in this section.
The model chosen handles material 40 inches wide and
coats at a speed of 300 feet per minute. This yields a
yearly production of 204 million square feet when operated
for 4,000 hours per year. The material usage is 344,630
gallons of paint and 34,460 gallons of solvent per year.
Case I The base case with no controls for emissions;
shows the cost of a new line using conventional
enamel coating which does not meet RACT
Case II The use of waterborne coating materials with
no additional treatment of emissions
Case III The base case with a thermal incinerator on
each of the primecoat and topcoat ovens.
Due to the relation of the coating appli-
cator to the curing oven, the oven exhausts
are assumed to be 90 percent of total emissions.
The incinerator is figured with primary heat
exchange to minimize the fuel costs and
operates at an average 90 percent efficiency.
Emission control costs for each of the cases studied
are summarized in Exhibit 4-5, on the following page. As
indicated, additional capital costs to install emission control
systems range from $50,000 to $254,000 over the base case
capital cost depending on the alternative selected. Operating
costs range from $8,000 to $75,000 more than the base case, or
0.3 percent to 2.5 percent increased cost per unit. Costs per
ton of solvent range from $11 to $112.
4-9
-------
Output 204,000,000 SF/yr.
(18,950,000 «q. waters)
4,000 hours/year
EXHIBIT 4-5
U.S. Environmental Protection Agency
SUMMARY OF EMISSION CONTROL COSTS
II
III
Total
Investment
Case $
Base Case - 3,300,000
solvent-borne
primecoat
6 topcoat
Waterborne 3,350,000
primecoat
t topcoat
Base Case with 3,554,260
thermal incin-
erators on
ovens; primary
heat recovery
Increased Increased
Increase Total Annual Cost Cost/Unit Cost Per
over Annual over 1000 SF 1000 SF
Base Case Cost Base Case (1000 SM) over Base
$ $ $ $ $ %
2,977,400 - 14.59
(157.05)
50,000 2,985,800 8,400 14.64 0.05 0.3
(157.58)
254,260 3,052,860 75,460 14.96 0.37 2.5
(161.03)
Tons
(Metric Tons)
Solvent
Emitted/Yr.
832.3
(755)
98.9
(89.9)
158.1
(143.5)
Decreased
Emission
over Base
(Metric Tons)
733.4
(665.1)
674.2
(611.5)
Cost/Ton
(Metric Ton)
Emission To Remove
Reduction Solvent
% $
ea 11.45
(12.63)
81 111.93
(123.40)
-------
4.3 COIL COATING OPERATIONS IN THE STATE OF OHIO
From information provided by Ohio EPA and from Booz,
Allen study team interviews, it was determined that there are
16 coil coating facilities in the state of Ohio. It was
assumed that each of the facilities for which no detailed
information from the emission inventory was available has a
single line. Therefore, there are 29 coating lines in Ohio
as some facilities had more than one line. Details pertinent
to these operations are shown in Exhibit 46, on the following
page. Many of these facilities currently have incinerators
and for purposes of this study they were assumed to meet the
RACT requirements.
4-10
-------
EXHIBIT 4-6
U.S. Environmental Protection Agency
COIL COATING OPERATIONS IN OHIO
Company
Alcan Aluminum
Alside Aluminum
American Metal
(Don Products)
Anaconda
(Alsco)
Armco Steel
Brainard Div.
(Sharon Steel)
Epic Metals
Kaiser Aluminum
Lifeguard Ind.
Norandex
Repulbic Steel
Reynolds Metals
Elwin G. Smith
(Cyclops Corp.)
Stolle
Thomas Steel
Wheelinq-Pittsburc
Plant Location
Warren OH
N. Hampton Township OH
West Lake OH
Gnadeanhutten OH
Middletown OH
Howland OH
Oregon OH
Toledo OH
Cincinnati OH
Walton Hills OH
Youngstown OH
Ashville OH
Cambridge OH
Sidney OH
Warren OH
1 Cornfield OH
No. of
Lines
1
3
2
8
1
N/A
1
3
N/A
1
1
1
1
2
1
1
Emission 1975, VOC
Control Emissions,
Equipment Tons
None
None
Thermal Incin-
cerators
Incinerator plus
high solids
Incinerator
N/A
None
Incinerator plus
waterborne
N/A
Incinerator
None
None
None
Incinerator (oper-
ates poorly)
None
None
769
878
472
24
190
N/A
59
154
N/A
15
404
N/A
N/A
1,324
24
86
1975, VOC
Emissions,
Ib/gal
4.10
5.60
4.18
0.21
1.05
N/A
4.67
0.54
N/A
1.76
4.44
N/A
N/A
5.00
5.77
5.56
Comment
As of 1978, assumed to
meet RACT
Assumed to meet RACT
Assumed to meet RACT
Assumed to meet RACT
Assumed to meet RACT
(Pittsburg-Corn-
field)
4,389
N/A = Information not available
Source: Booz, Allen & Hamilton Inc.
-------
4.4 DIRECT ECONOMIC IMPLICATIONS
As was shown in Exhibit 4-6, five coil coating firms in
Ohio (with 15 coating lines) are already in compliance with
RACT standards. In addition, three firms (with 4 coating lines)
are in the process of installing controls and it was assumed
that no additional economic impact will be felt. Therefore, if
we assume that in each case where no information was available,
one line uncontrolled must be brought within standards, ten lines
must be brought into control. For each line, the capital cost of
control is estimated at $250,00 and the operating cost is esti-
mated at $75,000 per year. Therefore, approximately $2.5 million
investment will be required to bring the industry within RACT
standards. Annual operating costs will be about $0.75 million.
Exhibit 4-7, on the following page, summarizes the findings
presented in this chapter.
4-11
-------
EXHIBIT 4-7
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR COIL COATING FACILITIES IN
THE STATE OF OHIO
Current Situation
Number of potentially affected facilities
Current industry technology trends
1975 VOC emissions (actual)
Industry preferred method of VOC control
to meet RACT guidelines
Assumed method of control to most RACT
guidelines
Discussion
There are 16 coil coating facilities
potentially affected by the coil coating
RACT guideline in Ohio. Five firms
currently meet RACT emission limitations
Due to the pressures of energy availability
as well as environmental protection, most
firms have or are installing regenerative
type incinerators
4,400 tons per year
Regenerative thermal incineration
Regenerative thermal incineration
Affected Areas in Meeting RACT
Capital Investment (statewide)
Annualized Cost (statewide)
Energy
Productivity
Employment
Market structure
RACT timing requirements (1982)
Problem area
VOC emission after control
Cost effectiveness of control
Discussion
$2.5 million incremental capital required by
eight firms if they were to install controls
on 10 processing lines
$.75 million
Small increased fuel consumption for re-
generative incineration
No major impact
No major impact
The captive coil coating operations not
meeting the RACT limitation may opt to
purchase coated material in lieu of in-
vesting significant capital requirements
Since most coil coating facilities in
Ohio meet the RACT limitations, timing
requirements should be met
Low solvent coating technology is currently
inadequate to meet product requirements
785 tons per year (18 percent of 1975 VOC
emission level)
$207 annualized cost/annual ton of VOC re-
duction.
Source; Booz, Allen 6 Hamilton Inc.
-------
BIBLIOGRAPHY
Springborn Laboratories, Inc., Air Pollution Control
Engineering and Cost Study of General Surface Coating
Industry, Second Interim Report.EPA Contract No.
68-02-2075, August 23, 1977.
U.S. Environmental Protection Agency, Control of
Volatile Organic Emissions from Existing Stationary
Sources, Volume II. Surface Coating of Cans, Coils,
Paper, Fabrics, Automobiles and Light Duty Trucks.
EPA-450/2-77-008, May 1977.
Private conversations at the following:
Alside Aluminum, N. Hampton Township, Ohio
Anaconda (Alsco), Gnadeanhutten, Ohio
Kaiser Aluminum, Toledo, Ohio
Lifeguard Industries, Cincinatti, Ohio
Elwin G. Smith (Cyclops Corp.), Cambridge, Ohio
National Coil Coaters Association
-------
-------
5.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
PLANTS SURFACE COATING
PAPER IN THE STATE OF OHIO
-------
-------
5.0 THE ECONOMIC IMPACT OF IMPLEMENT-
ING RACT FOR PLANTS SURFACE COATING
PAPER IN THE STATE OF OHIO
This chapter presents a detailed analysis of the impact
of implementing RACT for plants in the State of Ohio which
are engaged in the surface coating of paper. This is meant
to include protective or decorative coatings put on paper, pressure-
sensitive tapes regardless of substrate, related web coating
processes on plastic film and decorative coatings on metal
foil, but does not include conventional printing processes which
apply inks. The chapter is divided into five sections:
Specific methodology and quality of estimates
Industry statistics
The technical situation in the industry
Cost and VOC reduction benefit evaluations
for the most likely RACT alternatives
Direct economic impacts.
Each section presents detailed data and findings based
on analyses of the RACT guidelines; previous studies of paper
coating; interviews with paper coaters, coating equipment and
materials manufacturers; and a review of pertinent published
literature.
5-1
-------
5.1 SPECIFIC METHODOLOGY AND QUALITY OF ESTIMATES
This section describes the methodology for determining
estimates of:
Industry statistics
VOC emissions
Processes for controlling VOC emissions
Cost of controlling VOC emissions
Economic impacts
for plants engaged in the surface coating of paper. The
quality of these estimates is discussed in the last part of
this section.
5.1.1 Industry Statistics
Paper coating is practiced in a number of industries.
Among products that are coated using organic solvents are:
adhesive tapes; adhesive labels; decorated, coated and
glazed paper; book covers; office copier paper; carbon
paper; typewriter ribbons; photographic film; paper cartons;
and paper drums. The firms coating paper are classified in
a number of groupings in the U.S. Department of Commerce's
Standard Industrial Classification system. The major coaters
may be found in the following 16 SIC groups:
SIC Description
2611 Pulp mills
2621 Paper mills, except building paper mills
2631 Paperboard mills
2641 Paper coating and glazing
2643 Bags, except textile bags
2645 Diecut paper and paperboard and cardboard
2649 Paper converting, n.e.c.
2651 Folding paperboard boxes
3291 Abrasive products
3292 Asbestos products
3293 Gaskets, packing and sealing devices
3497 Metal foil and leaf
3679 Electronic components, n.e.c.
3842 Orthopedic, prothetic and surgical
appliances and supplies
3861 Photographic equipment and supplies
3955 Carbon paper and inked ribbons
5-2
-------
This list does not include plants listed in the SIC category
2700 (Printing, Publishing and Allied Industries), where
paper coating other than printing may also be a part of the
overall processing of the printed product.
Statistics concerning these industries were obtained
from a number of sources. All data where possible were
converted to the base year 1977 for the state using scaling
factors developed from U.S. Department of Commerce data as
presented in County Business Patterns. The primary sources
of economic data were the 1972 Census of Manufactures
and 1976 Annual Survey of Manufactures. Industry oriented
annuals such as Lockwoods' Directory and Davidson's Blue Book
and the Thomas Register of American Manufacturers were used
to identify some of the individual companies engaged in
paper conversion (i.e., coating of paper in roll form for
sale to other manufacturers) and to identify other paper
coating firms in the state.
The actual number of firms expected to be affected by
the proposed regulations was obtained by a comparison of a
tentative list of firms with the Ohio Environmental Protection
Agency emission inventory. This comparison was made with the
assistance of the Agency's personnel. The inventory did not
appear to be complete and it was necessary to extrapolate the
available Ohio data using information developed by Booz, Allen
on similar paper coating RACT implementation economic impact
studies completed for the states of Illinois, Michigan and
Wisconsin.
5.1.2 VOC Emissions
The Ohio emission inventory was used as a basis for estima-
tion of the total paper coating VOC emissions in the state.
As mentioned above, the inventory appeared to be incomplete and
it was necessary to extrapolate the emissions estimated on the
basis of the inventory alone. This extrapolation was made using
an estimated emission rate per employee in the affected plants.
5.1.3 Processes for Controlling VOC Emissions
Processes for controlling VOC emissions from sources
included in the paper coating category are described in Control
of Volatile Organic Emissions from Existing Stationary Sources,
Volume II (EPA-450/2-76-028).The feasibility of applying the
various control methods to paper coating discussed in this docu-
ment was reviewed with coating fjlrms, coating suppliers,
coating equipment manufacturers and industry associations.
These methods include both coating reformulation and the use of
control devices, such as incinerators and carbon adsorbers.
5-3
-------
Because of the wide variety of coating processes and
coating materials in use, most methods of control will find
some applicability. The percentage of emissions to be con-
trolled by reformulation and by control devices was esti-
mated based on a review of the literature and on information
obtained from the interviews described above.
5.1.4 Cost of Control and Estimated Reduction of VOC
Emissions
The overall costs of control of VOC emissions in accord
with the proposed regulations were determined from:
Estimated current emissions
Estimated type of control to be used
A development of capital, operating and energy
requirements for an average-sized model installa-
tion
Extrapolation of the model plant costs to an
industry total based on current emissions.
Model plant costs were primarily based on information provided
from:
Control of Volatile Organic Emissions from
Stationary Sources, Volume I (EPA-450/2-76-028)
Air Pollution Control Engineering and Cost
Study of General Surface Coating Industry, Second
Interim Report, Springborn Laboratories.
Additional cost data was supplied by equipment and material
suppliers and published literature sources. Major coaters were
consulted to determine industry views on acceptable control
methods and, in some cases, to provide direct estimates of their
projected control costs and experience in control equipment
installations.
5-4
-------
5.1.5 Economic Impacts
The economic impacts were determined by analyzing the
lead time requirements to implement RACT, assessing the
feasibility of instituting RACT controls in terms of capital
and equipment availability, comparing the direct costs of
RACT control to various state economic indicators and as-
sessing the secondary effects on market structure, employ-
ment and productivity as a result of implementing RACT
controls in the state.
5.1.6 Quality of Estimates
Several sources of information were utilized in as-
sessing the emissions, cost and economic impact of imple-
menting RACT controls on the surface coating of paper in
Ohio. A rating scheme is presented in this section to
indicate the quality of the data available for use in this
study. A rating of "A" indicates hard data (data that are
published for the base year), "B" indicates data that were
extrapolated from hard data and "C" indicates data that were
not available in secondary literature and were estimated
based on interviews, analysis of previous studies and best
engineering judgment. Exhibit 5-1, on the following page,
rates each study output listed and the overall quality of
the data.
5-5
-------
EXHIBIT 5-1
U.S. Environmental Protection Agency
DATA QUALITY—SURFACE COATING OF PAPER
Study Outputs
Hard Data
B
Extrapolated
Data
Estimated
Data
Industry statistics
X
Emissions
Cost of emissions control
Economic impact
Overall quality of data
Source; Booz, Allen & Hamilton Inc.
-------
5.2 INDUSTRY STATISTICS
Industry characteristics, statistics and trends for
paper coating in Ohio are presented in this section.
This information forms the basis for assessing the total
impact of implementing RACT for control of VOC emissions in
the state and for the affect upon individual firms. Though
there are a number of firms which coat paper as a part of
the manufacturing process, this discussion concentrates
primarily on those firms whose major activity is paper
coating only.
5.2.1 Size of the Industry
The Bureau of Census reports a total of about 409 firms
in 16 SIC categories in Ohio where paper coating, as
defined in proposed RACT guidelines, is the main business
of the firm or may be a part of its manufacturing activity.
The number of firms and other relevant statistics in each
SIC grouping are summarized in Exhibit 5-2, on the following
page.
Total value of shipments for these firms is estimated
to be about $2.2 billion, with a total of about 35,000
employees. New capital expenditures are estimated to be
about $96 million annually, based on the most recent
(1976) Annual Survey of Manufactures. The 39 firms in SIC
category 2641,those expected to bemost affected by the pro-
posed regulations, have estimated shipments of $254 million,
with a total of 4,985 employees.
However, in Ohio a total of only 25 to 30 plants are
expected to be affected by the proposed paper coating regu-
lations. This estimate is based upon a review of paper con-
verters in Lockwood's Directory and the Ohio Industrial
Directory, a review of the current Ohio emission inventory
and telephone interviews with major paper coating firms.
The total annual value of shipments of these firms is esti-
mated at about $600 million, based on paper coating statistics
for similar RACT impact studies.
5.2.2 Comparison of the Industry to the State Economy
A comparison of the value of shipments of plants in the
SIC categories listed above with the state economy indicates
that these plants represent about 2.6 percent of the total
value of manufacturing shipments in Ohio. The industry employs
2.7 percent of all manufacturing employees in the state.
5-6
-------
SIC Coda
2611
2621
2631
2641
2643
2645
2649
2651
3291
3292
3293
3497
3679
3842
3861
3955
•total
b. None listed.
Description
Pulp mills
Paper mills, except building
paper mills
Paperboard mills
Paper coating and glazing
Bags, except textile bags
Diecut paper and paperborad
and cardboard
Paper converting, n.e.c.
Folding paparboard boxes
Abrasive products
Asbestos products
Gaskets, packing and sealing
devices
Metal foil and leaf
Electronic components, n.e.c.
Orthopedic, prothetic and
surgical appliances and supplies
Photographic equipment and
supplies
Carbon paper and inked ribbons
Number
of
Plants
3
18
20
39
20
27
17
39
35
9
36
6
59
63
14
4
409
•total
Nunter of
Employees
60
7,622
2,680
4,985
1,440
1,004
660
3,700
2,825
764
1,831
1,478
2,421
2,557
590
370
34,987
•total
Payroll
(SI, 000)
c
114,671
40,674
67,897
15,664
10,209
5,891
c
35,488
7,623
18,434
19,482
21,150
23,918
7,057
c
388,158
Estimated Value
of Shipments3
(51,000)
7,800
536,600
219,700
254,200
96,000
67,400
37,300
' 242,000
194,300
45,500.
67,600
117,000.
101,500
108,300
48,600
27,900
2,171,700
itios of (value of shipment/total salary and wages) and (capital expenditures/total salary a
Annual Survey of Manufacturers where value of shipments or expenditures are not tabulated f
: proprietary information.
unilton Inc. : 1976 County Business Patterns
, and 1976 Annual Survey of Manufactures, U.S. E
EXHIBIT 5-2
U.S. Environmental Protection Agency
1976 INDUSTRY STATISTICS—SURFACE
COATING OF PAPER SIC GROUPS IN OHIO
Estimated
New Expenditures3
($1,000)
1,400
20,300
18,800
16,400
2,700
1,900
700
5,900
11,300
aoo
2,400
2,800
4,200
3,700
1,900
-------
5.2.3 Historical and Future Patterns of the Industry
The nationwide value of shipments in the industries expected
to be affected by the proposed paper coating regulations, in
general, exceed the growth rate of the economy. As summarized in
Exhibit 5-3, on the following page, the value of shipments
increased in every category between 1972 and 1976, with an average
annual growth rate of about 12.1 percent over the period. Com-
pared to an average inflationary rate of 6 to 8 percent, this is
equivalent to a real growth rate of 4 to 6 percent. In some
individual categories, growth rates were even greater. Paper
production increased by an uncorrected average annual growth
rate of 16.5 percent; metal and foil by 16 percent; paper
coating and glazing by about 12 percent, only slightly less
than the average.
It is expected that the growth rate will continue at
these rates for the near future.
5-7
-------
EXHIBIT 5-3
U.S. Environmental Protection Agency
HISTORICAL TRENDS IN VALUE OF SHIPMENTS OF
U.S. PLANTS ENGAGED IN PAPER COATING ($ millions)
SIC Code
2611
2621
2631
2641
2643
2645
2649
2651
3291
3292
3293
3499
3679
3842
3861
3955
Total
1972
710
6,385
4,153
1,954
1,886
676
631
1,487
888
763
665
702
3,060
1,450
5,624
237
31,271
1973
849
7,514
4,862
2,284
2,183
747
833
1,644
1,067
823
723
753
3,430
1,620
6,435
268
36,035
1974
1,525
9,942
6,516
2,645
2,867
923
1,079
1,890
1,235
963
835
973
3,210
1,800
7,490
309
42,400
1975
1,630
9,650
6,055
2,626
2,980
943
1,090
1,952
1,222
900
843
1,065
3,450
2,090
7,627
285
44,408
1976
51,744
Source;" T976 Annual Survey of Manufactures, U.S. Department of Commerce.
-------
5.3 TECHNICAL SITUATION IN THE INDUSTRY
This section presents a description of the principal
processes used in the surface coating of paper and similar
products proposed to be included under the PACT Surface
Coating of Paper regulations. These products include a myriad
of consumer and industry oriented items, such as pressure-
sensitive tapes, adhesive labels, book covers, milk cartons,
flexible packaging materials and photographic film. Although
many of these products are also printed in one manner or
another, the emissions from printing inks are not included
in the RACT regulations pertaining to paper coating; only the
emissions specifically issuing from the coating operation
are included. An estimate of these emissions for the state
is also presented in this section.
5.3.1 General Coating Process Description
In organic solvent paper coating, resins are dissolved
in an organic solvent mixture and this solution is applied
to a web (continuous roll) of paper. As the coated web is
dried, the solvent evaporates and the coating cures. An
organic solvent has several advantages: it will dissolve
organic resins that are not soluble in water, its components
can be changed to control drying rate, and the coatings show
superior water resistance and better mechanical properties
than most types of waterborne coatings. In addition, a
large variety of surface textures can be obtained using
solvent coatings.
Most organic solvent-borne coating is done by paper
converting companies that buy paper from the mills and apply
coatings to produce a final product. The paper mills them-
selves sometimes apply coatings, but these are usually
waterborne coatings consisting of a pigment (such as clay)
and a binder (such as starch or casein). However, much
additional coating is done by firms only as part of the
manufacturing process. For instance, many printed items
(e.g., periodical covers, playing cards and cartons) are
printed first and then coated in the printing plant with a
protective coating which can provide abrasion resistance,
water resistance or decorative effects.
5-8
-------
Nationwide emissions of organic solvents from paper
coating have been estimated to be 0.56 million tons per
year.1 This estimate includes resin emissions from sol-
ventless polyethylene extrusion coatings applied to milk
cartons and resin emissions from water emulsion coatings and
from rubber adhesives used to glue paper bags and boxes. A
lower estimate, based on solvent emissions from the type of
coating operations found in SIC 2641, is 0.35 million tons
per year. The true total emission rate, however, is probably
closer to the 0.56 million tons per year value. This is
slightly less than 3.0 percent of the estimate of 19 million
tons per year of hydrocarbon emissions from all stationary
sources previously reported by EPA.2 Manufacturing of
pressure sensitive tapes and labels, the largest single sol-
vent emission source in SIC 2641, alone accounts for 0.29
million tons per year.
Solvent emissions from an individual coating facility
will vary with the size and number of coating lines. A
plant may have one or as many as 20 coating lines. Uncon-
trolled emissions from a single line may vary from 50 pounds
per hour to 1,000 pounds per hour, depending on the line
size. The amount of solvent emitted also depends on the
number of hours the line operates each day.
Exhibit 5-4, on the following page, gives typical
emission data from various paper coating applications.
5-3.2 Nature of Coating Materials Used
The formulations usually used in organic solvent-borne
paper coatings may be divided into the following classes:
film-forming materials, plasticizers, pigments and solvents.
Dozens of organic solvents are used. The major ones are:
toluene, xylene, methyl ethyl ketone, isopropyl alcohol,
methanol, acetone and ethanol.
Although a single solvent is frequently used, often a
solvent mixture is necessary to obtain the optimum drying
rate. Too rapid drying results in bubbles and an "orange
peel effect in the coating; whereas, slow drying coatings
require more time in the ovens or slower production rates
Variations in the solvent mixture also affect the solvent
qualities of the mix.
i ?•' 5U??6S' et al" Source Assessment; Prioritization
of Air Pollution from Industrial Surface Coating Qperaf-.inn*
Monsanto Research Corporation, Dayton, Ohio.—Prepared
lark S'rEnvir°nme*tai Protection Agency, Research Triangle
Park, N.C., under Contract No. 68-02-1320 (Tech 14)
Publication No. 650/2-75-019a. i*«*-«. ±«;
2. EPA-450/2-76-028, Op. Cit.
5-9
-------
EXHIBIT 5-4
U.S. Environmental Protection Agency
EMISSION DATA FROM TYPICAL PAPER COATING PLANTS
Number
of coating
lines
2
5
8
2
10
20
3
3
1
a. Neglecting
Solvent
Usage
(Ib./day)
10,000
15,000
9,000
1,200
24,000
55,000
5,000
21,000
10,500
emissions that are not
Source: Control of Volatile Organics
Solvent Control
Emissions Efficiency (%)a
(Ib.day)
10,000
15,000
9,000
1,200
950 96
41,000 90
1,500 90
840 96
500 96
captured in the hooding system.
from Stationary Sources, Vol. II, EPA-450/2-77-008.
Control
Device
None
None
None
None
Carbon
adsorption
Carbon
adsorption
(not all lines
controlled)
Carbon
adsorption
Carbon
adsorption
Afterburner
-------
The main classes of film formers used in conventional
paper coating are cellulose derivatives and vinyl resins.
The most commonly used cellulose derivative, nitrocellulose
has been used for paper coating decorative paper, book
covers and similar items since the 1920s. It is relatively
easy to formulate and handle, and it dries quickly, allowing
lower oven temperatures than vinyl coatings. The most
common vinyl resin is the copolymer of vinyl chloride and
vinyl acetate. These vinyl copolymers are superior to
nitrocellulose in toughness, flexibility and abrasion re-
sistance. They also show good resistance to acids, alkyds,
alcohols and greases. Vinyl coatings tend to retain solvent,
however, so that comparatively high temperatures are needed.
In general, nitrocellulose is most applicable to the dec-
orative paper field, whereas vinyl copolymers are used for
functional papers, such as some packaging materials.
In the production of pressure-sensitive tapes and
labels, adhesives and silicone release agents are applied
using an organic solvent carrier. The adhesive layer is
usually natural or synthetic rubber, acrylic or silicone.
Because of their low cost, natural and synthetic rubber
compounds are the main film formers used for adhesives in
pressure-sensitive tapes and labels, although acrylic and
silicone adhesives offer performance advantages for certain
applications. In most cases tapes and labels also involve
the use of re'lease agents applied to a label carrier or the
backside of tape to allow release. The agents are usually
silicone compounds applied in a dilute solvent solution.
5.3.3 Coating Process Most Commonly Used
Exhibit 5-5, on the following page, shows a typical
paper coating line. Components include an unwind roll, a
coating applicator (knife, reverse roll or gravure), an
oven, various tension and chill rolls and a rewind roll.
The unwind, rewind and tension rolls display various degrees
of complexity, depending on the design of the line.
The coating applicator and the oven are the main areas
of organic emission in the paper coating facility.
Coatings may be applied to paper in several ways. The
main application devices are knives, reverse rollers or
rotogravure devices.
A knife coater (Exhibit 5-6, following Exhibit 5-5,
consists of a blade that scrapes off excess coating on the
paper. The position of the knife (relative to the paper
surface) can be adjusted to control the thickness of the
coating. The knife coater is simply constructed and easy to
clean.
5-10
-------
EXHIBIT 5-5
U.S. Environmental Protection Agency
TYPICAL PAPER COATING LINE
ZONE1
tXHAUST
ZONE I
EXHAUST
MCATEO AIR
FROM lUMHEII
NOT AIM NOZZLES
REVERSE ROIL
COATER
OVER
UWMM
TEMION ROltl
REVMM
Source; Control of Volatile Organic Emissions from Existing Sources, Volume II;
Surface Coating of Cans, Coils, Paper Fabrics/ Automobiles and Light-
Duty Trucks, EPA 450/2-77-008, May 1977.
-------
f
EXHIBIT 5-6
U.S. Environmental Protection Agency
KNIFE COATER
PAPfRWfl
Source; Control of Volatile Organic Emissions from Existing Sources, Volume II;
Surface Coating of Cans, Coils, Paper, Fabrics, Automobiles and Light-
Duty Trucks, EPA 450/2-77-008, May 1977.
-------
The reverse roll coater (Exhibit 5-7, on the following
page) applies a constant thickness of coating to the paper
web, usually by means of three rolls, each rotating in the
same direction. A transfer roll picks up the coating solu-
tion from a trough and transfers it to a coating roll.
(Sometimes there is no transfer roll and the coating is
pumped directly onto a coating roll.) A "doctor roll"
removes excess material from the coating roll. The gap
between the doctor roll and the coating roll determines the
thickness of the coating. The web is supported by a rubber
backing roll where the coating roll contacts the paper. The
coating roll turns in a direction opposite to that of the
paper, hence the name "reverse roll." This reverse direction
of the coating roll reduces striations in the coating that
can form if the coating roll is turned in the same direction
as the paper web.
Knife coaters can apply solutions of much higher vis-
cosity than roll coaters and thus, less solvent is emitted
per pound of coating applied. Knife coaters handle coatings
with viscosity up to 10,000 centipoise (cp). Reverse roll
coaters operate best in a much more dilute range, where
viscosity is 300 to 1,500 cp. Roll coaters, however, can
usually operate at higher speeds and show less tendency to
break the paper.
Rotogravure, another type of application method used by
paper coaters, is usually considered a printing operation.
With it, the image area on the coating or rotogravure roll
is recessed relative to the nonimage area. The coating is
picked up in the recessed area of the roll and transferred
directly to the substrate. The gravure printer can print
patterns or a solid sheet of color on a paper web. Roto-
gravure can also be used to apply materials, such as silicons
release coatings for pressure-sensitive tapes and labels.
Because of the similarities, the regulation is applicable t
gravure as well as knife and roll coating.
Most solvent emissions from coating paper come from the
dryer or oven. Ovens range from 20 feet to 200 feet in
length and may be divided into two to five temperature
zones. The first zone, where the coated paper enters the
oven, is usually at a low temperature (110°F). Solvent
emissions are highest in this zone. Other zones have
progressively h.gher temperatures that cure the coating
after most of the solvent has evaporated. The typical
curing temperature is 250°F, although in some ovens tem-
peratures of 400°F are reached. This is generally the
maximum because higher temperatures can damage the paper.
Exhaust streams from oven zones may be discharged indepen-
dently to the atmosphere or into a common exhaust and sent
to some type of air pollution control device. The average
exhaust temperature is about 200°F.
5-11
-------
EXHIBIT 5-7
U.S. Environmental Protection Agency
REVERSE ROLL COATER
DOCTOR NOLI
MtTtNINC CAP
TMMFEN NOLL
COATED PATEN WCI
IACKIN8 NOLL
COATIN6 NESEHVOIN
Source: Control of Volatile Organic Emissions Coils, Paper, Fabrics/ Automobiles,
and Light-Duty Trucks, EPA 450/2-77-008, May 1977
-------
However, in some coatings, such as in the manufacture
of photographic films or thermographic recording paper, the
heat sensitivity of the films requires that temperatures
considerably lower than this must be used. Exhaust temper-
atures may be as low as 100°F. Thus, much larger relative
volumes of air must be used than is possible with common
paper coating.
5.3.3 Current VQC Emissions
Current emissions from paper coating operations in Ohio
are believed to range from about 28,000 to 38,000 tons per year.
This estimate is based upon extrapolation of emission data for
this paper coating category developed by Booz, Allen for the
states of Illinois, Michigan and Wisconsin. The emission data .
for these three states were confirmed by detailed examination
of emission inventory records and an exhaustive telephone survey
of companies expected to be affected by the regulations.
Extrapolation was done using an average emission rate
per employee in SIC plant groups in each state expected to
coat paper as a major part of their operations. In Exhibit 5-8,
on the following page, are tabulated the total number of plants
and their employees in three combinations of SIC groupings for
Ohio, Illinois, Michigan and Wisconsin and the total and averaged
paper coating emissions for Illinois, Michigan and Wisconsin.
The most reliable average emission rates for extrapolation t^
Ohio emissions in the study team's opinion are considered to be
those based upon SIC groups 2641, 2649 and 3955 and the emission
rates for the states of Illinois and Michigan. Based on experience
with paper coating studies in other states, most firms in which
the principal activity is paper coating are included in these
three SIC groups. Furthermore, both of these states are highly
industrialized and are expected to have an indusl.-al \l^:\L
profile most like Ohio's.
5.3.4 RACT Guidelines
The RACT guidelines1 for control of VOC emissions from
the surface coating of paper require that emission dis-
charges of VOCs be limited to 2.9 pounds per gallon of
coating material delivered to the coating applicator.
Regulatory Guidance for Control of Volatile Organic Compounds
Emissions from 15 Categories of Stationary Sources, EPA
950/2-78-001.
5-12
-------
EXHIBIT 5-8
U.S. Environmental Protection Agency
SUWARY OF DATA USED FOR ESTIMATION
OF PAPER COATING EMISSIONS IN OHIO
ILLINOIS
Number of plants
Number of employees
Total paper coating emissions—33,500
for the state (tons/year)
Average emissions
(tons/year/employee)
MICHIGAN
Number of plants
Number of employees
Total paper coating emissions—13,000
for the state (tons/year)
Average emissions
(tons/year/employee)
WISCONSIN
Number of plants
Number of employees
Total paper coating emissions-
for the state (tons/year)
Average emissions
(tons/year/enployee)
OHIO
Number of plants
Number of employees
-6,300
72
5,272
6.35
38
2,735
4.75
22
3,658
1.72
60
6,015
SIC Groups*
B
171
12,989
2.58
85
7,435
1.7
49
5,348
1.2
127
11,140
563
34,987
0.95
397
22,990
0.56
255
29,380
0.21
409
37,611
a. As obtained from 1976 County Business Patterns, U.S. Dept. of Comerce
Group A includes SIC Codes 2641, 2649, 3955
Group B includes SIC Codes 2631, 2641, 2643, 2645, 2649, 3955
Group C includes SIC Codes 2611, 2621, 2631, 2641, 2643, 2645, 2649, 2651,
3291, 3292, 3293, 3499, 3679, 3842, 3861, 3955
See Exhibit 5-2, following page 5-6, for description of SIC Codes.
Source; Booz, Allen & Hamilton Inc.
-------
The recommended methods of achieving this requirement
are:
The application of low solvent content coatings;
or
Incineration, provided that 90 percent of the
nonmethane VOCs (measured as combustible carbon)
which enter the incinerator are oxidized to carbon
dioxide and water; or
A system demonstrated to have control efficiency
equivalent to or greater than provided by either
of the above methods.
In the following section are discussed several methods
of low solvent and solventless systems, which have been
demonstrated to be applicable to some paper coating prod-
ucts, and the two principal add-on systems, incineration and
carbon adsorption, generally used for emission control.
This information has been extracted principally from the
previously cited EPA report, Control of Volatile Organic
Emissions from Existing Sources, Volume II, which should be
consulted for a more thorough discussion. In some instances,
additional comment was obtained from coaters, coating mate-
rial suppliers and control equipment manufacturers.
5.3.5 Low Solvent and Solventless Coatings
In Exhibit 5-9, on the following page, are listed
several types of coating materials, which have found utility
in paper coating, and an estimate of expected solvent reduction,
5.3.5.1 Waterborne Coatings
Waterborne coatings have long been used in coating
paper to improve printability and gloss. The most widely
used types of waterborne coatings consist of an inorganic
pigment and nonvolatile adhesive. These waterborne coatings
are useful but cannot compete with organic solvent coatings
in properties such as weather, scuff and chemical resistance.
Newer waterborne coatings have been developed in which a
synthetic insoluble polymer is carried in water as a colloidal
dispersion or an emulsion. This is a two-phase system in
wnich water is the continuous phase and the polymer resin is
the dispersed phase. When the water is evaporated and the
coating cured, the polymer forms a film that has properties
similar to those obtained from organic-solvent-based coatings.
5-13
-------
EXHIBIT 5-9
U.S. Environmental Protection Agency
ACHIEVABLE SOLVENT REDUCTIONS USING LOW
SOLVENT COATINGS IN PAPER COATING INDUSTRY
Type of Low Solvent-Coating
Waterborne coatings
Plastisols
Hot melts
Extrusion coatings
Pressure-sensitive adhesives
Waterborne
Hot melts
Prepolymer
Silicone release agents
100 percent nonvolatile coatings
Waterborne emulsions
Reduction Achievable (%)a
80-99
95-99
99+
99+
80-99
99
99
99+
80-99
a. Based on comparison with a conventional coating containing 35 percent solids by volume
and 65 percent organic solvent by volume.
Sourcet EPA 450/2-77-008, op. cit.
-------
5.3.5.2 Plastisols and Organisols
Plastisols are a colloidal dispersion of synthetic
resin in a plasticizer. When the plasticizer is heated, the
resin particles are solvated by the plasticizer so that they
fuse together to form a continuous film. Plastisols usually
contain little or no solvent, but sometimes the addition of a
filler or pigment will change the viscosity so that organic
solvents must be added to obtain desirable flow character-
istics. When the volatile content of a plastisol exceeds 5
percent of the total weight, it is referred to as an organisol.
Paper is coated with plastisols to make such products
as artificial leather goods, book covers, carbon paper and
components of automobile interiors. Plastisols may be
applied by a variety of means, but the most common method is
probably reverse roll coating. One advantage of plastisols
is that they can be applied in layers up to 1/8 thick. This
avoids the necessity of multiple passes through a coating
machine.
Although organic solvents are not evaporated from
plastisols, some of the plasticizer may volatilize in the
oven. This plasticizer will condense when emitted from the
exhaust stack to form a visible emission.
5.3.5.3 Hot Melt Coatings
Hot melt coatings contain no solvent; the polymer resins
are applied in a molten state to the paper surfaces. All the
materials deposited on the paper remain as part of the coating.
Because the hot melt cools to a solid coating soon after it is
applied, a drying oven is not needed to evaporate solvent or to
cure the coating. Energy that would have been used to heat an
oven and to heat makeup air to replace oven exhaust is therefore
saved. Considerable floor space is also saved when an oven is
not used. In addition, the paper line speed can be increased
because the hot melt coating cools faster than a solvent coat-
ing can dry.
One disadvantage with hot melt coatings is that materials that
char or burn when heated cannot be applied by hot melt. Other
materials will slowly degrade when they are held at the necessary
elevated temperatures.
Hot melts may be applied by heate<3 gravure or roll coaters
and are usually applied at temperatures from 150°F to 450°F.
The materials with a lower melting point are generally waxy
materials with resins added to increase gloss and hardness. The
materials with a higher melting point form films that have superior
scuff resistance, transparency and gloss. These coatings form
excellent decorative finishes. One particular advantage of
hot melts is that a smooth finish can be applied over a rough
textured paper. This is possible because the hot melt does not
penetrate into the pores of the paper.
5-14
-------
5.3.5.4 Extrusion Coatings
A type of hot melt coating, plastic extrusion coating is a
solventless system in which a molten thermoplastic sheet is
discharged from a slotted dye onto a substrate of paper, paper-
board or snythetic material. The moving substrate and molten
plastic are combined in a nip between a rubber roll and a chill
roll. A screw-type extruder extrudes the coating at a temperature
sometimes as high as 600°F. Low and medium density polyethylene
are used for extrusion coating more than any other types of resins,
5.3.5.5 Pressure-Sensitive Adhesive Coatings
In 1974, sales of pressure-sensitive adhesives in the
United States exceeded $1 billion, and the growth rate was
about 15 percent per year. Products using pressure-sensitive
adhesives include tapes and labels, vinyl wall coverings and
floor, tiles. Nationwide, organic solvent emissions from
pressure-sensitive tape and label manufacture have been esti-
mated to be 580 million pounds per year.
Waterborne adhesives have the advantage that they can be
applied with conventional coating equipment. Waterborne emul-
sions, which can be applied less expensively than can solvent-
borne rubber-based adhesives, are already in use for pressure-
sensitive labels. A problem with waterborne adhesives is that
they tend to cause the paper substrate to curl and wrinkle.
Pressure-sensitive hot melts currently being marketed
consist mostly of styrene-butadiene rubber block copolymers.
Some acrylic resins are used, but these are more expensive. The
capital expense of hot melt coating equipment is a problem for
paper coaters that have already invested heavily in conventional
solvent coating equipment.
Prepolymer adhesive coatings are applied as a liquid
composed of monomers containing no solvent. The monomers
are polymerized by either heat or radiation. These prepolymer
systems show promise, but they are presently in a developmental
stage only.
5.3.5.6 Silicone Release Coatings
Silicone release coatings, usually solvent-borne, are
sometimes used for pressure-sensitive, adhesive-coated products.
Two low-solvent alternatives are currently on the market. The
first is a 100 percent nonvolatile coating which is usually
heatcured, but may be radiation cured. This is a prepolymer
coating which is applied as a liquid monomer that is crosslinked
by the curing process to form a solid film. The second system
is water emulsion coatings which is lower in cost than the pre-
polymer coating. However, because of wrinkling and other applica-
tion problems the waterborne coating may be of limited value.
5-15
-------
Some silicone coating materials which are under development
use single solvent systems that can be readily recovered by car-
bon adsorption. Current coatings are troublesome since some
silicone is carried into the adsorber where it clogs the carbon
pores to reduce adsorption efficiency.
5.3.6 Incineration
Catalytic and direct thermal incineration processes convert
hydrocarbons to carbon dioxide and water at high temperatures.
Incineration is widely accepted as a reliable means of reducing
hydrocarbon emissions by 90 percent or more.
Generally, the major disadvantage of this approach is
the increased energy required to raise the exhaust gas tem-
peratures above 1,200°F for direct incineration and 700°F
for catalytic incineration. Natural gas is the most commonly
used fuel though fuel oils, propane or other fluid hydrocarbons
can be employed. Fuel oil is not generally acceptable because
of the sulfur oxides generated in combustion or possible catalyst
poisoning in the oil. Another problem is the generation of
nitrogen oxides in direct fired incinerators because of the
exposure of air to high-temperature flames.
The increased energy consumption can, in some cases, be
reduced or eliminated by heat exchange of the exhaust gases with
fresh emissions (primary heat recovery) or by use of the hot in-
cinerator exhaust gases in process applications (secondary heat
recovery). Typical use of secondary heat recovery is for oven
heat in drying or baking ovens. In fact, with efficient primary
exchange and secondary heat recovery, total fuel consumption of
an incinerator-oven system can be less than that for the oven
before the incinerator is added. The heat required to sustain
the system comes from the combustion of the volatile organic
compounds in the exhausts.
Both catalytic and direct fired systems are capable of
high heat recovery efficiency if several conditions occur:
VOC concentrations are or can be increased
to 8-10 percent or more of their LEL
(lower explosion limit).
Oven temperatures are sufficiently high to
be able to use most of the sensible heat in the
exhaust gases after primary heat exchange.
Usually, temperatures above 140°F to 150°F can
be sufficient to allow 85 percent or more over-
all heat recovery.
Where catalytic incinerators are used, no
compounds must be present in the gases
treated which could poison or blind the
catalyst.
5-16
-------
In most paper coating operations, except for heat-sensitive
products such as photographic paper and film, these condi-
tions can be met. In other cases, 50-85 percent primary
heat recovery can be attained and at least a portion of the
incinerator exhaust heat can be used for in-plant energy
requirements.
Paper coaters who use coating machinery for a multi-
plicity of processes have commented that catalytic incin-
eration would probably not be used because of the possibility
of catalyst poisoning. Direct fired incineration would be
used.
5.3.7 Carbon Adsorption
Carbon adsorption has been used since the 1930s for
collecting solvents emitted from paper coating operations.
Most operational systems on paper coating lines were in-
stalled because they were profitable. Pollution control has
usually been a minor concern. Carbon adsorption systems at
existing paper coating plants range in size from 19,000 scfm
to 60,000 scfm. Exhausts from several paper coating lines
are often manifolded together to permit one carbon adsorption
unit to serve several coating lines. Paper products that
are now made on carbon-adsorption-controlled lines include
pressure-sensitive tape, office copier paper and decorative
paper.
Carbon adsorption is most adaptable to single solvent
processes. Many coaters using carbon adsorption have re-
formulated their coatings so that only one solvent is re-
quired. Toluene, a widely used solvent for paper coating,
is readily captured in carbon adsorption systems.
The greatest obstacle to the economical use of carbon
adsorption is that, in some cases, reusing recovered sol-
vents may be difficult. In many coating formulations, a
mixture of several solvents is needed to attain the desired
solvency and evaporation rates. Also if different coating
lines within the plant use different solvents and are all
ducted to one carbon adsorption system, then there may be
difficulty reusing the collected solvent mixture. In some
cases, such as in the preparation of photographic films or
thermographic recording paper, extremely high purity sol-
vents are necessary to maintain product performance and even
distillation may be insufficient to produce the quality of
recovered solvent needed. For most other coating formulations,
distillation is adequate.
5-17
-------
Separation of solvent mixtures by distillation is a
well-established technology and several plants are already
doing this. One paper coating plant has been using such
distillation procedures since 1934. Distillation equipment
can be expensive, however, and it is hard to build flexibility
into a distillation system. Flexibility is needed because
many paper coaters, especially those who do custom work for
others, are constantly changing solvent formulations.
However, in some plants where mixed solvents are used,
azeotropic mixtures can occur which can be separated only by
specialized techniques. Even large coaters have commented
that they did not have the knowledge at hand necessary for
the complex distillation and separation procedures needed.
Another problem with carbon adsorption is the potential
of generating explosive conditions in the adsorber because
of the localized increases in combustible organic material
concentrations. Ignition apparently can be caused by static
electricity in systems where dry air at high flow rates is
treated. Several explosions of absorbers have been reported
in paper coating and other plants.
Also, adsorption of solvents containing water soluble
compounds (such as alcohols, ketones or esters) can present
a secondary pollution problem where steam is used for re-
generation. Additional treatment of the condensed steam
with its content of dissolved organics would be required,
increasing the complexity of the solvent recovery system and
its cost.
5-18
-------
5.4 COST AND VOC REDUCTION BENEFIT EVALUATIONS
FOR THE MOST LIKELY RACT ALTERNATIVES
This section discusses the projected costs of control
for paper coating in the state, based on the emissions as
discussed on page 5-12 of this report. Where possible,
the validity of the costs were confirmed with coating firms
and equipment manufacturers.
Though some coaters will substitute low solvent or
solventless coating for current high solvent systems, no
reliable information was available to estimate the amount of
such coatings which might be used. Several coaters also
commented that though they had low'solvent coatings under
development the coatings would not be sufficiently evaluated
to meet proposed compliance schedules. Therefore, it has
been assumed (for cost estimating purposes) that either incin-
eration or carbon adsorption will be used to comply with the
proposed regulations.
5.4.1 Costs of Alternative Control Systems
Exhibits 5-10 and 5-11, on the following pages, present
costs for typical incineration and carbon adsorption systems
as developed by EPA sources. Both systems are based on the
assumption that exhaust air flow rates can be reduced suf-
ficiently to attain LEL levels of 25 percent. This is
possible with well-designed ovens where excess air can be
reduced or where product characteristics allow.
Several paper coaters indicate that this may not be
possible with older coating lines or with certain types of
coating. Coating drying rate is a function of air flow
rate, temperature and vapor concentration in the air. If
air flow rates are to be reduced, drying temperatures or
drying times must be increased. Because of the heat sen-
sitivity of some coating, temperature increases may not be
possible. Increase in drying time will necessitate either
more time in the ovens or reduced production rates. Several
coaters of heat sensitive products indicated that in order
to achieve special characteristics they could not increase
emission concentrations above 5 to 6 percent of LEL and
could not use oven temperatures above 140 F. Plants manu-
facturing conventional coated products, hcwever, can de-
crease air flow rates sufficiently to increase VOC con-
centrations in the exhausts to 40-50 percent with only
moderate increases in temperatures or changes in production
rates. We have assumed for cost estimation purposes that a
25 percent LEL can be attained on the average.
5-19
-------
EXHIBIT 5-10
U.S. Environmental Protection Agency
INCINERATION COSTS FOR A TYPICAL PAPER
COATING OPERATION
Incineration Device
No heat recovery
Catalytic
Noncatalytic
(Afterburner)
Installed Cost
($)
Annualized Cost
($/yr.)
155,000
125,000
100,000
105,000
Control Cost
($/ton of solvents
recovered)
51
54
Primary heat
recovery
Catalytic
Noncatalytic
(Afterburner)
180,000
150,000
75,000
66,000
39
34
Primary and
secondary heat
recovery
Catalytic
Noncatalytic
(Afterburner)
220,000
183,000
54,000
26,000e
28°
13a
Note: Typical operation parameters are: process rate of 15,000 scfm; temperature of 300°F,
operation at 25 percent of LEL. See Volume I, Chapter 4, for costs for other
operating parameters. Costs are believed to be valid only for mid-1974.
a. Assumes heat is recovered and used at a total heat recovery of 70 percent.
Source: EPA-450/2-76-028
-------
EXHIBIT 5-11
U.S. Environmental Protection Agency
CARBON ADSORPTION COSTS FOR PAPER COATING INDUSTRY
No credit for recovered
solvent
Installed Co3t
($)
320,000
Annualized Cost
($/yr.)
127,000
Control Cost
($ ton of solvent
recovered)
125
Recovered solvent credited
at fuel value
320,000
60,000
40
Solvent credited at market
320,000
(100,000)a
(50)'
Note: Operating parameters are: process rate of 15,000 scfm, temperature of 170°F,
operation at 25 percent of LEL. See Volume I, Chapter 4, for details on cost
estimates. Costs are believed to be valid only for mid-1974.
a. Costs in parenthesis indicate a net gain.
Source; EPA-450/2-76-028
-------
Both incinerator costs and adsorber costs are a func-
tion of equipment size and vary generally with air flow
rate. It was assumed for projection of overall costs in the
state that control equipment, on the average, would be sized
for 15,000 scfm per unit*. In most plants, it is impractical
to manifold exhausts so that all exhausts could be treated
in one add-on emission control system. In the case of
incinerators, it would be difficult to use secondary heat
recovery on ovens where the incinerator is remote from the
oven.
This assumption of 15,000 SCFM per unit can lead to
errors in both capital costs and annualized costs because of
economies of scale. For instance, as shown in Exhibit 5-10,
the capital costs of a 15000 SCFM noncatalytic incinerator
are equivalent to about $8.30/SCFM as estimated in EPA 450/
2-76-028. In the same report, a 7500 SCFM unit would have a
cost of $110,000 or $14.60/SCFM and a 30,000 SCFM unit a cost
of $15,000 or $5.00/SCFM. The 15,000 SCFM assumption is,
therefore, considered to lead only to an approximation of
compliance costs and may understate actual costs. Until the
actual number of firms affected and their emissions are
known, a more accurate estimate is probably not possible.
The major problem in estimating total installed costs
of control systems is the added cost of installation. The EPA
estimates were made on the assumption of an easily retrofitted
system. In practice coaters have found actual installed costs
to be three to five times those summarized in Exhibits 5-10
and 5-11. For instance, E.I. DuPont de Nemours, based on
their experience on actual installed equipment, estimates2
$1.2 million for a carbon adsorber to treat 15,000 scfm of
exhaust gases. Recent prices from recuperative type incinerator
manufacturers for a 15,000 scfm direct-fired, ceramic bed
primary recuperative heat exchanger are about $150,000 for
the incinerator alone; installed costs, with provision for
return of exhausts for secondary heat recovery, are estimated
to be more than $300,000. The estimates in Exhibits 5-10
and 5-11 indicate installed costs of $320,000 for an
equivalent adsorber, and $140,000 for the incinerator.
Using assumptions itemized in Exhibit 5-12, an average of 13,500
SCFM per unit is estimated if 25 firms are assumed have one unit
each.
T.A. Kittleman and A.B. Akell, "The Cost of Controlling Organic
Emissions," Chemical Engineering Progress, April 1978.
5-20
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5.4.2 Estimated Statewide Costs
The total emissions considered to be applicable under RACT,
as discussed on page 5-12 of this report, are about 28,000 to
38,000 tons per year. Based on this emission rate and EPA
costs as summarized in Exhibits 5-10 and 5-11, capital costs
are estimated as $6.0 million to $8.2 million, with annual costs
of $1.0 million to $1.4 million per year. All bases and assumptions
used in this estimate are summarized in Exhibit 5-12, on the
following page. The costs presented in Exhibits 5-10 and 5-11
were increased by 25 percent to account for inflationary increases
from mid-1974 to mid-1977.
However, as discussed on page 5-20, experience has shown that
these adjusted costs are probably low by as much as three to
four times because of difficult retrofit situations or the need
for modification of ovens or collection systems. Actual capital
costs are, therefore, estimated to range from $18 million to $33
million rather than $6.0 million to $8.2 million. Adjusting the
capital cost component of the annual costs as estimated in
EPA 450/2-78-028 for this increased capital costs, equivalent
annualized costs are estimated to be $6.0 million to $11.0 million.
5.4.3 Estimated Emission Reduction
Assuming that 90 percent of all solvents used in coating
operations can be collected by properly designed hoods and ovens,
emissions could be reduced by 23,000 to 31,000 tons per year.
This is based on a 90 percent capture of emissions by a carbon
adsorber or destruction in an incinerator, an overall reduction
in emissions of 81 percent.
In many cases this may result in a much lower emission rate
than required by the 2.9 pound per gallon RACT limit proposed.
A plant may, by proper selection of exhaust streams, reduce the
cost of compliance by treating only those emissions which would
result in an average emission rate of 2.9 pounds per gallon of
coating. However, the RACT limit of 2.9 pounds per gallon is
based on typical coatings now used in the industy in concert
with 81 percent overall reduction in emissions. Unless solvent
coatings are used, compliance can only be achieved plantwide
by using a system which provides an emission reduction level of
81 percent.
5-21
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EXHIBIT 5-12
U.S. Environmental Protection Agency
SUMMARY OF ASSUMPTIONS USED IN COST ESTIMATE
Assumptions
75 percent of emissions are controlled by incineration with primary and
secondary heat recovery; 25 percent by carbon adsorption with recovered
solvent credited at fuel prices. (Based on estimated distribution of
methods of control from interviews with coating firms.)
25 percent LEL is equal to 3,000 ppm of toluene by volume.
Air flow can be reduced to reach 25 percent LEL.
The price of a 15,000 SCFM system can be used as an average. No costs are
added for distillation or additional waste disposal.
33,500 tons of emissions are treated per year over an operating period of
5,840 hours per year.
Other assumptions regarding incinerator and adsorber prices, as estimated in
Control of Volatile Organic Emissions from Existing Stationary Sources,
Vol. I; Control Methods for Surface-Coating Operations, EPA-J50/2-76-028,
are valid.
Source: Booz, Allen & Hamilton Inc.
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5.5 DIRECT ECONOMIC IMPACTS
This section presents the direct economic implications of
implementing the RACT guidelines for surface coating of paper
on a statewide basis. The analysis includes the availability
of equipment and capital; feasibility of the control technology;
and impact on economic indicators, such as value of shipments,
unit price (assuming full cost pass-through), state economic
variables and capital investment.
5.5.1 RACT Timing
Current proposed guidelines for paper coating suggest
several compliance deadlines for alternative methods of
compliance.-1- Generally, for add-on systems they call for
installation of equipment and demonstration by mid-1980 or
late 1980; for low solvent systems, by late 1980 or mid-1981,
depending upon the degree of research and development needed.
Major coaters, material suppliers and equipment manufacturers
believe these deadlines to be unattainable.
Normally, large incinerator and carbon adsorption
systems will require about a year or more from
receipt of purchase to install and start up the
system. Engineering may require three months
or more, fabrication three to six months and
installation and startup as long as three
months. A major coater with considerable
experience with similar installations estimates
that the complete cycle of installation, from
initial selection of control method to testing
of the system, would require 37 months plus an
additional 12 months to establish an economically
sound method of control.
Only a small number of companies manufacture
incineration systems with proven high heat recovery.
The cumulative effect of equipment requirements by
all firms in the U.S. needing control devices could
severely impede the ability of these firms to supply
equipment. In some cases, the most efficient devices
are only now undergoing initial trials, and no pro-
duction capacity has been developed.
1
Regulatory Guidance for Control of Volatile Organic Compound
Emissions from 15 Source Categories, EPA-905/2-78-001
5-22
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A major coating firm estimates that the use of
low solvent or solventless coatings may take
as long as 68 months from initial research,
through product evaluation and customer acceptance
to final production. Product and process development
alone may take as long as 24 months and product
evaluation over 14 months.
In general, it appears that if either add-on control
systems are used or new low solvent systems need to be developed,
deadlines must be extended.
5.5.2 Technical Feasibility Issues
Though low solvent or solventless materials are used in
many paper coating operations at present, many types of solvent-
based systems have no satisfactory replacement. The alternative
materials do not meet the product quality standards demanded
by the coaters. Additional development is needed and will require
the combined efforts of both the coaters (who must maintain
product quality) and the coating material suppliers. Ideally,
the new coating materials should be adaptable to existing coat-
ing equipment to minimize additional capital investment.
As discussed above, both incineration and carbon adsorption
are not completely satisfactory add-on control systems.
Incineration requires large volumes of additional fuel if good
heat recovery is not accomplished; carbon adsorption is not
usable on many coating systems because of the multiplicity
of compounds used in solvent mixtures.
5.5.3 Comparison of Direct Cost with Selected Direct
Economic Indicators
The net increase in annual operating costs to coaters was
estimated at $6.0 million to $11.0 million. Based on similar
economic impact studies, these additional costs are projected
to represent 1.1 percent to 1.6 percent of the total annual value
of shipments of the firms affected by the proposed regulations.
Assuming a "direct pass-through" of these costs, prices will
increase by about the same fraction.
The major economic impact in terms of cost to most indivi-
dual companies will be the large capital expenditures required
for add-on devices, rather than increased annual operating costs
For most companies, these costs would exceed their current level
of capital expenditures for plant improvement and expansion. A
large pressure-sensitive paper coater in another state, for
instance, has estimated that a capital investment of about $2
million would be needed to meet proposed guidelines. His current
capital expenditure program is normally in the range of $1.5
million.
5-23
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A typical case is a Michigan firm which manufacturers
various types of recording paper and produces 40 percent of the
electrocardiogram paper used in this country. Although with
additional development, some of its coating solutions could
be replaced with low solvent or waterborne ones, incineration
or carbon adsorption would be the only method of complying with
the regulation as now proposed. Based on projected costs for
either of these add-on control systems, the firm is seriously
considering terminating or moving operations. Similar financial
difficulties are foreseen for marginally profitable firms which
have limited capital access or for which the added annual costs
of compliance are prohibitive.
5.5.4 Selected Secondary Economic Impacts
This section discusses the secondary impact of implementing
RACT on employment, market structure and productivity.
Employment is expected to be only moderately affected.
Employment would be reduced if marginally profitable facilities
closed, but the present indication from the industry is that
plant closures may occur only for small firms with limited
capital access. However, even some large firms may be forced
to close down marginally profitable coating lines "with a
resultant decrease in employment.
It is likely that market stucture may be affected by the
closure of firms with limited capital access, with their sales
being absorbed by larger firms. The number of closures, however,
is expected to be small if capital resources can be made
available to the companies, since operating costs have only a
small effect on sales price and would be the same for all firms
affected.
No significant effect on overall productivity is foreseen
except for a small change resulting from the need for add-on
control system operating and maintenance personnel.
Exhibit 5-13, on the following page, summarizes the
conclusions reached in this study and the implications of
the estimated costs of compliance for paper coaters.
5-24
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EXHIBIT 5-13
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR PAPER COATERS
IN THE STATE OF OHIO
Current Situation
Number of potentially affected facilities
Indication of relative importance of
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC control
to meet RACT guidelines
Assumed method of control to meet RACT
guidelines
Discussion
Approximately 25-30 plants in the state are
expected to be affected by these regulations.
However, if this category is interpreted to
include all types of paper coating, including
publishing, far more firms would be affected
The 1977 value of shipments of these is
estimated to be $600 million. These plants
are estimated to employ 8,000-10,000 employees
Gravure coating replacing older systems
Approximately 28,000-35,000 tons per year were
identified from the emission inventory. Actual
emissions are expected to be higher
Though low solvent coating use is increasing,
progress is slow. Add-on control systems will
probably be used
Thermal incineration with primary and secondary
heat recovery
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity
Employment
Market structure
RACT timing requirements (1982)
Problem areas
Discussion
Estimated to be $18 million to $33 million
depending on retrofit situations. This is
likely to be more than 100 percent of normal
expenditures for the affected paper coaters
$6.0 million to $11.0 million annually. This
may represent 1.1 to 1.6 percent of the 1977
annual sales for the affected paper coaters
Assuming a "direct cost pass-through"—1.1 to 1.6
percent
Assuming 70 percent heat recovery, annual energy
requirements would increase by approximately
175,000 equivalent barrels of oil annually
No major impact
No major impact
Smaller firms may be unable to secure capital
funding for add-on systems
RACT guideline needs clear definition for
rule making
Equipment deliverables and installation of in-
cineration systems prior to 1982 may present
problems
Retrofit situations and installation costs are
highly variable
-------
EXHIBIT 5-13(2)
U.S. Environmental Protection Agency
Affected Areas in Meeting RACT
VOC emissions after control
Cost effectiveness of control
Discussion
5,000-7,000 tons/year (20 percent of 1977
VOC emission level)
$250 - $350 annualized cost/annual ton of VOC
reduction
Source; Booz, Allen t Hamilton Inc.
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BIBLIOGRAPHY
T. W., Hughes, et al., Source Assessment; Prioritization
of Air Pollution from Industrial Surface Coating Operations,
Monsanto Research Corporation, Dayton, Ohio. Prepared for
U.S. Environmental Protection Agency, Research Triangle Park,
N.C., under Contract No. 68-02-1320 (Tech. 14) Publication
No. 650/2-75-019a.
T. A. Kittleman and A. B. Akell, "The Cost of Controlling
Organic Emissions," Chemical Engineering Progress, April 1978.
Springborn Laboratories, Air Pollution Control Engineering and
Cost Study of General Surface Coating Industry, Second Interim
Report. EPA Contract No. 68-0202075, August 23, 1977.
Davidson's Textile Blue Book, 1977.
Lockwoods' Directory of the Paper Industry, 1977.
Thomas Register of American Manufacturers, 1978.
U.S. Environmental Protection Agency, Control of Volatile
Organic Emissions from Existing Stationary Sources, Volume I.
EPA-450/2-76-028, May 1977.
U.S. Environmental Protection Agency, Control of Volatile
Organic Emissions from Existing Stationary Sources, Volume II.
EPA-450/2-77-008, May 1977.
U.S. Environmental Protection Agency, Regulatory Guidance for
Control of Volatile Organic Compounds Emissions from 15 Categories
of Stationary Sources, EPA-950/2-78-001, April 1978.
U.S. Department of Commerce, Annual Survey of Manufactures, 1976.
U.S. Department of Commerce, County Business Patterns, 1976.
U.S. Department of Commerce, Census of Manufactures, 1972.
-------
Private conversations at the following:
Armak Company, Marysville, Michigan, and Alliance, Ohio
American Can Company, Greenwich, Connecticut
Fasson, Painesville, Ohio
Presto Adhesive Paper Co., Miamisburg, Ohio
3M Company, St. Paul, Minnesota
Morgan Adhesives, Milan, Ohio
National Flexible Packaging Association, Cleveland, Ohio
Pressure Sensitive Tape Council, Chicago, Illinois
Continental Can Company, Newark, Ohio
General Electric Company, Coshocton, Ohio
Mead Corporation, Chillicothe, Ohio
St. Regis Paper Company, Battle Creek, Michigan,
and Troy, Ohio
World Wild Games, Radnor, Ohio
TEC Systems, DePere, Wisconsin
Overly Inc., Neenah, Wisconsin
Bobst-Champlain, Roseland, New Jersey
REECO, Inc., Morris Plains, New Jersey
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6.0 THE ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR PLANTS SURFACE COATING
FABRICS IN THE STATE OF OHIO
-------
-------
6.0 THE ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR PLANTS SURFACE COATING
FABRICS IN THE STATE OF OHIO
This chapter presents a detailed analysis of the impact of
implementing RACT for plants in the State of Ohio which are
engaged in the surface coating of fabrics and vinyls. This RACT
category is meant to include the roll, knife or rotogravure
coating and oven drying of textile fabrics (to impart strength,
stability, appearance or other properties), or of vinyl coated
fabrics or vinyl sheets. It includes printing on vinyl coated
fabrics or vinyl sheets to modify appearance but not printing
on textile fabrics for decorative or other purposes. It does
not, however, include the coating of fabric substrates with
vinyl plastic polymers, which are usually applied as melts or
plastisols, that result in only minor amounts of emissions. The
chapter is divided into six sections:
Specific methodology and quality of estimates
Industry statistics
The technical situation in the industry
Alternative control methods
Cost and VOC reduction benefit evaluations
for the most likely RACT alternatives
Direct economic impacts.
Each section presents detailed data and findings based on
analyses of the RACT guidelines; previous studies of fabric
coating; interviews with fabric and vinyl coaters, coating
equipment and materials manufacturers and add-on control equip-
ment manufacturers; and a review of pertinent published literature,
6-1
-------
6.1 SPJ^t£LiS: METHODOLOGY AI* 7 ' :V. "" ^ ESTIMATED
Tiiis section describes the methodology tor us^rinining
estimates of:
Industry statistics
VOC emissions
Processes for controlling VOC emissions
Cost of controlling VOC emissions
Economic impacts
for plants in the state engaged in the surface coating of fabrics
and vinyls. The quality of these estimates is discussed in the
last part of this section.
^ L.I J->*•!
-------
General statistics concerning the firms included in these
SIC groupings were obtained from the most recent Census of
Manufactures, County Business Patterns and other economic
summaries published by the U.S. Department of Commerce.
Data on industrywide shipments of coated fabrics was
obtained from the Textile Economics Bureau (New York City, N.Y.)
Identification of individual candidate firms which might be
affected by the proposed regulation was made by review of
industry directories:
Davidson"s Textile Blue Book
Rubber Red Book
Modern Plastic Encyclopedia
Thomas Register of American Manufacturers
Ohio Directory of Manufacturers
Membership list of the Canvas Products Association.
A list of establishments expected to be affected by the
proposed fabric coating RACT regulations in the state was sent
to the Ohio EPA for comparison with its emission inventory.
Six firms were located which have fabric coating operations.
6.1.2 VOC Emissions
The Ohio Environmental Protection Agency emission
inventory was used as a basis for the estimation of the total
VOC emissions from the fabric coating plants identified.
They are believed to represent 90 percent or more of the
emissions in this RACT category. Emissions from fabric
coating plants not identified in the state, if they exist, are
expected to be small and negligible.
6-3
-------
6 «1.3 rrr..c.-T..r.j.2s for Controlling VOC__ Emissions
Processes for con-.-,; _^_..g -/oc emidS-. :rc.i?i -"^L;tii,
coating processes are described in Control of Voi^ 1 - Organic
Emissions from Existing Stationary Sources^ Volume "±i
(EPA-450/2-77-008).The report suggests the use of various
low solvent or solventless coatings which have found some
use in the industry, as well as add-on devices, such as
incinerators or carbon adsorbers. In s -e cases waterborne
of other low solvent coatings can DC. :^-^d.
6.1.4 Cost of Control and Estimated Reduction of VOC Emissions
Ihe overall costs of control of VOC emissions were determined
by an independent estimate of control costs by the study team
based upon emissions obtained from the Ohio Environmental
Protection Agency inventory.
This estimate used design and cost information provided by
incinerator and carbon adsorber manufacturers or available
in the published literature and in the following EPA reports:
Control of Volatile Organic Emissions from Stationary
Sources, Volume~(EPA-450/2-76-028)
Air Pollution Control Engineering and Cost Study of
General Surface Coating Industry, Second Interim
Report, Springborn Laboratories.
Estimates of emission reduction are largely dependent upon
the efficiency with which solvents can be collected from the
coating operation. In formulation of the proposed regulation
EPA has estimated that, by proper collection system design, at
least 90 percent of the solvents in the applied coating
material can be collected. This 90 percent is not meant to
include solvents which might be lost in the compounding of
the coating or used for cleaning of the process equipment
or fabric.
Practically all fabric coating emissions in the state result
from vinyl coating operations. In most cases, single solvent
systems are used and are readily amendable to carbon adsorption
recovery. Compliance costs were therefore estimated assuming
that carbon adsorption would be used to control 75 percent of
the emissions and incineration with heat recovery to control the
remaining 25 percent. This assumption was generally agreed to
in telephone interviews with representatives of all six Ohio
coaters contacted.
6-4
-------
6.1.5 Economic Impacts
The economic impacts were determined by: analyzing the
lead time requirements to implement RACT; assessing the
feasibility of instituting RACT controls in terms of capital
availability and equipment availability; comparing the direct
costs of RACT control to various state economic indicators; and
assessing the secondary effects on market structure, employment
and productivity as a result of implementing RACT controls in
Ohio. Because of the confidential nature of value of shipments
and other financial details, none of the six companies inter-
viewed would disclose this information. Comments are thus
based on estimated amounts of such quantities as capital expen-
ditures and value of shipments.
6.1.6 Quality of Estimates
Several sources of information were utilized in assessing
the emissions, cost and economic impacts of implementing RACT
controls on the surface coating of fabrics in Ohio. A
rating scheme is presented in this section to indicate the
quality of the data available for use in this study. A rating
of "A" indicates hard data (data that are available for the
base year), "B" indicates data that were extrapolated from
hard data and "C" indicates data that were not available in
secondary literature and were estimated based on interviews,
analysis of previous studies and best engineering judgment.
Exhibit 6-1, on the following page, rates each study output
listed and the overall quality of the data.
6-5
-------
EXHIBIT 6-1
U.S. Environmental Protection Agency
DATA QUALITY—SURFACE COATING OF FABRICS
Study Outputs
Hard Data
B C
Extrapolated Estimated
Data Data
Industry statistics
X
Emissions
Xa
Cost of emissions control
Economic impact
X
Overall quality of data
a. Emission data supplied by Ohio Environmental Protection
Agency, state emission inventory.
Source: Booz, Allen & Hamilton Inc.
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6.2 INDUSTRY STATISTICS
Industry characteristics, statistics and trends for
fabric coating are presented in this section. This information
forms the basis for assessing the total impact of implementing
RACT for control of VOC emissions in this category upon the
state economy and upon the individual firms concerned. The
effects upon the firms involved are somewhat different because
of their relative sizes, though proportionately the effects
are similar.
6.2.1 Size of the Industry
The Bureau of Census, in 1976 County Business Patterns,
reported a total of about 808 plants in SIC categories in
which plants coating fabrics in Ohio would be expected
to be tabulated.
Pertinent data concerning these plants are summarized
in Exhibit 6-2, on the following page. As mentioned earlier
based on a review of industrial directories and other published
information, six plants were found in which fabric coating,
as defined in the proposed "fabric coating" regulation, is
being used. Statistics concerning these six plants are
summarized in Exhibit 6-3, following Exhibit 6-2.
As shown, these firms are estimated to employ a
total of 2,600 people.
6.2.2 Comparison of the Industry to the State Economy
A comparison of the value of shipments of these plants
with the state economy indicates that these plants represent
about 0.4 percent of the total value shipments by manufac-
turing plants and employ about 0.2 percent of manufacturing
workers in Ohio.
6.2.3 Historical and Future Patterns of the Industry
The fabric coating industry in the U.S., except for the
general economic slump in 1975, has shown a gradual but
steady growth in sales and shipments over the last several
years as demonstrated by Exhibits 6-4 and 6-5, following
Exhibit 6-3. The largest growth in terms of dollar value of
shipments was for vinyl coated fabrics which increased by
$215.5 million in shipments from 1972 to 1976, compared with
an increase of $301 million for all coated fabrics. Pyroxylin
(cellulose nitrate) coatings, because of their low cost and
6-6
-------
EXHIBIT 6-2
U.S. Environmental Protection Agency
INDUSTRY STATISTICS FOR PLANTS IN SIC CATEGORIES
WHERE FABRIC COATING MAY BE USED IN OHIO
cotton
man-made and silk
small wares mills
SIC Name
2211 Broad woven fabric mills,
2221 Broad woven fabric mills,
2241 Narrow fabrics and other,
2258 Warp knit fabric mills
2261 Finishers of broad woven fabrics of cotton
2262 Finishers of broad woven fabrics of man-
made fiber and silk
2269 Finishers of textiles, n.e.c.
2295 Coated fabrics, not rubberized
2297 Nonwoven fabrics
3069 Fabricated rubber products, n.e.c.
3079 Miscellaneous plastics products
3291 Abrasive products
3293 Gaskets, packing, sealing devices
Number of
Firms
b
b
6
b
4
b
1
16
b
161
549
37
36
808
Number of
Employees
417
370
750
2,353
21,612
39,966
2,825
1,831
69,707
Annual
Payroll
($OOOs)
3,855
a
30,571
272,460
464,349
35,488
18,434
821,302
a. Not reported to protect proprietary information.
b. None listed
Source; 1976 County Business Patterns, U.S. Department of Commerce.
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EXHIBIT 6-3
U.S. Environmental Protection Agency
FIRMS EXPECTED TO BE AFFECTED BY FABRIC
COAT REGULATIONS
Company
Borden Chemical Co.
Columbus Coated
Fabrics Div.
Location
Approximate
Number of
Employees
Estimated3
Emissions
Activity
Columbus
1,000
1,399
Vinyl coating and lamination
Chrysler Corp.
Sandusky
325
1,850
Vinyl coating
Custom Coated Products Cincinnati
30
96
Fabric coating
General Tire Corp., Toledo
Textile Leather Div.
650
798
Vinyl coating
Inmont Corp.
Toledo
325
1,857
Vinyl coating
\c -> Uniroyal
Port Clinton
300
2,630
1,472
7,472
Vinyl coating
a. Obtained from Ohio Environmental Protection Agency emission inventory.
Source: Booz, Allen & Hamilton Inc.
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EXHIBIT 6-4
U.S. Environmental Protection Agency
U.S. ANNUAL VALUE OF SHIPMENTS OF COATED FABRICS
($ millions)
Item
Pyroxylin-Coated Fabrics
Vinyl Coated Fabrics
Other Coated Fabrics
Coated Fabrics, not rubberized
Rubber Coated Fabrics
TOTAL
1972
26.3
601.9
154.1
26.3
67.9
876.5
1973
27.3
693.7
188.0
29.4
73.6r
1974
1975
34.5
728.7
212.6
(13.6)a
83. 5b
156.5
28.0
681.5
202.7
72.0
985.6
1976
32.5
817.4
213.8
(33.8)a
80.Ob
1,177.5
Notes:
a. Values obtained by difference from gross shipments of all coated fabrics, not rubberized
b. Booz, Allen estimate based on shipments of "Other Rubber Goods, N.E.C.", SIC Code 30698
Source; 1976 Annual Survey of Manufactures
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EXHIBIT 6-5
U.S. Environmental Protection Agency
U.S. ANNUAL SHIPMENTS OF BACKING MATERIALS FOR
COATED FABRICS
(in millions of pounds)
Transportation Fabric, all fibers'
1972
95.4
1973
100.9
1974
64.6
Coated and Protective Fabrics*3
133.7
149.3
167.5
137.8
177.6
TOTAL
229.1
250.2
232.2
203.1
259.1
Notes:
a.
b.
Transportation fabric includes auto seat upholstery and slipcovers, sidewall, headlining
and sheeting. The cotton poundage include the knit and woven fabric used as the backing
for vinyl sheeting. The item includes convertible auto tops & replacements thereof, as
well as upholstery used in other kinds of transportation, such as airplanes, railroad &
subway cars, buses, etc. It does not include seat padding, transportation rugs window
channeling flocking, tassels, trim, etc., or the textile glass fiber used in reinforced
plastic seating for subways, buses, etc.
Coated and protective fabrics includes parachutes, deceleration chutes and tow targets;
awnings; beach, garden & tractor umbrellas; inflatable dunnage and cushions, air-supported
structures and automotive air-spring diaphragms; boat and pool covers; tarpaulin covers
for athletic fields, etc.; also, the substrates used for vinyl sheeting. The cotton
poundage include awnings, boat covers, tarpaulins and tents. Not included here are the
cotton poundages used for vinyl substrates; such poundages are tabulated with their
appropriate end use, i.e., transportation upholstery, upholstery etc. Does not include
man-made fiber surfaces for recreational fields.
Source: Textile Economics Bureau, Technicon, November 1977
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ease of application, still continue to occupy a steady though
proportionately smaller share of the market. Natural and
artifical rubber coated fabrics, because of unique properties
not obtainable with plastic materials, also maintain a sub-
stantial (about 10 percent) share of the coated fabric market,
Vinyl and urethane coatings, however, are replacing a larger
share of both markets.
6-7
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6.3 TECHNICAL SITUATION IN THE INDUSTRY
This section describes the principal materials and
processes used in fabric and vinyl coating and various
methods which are considered to be reasonably available to
control technology to meet proposed regulations. The
proposed RACT guidelines for fabric coating and an estimate
of the total VOC emission reduction possible if the guide-
lines are implemented in the state are also presented.
6.3.1 General Coating Process Description
Fabrics are coated primarily to render them resistant
to penetration by various fluids or gases, improve abrasion
resistance or modify the appearance or texture. Typical
examples are materials used in shower curtains; rubber life
rafts; ballons; drapery material; synthetic leathers for
shoes, upholstery or luggage; table cloths; and outdoor
clothing. The base fabrics can be asbestos fiber cloth,
burlap and pite, cotton drill, duck canvas, glass fabrics,
knit cotton or rayon, nonwoven fabrics or nylon sheeting.
In the case of coating of vinyls, the substrate is a flexible
vinyl sheet or cloth-supported vinyl on which a coating is
applied to enhance the appearance or durability oT the vinyl
surface.
Typical coating materials are rubber compounds, vinyl
resins of various types, polyesters, polyurethanes, nitro-
cellulose resins, oleo resins, phenolic resins, epoxy resins
and polyethylene. Various techniques are used for applying
these coatings as melts, plastisols, latexes, solutions
or other forms. Since these proposed guidelines are primarily
concerned with coatings applied as solutions, where large
volumes of volatile organic materials can be emitted, the
following discussions will be limited primarily to processes
for coating with coating materials dissolved in organic
solvents.
Exhibit 6-6, on the following page, shows the general
operations involved in most fabric or vinyl coating operations.
Four basic operations are involved:
Milling — Milling is primarily restricted to
coatings containing rubber. Natural and synthetic
rubbers are usually milled with pigments, curing
agents and fillers to produce a homogeneous mass
that can be dissolved in a suitable solvent.
Organic solvents are not usually involved in the
milling process; thus, there are seldom any organic
emissions from this operation.
6-8
-------
EXHIBIT 6-6
U.S. Environmental Protection Agency
TYPICAL FABRIC COATING OPERATION
RUIIER
MOMENTS
CURINC AGENTS
SOLVENT
MULING
1
MIXING
DRYING AND
CURING
COATING
AffLICATION
MIRK
COATEDPRODUCT
Source:Control of Volatile Organic Emissions from Stationary
Sources, Volume I (EPA-450/2-76-028)
-------
Mixing — Mixing is the dissolution of solids
from the milling process in a solvent. The
formulation is usually mixed at ambient
temperatures. Sometimes only small fugitive
emissions occur. However, some vinyl coaters
estimate that as much as 25 percent of plant
solvents are lost in mixing operations.
Coating Application — Fabric is usually coated
by either a knife or a roller coater. Both
methods are basically spreading techniques
used for high speed application of coatings
to flat surfaces. In some unique situations,
dip coating may be used.
Drying and Curing — Finally, the coating is
dried or cured in a final operation using
heat or radiation to remove the solvents
or set the coating.
In general, the coating line is the largest source of
solvent emissions in a fabric coating plant, and the most
readily controllable. Some coating plants report that over
70 percent of solvents used within the plant are emitted
from the coating line. Other plants, especially those
involved in vinyl coating, report that only 40 to 60
percent of solvents purchased by the plant are emitted
from the coating line. Remaining solvents are lost as
fugitive emissions from other stages of processing and in
cleanup. These fugitive losses are generated by:
1. Transfer from rail cars or tank trucks to
storage tanks, and subsequent transfer to
processing tanks
2. Breathing losses from vents on storage
tanks
3. Agitation of mixing tanks which are vented
to the atmosphere
4. Solvent evaporation from cleanup of the
coating applicator when coating color or
type is changed
5. Handlinq, storage and disposal of solvent
soaked cleaning rags
6. Waste ink disposal — Waste ink is usually
distilled to recover much of solvent. After
distillation the sludge, which still contains
some solvent, is usually dumped in a land-
fill
6-9
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7. Losses from drums used to store coatings
which are being pumped onto a coating appli-
cator. These are usually drums which are
not hooded and may not even be covered
8. Cleaning empty coating drums with sol-
vent
9. Cleaning coating lines with solvent
10. Evaporation of solvent from the coated fabric
after it leaves the coating line. From 2-3
percent of total plant solvent usage
remains in the product. Half of this may
eventually evaporate into the air.
Control techniques for the above types of sources
include tightly fitted covers for open tanks, collection
hoods for areas where solvent is used for cleanup and
closed containers for solvent wiping cloths.
6.3.2 Nature of Coating Materials Used
Coating formulations used in organic solventborne
coatings normally incorporate film-forming materials,
plasticizers, pigments and solvents. A multitude of
organic solvents are used; solvents such as acetone toluene,
heptane, xylene, methyl ethylketone, isobutyl alcohol and
tetrahydrofuran are widely used in rubber, vinyl and ure-
thane coating formulations.
In some cases, a single solvent is used, but more
generally mixed solvents are employed to obtain optimum
drying rates and coating mixture properties. Too rapid
drying results in undesirable surface properties such
as "orange peel" or other effects; improper viscosity or
solvency of the coating mixture may prevent proper coating
of the substrate; slow drying can limit production rates.
As discussed earlier, a number of film-forming
materials are used. Typical coating materials are epoxy
resins, melamine-formaldehyde resins, nitrocellulose resins,
oleoresinous compounds, phenolic resins, polyesters, poly-
urethanes, rubber compounds and vinyl resins. Miscellaneous
resins such as polyethylene and ethylene copolymers, starch
and casein compounds, and acrylic resins are not discussed here
since most use coating techniques which are not solvent related,
6-10
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Plasticizers are added where the flexibility of the
coating is important, such as in clothing or upholstery
fabric. Pigments or opacifiers are added to clear film
formers to provide the colors or other appearance effects
desired or are used in inks as a separate coating operation
to modify the surface of the coating. Pigments applied
as a printed coating are normally further coated with a
clear finish coat to provide the luster desired and provide
protection from wear.
6.3.3 Coating Processes Commonly Used
Exhibits 6-7 and 6-8, on the following pages, illustrate
the two major methods of applying solvent-based coatings—
knife coating and roll coating.
Knife coating is probably the least expensive
method. The substrate is held flat by a roller
and drawn beneath a knife that spreads the
viscous coating evenly over the full width
of the fabric. Knife coating may not be
appropriate for coating materials such as
certain unstable knitgoods, or where a
high degree of accuracy in the coating
thickness is required.
Roller coating is done by applying the
coating material to the moving fabric, in
a direction opposite to the movement of the
substrate, by hard rubber or steel rolls.
The depth of the coating is determined by
the gap between rolls (A and B as shown
in Exhibit 6-7). The coating that is trans-
ferred from A to B is then transferred to
the substrate from roll B. Unlike knife
coaters, roller coaters apply a coating
of constant thickness without regard to
fabric irregularities.
Rotogravure printing is widely used in vinyl coating
of fabrics and is a large source of solvent emissions. Roto-
gravure printing uses a roll coating technique in which the
pattern to be printed is etched as a series of thousands
of tiny recessed dots on the coating roll. Ink from a
reservoir is picked up in these recessed dots and is trans-
ferred to the fabric surface. Shadow prints are used to
simulate leather grain. A variety of patterns are printed
on such items as vinyl wall paper. A transparent protective
topcoat over the printed pattern is also applied with roto-
gravure techniques.
6-11
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EXHIBIT 6-7
U.S. Environmental Protection Agency
KNIFE COATING OF FABRIC
COATIN6
KNIFE
COATED FABRIC TO DRYER
EXPANDED COATED FAIRIC
COATING
SUISTRATf
SUBSTRATE
HARD MINER Oft STEEl ROll EN
Source: Control of Volatile Organic Emissions from Stationary
Sources, Volume I (EPA-450/2-76-028)
-------
f 1
EXHIBIT 6-8
U.S. Environmental Protection Agency
ROLLER COATING OF FABRIC
COATED FAIRIC
SUISTHMl
Source:
Control of Volatile Organic Emissions from Stationary
Sources, Volume II (EPA-450/2-76-028)
-------
Solvent emissions from the coating applicator account
for 25 to 35 percent of all solvent emitted from a coating
line. This solvent may be collected by totally enclosing
the coating applicator in a small room or booth and sending
all booth exhaust to a control device. However, a total
enclosure of the coater may be difficult to retrofit on
many existing lines. Another alternative is to cover the
coater with a hood which can collect most of the solvent
emissions.
The final operation in the coating process is the
drying and curing of the applied coating material. Sixty-
five to 75 percent of solvent emissions from the
coating line usually occur in this step. In most ovens,
almost all solvent emissions are captured and vented with
exhaust gases. On some coating lines the emissions from
the coating applicator hood are ducted to the oven and
included with the oven exhaust.
Estimated and reported solvent concentration levels
from drying operations range between 5 and 40 percent of
the LEL (lower explosion limit). Typically, drying ovens
are designed to process fabric on a continuous basis, opera-
ting with a web or conveyor feed system. Ovens can be
enclosed or semienclosed and, depending on size, may
exhaust from a few thousand to tens of thousand of cubic
feet per minute of air. If an add-on control device is
to be installed, it is generally in the owner's best
interest to minimize the volume of air since the cost of
add-on control devices is largely determined by the
amount of air treated.
The oven heat increases the evaporation rate of the
solvent and, with some coatings, will produce chemical
changes within the coating solids to give desired proper-
ties to the product. In many cases, evaporation rates are
controlled to give the desired properties to the coated
fabric.
Many drying ovens in older plants are only semienclosed.
As a consequence, they draw in excessive dilution air. Sol-
vent concentrations range between 5 and 12 percent of the LEL
according to both calculations and reports by industry. How-
ever, levels of up to 50 percent of the LEL are possible if
p-oper safety devices are used. At least three plants in the
United States are operated at 40 to 50 percent of LEL.
6-12
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6.3.4 Emissions and Current Controls
As discussed earlier, six fabric or vinyl coaters have
been identified in Ohio. As shown in Exhibit 6-3, the total
VOC emissions from coating lines is estimated (from data
supplied by the Ohio Environmental Protection Agency) to be
7,500 tons. Only the Textile Leather Division of the General
Tire Company is known to have an emission control system
(carbon adsorption) in operation at this time on a portion of
the emissions from the plant.
6.3.5 RACT Guidelines
The RACT guidelines for control of VOC emissions from
fabric coating require that emissions from coating lines
be limited to a level of 2.9 pounds per gallon of coating
for coating of fabric substrates and 3.8 pounds per gallon
for coating of vinyl substrates.^- These limits are achiev-
able for the use of add-on control devices, 60 percent solids
organicborne coatings, or 24 percent solids waterborne coating,
which is 80 percent water/20 percent organic solvent. Typi-
cally, for add-on control devices, it is anticipated that
reduction would be 81 percent, requiring that 90 percent of
the VOC be captured and delivered to the control device which
also must have an efficiency of 90 percent.2
1. Regulatory Guidance For Control of Volatile Organic
Compounds Emissions From 15 Categories of Stationary
Sources, EPA-905/2-78-001
2. Control of Volatile Organic Emissions From Existing
Stationary Sources (page vi), Vol. II, EPA-450/2-77-008
6-13
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6.4 ALTERNATIVE CONTROL METHODS
In this section are briefly discussed methods of low
solvent and solventless systems, which have been demon-
strated to be applicable to some fabric coating products,
and the two principal add-on systems, incineration and
carbon adsorption, generally used for emission control.
This information has been extracted principally from the
previously cited EPA report, Control of Volatile Organic
Emissions from Existing Sources, Volumes I and II, which
should be consulted for a more thorough discussion. In some
instances, additional comment was obtained from coaters,
coating material suppliers and control equipment manufac-
turers .
6.4.1 Low Solvent and Solventless Coatings
Organic emissions can be reduced 80 to 100 percent
through use of coatings which inherently have low levels of
organic solvents. Both high-solids and waterborne coatings
are used. The actual reduction achievable depends on the
organic solvent contents of the original coating and the new
one. Using a coating which has a low organic solvent con-
tent may preclude the need for an emission control device.
Often the coating equipment and procedures need not be
changed when a plant converts to coatings low in organic
solvent.
Although a number of fabric coaters through the country
have converted to low solvent coating, either in part or in
total, one may not presume them to be universally applicable.
Each coating line is somewhat unique and many coated fabrics
have different specifications.
None of the plants identified were aware of suitable
alternative coatings currently available which would meet
the quality and performance standards required in all of
their products. Most firms believe that if sufficient time
were allowed for research and development, a majority of their
coatings could be replaced by low solvent ones. There may be
some coatings which could not be replaced.
6-14
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6.4.2 Incineration
Catalytic and direct thermal incineration processes
convert hydrocarbons to carbon dioxide and water at high
temperatures. Incineration is widely accepted as a reliable
means of reducing hydrocarbon emissions by 90 percent or
more.
Generally, the major disadvantage of this approach is
the increased energy required to raise the exhaust gas
temperatures over 1,200°F for direct incineration and 700°F
for catalytic incineration. Natural gas is the most commonly
used fuel though propane, fuel oils, or other fluid hydro-
carbons can be employed. Fuel oil is not generally acceptable
because of the sulfur oxides generated in combustion or the
presence of catalyst poisons in the oil. Another problem is
the generation of nitrogen oxides in direct fired incinerators
resulting from the exposure of air to high-temperature flames.
The increased energy consumption can, in some cases, be
reduced or eliminated by heat.exchange of the exhaust gases
with fresh emissions (primary heat recovery) or by use of
the hot exhaust gases in process applications (secondary
heat recovery). Typical use of secondary heat recovery is
for oven heat in drying or curing ovens. In fact, with
efficient primary exchange and secondary heat recovery,
total fuel consumption of an incinerator-oven system can be
less than that for the oven before the incinerator is added.
The heat required to sustain the system comes from com-
bustion of volatile organic compounds in the exhausts.
Both catalytic and direct fired systems are capable of
high heat recovery efficiency if several conditions occur:
VOC concentrations are or can be increased to 8-10
percent or more of their LEL (lower explosion
limit).
Oven temperatures are sufficiently high to enable
use of the sensible heat in the exhaust gases
after primary heat exchange. Usually, oven
temperatures above 140°F are sufficient to allow
85 percent or more overall heat recovery.
Where catalytic incinerators are used, no com-
pounds must be present in the gases treated which
could poison or blind the catalyst.
6-15
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In most coating operations, drying and curing tem-
peratures are 250°F or higher. By reduction of air flow to
reach exhaust levels of 8-10 percent or higher and proper
design of the heat recovery system, it may be possible to
achieve overall heat recoveries of 85 percent or greater.
For purposes of cost estimation, however, it was assumed that
only 70 percent heat recovery efficiency could be reached.
6.4.3 Carbon Adsorption
Carbon adsorption has been used since the 1930s for
collecting solvents emitted from paper coating operations.
Most operational systems on coating lines were installed
because they were profitable. Pollution control has usually
been a minor concern. Carbon adsorption systems on coating
lines range in size from a few thousand to tens of thousands
of cubic feet per minute. Exhausts from several coating
lines are often manifolded together to permit one carbon
adsorption unit to serve several coating lines.
The greatest obstacle to the economical use of carbon
adsorption is that, in some cases, reusing solvent may be
difficult. In many coating formulations, a mixture of
several solvents is needed to attain the desired solvency
and evaporation rates. If this solvent mixture is recovered,
it sometimes cannot be reused in formulating new batches of
coatings. Also if different coating lines within the plant
use different solvents and are all ducted to one carbon
adsorption system, then there may be difficulty reusing the
collected solvent mixture. In this case, solvents must be
separated by distillation.
However, in some cases azeotropic, constant boiling,
mixtures can occur which can be separated only by spe-«
cialized techniques. Most coating firms would not have the
skills necessary for the complex distillation and separation
procedures needed. For small adsorption systems, the ad-
ditional separation expenses would probably exceed the cost
of fresh solvent.
Also, adsorption of solvents containing water soluble
compounds (such as alcohols, ketones or esters) can present
a secondary pollution problem where steam is used for bed
regeneration. Additional treatment of the condensed steam
with its content of dissolved organics would be required,
increasing the complexity of the solvent recovery system and
its cost.
6-16
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The Textile Leather Division of the General Tire Company
has had a carbon adsorption system in operation for several
years on a coating line using methyl ethyl ketone. The system
uses steam regeneration of the bed and requires distillation
of the recovered solvent to remove its water content. No major
difficulty has been encountered with the operation of the com-
bined system; they would probably use carbon adsorption again
to comply with the proposed regulations particularly if solvent
prices continue to increase. Most other vinyl coaters also
thought the carbon adsorption would probably be the most cost
effective system in the long run.
6-17
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6.5 COST AND VOC REDUCTION BENEFIT EVALUATIONS
FOR THE MOST LIKELY RACT ALTERNATIVES
This section discusses the projected costs of control
for fabric coating in the state. Where possible, the validity
of the costs were confirmed with coating firms and equipment
manufacturers.
6.5.1 Estimated Compliance Costs
Exhibits 6-9 and 6-10, following the next page, summarize
costs for typical incineration and carbon adsorption systems as
developed by EPA sourcesl. These are based on the assumption
that exhaust flow rates can be reduced sufficiently to obtain
LEL levels of 25 percent. This is possible with well-designed
capture systems where intake air flows can be reduced.
The major problem in estimating individual installed
costs of control systems is the added cost of installation.
The EPA estimates were made on the assumption of an easily
retrofitted system. In practice, coaters have found actual
installed costs to be three to five times those summarized
in Exhibit 6-9 and 6-10. For instance, E.I. DuPont de Nemours,
based on their experience on actual installed equipment,
estimates^ $1.2 million for a carbon adsorber to treat
15,000 scfm of exhaust gases. Recent prices from recuper-
ative type incinerator manufacturers for a 15,000 scfm
direct fired, ceramic bed primary recuperative heat exchanger
are about $150,000 for the incinerator alone. Installed
costs, with provision for return of exhausts for secondary
heat recovery, are estimated at more than $300,000. The
estimates in Exhibits 6-9 and 6-10 indicated costs of $320,000
for an equivalent adsorber, and $140,000 for the incinerator.
1EPA 450/2-76-028 Op. Cit.
2T.A. Kittleman and A.B. Akell, "The Cost of Controlling Organic
Emissions," Chemical Engineering Progress, April 1978.
6-18
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The study team has, for the purposes of this report,
multiplied the capital costs provided in the EPA report by
three to provide what is believed to be a more realistic
add-on device equipment cost. In addition, costs have been
added to adsorber systems for the installation of a dis-
tillation and solvent purification system for recovery and
reuse of solvent. From discussions with the coaters affected,
methyl ethyl ketone is the primary solvent used. For recovery,
a distillation system will be required for separation of the
solvent from the condensed steam used for carbon bed regenera-
tion.
Overall compliance costs were based on the assumption
that air flow rates could be reduced to allow operation at
25 percent of LEL and that volatile organic compounds were
emitted only during actual coating periods. Total actual
coating time per year was assumed to be 3,120 hours. This is
equivalent to 260 days per year at 12 hours per day and was
selected as a reasonable average yearly operating period on
the basis of discussions with personnel from the plants
affected.
Total estimated capital and annual operating costs for
all affected plants in Ohio are summarized in Exhibit 6-11,
following Exhibit 6-11. The annual direct operating costs are
based primarily on cost data presented in the previously refer-
enced EPA report (EPA 450/2-76-028)! adjusted for reduced
operating time, capital cost charges increased by a factor of
three, the addition of distillation solvent purification costs
and, in the case of adsorption, savings due to recovery of
methyl ethyl ketone. Other general assumptions are summarized
in Exhibit 6-11, following Exhibit 6-10.
Total compliance costs are estimated as summarized in
Exhibit 6-12 at about $10 million in capital and $1 million
in annualized costs. The low annual cost is due largely to
the savings from recovered solvent when carbon adsorption is
used. Slight savings in fuel costs are also effected by the
use of secondary heat recovery in the incinerator systems.
Both capital and annualized costs are subject to a number of
errors because of the assumptions used. The basic one is
the installation costs of the control system used because of
uncertainties concerning retrofit situations, the need for
drying oven or coating-machine. Individual site costs may
be considerably higher (or lower) than those estimated on an
average basis as done here because of characteristics and
needs of the actual coating operations. A more accurate
estimate can only be made by a detailed examination of each
plant site and coating line.
1This report should be reviewed for details on capital and
annualized cost estimation methods.
6-19
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EXHIBIT 6-9
U.S. Environmental Protection Agency
CAPITAL COST FOR DIRECT FLAME AND CATALYTIC
INCINERATORS WITH PRIMARY AND SECONDARY
HEAT EXCHANGE
H
1* »• IS 30
fROCISS FLOW. Ill tclm (APPROXIMATE)
4ft
Source: Control of Volatile Organic Emissions from Stationary Sources,
Volume I (EPA-450/2-76-028) '—
-------
EXHIBIT 6-10
US. Environmental Protection Agency
ESTIMATED INSTALLED ADSORBER SYSTEM COST
10
20 30
ADSORBER CAPACITY, scfm x 1
40
Source; Control of Volatile Organic Emissions from Stationary Sources
Volume I (EPA-450/2-76-028) ~~~
-------
EXHIBIT 6-11
U.S. Environmental Protection Agency
SUMMARY OF ASSUMPTIONS USED IN COST ESTIMATE
Assumptions
25 percent of emissions are controlled by incineration with primary and
secondary heat recovery and 75 percent by carbon adsorption followed by
distillation. 90 percent of solvent emissions from the coating lines
are collected and the add-on control removes 90 percent of this. Total
reduction is 81 percent. This degree of reduction may not be required
in some cases where lower solvent concentration coatings are used.
25 percent LEL is equal to 4,250 ppm of methylethyl ketone by volume at 200°F.
Air flow can be reduced to reach 25 percent LEL
Emission rate is constant over a period of 3,120 hours per year.
Other assumptions regarding incinerator prices and operating parameters, as estimated
in Control of Volatile Organic Emissions from Existing Stationary Sources, Vol. It
Control Methods for Surface-Coating Operations, EPA-450/2-76-028, are valid except
that capital costs are increased by 300 percent and direct costs are increased
by 25 percent to account for cost escalations from 1974-1977.
Source: Booz, Allen & Hamilton Inc.
-------
I 1
till
1 I
1 i
EXHIBIT 6-12
U.S. Environmental Protection Agency
SUMMARY OF ESTIMATED COMPLIANCE COSTS
FOR FABRIC COATING IN OHIO
System
Capital
Solvent Recovery
Savings
Net
Annual Costs
Incineration
$ 1,600,000
Carbon Adsorption 8,400,000
Total $10,000,000
$2,050,000
$2,050,000
$ 360,000
650,000
$1,010,000
Source: Booz, Allen & Hamilton Inc.
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6.6 DIRECT ECONOMIC IMPACTS
This section presents the direct economic implications of
implementing the RACT guidelines for surface coating of fabrics
on a statewide basis. The analysis includes the availability
of equipment and capital; feasibility of the control technology;
and impact on economic indicators, such as value of shipments,
unit price (assuming full cost pass-through), state economic
variables and capital investment.
6.6.1 RACT Timing
Current proposed guidelines for fabric coating suggest
three sets of compliance deadlines for alternative methods of
compliance.1 Generally, for add-on systems they call for
installation of equipment and demonstration by mid-1980 or
late 1980; for low solvent systems, by late 1980 or mid-1981,
depending upon the degree of research and development needed.
Major coaters, material suppliers and equipment manufacturers
believe these deadlines to be unattainable.
Normally, large incinerator and carbon adsorp-
tion systems will require about a year or more
from receipt of purchase to install and start
up the system. Engineering may require three
months or more, fabrication three to six months
and installation and startup as long as three
months. A major paper coater with considerable
experience with similar installations estimates
that the complete cycle of installation, from
initial selection of control method to testing
of the system, would required 37 months plus an
initial 12 months to establish an economically
sound method of control.
Only a small number of companies manufacture
incineration systems with proven high heat
recovery. The cumulative effect of equipment
requirements by all firms in the U.S. needing
control devices could severely impede the
ability of these firms to supply equipment.
In some cases, the most efficient devices
are only now undergoing initial trials, and
no production capacity has been developed.
1Regulatorv Guidance for Control of Volatile Organic Compound
Emissions from 15 Source Categories, EPA-905/2-78-001.
2Refer to list of firms interviewed.
6-20
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A major coating firm estimates that the use of
low solvent or solventless coatings may
take as long as 68 months from initial research,
through product evaluation and customer accept-
ance to final production. Product and process
development alone may take as long as 24
months and product evaluation over 14 months.
In general, it appears that if either add-on control
systems are used or new low solvent systems need to be
developed, deadlines may need to be extended.
6.6.2 Technical Feasibility Issues
As discussed above, low solvent or solventless mater-
ials are used in many coating operations. At present, however,
many types of solvent-based systems have no satisfactory re-
placement. The alternative materials do not meet the product
quality standards demanded by the coaters. Additional
development is needed and will require the combined efforts
of both the coaters (who must maintain product quality) and
the coating material suppliers. Ideally, the new coating
materials should be adaptable to existing coating equipment
to minimize additional capital investment.
As discussed above, both incineration and carbon
adsorption are not completely satisfactory add-on control
systems. Incineration requires large volumes of additional
fuel if good heat recovery is not achieved; carbon adsorp-
tion is not useable on many coating systems because of the
multiplicity of compounds used in solvent mixtures.
6.6.3 Comparison of Costs with Selected Economic
Indicators
The net increase in the annual operating costs to
coaters cannot be estimated with a high degree of confi-
dence since operating costs are highly sensitive to various
retrofit situations, the efficiency of heat recovery and
other factors, as discussed above. Based on the estimated
annual costs of about $1.0 million as presented in Exhibit
6-11, and the estimated value of shipments (about $3.0 million)
of the firms affected compliance costs would be about 0,3
percent of the value of shipments. In a recent report,1 increased
annual costs for control of emissions from a rubber coating line
using Ccrbon aisorption with recovered solvent priced at fuel
value only were estimated to be about 0.9 percent of the price
of the finished rubberized fabric.
^Springborn Laboratories, Inc., op. cit.
6-21
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The major economic impact in terms of cost to indi-
vidual companies will probably be a result of capital related
rather than increased annualized costs. The capital required
for PACT compliance will represent a significant amount of capi-
tal appropriations for most firms and may force some plants
to shut down noncompetitive operations (a comment made by
several firms interviewed).
6.6.4 Selected Secondary Economic Impacts
This section discusses the secondary impact of imple-
menting RACT on employment, market structure and productivity.
Total employment in the state is expected to be marginally
affected since about 2,600 workers are employed by the plants
identified. Some plants may terminate some coating operations
if compliance costs are prohibitive.
Within the state, the market structure will probably
not be appreciably affected by the proposed regulation.
Five of the firms have essentially the same product line
(coated vinyl fabric) and would be affected about equally.
A special situation may occur, however, for marginally
profitable plants, which may find the added cost of compliance
prohibitive and may be forced to close operations. This was
not investigated. The sixth firm, has a different product
line and would be affected differently from the other firms;
exactly how was not evaluated. All firms, however, may be
affected by an uneven imposition of compliance to competitors
in other states. This would affect their competitiveness in
the marketplace, since costs of compliance could increase
the price of coated goods by about 0.3 percent or more.
Productivity is not expected to be affected except for
a short period when lines must be shut down for modifications
or installation of equipment.
Exhibit 6-13, on the following page, summarizes the
conclusions and projected implications of the results from
this study.
6-22
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EXHIBIT 6-13
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR FABRIC COATERS
IN THE STATE OF OHIO
Current Situation
Number of potentially affected facilities
Indication of relative importance of
industrial section to state economy
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC
control to meet RACT guidelines
Assumed method of VOC control to
meet RACT guidelines
Discussion
Six firms were identified as being affected
by the proposed regulation
Total value of shipments by the plants
identified could not be determined. These
plants employ about 2,600 persons
Newer plants are built with integrated coating
and emission control systems; older plants are
only marginally competitive now
Current emissions are estimated at about 7,500
tons/year
Direct fired incineration or carbon adsorption
for short range; low solvent coatings are a
long range goal
Direct fired incineration with primary and
secondary heat recovery and carbon adsorption
with distillation
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized operating cost (statewide)
Price
Energy
Productivity
Employment
Market Structure
RACT timing requirements (1982)
Problem areas
VOC emissions after RACT control
Cost effectiveness of RACT control
Discussion
Study team estimate is about $10 million
Approximately Sl.O million
Assuming a "direct pass-through of costs"
prices of coated fabrics will increase by about
0.3 percent
Assuming 70 percent heat recovery about 34,000
equivalent barrels of additional fuel oil would
be required per year
No major impact
No major impact
No change in market structure within the state
is anticipated; firms affected have different
product lines or are about the same size
Plants may have problem in control equipment
deliveries
Additional capital and operating costs may make
the plants uncompetitive with more modern and
efficient ones
Capital and operating costs can only be approxi-
mated because of unknown retrofit situations
1,500 tons/year (20 percent of 1977 VOC emission
$170 annualized cost/annual ton of VOC reduction
Source: Booz, Allen t Hamilton Inc.
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BIBLIOGRAPHY
T. A. Kittleman and A. B. Akell, "The Cost of Controlling Organic
Emissions," Chemical Engineering Progress, April 1978.
Springborn Laboratories, Air Pollution Control Engineering and
Cost Study of General Surface Coating Industry, Second Interim
Report. EPA Contract No. 68-02-2075, August 23, 1977.
Textile Economics Bureau, Technicon. November 1977.
Davidson's Textile Blue Book, 1977.
Rubber Red Book, New York, Palmerton Publishing Company, 1978.
Modern Plastics Encyclopedia, New York, McGraw-Hill, 1978.
Thomas Register of American Manufacturers, 1978.
Ohio Directory of Manufacturers, 1977.
U.S. Environmental Protection Agency, Control of Volatile
Organic Emissions from Existing Stationary Sources, Volume I.
EPA-450/2-76-028, May 1977.
U.S. Environmental Protection Agency, Control of Volatile
Organic Emissions from Existing Stationary Sources, Volume II.
EPA-450/2-77-008, May 1977.
U.S. Environmental Protection Agency, Regulatory Guidance for
Control of Volatile Organic Compounds Emissions from 15
Categories of Stationary Sources.EPA-905/2-78-001,April 1978.
U.S. Department of Commerce, County Business Patterns, 1976.
-------
Private conversations at the following:
Canvas Products Manufacturers Association
Bobst-Champlain
REECO, Inc.
Overly, Inc.
Textile Economics Institute
Technical Systems
Borden Chemical Company, Columbus Coated Fabrics
Division, Columbus, Ohio
Chrysler Corporation, Sandusky, Ohio
Custom Coated Products, Cincinnati, Ohio
General Tire Corporation, Textile Leather Division,
Toledo, Ohio
Inmont Corporation, Toledo, Ohio
Uniroyal, Port Clinton, Ohio
-------
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7.0 ECONOMIC IMPACT OF IMPLEMENTING RACT
FOR THE SURFACE COATING OF AUTOMOBILES
IN THE STATE OF OHIO
-------
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7.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT GUIDELINES
FOR SURFACE COATING OF AUTOMOBILES
IN THE STATE OF OHIO
This chapter presents a detailed analysis of the impact
of implementing RACT for surface coating of automobiles in the
State of Ohio.
The capital cost and energy requirements to achieve the
recommended RACT limitations were anticipated to be higher
than for any other industrial category studied. In addition,
the EPA is currently considering modifying the limitations in
certain areas. Therefore, the economic impact and analysis
for surface coating of automobiles is presented in two scenarios
of RACT implementation:
RACT compliance by 1982
Modified RACT timing requirements (and possible
limitations) to meet developing technologies.
To the extent that light duty trucks are also manufactured in
the same automobile assembly plant, their impact is included.
The chapter is divided into six sections including:
Specific methodology and quality of estimates
Industry statistics
The technical situation in the industry
Emissions and current controls
Cost and VOC reduction benefit evaluations for
the most likely RACT alternatives
Direct economic impacts.
Each section presents detailed data and findings based
on analyses of the RACT guidelines, previous studies of the
application of surface coatings on automobiles, interviews,
industry public hearing submissions and analysis.
7-1
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i.I SPECIFIC METHODOLOGY AND QUALITY OF ESTIMATES
This section describes the methodology for determining
estimates of:
Industry statistics
VOC emissions
Processes for controlling VOC emissions
Cost of controlling VOC emissions
Economic impact
for the surface coating of automobiles in Ohio.
An overall assessment of the quality of the estimates
is detailed in the latter part of this section.
7.1.1 Industry Statistics
The potentially affected facilities were identified
from the emission inventory and from Ward's Automotive Yearbook.
Detailed industry statistical data for value of shipments,
capital expenditures, employment, etc., were not available for
the state in secondary sources. Therefore, these estimates
were factored from national data based on the number of
units output in the state and study team analysis.
The number of units manufactured in 197f was obtained
from Ward's Automotive Yearbook.
7.1.2 VOC Emissions
Booz, Allen estimated the 1977 VOC emissions based on
information provided by industry interviews, submissions to
public hearings and typical emission rates for automobile
assembly plants that were reported in other states studied
in EPA Region V.
7.1.3 Processes for Controlling VOC Emissions
Processes for controlling VOC emmission for the surface
coating of automobiles are described in Control of Volatile
Organic Emissions from Existing Stationary Sources—Volume II
(EPA-450/2-77-008, May 1977). Manufacturers were interviewed
to ascertain the most feasible types of control for organic
emissions in the coating of automobiles.
7-2
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7.1.4 Cost of Control of VOC Emissions
The costs of control of volatile organic emissions were
developed by:
Determining the alternative types of control
systems likely to be used
Estimating the probable use of each type of
control system
Defining system components
Developing installed capital costs for modifi-
cations of likely coating processes based on
industry estimates, EPA estimates and Booz, Allen
study team judgment
Developing costs of control for the likely coating
processes on a model plant basis:
Installed capital costs
- Direct operating costs
Annual capital charges
- Energy requirements
Applying model plant costs to the specific facilities
affected in the state and aggregating costs to the
total industry for the state.
These costs were presented for two scenarios of RACT
implementation:
RACT compliance by 1982
Modified RACT timing requirements and possible
limitations to meet developing technologies.
Under the first scenario (RACT compliance by 1982) , a
waterborne system similiar to the systems used in developing
RACT guidelines was studied.
Under the second scenario, a high solids enamel topcoat
system (or other equivalent technology) that is not fully
developed (commercially for automobile coatings) was studied.
7-3
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7.1.5 Economic Impacts
The economic impacts were determined by analyzing the
lead time requirements to implement RACT, assessing the
feasibility of instituting RACT controls in terms of capital
availability and equipment availability, comparing the direct
costs of RACT control to various state economic indicators and
assessing the secondary effects on market structure, employment
and productivity as a result of implementing RACT controls in
Ohio.
7.1.6 Quality of Estimates
Several sources of information were utilized in assessing
the emissions, cost and economic impact of implementing RACT
controls on the surface coating of automobiles in Ohio.
A rating scheme is presented in this section to indicate the
quality of the data available for use in this study. A rating
of "A" indicates hard data, (data that are published for the
base year), "B" indicates data that were extrapolated from hard
data and "C" indicates data that were not available in secondary
literature and were estimated based on interviews, analysis of
previous studies and best engineering judgment. Exhibit 7-1,
on the following page, rates each study output listed and the
overall quality of the data.
7-4
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EXHIBIT 7-1
U.S. Environmental Protection Agency
SURFACE COATING OF AUTOMOBILES
DATA QUALITY
A B C
Extrapolated Estimated
Study Outputs Hard Data Data Data
Industry statistics X
Emissions X
Cost of emissions control X
Economic impact X
Overall quality of data X
Source; Booz, Allen & Hamilton Inc.
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7.2 INDUSTRY STATISTICS
Industry characteristics, statistics and business trends
for automobile assembly plants in Ohio are presented in this
section. Data in this section form the basis for assessing
the impact of implementing RACT for control of VOC emissions
for automobile manufacturing plants in the state.
7.2.1 Size of the Industry
There are five major automobile and light duty truck
manufacturing facilities that would be affected by the RACT
guidelines in Ohio. General Motors has two assembly plants in
Lordstown and Norwood. Ford has two assembly plants in Lorain
and Avon Lake/ and American Motors has an assembly plant in
Toledo. Exhibit 7-2, on the following page, presents the
potentially affected facilities and the approximate number
of automobiles manufactured.
In 1977, there were approximately 700,000 automobiles
manufactured in Ohio, approximately 8.7 percent of the
automobiles manufactured in the U.S. There are two states that
currently manufacture more automobiles than Ohio, but only
one (Michigan) has appreciably more automobile production.
The table below presents the percent of U.S. car production by
state for the 1976 model year.
Percent of U.S. Total
State Automobile Production
Michigan 33,9
Missouri 9.2
Ohio 8.7
New Jersey 6 . 8
California 6,7
Georgia 6.6
Wisconsin 6.4
Other states 21.7
Additionally, there were approximately 430,000 light duty
trucks manufactured at the facilities in Ohio. The 1977 value
of shipments of automobile and light duty trucks in Ohio is
estimated to be $5.5 billion. These manufacturing facilities
employ approximately 31,000 employees. The capital expenditures
for these five plants is not available; however historically the
auto industry nationwide expenditures for new .plant and new equip-
ment is 1-2 percent of the value of shipments.
7-5
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EXHIBIT 7-2
U.S. Environmental Protection Agency
LIST OF POTENTIALLY AFFECTED
FACILITIES BY THE RACT
GUIDELINE FOR SURFACE COATING
OF AUTOMOBILES—OHIO
Company or
Division
Ford
General Motors:
GM Assembly
General Motors:
GM Assembly
Make and Type of
Location Vehicle Manufactured
Ford-Automotive Lorain
Assembly Division
LTD II
Cougar
Econoline Vans
Avon Lake Club Wagons
Lordstown Chevrolet
Buick
Oldsmobile
Pontiac
Chevrolet GMC vans
Norwood Chevrolet
Pontiac
Automobile Production
for 1976 Model Year
175,000
44,000
234,000
252,000
Truck Production
for the 1976 Model Year
174,000
129,000
Jeep Corporation
(American Motors
Corp.)
Toledo
Jeep-trucks, wagoneers,
CJ-5, CJ-7, Cherokee
Total, Ohio (Approximately 8.7 percent of U.S. total
automobile production)
706,000
127,000
430,000
Source: Plants of U.S. Motor Vehicle Manufacturers, 1978, Motor
Vehicle Manufacturers Association of the United States, Inc.
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7.2.2 Comparison of the Industry to the State Economy
The Ohio automobile and light duty truck assembly industry
employs 2.4 percent of the state labor force, excluding government
employees. The value of shipments from automobile assembly
plants represents approximately 6.2 percent of the statewide
value of products manufactured.
7.2.3 Characterization of the Industry
The RACT guidelines apply only to automobile assembly plants
and not to custom shops, body shops or other repainting operations.
The automobile assembly industry receives parts from a variety
of sources and produces finished vehicles. Various models,
usually of the same general body style, may be built on an
assembly line. Assembly lines typically operate at 30 to 75
vehicles per hour and produce approximately 4,000 vehicles per
year.
The automobile manufacturing industry is unique in that
these companies are large and have extensive expertise in the
coatings technology developed. The surface coating of the
automobile must offer adequate protection against corrosion as
well as provide an attractive appearance and durability for the
customer. In developing technologies to meet the market needs,
the manufacturers have invested extensive capital in specific
technologies. The major difference in current technology
within the industry is the raw material and the associated equipment
used for top coating applications. General Motors has tradi-
tionally utilized lacquer systems while other manufacturers
traditionally utilize enamel coatings. In 1977, there were
only two plants using waterborne enamels, Van Nuys and South
Gate California, both General Motors facilities. For prime
coating of automobiles there has been a recent trend towards
water-based cathodic electrodeposition because of the increased
coverage, uniformity and paint recovery. Some of the anodic
electrodeposition facilities installed in the late 1960s
and 1970s have converted to cathodic to eliminate odor
problems and further improve corrosion protection. However,
the majority of the plants in the U.S still utilize spray,
dip or flow coating with solvent-based coatings.
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7.3 THE TECHNICAL SITUATION IN THE INDUSTRY
This section presents an overview of the types of coating
process alternatives that might be used to reduce emissions
from the surface coating of automobiles.
7.3.1 Process Description of Surface Coating of Automobiles
There are two major process areas for the surface coating
of automobiles:
Prime coat
Topcoat.
Processes for assembly of automobiles are described in
Control of Volatile Organic Emissions from Existing Stationary
Sources—Volume II (EPA-450/2-77-008, May 1977).
This section provides a summary of central technologies
that may be used for reducing solvent emissions.
7.3.1.1 Primers
The prime coat serves the dual function of protecting the
surface from corrosion and providing for good adhesion of the
topcoat. Currently, most primers used are organic solvent-borne
and are applied by a combination of manual and automatic spray,
dip or flow coating methods. However, there are a number of
new low-organic solvent-based primers, now used in limited
quantities, that could replace these:
Electrodeposition primers—These are electro-
phoretically deposited waterborne primers.
The process can be either cathodic or anodic.
The cathodic, which was developed more recently,
offers an improved corrosion protection but
does have slightly more VOC emissions than the
anodic process. Many automobile assembly facili-
ties have recently invested substantial capital
to convert facilities to the cathodic electro-
deposition process.
Waterborne primers—These are waterborne
primers that are applied by spray, dip or flow
coating processes. The processes require less
capital than an electrodeposition process
but do not offer the product quality advantages.
Powder primers—This technology is still in early
development stages but it could offer significant
emission reductions. Major technical problems to
date have been the significant processing changes
required and product smoothness.
7-7
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7.3.1.2 Topcoats
Two types of topcoats are currently used in industry—
lacquers and enamels. Most General Motors facilities are
based on lacquer technology while the other automobile manu-
facturers all employ enamel topcoats. There are a number of
technology developments which may apply in future periods.
Waterborne topcoats—Reductions in organic solvent
emissions of up to 92 percent from topcoat spray booths
and ovens are achievable using waterborne topcoats.
The exact reduction depends on both the original
coating and the replacement. If, for example, the
lacquer (6.5 pounds of organic solvent per gallon
of coating) and the waterborne had 2.8 pounds of
organic solvent per gallon of coating (as do GM
coatings in California), reduction would be 92
percent. If the original coating were 33 volume
percent solids, reduction would be 70 percent.
Waterborne topcoats are currently being used at
two General Motors automobile assembly plants in
California on a full-scale basis. Although there
can be no argument as to the technical feasibility
of waterborne topcoats, the number of major process
modifications necessary to retrofit this technology
to an existing plant are significant (often requiring
a completely new processing line). Also, the utili-
zation of energy is much greater than for solvent
systems.
Powder coatings—Acrylic powder coatings have been
evaluated as topcoats for General Motors and Ford
cars on a development basis at Framingham, Massachu-
setts, and Metuchen, New Jersey. Along with process
color change and other difficulties that are poten-
tially correctable, the greatest remaining obstacle
to powder utilization as an automotive topcoat is
the lack of an acceptable metallic color. This
commercial unacceptability of powder metallic
colors would be a particular problem, since over
50 percent of cars manufactured over the past
several years have been metallic.
Although very low in hydrocarbon emissions, powder
coating do not represent a viable approach for
automobile manufacturers in the near-term future.
7-8
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High solids (60-80 percent by volume solids) two-
component urethanes—Considerable research effort
is being devoted to high solids (60-80 percent by
volume solids) low-temperature curing urethane
systems. Experience with urethanes in general
in the aircraft industry indicates excellent
weathering and environmental resistance at the
low coating weights required on aircraft, although
the urethanes used are not at 60-80 percent solids
as applied.
At this point in time, there does not appear to
have been any major evaluation by automotive manu-
facturers of the high solids materials.
High solids urethane systems do offer significant
potential in reducing emissions and energy costs,
but would not be expected to be available for auto-
motive use in the near future.
An additional problem with urethanes is the expo-
sure to isocyanates from the coatings. Exposure wouL
have to be minimized to assure worker safety.
High solids (35-55 percent by volume solids) disper-
sion lacquers—Many suppliers have taken an inter-
mediate approach to high solids systems. For
example, a 55 percent solids dispersion system
is currently in use on trucks in Canada on an
advanced development basis. High solids dispersion
systems (35 percent) have also recently been
evaluated at an Oldsmobile plant.
None of these, however, have been production proven on
automotive lines and additional development would be
required to evaluate their performance.
High solids (30-62 percent by volume solids) enamels--
All major automobile manufacturers other than
General Motors use enamel topcoats. The average
solids content of enamels currently being applied
is approximately 30 percent; metallic colors
usually have a lower solids content. Paint suppliers
and the automotive industry are actively attempting
to achieve higher solid enamels.
7-9
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In the short term (one to two years) some high
solids colors may be available for use; however, it
is unlikely that the full color offering (especially
metallics) could be converted to high solids tech-
nology.
7.3.2 Emissions And Current Controls
This section presents the estimated VOC emissions from
automobile assembly facilities in Ohio in 1977 considering the
current level of emission controls implemented in the state.
Exhibit 7-4, on the following page, shows the estimated emissions
in 1977 from the three major companies. The VOC emissions are
estimated based on the following level of current control and
coating processes:
General Motors has two facilities, located at
Lordstown and Norwood. The total VOC emissions from
these facilities are approximately 10,000 tons per
year.
The Lordstown automobile assembly facility currently
utilizes the following types of coating systems:
Cathodic electrodesposition primers
A solvent-based primer surfacer (15 to 20
percent solids)
A dispersion acrylic lacquer topcoat
(approximately 18 percent solids).
For light duty trucks manufactured at
Lordstown the assembly facility utilizes
the following type of coating systems:
Cathodic electrodesposition primer
A solvent-based primer surfacer (15 to
20 percent solids)
An enamel topcoat(approximately 28-32 percent solids
The Norwood automobile assembly facility currently
utilizes the following types of coating systems:
Cathodic electrodesposition primer
A solvent-based primer surfacer (15 to
20 percent solids)
An acrylic lacquer topcoat (approximately
13 percent solids).
7-10
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EXHIBIT 7-4
U.S. Environmental Protection Agency
OHIO VOC EMISSIONS—SURFACE
COATING OF AUTOMOBILES AND
LIGHT DUTY TRUCKS
Estimated
1977 VOC
Company Name Locations Emissions
(tons per year)
General Motors Lordstown, Norwood 10,000
Ford Motor Company Lorain, Avon Lake 2,500
American Motors Toledo 1,150
Total, 1977
13,650
Source; Booz, Allen & Hamilton Inc., analysis of emission
estimates supplied by industry, reported current controls
and processes at the affected facilities, and VOC emissions
for similiar coating technologies reported in other states
of EPA Region V.
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Ford Motor Company has two facilities located at
Lorain and Avon Lake. The total VOC emissions from
these facilities are approximately 2,500 tons per
year. The coating systems utilized are similiar at
both plants.
Cathodic electrodesposition is used for the
prime coat.
The primer surfacer used is a 55 percent
volume solids (guide coat).
A 28 to 32 percent solids enamel is used for
the top coat.
American Motors has an assembly facility in Toledo,
Ohio. The VOC emission from this facility is
approximately 1,150 tons per year.
/
There are two different primer coats applied
to the auto bodies:
An epoxy dip primer at 38 percent solids
A reinforcement spray primer at 30 percent
solids.
The topcoat is an enamel system at 30 percent
solids (+5 percent).
7-11
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7.3.3 RACT Guidelines
The RACT guidelines (as recommended in EPA-450/2-77-008)
for VOC emission control specify the amount of allowable
VOC in pounds per gallon of coating, minus any water in the
solvent system. The RACT guidelines have established different
limitations for each process operation. These recommended
limits are shown in the table below.
Average Lbs. VOC/
Affected Gallons of Coating
Process Operations Minus Water
Prime application and flash-off 1.9
area and oven
Topcoat application, flash-off 2.8
area and oven
Final repair application, flash- 4.8
off area and oven
These limits apply to all objects surface coated in the
plant, including the body, fenders, chassis, small parts, wheels
and sound deadeners. They do not apply to adhesives.
These guidelines, as stated, are very specific to certain
types of control options, either in emission limit or timing,
that may be subject to change by the EPA, in the near future.
The prime coat application limitations were based
on an anodic electrodeposition system followed
by a 25 percent solids waterborne surface coat
for thickness and improved adhesion of the top-
coat. Since the guideline development, it has
been recognized that a cathodic electrodeposition
system offers additional benefits especially
in the areas of increased corrosion protection
and odor control. With current coating technology,
the 1.9 pounds per gallon limitations of the RACT
guidelines cannot be achieved with a cathodic system
(emissions would be approximately 2.1 pounds per
gallon). In light of continued technology develop-
ment and potential change in limits, it was assumed
for purposes of this anaylsis, that a cathodic
electrodeposition process with emissions of
approximately 2.1 pounds per gallon would meet
the RACT requirements.
7-12
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The topcoat limits were based on water
borne systems that were introduced at the
General Motors South Gate and Van Nuys,
California, facilities to meet Los Angeles
emission regulations. For purposes of
this analysis, two scenarios were assumed
in which RACT topcoat limitations could
be met(l) waterborne coatings and (2)
other technology with equivalent emission
character. It is anticipated that new
technology will be developed which will
effect reductions equivalent to water
borne coatings at lower costs and energy
use.
7.3.4 Selection of the Most Likely RACT Alternatives
Projecting the most likely industry response for control
of VOC emissions in automobile assembly facilities is compli-
cated by the different processing techniques manufacturers
have in place and the potential change of recommended RACT
limitations. Several general assumptions can be made.
The RACT limitations as recommended (EPA-450/2-77-
008) for prime coat application, flash-off area and
oven are specifically based on use of an anodic
electrodepositlon system followed by a 25 percent
solids waterborne coating. Recent technology
developments in cathodic electrodeposition provide
an improved system (versus anodic electrodeposition)
and, therefore, this is likely to be the preferred
industry response wherever feasible. A cathodic
system has somewhat higher solvent content than
anodic electrodeposition systems, the capital and
operating costs for both electrodeposition systems
are similar.
The RACT limitations, as recommended for topcoat
application, flash-off area and oven, are specifically
based on use of waterborne coatings at two General
Motors facilities. Although this alternative is
extremely capital and energy intensive, it is the
only currently available proven alternative that
would meet the recommended RACT limitations, if
compliance is required by the 1982 timeframe.
Other topcoat coating technologies (such as high
solids enamels, urethane enamels or powder coatings)
could potentially offer significant emission reduc-
tion and be cost effective for manufacturers. However,
these technologies are at various stages of develop-
ment and none have been technically proven for an
automotive assembly plant.
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The industry will install incinerators only as a
last resort if there is no economically feasible
low solvent coating technology available. The
annual cost of energy requirements for the incineration
of large volume and low concentration air flows (such
as would be required to control the total facility)
is generally cost prohibitive. Incineration may, however,
be vsed in combination with coatings of reduced solvent
content to produce emission levels in accord with the
RACT guidelines. For instance, an assembly plant using
a topcoat enamel system may use a higher solids enamel
and incinerate a portion of the emission from the spray
booths or ovens.
Carbon adsorption systems are not a likely control
alternative because of the large air flow rate of
the spray system.
Due to the uncertainty of the industry response to the
RACT recommended limitations, two scenarios of selection of
alternatives were developed for purposes of this study.
Scenario I (High Side)—the industry response to
meet the recommended RACT limitations by 1982 would
be:
- Prime coat--anodic or cathodic
electrodeposition
Topcoat—waterborne coating
Final repair—solvent-borne enamel with
35 percent solids
Scenario II (Technology Dependent)—RACT timing
requirements and possibly emission limitations are
modified to meet developing technologies.
Exhibit 7-5 and 7-6, on the following pages, present the
selection of the most likely RACT alternatives under the two
scenarios.
7-14
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EXHIBIT 7-5
U.S. Environmental Protection Agency
SELECTION OF THE MOST LIKELY RACT
ALTERNATIVES UNDER SCENARIO I (RACT
COMPLIANCE BY 1982)
Processing
Are."*
Primer
Control
Alternatives
Anodic electrodeposition
primer followed by water-
borne "surfacer"
Cathodic electrodeposi-
tion primer followed by
, a waterborne or high
solids "surfacer"
Topcoat
Spray, dip or flow coat
solvent-based primers
with incineration
Waterborne enamels
Repair
35 percent solids
enamel
Current or modified
coatings with incin-
eration
Discussion
Very low VOC emission
levels are achievable
yet system has some
technology disadvantages
to other alternatives
Offers improved corrosion
protection and eliminates
odor problem of anodic
"E-coat"
VOC emission levels are
moderately higher than
the recommended RACT
limitations
High operating cost for
energy demands
Only technologically
proven alternative that
would meet the RACT
requirements
Extremely high capital
cost and energy require-
ments
Technology is not fully
developed, i.e., some
colors cannot be matched
with currently available
coatings
High operating cost for
energy demands
Source; Booz, Allen & Hamilton Inc.
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EXHIBIT 7-6(1)
U.S. Environmental Protection Agency
SELECTION OF THE LIKELY RACT
ALTERNATIVES UNDER SCENARIO II
(MODIFIED RACT TIMING AND POSSIBLY
LIMITATIONS)
Processing
Area
Primer
Control
Alternatives
Anodic electrodeposition
primer followed by water-
borne "surfacer"
Cathodic electrodeposi-
tion primer followed by
a waterborne or high
solids "surfacer"
Other spray, dip or
flow coat primers with
incineration
Powder coatings
Topcoat
Waterborne enamels
Discussion
Very low VOC emission
levels are achievable
yet system has some
technology disadvantages
to other alternatives
Offers improved corrosion
protection and eliminates
odor problem of anodic
"E-coat"
VOC emission levels are
moderately higher than
the recommended RACT
limitations
High operating cost for
energy demands
Undeveloped technology
however, has potential
applications for use
on steel or as "surfacer"
Low VOC emission levels
might be achievable and
cost effective
Only technologically
proven alternative that
would meet the RACT
requirements
Extremely high capital
cost and energy require-
ments
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EXHIBIT 7-6(2)
U.S. Environmental Protection Agency
Processing
Area
Control
Alternatives
High solids enamels
Urethane enamels
Powder
Repair
35 percent solids
enamel
Discussion
Technology to achieve
the 62 percent solids
required by RACT limi-
tations is not developed.
However, paint suppliers
are optimistic for
potential application
of up to a 55 percent
solids enamel
If technology develops,
only minor modifications
would be required -t
facilities curren^
using enamels
Major modifications
would still be required
for facilities using
lacquer coatings
Technology is not
developed
Potentially large
energy savings and
improved properties
Toxicity protection is
required for workers
Technology is not
developed
Potential energy and
recovery savings
Color limitations
Technology is not fully
developed, i.e., some
colors cannot be matched
with currently available
coatings
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EXHIBIT 7-6(3)
U.S. Environmental Protection Agency
Processing Control
Area Alternatives Discussion
Current or modified coat- High operating cost for
ings with incineration energy demands
Source: Booz, Allen & Hamilton Inc.
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7.4 COST AND VOC BENEFIT EVALUATIONS FOR THE MOST LIKELY RACT
ALTERNATIVES
Costs for the two assumed scenarios of alternative VOC
emission controls are presented in this section. Under Scenario
I, it is assumed that the RACT requirements would be met by a
waterborne system. Under Scenario II, it is assumed that the
RACT timing requirements (and possibly limitations) are modified
to meet developing technologies. The costs presented in this
section are based on studies performed by the EPA and automobile
manufacturers to determine the estimated costs for actual plants.
The study team utilized published data to develop the cost estimate
presented in the section. The final section presents an extra-
polation of the typical costs for automobile assembly plants
to meet the RACT requirements for the two scenarios.
7.4.1 Costs for Alternative Control Systems under Scenario I
Under Scenario I, it is assumed that the RACT requirements
must be met with existing proven technology. Therefore, the
following control alternatives are assumed:
Cathodic or anodic electrodeposition of
primers. Although the RACT requirements of
1.9 pounds of VOC emissions per gallon of
coating are specific for the anodic process,
this analysis assumes that cathodic electro-
deposition of waterborne coatings would meet
the RACT requirements
Waterborne topcoat system
35 percent volume solids enamel repair system.
A electrodeposition waterborne system can be used only
directly over metal or other conductive surfaces. Although the
system offers an improved product advantage over other types of
primer application methods, the conversion represents a signifi-
cant capital cost. The cost of conversion for a typical electro-
deposition system at an automobile assembly plant is presented
below. 1 Costs will vary significantly depending on the retrofit
situation.
The installed capital cost would be approximately
$10 million to $12 million, not including additional
energy requirements (if necessary) .
Direct operating costs (utilities, direct labor
and raw materials) would be approximately $20,000
less annually than conventional application
techniques.
These cost ggfrjmat-afi were developed by the Booz, Allen study team after a
review of operating costs reported in "Control of Volatile Organic Emissions
From Existing Stationary Sources" - Volume II (EPA-450/2-77-008) and estimates
provided by General Motors, Ford MOtor Company, and American Motors in
Technical Support Documentation for the States of Ohio, Illinois and Wisconsin.
-------
Interest, depreciation, taxes and insurance are
estimated to be approximately $1.5 million annually
(assuming 15 percent of capital investment based
on a 20-year equipment life).
Therefore, the total annualized cost of the conver-
sion to an electrodeposition waterborne system would
be approximately $1.5 million.
The additional energy demands are estimated to be
approximately 5 million to 6 million kilowatt hours per
year.
If the electrodeposition system were anodic, the resulting
VOC emissions for the priming operation including primer surfacer
would be approximately 1.9 pounds of VOC per gallon of coating.
If the electrodeposition system were cathodic, the resulting VOC
emissions would be approximately 2.5 pounds of VOC per gallon
of coating. For purpose of economic analysis it is assumed that
both anodic and cathodic EDP require essentially equivalent capital
and operating costs.
The conversion of the topcoat application to a waterborne
system would require extensive modification of the existing
facilities, essentially equivalent to the cost of new line. The
conversion would require changes, such as humidification equip-
ment, a longer spray booth, new ovens, replacement of existing
piping with stainless steel piping, sludge handling equipment,
floor conveyors (for some facilities) and additional power
generating equipment. The conversion cost for a waterborne
system has been estimated by the EPA and all the major automobile
manufacturers. These estimates may differ by 100 percent, depending
on the particular facility being studied. After an evaluation
of these cost estimates, the study team found that a typical
facility is likely to incur the following costs to convert to
a waterborne system.
The installed capital cost would be approximately
$40 million to $50 million, including additional
power requirements.
Incremental direct operating costs (utilities,
direct labor and raw materials) would be approxi-
mately $750,000 annually, mostly for energy.
Interest, depreciation, taxes, and insurance
are estimated to be approximately $7 million
annually (assuming 15 percent of capital
based on a 25-year equipment life and 10
percent interest rate).
These cost estimates were developed by the Booz, Allen Study team after a
review of operating costs reported in "Control of Volatile Organic Emissions
From Existing Stationary Sources" - Volume II (EPA-450/2-77-008) and
estimates provided by General Motors, Ford Motor Company and American Motors
in Technical Support Documentation for the states of Ohio, Illinois and
Wisconsin.
7-16
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The annual!zed cost of the conversion to
a waterborne system would be approximately
$8 million.
The additional energy demands are estimated
to be equivalent to approximately 38,000
equivalent barrels of oil annually.
The resulting VOC emission from a waterborne topcoat
system would be approximately 2.8 pounds of VOC per gallon if
coating.
The cost of conversion to a 35 percent enamel for topcoat
repair is assumed to be minimal in relation to the conversion costs
for the other coating applications. A 35 percent topcoat repair
enamel cannot be obtained today for all types of paints applied.
However, this limitation might be met by incinerating a portion
of the total emissions to achieve the equivalent of a 4.8 pounds
per gallon limitation.
7.4.2 Cost for Alternative Control Systems under
Scenario II
Under Scenario II, it is assumed that the RACT requirements
are modified based on the following control alternatives.
Cathodic or anodic electrodeposition of
primers is used.
High solids enamels, urethane enamels or
powder coatings technologies are developed
for topcoat application.
35 percent solids enamel is used for topcoat
repair.
The conversion cost for a electrodeposition waterborne
system would be the same as developed for Scenario I.
The conversion of the topcoat application to a high
solids enamel, urethane enamel or powder coating would
depend on the particular system applied and the current
coating technology used by the manufacturer.
Since three facilities in Ohio currently use
enamel topcoating, this analysis assumes
that they would meet the RACT requirements
with high solids enamel technology develop-
ments..
7-17
-------
Under this scenario, minimal capital
and operating costs changes would
be required as the existing equipment
is likely to be adjustable to higher
solids coatings.
The average VOC emissions per gallon of
coating would depend on the high solids
enamels that are developed. Depending
on the timing constraints high solid
enamels ranging from 40 percent to 63
percent could be achieveable based on
projected technology developments
that are currently being applied by
other industrial sectors.
For manufacturers that are currently using lacquer
topcoat systems, there is likely to be significant
capital requirement to meet further technology
development:
A conversion to high solids enamel is
likely to require changes in equipment,
such as:
conveyor systems
ovens
in-house repair
spray systems
sludge disposal system
- The conversion requirements for urethane
enamels or powder coatings is at too
early a stage to estimate costs.
- The equipment modifications would depend
on the particular technology adapted at
these facilities and the available equip-
ment. Based on Booz, Allen study team
estimates, the anticipated capital
costs are likely to be less than $10
million per facility. Therefore, for
purposes of this study, a judgmental
analysis leads to the following cost
determination to convert current lacquer
processing:
Capital cost of $10 million
Annualized cost of $1.5 million
(assuming 15 percent of capital
cost)
7-18
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Exhibit 7-7, on the following page, presents the conversion
costs for the two scenarios developed.
7.4.3 Extrapolation to the Statewide Industry
Exhibit 7-8, following Exhibit 7-7, presents the extra-
polated costs of meeting the RACT guidelii es under two scenarios
that were developed. These costs are based upon:
The estimates of cost of compliance under the two
scenarios that were presented in sections 7.4.1 and
7.4.2.
The current processing techniques at the five potent-
ially affected facilities in the state.
Applying the model plant costs developed under each
scenario to each specific facility affected in the
state and aggregating the results (i.e., if cathodic
electrodeposition is already in operation at a specific
facility the cost compliance and the resulting potent-
ial emission reductions would not be included in this
analysis).
7-19
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I i 14 it 11 II
! t
» f 1
EXHIBIT 7-7
U.S. Environmental Protection Agency
ESTIMATED COST FOR MODEL PLANT TO
MEET AUTOMOBILE RACT REQUIREMENTS
Capital Cost
Direct Annualized
Operating Cost Capital Cost
Annualized Energy
Cost--Rounded Demand
SCENARIO I
Primer
Topcoat
Final Repair
($ millions)
10-12
40-50
($ millions)
(0.02)
0.8
($ millions)
1.5-1.8
6.0-7.5
($ millions)
1.6
8
(equivalent
barrels of
13,000
37,000
Total,
Scenario I
50-62
0.78
7.5-9.3
9.6
50,000
SCENARIO II
Primer 10-12
Topcoat
(Enamel
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EXHIBIT 7-8
U.S. Environmental Protection Agency
STATEWIDE COSTS TO MEET THE RACT GUIDELINES
FOR AUTOMOBILE ASEMBLY PLANTS
Characteristic
Number of plants
1977 VOC emissions
(tons per year)
Scenario I
5
13,650
Scenario II
5
13,650
Potential emission
reduction
(tons per year)
10,900
8,650-10,900a
VOC emissions after
RACT
(tons per year)
2,750
2,750-5,000
Capital cost
($ millions, 1977)
280
34
Annualized cost
($ millions, 1977)
44
Annualized cost per
ton of emission reduction
4,040
460-580
a. Emission reduction based on average solids concentration
of topcoat of 40 percent to 62 percent.
Source: Booz, Allen & Hamilton Inc.
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7.5 DIRECT ECONOMIC IMPLICATIONS
This section presents the direct economic implications
of implementing RACT controls to the statewide industry, in-
cluding: availability of equipment and capital; feasibility
of the control technology; and impact on economic indicators,
such as value of shipments, unit price, state economic
variables and capital investment. In this section, both
scenarios that were developed for surface coating of auto-
mobiles are discussed.
7.5.1 RACT Timing
Under Scenario I, it is assumed that the recommended
RACT guidelines must be implemented statewide by 1982. This
implies that the automobile manufacturers must have either
low solvent coatings or VOC control equipment installed and
operating within the next four years. The timing of RACT
is discussed for each of the major processes within auto-
mobile facilities.
To meet the RACT requirement for primer coating
operations, cathodic or anodic electrodeposition
will have to be installed. In general, the
industry has been installing the cathodic electro-
deposition process over the past few years
and four of the five affected facilities in Ohio
already have a cathodic electrodeposition
process.
Nationwide, these timing requirements for primers
represent a moderate forcing of the
current technology trend for most
manufacturers.
For American Motors the conversion
to an electrodeposition process represents
significant changes in their current process.
Construction plans would have to start
immediately to meet the 1982 timeframe.
To meet the RACT requirements for topcoating
operations, the only proven technology existing
today is waterborne coating.
Conversion to waterborne coatings
represents a complete changeover of
existing facilities. Essentially,
new production lines would have to
be installed at all facilities in Ohio.
7-20
-------
Construction alone would probably take
between three to four years. Although
this deadline of construction might be
met if Ohio were the only state
implementing RACT, it could not be
met on a nationwide basis by automobile
manufacturers.
To meet the RACT requirements for final repair,
the equivalent of a 35 percent solids enamel
must be achieved.
At American Motors, Ford, and the
General Motors light duty trucks,
which utilize enamel systems, it has
not been proven that high solids enamels
can be achieved for metallic colors. The
timing requirements might have to be met
with add-on equipment in the short run (until
technology developments are proven for
high solids enamel repairs).
Under Scenario II, it is assumed that the RACT requirements
are modified, to meet specific technologies. The only major
processing area where significant timing modifications need
to be adapted would be for topcoating.
It is likely that high solids enamels technol-
ogies will be developed over the next two or
three years, although it is highly unlikely
a 62 percent solids enamel could be developed
before 1982.
Topcoat changes at all facilities are likely to
be substantial unless an adaptable technology
can be developed.
The sections which follow further discuss the feasibility
of implementing RACT within the required timeframe and the
economic implications.
7-21
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7.5.2 Feasibility Issues
Technical and economic feasibility issues of implementing
RACT controls are discussed in this section.
The automobile manufacturing industry has extensively
evaluated most of the approaches to meeting RACT. The feeling
in the industry is that RACT cannot be achieved by January 1,
1982, using low solvent coatings—primarily waterborne.
The capital construction requirements to
achieve waterborne topcoat RACT limitations
cannot be achieved on a nationwide basis
by 1982.
The RACT controls for primer operations could
be achieved by a 1982 timeframe if they are
modified to incorporate the cathodic electro-
deposition processing technology. However,
in some older facilities where changes are
extensive, additional time may be required.
It is probable that the final repair
limitations could be achieved (with moderate
technology advances) at all automobile facili-
ties currently using enamel systems.
7.5.3 Comparison of Direct Cost with Selected Direct
Economic Indicators
This section presents a comparison of the net increase
in the annual operating cost of implementing RACT with
automobiles manufactured in the state, the value of wholesale
trade in the state and the unit value of automobiles.
Under Scenario I, which assumes that the recommended
RACT limitations are met with electrodeposition for primers,
waterborne topcoat processes and a 35 percent solids enamel
topcoat:
The capital requirement is estimated to be
$280 million, which represents approximately
340 percent of normal capital expenditures
(assuming current capital expenditures
represent 1.5 percent of value of shipments).
The net annualized cost increase is esti-
mated to be $44 million, which represents
approximately 0.8 percent of the statewide
auto industry's value of shipments.
7-22
-------
Assuming a "direct cost pass-through" the net
price increase would be approximately $38 per
car manufactured.
The automobile manufacturing industry represents
approximately 6 percent of the statewide economy
and the direct cost increase of compliance
represents approximately 0.05 percent of
the value of shipments statewide (all manu-
facturing industry).
Under Scenario II, which assumes that the RACT requirements
are modified to meet specific technologies;
The capital requirement is estimated to
be approximately $34 million, which
represents approximately 40 percent of
normal capital expenditures (assuming
capital expenditures represent 1.5 per-
cent of value of shipments).
The net annualized cost increase is approxi-
mately $5 million, which represents approximately
0.1 percent of the value of shipments.
Assuming a "direct cost pass-through" the price
increase would be approximately $4 to $5 per car
manufactured.
The direct cost increase of compliance represents
less than 0.01 percent of the value of shipments
statewide (all manufacturing industry).
7.5.4 Ancillary Issues Relating to the Impact of RACT
The automobile manufacturers are seeking to have the
guidelines altered to encompass a plant-wide emissions basis.
This would allow a credit from one operation, where emissions
were reduced to below the RACT recommended levels, to be
applied to another operation that is not in compliance under
this proposal. The plant would be in compliance if the total
emissions were reduced to the level proposed in RACT. It
appears that the impact of this proposed regulation, if
accepted, would be a reduction in compliance cost of the
RACT requirements. For instance, a manufacturer might
lower the emissions from prime coats below the RACT standard
to avoid installing emission control equipment for final
repair coating operations.
7-23
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7.5.5 Selected Secondary Economic Impact
This section discusses the secondary impact of implementing
RACT in employment, market structure and productivity.
The automobile assembly industry represents approximately
6 percent of Ohio's manufacturing industry and Ohio ranks as
the third largest automobile manufacturing state in the
nation.
If the recommended RACT limitations (Scenario I)
require waterborne coating technology/ the
effect would probably be a total remodeling
of existing lines and facilities. This might
represent a slight decrease in employment at these
facilities and a moderate increase in productivity.
If the RACT limitations are modified to meet
developing technologies, no significant effects
on employment and productivity are forecast.
Regardless of the RACT scenario implemented, no signi-
ficant change in market structure is likely to occur.
Under Scenario I, all manufacturers would
incur cost increases and none of the manu-
facturers stated that this would result
in market structure changes.
Under Scenario II, General Motors is likely
to incur higher costs than other manufacturers
but less cost per facility than under Scenario
I. General Motors feels that all of the currently
proven technology alternatives and final repair
would result in quality tradeoffs (with the
exception of retrofit control equipment).
Exhibits 7-9 and 7-10, on the following pages, present
a summary of the current economic implications of implementing
RACT under the two scenarios studied for automobile assembly
plants in the state of Ohio.
7-24
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EXHIBIT 7-9(1)
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING RACT SCENARIO I FOR
AUTOMOBILE ASSEMBLY PLANTS IN THE
STATE OF OHIO
SCENARIO I
(RACT Limitations
Implemented By 1982)
Current Situation
Number of potentially affected facilities
Indication of relative importance of indus-
trial section to state enconomy
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC control
to meet RACT guidelines
Assumed method of control to meet RACT
guidelines
Affected Areas in Meeting RACT
Scenario I
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity and employment
Discussion
Three companies operating five assembly plants
1977 value of shipments was approximately
$5.6 billion which represents approxi-
mately 6.2 percent of the state's manu-
facturing industry. Of all states,
Ohio ranks third in automobile
production
Prime coat—cathodic electrodeposition
Topcoats—high solids enamels for
manufacturers using enamel systems
Approximately 13,700 tons per year
Cathodic electrodeposition for prime
coat. High solids enamel for topcoat.
Cathodic electrodeposition for prime coat
Waterborne enamels for topcoat
High solids enamels for final repair
Discussion
$280 million (approximately 340 percent
of current annual capital expenditures
for the industry in the state)
$44 million (approximately 0.8 percent
of the industry's 1977 statewide value
of shipments)
Assuming a "direct cost pass-through"
approximately $38 per automobile manu-
factured
Increase of 250,000 equivalent barrels
of oil annually primarily for operation
of waterborne topcoating systems
Conversion to waterborne systems would
require total rework of existing pro-
cessing lines. Major modifications
would probably increase efficiency and
line speed in some facilities.
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EXHIBIT 7-9(2)
U.S. Environmental Protection Agency
SCENARIO I
(RACT Limitations
Implemented By 1982)
Current Situation
I .rket structure
**H
RACT timing requirements (1982)
"problem areas
emission after RACT control
(^st effectiveness of RACT control
Discussion
No major effect
Conversion of all automobile assembly
plants to topcoating waterborne systems
cannot be achieved by 1982
Prime coat RACT limitations are based
on anodic electrodeposition systems
and need to be modified to reflect
cathodic processing. Topcoat RACT
limitations are based on waterborne
coatings, which is not a cost or energy
effective alternative. Final repair
RACT limitations are based on high
solids enamel technology which would
require major modifications for man-
ufacturer's using lacquer systems
2,750 tons per year (20 percent of 1977
emission level)
$4,040 annualized cost/annual ton of
VOC reduction
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EXHIBIT 7-10
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS
OF IMPLEMENTING PACT SCENARIO II FOR
AUTOMOBILE ASSEMBLY PLANTS IN THE
STATE OF OHIO
SCENARIO II
RACT Requirements Are
Modified To Meet Specific
Technologies
Current Situation
dumber of potentially affected facilities
Indication of relative importance of indus-
trial section to state economy
Current industry technology trends
L977 VOC emissions (actual)
Industry preferred method of VOC control
;o meet RACT guidelines
\ssumed method of control to meet RACT
juidelines
Affected Areas in Meeting RACT
Scenario II
2apital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity and employment
Discussion
Three companies operating five assembly
plants.
1977 value of shipments was approximately
$5.6 billion which represents approximately
6.2 percent of the state's manufacturing
industry. Of all states, Ohio ranks
third in automobile production
Prime coat—cathodic electrodeposition
Topcoats—high solids enamels for
manufacturers using enamel systems
Approximately 13,700 tons per year
Cathodic electrodeposition for prime
coat. High solids enamel for topcoat.
Cathodic electrodeposition for prime coat
High solids enamels for topcoat. High
solids enamel for final repair.
Discussion
$34 million (approximately 40 percent
of current annual capital appropriations
for the industry in the state)
$5 million (approximately 0.1 percent of
the industry's 1977 statewide value of
shipments)
Assuming a "direct cost pass-through"
approximately $4 to $5 per automobile manufac-
tured
Dependent on technology applied
No major effect
-------
EXHIBIT 7-10 (2)
U.S. Environmental Protection Agency
SCENARIO II
«- Current Situation
t> rket structure
«**
RACT timing requirements
Pipblem area
VOC emission after RACT control
C*»st effectiveness for RACT control
Discussion
No major effect
Primer and final repair 7 imitations could
be implemented at most facilities by 1982
Topcoat limitations could be set at a 40
percent to 62 percent solids by 1985
dependent on technology developments
Limitations for topcoat are dependent
on technology development
2,750-5,000 tons per year (20 percent to
37 percent of 1977 emission levels dependent
on limitations)
$460-$580 annualized cost/annual ton
for VOC reduction
SWurce: Booz, Allen & Hamilton Inc.
-------
BIBLIOGRAPHY
"Ford's War On Rust," Industrial Finishing. August 1978.
Carl A. Gottesman, "The Finishing Touch," Coat and Painting.
April 28, 1977, pp. 19-24.
"G.M.'s Mel Halstead Looks At...," Industrial Finishing.
April 1977, pp. 16-20.
Bruce N. McBane, "Automotive Coatings," Treastise on Coatings,
Vol. 4; Formulations, Part I, R.R. Myers and J.S. Long, eds.
New York, Marcel Dekker, 1975.
Herbert W. Reiner, "It Pays to Electrocoat," Plating and
Surface Finishing. May 1976, pp. 15-20.
R.E. Roberts and J.B. Roberts, "Reducing Solvent Emissions in
Automotive Spray Paint," J. Air. Poll. Control Assoc. Vol. 26,
No. 4 (April 1976), pp. 353-358.
Joe Schrantz, "The Lincoln Clear Coat Program," Industrial
Finishing. July 1978, pp. 20-23.
General Motors Corporation, Recommended VOC Emission Limitations
and Technical Support Document for the State of Ohio, July 1978.
Motor Vehicle Manufacturers Association of the U.S., Inc.,
Plants of U.S. Motor Vehicle Manufacturers. December 1977.
U.S. Environmental Protection Agency, Control of Volatile
Organic Emissions from Existing Stationary Sources, Vol. II.
EPA-450/2-77-008, May 1977.
Letter to Mr. Ned E. Williams, Director, Ohio Environmental
Protection Agency, from Environmental Activities Staff of General
Motors Corporation, August 16, 1978.
Private conversations at General Motors Warren, Michigan
Private conversations at American Motors, Detroit, Michigan.
Private conversations at Ford Motor Company, Dearborn, Michigan.
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8.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
SURFACE COATING OF METAL
FURNITURE IN THE STATE OF
OHIO
-------
-------
8.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
SURFACE COATING OF METAL
FURNITURE IN THE STATE OF
OHIO
This chapter presents a detailed economic analysis
of implementing RACT controls for surface coating of metal
furniture in the State of Ohio. The chapter is divided
into six sections:
Specific methodology and quality of estimates
Industry statistics
The technical situation in the industry
Cost and VOC reduction benefit for the most
likely RACT alternatives
Direct economic implications
Selected secondary economic impacts.
Each section presents detailed data and findings
based on analyses of the RACT guidelines, previous studies
of metal furniture plants, interviews and analysis.
8-1
-------
8.1 SPECIFIC METHODOLOGY AND QUALITY OF ESTIMATES
This section describes the methodology for estimating:
Industry statistics
VOC emissions
Processes for controlling VOC emissions
Cost of controlling VOC emissions
Economic impact of emission control
for surface coating of metal furniture in Ohio.
The quality of the estimates is described in detail
in the last part of this section.
8.1.1 Industry Statistics
Industry statistics on metal furniture manufacturing
plants were obtained from several sources. All data were
converted to a base year 1977, based on specific scaling
factors. The number of establishments for 1977 was based
on the data provided by the Ohio EPA and supplemented by
a review of the 1976 County Business Patterns, Moody's
Industrial Manual and interviews with selected metal fur-
niture manufacturing corporations. The total number of
employees was obtained from the 1976 County Business
Patterns. The number of employees for individual companies
was based on information obtained during interviews with
selected metal furniture manufacturers and from the Ohio
Manufacturers Directory.
The industry value of shipments was estimated by
scaling up 1972 and 1976 published data to 1977. Because
of the lack of uniform data/ different approaches were
used for the household and business/institutional furniture
subcategories of this industry, as discussed below.
8.1.1.1 Value of Shipments for Household Metal
Furniture
The 1976 Current Industrial Reports presented the 1976
U.S. value of shipments of household metal furniture (SIC
2514) as $1,161 million and indicated an 8.7 percent in-
crease in th« value of shipments for 1977. The 1972 Census
of Manufacturers reported that th« value of shipments~Tn
-------
the East North Central region was 25 percent of the U.S.
value of shipments. The breakdown of the value of ship-
ments in this region was reported as follows:
Percent of Percent of
State Regional Total U.S. Total
Ohio 7 1.8
Illinois 52 13.0
Michigan 4 1.0
Wisconsin 16 4.0
Indiana 21 5.3
The 1977 value of shipments of metal household fur-
niture in Ohio was estimated by scaling up the 1976 U.S.
value of shipments to 1977 and applying the above
regional breakdown.
8.1.1.2 Value of Shipments for Business/Institutional
Metal Furniture
Business/institutional metal furniture includes
office furniture (SIC 2522), metal partitions (SIC 2542)
and public building furniture (SIC 2531). The value of
shipments for each of these groups was obtained as
follows:
For office furniture, the 1976 Current Indus-
trial Reports presented the U.S. value of
shipments as $1,002 million and indicated an 8
percent increase in the value of shipments for
1977. It also reported a 47.4 percent share
of the U.S. value of shipments for the East
North Central region. Since the regional break-
down of value of shipments was not available,
the regional breakdown by the Number of estab-
lishments with 20 or more employees (as given
in the Current Industrial Reports) was used to
estimate the value of shipments for individual
states:
Percent of Regional
State Number of Establishments
Ohio 22
Illinois 15
Wisconsin 7
Michigan 50
Indiana 6
8-3
-------
The 1977 value of shipments was estimated by scaling
up the 1976 U.S. value of shipments to 1977 and using the
above breakdown.
For metal partitions, which also include shelv-
ing, lockers/ storage racks and accessories and
miscellaneous fixtures, the 1972 Census of
Manufactures reported the value of shipments
for Ohio as $85.6 million. The 1977 value of
shipments was estimated by assuming a 6 percent
linear rate of growth between 1972 and 1977.
For public building furniture which includes
metal, wood and plastic furniture for stadiums,
schools and other public buildings, the 1972
Census of Manufactures reported the U.S. value
of shipments as $546.9 million and the value of
shipments for Ohio as $20 million. Since the
breakdown among metal, wood and plastic furni-
ture was also not reported, half of the total
value of shipments was assumed to be for metal
furniture. The 1977 value of shipments was
estimated by assuming a 6 percent linear rate
of growth between 1972 and 1977.
8.1.2 VOC Emissions
The VOC emission data were obtained in two ways. For
the plants that are listed in the Ohio EPA's emissions
inventory, the emissions data were obtained for the inven-
tory through personal communication with Mr. Bill Juris of
Ohio EPA and were verified for selected manufacturers
through interviews with the manufacturers. For those
plants not listed in the inventory, the emissions data were
estimated by multiplying the number of employees by a
factor of 0.3 tons per year per empoyee. This factor was
derived from the data for surface coating of metal furni-
ture in Illinois and it compared favorably for the several
facilities in Ohio, for which similar data were available.
8.1.3 Processes for Controlling VOC Emissions
Processes for controlling VOC emissions for metal
furniture plants are described in Control of Volatile
Organic Emissions from Stationary Sources, EPA-450/2-
77-032^.The data provide the alternatives available for
controlling VOC emissions from metal furniture manufactur-
ing plants. Several studies of VOC emission control were
also analyzed in detail, and metal furniture manufacturers
-------
were interviewed to ascertain the most likely types of
control techniques to be used in metal furniture manufac-
turing plants in Ohio. The specific studies analyzed
were Air Pollution Control Engineering and Cost Study of
General Surface Coating Industry, Second Interim Report,
Springborn Laboratories, and informational literature
supplied by the metal furniture manufacturers.
8.1.4 Cost of Controlling VOC Emissions for Surface
Coating of Metal Furniture
The costs of control of volatile organic emissions
for surface coating of metal furniture were developed by:
Determining the alternative types of control
systems likely to be used
Estimating the probable use of each type of
control system
Defining equipment components
Developing installed capital costs for modifi-
cations of existing systems
Aggregating installed capital costs for each
alternative control system
Defining two model plants
Developing costs of a control system for the
model plants:
Installed capital cost
Direct operating cost
Annual capital charges
Energy requirements
Extrapolating model costs to individual industry
sectors
Aggregating costs to the total industry for the
state.
The model plants used as the bases for estimating the
costs of meeting RACT were solvent-based dipping and elec-
trostatic spraying operations. The cost of modifications
to handle waterborne or high solids was not considered to
be a function of the type of metal furniture to be coated,
8-5
-------
sine* no modifications to the production lines arc
necessary. Modifications are required only to the coatings
handling and pumping and spraying equipment, and these
would not differ for different types of furniture pieces.
8.1.5 Economic Impacts
The economic impacts were determined by analyzing the
lead time requirements to implement PACT, assessing the
feasibility of instituting RACT controls in terms of capi-
tal availability and equipment availability, comparing the
direct costs of RACT control to various state economic
indicators and assessing the secondary effects on market
structure, employment and productivity as a result of
implementing RACT controls in Ohio.
8.1.6 Quality of Estimates
Several sources of information were utilized in
assessing the emissions, cost and economic impact of im-
plementing RACT controls on the surface coating of metal
furniture in Ohio. A rating scheme is presented in this
section to indicate the quality of the data available
for use in this study. A rating of "A" indicates hard
data (data that is published for the base year), "B"
indicates data that was extrapolated from hard data and
"C" indicates data that was not available in secondary
literature and was estimated based on interviews, analy-
sis or previous studies and best engineering judgment.
Exhibit 8-1, on the following page, rates each study
output listed and the overall quality of the data.
-------
EXHIBIT 8-1
U.S. Environmental Protection Agency
SURFACE COATING OF METAL FURNITURE DATA QUALITY
ABC
Extrapolated Estimated
Study Outputs Hard Data Data Data
Industry
statistics X
Emissions X
Cost of
emissions
control X
Economic impact X
Overall quality
of data X
Source: Booz, Allen & Hamilton Inc.
-------
8.2 INDUSTRY STATISTICS
Industry characteristics, statistics and business
trends for metal furniture manufacturing plants in Ohio
are presented in this section. Data in this section
form the basis for assessing the impact of implementing
RACT f :r control of VOC emissions from metal furniture
manufacturing plants in the state.
8.2.1 Industry Characteristics
Metal furniture is manufactured for both indoor and
outdoor use and may be divided into two general categor-
ies: office or business and institutional, and
household. Business and institutional furniture is
manufactured for use in hospitals, schools, av-letic
stadiums, restaurants, laboratories and othej types of
institutions, and government and private offices. House-
hold metal furniture is manufactured mostly for home and
general office use.
8.2.2 Size of the Industry
The Ohio EPA reports and Booz, Allen interviews have
identified 15 companies with 16 plants participating in
the manufacture and coating of metal furniture, as shown
in Exhibit 8-2, on the following page. These companies
accounted for an estimated $50 million in household metal
furniture shipments and $234 million in business/institu-
tional metal furniture shipments in 1977. This is
equivalent to about 10 percent and 4 percent of the U.S.
value of shipments of household and business/institutional
metal furniture, respectively. The estimated number of
employees in the entire metal furniture industry in Ohio
for 1977 was 7,300.
8.2.3 Comparison of the Industry to the State Economy
A comparison of the value of shipments of metal
furniture with the state economy indicates that the metal
furniture industry represents about 0.3 percent of the
total Ohio value of shipments of all manufactured goods.
The industry employs 0.6 percent of all people employed
in manufacturing in Ohio.
-------
Exhibit 8-2
U.S. Environmental Protection Agency
LIST OP METAL FURNITURE MANUFACTURERS
POTENTIALLY AFFECTED BY RACT IN OHIO
Facility Location
Albion Industries, Inc. Cleveland
Columbus Showcase Co. Bellevue
Dayton Display Dayton
Diebold, Inc. Wooster
Frick-Gallagher Manufacturing Co. Wellston
G.F. Business Equipment Co. Youngstown
Harvard Division, Rusco Industries, Inc. Bedford
Miami Carey Co. Monroe
Nutone Division, Scovill Manufacturing Co. Cincinnati
Republic Steel Manufacturing Division Canton
Shott Manufacturing Division Cincinnati
Marietta
Sperry Univac (sold to RQA Office Supply
Products, Inc.)
Toledo Guild Products, Inc.
Toledo Metal Furniture Co.
Zerbee Textile Co.
Toledo
Toledo
Bellefontaine
Source: Booz, Allen & Hamilton Inc. and Ohio EPA
-------
8.3 THE TECHNICAL SITUATION IN THE INDUSTRY
This section presents information on metal furni-
ture manufacturing operation, estimated VOC emissions,
the extent of current control and the likely alterna-
tives which may be used for controlling VOC emissions
in Ohio.
8.3.1 Metal Furniture Manufacturing and Coating
Operation
Manufacturing of metal furniture consists of the
following steps: fabrication of furniture parts, coating
and final as3?t-.bly. Coating operations usually include
surface preparation/ coating and curing.
The surface preparation typically consists of
cleansing, pretreating, hot and/or cold rinse and drying.
Depending on individual facilities, these steps may be
eliminated by substituting an organic solvent cleaning
operation or cleaning pieces in a shot-blast chamber.
Most metal furniture is finished with a single coat
applied by spraying, dipping and flow coating. The
latter two techniques are generally used when manufac-
turers only use one or two colors. Spraying is used
when a variety of colors are offered and is accomplished
by electrostatic spraying or by the conventional airless
or air spray methods. If the product requires two coats,
a primecoat is applied by one of the same methods used
for the topcoat or single coat.
Most painted furniture or furniture pieces are baked
in an oven; however, in some cases they are air dried.
After the coating application and before baking, the
solvent in the coating film is allowed to rise slowly in
a flash-off area to avoid popping of the film during
baking. The common steps in the coating operations are
illustrated in Exhibit 8-3, on the following page.
Most of the coatings applied to metal furniture are
enamel, although some lacquers and metallic coatings are
also used. Coating thickness generally varies from 0.7
to 1.5 mils.
-------
i I
Exhibit 8-3
U.S. linvironnn-ntaJ Protection Agency
COMMON TKCHNiyUI.S IISKI) IN COATING OF METAL
KUKNITUKE PIECES
CO*Vf •TIOMAl AIM 0*
AlfllfSSVMVCMTWC
nun COAT, n ASNorf Ant A
A«OOV(M
IWTIOMALI
CilAMIM MO
MHTMATlKliT
riOMCOAIIMb
IOrCO«l OMSINClf
COAT «m 1CAltON
Source: U.S. LnvironnwMital I'r ot eel ion Aqccicy
-------
8.3.2 Emissions and Current Controls
This section presents the estimated VOC emissions
from metal furniture manufacturing facilities in Ohio
in 1977 and the current level of emission controls
implemented in the state. Exhibit 8-4, on the follow-
ing page, shows the total emissions from the 16 metal
furniture manufacturing facilities to be about 1,532
tons per year. None of the manufacturers interviewed
have implemented complete hydrocarbon emissions controls
systems, although Republic Steel has converted some of
their operations to waterborne coating and the Nictcn? Go.
has implemented a waterborne flow coating line.
8.3.3 RACT Guidelines and Control Options
The emission limitations that can be achieved through
the application of Reasonably Available Control Technology
(RACT) for the metal furniture coating industry are
present in Exhibit 8-5, on the following pages. This
emission limit is based on the use of low organic solvent
coatings. It can also be achieved w.th waterborne coat-
ings and is approximately equivalent (on the basis of
solids applied) to the use of an add-on control device
that collects or destroys about 80 percent of the solvent
fror a conventional high organic solvent coating. In some
cases, greater reductions (up to 90 percent) can be
achieved by installing new equipment which uses powder or
electrcdeposited waterborne coatings. A comparison of the
various control options is presented in Exhibit 8-6,
following Exhibit 8-5.
8.3.4 Selection of the Most Likely RACT Alternatives
The choice of application of control alternatives,
for the reduction of hydrocarbon emissions in existing
facilities for the surface coating of metal furniture,
requires a line-by-line evaluation. A number of factors
must be considered, based on the individual characteristics
of the coating line to be controlled. The degree of
economic dislocation is a function of these factors.
The first factor to be considered is whether the
existing equipment can be used by the substitution of a
coating material which will meet the RACT guideline.
This alternative would require the least capital expen-
diture and may minimize production downtime.
If the existing equipment has to be modified,
replaced or expanded, factors to consider are the kind
-------
Facility Name
Exhibit 8-4
U.S. Environmental Protection Agency
1977 VCX: EMISSIONS FROM SURFACE COATING
OF METAL FURNITURE IN OHIO
Current
Number of Coating Number of Emissions
Employees Process Coating Lines (Actual)
Albion Industries
Columbus Showcase Co.
Dayton Display Co.
Diebold Inc.
Frick-Gallagher
Manufacturing Co.
G.F. Business Equipment Co.
Harvard Division, Rusco
Industries
Miami Carey Co.
Nutone Division, Scovill
Manufacturing Co.
Republic Steel
Shott Manufacturing Co.
Sperry Univac.
Reno Plant
Green Street Plant
Toledo Guild Products
Toledo Metal Furniture
Zerbee Textile Co.
TOTAL
-
10
50
11
N/A
91
1,500
150
590
N/A
N/A
19
N/A
N/A
75
7
N/A
N/A
spray
spray
N/A
spray
dip
spray, dip
spray,
flow coat
spray, dip
dip
spray
spray
N/A
N/A
N/A
N/A
N/A
1
3
N/A
6
3
2
3
2
1
4
2
N/A
N/A
N/A
(tons/yr;
3a
15a
3a
50
27*
515
45a
78
35
350
1
339
29
18a
22a
2a
1,532
the data from surface coating of metal furniture in Illinois and the
data available for the Ohio facilities.
Source; Personal communication with Mr. William Juris of Ohio EPA and
Boor, Allen & Hamilton, Inc. estimates
-------
IXHIB1T B-S
u.s. Knv i j Ofinu-itt al Protection Agency
EMISSION LIMITATIONS FOB RACT IN SURFACE
«T 1 11 cr of
costing (minus water)
ii. «•
Ibs. of organic solvent
emitted per gallon ol
ioat ing (minus water)
3.0
Source: (Environmental rrolt-ft ion
-------
1
f J i
i t
i
i
i
EXHIBIT 8-(, (I)
U.S. Environmental Protection Agency
RACT CONTROL OPTIONS FOR THE METAL FURNITURE INDUSTRY
Control Options
Waterborne
(electrodeposition,
EDP)
Affected Facility
and Application
Primecoat or
single coat
Typical Percent
Reduction
90-953
Comparison of Control Options
Provides excellent coverage
corrosion protection and
resistance
Fire hazards and potential
toxicity are reduced
Dry off oven may be omitted
after cleansing if an iron-
phosphate pretreatment is
used
Waterborne (spray dip
or flow coat)
All applications
60-90
Good quality control due to
fully automated process may
be offset by increased
electrical requirements for
the coating, refrigeration
and circulation systems if
EDP replaces waterborne
flow or dip coating opera-
tions. This would not be
true if EDP replaces a
spraying operation
EDP can be expensive on small-
scale production lines
This will likely be the first
option considered because of
the possibility that these
coatings can be applied
essentially with existing
equipment
-------
IIXMIUIT 8-bU')
U.S. KIIVI rounientcil Protection Agency
KACT CONTROL OPTIONS COR THE MKTAL FURNITURE INDUSTRY
Control Options
Waterborne (spray dip
or flow coat)
(continued)
Affected Facility
and Ajjpl i ca11on
Typical Percent
Reduction
Comparison of Control Options
Requires a longer flash-off
area than organic solvent-
borne coatings
Curing waterborne coatings
may allow a decrease in
oven temperature and some
reduction in airflow, but
limited reduction if high
humidity conditions occur
Spraying electrostatically
requires electrical isola-
tion of the entire system.
Large lines may be difficult
to convert because coating
storage areas may be
hundreds or thousands of
feet away from the
application area
Dip or flow coating applica-
tion requires closer
monitoring due to its
sensitive chemistry
Weather conditions affect the
application, so flash-off
time, temperature, air
circulation and humidity
must be frequently monitored
-------
* I
EXHIBIT 8-6(3)
U.S. Environmental Protection Agency
RACT CONTROL OPTIONS FOR THE METAL, FURNITURE INDUSTRY
Control Options
Waterborne (spray dip
or flow coat)
(continued)
Powder (spray or dip)
Affected Facility
and Application
Typical Percent
Reduction
Top or single coat
Comparison of Control Options
Changes in the number of nozzles
may be required
Sludge handling may be more
difficult
No solid or liquid wastes to
dispose of
Powder may reduce energy
requirements in a spray booth
and the ovens because less
air is required than for
solvent-borne coatings and
flash-off tunnel is
eliminated
Powder can be reclaimed, result-
ing in up to 98% coating
efficiency
All equipment (spray booths,
associated equipment and
often ovens) used for liquid
systems must be replaced
Powder films cannot be applied
in thicknesses of less than
2 mils and have appearance
limitations
Powder coatings may be subject
to explosions
-------
EXHIBIT 8-M4)
U.S. Environmental Protection Agency
RACT CONTROL OPTIONS FOH THE METAL. FURNITURE INDUSTRY
Control Options
Powder (spray or
dip)(continued)
Atfected K.x'ility
Applna>ion
Typical Percent
Reduction
High solids (spray)
Top or single coat
50-80
Carbon adsorption
Prime, single or
top coat
(application
and flash-off
areas)
90
Comparison of Control Options
Excessive downtime (half-hour)
is required during color
changes. If powders ar« not
reclaimed in their
respective colors, coating
usage efficiency drops to
50% to 60%
May be applied with existing
equipment
Reduces energy consumption
because it requires less
airflow in the spray booth,
oven and flash-off tunnel
Potential health hazard asso-
ciated with isocyanates used
in some high-solid two-
component systems
Although it is technically
feasible, no metal
furniture facilities are
known to use carbon
adsorption
Additional energy requirements
is a possible disadvantage
Additional filtration and
scrubbing of emissions from
spray booths may be
tequired
-------
i I
i i i i i t
I i
I I
EXHIBIT 8-6(5)
U.S. Environmental Protection Agency
RACT CONTROL OPTIONS FOR THE METAL FURNITURE INDUSTRY
Control Options
Carbon adsorption
(continued)
Affected Facility
and Application
Typical Percent
Reduction
Comparison of Control Options
There is little possibility
of reusing recovered solvents
because of the variety of
solvent mixtures
Many facilities may require
dual-bed units which require
valuable plant space
Particulate and condensible
matter from volatilization
and/or degradation of resin,
occurring in baking ovens
with high temperature, could
coat a carbon bed
Incineration
Prime, single or
topcoat (ovens)
90
These are less costly and more
efficient than carbon
adsorbers for the baking
ovens because the oven
exhaust temperatures are too
high for adsorption and the
high concentration of organics
in the vapor could provide
additional fuel for the
incinerator
-------
IIXIIIHIT 8-f>(6)
U.S. Knvironmeiit al Protection Agency
RACT CONTROL DPT IONS FOR THE MtTAL FURNITURE INDUSTRY
Affected Facility Typical Percent
Control Options and Application He-duct ion Comparison of Control Options
Incineration • Heat recovery syste» to reduce
(continued) fuel consumption would be
desirable and would make
.Application and flash-off
area usage a viable option
a. The base case against which these percent reductions were calculated is a high organic
solvent coating which contains 25 volume pet cent solids and 75 percent organic solvent.
The transfer efficiencies for liquid coatings were assumed to be 80 percent for spray, 90
percent for dip or flow coat, 9J percent for powders and 99 percent for electrodeposition.
b. This percent reduction in VOC emissions is only across the control device and does not take
into account the capture efficiency.
Source; Control of Volatile Organic Emiss ions t rom Stationary Sources—Volume III:, Surface Coating
of Metal Furniture, LPA-4'jO/2- 77-032, December 1977.
-------
of changes that have to be made, the capital costs, the
change in operating costs, the length of time needed to
make the changes, the effect on the production rate, the
operational problems that will have to be handled and
the effect on the quality of the product.
Interviews with industry representatives indicate
that most manufacturers will use their existing spraying
equipment and modify it to handle high solids or water-
borne coatings. The existing dipping or flow coating
equipment will be modified to handle waterborne coating.
One manufacturer will have to modify the existing dip
coating equipment to electrodeposition to meet the RACT
guidelines.
8-10
-------
8.4 COST AND VOC REDUCTION BENEFIT EVALUATIONS FOR THE
MOST LIKELY RACT ALTERNATIVES
This section presents the cost for the most likely
control systems and associated VOC reduction benefit.
First the costs for the two types of model plants are
presented, which are then extrapolated to the statewide
industry. For one plant in the state, the costs were
obtained directly from the manufacturer.
8.4.1 Model Plant Costs and VOC Reduction Benefits
Two types of model plants, each with different
sizes, were selected for the surface coating of metal
furniture. The first type included an electrostatic
spraying line with outputs of 3 million square feet and
48 million square feet of surface area coated per year.
The second type included a dip coating line with outputs
of 7 million square feet and 22.5 million square feet of
surface area coated per year. Assuming a one-color
single-coating line, the capital, operation and mainte-
nance costs for the model plant were estimated. The cost
of pretreatment facilities, ovens and plant building was
excluded from total capital costs. The annualized cost
includes coating materials, utilities, operation and
maintenance labor, maintenance material and capital
charges (depreciation, interest, taxes, insurance and
administrative charges). General plant overhead cost was
excluded from the annualized cost. The estimated costs
for the model base plant and the incremental costs for
the most likely control options are presented in Exhibit
8-7 for the electrostatic spraying and in Exhibit 8-8 for
dip coating lines, on the following pages.
The assumptions for the cost estimates are discussed
in the RACT guidelines document (EPA-450/2-77-032). It
should be noted that the incremental costs, or savings
can change significantly if the underlying assumptions
are changed. For example, if the base plant assumption
of 25 percent solids coating was 30 percent solids coat-
ing, no savings for conversion to higher solids (70 per-
cent) would result. Similarly, capital costs for
conversion to waterborne coating would increase
dramatically, if significant changes to the facility were
needed, compared to the assumption of cleaning and
corrosion protection only of existing dip tanks.
-------
i i
I 3
1
t S
Exhibit 8-7
U.S. Envjronmenlal Protection Agency
ESTIMATED COS! Of CONTROL FOR MODEL
EXISTING ELECTROSTATIC SPRAY COATING LINES
Model Plant A-l
(3 Million Square Keet/Yr)
Model Plant A-2
(48 Million Square Peet/Yr)
Installed capital cost ($000)
Direct operating costs (savings)
($000)
Capital charges (SOOO/yr)
Net annualized cost (credit)
($000/yr)
Solvent emissions controlled
(tons/yr)
Percent emissions reduction
Annualized cost (credit) per ton
of VOC controlled ($/ton)
Base
Plant
Cost
25%
Solids
255
175
48
223
N/A
N/A
N/A
Incremental Costs
Conversion
Higher
Solids Waterborne
15 15
(6) 5
3 3
(3) 8
21 20
86 80
(143) 400
for
Powder
60
17
11
28
24
, -, ;t.inl« -r \')ll.
-K.IUI cos , Volume 111: Surface
-------
I xlnbl t b-U
II.:.. l.nv i roniiu-iiLa 1 Protection Ayency
hSTIMATl-:!) CdVI' Of CONTKOL OPTIONS POH
MOUKL KXlbTJNi; I.) IP COATINC LINKS
Mod*} 1 Plant B-l Model Plant B-2
( / Million square teet/Yr) (i 2 .'> Million Square Kcet/Yr)
Installed capital cost (SOOO)
Dii^ct operating costs
($000)
Capital charges ($000/yr)
Net annual ized cost (SOOO/yr)
Solvent emissions controlled
(tons/yr)
Percent emissions reduction
Annual ized cost per ton of
VOC controlled (S/ton)
Base
Plant
Co:;t
2">4
Solids
10S
135
20
155
N/A
N/A
N/A
Incremental Costs
tor Conversion to
Waterborne
3
10
1
11
27
80
4U7
Babe
Plant
Cost
2'j\
Solids
215
450
40
490
N/A
N/A
N/A
Incremental Costs
for Conversion to
Waterborne
5
17
1
18
122
80
148
Note: 1977 dollars and short tons
Source: Control of Volatile Oiij.in' Emissions ttoro l.xt-.tuxj Stationary Sources,
Volume 111: Surtace Coal .
-------
8.4.2 Extrapolation of Control Costs to the
Statewide Industry
Exhibit 8-9, on the following page, presents the
extrapolated costs for meeting RACT guidelines for VOC
emission control for surface coating of metal furniture
to the statewide industry in Ohio. The estimates were
derived as follows.
Based on emissions estimates given in
Exhibit 8-4, 16 plants would require
controls to comply with the RACT guide-
lines.
The distribution of control options was based
on industry interviews, as well as Booz, Allen
estimates. In general, existing spray coating
lines are likely to convert to high solids
where high quality finish is required and to
waterborne where less emphasis is placed on
appearance.
The capital cost of control was estimated by
scaling up the model plants A-l and B-l costs
by a capacity factor calculated as follows,
except for those manufacturers who provided
the data to Booz, Allen during interviews.
The capacity factor was estimated to be one for
the coating lines with emissions per line
equal to or less than those of the model plants.
For the coating lines with greater emissions per
line than those of the model plant, the capacity
factor per line was determined to be equal to:
0.6
(actual emissions/model plant emissions)
The annual capital charges were estimated to be
18.7 percent of the capital cost.
Based on the data from the U.S. EPA, the incre-
mental annual operating costs was determined to
be proportional to the amount of emissions reduc-
tion and was scaled up from the model plant costs.
The data in Exhibix 8-9 show that the control of VOC for
surface coating of metal furniture to meet the RACT guidelines
in Ohio would require a statewide capital investment of about
$929,000 and a statewide direct annualized cost of about $41,000
The estimated capital cost for individual establishments varies
from $3,000 to $200,000. It should be noted that these findings
Includes 12 year life, 10 percent interest, and 4 percent for
taxes and insurance.
8-12
-------
txJiit.it 8-9
U.S. tuvi roiunent a I Protection Agency
STATEWIDE COSTS FOR PROCESS HUUIPICATIONS OF
EXISTING METAL FURNITURE COATING LINES
TO MEET RACT GUIDELINES TOR VOC EMISSION CONTROL
Projected Control Out ion
Characteristic
High
Nuaber of plants*
Hunter of process lines
Uncontrolled emissions (ton/yr)
Potential emission reduction (ton/yr)
Installs! capital cost ($000)°
Direct annual operating cost (credit)
($000) (1-3 shifts/day)0
Annual capital charges (credit)
(50001
Net annual ized cost (credit) <$OOO)d
Annuali zed cost (credit) per ton of
Solids
Spray
8
19
956
822
441
(239)
82
(1^7)
(191)
Materborne
Spray
7
IS
475
380
477
94
71
u»s
4)4
Waterborne Total
Pip
2
3
101
81
11
31
2
33
407
16
37
1.532
1.283
929
(114)
155
41
32
emission reduced ($)
a. Total number of plants is less than the sum of individual columns because some
plants have both spray my and dipping lines.
b. Based on control efficiency of B<> percent tor high solicit; and bu pc-rconr for
waterborne coatiny.
c. Based on cost for model plain A-l and U-l from Exhibits 8-/ and U-U, and fro« data
provided by -,«• J «•< I'•«.! maiiuf ai i utrc. .
d. 18.7 percent of capital cost.
Source: Booz, Allen k Hamilton Inc.
-------
are based on the assumption that all metal furniture manu-
facturing plants will experience average costs or savings
similar to those experienced by the model plants. However,
based on the data for other states, some plants in Ohio may
require substantial capital investment to modify the existing
facilities to meet the PACT, while others would experience
less.
8-13
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8.5 DIRECT EONOMIC IMPACTS
This section presents the direct economic impacts
of implementing the PACT guidelines for surface coating
of metal furniture/ on a statewide basis. The analysis
includes the availability of equipment and capital;
feasibility of the control technology; and impact on
economic indicators, such as value of shipments, unit
price (assuming full cost passthrough), state economic
variables and capital investment.
8.5.1 RACT Timing
RACT must be implemented statewide by January 1,
1982. This implies that surface coaters of metal furni-
ture must have made their process modifications and be
operating within the next four years. The timing
requirements of RACT impose several requirements on metal
furniture coaters:
Determine the appropriate emission control
system.
Raise or allocate capital to purchase new
equipment or modify existing facilities.
Acquire the necessary equipment or coating
material for emission control.
Install new equipment or modify existing
facilities and test equipment and/or new
materials to ensure that the system com-
plies with RACT and provides acceptable
coating quality.
Generate sufficient income from current
operations to pay the additional annual
operating costs incurred with emission
control.
The sections which follow discuss the feasibility
and the economic implications of implementing RACT
within the requirement timeframe.
8.5.2 Feasibility Issues
Technical and economic feasibility issues of
implementing the RACT guidelines are discussed in this
section.
-------
Several metal furniture manufacturers in Ohio, Illinois
and Wisconsin interviewed during this study have attempted
to implement the control systems discussed in this report.
One has already converted the entire facility to waterborne
electrostatic spray and dip coating during plant moderniza-
tion, whereas another has converted to powder coating.
Because these manufacturers use a limited number of colors,
they have been able to successfully convert their existing
operations to waterborne or powder coating. Others inter-
viewed use a variety of colors, some as many as 1,500, and
have experimented with high solids and waterborne coatings,
but have not succeeded in obtaining the desired quality
paint formulations in the variety of colors needed from the
suppliers. The development of suitable coating materials
in a variety of colors is the key to successful implementa-
tion of RACT in the required time.
Unless major modifications are required, such as
complete isolation of large coating facilities to convert
to electrostatically sprayed waterborne coating, the cost
of conversion to high solids or waterborne coatings is
not likely to have a significant effect on the implemen-
tation of the RACT guidelines for surface coating of
metal furniture.
8.5.3 Comparison of Direct Cost with Selected Direct
Economic Indicators
The net increase in the annualized cost to the coat-
ers of metal furniture represents approximately 0.014
percent of the industry's 1977 value of shipments manu-
factured in the state. This increase may translate to a
few cents per unit of furniture manufactured to more than
$1 per unit manufactured if the costs are passed through
to the customers depending on the furniture surface area
coated.
Based on the data presented in Exhibit 8-9, the major
economic impact in terms of cost to the other companies
will be capital related than from increased annual operating
costs. Several companies are estimated to require from
$45,000 to $200,000 capital investment, which may present a
capital appropriation problem for these companies. For the
remaining companies, capital appropriation would be a
problem only if significant facilities modifications were
required.
8-15
-------
In general, marginally profitable companies could be
severely affected, although none of the companies interviewed
had considered going out of business because of the projected
increased capital requirements and inability to pass on
these costs trhough higher prices.
-------
8.6 SELECTED SECONDARY ECONOMIC IMPACTS
This section discusses the secondary impact of imple-
menting RACT on employment, market structure and productivity.
Employment is expected to remain unchanged. Employment
would be reduced if marginally profitable facilities closed,
but the present indication from the industry is that no such
closures are anticipated.
The market structure for metal furniture industry is not
expected to be affected by the implementation of RACT in Ohio.
Productivity for those coaters who would be coating only
with high solids could be increased, because they will be able
to get more paint on per unit volume basis and reduce paint
application time.
Exhibit 8-10, on the following page, presents a summary of
direct economic implication of implementing RACT for metal
furniture coating in Ohio.
8-17
-------
EXHIBIT 1-10
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR SURFACl COATING OF
MCTAL FURHITUR* IN OHIO
Current Situation
Number of potentially affected
facilities
Indication of relative importance of
industrial section to state economy
Current industry technology trenda
1977 VOC emissions (actual)
Industry preferred method of VOC
co.-.trol
Assured method of control to meet
RACT guidelines
Discussion
There are 16 metal furniture manufacturing
facilities
1977 value of shipments was $284 million
Trend ia towards the use of a variety of colors
1,532 tone per year
Low solvent coatings
Low solvent coatings
Affected Areas in Meeting RACT
Capital investment (statewide)
A.-.T -al ized cost (statewide)
Prire
Discussion
Emplc;nent
Market structure
RACT timing requirement (1982)
Problem area
VOC emissions after FACT
Cost effectiveness of RACT
5929,000
$41,000 (approximately 0.014 percent of
current value of shipments)
Varies from a few cents to more than SI per
unit of furniture depending upon surface area
coated
No major impact
No major impact
No ma;or Impact
No major impact
Companies using a variety of colors may face
a problem
Low solvent coating in a variety of colors
providing acceptable quality needs to be
developed
249 tons per year (16 percent of current
emissions level)
$32 annualixed cost/annual ton of VOC
reduction
source;Hoot, Allen * Hamilton Inc.
-------
BIBLIOGRAPHY
U.S. Environmental Protection Agency, Control of Volatile
Organic Emissions from Stationary Sources, Volume III;
Surface Coating of Metal Furniture"! EPA-450/2-77-032,
December 1977.
U.S. Department of Commerce, County Business Patterns,
1976.
U.S. Department of Commerce, Census of Manufactures, 1977.
Springhorn Laboratories, Air Pollution Control Engineering
and Cost Study of General Surface Coating Industry, Second
Interim Report, Enfield, CT, August 23,1977.
Private conversations at the following:
Syd Leach, Sales Office, Toledo, Ohio
Custom Counter Top, Courtland, Ohio
Dayton Display, Inc., Dayton, Ohio
G. F. Business Equipment, Youngstown, Ohio
Sperry Univac, Marrietta, Ohio
Miami Cary, Monroe, Ohio
Nutone, Cincinatti, Ohio
Republic Steel, Canton, Ohio
Diebold, Wouster, Ohio
Harvard Mfg., Bedford, Ohio
-------
-------
9.0 THE ECONOMIC IMPACT OF IMPLEMENTATION
RACT GUIDELINES FOR SURFACE COATING
FOR INSULATION OF MAGNET WIRE IN
THE STATE OF OHIO
-------
-------
9.0 THE ECONOMIC IMPACT OF IMPLEMENTING
RACT GUIDELINES FOR SURFACE COATING
FOR INSULATION OF MAGNET WIRE IN
THE STATE OF OHIO
The State of Ohio EPA has identified two facilities that
surface c:>at magnet wire for insulation. The information
from the emission inventory indicates that both these facilities
have implemented controls that conform to the RACT guidelines
as acceptable control alternatives.
Exhibit 9-1, on the following page, lists the data provided
by the State of Ohio EPA on the magnet wire coaters. Exhibits
9-2, 9-3 and 9-4, following Exhibit 9-1, summarize the emission
limitations and control options for surface coating for insula-
tion of magnet wire.
Based on the following assumptions, there will be no
economic impact in Ohio for implementing RACT in the industry
category of surface coating for insulation of magnet wire:
All magnet wire coaters have been identified
by the Ohio EPA.
The controls reported to the Ohio EPA have
been implemented by these facilities.
The controls are sufficient to meet the RACT
guidelines.
One of the facilities utilizing catalytic
incineration has achieved only 75 percent
efficiency. Some additional costs might
be required to meet RACT requirements at
this facility.
9-1
-------
EXHIBIT 9-1
U.S. Environmental Protection Agency
MAGNET WIRE COATERS IN THE STATE OF OHIO
Current Potential Emission
Hydrocarbon Average Control Reduction through
Facility Type of Control Emission Efficiency RACT
(tons/yr.) (percent) (tons/yr.)
Packard Electric Catalytic Incin- 163 75 100
eration EXT. Thermal
Incinerator
Phelps Dodge Magnet Catalytic Incin- 50 90 0
Wire Co. eration EXT. Thermal
Incinerator
TOTAL 218 100
Source: Ohio EPA
-------
EXHIBIT 9-2
U.S. Environmental Protection Agency
EMISSION LIMITATIONS FOR RACT IN THE
SURFACE COATING FOR INSULATION OF MAGNET WIRE
Recommended Limitations For
Low Solvent Coatings
12!
>I\
kg solvent per liter Ibs. solvent per gallon
Affected of coating of coating
Facility (minus water) (minus water)
Wire coating oven 0.20 1.7
Source; Control of Volatile Organic Emissions from Stationary
Source—Volume IV; Surface Coating for Insulation of
Magnetic Wire, EPA-450/2-77-Q33, December 1977.
-------
EXHIBIT 9-3
U.S. Environmental Protection Agency
SUMMARY OF APPLICABLE CONTROL TECHNOLOGY
FOR CONTROL OF ORGANIC EMISSION FROM THE
SURFACE COATING FOR INSULATION
OF MAGNET WIRE
CARBON ADSORPTION
MAGNET WIRE COATING
EMISSION CONTROL
OPTIONS
LOW SOLVENT
COATINGS
WATERBORNE
HOT MELT(l)
ULTRAVIOLET CURED(2)
ELECTRO DEPOSITION(3)
POWDER COATINGS
(EPOXY)
INCINERATION
INTERNAL CATALYTIC
EXTERNAL CATALYTIC
.INTERNAL THERMAL
EXTERNAL THERMAL
Notes:(1)Has been used successfully in Europe.
(2) Available for specialized applications.
(3) Theoretically possible, but not commercially developed.
Source: Control of Volatile Organic Emissions from Existing Stationary
Sources—Volume IV: Surface Coating for Insulation of Magnet
Wire, EPA-450/2-77-033, December 1977.
23.
T51
-------
1.XIHB1T 9-4 (1)
U.S. Lnvironmental Protection Agency
RACT CONTROL OPTIONS FOK THE SURFACE
COATING FOR INSULATION OF MAGNET WIRE
Affected Facility
Magnet wire coating ovens
Control Options
Incineration
Catalytic, internal
Typical Percent
Reduction
75-95
Catalytic, external
75-95
Thermal, internal
Thermal, external
Low solvent coatnu
Waterborne coating
Powder coating
98
98
80
Comparison of Control Options
All major wire oven designers now incorporate
internal catalysts into their design. This
design recirculates clean, heated air into
the wire drying zone. However, this option
will not be considered part of this study
since it is not a retrofit option.
An add-on option, this is energy intensive and
is not easily adapted to primary heat
recovery. Catalytic devices cannot be imple-
mented where polyester amide-imide coatings
are used, since they act as catalyst poison.
Experimental catalysts are being developed
to overcome this problem.
Hot, clean gases can be recirculated back to
the drying zone but this type of incinerator
has not been popular with wire coaters
because it is a high energy user.
This option is readily adaptable to both pri-
mary and secondary heat recovery.
This option has not been developed with the
properties that meet all wire coating needs.
Presently being used in small quantities,
these are not available with properties suit-
able tor all wire coating applications and
don't have good high-temperature resistance.
Applied to wire on an experimental basis. The
upper temperature range of 130°C for epoxy
powder coating is well below the 220°C
operating temperature at which many types of
electrical equipment must operate. Powder
can be used only on large diameter wires.
For liner wire, the powder particle approaches
the wire diameter and will not adhere well
to the wire.
-------
EXHIBIT 9-4 (2)
U.S. Environmental Protection Agency
Affected Facility
Control Options
Hot melt coating
Ultraviolet cured coatings
Electrodeposition coatings
Typical Percent
Reduction
a
a
a
Comparison of Control Options
This has been reported successful in Europe.
This is available for specialized systems.
This is theoretically possible; but once a
layer of coating is applied by the wire,
the surface is insulated against further
electrodeposition.
a.Not available
Source: Control of Volatile Organic Emissions I rom Existing Stationary Sources—Volume IV:
Surface Coating for Insulation of Magnet Wire EPA-450/2-77-003, December 1977
-------
10.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT GUIDELINES
FOR SURFACE COATING OF LARGE
APPLIANCES IN THE STATE OF
OHIO
-------
-------
10.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT GUIDELINES
FOR SURFACE COATING OF LARGE
APPLIANCES IN THE STATE OF
OHIO
This chapter presents a detailed analysis of the impact
of implementing RACT for surface coating of large appliances
in the State of Ohio. The chapter is divided into six
sections including:
Specific methodology and quality of estimates
Industry statistics
The technical situation in the industry
Emissions and current controls
Cost and VOC reduction benefit evaluations for
the most likely RACT alternatives
Direct economic impacts.
Each section presents detailed data and findings based
on analyses of the RACT guidelines, previous studies of the
application of surface coatings on large appliances, inter-
views and analysis.
10-1
-------
10.1 SPECIFIC METHODOLOGY AND QUALITY OF ESTIMATES
This section describe* the methodology for determining
estimates oft
Industry statistics
VOC emissions
Processes for controlling VOC emissions
Cost of controlling VOC emissions
Economic impacts
for the surface coating of large appliances in Ohio.
An overall assessment of the quality of the estimates
is detailed in the latter part of this section.
10.1.1 Industry Statistics
The major aj._ . .ance industry contains six major indus-
trial areas as defined by the Standard Industrial Code (SIC).
SIC Code Description
3582 Commercial laundry
3585 Commercial refrigeration and air
conditioning
3589 Commercial cooking and dishwashing
3631 Household cooking
3632 Household refrigerator and freezer
3633 Household laundry
3639 Household appliances/ N.E.C.
(includes water heaters,
dishwashers, trash compactors)
Current Industrial Report provides detailed industry
statistical data for the major appliance industry on a national
basis. However/ because of confidentiality and disclosure
problems, there is no individual data source which provides
a comprehensive analysis of the statistical data for each
individual state. Therefore/ our methodology to provide
statewide major appliance statistical data was as follows:
A list of potentially affected facili-
ties was compiled from the state emission
inventory, associations and trade journals.
-------
Interviews were performed with some of
the manufacturers to validate the list
of potentially affected facilities (this
list was not 100 percent validated).
Secondary source data were collected for each
of the industry categories from sources such
as:
Sales and Marketing Management
(April 25, 1978)
1972 Census of Manufactures
The Booz, Allen study team, utilizing all
available inputs, including interviews with
selected manufacturers, determined an esti-
mated, percent of the total U.S. value of
shipments applicable to the state in each
SIC category.
For those categories which included products not included
in this study, the value of shipments of these items were
factored out of the totals.
Data on number of units shipped were not available for
commercial appliances, so economic impact based on unit
costs for the total large appliance industry could not be
calculated.
10.1.2 VOC Emissions
The Ohio EPA performed a preliminary study on hydrocarbon
emissions from the coating of large appliances and is in the
process of verifying the data. Only the total number of
facilities and total emissions were available from this report.
10.1.3 Processes for Controlling VOC Emissions
Processes for controlling VOC emission for the surface
coating of large appliances are described in Control of Volatile
Organic Emissions from Existing Stationary Sources—Volume V:
Surface Coating of Larje Appliances,(EPA-450/2-77-034,
December 1977). Several manufacturers of large appliances and
coating application equipment were interviewed to ascertain the
most feasible types of control for organic emissions in the
coating of large appliances.
10-3
-------
All manufacturers interviewed agreed that, currently/
consideration was being given to meeting the present RACT dead-
lines through one modification to the existing topcoating
equipment (i.e., high solids) and through two possible alter-
natives to primecoating operations (i.e., waterbome dip
or flow coat or high solids)/ depending on the type of
existing equipment. Therefore/ the analysis for this report
was based on these alternatives. The methodology for the
cost analysis is described in the following paragraphs.
10.1.4 Cost of Control of VOC Emissions for Surface
Coating of Large Appliances
The costs of control of volatile organic emissions for
surface coating of large appliances were developed by:
Determining the alternative types of control
systems likely to be used
Estimating the probable use of each type of control
system
Defining system components
Developing installed capital costs for modifi-
cations of existing systems
Aggregating installed capital costs for each
alternative control system
Defining a model plant
Developing costs of a control system for the
model plant:
Installed capital cost
Direct operating cost
Annual capital charges
Energy requirements
Extrapolating model costs to individual industry
sectors
Aggregating costs to the total industry for the
state.
-------
The model plant that was used as a basis for establishing
the cost of process modification to meet RACT was a solvent-
based dip (or flow coat) primecoat and a solvent-based electro-
static bell or disc topcoat. The cost of modification to water-
borne dip or flow coat primecoat and to high solids electrostatic
disc or bell topcoat was not considered to be a function of the
type of major appliance to be coated, since no modifications to
the production lines are necessary. Modifications are required
only to the coatings handling and pumping and spraying equipment,
and these would be approximately the same whether washers, dryers
or refrigerators were being coated.
Since industry interviewees indicated that about half the
household appliance industry primecoats before topcoating and
half does not, the costs of control for the industry will reflect
the additional cost that half the industry must incur in having to
convert both phases of its coating operation to meet RACT guide-
lines.
10.1.5 Economic Impacts
The economic impacts were determined by analyzing the
lead time requirements to implement RACT, assessing the
feasibility of instituting RACT controls in terms of capital
availability and equipment availability, comparing the direct
costs of RACT control to various state economic indicators and
assessing the secondary effects on market structure, employment
and productivity as a result of implementing RACT controls in
Ohio.
10.1.6 Quality of Estimates
!
Several sources of information were utilized in assessing
the emissions, cost and economic impact of implementing RACT
controls on the surface coating of large appliances in Ohio.
A rating scheme is presented in this section to indicate the
quality of the data available for use in this study. A rating
of "A" indicates hard data, (data that are published for the
base year), "B" indicates data that were extrapolated from hard
data and "C" indicates data that were not available in secondary
literature and were estimated based on interviews, analysis of
previous studies and best engineering judgment. Exhibit 10-1,
on the following page, rates each study output listed and the
overall quality of the data.
10-5
-------
EXHIBIT 10-1
U.S. Environmental Protection Agency
SURFACE COATING OF LARGE APPLIANCES
DATA QUALITY
B C
A Extrapolated Estimated
Study Outputs Hard Data Data Data
Industry statistics X
Emissions X
Cost of emissions control X
Economic impact X
Overall quality of data X
Source; Boot, Allen 6 Hamilton Inc.
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10.2 INDUSTRY STATISTICS
Industry statistics and business trends for the manufac-
ture and surface coating of large appliances in Ohio are
presented in this section. The discussion includes a descrip-
tion of the number of facilities, a comparision of the size
of the major appliance industry to the state economic indi-
cators, a historical characterization of the industry and an
assessment of future industry patterns. Data in this section
form the basis for assessing the impact on this industry
of implementing RACT to VOC emissions in Ohio.
10.2.1 Size of the Industry
The Ohio EPA has indicated ten companies participating
in the manufacture and coating of large appliances. These
companies accounted for between $2.0 billion to $3.0 billion
in shipments. The estimated number of employees was not
available. The data and the sources of information are
summarized in Exhibit 10-2, on the following page, and
indicate that Ohio shipped an estimated 13 percent to 19
percent of the U.S. value of shipments in the large appliance
industry.
10.2.2 Comparison of the Industry to the State Economy
A comparison of the value of shipments of large appliances
(in the SIC categories stated previously) with the state economy
indicates that the large appliance industry represents between
2.0 percent and 3.2 percent of the total Ohio value of ship-
ments of all manufactured goods. These figures are shown in
Exhibit 10-3, following Exhibit 10-2, along with the sources of
the data.
10.2.3 Historical and Future Patterns of the Industry
The shipments of major appliances have generally followed
the economic condition of the country. In the last ten years,
sales have generally increased annually, except during the
recession in 1974 and 1975. Shipments peaked in 1973 for all
major appliances.
Shipments picked up in 1976 and continued to grow in
1977. The outlook through 1982 is a continued annual growth
of about 3 percent to 5 percent.
10-6
-------
EXHIBIT 10-2
U.S. Environmental Protection Agency
INDUSTRY STATISTICS—SURFACE COATING OF LARGE APPLIANCES
OHIO
SIC Code RACT Category
3582 Commercial laundry
3585 Commercial refrigeration
and air conditioning
3589 Commercial cooking
and dishwashing
3631 Household cooking
3632 Household refrigerator
and freezer
3633 Household laundry
3639 Household appliances:
Hater heaters
Dishwashers
Trash compactors
TOTAL
U.S. Totals3
1977
Estimated
No. of Units
Shipped
(thousand)
b
b
b
5,000
7,300
8,500
9,300
Estimated Estimated
Value of Percent of U.S
Shipments Shipments
($ million)
200
9,500
150
1,500
2,000
1,500
800
4-8
12-18
6-9
20-25
15-20
15-18
5-7
Ohio Totals9
Estimated
Value of
Shipments
(S million)
8-16
1,200-1,700
9-14
300-400
300-400
220-270
40-60
Estimated
No. of Units
Shipped
(thousand)
b
b
b
1,000-1,250
1,100-1,500
1,200-1,600
400-650
15,650
13-19
2,077-2,860
3,700-5,000
a. Current Industrial Reports, Major Household Appliances, 1977 (issued June 1978) for categories 3631, 3632, 3633 and
3639.1972 Census of Manufactures Service Industry Machine Shops (issued March 1975 and updated to 1977) for categories
3582, 3585 and 3589.Sales and Marketing Management (April 25, 1977) for categories 3631, 3632, 3633 and 3585.
b. Not available
Source; Booz, Allen & Hamilton Inc.
-------
-. i I i I i
t i
I s !
I i i i
EXHIBIT 10-3
U.S. Environmental Protection Agency
COMPARISON OF LARGE APPLIANCE STATISTICS WITH
STATE OF OHIO ECONOMIC DATA
Estimated Ohio
Economic Indicators
Total 1977 value
of shipments of
all manufactured
goods
Number of employees
in manufacturing
$89.8 Billion
1.3 Million
Estimated Percent of Ohio
Manufacturing Economy Engaged
in Large Appliance Manufacturing
2.0 to 3.2
a.Not available
Source; Current Industrial Reports, Major Household Appliances, 1977 (issued June
1978) for categories 3631, 3632, 3633 and 3639. 1972 Census of Manufactures
Industry Machines and Machine Shops, (issued March 1975 and updated to 1977) .
for categories 3582, 3585 and 3589. Sales and Marketing Management, (April 24,
1978) for categories 3631, 3632, 3633 and 3585; Sales and Marketing Management,
April 25, 1977; Annual Survey of Manufactures, Statistics for States Standard
Metropolitan Statistical Areas, Large Industrial Counties and Selected Cities,
1976; Booz, Allen & Hamilton Inc.
-------
The growth of the major appliance market will be reflected
in the growth of the housing industry and the socio-economic
effects of the trends toward smaller families, single-person
household*, higher energy costs and the like.
Historical and future growth patterns ire shown in
Exhibits 10-4 and 10-5, on the following pages.
-------
i i i ! i i f ! 1 i I ! i ! I i I ! I i I
i » i
EXHIBIT 10-4
U.S. Environmental Protection Agency
HISTORICAL U.S. SALES FIGURES—SELECTED MAJOR
HOUSEHOLD APPLIANCES FOR 1968-1977
Appliance Sales (Millions of Units)
Appliance
Hasher
Dryer
Range
Dishwasher
Refrigerator
1KB
2.9
2.9
4.4
1.9
5.2
19<59
4.4
3.0
4.S
2.1
5.3
1970 1911
4.1 4.6
2.9 3.3
4.5 4.3
2.1 2.5
5.3 5.7
19?5
5.1
3.9
4.8
3.2
6.3
1973
5.5
4.3
5.0
3.7
6.8
1974
4.9
3.6
4.1
3.3
5.9
1975
4
2
3
2
4
.2
.9
.6
.7
.6
1976
4.
3.
4.
3.
4.
5
1
2
1
8
1977
4.9
3.6
4.7
3.4
5.7
Source;Appliance, April 1978, pp. 37-40.
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EXHIBIT 10-5
U.S. Environmental Protection Agency
FIVE-YEAR U.S. SALES FORECAST FOR
SELECTED MAJOR HOUSEHOLD APPLIANCES
(1978-1982)
Appliance Estimates (Millions of Units)
Appliance
Washer
Dryer
Range
Dishwasher
Refrigerator
1978 1979 1980 1981
5.4 5.6 5.7 5.8
4.0 4.2 4.4 4.5
5.2 5.4 5.6 5.7
3.7 3.9 4.1 4.4
6.0 6.2 6.4 6.5
1982
5.8
4.6
5.8
4.6
6.6
SoureelAppliance, January 1978, pp. 54-55.
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10.3 THE TECHNICAL SITUATION IN THE INDUSTRY
This section presents the process description for the prep-
aration, application and curing of surface coatings for large
appliances, estimated VOC emissions from facilities coating large
appliances in Ohio and the extent of current control in use.
10.3.1 Large "\ppliance Process Description
A large appliance plant typically manufactures one or two
types of appliances and contains only one or two lines. The
lines may range from 1,200 to 4,000 meters (3/4 mile to 2-1/2
miles) in length and operate at speeds of 3 to 15 meters (10
to 50 feet) per minute.
Cases, doors, lids, panels and interior parts for large
appliances are stamped from sheet metal and hung on overhead
conveyors. The parts are transported to the cleaning and pre-
treatment sections which are typically located on the ground
floor of the plant.
Exhibit 10-6 and Exhibit 10-7, on the following pages,
describe and illustrate the pretreatment, coating and curing
processes for a typical large appliance facility.
10-8
-------
i.XHIBIT 10-6
U.S. Environmental Protection Aqency
PRESENT MANUFACTURING TECHNOLOGY DESCRIPTION
MANUFACTURING AND PRETREATMCNT
PROCESS DESCRIPTION
Large appliance plant typically manu-
facturers one or two different type* of
appliances and contain* only one or
two llMS
. Lines Bay rang* from l.JOO to
4.000 meters (3/4 to 2-1/2
Biles) in length
. Lines nay operate at speeds of
3 to 15 asters (10 to SO feat)
par Binute
Parts ara transported on overhead
conveyors
. Cleaned in an alkaline solution
. Rinsed
. Treated with line or iron phos-
phate
. Rinsed again
. Treated with chronate (if
iron phosphate is used)
. Dried at 30O°P to 4OO°r in a
gas fired oven and cooled before
coating
Exterior parts Bay enter a prim*
preparation booth to check the
pretreatment
. Parts can be sanded and tack-
ragged (wiped) to provide an
even finish
COATING PROCESS DESCRII'TIOM
Primecoat or interior single coat
(O.S to l.O Mils) is applied
. Dip coating occurs in a con-
tinuously agitated tank
. Flow coating occurs in an
enclosed booth as the parts
•ove through on a conveyor
and are sprayed by station-
ary or oscillating nozzles
- Parts may enter a flash-
off tunnel to allow
coating to flow out
properly
. Spray coating occurs in booths
either by automatic electro-
static spraying or manually
- Flashoff of 7 Binutes
to allow solvents to rise
slowly in the film to avoid
popping in the oven
Prior to topcoating, the parts are
checked for smoothness and manually
sanded, "tack-ragged" or retouched
with a spray gun
Topcoat or exterior single coat
(direct-to-metal topcoat (1.0 to
l.S ails) is applied
. Usually applied by automated
electrostatic discs, bell or
other type of spray equipment
. Usually applied in many colors
. Applied in side-draft or ilo-n-
draft spray booths equipped
with water wash and undergoes
a 10-minute flashoff period
Inside of many exterior large appli-
ance parts are sprayed with gelsoiutc
for additional noibture resistance
and for sound deadening
CURING PROCESS DESCRIPTION
Coated parts are baked for about
20 minutes at 1BO°C to 23O°C
(350°F to 4SO°F) in a multipass
oven
TYPICAL COATINGS AND
SOLVENTS
Coatings includei
. Epo*y
. Epoay-acrylic
. Acrylic or BOlymntar
. Alkyd resins
Solvent* include t
. Esters
. Kaytones
. Aliphatic*
. Alcohol*
. Aroaatlc*
. Ethers
. Terpenss
Baked for 20 to 10 minutes at
140°C to 18O°C «270°F to 350°F)
in a multipass oven
Source: Control Of Volatile Organic Emissions Krom Existing Station*"y__Sourcus -- Volume y: Surface Coating:. Of Large Appliances,
-------
t J i i » i
I !
f MOM SNEET METAL MANUFACTURING
EXTERIOR PARTS
CASE* LIDS AND DOOMS)
EXHIBIT 10-7
U.S. Environmental Protection Agency
DIAGRAM OF A LARGE APPLIANCE COATING LINE
DIRECT TO METAL TOPCOAT
INTERIOR CLEANSING AND
PANTS PRETREATMENT
SECTION.
FLASMOPP
(OPEN OH TUNNELED)
PRIME DIP
TO ASSEMILY
Source t Control Of Volatile Organic Emissions From Existing Stationary Sources—Volume V; Surface Coating Of
Large Appliances, EPA-450/2-77-034, December 1977.
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10.4 EMISSIONS AND CURRENT CONTROLS
This Motion presents information on the distribution of VOC
emissions during the coating operation, th« estimated VOC •mis-
sions in Ohio in 1977 and the current level of emission control
implemented in the state.
VOC emissions occur in three areas during the process of
coating large appliances. They are the application/ flashoff and
oven areas. The percent distribution of VOC emissions by area
is as follows:
Percent of VOC Emission
Application Application
Method and Flashoff
Dip 50
Flow coat 60
Spray 80
The percent reduction of emissions for prime coating with
waterborne dip of flow coat operations was assumed to be 30
percent and for high solids (62 percent volume) top coat 60
percent. An overall average of 70 percent reduction in VOC
emissions is assumed in implementation of RACT guidelines for
surface coating of large appliances.
The total estimated emissions, as provided by the Ohio
EPA, in tons per year in Ohio from 10 coating facilities of
major appliances are 3,500 per year. The identification of
individual companies and their respective emissions were not
available from the Ohio EPA.
10.4.1 RACT Guidelines
The RACT guidelines for control of VOC emissions from the
surface coating of major appliances require the following:
Use of waterborne, high solids (at least 62 percent
by volume) or powder coating to reduce VOC emissions
Use of add-on control devices, such as incinerators
or carbon adsorbers.
Exhibits 10-8, 10-9 and 10-10, on the.following pages, sum-
marize the RACT emission limitations and control options for VOC
emissions control for surface coating of large appliances.
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EXHIBIT 10-8
U.S. Environmental Protection Agency
EMISSION LIMITATIONS FOR RACT IN THE
SURFACE COATING OF LARGE APPLIANCES
Recommended Limitations For
Low Solvent Coatings
wi
)!T
kg solvent per literIbs.solvent per gallon
Affected of coating of coating
Facility (minus water) (minus water)
Prime, single
or topcoat
application
area, flash-
off area and
oven 0.34 2.8
SourceTControl of Volatile Organic Emissions from Stationary
Sources—Volume V: Surface Coating of Large Appliances,
EPA-450/2-77-034, December 1977.
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EXHIBIT 10-9
U.S. Environmental Pro tact Ion A?«ncy
SUMMJIir OF APPLICABLE CONTROL TgCMMOLOCT FOB
COATING Or LAMCE APPLIANCE OOOHC. UM,
PANELS. CASES AMD IKimillCM M
Materborne
Elactrodapoaltlon IEOP)
Prlaa or Interior
Matart>orn«
(Spray. Dip or Flow Co«t)
Top, t»t«rtor or
Interior
Coat
Materborn*
Carbon Adaorptton
urcei Control f Volattla Orqanlc EMlMlona ro« Existing Stationary Source*--Volume V; Surface Coating of Uarqa Appllancaa. EPA-45O/2-77-OJ4,
1977~~ C
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i t I
t 1
EXHIBIT 10-10 (1)
U.S. Environmental Protection Agency
RACT CONTROL OPTIONS FOR THE
LARGE APPLIANCE INDUSTRY
Affected Facility
and Application
Control Options
Typical Percent
Reduction
Comparison of Control Options
Prime or interior
•ingle coat
Materborne
(electrodeposition,
EDP)
90-95*
All applications
Waterborne (spray
dip or flow coat)
70-90a
Provides excellent coverage corrosion protec-
tion and detergent resistance
Fire hazards and potential toxicity are reduced
Dry off oven may be omitted after cleansing if
an iron-phosphate pretreatment is used
Lower energy consumption via lover ventilation
requirements
Good quality control due to fully automated
process may be offset by increased electrical
requirements for the coating, refrigeration
and circulation systems if EDP replaces
waterborne flow or dip coating operations
This would not be true if EDP replaces a
spraying operation
EOP can be expensive on small-scale production
lines
This will likely be the flret option consider*!
because of the possibility that these
coatings can be applied essentially with
existing equipment
Requires a longer flash-off area than organic
solvent-borne coatings
Curing waterborne coatings may allow a de-
crease in oven temperature and some reduc-
tion in airflow but limited reduction if
high humidity conditions occur
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EXHIBIT 10-10 (2)
U.S. Environmental Protection Agency
Affected Facility
and Application
Control Options
Typical Percent
Reduction
Top, exterior or
interior single
coat
Powder
95-99*
Comparison of Control Options
Spraying electrostatically requires electrical iso-
lation of the entire system. Large lines may
be difficult to convert because coating storage
areas may be hundreds or thousands of feet away
from the application, area
Dip or flow coating application requires closer
monitoring due to their sensitive chemistry
Heather conditions affect the application, so both
flash-off time, temperature, air circulation and
humidity must be frequently monitored
Changes in the number of notlies may be required
Sludge handling may be more difficult
No solid or liquid wastes to dispose of
Powder may reduce energy requirements in a spray
booth and the ovens because less air is required
than for solvent-borne coatings and flash-off
tunnel is eliminated
Powder can be reclaimed resulting in up to 9t%
coating efficiency
All equipment (spray booths, associated equipment
and often ovens) used for liquid systems must be
replaced
Powder films cannot be applied in thicknesses in
leas than 2 mils and have appearance limita-
tions
Powder coatings may be subject to explosions
Excessive downtime (half-hour) is required during
color changes. If powders are not reclaimed
in their respective colors, coating usage
efficiency drops to 50% to 60%
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I I
i i
EXHIBIT 10-10 (3)
U.S. Environmental Protection Agency
Affected Facility
and Application
top or exterior eingle
coat and sound
deadener
Control Options
High solid* (apray)
Typical Percent
Reduction
60-80*
Prine, eingle of top
coat application
and flash-off
apray booths
Carbon adsorption
901
Ov*na
Incineration
90
b.
ba»« case against which these percent reductions were
calculated ia a high organic solvent coating which con-
talna 25 volusta percent solids and 75 percent organic
solvent. The transfer efficiencies for liquid coatings
were calculated to be to percent, for powders about 93
percent and for electrodeposltion about 99 percent.
in VOC -l"lon« i- only across the
lnt° account
Source:
Comparison of Control Options
May be applied with existing equipment
Reduces energy consusiption because it requires
less airflow in the spray booth, oven and
flash-off tunnel
Potential health hasard associated with iso-
cyanatea used in son* high-solid two-
syst
Although it is technically feasible, no larger
appliance facilities are known to us* carbon
adsorption
its is a possible
Additional energy requi
disadvantage
Additional filtration and scrubbing of emissions
from spray booths My be required
There is little possibility of reusing recovered
solvents because of the variety of solvent
Mixtures
Many facilities stay require dual-bed units which
will require valuable plant space
Particulate and condensible natter fi
volatilization and/or degradation of resin
occuring in baking ovens with high tenperature
could coat a carbon bed
These are leas costly and sore efficient than
carbon adsorbers for the baking
the oven exhaust tenperatures ace too high for
adaorption and the high concentration of organios
in the vapor could provide additional fuel for
the incinerator
Heat recovery aysteal to reduce fuel consumption
would be desirable and would stake application
and flash-off area uaage a viable option
tcom Stationary Sourcea—Volume Vi Surface Coatings of Large Appliances
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10.4.2 Selection of the Moat Likely RACT Alt«rnatives
The choice of application of control alternatives, for the
reduction of hydrocarbon emission* in existing facilities for
the surface coating of large appliances, requires a line-by-line
evaluation. A number of factors must be considered, based on
the individual characteristics of the coating line to be con-
trolled. The degree of economic dislocation is a function of
these factors.
The first factor to be considered is whether the existing
equipment can be used by the substitution of a coating material
which will meet the RACT guideline. This alternative would re-
quire the least capital expenditure and minimize production
downtime.
If the existing equipment has to be modified, replaced
or added to, other factors to consider are the kind of changes that
have to be made, the capital costs, the change in operating
costs, the length of time needed to make the changes, the
effect on the production rate, the operational problems that
will have to be handled and the effect on the quality of the
product.
Interviews with industry representatives indicate a
unanimous opinion in the area of choosing the alternative(s)
for VOC emission control in coating large appliances. The
industry intends to use their existing topcoat application
equipment and modify it to handle high solids. Those companies
that use a primecoat will convert their conventional solvent
systems to either waterborne dip or flow coat or high solids
discs or bells. The alternatives are shown in Exhibit 10-13,
on the following page.
Other alternatives such as electrodeposition for prime-
coating or powder coating for single coat application may be
implemented in special cases,i.e., where extensive corrosion
protection is required. These alternatives are not incorporated
into this study because their applicability was not specifically
identified in this state.
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10.5 COST AND VOC REDUCTION BENEFIT EVALUATIONS FOR THE
MOST LIKELY RACT ALTERNATIVES
Costs for the VOC emission control systems are presented
in this section. The costs for the alternative primecoat
and topcoat applications are described individually. The
final section presents an extrapolation of typical costs for
surface coating of large appliances to the statewide industry.
10.5.1 Costs for Alternative Control Systems
Estimates of capital and annualized costs are presented
for controlling solvent emissions from application areas and
curing ovens in primecoats and topcoats of large appliances.
The estimates were provided by appliance coaters who have
either made conversions to the appropriate process modifications
or who are in the preliminary estimating stage prior to imple-
mentation of these modifications.
The process modifications involve the converting of a
solventborne primecoat or topcoat line to a coating system
which emits lesser amounts of VOC. The coating lines and
the costs for their modification are shown in Exhibit 10-12,
on the following page.
If an existing prime coat conventional-solvent-based
dip operation is converted to waterborne dip, the capital
costs cover the requirements for additional equipment for
close humidity and temperature control during flashoffs and
for changeover to materials handling system (pumps and
piping) that can handle waterborne coatings without corrosion
related problems. Based on these assumptions, the capital
installed cost of these modifications is estimated at between
$50,000 and $75,000. No additional floor space is required
so the capital allocated building costs remain unchanged.
The fixed costs associated with the increased capital requirements
are estimated at between $13,000 and $19,000. This includes
depreciation/ interest, taxes, insurance, administration expenses
and maintenance materials.
For the conversion of primecoat or topcoat solvent-
based electrostatic disc or bell spray to high solids, the
cost of such conversion is based on a number of assumptions:
that the paint will have to be preheated to reduce the viscosity
prior to application, that the existing pumping system will
have to be replaced (including the installation of larger
capacity/head pumps and large diameter piping) and that high
speed (25,000 to 50,000 RPM) turbine or air drive discs or
bells will be required. Also, it is assumed that the type of
booth remains unchanged and that the existing painting configuration
(including the proper indexing layout) requires no change.
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EXHIBIT 10-11
U.S. Environmental Protection Agency
MOST LIKELY RACT CONTROL ALTERNATIVES FOR
SURFACE COATING OF LARGE APPLIANCES
IN STATE OF OHIO
Existing System
Dip or flow coating
Conventional solvent
Most Likely Alternative Control Techniques
Dip or flow coating with waterborne
solvent
Electrostatic application with discs
or bells of high solids coatings
Preheat paint, or
Use high speed discs
or bells
Top
Electrostatic appli-
cation with discs or
bells of conventional
solvents
Electrostatic application with discs or
bells of high solids coating
Preheat paint, or
Use high speed discs
or bells
Source: Booz, Allen & Hamilton Inc.
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i I
rxilIBIT 10-12
U.S. Environmental Protection Agency
ESTIMATED COST FOR PROCESS MODIFICATION
OF EXISTING LARGE APPLIANCE COSTING LINES
TO MEET RACT GUIDELINES FOR VOC EMISSION CONTROL
Existing System
Primecoat
Conventional
solvent-based
dip or flow
Conventional
so1vent-based
electrostatic
spray, diac
or bell
Most Likely
Control Alternative
Waterborne dip of
flow coat
High solids
electrostatic
Topcoat
Conventional
solvent-based
electrostatic
spray, disc
or bell
High solids
electrostatic
Major Process
Modification
Instrumentation for close
control of temperature and
humidity
Total repiping and replace-
ment of pumps
Pre-heating system
Installation of high
disc or bells
Repiping for larger
line sizes and possible
coatings pump replace-
ments
Major revamp of booth
line configuration
and air handling system
in addition to changes
stated above
Preheating system
Installation of high
speed disc or bells
Repiping for larger
line sizes and
possible coatings
pump replacement
Major revamp of booth
configuration and air
handling system in
addition to changes
stated above
Capital Cost
Installed capital
$50.000 - $75,000
Annualized ccst
$13,000 - $19,000
Installed capital
$50,000 - $75,000
Annualized cost
$13,000 - $19,000
Installed capital
$150,000 - $250,000
Annualized cost
$37,000 - $63,000
Installed capital
$50,000 - $75,000
Annualized coat
$13.000 - $19.000
Installed capital
$150,000 - $250,000
Annualized cost
$37,000 - $63,000
Source: Booz, Allen 6 Hamilton Inc.
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Based on these assumptions, the capital installed cost of
these modifications is estimated at between $50,000 and
$75,000. No additional floor space is required so the capital
allocated building costs remain unchanged. The fixed costs
associated with the increased capital requirements are
estimated at between $13,000 and $19,000. This includes
depreciation, interest, taxes, insurance, administration
expenses and maintenance materials.
Each paint application conversion to meet RACT has its
own unique characteristics. Where such conversions require
major changes in booth structure, paint application techniques
and air handling system, the costs will be considerably higher
than the figures stated above. A first pass estimate, provided
from inc*. ;y interviews with appliance coaters, at these major
changes . uicates a capital requirement of $150,000 to $250,000
per booth. The annualized costs would be $37,000 to $63,000.
Based- on industry interviews and Booz, Allen judgment, it is
assumed that 50 percent of the topcoating application units
will require major modifications.
The annual operating expenses will not change appreciably
because the manpower requirements remain the same for the
two systems. There will be a minor savings in the utilities,
associated with the oven curing of the high solids coating.
This could amount to about $1 per hour of operation time
($2,000 to $6,000 per year per line (equivalent to 700 cubic
feet of natural gas/hour/line).
The overall cost of coating materials may increase slightly
even though conversion to water-based or high solids coating
will eliminate the need for solvent thinning. This overall
increase is expected because of the anticipated price increases
in the coatings that will be required to meet the RACT guidelines.
At this time, difinitive numbers in change of paint prices cannot
be developed but an overall paint cost increase of between 10
percent and 20 percent may be anticipated.
10.5.2 Extrapolation to the Statewide Industry
Exhibit 10-13, on the following page/ extrapolates the
costs for meeting RACT guidelines for VOC emission control
for surface coating of large appliances to the statewide
industry in Ohio. The estimates are based on the following
assumptions:
All large appliance coaters will imple-
ment the control alternatives stated in this
report to comply with RACT.
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EXHIBIT 10-13
U.S. Environmental Protection Agency
STATEWIDE COSTS FOR PROCESS MODIFICATIONS OF
EXISTING LARGE APPLIANCE COATING LINES
TO MEET RACT GUIDELINES FOR VOC EMISSION CONTROL
OHIO
Characteristic
Number of plants
Number of process lines
Estimated value of shipments
($ billion)
Uncontrolled emissions (Ton/yr)
Potential emission reduction (Ton/yr)
Installed Capital Costb ($ Thousand)
Direct annual operating cost (credit)
($ Thousand) (1-3 shifts/day)
Annual capital charges'3 ($ Thousand)
Net Annual operating cost0
($ Thousand)
Annual cost per ton or emission
reduced ($)
Plants with Top-
coat Process Only
Plants with Primecoat
and Topcoat Process
Total
5
10
a
a
a
5
10
a
a
a
10
20
2.0-3.0
3,500
2,450
1,625
(20-60)
406
346d-386e
2,375
(20-60)
593
533d-573e
4,000
(40-120)
999
879^-9596
358^-3916
a. Not available
b. Figures represent the upper limit of the installed capital cost, and annual
charges
c. Net annual operating cost is the summation of the direct annual operating cost and
the annual capital charges
d. Represents a three-shift/day operation
e. Represents a one-shift/day operation
Source: Booz, Allen & Hamilton Inc.
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The distribution of primecoat or topcoat
or both as applications, as per industry
interview, is: SO percent of the coaters
topcoat only; the other half both primecoat
and topcoat the appliances, unless specific
information was available for individual
facilities.
Each plant is assumed to have two process
lines.
Also 50 percent of the topcoat applications
require major modifications to meet RACT.
The ten plants identified by the Ohio
EPA represent the majority of all the
s'-ite industry production of large
.iances.
For the specific alternatives listed in
Exhibit 10-12, the cost of process modifica-
tions for the prime or top coat operations are
the same.
Actual costs to large appliance coaters may vary depending
on the type of control alternative, manufacturer's equipment
and coating material selected by each manufacturing facility.
Based on the above assumptions, the total capital cost
to the industry in Ohio for process modifications to meet
RACT guidelines is estimated at $4.0 million. The annual cost
is estimated at $358 to $391 per ton of emission controlled.
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10.6 DIRECT ECONOMIC IMPACTS
This section presents the direct economic impacts of
implementing the RACT guidelines for surface coating of large
appliances on a statewide basis. The analysis includes the
availability of equipment and capital; feasibility of the con-
trol technology; and impact on economic indicators, such as
value of shipments, unit price (assuming full cost passthrough),
state economic variables and capital investment.
10.6.1 RACT Timing
RACT must be implemented statewide by January 1, 1982.
This implies that surface coaters of large appliances must have
made their process modifications and be operating within the
next three years. The timing requirements of RACT impose several
requirements on major appliance coaters:
Determine the appropriate emission control
system.
Raise or allocate capital to purchase
equipment.
Acquire the necessary equipment for emission
control.
Install and test the emission control
equipment to insure that the system complies
with RACT.
Generate sufficient income from current
operations to pay the additional annual
operating costs incurred with emission
control.
The sections which follow discuss the feasibility and the
economic implications of implementing RACT within the required
timeframe.
10.6.2 Technical Feasibility Issues
Technical and economic feasibility issues of implementing
the RACT guidelines are discussed in this section.
Only one major appliance manufacturer interviewed has
attempted to implement the control alternatives discussed in
this report. The company has converted its conventional sol-
vent flow primecoat to water reducible flow coat.
10-14
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Although a longer flash-off period for water reducible coatings
is usually required, there was not enough floor space available
to add the process line. However, additional heating was added
and the flash-off area temperature was elevated to 130°F-180°F.
Also, extensive humidity controls had to be added because of the
sensitivity of water reducible finish to moisture in the flash-
off area.
The facility also has attempted the application of medium
solids polyester (55 percent to 60 percent by volume) as a top-
coat, using the existing electrostatic discs. There have been
no attempts at pre-heating the paint, and the discs have been
run at 2,400 RPM to 3,300 RPM. The unit, as it is presently
constituted, will not apply 62 percent volume solids or higher.
Pre-heat and/or higher speed disc modifications will have to
be made to handle the more viscous coatings. Under the present
operating conditions, the facility is not meeting the RACT
guidelines for solvent emission control.
The equipment manufacturers interviewed have indicated
that present technology is available to handle and apply high
solids (greater than 62 volume percent solids) using electrostatic
speed application. In addition, high solids coating material
suppliers indicated that sufficient quantities of paint would
be available to meet the expected market demand. Application
equipment manufacturers have indicated that, even with the
projected demand for their equipment, they can maintain a 10-week
to 12-week delivery schedule.
10.6.3 Comparison Of Direct Cost With Selected
Direct Economic Indicators
The net increase in the annual operating cost to the
coaters of large appliances represents approximately 0.038 per-
cent of the industry's 1977 value of shipments manufactured
in the state. This may translate to an approximate cost increase
of $0.21 per unit of household appliances coated; the average
cost of a unit is $230.
The major economic impact in terms of cost to individual
companies will be capital related rather than from increased
annual operating costs. The capital required for RACT com-
pliance may represent a significant amount of capital appro-
priations for the companies affected.
Any marginally profitable companies may be severely
affected, although none of the companies interviewed had con-
sidered going out of business because of the projected in-
creased capital requirements and inability to pass on these
costs through higher prices.
16-15
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10.6.4 Selected Secondary Economic Impacts
This section discusses the secondary impact of implementing
RACT on employment/ market structure and productivity.
Employment is expected to remain unchanged. Employment may
be reduced if marginally profitable facilities cloaed, but the
present indication from the industry is that no such closures are
anticipated.
It appears that implementation of the RACT guidelines will
have no significant impact on the present market structure.
The major appliance industry can be characterized as being
highly competitive and manufacturers interviewed state that
the regulation may present some cost inequities to smaller and/or
less profitable production lines, i.e., if certain manufacturers
incur disproportionate compliance costs they probably will not
be passed along in the marketplace in the form of a price increase
and could further deteriorate the profit position of marginally
profitable operations.
Productivity for those coaters who are topcoating only
with high solids may be increased if they are able to get
more paint on per unit volume and reduce paint application
time.
Exhibit 10-14, on the following page, presents a summary
of the current economic implications of implementing RACT for
surface coating of large appliances in the state of Ohio.
10-16
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EX8XBXT 10*14
U.S. Environmental Protection
SUMMARY QT DIRECT ECONOMIC IMPLICATIONS OP
IMPLEMENTING RACT POM SURPACE COATING OP LARGE
APPLIANCES IN THE STATE OP OHIO
Currant Situation
Number of potentially affected
facilities
Indication of relative importance
of industrial section to state
economy
1977 VOC emissions (actual)
Industry preferred method of VOC
control to meet RACT guidelines
Assumed method of VOC control to
meet RACT guidelines
Discussion
There are ten major large appliance manufacturers
and coaters
1977 statewide value of shipments was estimated
at 92.4 billion and represents 10 percent of
the estimated $15 billion U.S. value of shipments.
of the major appliance industry
3,500 tons per year
Haterborne primecoat and high solids topcoat
Waterborne primecoat and high solids topcoat
Affected Areas in Meeting RACT
Capital investment (statewide)
Ar.nualized cost (statewide)
Price
E.-.ergy
Productivity
Employment
Market structure
RACT timing requirements (1982)
Problem area
VOC emission after RACT control
Cost effectiveness of RACT control
Discussion
S4.0 million
S920.000 which represents 0.038 percent of the
industry's 1977 statewide value of shipments.
Assuming a "direct cost pass-through"--increase
of 30.21/anit for household appliances (based on
a price of $230 per unit appliance)
Reduced natural gas requirements in the curing
operation (equivalent to 3,000 barrels of oil
per year)
No major impact
No major impact
No major impact
Possible problems meeting equipment deliveries
and installation are anticipated
Commercial application of high solids (greater
than 62% by volume) has not been proven
1,050 tons/year (30 percent of 1977 emission
level}
$374 annualized cost/ton VOC reduction
source": Boos, Allen t Haailton, Inc.
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BIBLIOGRAPHY
Appliance, April 1978
Annual Survey of Manufactures, 1976
Census of Manufactures, Industry Machines
and Machine Shops, 1972
Current Industrial Reports, Major Household
Appliances,1977
Sales and Marketing Management, April 24, 1978
U.S. Environmental Protection Agency, Control of
Volatile Organic Emissions from Stationary Sources-
Volume V; Surface Coating of Large Appliances.
EPA-450/2-77-034, December 1977.
Private conversations at the following:
Ferro Corporation, Cleveland, Ohio
Frigidaire, Division of General Motors, Dayton, Ohio
Interrad, Stamford, Connecticut
Nordsen Corporation, Amherst, Ohio
Ransburg Corporation, Indianapolis, Indiana
Whirlpool Corporation, Findlay, Ohio
Association of Home Appliances Manufacturers, Chicago, Illinois
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11.0 THE ECONOMIC IMPACT OF IMPLEMENTING RACT FOR
SOLVENT METAL DECREASING IN THE STATE
OF OHIO
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11.0 THE ECONOMIC IMPACT OF IMPLEMENTING RACT FOR
SOLVENT METAL DECREASING IN THE STATE
OF OHIO
This chapter summarizes the estimated economic impact
of the implementation of reasonably available control techno-
logy for volatile organic compound emissions from solvent
metal degreasers. Solvent metal degreasing is the process
of cleaning the surfaces of articles to remove oil, dirt, grease
and other foreign material by immersing the article in vaporized
or liquid organic solvent. The chapter is divided into six
sections:
Specific methodology and quality of estimates
Industry statistics
The technical situation in the industry
Estimated costs of RACT implementation
Direct economic impacts
Selected secondary economic impacts.
Each section presents detailed data and findings based
on analyses of the RACT guidelines; previous studies of solvent
metal cleaning; interviews with degreaser users, equipment and
materials suppliers; and a review of pertinent published literature,
11-1
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11.1 SPECIFIC METHODOLOGY AND QUALITY OF ESTIMATE
11.1.1 Background
Solvent metal cleaning is normally done in one of three
devices:
A cold cleaner, in which the article is immersed,
sprayed or otherwise washed in a solvent at or
about room temperature.
An open top vapor degreaser, in which the article
is suspended in a solvent vapor over a pool of
boiling solvent. The solvent vapors condense on
the article and dissolve or wash soils and greases
from it.
A conveyorized degreaser, in which articles are
conveyed on a chain, belt or other conveying
system either through a spray or pool of cold
solvent or through the vapor of a boiling solvent.
The cold cleaner and open top vapor degreaser are designed
for batch cleaning and are used in both manufacturing opera-
tions and maintenance operations. The conveyorized cleaners
are designed for continuous use and are normally found only
in manufacturing operations. A more detailed discussion of
these cleaners is presented in a later section of this chapter.
The EPA has estimated1 that about 1.3 million cold
cleaners operate in the U.S.; about 70 percent are used in
maintenance or service cleaning and 30 percent in manufacturing.
There are also an estimated 22,200 open top vapor degreasers
and 4,000 vapor conveyorized degreasers. In 1975, estimated
emissions in the United States from these cleaners exceeded
700,000 metric tons, making solvent cleaning the fifth largest
stationary source of organic emissions.
Control of Volatile Organic Emissions from Solvent Metal
Cleaning, EPA-450/2-77-022, November 1977.
11-2
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As recently as 1974, most degreasing operations were
exempt from state regulations that covered solvent degreasing,
since they rarely emitted more than the 3,000 pounds per
day of volatile organic compounds (VOC). They could also
qualify for exemption by the substitution of a solvent not
considered to be photochemically active. However, the EPA's
current direction is toward positive reduction of all VOC
emissions, and the EPA has proposed control technology for
solvent metal cleaning operations which can achieve sizeable
total emission reduction. This technology involves the use
of proper operating practices and the use of retrofit con-
trol equipment.
Proper operating practices are those which minimize
solvent loss to the atmosphere. These include covering
degreasing equipment whenever possible, properly using solvent
sprays, employing various means to reduce the amount of
solvent carried out of the degreaser on cleaned work, promptly
repairing leaking equipment and most important, properly dis-
posing of wastes containing volatile organic solvents.
In addition to proper operating practices, many control
devices can be retrofit to existing degreasers; however,
because of the diversity in their designs, not all degreasers
require the same type of control devices. Small degreasers
using a room temperature solvent may require only a cover,
whereas large degreasers using boiling solvent may require a
refrigerated freeboard chiller or a carbon adsorption system.
Two types of control equipment which will be applicable to
many degreaser designs are drainage facilities for cleaned
parts and safety switches and thermostats, which prevent
large emissions from equipment malfunction. These controls,
the types of degreasers to which they can be applied and
the expected emission reductions are described later in this
chapter.
11.1.2 Method of Estimation of the Number of Degreasers
Subsequent estimation of the economic impact of imple-
menting the proposed RACT for solvent metal cleaning is based
upon a determination of the number of solvent metal cleaners
in the state. This determination was made on the basis of a
detailed industrywide study of metal degreasing in the U.S.,
conducted by the Dow Chemical Company under contract to the
EPA. The rjsults of the study are reported in: Study to
Support New Source Performance Standards for Solvent Metal
Cleaning Operations, Contract No. 68-02-1329, June 30, 1976.
11-3
-------
The report was based on a telephone survey of more than
2,500 plants in the metal working industry (SIC groups 25, 33,
34, 35, 36, 37, 38 and 39) with more than 19 employees. The
report presents estimates of the:
Percentage of U.S. plants using solvent degreasing
Percentage of plants using cold cleaners, open top
vapor degreasers or conveyorized cleaners
Average number and type of vapor degreasers used
in these plants
Distribution of these quantities by region.
All of these quantities are further identified by the
eight metal working industries. In the report (based on the
1972 Census of Manufactures), 15,294 open top and 2,796
conveyorized vapor degreasers were estimated to be in use
in the eight SIC groups; an additional 5,000 to 7,000 open
top degreasers were estimated* to be in use in 1972 by other
manufacturing or service firms not included in one of the
eight SIC groups.
To determine the number of open top and conveyorized vapor
metal degreasers in the state, first the number of plants in each
of the eight SIC groups was determined for the state. The average
number of plants using solvent metal degreasing and the average
number and type of cleaners used per plant were then obtained
by using the factors presented in the Dow report. The results
of these calculations and the factors used are tabulated in
Exhibit 11-2, in section 11.2. The total number of open top
degreasers in the state was then estimated by multiplying the
number expected to be used in metal working SIC groups by the
ratio of 22,200/15,200 (the ratio of total number of open top units
in the U.S. to that in the eight SIC groups).
Because of their expense and function, conveyorized vapor
degreasing units are most likely to be used in manufacturing only.
Therefore, the total number of these units in the state was assumed
to be same as that calculated for the eight SIC metal working
industries. The total number of conveyorized cleaners, vapor and
cold, was then determined by multiplying the number of vapor
conveyorized cleaners by 100/85, the EPA2 estimated ratio of total
conveyorized cleaners to vapor conveyorized cleaners in the U.S.
1. Interviews with Parker Johnson, Vice President, Sales,
Baron Slakeslee Corp., Cicero, Illinois, and with Richard
Clement, Sales Manager, Detrex Chemical, Detroit, Michigan,
July 1978.
2. Control of Volatile Organic Emissions from Solvent Metal
.le Org
'2-77-0
Cleaning EPA-450/2-77-022, November 1977.
11-4
-------
The number of cold cleaners in the state was determined
by using the Dow estimates of cold cleaning done in plants
in the eight SIC metal working industries and an EPA estimate
of 1,300,000 cold metal cleaners in the U.S., including
390,000 in manufacturing and 910,000 in maintenance or ser-
vice use. 1
The EPA estimates of all cold cleaners in manu-
facturing in the U.S. was multiplied by the
ratio of the number of plants in the metal
working industries (SICs 25 and 33-39) in the
state to the number in the U.S.
Then, the EPA estimates of all cold cleaners in
maintenance and service use in the U.S. were
multiplied by the ratio of the number of plants
in the metal working industries plus selected
service industries (SIC codes 551, 554, 557,
7538, 7539, 7964) for the state to the number
in the U.S. These service industries are
expected to have at least one or more cold
cleaners.
SIC 551 applies to industries cate-
gorized as new or used car dealers.
SIC 554 applies to industries cate-
gorized as gasoline service stations.
SIC 557 applies to industries cate-
gorized as motorcycle dealers.
SIC 7538 applies to industries cate-
gorized as general automotive repair
shops.
SIC 7539 applies to industries cate-
gorized as automotive repair shops,
n.e.c.
SIC 7964 applies to industries cate-
gorized as armature rewinding shops.
The estimates of the total number of cold cleaners in the
state obtained by these calculations are tabulated in Exhibit
11-3.
1. Cold cleaners in manufacturing use are meant to include only
those cleaners employed in the manufacturing process; cold
cleaners in maintenance and service use are those employed
for this purpose by either manufacturing or service estab-
lishments.
11-5
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11.1.3 Method of Estimation of Nonexempt Degreasers
The RACT guidelines propose several exemptions for degreasers
based primarily on size, type of solvent used or emission rate.
The RACT guidelines apply to cleaners with emis-
sions over 15 pounds in any one day or 3 pounds
in any one hour whichever is greater. It has
been estimated that about 70 percent of cold
cleaners would have VOC emissions less than this
and would be exempt.
Cleaners used exclusively for chemical or physi-
cal analysis or determination of product quality
and acceptance are to be exempt. Since few such
cleaners exist, no correction was made to the
estimated number of cleaners used in determining
the estimated compliance costs.
Those cleaners using 1,1,1-trichloroethane and
trichlorotrifluoroethane are to be exempt. Esti-
mates of the number of open top degreasers which
use either of these solvents range from 35 per-
cent to 60 percent.2 For the purpose of calculat-
ing cost impacts in this study, 35 percent was
used. About 10 percent of conveyorized cleaners
are expected to be exempt and about 20 percent
of cold cleaners.1
Open top vapor degreasers with less than one
square meter (10.8 square feet) air/vapor inter-
face and conveyorized degreasers with less than
two square meters (21.6 square feet) are to be
exempt. This exemption applies to about 30
percent of open top cleaners and 5 percent of
conveyorized degreasers.2
The guidelines leave open to the degreaser user the option of
changing from a nonexempt solvent to an exempt one. In most cases,
this will require some modification of the degreaser and an
additional expense for the modification. In this study it was
assumed that no substitution is made. In most cases, 1,1,1-
trichloroethane would be used as a substitute for existing
solvents; this would require equipment conversions because of
potential corrosiveness and other properties of this compound.
No estimation of costs of conversion was made since data
are unavailable on the number of systems which would be converted.
If Freon 113 were used as a substitute new cleaners would prob-
ably have to be purchased.
1. Interview with Safety-Kleen Co., Gray-Mills Co. and Kleer-
Flo Co. personnel; these firms are manufacturers of cold solvent
metal degreasing equipment.
2. Based on information in EPA 450/2-77-022, op. cit., and
interviews with Baron-Blakeslee and Detrex Chemical personnel.
11-6
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No reliable information has been found which relates size
of cleaner with solvent composition. Therefore, we have assumed
a uniform distribution of solvent composition with cleaner
size, i.e., the number of small cleaners using exempt solvents
is the same as the number of large cleaners using exempt
solvents. For instance, the total of nonexempt open top
vapor degreasers in the state was determined by multiplying
the total number of open top vapor degreasers in the state
by the fractions that are nonexempt by solvent use and by
size, i.e.:
Number exempt by size = (Total number of open top
degreasers), x (Fraction exempt by size, 0.3)
Number exempt by solvent = (Total number of open
top degreasers - number exempt by size) x
(Fraction exempt by solvent, 0.35)
Total number of affected (nonexempt) degreasers =
(Total number of open top degreasers) - (Number
exempt by size) - (Number exempt by solvent)
The resulting estimate of the total number of degreasers in the
state and those exempt from the proposed regulations by size and
solvent composition are summarized in Exhibit 11-4, in section
11.2.
11.1.4 Method of Estimation of Number and Type of Retrofitted
Controls Needed -
The proposed regulations specify certain controls which can
be retrofitted to existing solvent metal cleaners. These are
discussed in detail in a later section of this chapter. Briefly
they are:
For nonexempt cold cleaners—
A cover must be installed when the solvent
used has a volatility greater than 15 milli-
meters of mercury at 38°C, or is agitated,
or the solvent is heated; and
An internal drainage facility (or, where that
is not possible, an external closed drainage
facility) must be installed, such that the
cleaned parts drain while covered, when the
solvent used has a volatility greater than
32 millimeters of mercury at 38°C; and
Where the solvent has a volatility greater
than 32 millimeters of mercury at 38°C, a
freeboard must be installed that gives a
freeboard ratio (i.e., distance from cleaner
top to solvent surface divided by cleaner
width) greater than or equal to 0.7; or a
water cover where the solvent is heavier
and immiscible or unreactive with water;
or some other system of equivalent control.
11-7
-------
For nonexempt open top vapor degreasers—
The vapor degreaser must be equipped with a
cover; and
A spray safety switch must be installed which
shuts off the spray pump when the vapor level
drops more than 4 inches; and
If the freeboard ratio is greater than 0.75,
a powered cover must be installed or a refrigerated
chiller; or an enclosure in which a cover or door
opens only when the dry part is entering or
exiting the degreaser; or a carbon adsorption
system; or an equivalent control system.
For nonexempt conveyorized degreasers—
A refrigerated chiller; or carbon adsorption
system; or another equivalent control system
must be installed; and
The cleaner must be equipped with a drying
tunnel or rotating basket to prevent cleaned
parts from carrying out solvent; and
A condenser flow switch and thermostat, a spray
safety switch and a vapor high level control
thermostat must be installed; and
Openings must be minimized during operation
so that entrances and exits silhouette workloads;
and
Downtime covers must be provided for closing off
the entrance and exit during shutdown hours.
Exhibits 11-16, 11-17 and 11-18 in section 11.4, summarize esti-
mates of the percentage of nonexempt cleaners needing these con-
trols. Equipment manufacturers were the primary source.of the
percentages used. In applying this information, it was assumed
that the number and types of controls needed were independent of
size.
11-8
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11.1.5 Method of Estimation of Current Emissions and Expected
Reductions
Current VOC emissions from solvent metal degreasing and the
reductions anticipated by the enforcement of the proposed regu-
lations are based on information presented in Control of Volatile
Organic Emissions from Solvent Metal Cleaning, EPA-450/2-77-022,
November 1977.This report estimates average emissions for each
type of degreaser. The total current emissions were obtained by
multiplying these estimated average emissions by the number of
each type of degreaser in the state.
The report also estimates the reduction in emissions possible
by implementation of various types of controls. The methods pro-
posed in recent EPA guidance can result in reduction of 50 percent
to 69 percent for various types of degreasers. Emission levels
which would result from implementation of the RACT proposals for
solvent metal cleaners was obtained by use of these estimated
reductions for the number of nonexempt cleaners in the state.
For purposes of estimation, a 50 percent reduction was used for
cold cleaners. For open top vapor and conveyorized cleaners, a
60 percent reduction was used.
11.1.6 Method of Estimation of Compliance Costs
Compliance costs also were based primarily on the cost data
presented in the EPA report, Control of Volatile Organics Emissions
from Solvent Metal Cleaning, for average-sized, cold, open top
vapor and conveyorized cleaners. The cost data, however, were
verified by discussions with equipment manufacturers. Where some
costs, such as for safety switches or downtime covers, were not
estimated in the report, estimates were based on further
discussions with equipment manufacturers. In the EPA report,
costs were presented for various retrofit control options; in
each case, the control which would provide minimum net annual-
ized costs was used in the estimates made here. Other costs
not presented in the EPA report were determined as follows:
Capital costs for safety switches, minimizing convey-
orized cleaner openings and downtime covers were
estimated on the basis of discussions with equip-
ment manufacturers. Costs used were:
$275 per manual cover and $100 per safety
switch installation for open top vapor
degreasers
$250 per safety switch installation, $300
per downtime cover installation, $2,500
per drying tunnel and $1,000 for reducing
openings for conveyorized cleaners.
11-9
-------
An average of $300 was estimated as the cost to increase
free board of cold cleaners using high volatility
solvents.
Additional annual capital charges were estimated
as 25 percent of capital costs, to include depre-
ciation, interest, maintenance, insurance and
administrative costs.
Labor costs for mounting downtime covers on con-
veyorized cleaners at shift end were estimated at
$1,500 per year per cleaner.
Additional costs which might result from decreased
productivity, labeling and other requirements of the
proposed regulations were assumed to be small and
negligible.
11.1.7 Quality of Estimates
Several sources of information were utilized in assessing
the emissions, direct compliance cost and economic impact of
implementing RACT controls on plants using solvent metal de-
greasers in Ohio. A rating scheme is presented in this section
to indicate the quality of the data available for use in this
study. A rating of "A" indicates hard data, "B1 indicates data
that were not available in secondary literature and were extra-
polated from hard data (i.e., data that are published for the
base year) and "C" indicates data were estimated based on inter-
views, analyses of previous studies and best engineering judg-
ment. Exhibit 11-1 , on the following page, rates each study
output and overall quality of the data.
11-10
-------
Industry statistics
Emissions
Statewide costs of
emissions
EXHIBIT 11-1
U.S. Environmental Protection Agency
DATA QUALITY
Study Outputs
A B
Hard Extrapolated
Data Data
Estimated
Data
Cost of emissions
control
X
X
Overall quality of
data
X
Source: Booz/ Allen & Hamilton Inc.
-------
11.2 INDUSTRY STATISTICS
This section summarizes an estimation of the total
number of solvent metal cleaners in the state determined by
the methods discussed in section 11.1.2 of this report. As
shown in Exhibits 11-2 and 11-3, on the following pages, a
total of 1,294 open top vapor degreasers, 298 conveyorized
degreasers and 75,610 cold cleaners are estimated to be in
use in Ohio in manufacturing, maintenance and service. As
discussed earlier, not all of these will be subject to RACT
regulations because of size or solvent exemptions. About
30 percent of open top vapor degreasers, 5 percent of con-
veyorized degreasers and 70 percent of cold cleaners are
expected to be exempt on the basis of size. About 35
percent of open top vapor degreasers, 10 percent of con-
veyorized degreasers and 20 percent of cold cleaners are
expected to be exempt because they use exempt solvents 1,1,1-
trichloroethane or Freon 113. Applying these factors
results in the total of affected cleaners shown in Exhibit
11-4, following Exhibit 11-3.
It is difficult to estimate the number of establish-
ments affected by the regulations, since a plant may have
one or many cleaners of each type. In fact, large-scale
users may have more than 100 degreasing operations in one
plant location. Metal working industries would be major
users; eight SIC codes, 25 and 33-39, cover these indus-
tries.
These classifications include such industries as auto-
motive, electronics, appliances, furniture, jewelry, plumbing,
aircraft, refrigeration, business machinery and fasteners.
However, use of solvent cleaning is not limited to those
industries, since many cleaners are used, for both manufac-
turing and maintenance, in nonmetal working industries such
as printing, chemicals, plastics, rubber, textiles, paper
and electric power. Also, most automotive, railroad, bus,
aircraft, truck and electric motor repair stations use metal
solvent cleaners at least part time.
As shown in Exhibit 11-2, 1,566 establishments in the
SIC codes 25 and 33-39, with more than 19 employees are esti-
mated to use solvent metal degreasing. However, as shown in
Exhibit 11-3, following Exhibit 11-2, there are a total of
8,135 plants in SIC groups 25 and 33-39 and an additional 11,360
plants in service industries; all of these are expected to have
some type of solvent degreaser and could be potentially affected.
11-11
-------
i i i
i i
Exhibit 11-2(1)
U.S. Environmental Protection Agency
ESTIMATED NUMBER OF VAPOR DEGREASERS
IN OHIO
_SIC GROUP
I tea
25
Metal
Furniture
Number of Ohio
plant* with sore
than 19 employee*
Percent of U.S.
plant! using sol-
vent degreaslngb
Percent of Ohio
plants using sol-
vent degrees ing
Number of Ohio
plants using sol-
vent degreaaing
Percent of U.S.
plants using vapor
degreasing
Percent of Ohio
plants using vapor
degreasing
of Ohio
plants using vapor
degreasing
Average number of
vapor degreaser*
per U.S. plant
Average number of
vapor degreaser*
per Ohio
plant
Number of vapor de-
greaaers in Ohio
121
46
45
54
48
46
25
1.98
' . 85
46
33
Primary
Metals
406
40
39
158
42
40
63
2.21
2.06
130
34
Fabricated
Products
1,004
42
41
411
41
39
160
1.62
1.51
35
Nonelectri-
cal Machinery
1,013
52
51
516
33
31
1GO
36
Electrical
Equipment
328
55
54
177
67
64
113
1.61
1.50
2.03
1.09
37 38
Transptn. Instruments
Equipment and clocks
234
50
49
115
43
41
47
3.25
3.03
124
65
64
79
62
59
47
2.27
2.12
39
Mlac.
Industry Total
148 3,378
39
38
56
53
30
1,566
645
241
240
213
. t
142
100
1.02
0.95
28 1,140
-------
Item
Percent in U.S.
as open top
greasers
Percent in Ohio
•• open top de-
greasers
•umber of open top
vapor degreasers
In Ohio
Number of conveyor-
Ised vapor degreasers
in Ohio
Exhibit 11-2(2)
U.S. Environmental Protection Agency
(Ohio)
25
Metal
Furniture
74
69
32
isers
14
33
Primary
Metals
79
74
96
34
34
Fabricated
Products
79
74
178
63
35
Nonelectri-
cal Machinery
81
76
182
58
36
Electrical
Equipment
87
81
172
41
37
Transptn.
Equipment
87
81
115
27
38
Instruments
and clocks
94
88
88
12
39
Misc.
Industry Total
89
83
23
886C
254d
Note:
All data based on plants with more than 19 employees. Number of degreaaers rounded to the nearest whole integer.
a. Source; County Business Patterns, U.S. Dept. of Commerce, 1976.
b. Source of data on percentage of plants solvent degreasing. those with open top or
conveyorized vapor degreasers and average numbers of degreasers per plant: Study
to Support New Sour' -; Performance Standards for Solvent Metal Cleaning Operations,
Dow chemical Company under EPA Contract 68-02-1329, June 30, 1976.
c. To adjust quantities to account for vapor degreasers in other SIC groups multiply
by the factor (22,200/15,200) the ratio of all vapor degreasers in U.S. to open top
vapor degreasers in metal working SIC groups.
d. To adjust quantities to include cold conveyorized cleaners, multiply by 100/85,
since conveyorized vapor cleaners are estimated to represent 85 percent of all
conveyorized cleaners.
Source; Booz, Allen & Hamilton Inc. analysis of Department of Commerce and EPA Reports
-------
i 1
I c
I I i i
i i
EXHIBIT 11-3
U.S. Environmental Protection Agency
ESTIMATED NUMBERS OF COLD
CLEANERS IN OHIO
U.S.
Ohio
Total number of plants in SIC Groups
2s,JJ,j,,:5.16.37,38,39*
Estimated number of cold cleaners in
manufacturing^
Total number of plants in service
industries 551,554,557,7538,7539,7964*
Estimated number of cold cleaners^rC
in maintenance and service use
Estimated total number of cold cleaners*5
125,271
390,000
227,350
910,000
1,300,000
8,135
25,300
11,360
50,310
75,610
Notes:
a. Source: 1976 County Business Patterns, U.S. Department of Commerce, 1976.
b. Source: Control of Volatile Organic Emissions from Solvent Metal Cleaning, EPA-450/2-77-022,
November 1977.
c. This includes cold cleaners in maintenance and service applications by both
manufacturing and repair firms.
Source; Booz, Allen & Hamilton Inc.
-------
EXHIBIT 11-4
U.S. Environmental Protection Agency
ESTIMATE OF AFFECTED SOLVENT METAL
CLEANERS IN OHIO
Number of Cleaners by Type
Exemption ColdOpen Top Vapor Conveyorized
Total number of
cleaners 75,610 1,294 298
Number exempt by size 52,930 388 14
Number nonexempt by
size 22,680 906 283
Number further exempted
by type of solvent
used 4,540 317 28
Total number of
affected cleaners 18,140 589 255
Source;Booz, Allen & Hamilton Inc.
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11.3 THE TECHNICAL SITUATION IN THE INDUSTRY
11.3.1 Solvent Metal Cleaning Processes^
Solvent metal cleaning describes those processes using
nonaqueous solvents to clean and remove soils from metal
surfaces. These solvents, which are principally derived
from petroleum, include petroleum distillates, chlorinated
hydrocarbons, ketones and alcohols. Organic solvents, such
as these, can be used alone or in blends to remove water-
insoluble soils for cleaning purposes and to prepare parts
for painting, plating, repair, inspection, assembly, heat
treatment or machining.
A broad spectrum of organic solvents is available.
Choices among the solvents are based on the solubility of
the soil, toxicity, flammability, evaporation rate, effect
on nonmetallic portions of the part cleaned and numerous
other properties. Exhibit 11-5, on the following page, lists
solvents normally used in solvent degreasing.
The cleaning techniques can be broken down into two cate-
gories: cold cleaning and vapor degreasing. In cold cleaning,
parts are dipped, sprayed, brushed or wiped with solvents at or
near room temperature. In vapor degreasing, cold parts are
suspended in a solvent vapor which condenses on the parts and
dissolves greases and other soils.
Typically, the cleaning process is done in one of three
types of cleaners or degreasers:
A cold cleaner
An open top vapor degreaser
A conveyorized degreaser.
1
The descriptive and other information in this section has
been obtained from Control of Volatile Organic Emissions
from Solvent Metal Cleaning (EPA-450/2-77, November 1977).
This document should be consulted for a more detailed
description of the techniques and devices used for solvent
degreasing.
11-12
-------
EXHIBIT 11-5
U.S. Environmental Protection Agency
SOLVENTS CONVENTIONALLY USED IN
SOLVENT METAL DECREASING
General Type Solvent
Alcohols Ethanol (95%)
Isopropanol
Methanol
Alipatic hydrocarbons Heptane
Kerosene
Stoddard
Mineral spirits 66
Aromatic hydrocarbons Benzene
SC 150
Toluene
Turpentine
Xylene
Chlorinated solvents Carbon tetrachloride
Methylene chloride
Perchloroethylene
1,1,1-trichloroethane
Trichloroethylene
Fluorinated solvents Trichlorotrifluoroethane
(FC-113)
Ketones Acetone
Methyl ethyl ketone
Source: Booz, Allen & Hamilton Inc.
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11.3.1.1 Cold Cleaners
Cold cleaner operations include spraying, brushing, flush-
ing and immersion. The solvent occasionally is heated in cold
cleaners but always remains well below its boiling point.
Cold cleaners are estimated to result in the largest total
emission of the three categories of degreasers. This is primarily
because there are so many of these units (more than 1 million
nationally) and because much of the waste solvent that is dis-
posed of is allowed to evaporate. It is estimated that cold
cleaners emit 420,000 short tons of organics per year,
about 55 percent of the national degreasing emissions.
Cold cleaning solvents nationally account for almost all of the
aliphatic, aromatic and oxygenated degreasing solvents and
about one-third of halogenated degreasing solvents.
Despite the large aggregate emission, the average cold
cleaning unit generally emits only about one-third ton per
year of organics, with about one-half to three-fourths of that
emission resulting from evaporation of the waste solvent at a
disposal site.
In a typical cold cleaner (Figure 11-1, on the following
page) , dirty parts are placed in a basket and are cleaned manually
by spraying or soaking in a dip tank. The solvent in this dip
tank is often agitated to enhance the cleaning action. After
cleaning, the basket of cleaned parts may be suspended over the
solvent to allow the parts to drain, or the cleaned parts may be
drained on an external drainage rack which routes the drained
solvent back into the cleaner. The cover should be closed when-
ever parts are not being handled in the cleaner. Typically, a
maintenance cold cleaner has about 0.4 m2 (4 ft.2) of opening
and about 0.1 m3 (30 gallon) capacity.
The two basic types of cold cleaners are maintenance
cleaners and manufacturing cleaners. The maintenance cold
cleaners are usually simpler, less expensive and smaller. They
are designed principally for automotive and general plant main-
tenance cleaning.
Manufacturing cold cleaners usually give a higher quality
of cleaning than maintenance cleaners do, and are thus more
specialized. Manufacturing cold cleaning is generally an
integral stage in metal working production. There are fewer
manufacturing cold cleaners than maintenance cleaners but the
former tend to emit more solvent per unit because of the larger
11-13
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FIGURE 11-1
U.S. Environmental Protection Agency
TYPICAL COLD CLEANER
SPRAY CLEANING EQUIPMENT
Source; EPA 450/2-77-022, op. cit.
-------
size and workload. Manufacturing cleaners use a wide variety
of solvents, whereas maintenance cleaners use mainly petroleum
solvents such as mineral spirits (petroleum distillates and
Stoddard solvents). Some cold cleaners can serve both mainten-
ance and manufacturing purposes and thus are difficult to
classify.
11.3.1.2 Open Top Vapor Degreasers
Vapor degreasers clean through the condensation of hot
solvent vapor on colder metal parts. Open top vapor degreasers
are batch loaded, i.e., they clean only one workload at a time.
Open top vapor degreasers are estimated to result in the
second largest emission of the three categories of degreasers.
It is estimated that open top vapor degreasers emit 220,000 short
tons of organic per year, this being about 30 percent of the
national degreasing emissions.
In the vapor degreaser, solvent vapors condense on the
parts to be cleaned until the temperature of the parts
approaches the boiling point of the solvent. The condensing
solvent both dissolves oils and provides a washing action to
clean the parts. The selected solvents boil at much lower
temperatures than do the contaminants; thus, the solvent/soil
mixture in the degreaser boils to produce an essentially pure
solvent vapor.
The simplest cleaning cycle involves lowering the parts
into the vapor zone so that the condensation action can
begin. When condensation ceases, the parts are slowly with-
drawn from the degreaser. Residual liquid solvent on the parts
rapidly evaporates as the parts are removed from the vapor
zone. The cleaning action is often increased by spraying the
parts with solvent (below the vapor level) or by immersing
them into the liquid solvent bath.
A typical vapor degreaser, shown in Figure 11-2, on the
following page, is a tank designed to produce and contain sol-
vent vapor. At least one section of the tank is equipped with
a heating system that uses steam, electricity or fuel combus-
tion to boil the solvent. As the solvent boils, the dense
solvent vapors displace the air within the equipment. The
upper level of these pure vapors is controlled by condenser
coils located on the sidewalls of the degreaser. These coils,
which are supplied with a coolant such as water, are generally
located around the entire inner surface of the degreaser, although
for some smaller equipment they are limited to a spiral coil
at one end of the degreaser. Most vapor degreasers are also
equipped with a water jacket which provides additional cooling
and prevents convection of solvent vapors up hot degreaser walls.
11-14
-------
FIGURE 11-2
U.S. Environmental Protection Agency
TYPICAL OPEN TOP VAPOR DEGREASER
OPEN TOP DEGREASER
Safety Thermostat
Condensing Coils
Temperature
Indicator
CJeanout Door
Solvent Level Sight Glass
Freeboard
Water Jacket
Condensate Trough
»
Water Separator
Heating Elements
Work Rest And Protective Grate
Source; EPA 450/2-77-022, op. cit.
-------
The cooling coils must be placed at some distance below
the top edge of the degreaser to protect the solvent vapor
zone from disturbance caused by air movement around the equip-
ment. This distance from the top of the vapor zone to the
top of the degreaser tank is called the freeboard and is
generally established by the location of the condenser coils.
Nearly all vapor degreasers are equipped with a water
separator, such as that depicted in Figure 11-2. The con-
densed solvent and moisture are collected in a trough below
the condenser coils and directed to the water separator.
The water separator is a simple container which allows the
water (being immiscible and less dense than solvents) to
separate from the solvent and decant from the system while
the solvent flows from the bottom of the chamber back into the
vapor degreaser.
11.3.1.3 Conveyorized Degreaser
There are several types of conveyorized degreasers, operat-
ing both with cold and with vaporized solvents. An average
conveyorized degreaser emits about 25 metric tons per year of
solvent; however, because of their limited numbers, these
degreasers contribute only about 15 percent of the total solvent
degreasing emissions. Because of their large work capacity,
conveyorized degreasers actually emit less solvent per part
cleaned than either open top vapor degreasers or cold cleaners.
In conveyorized equipment, most, and sometimes all, of the
manual parts handling associated with open top vapor degreasing
has been eliminated. Conveyorized degreasers are nearly always
hooded or covered. The enclosure of a degreaser diminishes
solvent losses from the system as the result of air movement
within the plant. Conveyorized degreasers are used by a broad
spectrum of metal working industries but are most often found
in plants where there is enough production to provide a con-
stant stream of products to be degreased.
There are a number of types of conveyorized degreasers
employing various techniques of conveying the parts, either
through a pool or spray of cold cleaning solvents or through
a space containing vaporized solvent. A cross-rod degreaser
(Figure 11-3, on the following page) illustrates the general
concepts of operation of the various types of conveyorized
degreasers.
11-15
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FIGURE 11-3
U.S. Environmental Protection Agency
TYPICAL CONVEYORIZED DEGREASER
CROSS-ROD CONVEYORIZED DEGREASER
Source: EPA 450/2-77-022, op. cit.
-------
The cross-rod degreaser obtains its name from the rods
between the two power driven chains from which parts are
supported as they are conveyed through the equipment. The
parts are contained in pendant baskets or, where tumbling
of the parts is desired, perforated cylinders. These
cylinders are rotated by a rack and pinion design within the
solvent and/or the vapor zone. This type of equipment lends
itself particularly well to handling small parts which need
to be immersed in solvent to obtain satisfactory cleaning or
require tumbling to provide drainage from cavities in the
parts.
Other types of conveyorized degreasers similarly use
rotating wheels, conveyor belts, monorail or other systems
to convey the parts through the degreasing medium.
11.3.2 Proposed Emission Control Systems for Solvent
Metal Cleaners"*
The EPA has proposed two different emission control methods,
A and B, for each of the three types of cleaners: cold, open
top vapor and conveyorized. The control methods can be combined
in various ways to form a number of alternative control systems.
Generally, control system A consists of proper operating prac-
tices and simple, inexpensive control equipment. Control system
B consists of system A plus other devices that increase the
effectiveness of control. Elements of control systems A or B
can be modified to arrive at the level of control needed. The
control systems are presented in the three exhibits, Exhibit 11-6,
11-7 and 11-8, on the following pages, and are briefly discussed below
In most recent RACT guidelines, use of control system B has been
proposed to maximize emission reductions; costs, therefore, were
assumed only for this case.
11.3.2.1 Cold Cleaning Control Systems
The most important emission control for cold cleaners is
the control of waste solvent. The waste solvent needs to be
reclaimed or disposed of so that a minimum evaporates into the
atmosphere. Next in importance are the operating practices of
closing the cover and draining cleaned parts. Several other
control techniques become significant only in a small fraction
of applications.
The difference in effect between systems A and B (Exhibit
11-6) is not large because most of the cold cleaning emissions
are controlled in system A. If the requirements of system A
1Control of Volatile Organic Emissions from Solvent Metal
Cleaning, EPA-450/2-77-022
2 Regulatory Guidance for Control of Volatile Organic
Emissions from 15 Categories of Stationary Sources,
EPA-905/2-78-001
11-16
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EXHIBIT 11-6
U.S. Environmental Protection Agency
CONTROL SYSTEMS FOR COLD CLEANING
Control System A
Control Equipments
i
1. Cover
2. Facility for draining cleaned parts
3. Permanent, conspicuous label, summarizing the operating requirements
Operating Requirements:
1. Do not dispose of waste solvent or transfer it to another party, such that greater than 20 percent
of the waste (by weight) can evaporate into the atmosphers.* Store waste solvent only in covered containers.
2. Close degreaser cover whenever not handling parts in the cleaner.
3. Drain cleaned parts for at least 15 seconds or until dripping ceases.
Control System B
Control Equipment!
1. Cover: Same as in System A, except if (a) solvent volatility is greater than 2 Kpa (IS mm Hg or 0.3 psi)
measured at 3B*C (100*F),** (b) solvent is agitated, or (c) solvent is heated, then the cover must be designed so that
it can be easily operated with one hand. (Covers for larger degreasers may require mechanical assistance, by spring
loading, counterweighting or powered systems.)
2. Drainage facility: Same as in System A, except that if solvent volatility is greater than about 4.3 Kpa
(32 mm Hg or 0.6 psi) measured at 38* C (100*F), then the drainage facility must be internal, so that parts are
enclosed under the cover while draining. The drainage facility nay be external for applications where an internal
type cannot fit into the cleaning system.
3. Label: Same as in System A
4. If used, the solvent spray must be solid, fluid stream (not a fine, atomized or shower type spray)
and at a pressure which does not cause excessive splashing.
5. Major control device for highly volatile solvents: If the solvent volatility is 4.3 Kpa (33 mm Hg or
0.6 psi) measured at 38*C (100'F), or if solvent is heated about 50*C (120°F), then one of the following control
devices must be usedt
a. Freeboard that gives a freeboard ratio*** 0.7
b. Mater cover (solvent must be insoluble in and heavier than water)
c. Other systems of equivalent control, such as refrigerated chiller or carbon absorption.
Operating Requirements:
Same as in System A
• Mater and solid waste regulations must also be complied with
** Generally solvents consisting primarily of mineral spirits (Stoddard) have volatilities 2 Kpa.
•** Freeboard ratio is defined as the freeboard height divided by the width of the degreaaer.
Source: EPA 450/2-77-022. on. c-it-
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EXHIBIT 11-7(1)
U.S. Environmental Protection Agency
EPA PROPOSED CONTROL SYSTEMS FOR OPEN TOP VAPOR DEGREASERS
Control System A
Control Equipmentt
1. Cover that can be opened and closed easily without disturbing the vapor zone.
Operating Requirementst
1. Keep cover closed at all times except when processing work loads through the degreaser.
2. Minimize solvent carry-out by the following measures:
a. Rack Parts to allow full drainage.
b. Move parts in and out of the degreaser at less than 3.3 m/sec (11 ft/min).
c. Degrease the '..urk load in the vapor zone at least 30 sec. or until condensation ceases.
d. Tip out any pools of solvent on the cleaned parts before removal.
e. Allow parts to dry within the degreaser for at least 15 sec. or until visually dry.
3. Do not degrease porous or absorbent materials, such as cloth, leather, wood or rope.
4. Work loads should not occupy more than half of the degreaser's open top area.
5. The vapor level should not drop more than 10 cm (4 in) when the work load enters the vapor zone.
6. Never spray above the vapor level.
7. Repair solvent leaks immediately, or shutdown the degreaser.
8. Do not dispose of waste solvent or transfer it to another party such that greater than 20 percent of the
waste (by weight) will evaporate into the atmosphere. Store waste solvent only in closed containers.
9.
Exhaust ventilation should not exceed 20 m /min per m (65 cfm per ft ) of degreaser open area, unless
necessary to meet OSHA requirements. Ventilation fans should not be near the degreaser opening.
10. Water should not be visually detectable in solvent exiting the water separator.
Control System B
Control Equipment:
1. Cover (same as in system A).
2. Safety switches
a. Condenser flow switch and thermostat - (shuts off sump heat if condenser coolant is either not circulating
or too warm).
b. Spray safety switch - shuts off spray pump if the vapor level drops excessively, about 10 cm (4 in) .
Source: EPA 45O/2-77-022, op. cit.
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EXHIBIT 11-7(2)
U.S. Environmental Protection Aaency
3. Major Control Device:
Eithert a. Freeboard ratio greater than or equal to 0.75, and if the degreaser opening is
1 H^ (io ft )f the cover must be powered,
b. Refrigerated chiller,
c. Enclosed design (cover or door opens only when the dry part is actually entering or
exiting the degreaser.),
d. Carbon adsorption system, with ventilation 15 m3/min per m2 (50 cfm/ft2) or air/vapor
area (when cover is open), and exhausting 25 ppm solvent averaged over one complete adsorption cycle, or
e. Control system, demonstrated to have control efficiency, equivalent to or better than
any of the above.
4. Permanent, conspicuous label, summarizing operating procedures II to 16.
Operating Requirements:
Sa*e as in System A.
Source: EPA 450/2-77-022, op. cit.
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EXHIBIT 11-8
U.S. Environmental Protection Agency
EPA PROPOSED CONTROL SYSTEMS FOR CONVEYORIZED DEGREASERS
Control System A '
Control Equipment: None
Operating Requirements:
1. Exhaust ventilation should not exceed 20 m^/min per m2 (55 cfm per ft2) of degreaser opening,
unless necessary to meet OSHA requirements. Work place fans should not be used near the degreaser opening.
2. Minimize carry-out emissions by:
a. Racking parts for best drainage.
b. Maintaining verticle conveyor speed at 3.3 m/min (11 ft/min).
3. Do not dispose of waste solvent or transfer it to another party such that greater than 20 percent
of the waste (by weight) can evaporate into the atmosphere. Store waste solvent only in covered containers.
4. Repair solvent leaks immediately, or shutdown the degreaser.
5. Water should not be visibly detectable in the solvent exiting the water separator.
Control System B
1. Major control devices; the degreaser must be controlled by either:
a. Refrigerated chiller,
b. Carbon adsorption system, with ventilation 15 m2/min per m2 (50 cfm/ft2) of air/vapor area (when down-time
covers are open), and exhausting 25 ppm of solvent by volume averaged over a complete adsorption cycle, or
c. System demonstrated to have control efficiency equivalent to or better than either of the above.
2. Either a drying tunnel, or another means such as rotating (tumbling) basket, sufficient to prevent cleaned parts
from carrying out solvent liquid or vapor.
3. Safety switches
a. Condenser flow switch and thermostat - (shuts off sump heat if coolant is eiter not circulating or too warm).
b. Spray safety switch - (shuts off spray pump or conveyor if the vapor level drops excessively, e.g. 10 cm (4 in.))
c. Vapor level control thermostat - (shuts off sump heat when vapor level rises too high).
4. Minimized openings: Entrances and exits should silhouette work loads so that the average clearance (between
parts and the edge of the degreaser opening) is either 10 cm (4 in.) or 10 percent of the width of the opening.
5. Down-time covers: Covers should be provided for closing off the entrance and exit during shutdown hours.
Operating Requirements:
1. to 5. Same as the System A
6. Down-time cover must be placed over entrances and exits of conveyorized degreasers immediately after the
conveyor and exhaust are shutdown and removed just before they are started up.
Source: EPA 450/2-77-022, op. cit.
-------
were followed conscientiously by nearly all of the cold
cleaning operators, there would be little need for the
additional system B requirements. However, because cold
cleaning operators tend to be lax in keeping the cover
closed, equipment requirements #1 and #4 in system B are
added. Similarly, the modifications for 12 and the equipment
requirements in 13 would effect significant emission reduc-
tions in a few applications.
The effectiveness of the control systems depends greatly
on the quality of operation. On the average, system A is
estimated to be able to reduce cold cleaning emissions by
50 (± 20) percent and system B may reduce it by 53 (± 20)
percent. The low end of the range represents the emission
reduction projected for poor compliance, and the high end
represents excellent compliance. The expected benefit from
system B is only slightly better than that for system A for
an average cold cleaner because the additonal devices required
in system B generally control only bath evaporation, about 20
to 30 percent of the total emission from an average cold
cleaner. For cold cleaners with high volatility solvents,
bath evaporation may contribute about 50 percent of the total
emission; EPA estimates that system B could achieve 69 (± 20)
percent control efficiency, whereas system A might achieve
only 55 (±20) percent.1
11.3.2.2 Open Top Vapor Degreasing Control Systems
The basic elements of a control system for open top vapor
degreasers are proper operating practices and use of control
equipment. There are about ten main operating practices. The
control equipment includes a cover, safety switches and a major
control device, either high freeboard, refrigerated chiller,
enclosed design or carbon adsorption as outlined in Exhibit 11-7,
A vapor level thermostat is not included because it is
already required by OSHA on "open surface vapor degreasing
tanks." Sump thermostats and solvent level controls are
used primarily to prevent solvent degradation and protect the
equipment and thus are also not included here. The emission
reduction by these controls is a secondary effect in any event.
The two safety switches serve primarily to reduce vapor solvent
emissions.
EPA 450/2-77-022
11-17
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EXHIBIT 11-9
U.S. Environmental Protection Agency
AVERAGE UNIT EMISSION RATES AND EXPECTED
EMISSION REDUCTIONS
EMISSION RATES WITHOUT CONTROLS
Type of Degreaser
Cold cleaners, batch a
Open top vapor degreaser
Conveyorized degreaser
Averaged Emission Rate
Per Unit (short tons/yr.)
0.33
11.00
29.70
PERCENT EMISSION REDUCTION EXPECTED WITH TYPE B CONTROLS
Type of Degreaser
Cold cleaner, batch
Low volatility solvents
High volatility solvents
Open top vapor degreaser
Conveyorized degreaser
Percent Emission
Reduction Expected
53 (+ 20)
69 (+ 20)
60 (+ 15)
60 (-*- 15)
a. Does not include emissions from Conveyorized-type cold cleaners which represent
about 15 percent of all conveyorized cleaners.
Source: EPA-450/2-77-022, op. cit.
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11.3.3 Emissions and Expected Emission Reduction
In Exhibit 11-9, on the following page, are summarized
the average emissions from solvent metal degreasers by type
and also the percent emission reduction expected by imple-
mentation of Type B method of controls on affected degreasers.
The levels are based on estimated emissions as presented in the
previously referenced EPA report (EPA 450/2-77-022) and represent
current average emission levels and expected reductions achiev-
able if emission controls are rigorously enforced. For estimation,
50 percent reduction was used for cold cleaners and 60 percent
for open top vapor and conveyorized degreasers.
Exhibit 11-10,following Exhibit 11-9, presents the estimated
current emissions from solvent metal degreasing and the expected
emissions if the B methods of control are implemented for metal
cleaners and proposed exemptions for size and type of solvent are
implemented. As shown, emissions are expected to be reduced from
about 48,100 short tons per year to a total of 36,700 short tons
per year. The major portion of these reduced emissions, 28,100
tons, are from solvent metal cleaners exempt from the proposed
RACT regulations either by size or by the nature of solvent used.
Implementation of the regulations will reduce emissions only by
11,400 short tons per year (48,100-36,700).
11-19
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11.4 ESTIMATED COSTS OF RACT IMPLEMENTATION
As discussed in section 11.1.6, compliance costs are based
upon EPA estimates of the costs and benefits of various retro-
fitted methods of control. These estimates are summarized in
Exhibits 11-11 and 11-12, on the following pages.
Costs of implementation of the RACT regulations are summar-
ized in Exhibits 11-13, 11-14 and 11-15, following Exhibit 11-12, on
the assumption that control method B is used to maximize emission
reduction on nonexempt cleaners. Exhibits 11-16, 11-17 and 11-18,
following Exhibit 11-15, summarize the number and type of controls
needed by cleaner type as determined from interviews with cleaner
manufacturers. Total expenditures for all cleaners, vapor and cold
types, are estimated to be about $9.2 million in capital and about
$1.1 million in net annualized costs. The low net annualized costs
result primarily from the savings in solvent use which the
regulations are expected to provide.
In most cases, the regulations are not expected to present a
financial burden to individual firms. The largest single expendi-
ture would be for retrofitting a monorail conveyorized degreaser
with chiller, switches, drying tunnel, reduced openings and down-
time covers. Total cost for an average-sized degreaser of about
3.8 square meters area (40.9 ft2) would be less than $12,500. A
large unit, 14 square meters, would cost about $27,000 to $30,000.
Since these conveyorized systems would only be used in large
plants with large sales volumes, this implementation cost is not
expected to present a hardship to most firms. There may be a few
marginally profitable firms, however, which may find access to
sufficient capital difficulty. The number of such firms is
anticipated to be small.
11-20
-------
EXHIBIT 11-10
U.S. Environmental Protection Agency
ESTIMATED CURRENT AND REDUCED EMISSIONS FROM
SOLVENT METAL CLEANING IN OHIO
(TONS/YEAR)
Type of Cleaner
Open top vapor
Conveyorized
Cold
Total
Estimated
Current
Emissions
14,200
8,900
25,000
48,100
Current
Emissions
From Affected
Cleaners
6,400
7,700
5,900
20,000
Estimated
Emissions from
Affected Cleaners
After RACT
2,600
3,000
3,000
8,600
Estimated
Emissions from
Exempt Cleaners
After RACTa
7.800
1,200
19,100
28,100
Estimated
Total
Emissions
After RACT*
10,400
4,200
22,100
36,700
Note: Emissions rounded to nearest 100 tons/year
a. Includes emissions from cleaners exempt by size or using 1,1,1-trichloroethane or Freon 113
Source; Booz, Allen & Hamilton Inc.
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EXHIBIT 11-12
U.S. Environmental Protection Agency
CONTROL COSTS FOR AVERAGE-SIZED
OPEN TOP VAPOR AND CONVEYORIZED CLEANERS
1. CONTROL COSTS FOR TYPICAL SIZE OPEN TOP VAPOR DEGREASER
(Vapor to Air Area of 1.67 m2)
Control Technique
installed capital ($)
Direct operating
cost ($/yr.)
Capi tal charge s ($/yr.)
Solvent cost (credit)
($/yr.)
Net annualized cost
(credit) ($/yr.)
Manual
Cover
300
10
75
(860)
Carbon
Adsorption8
10,300
451
2,575
(1,419)
Refrigerated
Chiller
6,500
259
1,625
(1,290)
Extended Freeboard
fi Powered Cover
8,000
100
2,000
(1,161)
(775)
1,607
594
939
2. CONTROL COSTS FOR TYPICAL CONVEYORIZED DEGREASERS
(Vapor to Air Vapor Area of 3.8 m2)
Control Technique
Installed capital ($)
Direct operating
costs ($/yr.)
Capital charges ($/yr.)
Solvent cost (credit)
($/yr.)
Annualized cost (credit)
($/yr.)
Monorail Degreaser
(263)
(3,065)
Crossrod Degreaser
Carbon3
Adsorber
17,600
970
4,400
(5,633)
Re f rigerated
Chiller
8,550
430
2,138
(5,633)
Carbon3
Adsorber
17,600
754
4,400
(2,258)
Refrigerated
Chiller
7,460
334
1,865
(2,258)
2,896
(59)
a. Not used in cost estimates since net annualized costs for carbon absorption
are the highest for any control method.
b. Capital charges used in study estimate were 25 percent of capital instead of
17 percent used by EPA source.
Source; EPA 450/2-77-022, op. cit.
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EXHIBIT 11-11
U.S. Environmental Protection Agency
CONTROL COSTS FOR COLD CLEANER
WITH 5.25 Ft.2 AREA
Item
Installed capital ($)
Direct operating costs
($/yr.)
Capital charges ($/yr.)c
Solvent cost (credit)
($/yr.)
Annualized cost (credit)
($/yr.)
Low Volatility
Solvent5
25.00
1.00
6.25
(4.80)
2.45
High Volatility
Solventb
365
2.60
91.25
(39.36)
54.49
Costs include only a drainage facility for low volatility
solvents.
Includes $65 for drainage facility, a mechanically assisted
cover and extension of freeboard.
Capital charges used in study estimates were 25 percent of
capital instead of 17 percent used in EPA report.
Source; EPA-450/2-77-022, op. cit.
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EXHIBIT 11-14
U.S. Environmental Protection Agency
ESTIMATED CONTROL COSTS FOR OPEN TOP
VAPOR DEGREASERS FOR THE STATE OF OHIO
1. CAPITAL COSTS
Item
Safety switches
Powered covers
Manual covers
Total
Costs
$ 9,100
2,824,000
53,100
$2,888,900
2. ANNUAL OPERATING COSTS
Item
Direct operating costs
Capital charges
Solvent cost (credit)
Net annualized costs
Costs
$ 37,100
722,200
(562,000)
$ 197,300
Source; Booz, Allen & Hamilton Inc.
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EXHIBIT 11-13
U.S. Environmental Protection Agency
ESTIMATED CONTROL COSTS FOR COLD CLEANERS
FOR THE STATE OF OHIO
Item
Capital
1. CAPITAL COSTS
Number of Degreasers
Needing Conversion
12,340
Costs
$4,194,800
2. ANNUAL OPERATING COSTS
Item
Direct operating costs
Capital charges
Solvent cost (credit)
Net annualized costs
$ 625,000
Source;Bcoz, Allen & Hamilton, Inc.
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EXHIBIT 11-16
U.S. Environmental Protection Agency
ESTIMATED NUMBER OF COLD CLEANERS
NEEDING CONTROLS IN THE STATE
OF OHIO
Percent of Number of Cleaners0
Type of Control Cleaners Needing Control Needing Control
Drainage facility
only3 5 910
Freeboard and
drainage^ 63 11,430
Notes:
a. Based on 10 percent of cleaners using low availability solvents
and half of these needing drainage facilities.
b. Based on 90 percent of cleaners using high volatility solvents
and 70 percent needing additional freeboard and drainage
c. Numbers of these rounded to nearest 10 units.
Source; Booz, Allen & Hamilton, Inc.
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EXHIBIT 11-15
U.S. Environmental Protection Agency
ESTIMATED CONTROL COSTS FOR CONVEYORIZED
DEGREASERS FOR THE STATE OF OHIO
1. CAPITAL COSTS
Item
Refrigerator chillers
Monorail degreasers
Crossrod degreasers
Safety switches
Drying tunnel
Reduce openings
Downtime covers
Total
Costs
$ 784,600
1,026,800
11,200
55,900
201,200
60,400
$2,140,100
2. ANNUAL OPERATING COSTS
Item
Direct operating costs
Capital charges
Solvent cost (credit)
Net allualized cost
Costs
430,700
535,000
(829,840)
135,900
Source:Booz, Allen & Hamilton, Inc.
-------
Implementation of the regulations will reduce demand
for metal cleaning solvents. At an average price of 15 cents
per pound (mineral spirits are about 10 cents per pound;
chlorinated solvents are about 20 cents per pound), this would
result in a reduction in solvent sales of about $3.4 million
annually based on a reduction in emissions of 11,400 tons yearly.
This may result in a loss of employment for firms supplying metal
cleaning solvents.
11.5.3 Effect of Compliance upon Energy Consumption
Carbon adsorbers, refrigerated chillers and distillation units
are the principal energy consuming control devices used for
controlling degreasing emissions. The refrigerated chiller, which
would probably be the preferred method of control because of its
low capital and operating costs, will increase a degreaser's
energy consumption by about 5 percent. The EPA has estimated
consumption of 0.2 kw to 2.2 kw by a chiller, used on a typical
open top vapor degreaser of 1.7m^ size. For a typical conveyorized
degreaser of about 3.8m^ size, consumption is estimated, on this
basis, to be 0.5 kw to 5.0 kw. Only conveyorized degreasers are
expected to use chillers to comply; and about 90 percent or 255
of these currently do not have chillers. Assuming 2,250 hours
per year operation, total additional energy consumption annually
would be about 285,000 kw-hours to 2,850,000 kw-hours. This is
equal to $11,400 to $111,400 per year in additional power costs,
at a cost of $0.04 per kw-hour. Most of this cost is recovered
by savings in solvent use.
1EPA-450/2-7-002, op.cit.
11-22
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EXHIBIT 11-17
U.S. Environmental Protection Agenc
ESTIMATED NUMBER OF OPEN TOP VAPOF
DEGREASERS NEEDING CONTROL IN THE
STATE OF OHIO
Percent of Number of Cleaners
Type of Control Cleaners Needing Control Needing Control
Manual covers 30 177
Safety switches 20 118
Powered cover 60 353
Source: Booz, Allen & Hamilton, Inc.
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EXHIBIT 11-19
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR SOLVENT METAL DECREASING
IN THE STATE OF OHIO
Current Situation
Number of potentially affected
facilities
Indication of relative importance
of industrial section to state
economy
Current industry technology trends
1977 VOC emissions (actual)
Industry preferred method of VOC
control to meet RACT guidelines
Assumed method of VOC control
meet RACT guidelines
Discussion
About 20,000 plants
Value of shipments of firms in SIC groups af-
fected is in the range of $55 billion, about
one-half of the state's 1977 value of
shipments.
Where technically feasible, firms are sub-
stituting exempt solvents
48,100 tons/year (of which 20,000 tons are
subject to RACT)
Substitution. Otherwise lowest cost option
as specified by EPA will be used.
Equipment modifications as specified by the
RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized operating cost (statewide)
Price
Energy
Productivity
Employment
Market Structure
RACT timing requirements (1982)
Problem Areas
VOC emission after RACT control
Cost effectiveness of RACT control
Discussion
$9.2 million
$1.1 million, (less than 0.002 percent of the
1977 statewide value of shipments)
Metal cleaning is only a fraction of manu-
facturing costs; price affect expected to
be less than 0.01 percent
Less than a 1500 equivalent barrels of oil
per year in reduction
5-10 percent decrease for manually operated
degreasers. Will probably not affect conveyori:
cleaners.
No effect except a possible slight decrease
in firms supplying metal degreasing solvents
No change
Equipment availability—only a few companies
now supply the recommended control modifications
No significant problem areas seen. Most
firms will be able to absorb cost.
36,700 tons/year (76 percent of 19.77 VOC emissic
level—however, this does not include emission
controls for exempt solvents)
$105 annualized cost per ton of emissions reduci
Source;Booz, Allen & Hamilton Inc.
-------
11.5 DIRECT ECONOMIC IMPLICATIONS
11.5.1 Time Required to Implement Proposed RACT Regulations
Because so many degreasers are affected under the
proposed regulation (589 open top vapor degreasers, 255
conveyorized degreasers and 18,140 cold cleaners in Ohio
alone) and because each requires retrofitting of a control
device, some users may not be able to comply within proposed
compliance schedules because of equipment availability.^
Discussions with personnel from the major manufacturers of
vapor and cold degreasers reveal that none are prepared to
provide the necessary controls in quantities to meet a
cumulative U.S. wide demand. Some cleaners could be con-
verted to 1,1,1-trichloroethane and thus become exempt. In
fact, many metal solvent cleaners have been converted to
trichloroethane in the last few years in anticipation of
RACT regulations. However, not all existing machines can be
converted because of inadequate condensing sections or
improper materials of construction. Trichloroethane can be
extremely corrosive if stabilizers are insufficiently reple-
nished. In fact, stainless steel vapor degreasers using
1,1,1-trichloroethane have been reported to fail because of
corrosion following the loss of stabilizer.
11.5.2 Effect of Compliance upon Selected Economic Indicators
Implementation of the proposed regulations is expected
to have a negligible effect on factors such as value of
shipments, prices, capital investment or the state economy
as a whole, because of the low total capital and annual
operating costs required by solvent metal cleaner owners.
For example, total shipments in SIC groups 25 and 33-39
alone exceeded $52 billion in 1975 and are expected to
exceed $55 billion in 1977. Total capital expenditures for
retrofitting are estimated to amount to less than 0.02
percent of this; annualized costs are estimated to be less
than 0.002 percent, including a slight drop in productivity
because of work practice modifications.
Similarly, implementation is expected to have a neg-
ligible impact on total capital expenditures, which amounted
to about $1.1 billion in 1976. Since it appears that com-
pliance may require several years in practice, average
capital expenditures will be about $2.5 million per year
and would be about 0.2 percent or less of normal capital
expenditures for plants in these SIC groups. Considering
that these expenditures are spread over service industries,
and other industries also not included in SICs 25 and 33-39,
the overall economic impact is even less significant.
1Based on comments by several degreasing equipment manufacturers
who have not geared up production for potential demands created by
implementation of RACT guidelines.
2 1976 Census of Manufactures data for average capital expendi-
tures per employee in these SIC groups was used in conjunction with
County Business Pattern data to estimate these values.
1 1-91
-------
-------
11.6 SELECTED SECONDARY ECONOMIC IMPACTS
Implementation is also expected to have minor, if not negligible
impact upon other factors, such as employment, market structure and
productivity. The proposed regulations include some change in work
practices which will decrease productivity in the metal cleaning
operation by 5 percent to 10 percent. Since metal cleaning is nor-
mally a minor step in the manufacturing or service process, any
change in productivity and employment in user plants will be insig-
nificant.
There will, however, be some temporary increase in employment
by those firms manufacturing such components as refrigeration chiller!
and drying tunnels, that may be required for retrofit controls. No
estimates have been made because manufacturers of such components
are located throughout the country. This temporary increase, however
may be balanced by a slight decrease in employment occurring because
of lower solvent consumption. The- decrease would occur primarily
in shipping and repackaging operations.
The implementation of the RACT guidelines should not have
any major affect on the current market structure of the industries
using solvent metal cleaning. Cleaners requiring highest retro-
fitting costs (i.e., for conveyorized cleaners) are generally
owned by large firms. Smaller firms would be expected to have
only cold cleaners or open top vapor degreasers. The highest
capital costs would be for an open top. unit which would require
an expenditure of $8,000 or less to comply. This is not expected
to be a significant financial burden even to small firms.
Exhibit 11-19, on the following page, summarizes the conclusions
presented in this report.
11-23
-------
-------
BIBLIOGRAPHY
U.S. Department of Commerce, County Business Patterns,1976.
U.S. Department of Commerce, Census of Manufactures, 1972
U.S. Environmental Protection Agency, Control of Volatile
Organic Emissions from Solvent Metal Cleaning EPA-450/2-77-002,
November 1977.
U.S. Environmental Protection Agency, Regulatory Guidance
for Control of Volatile Organic Emissions from 15 Categories
of Stationary Sources.EPA-905/2-78-001, April 1978.
Dow Chemical Company, Study to Support New Source Performance
Standards for Solvent Metal Cleaning Operations. EPA Contract
68-02-1329, June 30, 1976.
Private conversations with the following:
Dextrex Chemical Company, Detroit, Michigan
Ethyl Corporation
DuPont
Dow Chemical Company
PPG
Allied Chemical Company
R.R. Street
Baron Blakeslee Corporation, Cicero, Illinois
-------
12.0 THE ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR CONTROL OF REFINERY VACUUM
PRODUCING SYSTEMS, WASTEWATER SEPARATORS
AND PROCESS UNIT TURNAROUNDS IN THE
STATE OF OHIO
-------
-------
12.0 THE ECONOMIC IMPACT OF IMPLEMENTING
RACT FOR CONTROL OF REFINERY VACUUM
PRODUCING SYSTEMS, WASTEWATER
SEPARATORS AND PROCESS UNIT TURNAROUNDS
IN THE STATE OF OHIO
This chapter presents a detailed analysis of the impact
of implementing RACT controls of refinery vacuum producing
systems, wastewater separators and process unit turnarounds
in the State of Ohio. The chapter is divided into six
sections including:
Specific methodology and quality of estimates
Industry statistics
The technical situation of the industry
Cost and VOC reduction benefit evaluations for
the most likely RACT alternatives
Direct economic implications
Selected secondary economic impacts.
Each section presents detailed data and findings based
on analyses of the RACT guidelines, previous studies of
refineries, interviews and analyses.
12-1
-------
12.1 SPECIFIC mTHOOOtOSY AMD QCXLITY Of tSTIMATH
This) faction dascribas th« methodology fo* determining
•Stiaate* Oft
Industry statistics)
voe tali • lone
Processes for centrollinf voe emissions
Cost of controlling VOC emissions
Economic impact of emission control
for control of r«fin«ry vscuua producing systaas, vastewater
separators and process unit turnarounds ia the Stats of Ohio.
An ovsrsll assessment of the quality of th« estimates
is dstailsd in ths lattsr part of this faction.
12.1.1 Industry Statistics
Industry statistics on rsfinsriss w«r« obtained from
savtral sourcss. All data vert converted to a basa year,
1977, basad on th« following mathodoloo.iass
Ths nvunbar of rafinariss for 1577 was obtained
froa tha Oil and Gas Journal, March 20, 1978,
and tha Axnarican Patrolaua instituta*
Tha nuirJbar of tmployaas in 1977 w«s t»tL-nat«d
basad on data froa tha County Businass Patterni,
c«partmant of Corranarca, 197«.
Tha output in barrals par day of rafinad patroltua
liquids was astiaatad basad on data supplied by tha
Amaricaa Patrolaua Instituta for 1977.
Value- of shipaants was tstimatad basad on a valua
of rafinad product of U3.93 par barral. This
prica was obtainad froa tha National Patrolaua
Kavs fact Bock, 1J77.
Capital axpandituras wars astiaatad basad on data
froa tha Chasa Manhattan Bank.
-------
12.1.2 VOC Emissions
Uncontrolled emissions from wastewater separators and
process unit turnarounds were estimated using factors from
Control of Refinery Vacuum Producing Systems, Wastewater
Separators and Process Unit Turnarounds, EPA-450/2-77-025.
Uncontrolled emissions from vacuum producing systems were
estimated using Revision of Evaporative Hydrocarbon Emission
Factors, EPA-450/3-76-039.Emissions at existing levels of
control were estimated using the data supplied by the Ohio
Environmental Protection Agency. Emissions at complete
control were based on percent recoveries estimated in Control
of Refinery Vacuum Producing Systems, Wastewater Separators
and Process Unit Turnarounds, EPA-450/2-77-025.
12.1.2 Processes for Controlling VOC Emissions
Processes for controlling VOC emissions from refinery
vacuum producing systems, wastewater separators and process
unit turnarounds are described in Control of Refinery
Vacuum Producing Systems, Wastewater Separators and Process
Unit Turnarounds, EPA-450/2-77-025.These data provide
the alternatives available for controlling VOC emissions
from these refinery operations. Several studies of VOC
emission control were also analyzed in detail; and petroleum
trade associations, refinery operators and vapor control
equipment manufacturers were interviewed to ascertain the
most likely types of control processes which would be used
in refineries in Ohio. The specific studies analyzed were:
Technical Support Document Petroleum Refinery Sources
Illinois Environmental Protection Agency; Human Exposures
to Atmospheric Emissions from Refineries. American Petroleum
Institute, July 1973; and Economic Impact of EPA's Regulations
on the Petroleum Refining Industry. "—
The alternative types of vapor control equipment likely
to be applied to refinery vacuum producing systems, waste-
water separators and process unit turnarounds were described,
and percentage reductions from using each type of control
were determined. The methodology for the cost analysis based
on this scheme is described in the following paragraphs.
12-3
-------
12.1.4 Co it of Vapor Control Systems
Ths costs of vapor control systems wort dsvsloped byt
Dstsrmining the) alternative) typos of control
systems liksly to b« ussd
Developing installs* capital costs for each con*
trol system
applicable installed capital costs to
th« refineries in ths stats
Developing additional costs including:
Direct operating costs
Annual capital charges
Petroleum credit
Net annual cost.
Costs were d«t«rnin«d from analysts of th« following
previous studiast
Control of R»fintry Vacuum Producing Systtms,
wasttwattr Separators and Procass Unit Turnarounds,
EPA 450/2-77-025
Hydrocarbon Emissions from Rff in«ri«st Amtrican
PttrolauB Institute, October 1977
and from interviews with petroleum marketers' associations,
refinery operators, major oil companies and vapor control
equipment manufacturers.
Ths assignment of ths estimated cost of control for
refineries in Ohio required knowledge of th« levsl of
current controls* ths number of refineries and characteris-
tics of uncontrolled refinery processes. These data were
provided by the Ohio Environmental Protection Agency. It
is estimated bassd oa industry interviews with three)
refiners in Ohio that all of th« ssvsa refinsrs in Ohio
would currently comply with RACt retirements, except for
approximately five uncovered wastsvatsr separators and tea
process units at various refineries.
12.1.5 economic Impacts
The economic impacts were determined by analysing ths
leedtias) requirements needed to implement RACT; assessing
-------
the feasibility of instituting RACT controls in terms of
capital availability and equipment availability; comparing
the direct costs of RACT control to various state economic
indicators; and assessing the secondary effects on market
structure, employment, and productivity as a result of im-
plementing RACT controls in Ohio.
12.1.6 Quality of Estimates
Several sources of information were utilized in
assessing the emissions, cost, and economic impact of
implementing RACT controls on selected refinery operations
in Ohio. A rating scheme is presented in this section
to indicate the quality of the data available for use in
this study. A rating of "A" indicates hard data (i.e.,
data that are published for the base year); "B" indicates
data that were extrapolated from hard data; and "C"
indicates data that were not available in secondary
literature and were estimated based on interviews, analyses
of previous studies, and best engineering judgment.
Exhibit 12-1, on the following page, rates each study output
listed and the overall quality of the data.
12-5
-------
O.J. CaviroaM&tal frottctio*
• C
* Cxtxapolat«4 Utioatt*
Study Outputs
control
seatcvid* eo«t« of
•oi«lions
Ecenoaie utp«ct
Overall quality o*
data
-------
12.2 INDUSTRY STATISTICS
Industry facilities, statistics and business trends
for refineries in Ohio are presented in this section.
The discussion includes a description of the facilities
and their characteristics, a comparison of the size of the
refining industry to state economic indicators, a historical
characterization and description of the industry and an
assessment of future industry patterns. Data in this
section form the basis for assessing the impact on this
industry of implementing RACT to VOC emissions from selected
refinery operations.
12.2.1 Size of the Industry
There are seven refineries in Ohio, each listed in
Exhibit 12-2, on the following page, along with location,
crude capacity and vacuum distillation capacity. The
statewide employment, output, value of shipments and capital
expenditures for Ohio refineries are displayed in Exhibit 12-3,
following Exhibit 12-2.
12.2.2 Comparison of the Industry to the State Economy
In this section, the refining industry is compared to
the economy of the State of Ohio by comparing industry
statistics to state economic indicators. Employees in the
refining industry represent 0.05 percent of the total state
civilian labor force of Ohio. The value of refined products
from Ohio refineries represents approximately 12 percent of
the total value of wholesale trade in Ohio in 1977.
12.2.3 Industry Trends
Petroleum refining is the third largest industry in
the United States. Until the 1970s the output of the
refining industry had grown at a steady rate. Currently,
approximately 280 refineries are owned by approximately
140 firms, located in 40 of the 50 states, Guam,.Puerto
Rico, and the Virgin Islands. The refining industry
manufactures hundreds of distinguishably diffeient products,
which may be grouped into four broad product classes:
gasoline, middle distillates, residual and other.
The bulk of refining is done by firms which also market
refined products or produce crude oil, or both.
12-6
-------
U.S. KI.VII oi
Protection
IM OUIO
of rir»
OB.
Gulf Oil 0».
Oil Co. of Okio
Sun Oo.« lac.
Location
Canton
Fiadlay
Cleveb
Toledo
Lima
Toledo
Toledo
TOTALS
Crude
66
21
44
SI
177
tip
61S
Vacuu*
l»t illation
JJ
11
SI
22
a. HttPSOi Million* of barrels
*- n»f&i»t niiiion* of barrels per ^tand^id day.
Sourcei Oil fc C*e -VmrMl, Hereto 2O. 1976, pp\ 1OU-130. and American Pc-iroleim Inatltute
-------
11*1
Exhibit 12-3
U.S. Environmental Protection Agency
INDUSTRY STATISTICS FOR
REFINERIES IN OHIO
Establishments
Employees
Output
(000, Barrels
per day)
Yearly
Value of
Shipments
($ Million, 1977)
Yearly
Capital
Expenditures
($ Million, 1977)
2,500
590
3,000
a. Estimated by Booz, Allen & Hamilton Inc., based on County Business Patterns (Department of Commerce),
in 1976.
b. Based on data supplied by the American Petroleum Institute for 1977.
c. Assumes a value of $13.95 per barrel as average for 1977 (source: National Petroleum News
Factbook, 1977).
d. Assumes capital expenditures in 1976 in the state were the same percent of the total U.S.
expenditure on refineries as in 1977. Data for 1976 supplied by the Chase
Manhattan Bank.
-------
0240
twi
put tT^ »pn2d |o s^aoduiT ue
*tx
put
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12.3 THE TECHNICAL SITUATION IN THE INDUSTRY
This section presents information on refinery operation,
estimated VOC emissions from selected refinery operations
in Ohio, the extent of current controls in use, the
requirements of vapor control under RACT and the likely
RACT alternatives which may be used for controlling VOC
emissions from selected refinery.operations in Ohio.
12.3.1 Refinery Operations
The refinery operations considered in this report are:
Vacuum producing systems
Wastewater separators
Process unit turnarounds.
The emissions from these sources vary from one petroleum
refinery to another depending on such factors as refinery
size and age, crude type, processing complexity, application
of control measures and degree of maintenance.
12.3.2 Vacuum Producing Systems
Crude oil is a mixture of many different hydrocarbon
compounds. These compounds are distinguished by their
hydrocarbon type and by their normal boiling temperatures.
In crude oil refining the first processing step is the
physical separation of the crude oil into different fractions
of specific boiling temperature ranges. This separation is
performed in the atmospheric distillation unit and in' the
vacuum distillation unit.
Vacuum distillation receives its name from the sub-
atmospheric operating pressure of the fractionation tower(s)
employed. The vacuum distillation separates heavy petroleum
distillates from reduced crude (atmospheric distillation
tower bottoms). Vacuum fractionation with steam stripping
is employed to avoid excessive temperatures that would be
encountered in producing these heavy distillates by
atmospheric fractionation. P
In the vacuum distillation process, reduced crude is
first heated in a direct-fired furnace to a predetermined
temperature of approximately 730°F to 770°F. The hot oil is
then charged to the vacuum producing unit for separation of
distillates from the charge stock. Vacuum residuum is
12-8
-------
recovered as the fractionator'i bottom* product. Vacuum
fractionate™ art maintained at approximately 100 mrnHg
absolute pressure by one of the following
Steam ejectors with contact condensers
Steam ejectors with surface condensers
Mechanical pumps.
12.3.2.1 Steam Ejectors with Contact Condensers
Dirtct contact or barometric condensers are used for
maintaining a vacuum by condensing the steam used in the
ejector jet plus steam removed from the distillation column.
In the contact condenser, condensable VOC and steam from
the vacuum still and the jet ejectors are condensed by
intimately mixing with cold water. The noncondensable
voc is frequently discharge to the atmosphere. A two-stage
steam jet ejector is shown in Exhibit 12-4, on the following
page, and a three-stage ejector with a booster is shown
in Exhibit 12-5, following Exhibit 12-4. These are typical
of vacuum producing systems used in existing refineries.
12.3.2.2 Steam Ejectors with Surface Condensers
Modern refiners prefer surface condensers to contact
condensers. In a surface condenser, noncondensables and
process steam from the vacuum still, mixed with steam
from the jets, are condensed by cooling water in tube
heat exchangers and thus do not come in contact with cooling
water. This is a major advantage since it reduces by
25 fold the quantity of emulsified wastewater that must be
treated. A disadvantage of surface condensers is their
greater initial investment and maintenance expense for
the heat exchangers and additional cooling tower capacity
necessary for the cooling water.
12.3.2.3 Mechanical Vacuum Pumps
Steasi jets have) been traditionally favored over vacuum
pumps. Recently* however, because of high energy costs for
generating steam and the) cost for disposing of wastewater
from contact condensers, vacuum pumps are being used. Zn
addition to energy savings, vacuum pumps have fewer cooling
tower and/or wastewater treatment requirements compared to
•team ejector systems. Aside from the stripping steam, the
ejected stream is essentially all hydrocarbon so it can be
vented thorugh a small condenser before being combusted in
a flare or sent to the) refinery fuel gas system.
-------
T, c „ • Exibit 12-4
U.S. Environmental Protection Agency
VACUUM PRODUCING SYSTEM UTILIZING
A TWO STAGE CONTACT CONDENSER
CONDENSER WATER
r 1st STAGE: T J*STEAM
INCOMING
NONCONDENSABLES
AND PROCESS
STEAM
"BAROMETRIC LEG
BAROMETRIC
CONDENSERS
2nd STAGE
t
TO ATMOSPHERE
OR TO A
CONDENSER FOR
JET STEAM
HOT WELL
Source; Control of Refinery Vacuum Producing Systems,
Wastewater Separators and Process Unit Turnarounds,
EPA-450/2-77-025.
-------
txhifeit 12-1
O.S. tsvirooMAtal Protection A?«ncy
VXCUW FKOOQCXN6 SYSTDI UTXUZXNO
BOOJTO CJICTO* rO« LOW VACUUM SYSTD>S
JETST£AM
I
L
CONDENSER WATER
I
INCOMING
NCNCONOENSABlES
AND PROCESS STEAM
STAGE
BAROMETRIC LEG
f
TO ATMOSPHERE
OR A CONDENSER
OR TO OTHER
NONCQNOENSING
STAGES
HOT WELL
Control of >«fin«r» v«cu\ai
S«p4r«tcr«
Froct«g Unit
-------
12.3.3 Wastewater Separators
Contaminated wastewater originates from several sources
in petroleum refineries including, but not limited to, leaks,
spills, pump and compressor seal cooling and flushing,
sampling, equipment cleaning, and rain runoff. Contaminated
wastewater is collected in the process drain system and
directed to the refinery treatment system where oil is
skimmed in a separator and the wastewater undergoes additional
treatment as required.
Refinery drains and treatment facilities are a source
of emissions because of evaporation of VOC contained in waste-
water. VOC will be emitted wherever wastewater is exposed
to the atmosphere. As such, emission points include open
drains and drainage ditches, manholes, sewer outfalls and
surfaces of forebays, separators and treatment ponds. Due
to the safety hazards associated with hydrocarbon-air mix-
tures in refinery atmospheres, current refinery practice
is to seal sewer openings and use liquid traps downstream
of process drains, thus minimizing VOC emissions from drains
and sewers within the refinery.
12.3.4 Process Unit Turnarounds
Refinery units such as reactors, and fractionators,
are 'periodically shut down and emptied for internal inspec-
tion, and startup is termed a unit turnaround.. Purging
the contents of a vessel to provide a safe interior
atmosphere for workmen is termed a vessel blowdown. In a
typical process unit turnaround, liquid contents are pumped
from the vessel to some available storage facility. The
vessel is then depressurized, flushed with water, steam
or nitrogen and ventilated. Depending on the refinery
configuration, vapor content of the vessel may be vented
to a fuel gas system, flared or released directly to
atmosphere. When vapors are released directly to atmosphere,
it is through a blowdown stack which is usually remotely
located to ensure that combustible mixtures will not be
released within the refinery.
12.3.5 Emissions and Current Controls
This section presents the estimated VOC emissions from
selected refinery operations in Ohio in 1977 and the
current level of emission control already implemented in the
state. Exhibit 12-6, on the following page, shows total
12-10
-------
U.S. I i>v t(uu»ojtc<*l Protect ton
t^TINATfcU UVU440CAUIKJM UUSS1G
S£l£LTU> M£?lMUtv OPUUTIOMS IM GsUO
of
••fineries
Without
Control
Vac
Mast
Producing Syst«
,er S«|»4rator«
Unit Tur»«round»
2.02O
8.979
6S.09I
TOTAL 76.096
At
is
Control
At
114
A. Emissions are estimated using factors from Control of
Vacuun Producing Systena,
aixt frocks Unit Turnaroonda, tPA-4SO/2-77-O2S.
t»ibkion« fro» VACUUM produclnq
a). Current level of
**• eatimete* to
••tiisAC.«d using le«4
-------
estimated emissions from the 7 refineries in Ohio, if
there were no emission controls for vacuum producing
units, wastewater separators or process unit turnarounds.
The estimated emissions at the existing level of control
are also shown along with estimated emissions at the
complete level of control.
In Ohio, refineries have most likely implemented control
measures for vacuum producing units, most process unit
turnarounds and at least two wastewater separators. An
estimated five wastewater separators at refineries in Ohio
are presently not covered.
Emissions were estimated based on EPA emission factors
reported by U.S. EP£. The EPA is currently updating emission
factors based on a new analysis of previous test data. EPA
reports the emission factors may change as a result of
their ongoing program; therefore, caution must be exercised
in using these emission factors.
12.3.6 RACT Guidelines
The RACT guidelines for VOC emission control from
vacuum producing systems, wastewater separators and process
unit turnarounds require the following control systems:
Vacuum producing units—The control measure
for vacuum producing units is to vent the non-
condensable hydrocarbon stream to a flare or to
the refinery fuel gas system.
Wastewater separators—The control measure for
emissions from wastewater separators is to cover
the separators. Emissions are collected and
sent to the flare or refinery fuel gas system.
Process unit turnarounds—Process unit turnaround
emissions are controlled by piping emissions to a
flare or to the refinery fuel gas system.
Proper operation and maintenance of equipment will also
reduce emissions from cracks and leaks in the system.
12.3.7 Selection of the Most Likely RACT Alternative
The techniques for the control of VOC emissions from
refinery vacuum producing systems, wastewater separators
and process unit turnarounds are discussed in detail in
this section.
12-11
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12.3.7.1 Controlling Emission* from Vacuusj Producing Units
Steaa ejectors with contact condensers, steaa ejectors
with surface* condensers and mechanical vacuua pumps all
discharge a streaa of noncondensable VOC while generating
the- vacuua. staaa tjactors with contact condensers also
have potential VOC emissions from their hot wells, voc
emissions frosi vacuum producing systems can be prevented
by piping the noncondensable vapors to an appropriate
firebox or incinerator or (if spare compressor capability
is available) compressing the vapors and adding thea to
refinery fuel gas. The hot veils associated with contact
condensers can be covered and the vapors incinerated.
Controlling vacuum producing systems in this manner will
result in negligible emissions of hydrocarbons from this
source. Such systems are now in commercial operation
and have been retrofitted in existing refineriee. For
purposes of this report it is assumed that recovered VOC
are used in the refinery fuel gas system.
12.3.7.2 Controlling Emissions from Wastewater Separators
Reasonable control of VOC emissions from wastewater
separators consists of covering the forebays and separator
sections/ thus minimizing the amount of oily water exposed
to atmosphere. Commercially operating systems include a
solid cover with all openings sealed, totally enclosing
the compartment liquid contents, or a floating pontoon or
dcuble-dack type cover, equipped with closure seals to
enclose any space between the cover's edge and compartment
wall. Also/ any gauging and sampling device in the com-
partment cover can be designed to provide a projection into
the liquid surface to prevent VOC froa escaping. The
sampling device can also be equipped with a cover or lid
that is closed at all times except when the device is in
actual use. It is assumed that 99 percent of these emissions
are recovered and used in the refinery fuel cas systea based
on data reported in Control of Refinery Vacuua Producing
Systems Wastewater Separators and Process Unit Turnarounds.
p.43.*
12.3.7.) Controlling Emissions froa Process Unit Turnaround
A typical process unit turnaround would include
pumping the liquid contents to storage, purging the vapors
by depressurixing, flushing the remaining vapors with water/
steaa or nitrogen, and ventilating the vessel so workmen
-------
can enter. The major potential source of VOC emissions is
in depressurizing the vapors to the atmosphere. After the
vapors pass through a knockout pot to remove the condensable
hydrocarbons, the vapors can be added to the fuel gas system,
flared or directly vented to atmosphere. Atmospheric
emissions will be greatly reduced if the vapors are
combusted as fuel gas or flared until the pressure in the
vessel is as close to atmospheric pressure as practicably
possible. The exact pressure at which the vent to the
atmosphere is opened will depend on the pressure drop of
the disposal system. Most refineries should easily be
able to depressurize processing units to five psig or
below, before venting to the atmosphere. Many refineries
depressurize a vessel to almost atmospheric pressure and
then steam the vessel to the flare header before opening
it to atmosphere. In some refineries, the hydrocarbon
concentration is as low as 1 percent to 30 percent before
the vessel is vented to atmosphere. Based on current
industry practise at two refineries in Ohio, it is assumed
that no VOC emissions are recovered and used in the refinery
fuel gas system.
The sections which follow discuss the costs of imple-
menting these control techniques at refineries in Ohio.
12-13
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12.4 COST AND HYPBOCAMQK ftgOUCTIOM BENWT CVALCATIONI
TH« MOST LIKELY BACT ALTERNATIVE*
Cost* fey VOC emission control equipment *r« presented
in this section. Th« costs for the) thre« emission control
systems described in Section 12.3 are) described for vacuum
producing systems, vastevater separators and process unit
turnarounds individually, followed by an extrapolation
of coats for an estimated five uncovered wastewater
separators and ten process units for the statewide industry.
12.4.1 Costs for Omission Control Systems
The installed capital- costs for the three emission
control systems (summarized in Exhibit 12*7, on the following
page) were derived from analysis of the RACT guidelines, from
interviews with refinery operators and major oil companies
and from previous cost and economic studies of refineries.
Control measures for vacuum producing systems at a
typical 100/000 barrel per day capacity refinery, range in
casts from approximately 524,000 for vacuum producing systems
-3 ing either surface condensers or .Technical pumps to
352,000 for vacuum producing systems using contact (baro-
retric) condensers. These cost estimates are based on the
refinery esquiring the following «quipm«nt.
Tor vacuum producing systems using other surface
condensers or machanical pumps, typical equipment
includes!
200 feet of piping
6 valves
1 flame arrester.
for vacuvaa producing systems using contact
(barometric) condensers, typical equipment includes:
400 feet of pipirig
12 valves
• 2 flam* arresters
Hotwell cover are* of 100 ft2.
Zn an interview with Exxon it was reported that control
of wastewater separators using covers can range from $30 per
square foot to $2,000 per square foot, depending upon the
types off covers used. The RACT guideline document reports
a cost of $12. SO per square foot which has been used in this
Analysis. Refineries with old wastewater separate:-* • n.y «e
required to rebuild the separators. Such costs have :.ot been
reflected in this report because of lark of daf
-------
Exhibit 12-7
U.S. Environmental Protection Agency
INSTALLED CAPITAL COSTS OF VAPOR CONTROL SY:
FOR VACUUM PRODUCING SYSTEMS, WASTEWATE!
SEPARATORS AND PROCESS
UNIT TURNAROUNDS
Vacuum Producing
Systems
Surface
Condensers
or Mechanical
($, 1977)
Contact
Condensers
($, 1977)
Wastewater
Separators
($, 1977)
Process Unit
Turnarounds
($, 1977)
24,000
52,000
63,000
100,000
Note: Capital costs are for a typical 100,000 barrel per day refinery
a. Equipment includes 200 feet of piping, 6 valves and 1 flame
arrester.
b. Equipment includes 400 feet of piping, 12 valves, 2 flame
arresters, 100 ft.2 area hotwell cover.
2
c. Cover for 5,000 ft. wastewater separator.
d. Equipment includes 1,000 ft. of piping and 20 valves.
Source: Control of "Refinery Vacuum Producing Systems^ Wastewater
Separators and Process Unit Turnarounds, EPA-450/2-77 25,
pp. 4-10.
-------
Equipment raquirad for controlling emissions fro* pro*
cess unit turnarounds basically include piping and valves.
Tha installad capital coats for a typical 100,000 barrel
par day rafinary would be) in tha ranga of 910,000 par pro*
cess unit} thara art-* on tha avaraga tan procaaa unita for
a 100,000 barrel par day rafinary.
Costa for actual rafinaraia will diffar from thia typical
refinary depending on tha numbar of vacuua producing tystama
and tha amount of piping required, tha area of tha waatavatar
separator and tha typa of saparator and tha nunbar of process
unita that naad control*
Coat aatimataa obtainad from Control of Rafinary vacuum
Producing Systems, wastewater Separators and Process Unit
Turnarounds, EPA-450/2-7y-025 and verified^ thoruah intar-
views wilt vary from ona rafinary to anothar, raflacting tha
variability in rafinary siza, configuration, aga, product
.-ix and dagraa of control.
In Ohio, it ia tstimatad that savan rafinarits hava
alr«ady incurrad coata for control of vacuum producing
systema/ nost procasa unit turnarounds and all but approx-
;.-r.at«ly fiva wasttwatar separators.
Tha remainder of this section therefore presents the
costs for covering tha fiva uncovered wastewater separators
ar.d an estimated ten process units.
12.4.2 Extrapolation to tha Statewide Industry
Exhibit 12-1, on tha following paga, shows tha extrap-
olation of vapor racovary costa for covering fiva wastewater
separators and tan procaaa units to tha statewide industry
in Ohio. Tha aatimataa ara basad on tha following:
Each waatavatar saparator ia, on tha avaraga,
7,500 samara faat. The) actual siza of tha wasta-
watar saparators will vary from ona rafinary to
anothar, SOM largar and sotna smaller than tha
avaraga) sixa datarminad through interviews.
Each of the) tan procaaa units can ba controlled
at a coat of $10,000.
Installed capital coat includes parts and labor.
-------
Exhibit 12-8
U-.S. Environmental Protection Agency
STATEWIDE COSTS FOR VAPOR CONTROL
SYSTEMS FOR REFINERY WASTEWATER SEPARATOI
AND PROCESS UNIT TURNAROUND
Characteristics/Cost Item Data
Number of process units 10
Number of wastewater separators 5
Emission reduction 14,521
(tons/year)
Installed capital 571,000
($, 1977}
Direct annual operating 17,130
cost ($, 1977)
Annual capital charges 142,750
($, 1977)
Annual gasoline credit 543,361
($, 1977)
Net annual credit 383,481
($, 1977)'
Annual credit per ton of 26
emissions reduced
. C$ per ton)
a. Based on 95 percent of reduced emissions of 5,970 tons recovered
from five previously uncovered wastewater separators and valued
at $13.00 per barrel. The gasoline credit does not include
emissions which were reduced by sending to a flare system
(process unit turnaround emissions).
Source: Booz, Allen & Hamilton. Inc.
-------
Annual1ltd direct operating costs, expected to be
3 percent of installed capital costs*1 include cost*.
for labor* utilities, recordkeeping and training.
Annualixed capital charges, estimated to b« 23
percent of installed capital costs, include
costs for depreciation, interest, maintenance,
taxes and insurance.
The petroleua credit is based on recovering 95
percent of emissions from wastewater separators
and is valued at $13.00 per barrel.
Net annualized costs are the sua of the capital
charges and direct operating costs, less the
petroleua credit.
Actual costs to refinery operators may vary, depending on
the type of manufacturer's equipment selected by each
refinery operator. However, because three of the refineries
in the state are above 100 MBPSO and four are below, this
estimated costs for the 100 MBPSO are reasonable.
Based on the above, the total cost to the industry for
installing vapor recovery equipment on the five remaining
wastewater separators and ten process units is estimated to
exceed $570,000. The amount of petroleum recovered is valued
at 5543,361. The annual credit per ton of emissions controlled
is estimated to be $26.
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12.5 DIRECT ECONOMIC IMPACTS
This section presents the direct economic impacts of
implementing RACT for refineries in Ohio. The impacts in-
clude capital availability, technical feasibility and value
of shipments. It is estimated that emissions are currently
controlled from vacuum producing systems and all but ten
process unit turnarounds. It was further estimated that
there are five uncovered wastewater separators in Ohio.
Capital availability—The Ohio refineries will
need to raise an estimated $570,000 to implement
RACT controls. It is expected that the refiner
will be able to raise sufficient capital since
the petroleum credit will more than offset the
cost of implementing RACT controls.
Technical feasibility—Emission controls for
vacuum producing units, wastewater separators,
and process unit turnarounds have been success-
fully demonstrated in several refineries in the
United States. It is expected that Ohio will be
able to successfully implement emission controls
to comply with RACT.
Value of shipments—Based on U.S. EPA emission
factors, it is estimated that $543,000 worth
of petroleum liquids may be recovered annually by
implementing RACT.
12-17
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12.C SILtCTlD SCCONOAM ECONOMIC IMPACTS
This section discusses) the secondary impact of imple-
menting RACT on employment, market structure and productiv*
Ewploym«nt—Ho charge in employment is anticipated
from implementing RACT in Ohio.
Market structure—The market structure will remain
unchanged when RACT is implemented in Ohio.
Productivity—Worker productivity will probably be
unaffected by implementing RACT in Ohio.
Exhibit 12-9, on tx.e following page, summarizes the
findings of this chapter.
-------
Exhibit 12-9
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF IMPLEMENTINl
RACT FOR REFINERY VACUUM PRODUCING SYSTEMS, WASTEWATE1
SEPARATORS AND PROCESS UNIT TURNAROUNDS
IN THE STATE OF OHIO
Current Situation
Number of potentially affected
facilities
Indication of relative impor-
tance of industrial section to
state economy
Current industry technology
trends
1977 VOC actual emissions
Industry preferred method of
VOC control to meet RACT
guidelines
Estimated method of VOC
control to meet RACT guidelines
Discussion
1977 industry sales were $3 billion. The
estimated annual crude oil throughput was
215million barrels
Most refineries have installed controls equiv
alent to RACT with the exception of 5 uncover
wastewater separators and 10 uncontrolled
process units
15,000 tons per year
Vapor recovery of emissions by piping
emissions to refinery fuel gas system or
flare and by covering wastewater separators
Vapor recovery of emissions from process
unit to refinery fuel gas system, cover
wastewaster separators and piping emissions
from process units to flare
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized credit
(statewide)
Price
Energy
Productivity
Employment
Market structure
VOC emission after control
Cost effectiveness of control
Discussion
$571,000
$383,000
No major impact
Assuming full recovery of emissions
—net savings of 101,600 barrels annually
No major impact
Mo major impact
No major impact
764 tons per year .
$26 annualized credit/annual ton of
VOC reduction
Source: Booz, Allen & Hamilton Inc.
-------
BIBLIOCPXPHY
control of Rafinary Vaeuua Producing Syatamt, waitavatar
Stparatora and Procaaa Unit Turnarounds, EP*-4SO/a-77-023,
1977.
Rayiaion of gvaporativa Hydrocarbon Sminion facton, PB-267
659, Radian Corp., Augu«t 1974.
Control of Hydrocarbon Efrisiioni from Patrolaua Liquidi,
F3-246 650, Radian Corp., S«pt«tn^«r 1973.
Pe^ulatory Guidanet for Control of volatile Organic Compound
E.Ttlssioni from 15 Cittqoritt of Stationary Sourc««, EPA 905/
2-73-001, April 1971.
Systems and Cotti to Control Hydrocarbon emissions from
Stationary Scurctt, PB-236 921, Enviroruntntal Protaction
Agency, Saptan&ar 1974.
Economic Impact of EPA* t Btqulatiorn on tha Patrolaum Safir.inq
Ir.sustry, P8-253 759. SobotXa and Co., Inc.. April 1976.
Hydrocarbon pniniofn from Raf ir.ariai, Anarican Patrola'oa
rr.stituta, Publication No. 928, July 1973.
Technical Support Doguirant, Patrola'jg Ragintry Sourcat,
Illinois Envlrorunantal Protaction Agtncy.
Petroltom p.afininq Enginaarinq, w.L. Nalson, McCraw-Hill 3ooV
Ccr?*ny, inc. Naw York, 1951.
P«troleun Rafinary Manual/ Hanry Martin Noal, aainhold Publish*
Corporation, Saw York, 193f.
Oil and Cat Journal, April 23, 1973.
Petrolaua Products Handbook, Virgil I. Guthria, Editor, Mcgrtw
.11 il Book Company, Naw YorX, 1960.
-------
Private conversations with the following:
Mr. .Robert Watt, Plant Manager, Ashland Petroleum Oil Co.,
Canton Ohio refinery.
Gulf Oil Company, Cleves, Ohio refinery
Standard Oil Company of Ohio, Lima, Ohio refinery
Ohio Petroleum Marketers Association, Mr. Roger Dreyer
Mr. Ed Sullivan, Amoco Oil Refinery, Wood River, Illinois
Texaco Refinery, Lockport, Illinois, Mr. Oliver Goodlander.
Exxon Research, Mr. Fritz, New Jersey
Exxon Corporation, Mr. Gorden Potter, Houston, Texas
U.S. EPA, Mr. Chuck Masser, Research Triangle Park,
North Carolina
American Petroleum Institute, Mr. Karlowitz, Washington, D.C,
Mr. William Juris, Ohio Environmental Protection Agency
-------
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13.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
TANK TRUCK GASOLINE
LOADING TERMINALS
THE STATE OF OHIO
-------
-------
13.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
TANK TRUCK GASOLINE
LOADING TERMINALS IN
THE STATE OF OHIO
This chapter presents a detailed analysis of the impact
of implementing RACT controls for tank truck gasoline loading
terminals in the State of Ohio. The chapter is divided
into six sections including:
Specific methodology and quality of estimates
Industry statistics
The technical situation in the industry
Cost and VOC reduction benefit evaluations for
the most likely RACT alternatives
Direct economic implications
Selected secondary economic impacts.
Each section presents detailed data and findings based
on analyses of the RACT guidelines, previous studies of tank
truck gasoline loading terminals, interviews and analysis.
13-1
-------
13.1 SPECIFIC METHODOLOGY ANB QUALITY Of ESTIMATES
This faction describes the methodology for determining
estimates oft
Industry statistic*
voc emission*
Processes for controlling voc emissions
Cost of controlling VOC emissions
Economic impact of emission control
for tank truck gasoline loading terminals in the State of
Chio.
An overall assessment of the quality of the estimates
is detailed in the) latter part of this section.
13.1.1 Industry Statistics
Industry statistics on tank truck gasoline loading
terminals were obtained from several sources. All data
were converted to a base year/ 1977, based on the following
specific methodologies*
The number of establishments for 1977 was extrap-
olated from the 1972 Census of wholesale Trade/
Petroleum BulH Stations and Terminals,based on
the decline in the number of terminals from L967
to 1972.
The number of employees in 1977 was derived by
determining the number of employees per establish-
ment in 1972 from the 1972 Census of wholesale
Trade/ Petroleum Bulk Stations and Terminals, and
multiplying this factor by the number of establish-
ments estimated for 1977.
The number of gallons of gasoline sold from bulk
plants and terminals in 1977 in the State of Ohio
was obtained from data in the Ohio emissions
inventory. The percentage of sale* from terminals
was estimated to b« 70 percent of this total based
on data in th« 1973 Census cf wholesale Trade,
Petroleum Bulk Stations and Terminals*
Sales/ in dollars, of motor gasoline for 1977 were
estimated by multiplying the number of gallons of
gasoline sold in 1977 by the national dealer tank*
wagon price in 1977 (42.SC/gallon), which was
reported in the National P^trolfua Vevs Fact Book. 1978.
-------
13.1.2 VOC Emissions
VOC emissions for tank truck gasoline loading terminals
were estimated based on gasoline throughput, emission fac-
tors and characteristics of tank truck gasoline loading
terminals presented in Hydrocarbon Control Strategies for
Gasoline Marketing Operations, EPA-450/3-78-017.
13.1.3 Processes for Controlling VOC Emissions
Processes for controlling VOC emissions for tank truck
gasoline loading terminals are described in Control of
Hydrocarbons from Tank Truck Gasoline Loading Terminals,
EPA-450/2-77-026. These data provide the alternatives
available for controlling VOC emissions from tank truck
gasoline loading terminals. Several studies of VOC emission
control were also analyzed in detail, and interviews with
petroleum trade associations, terminal operators and vapor
control equipment manufacturers were conducted to ascertain
the most likely types of control processes which would be
used in terminals in Ohio. The specific studies analyzed
were: Demonstration of Reduced Hydrocarbon Emissions from
Gasoline Loading Terminals, PB-243 363; Systems and Costs
to Control Hydrocarbon Emissions from Stationary Sources,
PB-236 921; and The Economic Impact of Vapor Control in the
Bulk Storage Industry, draft report to U.S. EPA by Arthur
D. Little.
The alternative types of vapor control equipment likely
to be applied to tank truck gasoline loading terminals were
analyzed. Model plants reflecting each control alternative
were defined and each type of control alternative used was
applied to the number of tank truck gasoline loading ter-
minals in the state. The methodology for the cost analysis
of VOC emissions control is described in the following para-
graphs.
13.1.4 Cost of Vapor Control Systems
The costs of vapor control systems were developed by:
Determining the alternative types of control
systems likely to be used
Estimating the probable use of each type of con-
trol system
Defining systems components
13-3
-------
Developing installed capital cost* for system*
components
Aggregating installed capital costs for each
alternative control system
Defining two model terminals bated on throughput
levels
Developing costs of the alternative control systems
for the two model terminals including!
Installed capital cost
Direct operating costs
Annual capital charges
Gasoline credit
Net annual cose
Assigning model terminal costs to terminals in
Ohio
Aggregating costs to the total industry in Ohio.
Costs w«re determined mainly from analyses of the RACT
guidelines and from interviews with petroleum marketers'
associations, terminal operators and vapor control equip-
~ent manufacturers.
The assignment of the estimated cost of control to
Ohio required a profile of a tank truck gasoline loading
terminals in the state by sir.«« of gasoline throughput.
-attonal profile is presented which is assumed to approximate
the terminals in Ohio.
13.1.5 Economic Impact
The economic impacts were determined by analyzing the
lead time) requirements needed to implement RACTj assessing
the feasibility of instituting PACT controls la terms of
capital availability and equipment availability; comparing
the direct costs of RACT control to various state economic
indicators; and assessing the secondary effects on market
structure, employment and productivity as a result of im-
plementing RACT controls in Ohio.
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13.1.6 Quality of Estimates
Several sources of information were utilized in assessing
the emissions, cost and economic impact of implementing
RACT controls on tank truck gasoline loading terminals in
Ohio. A rating scheme is presented in this section to in-
dicate the quality of the data available for use in this
study. A rating of "A" indicates hard data (i.e., data
that are published for the base year); "B" indicates data
that were extrapolated from hard data; and "C" indicates
data that were not available in secondary literature and
were estimated based on interviews, analyses of previous
studies and best engineering judgment. Exhibit 13-1, on the
following page, rates each study output listed and the
overall quality of the data.
13-5
-------
exhibit U-l
U.S. Znvironsvant*! frottction
CAtA QUALITY
• C
A Extrapolata4 tstiaats*
Study Output* Hard D«ti Q«ta 0«t«
Industry statistics
Cast of «missions •
control
costs of •
emissions
Economic impact 41
Overall quality of ^
data *
Sourcei 8o«S, Allan t Hamilton, Inc.
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13.2 INDUSTRY STATISTICS
Industry characteristics, statistics and business trends
for tank truck gasoline loading terminals in Ohio are pre-
sented in this section. The discussion includes a descrip-
tion of the number of facilities and their charcteristics,
a comparison of the size of the gasoline terminal industry
to state economic indicators, a historical characterization
and description of the industry and an assessment of future
industry patterns. Data in this section form the basis for
assessing the impact on this industry of implementing RACT
on tank truck gasoline loading terminals in Ohio.
13.2.1 Size of the Industry
There were an estimated 50 tank truck gasoline loading
terminals, as of 1977, in Ohio. Industry sales from
terminals in Ohio were in the range of $1.480 billion, with
an estimated yearly throughput of 3.484 billion gallons of
gasoline. The estimated number of employees in 1977 was
1,120. These data and the sources of information are
summarized in Exhibit 13-2, on the following page. Annual
capital investments have not been estimated. In general,
tank truck gasoline loading terminal investments are for
plant and equipment to replace worn-out facilities, modernize
the establishments or improve operating efficiencies.
13.2.2 Comparison of the Industry to the State Economy
A comparison of the tank truck gasoline loading ter-
minal industry to the economy of the State of Ohio is shown
in this section by comparing industry statistics to State
economic indicators. Employees in the tank truck gasoline
loading terminal industry represent 0.02 percent of the
total State civilian labor force of Ohio. The value of
gasoline sold from terminals represented less than 6 per-
cent of the total value of wholesale trade in Ohio in 1977.
13.2.3 Characterization of the Industry
Tank truck gasoline loading terminals ar3 the primary
distribution point in the petroleum product marketing net-
work as shown in Exhibit 13-3, following Exhibit 13-2.
Terminals receive gasoline from refineries by pipeline,
tanker or barge.
13-6
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Exhibit 13-3
tf.J. Environment*! Protection Agency
INWJSTW STATISTICS fOl TANK TftUCK
t£AOiM4 TXUMINAU IN OHIO
tfuabe* of Mab«t of
Establishments) Saploveei Sale« SasoUne) So 14
(I Iillion, 1577) (Billions ol Gallons)
50* 1,12^ 1.480C 3.484
a. 3cox, Allen ft Hamilton Inc. «8timat« ba««4 on the 1972 Ctntui of
Tra<3«, Pttroltvm Bulk Stations *nd Ttrainalt.
b. 3oo x, Allan ft Hamilton inc. «*tiin*t« bas«4 on th« ratio of tht
bar of «aploy«t« to th« number of tstablxshs«nt« in 1972.
c. Munb«r of gallons of motor gasoline sold in 1977 multiplied by
-:-.« national dealer tanfcvagon price Ln 1977 (42. Sic/gallon) .
d. 3oo z, Allen 6 Hamilton Inc. eati.Tuate based on data from the
emissions inventory.
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Exhibit 13-3
U.S. Environmental Protection Agency
GASOLINE DISTRIBUTION NETWORK
REFINERY
V
BULK
PLANT
"T
I
i
I
V
SMALL VOLUME
ACCOUNTS
AGRICULTURAL
COMMERCIAL
RETAIL
TERMINAL
V
..Y
LARGE VOLUME
ACCOUNTS
RETAIL
COMMERCIAL
AGRICULTURAL
—o
CUSTOMER
PICK-UP
O
Typical delivery route of truck-trailer
Typical delivery route of account truck
Typical transaction with consumer coming to supplier
Final Product Usage
Source; Economic Analysis of Vapor Recovery Systems on Small
Bulk Plants. EPA 340/1-77-013, September 1976, p. 3-2.
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Most gasoline terminals load all of the petroleum
product they receive into truck transports at the terminals'
loading racki. These truck transports usually have storage
capacities between 8,000 and 9,000 gallons and deliver gaso-
line to service stations and bulk gasoline plants for further
distribution.
Over two-thirds of the gasoline terminals in the United
Statts are owned by major oil companies and refiner/marketers.
The ramaining gasoline terminals are owned by independents.
The major oil companies and regional refiners own a propor-
tionately greater number of the Large gasoline terminals and
proportionately fewer of the small gasoline terminals.
Approximately ten years ago, petroleum companies began
to consider gasoline terminals as separate profit centers.
Terminals are now expected to recover all operating expenses
as well as to provide an acceptable return on capital. Since
terminals are now treated as profit centers, petroleum mar-
keters have closed many uneconomic and marginal facilities
throughout the country. Some marketers have withdrawn
from selected regions of the country as part of their over-
all corporate strategy. Gasoline terminals in these markets
are being consolidated, sold or closed.
Gasoline terminals are generally located near refineries
pipelines and large metropolitan areas. The daily through-
?-t ranges from 30,000 gallons per day to over 600,000
gallons per day. In a report entitled Hydrocarbon Control
Strategies for Gasoline Marketing Operations, terminals
nationally are characterized as having sixty percent fixed-
roof tanks, forty percent floating roof tanks and twenty-
five percent of terminals bottom fill. These character-
istics are assumed to characterize terminals in Ohio.
Exhibit 13-14, on the following page, shows an estimated
national distribution of gasoline terminals by throughput.
This distribution is assumed to be representative of terminals
in Ohio, for the purpose of this analysis.
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13.3 THE TECHNICAL SITUATION IN THE INDUSTRY
This section presents information on tank truck gasoline
loading terminal operations, estimated VOC emissions from
terminal operations in Ohio, the extent of current controls
in use, the requirements of vapor control required by RACT
and the likely RACT alternatives which may be used for
controlling VOC emissions from gasoline terminals in Ohio.
13.3.1 Tank Truck Gasoline Loading Terminal Operations
Tank truck gasoline loading terminals are the primary
distribution facilities which receive gasoline from pipelines,
tankers and barges; store it in above-ground storage tanks;
and subsequently dispense it via tank trucks to bulk gaso-
line plants and service stations. Tank truck gasoline
loading terminals with an average daily gasoline throughput
of 20,000 gallons per day or more (as defined by EPA) require
vapor control equipment to reduce VOC emissions from gasoline
terminal operations.
13.3.1.1 Facilities
The following description of tank truck gasoline
loading terminals was based on a synthesis of"information
from:
Control of Hydrocarbons from Tank Truck Gasoline
Loading Terminals, EPA-450/2-77-026
Illinois "Technical Support Document, Bulk
Gasoline Terminals, Bulk Gasoline Plants and
Fixed Roof Petroleum Storage Tanks"
Industry interviews
Systems and Costs to Control Hydrocarbon Emissions
from Stationary Sources, PB-236 921.
Gasoline terminal facilities generally include tanks
for gasoline storage, loading racks and incoming and out-
going tank trucks.
The most prevalent type of gasoline storage tank found
at gasoline terminals is the above-ground storage tank.
These tanks are usually cylindrical with domed ends (ver-
tical or horizontal). Typical storage capacities range from
13-8
-------
500,009 to 3,000/000 gallons and ttch terminal averages
4.S tank*.
A typical loading rick used for dispensing gasoline to
account truck* includes shut-off valves, meters, relief
valves, electrical grounding, lighting, by-pass plumbing and
loading arms. Loading may be by bottom fill, top splash or
top submerged fill. It is assumed bottom filling is used at
25 percent of the terminals in Ohio and that the remaining
terminals use top submerge filling. A typical tank truck
gasoline loading terminal has one or two loading racks equip-
ped with 4 to 20 loading arms, with an average gasoline
rate of 493 gallons per minute.
Trailer-transport trucks are used to supply bulk plants
and gasoline service stations with gasoline. Trailer-
transport trucks have four to six compartments and deliver
approximately 8,000 to 9,000 gallons of gasoline to the bulk
plant or service station. Most commonly, trailer-transport
trucks are owned by oil companies or commercial carriers.
There are several trucks per facility. One terminal operator,
who pumps 1.26 million gallons of gasoline per day, reported
that he owns 30 trucks.
13.3.1.2 Operations
VOC emissions occur at various stages in tank truck
gasoline loading terminal operations. Gasoline is leaded
into trailer-transport trucks from gasoline storage tanks
via loading racks. The two methods of loading gasoline into
tank trucks are bottom filling and top submerged filling.
Emissions occur from this operation through the displacement
of vapor laden air in the tank truck with gasoline, leakage
in seals and overfilling the truck, vapor collection and
proper operation and maintenance are the recommended methods
for controlling these eaissions.
Another major source of emissions is froa vaporization
of gasoline in the storage tank because of changes in pres-
sure in the tank caused by variation in temperature. These
emissions, referred to as breathing losses, are controlled
by adjusting the pressure relief valve on the storage tank
«nd eqvtpping storage tanks of greater than 40,000
capacity with internal floating riofa.
Vapors collected during tank truck filling are con-
densed or oxidized by vapor controlled equipment discussed
i-n detail in Section 13.3.4.
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13.3.2 Emissions and Current Controls
This section presents the estimated VOC emissions from
tank truck gasoline loading terminals in Ohio in 1977
and the current level of emission control already imple-
mented in the state. Exhibit 13-5, on the following page,
shows the total estimated emissions in tons per year from
gasoline terminals in Ohio. The estimated VOC emissions
from the 50 tank truck gasoline loading terminals are
17,378 tons per year.
It is estimated that bottom filling is used at 25
percent of the gasoline terminals in Ohio and that the
remaining terminals employ top submerge filling. This
estimate is based on national data presented in Hydrocarbon
Control Strategies from Gasoline Marketing Operations,
EPA-450/3-78-017. An assumption was made, for purposes
of this report that no terminals in Ohio are currently
equipped with vapor recovery systems, since no data was
obtained through interviews to indicate otherwise.
13.3.3 RACT Guidelines
The RACT guidelines for VOC emission control from tank
truck gasoline loading terminals require the following con-
trol systems:
Top submerged or bottom fill of gasoline storage
tanks and outgoing tank trucks
Vapor collection from trailer-transport truck
loading
Vapor recovery or thermal oxidation of collected
vapors
Proper operation and maintenance of equipment.
Exhibit 13-6, following Exhibit 13-5, summarizes the RACT
guidelines for VOC emissions control from tank truck gasoline
loading terminals.
13.3.4 Selection of the Most Likely RAC'.1 Alternatives
Control of VOC emissions from tank truck gasoline
loading terminals is achieved using submerged or bottom
filling of storage tanks and of tank trucks and vapor con-
trol of the loading of outgoing trailer-transport trucks.
13-10
-------
exhibit 13-9
U.S. tnvixen»«nt*l Frottction A
-------
Exhibit 13-6
U.S. Environmental Protection Agency
VOC EMISSION CONTROL TECHNOLOGY FOR
TANK TRUCK GASOLINE LOADING TERMINALS
Facilities Affected Sources of Emissions RACT Control Guideline
Tank truck ter- Filling tank Top submerge or
minals with daily trucks and bottom fill tank
throughput of breathing and truck and one of
greater than 76,000 working losses the following vapor
liters (20,000 from storage control systems:
gallons) of gaso- tanks
line - Adsorption/
Absorption
- Refrigeration
- Compression
Refrigeration
Absorption
- Thermal
Oxidation
Leakage Maintenance of
areas that may
leak
Source: U.S. Environmental Protection Agency
-------
There trsj several alternative means of achieving vapor
control at tank truck gasoline loading terminals, based
on the type of vapor control •equipment installed.
Four likely alternatives for vapor control aret
Adsorption/absorption
Compression refrigeration absorption
Refrigeration
Thermal oxidation.
Each type of vapor control system is briefly described
below.
13.3.4.1 Adsorption/Absorption (AA)
Vapor control by adsorption/absorption is achieved by
the following method. Vapors from tank truck loading oper-
ations are collected and directed to one of two activated
carbon beds. Vapors are condensed into pores in the carbon.
These vapors are then regenerated by pulling a vacuum over
the bed. Cold gasoline is then circulated in a separator
and the hot vapors are absorbed into the cold gasoline. This
process has recently been marketed and is becoming competi-
tive with the refrigeration system described below. It has
issn reported that less maintenance is required for this
type of vapor recovery system than for the other three types.
13.3.4.2 Compression Refrigeration Absorption (CRA)
Vapor control by compression refrigeration absorption
is achieved by the following method, vapors from tank truck
leading operations are collected in a vapor holder. The pres-
sure is increased in the holder* thus causing vapors to
condense. Further condensation is then achieved by mixing
chilled gasoline and vapors under pressure and the vapors
are absorbed into the) gasoline. Prom interviews with manu-
facturers of vapor recovery equipment it it reported that
this system is becoming less popular than the) more recently
developed refrigeration system described below. Therefore,
it was assumed that this type) of system will not be used ia
Ohio.
-------
13.3.4.3 Refrigeration (RF)
Vapor recovery using refrigeration is based on the
condensation of gasoline vapors by refrigeration at atmos-
pheric pressure. Vapors displaced from tank truck loading
operations enter a horizontal fin-tube condenser where they
are cooled to a temperature of about -40°F and condensed.
Because vapors are treated as they are vented from tank
trucks, no vapor holder is required. Condensate is with-
drawn from the condenser and the remaining air, containing
only a small amount of hydrocarbons, is vented to the atmos-
phere. This system is priced competitively with AA systems
because of market pressure, although it is estimated
to be more costly to build.
13.3.4.4 Thermal Oxidation (OX)
Vapor control by thermal oxidation is achieved by
incineration devices. Gasoline vapors are displaced to a
vapor holder. When the vapor holder reaches its capacity,
vapors are released to the oxidizer, after mixing with a
properly metered air stream, and combusted. Later models
of this type of thermal oxidizer do not require vapor holders;
vapors from the tank trucks during loading operations are
vented directly to the thermal oxidizer. It is not expected
that this type of vapor control system will be used in
Ohio since there are fire hazards with a flame and one
terminal operator reported during interviews that terminal
operators are reluctant to burn valuable hydrocarbons.
13.3.5 Leak Prevention from Tank Trucks
For vapor control systems to operate optimally,
it is essential to maintain leakless tank trucks. This is
achieved by using proper operating procedures and periodic
maintenance of hatches, P-V valves and liquid and gaseous
connections.
13-12
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13.4 COST ANO HYP ROC AM ON DEDUCTION BINIflT EVALUATIONS TOK
TH1 MOST LIKXLY RACT ALTEiWATIvTST
Cost! foe VOC emission control equipment are presented
in this section. Th« costs for the) four types of vapor con*
trol systeasj described in Section 13.3 art presented for two
nodal tank truck gasoline loading terminals* Thej final sac*
tion peasants an axtrapolation of modal terminal control
costs to the) statewide industry.
13.4.1 factory Costs for Tour Typas of vapor Control Systems
The factory coata for the four typas of vapor control
systems (summarized in Exhibit 13-7, on the following page)
w«ra derived from analysis of tha RACT guidelines? from
interviews with tarminai operators, major oil companies and
equipment manufacturers) and from previous cost and aconomic
studies of tank truck gasoline loading tarminals.
Adsorption/absorption and refrigeration systems are
expectad to be tha only two types of vapor control systems
used at tank truck gasoline loading terminals in Ohio.
it is astimated that SO percent of the systams will be
adsorption/absorption and the other SO percent will be
refrigeration systems. Factory costs for both systems are
assumed to be equal because of competitive pressures. Mainte*
r.ance costs for refrigeration systems »re approximately 2
percent higher than those for adsorption/absorption systems.
13.4.2 Costs for Two Model Tank Truck Gasoline Loading
Terminals
Two model tank truck gasoline loading terminals and
their associated vapor control costs are characterized in
this section. The costs are based on the control estimates
for adsorption/absorption and refrigeration systems reported
by equipment manufacturers and through interviews.
Exhibit 13-f, following exhibit 13-7, defines) two model
tank truck gasoline loading terminals characteristics and
associated control costs. It is assumed that approximately
50 percent ol the terminals in Ohio can be characterized
by Model Terminal A; the remaining SO percent are assumed to
be characterized by Model Terminal 1. it is estimated that
trucks requiring vapor control modifications are largely
accounted for by the model plant estimates.
-------
Exhibit 13-7
U.S. .Environmental Protection Agency
FACTORY COSTS OF ALTERNATIVE
VAPOR CONTROL SYSTEMS
Factory Cost3 Factory Cost
for 250,000 for 500,000
gallon per gallon per
Type of Control System day system day system
($000, 1977) ($000, 1977)
Adsorption/Absorption 120 155
Compression-Refrigera- 128 164
tion-Absorption
Refrigeration 120C 155
Thermal Oxidation 72 95
a. Costs are based on average of range of costs quoted by vendors
to the U.S. Environmental Protection Agency and reported in The
Economic Impact of Vapor Control on the Bulk Storage Industry,
draft report, July 1978.
b. Hydrotech Engineering reported a factory price of $92,000 for a
250,000 gallon per day unit.
c. Expect system priced competitively to adsorption/absorption system
due to market pressure.
Source: Hydrotech, U.S. Environmental Protection Agency, Exxon and
Booz, Allen & Hamilton Inc. estimates
-------
bfcifeift IJ-t
O.i. CnvUonMatal Protection Agency
oncurrxoN we COST or MOOCL TANK
mOCK SMOUNI LOADING TIMUMAU
EQUIP?to wm VAJOI COM ML
Tank Truck Gasoline toadinf
T«cainal O>4r«ct«ri
-------
The costs for the model terminals are used in Section
13.4.3 to extrapolate costs of vapor control equipment to
the industry statewide. The costs for each model terminal
are:
Installed capital cost, which includes equipment
and modification costs, labor and costs to modify
trucks ($3,000 per truck)
Annualized direct operating costs which include elec-
tricity, maintenance, operating labor and carbon
replacement costs. Maintenance costs for the
adsorption/absorption system are slightly lower
than those for refrigeration
Annualized capital charges include costs for
depreciation, interest, taxes and insurance and
are estimated to be 21 percent of the installed
capital cost
Net annualized operating costs, which are the sum
of the capital charges and direct operating costs.
It should be noted that gasoline credit has not
yet been accounted for. Gasoline credit will be
taken into account when the costs are extrapolated
to the industry.
Another cost characterization that can be made is hydrocarbon
reduction versus cost. This finding will also be shown in
the statewide analysis.
13.4.3 Extrapolation to the Statewide Industry
Exhibit 13-9, on the following page, shows the extrap-
olation of vapor recovery costs to the statewide industry in
Ohio. The estimates are based on the following assump-
tions :
In Ohio., 50 percent of the tank truck gasoline
loading terminals can be characterized by Model
Terminal A and the remaining can be characterized
by Model Terminal B.
Fifty percent of the terminals will implement the
adsorption/absorption vapor control system to com-
ply with RACT and the other 50 percent will imple-
ment the refrigeration system to comply with RACT.
13-14
-------
exhibit u-f
U.S. Environmental Protection Agency
STVRVZOI COSTS Of VAPOft CONTROL SYSTEMS
FOR TANK TVUOC OASOLtNt LOADING TERMINAL*
Characteristic/Cast Item Data
Nuatoo* of terminal* 50
Total annual throughput 3.414
(billions of gallon*)
Uncontrolled emissions 17.J7S
(tons/year)
Saission reduction from 15,640
terminals (tone/year)
Installed capital cost 15.33
(S million, 1977)
Direct annual operating coats 1.369
(5 million, 1977)
Annual capital charges 3.21
(S millions, 1977)
Annual gasoline credit* 6.073
(S millions, 1977)
Net annualized cost (credit) (1.494)
(5 millions, 1977)
Annual cost per ton of 161
emissions, terminal emissions
only (J per ton)
Annual cost (credit) per ton (32)
of emissions) reduced*
(5 per ton)
Annual cost (credit) per ton 104
of emissions reduced frost
gasoline) marketing* ($ p«r ton)
a. S<«e4 on 44,30t tons of emissions recovered which Includes 17,909
tons collected frosi gasoline service stations), 12,759 tons collected
from bulk plants and 15,640 tans collected at the terminal.
b. Annual cost of emissions reduced from gasoline aarketine; based on
sum of net annual!ted costs from terminals, bulk plants, gasoline
4ispensin«. facilities and fixed-roof tanks divided by cae sum of
emissions) reductions) from these sajM categories.
Boos, Allan e Hamilton, I no.
-------
Ninety percent of terminal emissions are recovered
based on information obtained from interviews
with manufacturers of adsorption/absorption vapor
control equipment and refrigeration vapor control
equipment
RACT is implemented at bulk gasoline plants and
gasoline service stations in the state and the
gasoline vapors collected from bulk gasoline plants
and gasoline service stations are recovered and
credited to the tank truck gasoline loading termi-
nal.
Based on the above, the total cost to the industry
for installing vapor recovery equipment is estimated to
exceed $15 million.
The value of gasoline recovered from terminal emission
reductions .only is $2.051 million. The value of aasoline
recovered from "terminal emission reduction plus emission
returned to the terminal from bulk gasoline plants and
gasoline service stations is $6.073 million. The annual
cost per ton of emissions from terminal emission reduction
'only is $161 per ton. The annual credit per ton of emissions
recovered at the terminal from combined emissions from
terminals, bulk plants and gasoline service stations is
$32 per ton. The overall cost per ton of emissions reduced
from gasoline marketing is $106 per ton.
13-15
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13.5 DIR1CT ECONOMIC IMPLICATIONS
This section presents th« direct economic implications
of implementing RACT controls to the statewide industry,
including AvailAbility of equip»«nt and capital} feasibility
of the control technology* and impact oa state economic in*
dicators.
13.5,1 RACT Timing
RACT is assumed implemented statewide by January I, L^"2.
This implitf that tank truck gasoline leading tarrainal oper-
ators must hav« vapor control aquipm«nt installtd and oper-
ating within th« n«xt thr«« ytars. Th« timing r«quir«m«nts
of RACT impos« s«v«ral raquiram«nts on ttrminal operators
including!
Oettrmining appropriate vapor control systam
Raising capital to purchase equipment
Acquiring the necessary vapor control equipment
Installing and testing vapor control equipment to
insure that the system complies with. RACT*.
the sections which follow discuss the feasibility and the
economic implications of implementing RACT within the re-
quired timeframe.
13.5.2 Feasibility Issues
Technical and economic feasibility issues of implementing
PACT controls are discussed in this section.
Several tank truck gasoline loading terminal operators
in the United States have successfully implemented vapor
control systeme. State adoption of RACT regulations will
generate) a new demand for vapor control system*. Xt is
expected based on information frost industry interviews that
sufficient leadtime is available to meet the increased
Demand, thus making the implementation of RACT technically
feasible.
-------
In the area of economic feasibility it has been reported
from interviews that terminal operators should have access to
capital to purchase vapor control equipment, and it is expected
from information through interviews that terminals will not
cease operations because of the cost of implementing RACT.
If RACT is implemented statewide at tank truck gasoline
loading terminals, bulk gasoline plants and gasoline service
stations, there should be a possible savings for bulk terminals
if the total system operates at maximum efficiency.
13.5.3 Comparison of Direct Cost with Selected Direct
Economic Indicators
This section presents a comparison of the net annualized
credit of implementing RACT with the total value of gasoline
sold in the state and the value of wholesale trade in the
state.
The net annualized credit to the tank truck gasoline
loading terminals resulting from RACT represents 0.1 percent
of the total gasoline sold from affected terminals in the
state. When compared to the statewide value of wholesale
trade, the annualized credit is small.
13-17
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13.6 SgLgCTgQ SECONOAHY ECONOMIC IMPACTS
This section discusses the secondary econoaic impact
of implementing RACT on employment, market structure and
productivity that was derived frosi industry interviews and
analysis of data.
Employment—No decline in employment is predicted
since terminals should not close solelv becau** «?
FACT requirements. A slight increase in operating
and maintenance labor will be required through
implementation of RACT but this is predicted to have
minimal impact on any employment increase.
Market structure—No change in market structure
is expected from implementation of RACT.
Produc t i v ity.—No change in worker productivity is
expected to result from implementation of RACT.
Exhib.t 13-10, on the following saoe, presents a s-.-r.arv
of the findings of this report.
-------
Current Situation
Number of potentially affected
facilities
Indication of relative importance
of industrial section to state
economy
Current industry technology trends
1977 VOC actual emissions
Industry preferred method of VOC
control to meet RACT guidelines
Exhibit 13-10
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR TANK TRUCK GASOLINE
LOADING TERMINALS IN OHIO
Discussion
50
1977 industry sales were $1,480 million, with
annual throughput of 3.484 billion gallons.
The primary market is rural accounts.
New terminals will be designed with vapor
recovery equipment
17,378 tons per year
Bottom or submerge fill and vapor recovery
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized credit (statewide)
Price
Energy
Productivity
Employment
Market structure
Problem area
VOC emissions after control from
terminal operations only
Cost effectiveness of control
Discussion
$15.3 million
$1.494 million (approximately 0.1 percent of
value of shipments)
No change in price
Assuming full recovery of gasoline from
terminal emissions only—net savings of
106,830 barrels annually from terminal
emissions
No major impact
No direct impact
No direct impact
Gasoline credit from vapors from bulk gasoline
plants and gasoline service stations require
uniform RACT requirements throughout the state
1,738 tons per year
$32 annualized credit/annual ton of VOC con-
trolled from terminals, and emissions returnee
from bulk gasoline plants and gasoline servic*
stations (i.e., 46,308 tons per year).
Source: Booz, Allen & Hamilton Inc.
-------
BIBLIOGRAPHY
Hydrocarbon Control Strategies froa Gasoline
Qp«rationi. E»A-4Sd/}-7i-OiJ, April i97C
*• •
National Fetroleua K«v« fact aook, 1971, McCrav Hill, Mid-
May 197f,
National Petroleua Nevt fact Book, 1977, McCrav Hill, Mid-
May 1977.
Mationtl P«trol«ua M«vt fact Book, I97i, McCrtv Hill, Mid-
L97I.
Control of Hydrocarbons froa Tank Truck Gasoline Loading
Terminal!/, EPA-450/2-77-02<, J.3. Environmental
Prottction Agency, October 1977.
The Economic Impact of Vapor Control on the Bulk Storage
industry, pctpared for U.S. Environaentai Protection
Agtncy fey Arthur 0. Little, draft report, July 1971.
Regulatory Guidance for Control of Volatile Organic Compound
r^istioni from 13 Categories of Stationary Soureet,
£?A-»05/2-78-OOi, April 1971.
Syatemi and Co«tt to Control Hydrocarbon Sniaiioni from
Stationary Source!/ PB-236 921, Environmental Protaetion
A,tncy, Stptensber 1974.
1972 Ctnsut of wholesale Trade, Petroleum SuIX Stations and
U.S. aurtau qg C«nau«.
Cewonstration of Reduced Hydrocarbon Sal««ions from Gasoline
Loading Ttnainala, PB»J34 3»3.
Private conversation vita MX. Clark Hou?hton, Mid-Missouri
Oil Company.
Private conversation with Mr. Cordon Potter, Exxon, Houston,
r«xaa.
Private conversation vita Mr. Junes McOiU, Hydrotach,
Tulsa, oklahosM.
Private conversation with Mr. Frederick Rainey, Shell Oil
Cosapany, Houeton, Texas.
-------
"1978 Marketing Directory and Yearbook," Michigan Petroleum
Association, 1978.
Private conversation with Mr. William Deutsch, Illinois
Petroleum Marketers Association, Springfield, Illinois.
Private conversation with Mr. Richard Pressler, Illinois
Environmental Protection Agency, Springfield, Illinois.
-------
-------
14.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
BULK GASOLINE PLANTS IN
THE STATE OF OHIO
-------
-------
14.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
BULK GASOLINE PLANTS IN
THE STATE OF OHIO
This chapter presents a detailed analysis of the impact
of implementing RACT controls for bulk gasoline plants in
the State of Ohio. The chapter is divided into six
sections including:
Specific methodology and quality of estimates
Industry statistics
The technical situation of the industry
Cost and VOC reduction benefit evaluations for
the most likely RACT alternatives
Direct economic implications
Selected secondary economic impacts.
Each section presents detailed data and findings based
on analyses of the RACT guidelines, previous studies of bulk
gasoline plants, interviews, and analysis.
14-1
-------
14.1 SPECIFIC METHODOLOGY AND QUALITY OF ESTIMATES
This section describes the methodology for determining
estimates of:
Industry statistics
VOC emissions
Processes for controlling VOC emissions
Cost of controlling VOC emissions
Economic impact of emission control
for bulk gasoline plants in the State of Ohio.
An overall assessment of the quality of the estimates
is detailed in the latter part of this section.
14.1.1 Industry Statistics
Industry statistics on bulk gasoline plants were
obtained from several sources. All data were converted to
a base year, 1977, based on specific scaling factors:
The number of establishments for 1977 was extrapo-
lated from the 1967 and 1972 Census of Wholesale
Trade for Petroleum Bulk Stations and Terminals.
The number of employees in 1977 was derived from
the 1972 Census of Wholesale Trade, Petroleum Bulk
Stations and Terminals, by determining the number
of employees per establishment in 1972 and mul-
tiplying this factor by the number of establish-
ments reported for 1977.
The number of gallons of gasoline sold in 1977 in
the State of Ohio was estimated based on data from
the Ohio emissions inventory for terminals and
bulk plants. It was determined that 30 percent of
the combined throughput was from bulk plants based
on the ratio of bulk plant gasoline sales to total
gasoline sold from bulk plants and terminals in
1972(reported in the 1972 Census of Wholesale Trade,
Petroleum Bulk Stations and Terminals^
Sales, in dollars, of motor gasoline for 1977 were
estimated by multiplying the number of gallons of
14-2
-------
gasoline sold in 1977 by the national dealer tank-
wagon price in 1977 (42.SlC/gallon—reported in
the National Petroleum News Fact Book, 1978).
14.1.2 VOC Emissions
VOC emissions were estimated for bulk gasoline plants
in Ohio based on the following methodology: Emissions
per 1,000 gallons of throughput presented in Control of
Volatile Organic Emissions from Bulk Gasoline Plants,
EPA-450/2-77-035 were multiplied by the estimated number of
gallons of gasoline sold from bulk gasoline plants in
Ohio in 1977.
14.1.3 Processes for Controlling VOC Emissions
Processes for controlling VOC emissions for bulk
gasoline plants are described in Control of Volatile
Organic Emissions from Bulk Gasoline Plants, EPA-450/2-77-
035. These data provide the alternatives available for con-
trolling VOC emissions from bulk gasoline plants. Several
studies of VOC emission control were also analyzed in detail,
and interviews with petroleum trade associations, bulk plant
operators, and vapor control equipment manufacturers were
conducted to ascertain the most likely types of control
processes which would be used in bulk gasoline plants in
Ohio. The specific studies analyzed were: Evaluation of
Top Loading Vapor Balance Systems for Small Bulk Plants,
EPA 340/1-77-014; Economic Analysis of Vapor Recovery
Systems on Small Bulk Plants, EPA 340/1-77-013; Systems
and Costs to Control Hydrocarbon Emissions from Stationary
Sources, EPA PB-236 921; and Study of Gasoline Vapor
Emission Controls at Small Bulk Plants, EPA,PB-267-096.
The alternative types of vapor control equipment likely
to be applied to bulk gasoline plants were arrayed, and
percentage reductions from using each type of control were
determined. The methodology for the cost analysis based on
this scheme is described in the following paragraphs.
14.1.4 Cost of Vapor Control Systems
The costs of vapor control systems were developed by:
Determining the alternative types of control
systems likely to be used
14-3
-------
Estimating the probable use of each type of control
sys'tem
Defining systems components
Developing installed capital costs for systems
components
Aggregating installed capital costs for each
alternative control system
Defining two model plants
Developing costs of control systems for model
plants including
- Installed capital cost
- Direct operating costs
Annual capital charges
- Gasoline credit
Net annualized cost
Assigning model plant costs to plants in Ohio
Aggregating costs to the total industry in
Ohio.
Costs were determined from analyses of the following
previous studies:
Control of Volatile Organic Emissions from Bulk
Gasoline Plants, EPA 450/2-77-035
Study of Gasoline Vapor Emission Controls at
Small Bulk Plants, EPA PB-267 096
Economic Analysis of Vapor Recovery Systems on
Small Bulk Plants, EPA 340/1-77-013
Evaluation of Top Loading Vapor Balance Systems
for Small Bulk Plants, EPA 340/1-77-014
and from interviews with petroleum marketers' associations,
bulk plant operators, and vapor control equipment manufac-
turers.
14-4
-------
The assignment of the estimated cost of control to
Ohio required a profile of bulk plants for the state,
showing the percentage of plants for:
Various ranges of throughput
Using top loading for account trucks
Using bottom loading
Plants with vapor control equipment already installed,
Since detailed data on bulk gasoline plant characteristics
were not available for Ohio, it was assumed that data
developed in a previous study of small bulk plants in
Colorado and California could be used to broadly characterize
the bulk plant population throughput in Ohio.
Bulk plants in Ohio may have a different distribution
of number of plants by throughput range, although these
data were not available for Ohio.
14.1.5 Economic Impacts
The economic impacts were determined by analyzing the
lead time requirements needed to implement RACT; assessing
the feasibility of instituting RACT controls in terms of
capital availability and equipment availability; comparing
the direct costs of RACT control to various state economic
indicators; and assessing the secondary effects on market
structure, employment, and producitivity as a result of im-
plementing RACT controls in Ohio.
14.1.6 Quality of Estimates
Several sources of information were utilized in
assessing the emissions, cost, and economic impact of
implementing RACT controls on bulk gasoline plants in Ohio.
A rating scheme is presented in this section to indicate
the quality of the data available for use in this study.
A rating of "A" indicates hard data (i.e., data that are
published for the base year); "B" indicates data that were
extrapolated from hard data; and "C" indicates data that
were not available in secondary literature and were estimated
based on interviews, analyses of previous studies, and best
engineering judgment. Exhibit 14-1, on the following page,
rates each study output listed and the overall quality of
the data.
14-5
-------
Exhibit 14-1
U.S. Environmental Protection Agency
DATA QUALITY
B C
A Extrapolated Estimated
Study Outputs Hard Data Data Data
Industry statistics *
Emissions •
Cost of emissions •
control
Statewide costs of
emissions
Economic Impact •
Overall quality of
data
:ce: Booz, Allen S Hamilton, Inc.
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14.2 INDUSTRY STATISTICS
Industry characterisitcs, statistics, and business
trends for bulk gasoline plants in Ohio are presented
in this section. The discussion includes a description of
the number of facilities and their characteristics, a com-
parison of the size of the bulk gasoline plant industry to
state economic indicators, a historical characterization and
description of the industry, and an assessment of future
industry patterns. Data in this section form the basis for
assessing the impact on this industry of implementing RACT
to VOC emissions from bulk gasoline plants in Ohio.
14.2.1 Size of the Industry
There were an estimated 670 bulk gasoline plants, as
of 1977, in Ohio. Industry sales were in the range of
.$693 million, with an estimated yearly throughput of- 1.631
billion gallons of gasoline. The estimated number of em-
ployees in 1977 was 2,805. These data and the sources of
information are summarized in Exhibit 14-2, on the following
page. Annual capital investments have not been estimated.
In general, bulk plant capital investments are for plant
and equipment to replace worr.-cut facilities, modernize the
establishments, or improve operating efficiencies.
14.2.2 Comparison of the Industry to the Stats Economy
A comparison of the bulk gasoline plant industry to
the economy of the State of Ohio is shown in this
section by comparing industry statistics to state
economic indicators. Employees in the bulk gasoline
plant industry represent less than 0.1 percent of the total
state civilian labor force of Ohio. The value of gasoline
sold from bulk plants represented less than ..two percent of
the total value of wholesale trade in Ohio in 1977.
14.2.3 Characterization of the Industry
Lulk plants are an intermediate distribution point
in the petroleum product marketing network as shown in
Exhibit 14-3, following Exhibit 14-2. Bulk gasoline plants
compete with bulk gasoline tank terminals and large retail
gasoline outlets. Ownership and operation of bulk plants
are predominantly by independent .iobbers and commissioned
14-6
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Exhibit 14-2
U.S. Environmental Protection Agency
INDUSTRY STATISTICS FOR BULK GASOLINE
PLANTS IN OHIO
Number of. Number of Sales Gasoline Sold
Establishments Employees ($ Million, 1977) (Billions of Gallons)
67 Oa 2,805*> 693C 1.631d
a. Booz, Allen & Hamilton estimate based on 11.28% decline nationally
for bulk plants from 1967 to 1972.
b. Booz, Allen & Hamilton estimate based on the ratio of the
number of employees to the number of establishments in 1972-
c. Number of gallons of motor gasoline sold in 1977 multiplied
by the national dealer tankwagon price in 1977 (42.51C/gallon).
National Petroleum News Fact Book, 1978.
d. Booz, Allen & Hamilton estimate based on data from the Ohio
emissions inventory.
-------
Exhibit 14-3
U.S. Environmental Protection Agency
GASOLINE DISTRIBUTION NETWORK
REFINERY
V
BULK
PLANT
A
V V
SMALL VOLUME
ACCOUNTS
AGRICULTURAL
COMMERCIAL
RETAIL
o
"T
I
I
I
-h-
.y
TERMINAL
v
\/
LARGE VOLUME
ACCOUNTS
RETAIL
COMMERCIAL
AGRICULTURAL
—o
V
"1
CUSTOMER
PICK-UP
o
o
Typical delivery route of truck-trailer
Typical delivery route of account truck
Typical transaction with consumer coming to supplier
Final Product Usage
Source; Economic Analysis of Vapor Recovery Systems on Small
Bulk Plants, EPA 340/1-77-013, September 1976, p. 3-2.
-------
agents but also includes cooperatives and salaried employees.
The independent jobber owns the equipment and structures
at his bulk plant, the inventory, and rolling stock, and
he contracts directly with the oil company for gasoline. A
commissioned agent usually does not own the equipment and
facilities but operates the bulk plant for a major integrated
oil company.
Bulk gasoline plants are typically located near towns
and small cities, since their predominant market is agri-
cultural and small retail accounts. The maximum daily
throughput of a bulk gasoline plant ranges from less than
2,000 gallons per day up to 20,000 gallons per day.
Exhibit 14-4, on the following page, shows a typical distri-
bution of bulk gasoline plants by plant throughput nation-
wide. It is assumed this distribution characterizes bulk
gasoline plants in Ohio.
It is estimated that the majority of the bulk gasoline
plants are up to 25 years old, with a few new modernized,
higher volume plants. Forty years ago, bulk gasoline plants
were a major link in the gasoline distribution network.
From that time, their importance has been declining in the
marketing sector of the petroleum industry, basically for
economic reasons. There is evidence that profitability in
bulk gasoline plants has been decreasing. The number of
bulk gasoline plants decreased by 11 percent nationally
from 1967 to 1972 and is predicted to continue declining
in the near term.l This decline is largely attributable to
major oil companies disposing of commission-agent-operated
bulk plants.
1 National Petroleum News Fact Book, 1976.
14-7
-------
Exhibit 14-4
U.S. Environmental Protection Agency
NATIONAL DISTRIBUTION OF BULK GASOLINE
PLANTS BY AMOUNT OF THROUGHPUT
Gasoline
Throughput Percentage
(gallons per day) of Plants
Less than 2,000 24
2,000 to 3,999 27
4,000 to 5,999 16
6,000 to 7,999 8
8,000 to 9,999 12
10,000 to 11,999 4
12,000 to 13,999 1
14,000 to 15,999 2
16,000 to 17,999 1
18,000 to 20,000 5
Source; Economic Analysis of Vapor Recovery Systems
on Small Bulk Plants/ EPA, September 1976.
-------
14.3 THE TECHNICAL SITUATION IN THE INDUSTRY
This section presents information on bulk gasoline
plant operation, estimated VOC emissions from bulk gasoline
plant operations in Ohio, the extent of current control
in use, the requirements of vapor control required by RACT
and the likely RACT alternatives which may be used for con-
trolling VOC emissions from bulk gasoline plants in Ohio.
14.3.1 Bulk Gasoline Plant Operations
Bulk gasoline plants are typically secondary distribu-
tion facilities which receive gasoline from bulk gasoline
tank terminals by trailer-transport trucks; store it in
above-ground storage tanks, and subsequently dispense it
via account trucks to local farms, businesses and service
stations. Bulk gasoline plants with an average daily
gasoline throughput of 20,000 gallons per day or less have
been defined by EPA as requiring vapor control equipment
to reduce VOC emissions from bulk gasoline plant operations
14.3.1.1 Facilities
Bulk plant facilities generally include tanks for
gasoline storage, loading racks, and incoming and outgoing
tank trucks.
The most prevalent type of gasoline storage tank found
at bulk plants is the above ground storage tank.
These tanks are usually cylindrical with domed ends (vertical
or horizontal). Typical storage capacities range from
13,000 to 20,000 gallons and the number of tanks at each
plant ranges from one to eight, with an average of three
tanks per plant. The number of tanks is likely to be
greater for plants with throughput greater than the average
throughput.
A typical loading rack used for dispensing gasoline to
account trucks includes shut-off valves, meters, relief
valves, electrical grounding, lighting, by-pass plumbing
and loading arms. Loading may be by bottom fill, top
splash, or submerae fill pipe through hatches, or dry
connections on the tops of trucks. It is estimated that
top splash filling is used in about 50 percent of bulk
plants and submerged filling in the remaining 50 percent
of the bulk gasoline plants. A typical bulk gasoline plant
has one loading rack with an average pumping rate of 125
gallons per minute.
14-8
-------
Trailer-transport trucks supply bulk plants with
gasoline, while account trucks deliver gasoline to bulk
plant customers. Trailer-transport trucks have four to
six compartments and deliver approximately 8,000 gallons
of gasoline to the bulk plant. Most commonly, trailer-
transport trucks are owned by oil companies or commercial
carriers. Account trucks usually have four compartments
with a total capacity of 2,000 gallons. Bulk plants have
an average of two account trucks, and these trucks are
most commonly owned by the bulk plant operator.
The facility description was synthesized from in-,.-
mation obtained from:
Control of Volatile Organic Emissions from Bulk
Gasoline Plants, EPA-450/2-77-035.
Stage I Vapor Recovery and Small Bulk Plants
in Washington, D.C., Baltimore, Maryland,
and Houston/Galveston, Texas, EPA-340/1-77-010
Economic Analysis of Vapor Recovery Systems on
Small Bulk Plants, EPA 340/1-77-013
Industry interviews.
14.3.1.2 Operations
VOC emissions occur at various stages in bulk plant
operations. Gasoline is unloaded from trailer-transport
trucks into gasoline storage tanks. The two methods of
unloading gasoline into storage tanks are bottom filling
and top submerged filling. Emissions occur from this
operation through the displacement of vapor laden air in
the storage tank with gasoline. Vapor balancing between
the tank truck and the storage tank is the recommended
method for controlling these emissions.
Another major source of emissions is from vaporization
of gasoline in the storage tank because of changes in
pressure in the tank caused by variation in temperature.
These emissions, referred to as breathing losses, are con-
trolled by adjusting the pressure rtlief valve on the
storage tank.
The final major occurrence of emissions is during
loading of account trucks which dispense gasoline to bulk
plant customers. The cause of emissions during account
14-9
-------
truck filling is from turbulence of the liquids being loaded
and the resulting vaporization. The vapor laden air in the
account truck is displaced to the atmosphere during filling.
Top loading account trucks cause greater emissions than
trucks loading from the bottom since greater liquid tur-
bulence occurs. Vapor balancing the account truck and
the storage tank is the primary method for controlling
emissions.
14.3.2 Emissions and Current Controls
This section presents the estimated VOC emissions from
bulk gasoline plants in Ohio in 1977 and the current
level of emission control already implemented in the state.
Exhibit 14-5 on the following page, shows the total estimated
emissions in tons per year from bulk plants in Ohio. The
estimated VOC emissions from the 670 bulk plants are 19,439
tons per year.
It was estimated that 50 percent of the loading facili-
ties are currently equipped with submerged loading equip-
ment and that approximately 50 percent of bulk gasoline
plants in Ohio use top splash filling based on data from
Michigan and Wisconsin.
14.3.3 RACT Guidelines
The RACT guidelines for VOC emission control from
bulk gasoline plants require the following control systems:
Top submerged or bottom fill of gasoline storage
tanks and outgoing account trucks
Vapor balancing between the incoming trailer-
transport truck and the gasoline storage tank
Vapor balancing between the gasoline storage
tank and the outgoing account truck
Proper operation and maintenance of equipment.
Exhibit 14-6, following Exhibit 14-5, summarizes the RACT
guidelines for VOC emissions control from bulk gasoline
plants.
14-10
-------
Exhibit 14-5
U.S. Environmental Protection Agency
VOC EMISSIONS FROM BULK GASOLINE
PLANTS IN OHIO
Number of
Facilities
Estimated
Number of Tanks
Yearly
Throughput
(billions
of
gallons)
Total Emissions
670 2,010a 1.631 19,439
a. Booz, Allen & Hamilton estimate"based on 3 tanks per facility.
Source; Booz, Allen S Hamilton Inc.
-------
EXHIBIT 14-6
U.S. Environmental Protection Agency
VCC EMISSION CONTROL TECHNCLOGY FOR
BULK GASOLINE PLANTS
Facilities
Affected
Bulk plants with
daily throughputs
of 76,000 liters
(20,000 gallons)
of gasoline or less
Sources of
Emissions
RACT Control
Guideline
Vapor displacement
from filling ac-
count trucks, and
breathing losses
and working losses
from storage tanks
Submerge filling and
vapor balancing:
. Vapor balancing of
transport truck and
storage tank
. Vapor balancing of
storage and
account truck
Cracks in seals
and connections
Proper operation
maintenance
Improper hook up
of liquid lines
and top loading
nozzles
Proper operation
maintenance
Truck cleaning
Proper operation
maintenance
Pressure vacuum
relief valves
Proper opera tier-
maintenance
Source: Control of Volatile Organic Emissions from Bulk Gasoline
Plants, EPA-450/2-77-035.
-------
14.3.4 Selection of the Most Likely RACT Alternatives
Control of VOC emission from bulk gasoline plants is
achieved using submerged or bottom filling of storage tanks
and account trucks and vapor balancing between the loading
and unloading of incoming and outgoing trailer-transport
trucks and the gasoline storage tanks. There are several
alternative means of achieving vapor control at bulk gasoline
plants, based on the manner in which the bulk plant is
operated.
Three likely control alternatives, summarized in
Exhibit 14-7, on the following page, are discussed
separately in the paragraphs which follow.
14.3.4.1 Alternative I
Control Alternative I involves top submerged loading
and equipping the bulk plant with a vapor balancing system.
In detail, this control alternative implies:
Submerged filling of gasoline storage tanks
Vapor balancing between the incoming trailer-
transport truck and the gasoline storage tank
Submerged top loading of outgoing account trucks
Vapor balancing of gasoline storage tank and
outgoing account truck
Equipping account trucks with vapor balancing
connections.
It is estimated that bulk plants in Ohio would select
Control Alternative I to achieve vapor recovery to meet
the state RACT requirements. During interviews, the indus-
try has questioned whether vapor recovery by this control
method will achieve 90 percent emissions recovery as stated
in the RACT guidelines.
14.3.4.2 Alternative II
Control Alternative II involves implementing a complete
vapor balancing system on bulk plants which currently
14-11
-------
Exhibit 14-7
U.S. Environmental Protection Agency
ALTERNATIVE CONTROL METHOD
FOR VAPOR CONTROL AT BULK GASOLINE FLAN1:
Description of
Alternative Number Control Method
Top submerged filling
and vapor balance entire
system
II Vapor balance existing
bottom filled bulk
plant
ITT Convert top filled bulk
plant to bottom filled,
and vapor balance total
system
Source; Booz, Allen & Hamilton analysis of Control of Volatile
Organic Emissions from Bulk Gasoline Plants, EPA-450/2-77-035.
-------
operate with bottom filling. In detail this control alter-
native encompasses:
Vapor balancing between the incoming trailer-
transport truck and the gasoline storage tank
Vapor balancing between the gasoline storage tank
and the outgoing account truck
Modification of account trucks to accommodate a
vapor recovery connection.
The cost for this alternative would be similar to costs
for Control Alternative I.
14.3.4.3 Alternative III
Control Alternative III involves converting top loading
bulk gasoline plants to bottom filling and implementing a
complete vapor balancing system. In detail, this control
alternative entails:
Converting the loading rack to bottom filling
Converting storage tank loading to bottom filling
Vapor balancing the incoming trailer-transport
truck and the gasoline storage tank
Converting the account truck to bottom loading
and installing vapor balancing connections on the
account truck.
The additional cost of converting a bulk plant from
top filling to bottom filling makes Control Alternative III
more costly than Control Alternative I or II. This
additional cost may be attributable to improved bulk plant
operations rather than compliance with proposed limitations.
14-12
-------
14.4 COST AND HYDROCARBON REDUCTION BENEFIT EVALUATIONS
FOR THE MOST LIKELY RACT ALTERNATIVES
Costs for VCX: emission control equipment are presented
in this section. The costs for the three alternative
control systems described in Section 14.3 are described
individually, followed by costs for typical bulk plants.
The final section then presents a projection of typical
bulk gasoline plant control costs to the statewide industry,
14.4.1 Costs for Alternative Control Systems
The costs for the three alternative control systems
(summarized in Exhibit 14-8, on the following page) were
derived from analysis of the RACT guidelines, from inter-
views with bulk plant operators and petroleum marketing
trade associations, and from previous cost and economic
studies of small bulk plants.
Control Alernative I is expected to be the most widely
applied system for bulk plants in Ohio. The U.S. EPA
currently endorses the cost estimates developed by Pacific
Environmental Services, Inc. for the Houston/Galveston
area bulk plants. However, several large volume bulk plant
operators who were interviewed have reported vapor control
costs in excess of $50,000 which included conversion of the
loading rack to bottom filling.
Control Alternative II is similar in cost to Control
Alternative I.
Control Alternative III is the most costly control
system. Several bulk gasoline plant operators interviewed
in California and Maryland have adopted this system, although
it cannot be shown from the data in Ohio that any bulk
gasoline plant in Ohio would be willing to implement a
system this costly. This alternative, therefore, is not
included in the projection of vapor control costs to the
statewide industry in the next section.
14.4.2 Costs for Two Model Bulk Plants
Two model balk plants and their associated vapor con-
trol costs are characterized in this section. The costs
are based on the control estimates for Control Alternative
I, reported by Pacific Environmental Services, Inc. for
bulk plants in the Houston/Galveston area. Several other
14-13
-------
Exhibit 14-8
U.S. Environmental Protection Agency
COSTS OF ALTERNATIVE VAPOR CONTROL SYSTEM:
Cost Estimate
National Oil
Jobbers Council
estimate
Alternative
I
1 truck (4-com-
partments)
1 loading rack
(3 arms)
3-inch system
Pre-set meters
Direct Cost
(no labor)
$20,524 (with-
out air)
$22,754 (with
air)
Alternative Alternative
II III
(Includes conversion
to botton fillinc)
Similar to costs 1 truck (4-corn-
for alternative partments)
I
1 loading rack
(3 arms)
3-inch system
Fre-set meters
Direct cost
(No labor)
527,729
Pacific Environ-
mental Services
estimate of
Houston/Calveston
area system
1 loading rack
Meters
Average instal-
led cost
$3,200 (without
metering)
$7,700 (with
metering)
Wiggins system
Source:
National oil Jobbers Council, Pacific
Environmental Services Inc., Wiggins
Division, Delaware Turbines, Inc.
1 truck 4-com-
partments)
1 loading rack
(4 arms)
Fre-set meters
Installed cost
$17,352-
$18,416
-------
bulk plant operators have reported costs in excess of
$50,000 for vapor control systems although these cost
estimates exceed the level of control required to meet the
RACT requirements.
Exhibit 14-9, on the following page, defines two model
bulk plant characteristics and associated control costs.
It is assumed that approximately 75 percent of the bulk
plants in Ohio can be characterized by Model Plant A; the
remaining 25 percent are assumed to be characterized by
Model Plant B.
The costs for the model plants are used in Section
14.4.3 to project costs of vapor control equipment to the
industry statewide. The costs for each model plant are:
Installed capital cost, which includes parts
and labor
Annualized direct operating costs, expected to
be 3 percent of installed capital costs, including
costs for labor, utilities, recordkeeping, and
training costs.1
Annualized capital charges, estimated to be 25
percent of installed capital costs, including
costs for depreciation, interest, maintenance,
taxes, and insurance
Net annualized operating costs, which are the
sum of the capital charges and direct operating
costs. It should be noted that gasoline credit
has not yet been accounted for. Gasoline credit
will be taken into account when the costs are
projected to the industry.
Another cost characterization that can be made is hydro-
carbon reduction versus cost. This finding will also be
shown in the statewide analysis.
14.4.3 Projection to the Statewide Industry
Exhibit 14-10, following Exhibit 14-9, shows the pro-
jection of v&oor recovery costs to the statewide industry
in Ohio. The estimates are based on the following:
In Ohio, 75 percent of the bulk gasoline plants
can be characterized by Model Plant A and the
1. Control of Volatile Organic Emissions from Bulk Gasoline Plants,
EPA-450/2-77-035, p. 4-6.
14-14
-------
Exhibit 14-9
U.S. Environmental Protection Agency
DESCRIPTION AND COST OF MODEL BULK PLANTS
EQUIPPED WITH VAPOR CONTROL SYSTEMS
Bulk Plant
Characteristics
Throughput
Loading racks
Storage tanks
Account trucks
Compartment per account
truck
Vapor control system
iModel Bulk
Plant A
2,500 gallons/day
1
3
2
Model Bulk
Plant B
13,000 gallons/day
1
3
4
Alternative I
Alternative I
Bulk Plant
Costs
Installed capital costa
Annualized direct operating
costs @ 3 percent of
installed cost
Annualized capital
charges ? 25 percent
of installed capital
cost
Net annualized cost
(not including gasoline
credit)
$13,700
411
3,425
. 3,836
$19,700
591
4,925
5,516
a. Cost to modify one 4-compartment account
to be $3,000.
truck estimated
Source: Booz, Allen & Hamilton, Inc.
-------
Exhibit 14-10
U.S. Environmental Protection Agency
STATEWIDE COSTS OF VAPOR CONTROL
SYSTEMS FOR BULK GASOLINE PLANTS
Characteristic/Cost Item
Number of facilities
Total annual throughput
(billions of gallons)
Uncontrolled emissions
(tons/year)
Emission reduction
(tons/year)
Net emissions
(tons/year)
Installed capital
($ million, 1977)
Direct annual operating
cost ($ million, 1977)
Annualized capital charges
($ millions, 1977)
Annualized gasoline credit3
($ million, 1977)
Net annualized cost
(S millions, 1977)
Annual cost per tor. of
emissions reduced
($ per ton)
Data
670
1.631
19,439
14,176
5,263
10.237
.307
2.55
.136
2.67
188
a. Based on 10 percent of emission reduction (resulting from less
turbulence in gasoline loading) accrued to bulk plants at 40$
per gallon.
• b. Includes cost of 50,000 to equip 335 bulk plants with a
submerged fill pipe at a cost of $150 per plant.
Source: Booz, Allen & Hamilton Inc.
-------
remaining can be characterized by Model Plant
B-
All bulk plants will implement the Control Alter-
native I vapor control system to comply with RACT.
Actual costs to bulk plant operators may vary depending on
the type of control alternative and manufacturer's equipment
selected by each bulk plant operator.
Based on the above,-the"total cost to.the -"
industry for installing vapor recovery equipment is estima-
ted to exceed $10 mlliion. The amount of gasoline prevented
from vaporizing using vapor control is valued at approxi-
mately $186,000. Approximately 10 percent of total emis-
sions can be credited to the bulk plant since installation
of vapor control equipment will reduce the amount of vapor-
ization by approximately 10 percent. The annual cost per
ton of emissions controlled is estimated to be $188 per ton.
The statewide costs of vapor control systems by size
of bulk gasoline plant are analyzed and arrayed in Exhibit
14-11. It is noted that bulk plants with throughput less
than 4,000 gallons per day achieve only 20 percent reduc-
tion in overall emissions yet bear over 45 percent of the
annual cost of hydrocarbon emission control costs. Emissions
were allocated based on the estimated percentage of statewide
throughput in each throughput class. Annualized costs were
distributed for each throughput class based on the national
percentage of plants in each throughput class.
14-15
-------
Exhibit 14-11
U.S. Environmental Protection Agency
STATEWIDE COSTS OF VAPOR CONTROL
SYSTEM BY SIZE OF BULK GASOLINE PLANT
Bulk Plant Gasoline
Throughput
Percentaqe
of Plants
(gallons per day)
Less than
2,000 -
4,000 -
6,000 -
8,000 -
10,000 -
12,000 -
14,000 -
16,000 -
18,000 -
2,000
3,999
5,999
7,999
9,999
11,999
13,999
15,999
17,999
20,000
24
27
16
8
12
4
1
2
1
5
Current
Estimated
Annual VOC
Emi ssions
(tons per year)
1,244
2,819
2,770
1 , c>44
1,752
1,536
4?8
1,050
583
3,304
Estimated
Annual VOC
Emissions After
RAPT Control
(tons per year)
337
763
753
5^6
1,01ft
416
116
2B4
158
894
Net
VOC Emission
Reduction
(tons per year)
007
2,05f>
2 ,
1 , 1 20
312
7f,f>
425
2,410
Perrrntaqe
of Total VOC
Fmi'.sions
Rr.iiui fd
Es t imated
Annual Cost
Percent of
Total Annual
Cost
(S millions, 1977)
(..4
14.5
14. 3
in.n
ri. 1
;.,
? i
5.4
3.0
17.0
.573
.644
. 380
. 194
.419
.141
.036
.073
.036
.167
21.50
24.16
14.25
7.20
15.72
5.29
1.35
2.74
1.35
6.26
Net Hydrocarbon
Cost
Effectiveness
/ S, 1977 \
I tons per year/
632
314
188
137
153
125
115
95
84
69
Source: Booz, Allen & Hamilton Inc.
-------
14.5 DIRECT ECONOMIC IMPLICATIONS
This section presents the direct economic implications
of implementing RACT controls to the statewide industry,
including availability of equipment and capital; feasibility
of the control technology? and impact on economic indicators,
such as value of shipments, unit price (assuming full cost
passthrough), state economic variables, and capital investment.
14.5.1 RACT Timing
RACT must be implemented statewide by January 1, 1982.
This requires that bulk gasoline plant operators must have
vapor control equipment installed and operating within
the next three years. The timing requirements of RACT
impose several requirements on bulk plant operators
including:
Determining appropriate vapor control system
Raising capital to purchase equipment
Generating sufficient income from current opera-
tions to pay the additional annual operating
costs incurred with vapor control
Acquiring the necessary vapor control equipment
Installing and testing vapor control equipment to
insure that the system complies with RACT.
The sections which follow discuss the feasibility and the
economic implications of implementing RACT within the
required timeframe.
14.5.2 Feasibility Issues
Technical and economic feasibility issues of implement-
ing RACT controls are discussed in this section.
Several bulk plants in the U.S. have attempted to implement
vapor control systems with varying degrees of success. One
bulk plant operator interviewed in Maryland implemented vapor
recovery at a cost of $65,000 in 1974. The operator indicated
that recent tests have shown the system operates well within,
the 90 percent recovery requirement of RACT. This particular
bulk plant was converted to bottom filling and completely
vapor balanced. The plant's throughput was 20,000 gallons
14-16
-------
per day and included one loading rack and three account
trucks. This plant would be characterized as installing a
sophisticated Alternative III control system. The plant
is also operated by a major oil company, so capital avail-
ability problems were not similar to a small/independently
owned bulk plant.
Bulk plants in the Houston/Galveston area, on the
contrary, have implemented "bare bone" type control systems
that were individually designed and installed at a bulk
plant which was owned by a major oil company. No emission
data are available to verify whether these systems are in
compliance, but U.S. EPA estimates that these control systems
are sufficient to meet the requirements of RACT. These
systems are not marketed by any equipment manufacturer;
therefore, their availability for widespread application is
doubtful at the present time.
State adoption of RACT regulations will generate a
demand for economical vapor control systems for bulk plants.
It is, therefore, anticipated that off-the-shelf systems
could be developed within the next four years that are
similar to the control system implemented in the Houston/
Calveston area; thus making the implementation of RACT
technically feasible.
A number of economic factors are involved in determining
whether a specific bulk plant operator will be able to
implement vapor control systems and still remain profitable.
These include:
Degree of competition
Ability to pass on a price increase
The current profitability of the plant
Age of the plant
State of repair of the plant
Ownership—major oil company or private individual.
*''
By dividing the annual cost per plant by annual plant
throughput it is estimated that small bulk plants, with
throughput less than 4,000 gallons per day, could possibly
experience a direct cost increase of nearly 0.28 cents per
gallon if they implement RACT. This may affect up to
50 percent of the bulk t>lants in the state and these plants
are likely to be located in rural areas.
The key to the direct economic impact will be the
ability of a bulk plant operator to pass on up to a 0.28
cent increase in the price of gasoline to customers (assuming
a full cost passthough). One small bulk plant operator
in Missouri reported during an interview that his gross
14-17
-------
profit margin per gallon of gasoline is 4 ro 5 cents per
gallon. His net profit margin is 0.5 cent per gallon.
This operator stated that he plans to discontinue operations
rather than comply with RACT. Again, sufficient data are
not available to determine if this would be typical of
small bulk plants in the state. In a previous study of
the economics of vapor recovery for small bulk plants, a
trend of declining profitability in bulk plant operations
was identified.^ If this trend continues, vapor control
systems may not be affordable at marginal plants. Many
bulk plants now operate at a profit only because their
plants are fully depreciated. In the same study it was
also determined that a large percentage of small bulk
plants may not be able to raise sufficient capital to
purchase vapor control equipment. Furthermore, it is
estimated that the price of vapor control systems is likely
to increase in the future at a rate greater than the GNP.
One bulk plant operator stated that prices for vapor control
have risen 30 percent over the past three years. It is
possible that the industry decline could continue and
that some bulk plant operators may cease operations
because of their present financial condition and the addi-
tional financial burden of the RACT reauirements.
The paragraphs which follow compare statewide compliance
costs of RACT control, in 1977 dollars, to various economic
indicators.
14.5.3 Comparison of Direct Cost With Selected Direct
Economic Indicators
This section presents a comparison of the net increase
in the annual operating cost of implementing RACT with
the total value of gasoline sold in the state, the value
of wholesale trade in the state, and the unit price of
gasoline.
The net increase in the annualized co"st/to the
bulk gasoline plants due to RACT represents 0.35 percent of
the total gasoline sold in the state. When compared 'to the
statewide value of wholesale trade, these annual cost in-
creases represent less than 0.01 percent. The impact on the
unit price of gasoline varies with the bulk plant throughput.
As discussed in the preceding section, the small bulk plants
Economic Analysis of Vapor Recovery Systems on Small Bulk Plants,
EPA, 340/1-77-013, September 1976.
14-18
-------
may experience a direct cost increase of up to 0.3 cent per
gallon of gasoline sold, whereas the large bulk plants nay
experience a much smaller direct cost increase.
Assuming a full cost passthrough, the price of gasoline
is likely to rise more in rural areas than urban areas
(i.e., the small volume bulk plants tend to be located in
rural areas) .
14-19
-------
14.6 SELECTED SECONDARY ECONOMIC IMPACTS
This section discusses the secondary impacts of imple-
menting RACT on employment, market structure, and productiv-
ity.
For bulk gasoline plants that comply with RACT
requirements, no additional manpower requirements are
expected. Overall bulk gasoline plant industrial sector
employment may continue to decline if the number of bulk
gasoline plants operating in the state decline. Based on
the statewide estimates of number of employees and number
of bulk plants, an average of approximately 4.6 jobs could
be lost with the closing of a bulk plant. No estimate
was made of the number of bulk plants that might close due
to RACT.
The impact on the market structure for bulk plants
differs significiantly in urban and rural areas. The
importance of bulk plants in the urban areas may be
declining because of competition from retailers and tank
truck terminals and could continue to decline regardless
of RACT requirements.
In rural areas, the bulk plants serve as a vital link
in the gasoline distribution network, since large trailer
transport trucks cannot be accommodated by many rural roads
serving the farm accounts. It is estimated that approx-
imately 60 percent of the customers served by the small
bulk plants in the rural areas are farm accounts, which
could be severely impacted if the small bulk plants are
forced out of business. The increased operating cost of
complying with RACT may create market imbalances if the
compliance cost cannot be passed on to the marketplace in
terms of a price increase (i.e., the market structure would
tend to concentrate further). As small bulk plant operators
cease operation, the supply of fuel to some farmers could
be threatened. Bulk plants not equipped with vapor control
equipment may not be able to serve gasoline service stations
equipped with vapor control equipment due to incompatible
hardware configurations. A uniform policy, therefore, is
necessary so that market disruptions due to equipment
incompatibility are minimized.
The productivity of a specific bulk plant is a function
of the type of vapor control system installed. If a bulk
plant converts to bottom filling along with vapor recovery,
the productivity of the bulk plant should increase.
14-20
-------
However, sor.e vapor control systems may decrease plant
productivity if flow rates substantially decline, requiring
longer times to load and unload trucks.
Exhibit 14-12 presents a summary of the findings of
this report.
14-21
-------
Current Situation
Number of potentially affected
facilities
Indication of relative importance
of industrial section to state
economy
Current industry technology trends
1977 VOC actual emissions
Industry preferred method of VOC
control to meet RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity
Employment
Market structure
Problem area
VOC emission after control
Cost effectiveness
Exhibit 14-12
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR
BULK GASOLINE PLANTS IN OHIO
Discussion
670
1977 industry sales were $693 million, with
annual throughput of 1.631 billion gallons.
The primary market is rural accounts
Only small percent of industry has new/
modernized plants
19,440 tons per year
Top submerge or bottom fill and -vapor
balancing (cost analysis reflects top
submerge fill, not bottom fill)
Discussion
$10.1 million
$2.66 million (approximately 0.36
percent of value of shipment)
Assuming a "direct cost passthrough"
Industrywide—$.0014 per gallon increas
Small operations—$.003 per
gallon increase
Assuming full recovery of gasoline—net
savings of 96,800 barrels annually
No major impact
No direct impact; however for plants closinc
potential average of 4.6 jobs lost per
plant closed
Regulation could further concentrate a de-
clining industry. Many small bulk gas plant
today are marginal operations; further cost
increases could result in some plant closinc
Severe economic impact for small bulk plant
operations. Regulation could cause further
market imbalances. Emission control effi-
ciency of cost effective alternatives has
not been fully demonstrated
5,26^ tons per year (27 percent of current \
level)
$188 annualized cost/annual ton of VOC
reduction
Source: Booz, Allen & Hamilton, Inc.
-------
BIBLIOGRAPHY
National Petroleum News Fact Book, 1967,
McGraw Hill, Mid-May 1976.
National Petroleum News Fact Book, 1977,
McGraw Hill, Mid-May 1977.
National Petroleum News Fact Book, 1978,
McGraw Hill, Mid-June 1978.
"Economic Analysis of Vapor Recovery Systems on
Small Bulk Plants," EPA 340/1-77-013, September
1976.
"Stage I Vapor Recovery and Small Bulk Plants
in Washington, D.C., Baltimore, MD, and Houston/
Galveston, TX," EPA 340/1-77-010, April 1977.
"Evaluation of Top Loading Vapor Balance Systems
for Small Bulk Plants," EPA 340/1-77-014, April
1977.
"Regulatory Guidance for Control of Volatile
Organic Compound Emissions from 15 Categories of
Stationary Sources," EPA 905/2-78-001, April
1978.
"Systems and Costs to Control Hydrocarbon
Emissions from Stationary Sources," PB-236 921,
Environmental Protection Agency, September 1974.
"Control of Volatile Organic Emissions from
Bulk Gasoline Plants," EPA 450/2-77-035, December
1977.
Memorandum, "Meeting with EPA and Others on Bulk
Plant Vapor Recovery," National Oil Jobbers Council,
Mr. Bob Bassman, Council, March 21, 1978.
Letter to Mr. William F. Hamilton, Economic Analysis
Branch, United States Environmental Protection
Agency, from California Independent Oil Marketers
Association, February 28, 1978.
-------
Private conversation with Mr. Clark Houghton,
Missouri Bulk Plant Operator.
Private conversation with Mr. D. L. Adams,
Phillips Petroleum, Towson, Maryland.
Private conversation with Mr. Robert Schuster,
bulk plant operator in Escondido, California.
Private conversation with Mr. Burton McCormick,
bulk plant operator in Santa Barbara, California.
"The Lundburg, Letter," Pele-Drop, North Hollywood
California.
Private conversation with Mr. William Deutsch, Illinois
Petroleum Marketers Association, Springfield, Illinois.
-------
-------
15.0 STORAGE OF PETROLEUM
LIQUIDS IN FIXED-ROOF
TANKS IN OHIO
-------
-------
15.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR STORAGE
OF PETROLEUM LIQUIDS IN FIXED-ROOF
TANKS IN THE STATE OF OHIO
This chapter presents a detailed analysis of the impact
of implementing RACT controls for the storage of petroleum
liquids in fixed-roof tanks. The major sections of the
chapter include:
Specific methodology and quality of estimates
Technical characteristics of fixed-roof tanks and
VOC emission control technology
Profile of statewide fixed-roof tank industry
and estimated annual VOC emissions
Cost of controlling VOC emissions
Economic impact.
Each section presents detailed data and findings based
on analyses of the RACT guidelines, previous studies of
fixed-roof storage tanks, interviews and analysis.
15-1
-------
15.1 SPECIFIC METHODOLOGY AND QUALITY OF ESTIMATES
This section describes the methodology for determining:
Technical characteristics of fixed-roof tanks
Profile of fixed-roof tanks
VOC emissions
Cost of vapor control systems
Economic impact of emission control for the
storage of petroleum liquids in fixed-roof tanks.
The quality of these estimates is discussed in the last
part of this section.
15.1.1 Technical Characteristics of Fixed-Roof Tanks
The technical characteristics of fixed-roof tanks and
processes for controlling their emissions were obtained
mainly from the RACT guideline entitled, Control of Volatile
Organic Emissions from Storage of Petroleum Liquids in Fixed-
Roof Tanks, EPA-450/2-77-036, and from several other studies
of fixed-roof tanks listed in the reference section of this
report.
15.1.2 Profile of Fixed-Roof Tanks
The Ohio Environmental Protection Agency provided a
listing of all affected fixed-roof tanks greater than 40,000-
gallon capacity used for storing petroleum liquids in Ohio.l
Capacity of each tank as well as the type of petroleum
liquid stored were also provided. Annual statewide
throughput was calculated based on a turnover rate of 30
times per year based on data in a report, Benzene Emission
Control Costs in Selected Segments of the Chemical Industry.
These data form the basis for calculating statewide VOC
emissions in Ohio.
1 Ohio currently has a regulation requiring internal floating covers on
fixed roof tanks greater than 65,000 gallons and holding organic
meterials with a vapor pressure of i.5 psia or greater. This
regulation is applicable to existing tanks in Priority I areas for
oxidants and new tanks regardless of location. Priority I area
includes the following counties and metropolitan areas: Butler,
Clark, Claermont, Cuyahoga, Darke, Delaware, Fairfield, Franklin,
Geauga, Green, Hamilton Lake, Licking, Lorain, Lucas, Madison,
Medina, Miami, Montgomery, Perry, Pickaway, Portage, Preble, Stark,
Summit, Union, Warren, and Wood Counties and Cleveland, Columbus,
Dayton, and Cincinnati metropolitan areas.
15-2
-------
15.1.3 VOC Emissions
VOC emissions for affected tanks were calculated based
on the emission factors for working and breathing losses
of various types of petroleum liquids. The emission factors
were obtained from Compilation of Air Pollutant Emission
Factors, AP-42, U.S. Environmental Protection Agency. Tank
capacity, fuel type and number of tanks were provided by
the Ohio Environmental Protection Agency.
15.1.4 Cost of Vapor Control Systems
The costs of vapor control systems were developed by:
Determining the type of control system
Developing installed capital costs for each tank
Developing total annual costs of control systems
for the number of tanks in the state including:
Installed capital cost
Direct operating costs
Annual capital charges
Petroleum liquid credit
Net annualized cost
Aggregating costs to the total affected industry
in Ohio.
Costs were determined from analyses of the following
studies:
Control of Volatile Organic Emissions from Storage
of Petroleum Liquids in Fixed-Roof Tanks,
EPA 450/2-77-036
Benzene Emission Control Costs in Selected
Segments of the Chemical Industry, prepared for
Manufacturing Chemists Association by Booz, Allen
& Hamilton Inc., June 12, 1978
and from interviews with petroleum marketers' associations,
petrochemical manufacturers and vapor control equipment
manufacturers.
15-3
-------
The projection of the estimated cost of control to
Ohio required a profile of fixed-roof tanks for storing
petroleum liquids for the state, showing the capacity of
each tank and the type of petroleum liquid being stored.
These data were provided by the Ohio Environmental Protec-
tion Agency for affected fixed-roof tanks greater than
40,000-gallon capacity.
15.1.5 Economic Impact of Emission Control
The economic impact of emission control for equipping
fixed-roof tanks used for storing petroleum liquids can
be determined only in terms of the statewide cost of con-
trols. Since several industries use fixed-roof tanks, eco-
nomic impacts on individual industries depend on the extent
to which the industries must bear the increased cost. The
economic impact analysis in this report is, therefore,
limited to estimating statewide costs of controls and
qualitatively assessing the potential impacts on these
costs on various industries.
15.1.6 Quality of Estimates
Several sources of information were utilized in assess-
ing the emissions, cost and economic impact of implementing
RACT controls for affected fixed-roof tanks in Ohio. A
rating scheme is presented in this section to indicate the
quality of the data available for use in this study. A
rating of "A" indicates hard data (i.e., data that are
published for the base year); "B" indicates data that were
extrapolated from hard data; and "C" indicates data that
were not available in secondary literature and were estimated
based on interviews, analyses of previous studies and best
engineering judgment. Exhibit 15-1, on the following page,
rates each study ouput listed and the overall quality of
the data.
15-4
-------
Exhibit 15-1
U.S. Environmental Protection Agency
DATA QUALITY
B C
A Extrapolated Estimated
Study Outputs Hard Data Data Data
Industry statistics
Emissions
Cost of emissions
control
Statewide costs of
emissions
Economic impact
Overall quality of
data
Source: Booz, Allen & Hamilton Inc.
-------
15.2 TECHNICAL CHARACTERISTICS OF FIXED-ROOF TANKS FOR
STORING PETROLEUM LIQUIDS
This section describes the technical characteristics
of fixed-roof tanks for storing petroleum liquids, the sources
and types of VOC emitted by these tanks, the control measures
for reducing VOC emissions from fixed-roof tanks and RACT
guidelines.
15.2.1 Characteristics of Fixed-Roof Tanks for Storing
Petroleum Liquids
Fixed-roof tanks consist of a cylindrical steel shell
with a permanently affixed roof as characterized in Exhibit
15-2, on the following page. The roof design may vary from
cone shape to flat. The fixed-roof tank is the least expen-
sive type of storage tank to construct and is generally con-
sidered to be the minimum acceptable standard for storage of
petroleum liquids. The tank is designed to operate at only
slight internal pressure or vacuum.
Fixed-roof tanks having greater than 40,000-gallon capa-
city and containing petroleum liquids greater than 1.52 psia
are the specific fixed-roof tanks under analysis in this
report, excluding those tanks which already comply under
a previous regulation. These tanks are used for storing
petroleum liquids at refineries, bulk terminals and tank
farms and along pipelines. Tanks are generally loaded by
submerged fill and are unloaded into tank cars, tank trucks,
ships, barges or pipelines.
The processes of petroleum liquid storage, tank loading
and unloading are sources of VOC emissions in Ohio.
Specific sources and types of emissions from such tanks are
discussed in the paragraphs which follow.
15.2.2 Sources and Types of VOC Emissions from Fixed-
Roof Storage Tanks
VOC emissions result from the process of storing petro-
leum liquids in fixed-roof storage tanks and loading and
unloading tanks with petroleum liquids. Fixed-roof tanks
are designed to operate at only slight internal pressure or
vacuum, and as a result the emissions from storage, filling
and emptying can be appreciable.
15-5
-------
15.2.2.1 Emissions from Petroleum Liquid Storage
Emissions from petroleum liquid storage, referred to
as breathing losses, occur from changes in temperature and
pressure in the storage tank. Vapors are expelled from
the tank when diurnal temperature and barometric pressure
changes cause expansion and contraction of the volatile
petroleum liquid. These VOC emissions, or losses, occur in
the absence of any liquid level change" in the tank.
Breather valves (pressure vacuum) are installed on many
fixed-roof tanks to prevent vapors from escaping to the
atmosphere because of small changes in temperature and
barometric pressure or very small fluctuations in liquid
level. These vents, however, will vent vapors to the
atmosphere during normal filling and draw air into the tank
during emptying.
15.2.2.2 VOC Emissions from Filling and Emptying Storage
Tanks
VOC emissions resulting from filling and emptying storage
tanks are referred to as "working losses." As a tank is filled
the vapor laden air in the airspace between the liquid and the
tank top is displaced to the atmosphere through breather vents.
Emptying losses occur when air drawn into the tank through
the breather vent becomes saturated with hydrocarbon vapor and
expands such that the volume of the vapor laden air exceeds
the capacity of the vapor space.
Additional VOC emissions occur during tank cleaning
and from any corrosion spots or deterioration in the tank.
15.2.3 Techniques for VOC Emission Control
Fixed-roof tank emissions are most readily controlled by
the installation of internal floating roofs. An internal
floating roof for fixed-roof tanks is a cover floating on
the liquid surface inside the tank, rising and falling with
the liquid level. Exhibit 15-3, on the following page, is a
schematic of a typical fixed-roof tank equipped with an
internal floating roof or cover. There are two types of
internal floating roofs:
A pan-type steel floating roof
A nonferrous floating roof made of aluminum or
polyurethane.
15-6
-------
Exhibit 15-2
U.S. Environmental Protection Agency
TYPICAL FIXED ROOF TANK
Thief Hatch
Vent
-Manhole
Nozzle
(For submerged fill
or drainage)
Source; Regulatory Guidance for Control of Volatile Organic Compound
Emissions from 15 Categories of Stationary Sources,
EPA-905/2-78-00, U.S. Environmental Protection Agency/ April 1978
-------
Exhibit 15-3
U.S. Environmental Protection Agency
SCHEMATIC OF TYPICAL FIXED ROOF TANK
WITH INTERNAL FLOATING COVER
.Center Vent
Automatic
Tank Ga uge Piping
Sup on Thief Hatch
Located Ovtr Sumple Well
Optional Overflow Vent
• S.S. Ground Cabin
Automatic Gauge Float Wall
Sample Well
Shell Manway
Roof to
Shell Sea
Rim Plait
Ground C«bl* Roof Attachment
Anti-Rotation Roof Fitting
Peripheral Roof Vent/
Inspection Hatch
Anti-Rotation Cable Pauea
Through Fitting Bolted to Rim Plato
Rim Pontoon*
Anti-Rotation Lug WehM to Floor
Tank Support Column with Column Well
Rim Pontoon*
Cover Accna Hutch
Vacuum Breaker and Acluittor Leg
Source; Regulatory Guidance for Control of Volatile Organic Compound Emissions from 15
Categories of Stationary Sources, EPA-905/2-78-001, U.S. Environmental Protection
Agency, April 1978
-------
The fixed-roof protects the internal floating roof and
seal from deterioration from climatological effects and
eliminates the possibility of the floating roof sinking from
the weight of rain or snow loads.
A closure device must be used to seal the gap between
the tank shell and the internal floating roof around the roof
perimeter. Special materials are available for the closure
device in a wide range of designs to accommodate the entire
spectrum of petroleum liquids. Exhibit 15-4, on the following
page, illustrates several typical internal floating roofs and
perimeter closure seals.
Other modifications may need to be made to the fixed-
roof tank before it is equipped with an internal floating roof.
Tank shell deformations and obstructions may require correc-
tion; special structural modifications such as bracing, re-
inforcing and plumbing vertical columns may be necessary.
Anti-rotational guides should be installed to keep the in-
ternal floating roof openings in alignment with the fixed-
roof openings. Special vents are installed on the fixed
roof or on the walls at the top of the shell to minimize
the possibility of VOCs approaching the flammable range in
the vapor space.
15.2.4 RACT Guideline for VOC Emission Control
The RACT guidelines call for installation of an internal
floating roof for fixed-roof tanks storing greater than
40,000 gallons of petroleum liquids with a true vapor pressure
that exceeds 1.52 psia. The guidelines do not apply to
storage tanks equipped with external floating roofs or to storage
tanks having capacities less than 416,000 gallons used to
store crude oil and condensate prior to lease custody trans-
fer.
It is expected that the State of Ohio will prepare
legislation for the storage of petroleum liquids which is
modeled after the RACT guidelines.
"Custody transfer" means the transfer of produced crude oil and/or
condensate, after processing and/or treating in the production
operations, from storage tanks or automatic transfer facilities
to pipelines or any other forms of transportation.
15-7
-------
Exhibit 15-4
U.S. Environmental Protection Agency
TYPICAL FLOTATION DEVICES AND PERIMETER SEAL,
FOR INTERNAL FLOATING COVERS AND
COVERED FLOATING ROOF
Aluminum deck supported above
liquid by tubular aluminum pontoons
Elastomer wiper seal
r
^\ Note: v = vapf
Deck
1
1
r
. / L = liqi id
)
t
\_r;
Pontoon
\ Tank shell
Metal seal ring
Pontoon
Aluminum sandwich panels' with honeycombed
aluminum core floating on surface
iSanwich panek
i
v L
Foam filled coated fabric
Foam filled
coated fabric
Steel pan
j—
Source; ,Based on Annex A, API Publication 2519, Second Edition
-------
15.3 AFFECTED FIXED-ROOF TANKS FOR STORING PETROLEUM
LIQUIDS AND ESTIMATED VOC EMISSIONS
This section contains data on the affected fixed-roof tanks
used for storing petroleum liquids in the State of Ohio and the
estimated annual VOC emissions from these tanks.
The Ohio Environmental Protection Agency compiled a
list of affected fixed-roof tanks from their emissions
inventory. The capacity of each tank and the type of
petroleum liquid stored were provided in the listing (see
Exhibit 15-5). There are 6 unregulated fixed-roof tanks
greater than 40,000-gallon capacity containing gasoline and
not equipped with an internal floating roof in Ohio.l The
total storage capacity of these tanks is 7.144 million
gallons, and the annual throughput of petroleum liquid is
estimated to be 214 million gallons.
It is estimated that annual VOC emissions from the
storage of petroleum liquids in fixed-roof tanks in Ohio
are 1,217 tons per year.
It is further estimated that these emissions could be
reduced by 90 percent or to 122 tons per year by imple-
menting RACT in Ohio, assuming no existing control of
these tanks.
Fixed roof tanks over 60,000 gallons in Priority I areas of Ohio
are currently required to be equipped with floating roofs. Although
the Ohio EPA could not verify if all the affected tanks in the
Priority I area were in control, the regulation has been in effect
and has been enforced. Therefore, representatives of the Ohio EPA
stated that, although there is a possibility that some tanks are
not equipped properly in the Priority I area, most, if not all, of
the tanks are currently controlled.
15-8
-------
Exhibit 15-5
U.S. Environmental Protection Agency
DISTRIBUTION OF FIXED-ROOF
TANKS IN OHIO BY
CAPACITY AND COST
Installed Capital
Tank Capacity Cost
») ($, 000)
30.12
30.12
36.16
332.04
332.04
20.00
A
B
C
D
E
F
(000, gal]
147
147
210
3,292
3,292
56
Source: Ohio EPA and Booz, Allen & Hamilton Inc.
-------
15.4 COST OF CONTROLLING VOC EMISSIONS
This section presents a cost analysis of equipping
fixed-roof tanks used for storing petroleum liquids with
internal floating roofs as a means of controlling VOC
emissions.
The costs for emission control equipment include:
Installed capital cost, including parts and
labor
Annual capital charges, estimated to be 25
percent of installed capital cost and including
costs for depreciation, interest, maintenance,
taxes and insurance. Capital charges assuming
a 30 year equipment life would be lower on an
annual basis
Annualized direct operating costs, estimated to
be 2 percent of installed capital cost and
including costs for inspection and recordkeeping-1-
Annual petroleum liquid credit
Net annualized operating costs, the sum of the
capital charges and direct operating costs less
the petroleum liquid credit.
Costs reported in EPA-450/2-77-036 were not used since more
recent data by tank capacity were available in Benzene
Emission Control Costs in Selected Segments of tne Chemical
Industry.
Capital costs were determined for each tank from the
graph in Exhibit 15-6, on the following page. This graph
was prepared by Booz, Allen based on interviews with
petroleum refineries, petrochemical manufacturers, tank
manufacturers and emission control equipment manufacturers.
Total installed capital cost, including labor, is two times
the value given on the graph since the graph represents
equipment costs and installation costs are 100 percent
of equipment costs based on interviews. All costs are
for 1977.
Estimated from Control of Refinery Vacuum Producing Systems,
Wastewater Separators and Process Unit Turnarounds, assuming
maintenance is 4 percent of the capital cost.
15-9
-------
Exhibit 15-7
U.S. Environmental Protection Agency
VOC EMISSIONS CONTROL COSTS FOR
STORAGE OF PETROLEUM LIQUIDS IN
FIXED-ROOF TANKS IN OHIO
SUMMARY OF COSTS
Number of tanks 6
Total capacity 7.144
(millions of gallons)
Estimated annual throughput 214
(millions of gallons)
Uncontrolled emissions 1,217
(tons per year)
Emissions reduction 1,095
(tons per year)
Controlled emissions 122
(tons per year)
Installed capital cost .780
($ millions, 1977)
Annualized capital charges .195
($ million, 1977)
Annualized direct operating costs .015
($ millions, 1977)
Annual petroleum credit .140
($ millions, 1977)
Net annualized cost .07
($ millions, 1977)
Cost per ton of emissions reduced $63.92
($, 1977)
a. Assume value of petroleum liquid saved is $.39 per gallon and
density of petroleum liquid is 6.1 pounds per gallon.
Source: Booz, Allen & Hamilton Inc.
-------
A summary of the cost aggregated statewide from the
emission control of petroleum liquids stored in fixed-roof
tanks is shown in Exhibit 15-7, on the following page.
The total installed capital cost for equipping the six
uncontrolled fixed-roof tanks in Ohio with internal floating
roofs is $780,480. The net annualized cost is $70,000
at a cost of $63.92 per ton of emissions reduced.
15-10
-------
Exhibit 15-8
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR STORAGE OF PETROLEUM LIQUIDS
IN THE STATE OF OHIO
Current Situation^
Number of potentially affected
storage tanks
Indication of relative importance
of industrial section to state
economy
Current industry technology trends
VOC emissions
Preferred method of VOC control to
meet RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Discussion
Six
The annual throughput was an estimated
214 million gallons
Internal floating roof tanks utilizing
a double seal have been proven to be
more cost effective
1,217 tons per year
Single seal and internal floating roof
$780,000
$70,000
Price
Energy
Productivity •
Employment
Market structure
Problem area
VOC emission after control
Cost effectiveness of control
No change in price anticipated
Assuming 90 percent reduction of
current VOC level, the net energy
savings represent an estimated savings
of 7,479 equivalent barrels of oil
annually
No major impact
No major impact
No major impact
No problems anticipated
122 tons per year
$64 annualized cost/annual ton
of VOC reduction
Source: Booz, Allen & Hamilton Inc.
-------
15.5 ECONOMIC IMPACT
This section discusses the economic impact of equipping
fixed-roof tanks used for storing petroleum liquids with in-
ternal floating roofs to control VOC emissions. The impacts
analyzed include: total cost statewide; impact of industries
that may be affected and their ability to raise the capital
needed for the controls; and effects on employment, pro-
ductivity and market structure.
Total cost in Ohio—An estimated $780,000 will be
required statewide in Ohio to egXiip affected
fixed-roof tanks for storing petroleum liquids
with internal floating roofs. This represents
approximately 0.9 percent of the estimated value
of petroleum liquids sold from these affected
tanks in Ohio and an insignificant percent of
the value of wholesale trade in Ohio.
Industries affected—Fixed-roof tanks, greater than
40,000 gallons, used for storing petroleum liquids
are usually owned by major oil companies, large
petrochemical firms and bulk gasoline tank terminal
companies. It is expected that these companies
will be able to meet the capital requirements.
The source of capital is likely to be the company's
traditional source of funds.
Employment—No change in employment is predicted
from the implementation of RACT.
Productivity—No change in worker productivity
will result from the implementation of RACT.
Market structure—No change in market structure
will result from implementation in RACT.
Exhibit 15-8, on the following page, presents a summary
of the findings of this report.
15-11
-------
-------
BIBLIOGRAPHY
Benzene Emission Control Costs in Selected Segments of the
Chemical Industry,prepared for Manufacturing Chemists
Association by Booz, Allen & Hamilton Inc., June 12, 1978.
Control of Volatile Organic Emissions from Storage of
Petroleum Liquids in Fixed-Roof Tanks, EPA-450/2-77-036,
U.S. Environmental Protection Agency, December 1977.
Regulatory Guidance for Control of Volatile Organic Com-
pound Emissions from 15 Categories of Stationary Sources,
EPA-905/2-78-001, U.S. Environmental Protection Agency,
April 1978.
Revision of Evaporative Hydrocarbon Emission, PB-267 659,
Radian Corp., August 1976.
-------
16.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT STAGE I FOR
GASOLINE DISPENSING FACILITIES
IN THE STATE OF OHIO
-------
-------
16.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT STAGE I FOR
GASOLINE DISPENSING FACILITIES
IN THE STATE OF OHIO
This chapter presents a detailed analysis of implement-
ing RACT Stage I controls for gasoline dispensing facilities
in the State of Ohio. The chapter is divided into six
sections including:
Specific methodology and quality of estimates
Industry statistics
The technical situation of the industry
Cost and VOC reduction benefit evaluations for
the most likely RACT alternatives
Direct economic implications
Selected secondary economic impacts.
Each section presents detailed data and findings based
on analyses of the RACT guidelines, previous studies of
gasoline service station vapor recovery, interviews and
analysis.
16-1
-------
16.1 SPECIFIC METHODOLOGY AND QUALITY
This section describes the methodology for determining
estimates of:
Industry statistics
VOC emissions
Processes for controlling VOC emissions
Economic impact of emission control
for gasoline dispensing facilities in the State of Ohio.
The quality of the estimates based on a three point
scale is described in detail in the latter part of this
section.
16.1.1 Industry Statistics
Industry statistics on gasoline dispensing facilities
were obtained from several sources. All data were con-
verted to a base year, 1977, based on specific scaling
factors. The number of service stations for 1977 was
reported in the National Petroleum News Fact Book, 1978 .
The number of "non-service stations" was estimated to be
an additional 137 percent of the number of service stations
in the state based on a study entitled, The Economic Impact
of Vapor Recovery Regulations on the Service Station Indus-
try, iThe number of employees at service stations in 1977
was determined by multiplying the national average number
of employees per service station (3.5) by the number of estab-
lishments in the state which were reported in 1977. The number
of employees, at non-service stations is estimated to be two
employees per facility. The number of gallons of gasoline
sold in 1977 in the state was estimated by using data from
the 1975 Federal Highway Statistics and escalating the 1975
number by 2 percent (determined from Illinois Environmental
Protection agency data) for 1977. Sales, in dollars, of motor
gasoline for 1977 were estimated by multiplying the number of
gallons of gasoline sold in 1977 by the average national service
station price (excluding tax) in 1977 (50.7C/gallon) which was
reported in the National Petroleum News Fact Book, 1978.
16.1.2 VOC Emissions
Emissions from gasoline dispensing facilities
(including emissions from underground tank breathing,
Prepared for the Department of Labor, OSHA, C 79911, March,
1978, pp. 4-7
16-2
-------
underground tank filling, vehicle refueling and spillage)
in Ohio were calculated by multiplying emission factors
by gasoline throughput statewide. The emission factors
were reported in Hydrocarbon Control Strategies for Gasoline
Marketing Operations, EPA-450/3-78-017, April 1978.It
was estimated, based on data from interviews, that 90 per-
cent of the gasoline dispensing facilities in Ohio employ
submerge filling of underground storage tanks and the
remaining 10 percent employ splash fill.
16.1.3 Processes for Controlling VOC Emissions
Processes for controlling VOC emissions for gasoline
dispensing facilities are described in Design Criteria for
Stage I Vapor Control Systems Gasoline Service Stations.
This document provides data on alternative methods available
for controlling VOC emissions from gasoline dispensing
facilities. Several studies of VOC emission control were
also analyzed in detail and interviews with petroleum trade
associations, gasoline service station operators, and vapor
control equipment manufacturers were conducted to ascertain
the most likely types of equipment which would be used in
gasoline dispensing facilities in Ohio. The specific
studies analyzed were: Economic Impact of Stage II Vapor
Recovery Regulations: Working Memoranda,EPA-450/2-76-042;
A Study of Vapor Control Methods for Gasoline Marketing
Operations, PB-246-088, Radian Corporation; Reliability
Study of Vapor Recovery Systems at Service Stations, EPA-
450/3-76-001; Technical Support Document Stage I Vapor
Recovery at Service Stations, draft, Illinois Environmental
Protection Agency.
16.1.4 Cost of Vapor Control Systems
The costs of vapor control systems were developed
by:
Developing costs of two different control systems
for a model gasoline dispensing facility
Installed capital cost
- Direct operating costs
- Annual capital charges
- Gasoline credit
Net annualized cost
Aggregating costs to the statewide gasoline
dispensing facility industry.
16-3
-------
Costs were determined from analyses of the studies
listed previously and from interviews with petroleum mar-
keters' associations/ gasoline service station operators,
and vapor control equipment manufacturers.
It was assumed from interviews with industry trade
associations that 75 percent of the gasoline dispensing
facilities would install coaxial or concentric vapor
balance systems and the remaining 25 percent would install
the two point vapor balance system. Costs for the two
systems are assumed to be represented by the costs developed
for the model gasoline dispensing facility. Statewide costs
were projected from the model costs. It was assumed that
gasoline dispensing facilities in the state will be required
to meet the RACT guidelines.
16.1.5 Economic Impacts
The economic impacts were determined by analyzing the
lead time requirements needed to implement RACT; assessing
the feasibility of instituting RACT controls in terms of
capital and equipment availability; comparing the direct
costs of RACT control to various state economic indicators;
and assessing the secondary impacts on market structure,
employment and productivity resulting from implementation
of RACT controls.
16.1.6 Quality of Estimates
Several sources of information were utilized in
assessing the emissions, cost and economic impact of
implementing RACT controls on gasoline dispensing facili-
ties. A rating scheme is presented in this section to
indicate the quality of the data available for use in this
study. A rating of "A" indicates hard data (i.e., data
that are published for the base year); "B" indicates data
that were extrapolated from hard data; and "C" indicates
data that were not available in secondary literature and
were estimated based on interviews, analyses of previous
studies and best engineering judgment. Exhibit 16-1, on
the following page, rates each study output and the overall
quality of the da\a.
16-4
-------
Exhibit 16-1
U.S. Environmental Protection Agency
DATA QUALITY
ABC
Study Outputs Hard Data Extrapolated Estimated
Data Data
Industry statistics
Emissions
Cost of emissions
control
Statewide costs of
Emissions
Economic impact
Overall quality of
data
Source: Boo2, Allen & Hamilton, Inc.
-------
16.2 INDUSTRY STATISTICS
Industry characteristics, statistics and business trends
for gasoline dispensing facilities are presented in this
section. The discussion includes a description of the num-
ber of facilities and their characteristics, a comparison
of the size of the industry to state economic indicators,
a historical characterization and description of the indus-
try and an assessment of future industry patterns. Data
in this section form the basis for assessing the impact on
this industry of implementing RACT, Stage I, to VOC emissions
from gasoline dispensing facilities in Ohio.
16.2.1 Size of Industry
There were an estimated 9,531 gasoline service stations
in Ohio in 1977, and an additional estimated 13,057 "non-
service stations" which include gasoline dispensing facili-
ties such as marinas, general aviation facilities, commercial
and industrial gasoline consumers and rural
operations with gas pumps. Industry sales were in the range
of $2.59 billion, with a yearly throughput of 5.116 billion
gallons of gasoline. The estimated number of employees in
1977 was 33,400 employees in service stations and 26,114
employees in "non-service stations" for a total of 59,500
employees. These data and the sources of information are
summarized in Exhibit 16-2, on the following page. Total
capital investments by the gasoline dispensing facilities
were not identified, although in general facility operators
make investments in plant and equipment to replace worn-
out facilities and equipment, modernize the establishments
or improve operating efficiencies.
16.2.2 Comparison of Industry to State Economy
The gasoline dispensing facility industry is compared
to the economy of the State of Ohio in this section by
comparing industry statistics to state economic indicators.
Employees in the industry represent approximately 0.1 per-
cent of the total state civilian labor force of Ohio. The
value of gasoline sold from gasoline dispensing facilities
represented 7 percent of the total value of retail trade
in Ohio in 1977.
16-5
-------
Number of Facilities Number of Employees
Service Non-Service Service Non-Service
Stations Stations Stations Stations
9,531
13,057
33,400
26,114
Exhibit 16-2
U.S. Environmental Protection Agency
INDUSTRY STATISTICS FOR GASOLINE
DISPENSING FACILITIES IN OHIO
Sales
Gasoline Sold
(SBillion, 1977) (Billions of Gallons)
2.59^
5.117'
a. national Petroleum News Fact Book, 1978.
b. Includes gasoline dispensing facilities such as marinas, general aviation
facilities, commercial and industrial gasoline consumers and rural
c. Estimate based on the ratio of the number of employees to the number of
establishments nationally in 1977.
d. Estimate based on two employees per facility.
e. Number of gallons of motor gasoline sold in 1977 multiplied by the national
service station price in 1977 (50.70C/gallon), National Petroleum News Fact
Book, 1978.
f. Estimated based on Federal highway statistics for 1975 and escalated by 2 percent
for 1977.
Source; Booz, Allen & Hamilton Inc.
-------
16.2.3 Characterization of the Industry
Gasoline service stations and retail outlets are the
final distribution point in the petroleum marketing network,
as shown in Exhibit 16-3, on the following page. Several
types of gasoline service stations and retail gasoline out-
lets offer services ranging from self-service to full ser-
vice. A general classification of service stations in the
United States is listed in Exhibit 16-4, following Exhibit
16-3, along with the percentage of each type of station
existing nationally in 1977. Facility ownership may be
characterized by one of the following four arrangements:
Supplier owned/supplier operated
Supplier owned/dealer leased
Dealer owned/dealer operated
Convenience store.
An estimated 26 percent of facilities are owned and
operated by the station's supplier of gasoline, 44 percent
are owned by the supplier and leased to a dealer and 30 ..
percent are owned and operated by an independent dealer.
Gasoline marketing is characterized by high fixed costs,
with operations varying by degree of labor intensity. Con-
ventional service stations (service bay with mechanics on
duty and nongasoline automotive items available) are the most
labor intensive, while self-service "gas and go" stations
exemplify low labor intensity.
The number of gasoline dispensing facilities nationally
has been declining since 1972, while the throughput per
facility has been rising. This trend is also evident in
Ohio and is predicted to continue. It is estimated that,
by 1980, one-half the gasoline dispensing facilities in
the country will be totally self-service.2
16.2.4 Gasoline Prices
Gasoline prices vary among types of gasoline dispensing
facilities within a geographical area. Convenience stores are
apt to have higher pump prices than large self-service "gas
1 Economic Impact of Stage II Vapor Recovery Regulations: Working
Memoranda, EPA-450/3-76-042, November 1976, p. 6.
2. Ibid., p. 2.
16-6
-------
Exhibit 16-3
U.S. Environmental Protection Agency
GASOLINE DISTRIBUTION NETWORK
REFINERY
V
BULK
PLANT
-•!-•
.V
TERMINAL
V
\/
LARGE VOLUME
ACCOUNTS
RETAIL
COMMERCIAL
AGRICULTURAL
—o
^
-i
v
V.
SMALL VOLUME
ACCOUNTS
AGRICULTURAL
COMMERCIAL
RETAIL
CUSTOMER
PICK-UP
O
O
_._.
(~~\
-*. Typical delivery route of truck-trailer
•*• Typical delivery route of account truck
-*• Typical transaction with consumer coming to supplier
Final Product Usage
Source; Economic Analysis of Vapor Recovery Systems on Small
Bulk Plants, EPA 340/1-77-013, p. 3-2.
-------
Exhibit 16-4
U.S. Environmental Protection Agency
CLASSIFICATION OF GASOLINE
DISPENSING FACILITIES
Type of Service Station Percentage of Population
Full-service 41.8
Self-service 9.4
Split island 37.3
Convenience store 4.4
Car wash 4.5
Truck stop 1.9
Mini service 0.7
TOTAL 100.0
Source; National Petroleum News Fact Book, 1978, p. 106
-------
and go" stations. The pump price less the dealer tank wagon
price represents the gross margin on a gallon of gasoline.
Gasoline dispensing facility operating costs then must come
out of the gross margin for gasoline as well as the gross
margin for other products which may be sold at the facility.
Operating costs vary substantially among the various types
of facilities. It is reported that some facilities operate
with nearly zero net margin or profit, while others may enjoy
up to four to five cents per gallon profit. Sufficient data are
not available on gasoline dispensing facilities in Ohio to present
a thorough analysis of existing price structures and degree of
competition in the industry within the State.
16-7
-------
16.3 THE TECHNICAL SITUATION IN THE INDUSTRY
This section presents information on gasoline dispensing
facility operation, estimated VOC emissions from facility
operations in the state, the extent of current control in
use, the vapor control requirements of RACT and the likely
alternatives which may be used for controlling VOC emissions
from gasoline dispensing facilities in Ohio.
16.3.1 Gasoline Dispensing Facility Operations
Gasoline dispensing facilities are the final distribu-
ion point in the gasoline marketing network. Gasoline is
delivered from bulk gasoline plants via account truck or
from the bulk gasoline tank terminal via trailer-transport
truck, stored in underground storage tanks, and subsequently
dispensed via pump to motor vehicles. Gasoline dispensing
facilities are characterized by their services and business
operations: full service stations, split island stations,
self-service stations, and convenience store operations.
In full service stations, attendants offer all services
including gasoline pumping and mechanical check-ups. If
fuel is used at any of the last three classes of stations,
the customers may fill up the tanks themselves. In split
island stations, both self-service and full service are
offered. At the two remaining types of stations, only
self-service is available.
Gasoline service stations and other gasoline dispensing
facilities will be required to comply with Stage I vapor
control by January 1, 1982.
16.3.1.1 Facilities
Equipment at gasoline dispensing facilities used in
handling gasoline are: gasoline storage tanks, piping and
gasoline pumps. The most prevalent type of gasoline storage
tank is the underground tank. It is assumed that there are
typically three storage tanks per facility based on infor-
mation in Hydrocarbon Control Strategies for Gasoline
Marketing Operations, p. 2-17. Gasoline is dispensed to
motor vehicles through pumps and there may be anywhere from
one to twenty pumps per facility. Stage I vapor control
regulations apply to the delivery of gasoline to the
facility and the subsequent storage in underground tanks.
16-8
-------
16.3.1.2 Operations
Uncontrolled VOC emissions at gasoline dispensing
facilities come from loading and unloading losses from tank
trucks and underground tanks, refueling losses from vehicle
tanks, breathing losses from the underground tank vent and
from spillage. Stage I vapor control applies to tank truck
unloading and working and breathing losses from underground
storage tanks.
Tank trucks are unloaded into underground storage tanks
either by splash loading or submerged loading. Splash
loading results in more emissions than submerged loading.
More specifically, losses occur when:
Organic liquids vaporize into the air that is
drawn into the tank truck compartment during
unloading of the tank truck.
Vapors are displaced from the underground storage
tank during tank loading.
Changes in temperature and pressure in the under-
ground storage tank result in vapors being vented
to the atmosphere.
The control measures involve vapor balancing between
tank truck and storage tank and submerged filling of the
gasoline storage tank. Vapor recovery systems are also
available for emission control when combined with a vapor
balancing system.
Since most storage tanks at gasoline dispensing facili-
ties are relatively small and underground, it is unlikely
that they are equipped with sophisticated control equipment.
The breathing losses, therefore, can be controlled by
adjusting the pressure relief valve.
16.3.2 Emissions and Current Controls
This section presents the estimated VOC emissions from
gasoline dispensing facilities in Ohio in 1977 and the cur-
rent level of emission control already implemented in the
State. Exhibit 16-5, on the following page, shows the total
estimated emissions in tons per year from gasoline dispensing
facilities in Ohio. Emissions, based on gasoline throughput,
16-9
-------
Exhibit 16-5
U.S. Environmental Protection Agency
VOC EMISSIONS FROM GASOLINE DISPENSING
FACILITIES IN OHIO
Estimated
Number of
Facilities Average Yearly Throughput Total Emissions
(Millions of Gallons) (Tons/Year)
22,588 5,117 45,506
Source: Booz, Allen & Hamilton Inc.
-------
are estimated to be 45,506 tons per year. Emissions
include emissions from underground tank breathing, under-
ground tank filling, vehicle refueling and spillage.
It was assumed that 90 percent of the storage tank
loading was by the submerge fill method based on industry
interviews.
16.3.3
RACT Guidelines
The RACT guidelines for Stage I VOC emission control
from gasoline dispensing facilities require the following
controls:
Submerged fill of gasoline storage tanks
Vapor balancing between the truck and the gasoline
storage tank
Proper operation and maintenance of equipment.
Exhibit 16-6, on the following page, summarizes the RACT
guidelines for VOC emissions control from gasoline dispensing
facilities.
16.3.4
Selection of the Most Likely RACT Alternatives
Stage I control of VOC emissions from gasoline dispensing
facilities is achieved using submerged filling of storage
tanks and vapor balancing between the unloading of incoming
tank trucks and the gasoline storage tanks. There are alter-
native means of achieving vapor balance based primarily
on the method of connecting the vapor return line to the
gasoline storage tank. The two primary methods for con-
necting vapor return lines, two point connection and coaxial
or concentric connection (often referred to as tube-in-tube
connection), are described in Sections 16.3.4.2 and 16.3.4.3.
16.3.4.1 Vapor Balance System
The purpose of the vapor balance system is to return
displaced vapors from the underground gasoline storage
tank to the tank truck during storage tank loading. There
16-10
-------
Exhibit 16-6
U.S. Environmental Protection Agency
VOC EMISSION CONTROL TECHNOLOGY FOR
TYPICAL GASOLINE DISPENSING
FACILITY
Facilities
Affected
Sources of
Emissions
Gasoline service
stations and gas-
oline dispensing
facilities
Storage tank fill-
ing and unloading
tank truck
RACT Control
Guidelines
Stage I vapor control
system, i.e., vapor
balance system which
returns vapors dis-
placed from the stor-
age tank to the truck
during storage tank
filling; and submerge
filling
Source: Design Criteria for Stage I Vapor Control Systems -
Gasoline Service Stations, U.S. EPA, November 1975.
-------
are two basic versions of vapor balancing for Stage I.
The "two point" method depected in Exhibit 16-7. on
the following page, shows a storage tank with two risers.
One riser is for fuel delivery and the other is for returning
vapors to the tank truck. The other method, "concentric or
coaxial system," shown in Exhibit 16-8, following Exhibit
16-7, employs a concentric liquid vapor return line, thus
requiring only one tank riser.
The vapor balance systems use flexible hoses carrying
liquid gasoline from the tank truck down a drop tube to the
underground storage tank. Entering liquid forces the air-
hydrocarbon mixture in the storage tank out through a flex-
ible vapor return hose to the tank truck. At the truck, the
vapor return hose is connected to a piping manifold which is
interconnected with the truck compartments by vents. The
vents are opened selectively during truck unloading, allow-
ing returning vapors from the underground tank to enter
respective product compartments on the truck.
16.3.4.2 Two Point Vapor Balance System
The most effective method of transferring displaced
vapors from the underground tank to the truck is by using
a separate connection to the underground storage tank for
the vapor return hose as shown in Exhibit 16-8. Equipment
costs for this type of system are less expensive than for
the coaxial or concentric system, although installation costs
are considerably higher. U.S. EPA has tested this type of
system to show that it complies to RACT requirements. It
is estimated that 25 percent of the gasoline dispensing
facilities would install the two point system, bearing a
higher cost but achieving greater efficiency.
16.3.4.3 Concentric or Coaxial Vapor Balance Systems
At some gasoline dispensing facilities, a separate
riser is not available on storage tanks or the gasoline dis-
pensing facility operator does not wish to incur the additional
installation expense to excavate to an unused entry to install a
separate riser. For these cases, coaxi; 1 devices have been
developed to remove vapors from the same opening through
which the fuel is delivered.
As shown in Exhibit 16-8, a drop tube of smaller diameter
is inserted in the existing fuel riser. The vapors exit
16-11
-------
Exhibit 16-7
U.S. Environmental Protection Agency
STAGE I VAPOR CONTROL SYSTEM -
VAPOR BALANCING WITH SEPARATE LIQUID-VAPOR RISE]
Orifice or P-V Vjlve
Unlcti
Vjpor lluics «rc
Inttrlocl.td.
Orybrejk,
Interlock or
Pcriunfrit
V.<;.or bjlan,:1nj tilth
- v«jpor
risers.
Source; Design Criteria for Stage I Vapor Control Systems Gasoline
Service Stations, U.S. EPA, November 1975.
-------
Exhibit 16-8
U.S. Environmental Protection Agency
STAGE I VAPOR CONTROL SYSTEM -
VAPOR BALANCING WITH CONCENTRIC LIQUID-VAPOR RI-
Vvir ! 'lire ing ,1th
Cur;,.,trie li^.
riser.
Source; Design Criteria for Stage I Vapor Control Systems Gasoline
Service Stations, U.S. EPA, November 1975.
-------
through the annular space. A coaxial adaptor fits on the
riser and provides connections for the fuel delivery hose to
the vapor return hose. In the other system, the fuel and
vapor passages are separated in a "Y" fitting which is per-
manently attached to the underground tank. The fittings for
the hose connections are located in a conventional manhole.
Most of these coaxial devices provide less cross-sectional
area in the vapor return passage than do separate connectors
and tend to reduce vapor recovery efficiency and gasoline
storage tank fill rates to some extent. It is estimated
that 75 percent of the gasoline dispensing facilities would
install this type of system due to the lower installed cost
of the system.
16.3.4.4 Manifolded Vent Lines
Several schemes have been used to manifold vents from
two or more tanks to a common vapor hose connection. Mani-
folding may be above or below grade. A number of configura-
tions have been developed for use with suitable vent restric-
tions. A three-way connector provides the most effective
arrangement since connection of the vapor hose to the common
connector blocks flow to the atmosphere and routes all dis-
placed vapor to the tank truck. In any manifold piping
system, care must be exercised to prevent ccr.tamination of
"no-lead" gasoline products.
16.3.4.5 Drop Tubes for Submerged Filling
Submerged fill is required by Stage I vapor control.
The submerged fill requirement means use of a drop tube
extending to within six inches of the storage tank bottom.
Under normal industry practices, a tube meeting this spec-
ification will always be submerged since the storage tanks
are not pumped dry.
16-12
-------
16.4 COST AND HYDROCARBON REDUCTION BENEFIT EVALUATIONS FOR
RACT STAGE I REQUIREMENTS
Costs for VOC emission control equipment are presented
in this section. The costs for a typical gasoline dispensing
facility are described, followed by a projection to the
statewide industry.
16.4.1 Costs for Vapor Control Systems
The costs for vapor control systems were derived from
analysis of the petroleum marketing trade associations data and
from previous cost and economic studies of gasoline dispensing
facilities, and are summarized for a typical gasoline dispensing
facility in Exhibit 16-9, on the following page. Costs are
based on the type and amount of equipment at a gasoline dis-
pensing facility. The cost of Stage I vapor control for a
typical facility of 45,000 gallons per month throughput has
been estimated as follows. Capital costs of installing the
two point vapor-balance equipment at existing facilities are
about $2,000 per station. This cost includes equipment costs
($300-$500) and installation ($1,300-$1,600).1 The installed
capital cost for a coaxial or concentric system is reported
by U.S.EPA to be $150 to $200 per tank, including parts and
labor. Annualized capital costs are estimated at 25 percent
of installed capital cost and include interest, depreciation,
taxes and maintenance. This cost analysis does not consider
the cost of tank truck modification. The cost of modifica-
tion of trucks to receive the displaced vapors is about
$2,000-$3,000 per truck. It is assumed that the service
station operator does not own the tank truck and, therefore,
will not bear this cost.
Stage I vapor control at gasoline dispensing facilities
will not increase direct annual operating costs. Gasoline
credit is not included in Exhibit 16-9, but it will be included
in the statewide costs in the next section. The net annualized
cost for a typical gasoline service station with 45,000 gallons
per month throughput is estimated to be $500 for the two point
system and $150 for the concentric or coaxial system.
1 Air Pollution Control Technology Applicable to 26 Sources of
Organic Compounds, U.S. Environmental Protection Agency, May 27,
1977. (This cost includes excavation and construction of mani-
folded stroage tanks.)
16-13
-------
Exhibit 16-9
U.S. Environmental Protection Agency
STAGE I VAPOR CONTROL COSTS FOR A
TYPICAL GASOLINE DISPENSING
FACILITY
Description of Model Gasoline Dispensing Facility
Monthly throughput (gallons) 45,000
Number of storage tanks 3
Costs
($, 1977)
Coaxial or
Two Point Concentric
System System
Installed capital cost 2,000 600
Annualized capital charges 500 150
Direct operating cost 0 0
Net annualized cost 500 150
a. Twenty-five percent of installed capital
cost. Includes depreciation, interest, taxes,
insurance and maintenance.
Source: Booz, Allen & Hamilton Inc.
-------
16.4.2 Extrapolation to the Statewide Industry
Exhibit 16-10, on the following page, shows the ex-
trapolation of vapor control costs to the statewide industry
based on the costs for a typical gasoline dispensing facility.
It should be noted that actual costs to gasoline dispensing
facility operators may vary depending on the type of control
method and manufacturer's equipment selected by each facility
operator.
The total cost to the industry for installing vapor
control equipment is estimated to exceed $21.4 million.
The amount of gasoline prevented from vaporizing using
submerged filling of the gasoline storage tank is valued at
$176,000 per year. The annualized cost per ton of emissions
controlled is estimated to be $195 per ton. The distribution of
the statewide costs and emissions reduction by the size of
gasoline dispensing facilities based on throughput is shown
in Exhibit 16-11, following Exhibit 16-10. Based on these
data, gasoline dispensing facilities with throughput less than
24,000 gallons per month account for 45 percent of the
estimated statewide cost of control but only 23 percent of
the estimated emissions reduction from gasoline dispensing
facilities.
16-14
-------
Exhibit 16-10
U.S. Environmental Protection Agency
STATEWIDE COSTS IN OHIO FOR STAGE I
VAPOR CONTROL OF
GASOLINE DISPENSING FACILITIES
SUMMARY OF COSTS
Number of facilities 22,588
Total annual throughput 5,117
(millions of gallons)
Uncontrolled emissions 45,506
(tons/year)
Emissions reduction 26,523
(tons/year)
Emissions after RACT control 18,983
(tons/year)
Installed capital 21.46
($ millions)
Annualized capital cost 5.365
($ millions)
Annual gasoline credit 0.176
($ millions)
Net annualized cost 5.189
($ millions)
Net annualized cost per ton of 195
emissions reduced
($ per ton/year)
a. Emission reduction based on reducing emissions from tank filling
by employing submerged filling and vapor balancing.
b. Gasoline credit of $1.076 million calculated based on converting frc
splash fill to submerged fill and gasoline valued at $0.507 per gall
Source; Booz, Allen & Hamilton Inc.
-------
Exhibit 16-11
U.S. Environmental Protection Agency
STATEWIDE COSTS OF VAPOR CONTROL
SYSTEMS BY SIZE OF GASOLINE
DISPENSING FACILITY IN OHIO
Gasoline Dispensing
(000 gallons per month)
« 10
11-24
25-49
50-99
,,„„
F '--I imotC'J
Current F^t *' pA Annu.il VCK Net V'X
((on1; |" i y.ir) (ton1, |'<*r y.ir t ((MI.- i • r \-^.ir !
4,5 I 4r>5.0fr 1H-) HI /r.r, ,M
4O.7 ?? \n.oil \: 'tis 77 '•>,«)•• IK.
31.2 10 ll.f.Sl.H S.f.94.') ','!•,( >
18.7 II IS.Olfi.'IH fi./'.4.11 B.7'..1 '.'1
4.9 14 r,, 1)1). H4 ^.».M f,.' l.'li "
Porcontaqe of Percentage
Total V(X' rstitnated of Total
i ( j . F*U 1 1 ions .
1077)
] 0..-M3 4.5
i ; 1 . 11 2 40.7
10 1 fc!9 11.2
11 0.070 18.7
] -1 O.?r>4 4.9
N*t Hydro-
carbon Control Coat
tc.ns | "r yar )
878
162
203
111
68
a. The Economic Impact of Vapor Recovery Regulations on the Service
Station Industry, p. 32.
Source: Booz, Allen & Hamilton Inc.
-------
16.5 DIRECT ECONOMIC IMPLICATIONS
This section presents the direct economic implications
of implementing Stage I RACT controls to the statewide
industry including availability of equipment and capital;
feasibility of the control technology; and impact on economic
indicators, such as value of shipments, unit price, state
economic variables and capital investment.
16.5.1 RACT Timing
RACT must be implemented statewide by January 1, 1982.
This means that gasoline dispensing facility operators must
have vapor control equipment installed and operating within
the next three years. The timing requirements of RACT impose
several requirements on facility operators including:
Determining the appropriate method of vapor balancing
Raising capital to purchase equipment
Generating sufficent income from current opera-
tions to pay the additional annual operating
costs incurred with vapor control
Acquiring the necessary vapor control equipment
Installing and testing vapor control equipment to
insure that the system complies with RACT.
The sections which follow discuss the feasibility and
economic impacts of meeting the above requirements within
the required timeframe.
16.5.2 Feasibility Issues
Technical and economic feasibility issues of implement-
ing RACT controls are discussed in this section.
Gasoline service stations in several air quality control
regions of the United States have successfully implemented
Stage I vapor control systems.
State adoption of Stage I RACT regulations will generate
additional demand for the vapor control systems for gasoline
dispensing facilities. However, it is estimated that off-
the-shelf systems will be readily available within the next
three years, thus making the implementation of Stage I RACT
technically feasible.
16-15
-------
A number of economic factors are involved in determining
whether a specific facility operator will be able to imple-
ment vapor control systems and still remain profitable.
These include:
Ability to obtain financing
Ownership—major oil company or private individual
Ability to pass on a price increase
The current profitability of the gasoline dispensing
facility
Age of the facility.
A major finding in a study on gasoline dispensing
facility vapor control was that small facilities could have
problems raising the necessary capital to purchase and in-
stall vapor control equipment. The inability to raise the
necessary capital to install vapor control equipment is
predicted to cause the closing of some facilities.
Gasoline dispensing facilities that are owned by
major oil companies may have better access to capital than
privately owned facilities. A private gasoline dispensing
facility owner may have to borrow capital from local banks,
friends or relatives, whereas a facility o^-—-^ by a major
oil company may receive funding out of the oj.1 company's
capital budget.
It is estimated that small gasoline dispensing facilities
with throughput less than 10,000 gallons per month (which
represent approximately 4.5 percent of the facilities in
the State) will experience a cost increase of nearly
$.0045 per gallon to implement RACT, whereas larger
facilities will experience a smaller cost increase.
This will put the smaller stations at a competitive disadvan-
tage in terms of passing on the costs to the customers by
raising prices.
Recent experience indicates that temporary disruption resultii
from Stage I RACT control installation can have serious impacts
on the service station profitability. In an interview, the Create:
Washington/Maryland Service Station Association reported that
several stations experienced loss of business for up to three
weeks while Stage I vapor control was being installed. Service
station driveways were torn up, greatly restricting access to
pumps.
16-16
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In some instances, oil company owned service stations
were sold or closed down because the oil companies did not
want to expend funds for vapor control at these marginally
profitable operations.
The older gasoline dispensing facilities reportedly
may experience greater cost and temporary loss of business
than new facilities when implementing Stage I vapor control
because of the more extensive retrofit requirements.
The number of gasoline dispensing facilities has been
declining nationally over the past few years for a number
of reasons, including a trend towards reducing overhead
costs by building high throughput facilities. This trend
is likely to continue whether or not vapor control is
required. Implementation of Stage I RACT control may simply
accelerate as marginal operations may opt not to invest
in the required capital costs. Sufficient data for this
state are not available to quantify the magnitude of this
impact.
The paragraphs which follow compare statewide costs of
RACT control, in 1977 dollars, to various economic indicators,
16.5.3 Comparison of Direct Cost with Selected Direct
Economic Indicators
This section presents a comparison of the net increase
in the annual operating cost of implementing RACT with the
total value of gasoline sold in the state, the value of re-
tail trade in the state and the unit price of gasoline.
The net increase in the net annualized cost to the
gasoline dispensing industry from RACT represents 0.2
percent of the value of the total gasoline sold in the state.
Compared to the statewide value of retail trade, this
annual cost increase is insignificant. The impact of the
unit price of gasoline on individual facilities varies
with the facility throughput. As discussed in the preceding
section, the small facilities, less than 10,000 gallons per
month throughput, may experience an annualized cost of up
to $.0045 per gallon of gasoline sold, whereas th 2 large
facilities may experience a smaller annualized cost increase.
16-17
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16.6 SELECTED SECONDARY ECONOMIC IMPACTS
This section discusses the secondary impact of imple-
menting RACT on employment, market structure and gasoline
dispensing facility operations.
Employment is expected to decline, if a number of small,
marginally profitable gasoline facilities cease operation
in lieu of investing capital for compliance with RACT.
Based on the statewide estimates of number of employees and
number of service stations, approximately three jobs will be
lost with the closing of a gasoline dispensing facility.
No estimate was made of the total number of facilities
that may close due to RACT.
The market structure is not expected to change signif-
icantly because of Stage I vapor control requirements.
The industry trend is such that there would be 50 percent
self-service stations by 1980s. The total number of stations
is predicted to decline, while throughput per station is
predicted to increase.
The impact on a specific facility operation is
expected to be slight. Fill rates for loading gasoline
storage tanks may slightly decline if coaxial or concen-
tric vapor hose connections are used.
Exhibit 16-12, on the following page, presents a sum-
mary of the findings on this report.
16-18
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Current Situation
Number of potentially affected
facilities
Indication of relative impor-
tance of industrial sector to
state economy
Current industry technology
trends
1977 VOC actual emissions
Exhibit 16-12
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTING RACT FOR GASOLINE DISPENSING
FACILITIES IN THE STATE OF OHIO
Discussion
22,600
Industry sales are $2.6 billion with a yearly
throughput of 5.116 billion gallons
Number of stations has been declining and throughput
per station has been increasing. By 1980, one-half
of facilities in U.S. will be totally self-service
45,506 tons per year from tank loading operation
Industry preferred method of VOC Submerged fill and vapor balance
control to meet RACT guidelines
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost
(statewide)
Price
Energy
Productivity
Employment
Market structure
Problem area
VOC emissions after control
Cost effectiveness of control
Discussion
$21.46 million
$5.189 million (approximately 0.2 percent of the
value of gasoline sold) ,
Assuming a "direct cost pass-through"—less than
$0.002 per gallon increase
Assuming full recovery of gasoline—net savings of
181,000 barrels annually
No major impact
No major impact
Compliance requirements may accelerate the industry
trend towards high throughput stations (i.e., mar-
ginal operations may opt to stop operations)
Older facilities face higher retrofit costs—potential
concerns are dislocations during installation
18,983 tons per year from tank loading operation tank
breathing, vehicle refueling and spillage
$195 annualized cost/annual ton of VOC reduction
Source; Booz, Allen & Hamilton Inc.
-------
BIBLIOGRAPHY
Hydrocarbon Control Strategies for Gasoline Marketing
Operations, EPA-450/3-78-017, April 1978.
"Economic Impact of Stage II Vapor Recovery Regulations:
Working Memoranda," EPA-450/3-76-042, November 1976.
National Petroleum News Fact Book, 1978, McGraw Hill,
Mid-June 1978.
"Cost Data-Vapor Recovery Systems at Service Stations,"
PB-248 353, September 1975.
"Hunan Exposure to Atmospheric Benzine," EPA Contract
No. 68-01-4314, October 1977.
"Reliability Study of Vapor Recovery Systems at
Service Stations," EPA-450/3-76-001, March 1976.
"Regulatory Guidance for Control of Volatile
Organic Compound Emissions from 15 Categories of
Stationary Sources," EPA-905/2-78-001, April 1978.
"Systems and Costs to Control Hydrocarbon Emissions
from Stationary Sources," PB-236 921, Environmental
Protection Agency, September 1974.
Private conversation with Mr. Vic Rasheed, Greater
Washington/Maryland Service Station Association.
"The Lundburg Letter," Pele-Drop, North Hollywood,
California.
"Revision of Evaporative Hydrocarbon Emission Factors,"
Radian Corporation, PB-267 659, August 1976.
"A Study of Vapor Control Methods for Gasoline Marketing
Operations," Radian Corporation, PB-246 088, April 1975.
"Design Criteria for Stage I Vapor Control Systems
Gasoline Service Stations," U.S. EPA, November 1975.
-------
-------
17.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
USE OF CUTBACK ASPHALT
IN THE STATE OF OHIO
-------
-------
17.0 THE ECONOMIC IMPACT OF
IMPLEMENTING RACT FOR
USE OF CUTBACK ASPHALT
IN THE STATE OF OHIO
This chapter presents a detailed analysis of the impact
of implementing RACT for use of cutback asphalt in the State
of Ohio. The chapter is divided into six sections
including:
Specific methodology and quality of estimates
Industry statistics
The technical situation in the industry
Ccst and VOC reduction benefit evaluations for
the most likely RACT alternatives
Direct economic implications
Selected secondary economic impacts.
Each section presents detailed data and findings based
on analyses of the RACT guidelines, previous studies of the
use of cutback asphalt, interviews and analysis.
17-1
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17.1 SPECIFIC METHODOLOGY AND QUALITY OF ESTIMATES
This section describes the methodology for determining
estimates of:
Industry statistics
VOC emissions
Controlling of VOC emissions
Cost of controlling VOC emissions
Economic impact of emission control
for the use of cutback asphalt in Ohio.
An overall assessment of the quality of the estimates
is detailed in the latter part of this section.
17.1.1 Industry Statistics
Industry statistics on the use of cutback asphalt were
obtained from the U.S. Bureau of Mines. Sales in tons
were available for 1976. Sales in 1977 were assumed to be
equal to 1976. The value of shipments was calculated by
applying an average unit price of 36 cents per gallon.
17.1.2 VOC Emissions
VOC emissions from the use of cutback asphalt in
Ohio were calculated by multiplying the emission factors
for cutback asphalt by the number of tons of asphalt used.
The emission factor for slow cure asphalt is 0.078 tons per
ton, for medium cure asphalt 0.209 tons per ton, and for
rapid cure asphalt 0.20 tons per ton. ^
17.1. 3 Process for Controlling VOC Emissions
The process for controlling VOC emissions from the use
of cutback asphalt is decribed in "Control of Volatile
Organic Compounds from Use of Cutback Asphalt,"
EPA-450/2-77-037, and "Air Quality and Energy Conservation
Benefits from Using Emulsions to Replace Cutbacks in Certain
Paving Operations," EPA-450/12-78-004. Interviews were
conducted with asphalt trade associations, asphalt producers,
and government agencies to gather the most up-to-date
information on costs for cutback asphalt and asphalt emul-
sions, the feasibility of using emulsions in place of cutback
1 "Control of Volatile Organic Compounds from Use of Cutback
Asphalt," EPA-450/2-77-037, p. 1-3.
17-2
-------
asphalt and the associated cost implications. Other sources
of information were "Mineral Industry Surveys," U.S. Bureau
of Mines; "Magic Carpet, the Story of Asphalt," The Asphalt
Institute; "Technical Support for RACT Cutback Asphalt,"
State of Illinois; and "World Use of Asphalt Emulsion,"
paper by Cyril C. Landis, Armak Company.
17.1.4 Cost of Vapor Control
The costs for control of VOC emissions from the use of
cutback asphalt are incurred by using emulsions in place of
cutback asphalt. These costs include:
Differential cost per gallon of emulsion versus
cutback asphalt
Changes in equipment for applying emulsions in
place of cutback asphalt
Training of personnel to work with asphalt
emulsions in place of cutback asphalt.
Additionally, if every state incorporates the RACT
guidelines, additional plant capacity to produce asphalt
emulsions would have to be created.
Costs were determined from analyses of the studies
listed above and from interviews with asphalt trade asso-
ciations, government agencies and producers and users of
cutback asphalt and emulsions. Differential costs were for
replacing cutback asphalt with asphalt emulsions, and these
costs were extrapolated to the state.
17.1.5 Economic Imoacts
The economic impacts were determined by assessing the
feasibility of instituting RACT controls; analyzing the lead
time requirements for implementing RACT; and determining any
changes in employment, productivity and market structure.
17.1.6 Quality of Estimates
Several sources of information were utilized in
assessing the emissions, cost and economic impact of
implementing RACT for the use of cutback asphalt. A rating
scheme is presented in this section to indicate the quality
17-3
-------
of the data available for use in this study. A rating of
"A" indicates hard data (i.e., data that are published for
the base year); "B" indicates data that were extrapolated
from hard data; and "C" indicates data that were not avail-
able in secondary literature and were estimated based on
interviews, analyses of previous studies and best engineering
judgment. Exhibit 17-1, on the following page, rates each
study output listed and the overall quality of the data.
17-4
-------
Exhibit 17-1
U.S. Environmental Protection Agency
DATA QUALITY
ABC
Study Outputs Hard Data Extrapolated Estimated
Data Data
Industry statistics
Emissions
Cost of emissions
control
Statewide costs of
emissions
Economic impact
Overall quality of
data
Source: Boo2, Allen & Hamilton, Inc.
-------
17.2 INDUSTRY STATISTICS
This section presents information on the cutback
asphalt industry, statewide statistics of cutback asphalt
use, and comparison of cutback asphalt consumption to the
statewide value of wholesale trade. A history of the use
of cutback asphalt and its future pattern of use are also
discussed. Data in this section form the basis for assessing
the technical and economic impacts of implementing RACT in
Ohio.
17.2.1 Industry Description
The cutback asphalt industry encompasses the production
and use of cutback asphalt. Cutback asphalt is one product
resulting from the refining and processing of asphalt from
crude oil. Exhibit 17-2, on the following page, depicts how
asphalt is produced at the refinery and then further processed.
Cutback asphalt is produced from refined asphalt and petroleum
liquids at an asphalt mixing plant. It is then stored in
tanks or loaded into tank trucks and sold to end users, pri-
marily state highway organizations and construction contractors
Since RACT control requires the use of asphalt emulsions
to replace cutback asphalt, it is necessary to understand how
each of the asphalt types is produced. A discussion of as-
phalt production and use appears in a later section of this
report.
17.2.2 Size of the Cutback Asphalt User Industry
This report addresses the size of the cutback asphalt
user industry in Ohio. Although some cutback asphalt
may be produced in Ohio, the production industry is 'not
the focus of this study since RACT requires control of the
use of cutback asphalt. An estimated 265,000 tons of cut-
back asphalt were purchased in Ohio in 1977 at a value
of $24.3 million. The value is based on an estimated average
price per gallon of $0.36.
Cutback asphalt is primarily used in paving in Ohio.
The number of employees involved in cutback asphalt paving
operations in Ohio is unknown although it was estimated from
interviews that there are approximately six employees per
county currently employed in the use of cutback asphalt.
17-5
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Exhibit 17-2
U.S. Environmental Protection Ager
PETROLEUM ASPHALT FLOW CHART
On win
PETROLEUM ASPHALT FLOW CHART
MOCISi'MC
GASOilMI
Wt*IMT|
iotiNi
HGMt (UtNII OH
DIIUI On
lUM'CATIMG OllS
H«lO STOtAGl *M»*MC ttATIQN
Thu amplified graphic chert ihowi "
-a Iht inter-f»lotionthipt of petroleum tlliOuAi
P . . . »Ull OH
r- producti with 9otonn«. oil end
'-^ oipholt flowing front rhc lomt oil
p=> well
i
l
i
CAS
iANO ANO WATtl
MCUWII I M
itow .v—v
ll«W«* A»»NMTS
. . ! AM»tOA»OUt
ft(»Alf 0 »' CMICCT
DISTIllATIOMI
•LIMOfl
MI04UM CUMMO
IIOUIO A»»MALTt
• UMIIMTWB AtmUktTt
CUTBACK
ASPHALT
Source; The Asphalt Institute
-------
17.2.3 Comparison to Statewide Economy
The value of shipments of cutback asphalt to the
statewide value of wholesale trade in Ohio is small.
17.2.4 Demand for Cutback Asphalt
In the 1920s and 1930s, cutback asphalt emerged as a
low-cost adequate binder for paving materials that provided
weather resistance and a dust-free surface to respond to the
rapidly growing demand for increased highway mileage brought
on by the increasing numbers of automobiles. After the
Second World War, the sale of cutback asphalts remained at
an almost constant level while the sales and use of asphalt
cement more than quadrupled from 1954 to 1974. Since 1973,
the use of cutback asphalt has decreased. Exhibit 17-3, on
the following page, shows the historical sales nationally
from 1970 to 1976 of asphalt cement, cutback asphalt and
asphalt emulsions.
17.2.5 Prices
Historically, asphalt emulsions were up to 10 percent
less expensive per gallon than cutback asphalt; currently,
the price difference is not appreciable.
17-6
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Exhibit 17-3
U.S. Environmental Protection Agency
HISTORICAL NATIONAL SALES OF ASPHALT CEMENT,
CUTBACK ASPHALT AND ASPHALT EMULSIONS
YEAR
ASPHALT CEMENT
Percent
Use of of Total
CUTBACK ASPHALT
Percent
Use of of Total
ASPHALT EMULSIONS TOTAL
Percent
Use of of Total Use of
(000 of tons)
1970
1971
1972
1973
1974
1975
1976
17,158
17,612
18,046
20,235
19,075
16,324
16,183
72.7
73.8
74.2
74.8
77.4
75.7
75.3
(000 of tons)
4,096
3,994
3,860
4,220
3,359
3,072
3,038
17.4
16.7
15.9
15.6
13.6
14.2
14.2
(000 of tons
2,341
2,275
2,399
2,585
2,208
2,197
2,254
9.9
9.5
9.9
9.6
9.0
10.1
10.5
23,594
23,821
24,305
27,040
24,642
21,593
21,474
Source: U.S. Bureau of Mines
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17.3 THE TECHNICAL SITUATION IN THE INDUSTRY
This section presents information on the use and
production of asphalt. The sources and VOC emission
characteristics of cutback asphalt are then described
followed by: estimated statewide VOC emissions from the
use of cutback asphalt; the VOC control measures required
by RACT; and the VOC emission control procedure for use of
cutback asphalt in Ohio.
17.3.1 Asphalt and Its Uses
Asphalt is a by-product of petroleum distillation
(natural or man-made) which has been put to use in many
different ways. In ancient times, asphalt was used in its
natural form to caulk boats and ships, for mortar in masonry
construction and-'as cement for mending stone tools. In the
present day, asphalt is used primarily for paving and in a
wide range of construction applications including: roofing,
weatherproofing, floor tile, insulating materials, molded
electrical equipment, papers, shingles and coatings.
Asphalt is highly suitable for paving because it is
durable and weather resistent. The types of paving appli-
cations in which asphalt is used range from a thin layer
sprayed on a dirt road to keep down dust, to a heavy duty
pavement of thick layers of asphalt mixed with aggregate
designed to carry heavy traffic. Asphalt pavement may vary
greatly in thicknesses and strengths, depending on the
traffic it will be required to carry.
Three major types of asphalt pavements are currently
in use in the United States:
Asphalt cement
Cutback asphalt
Asphalt emulsions.
Asphalt cement pavements are often referred to as "hot
mix." This type of pavement is not under consideration for
RACT. Cutback and asphalt emulsions fall into the class of
"liquid asphalt" and are discussed in detail since RACT
guidelines specify replacing the use of highly volatile
cutback asphalt with asphalt emulsions.
Cutback asphalts are produced by liquifying asphalt
cement by blending it with a petroleum solvent. Three basic
types of cutback asphalt are:
17-7
-------
Slow cure asphalt, sometimes referred to as road
oil, is composed of asphalt cement and oils of
low volatility.
Medium curing cutback asphalt is a liquid asphalt
composed of asphalt cement and a kerosene-type
diluent of medium volatility.
Rapid curing cutback asphalt is liquid asphalt
composed of asphalt cement and a naphtha of
gasoline-type diluent of high volatility.
Asphalt emulsions are emulsions of asphalt cement and
water which contain a small amount of emulsifying agent.
Asphalt and water are normally immiscible products, but the
emulsifying agent causes the two products to mix.
Cutback and emulsified asphalt are used in nearly all
paving applications. In most applications, cutback asphalt
and asphalt emulsions are sprayed directly on the road sur-
face; the principal other mode is in cold mix applications
normally used for wintertime patching. As cutback asphalt
cures, VOC evaporates to the atmosphere. Asphalt emulsions,
however, consist of asphalt suspended in water, which
evaporates during curing.
17.3.2 Production of Asphalt
Asphalt is a product of the distillation of crude oil.
It is found naturally and can also be produced from petroleum
refining. Almost all asphalt used in the United States is
refined from petroleum. Such asphalt is produced in a
variety of types and grades ranging from hard brittle solids
to almost water-thin liquids. The types of products pro-
duced from refining crude oil are shown in Exhibit 17-2.
About 70 percent of the asphalt produced in the United States
is used for paving.
Asphalt is distilled from crude oil at refineries. The
"crude" is distilled at atmospheric pressure to remove the
lower boiling materials, such as gasoline, kerosene, diesel
oil and gas oil. Nondistiliable asphalt is then recovered
from selected topped crude by vacuum distillation; oil and
wax are removed as distillates; and the \sphalt is left as
residue. At this stage of production, asphalt cement has
been produced. Some of this product is then blended with
various petroleum solvents to produce cutback asphalt. As-
phalt cement is further processed at an emulsion plant to
produce asphalt emulsion. Asphalt cement used directly for
paving must be heated and mixed with aggregate at a "hot mix"
plant.
17-8
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17.3.2.1 Cutback Asphalt Manufacture
Cutback asphalt is manufactured by blending asphalt
cement and solvents at an asphalt mixing plant. Processes
for manufacturing cutback asphalt can be batch or continu-
ous. In batch processing, a suitable solvent is pumped into
a vessel, then hot (fluid) asphalt is added and both compo-
nents are mixed by mechanical agitation. When the appropri-
ate formula has been obtained the mixture is poured into
tanks and sealed. Increased demand for cutback asphalt
brought about the advent of continuous processing for manu-
facture. In a continuous process the asphalt and solvent
are pumped through positive displacement meters to a mixing
or blending station and then through a heat exchanger to
storage tank, ship, tank car or tank truck.
17.3.2.2 Asphalt Emulsion Manufacture
Continuous manufacture is the most common process for
manufacturing asphalt emulsions. In this process, the as-
phalt and water are mixed or emulsified in a colloidal mill,
In most types of colloidal mills, the hot asphalt is drawn
out into thin films between a stator and a high speed rotor,
The metal surfaces may be smooth or rough and the space be-
tween them is adjustable. In the presence of the aqueous
emulsifying solution the film breaks into the small drops
found in the finished emulsion. Asphalt emulsions must be
perfectly homogeneous and able to withstand storage and
shipping. Most emulsions must not be subjected to temper-
atures below 0°C because freezing of the aqueous solution
will coagulate the asphalt particles.
17.3.3 Sources and VOC Emission Characteristics of Cutback
Asphalt
Hydrocarbons evaporate from cutback asphalts at the
job site and at the mixing plant. At the job site, hydro-
carbons are emitted from equipment used for applying the
asphaltic product and from road surfaces. At the mixing
plant, hydrocarbons are released during mixing - vl stcr1 -
piling. The largest source of emissions, however, is t^e
road surface itself. In Ohio, cutback asphalt is used
in construction and maintenance of secondary roads throughout
the state.
17-9
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It is the petroleum distillate (diluent) in the cutback
asphalt that evaporates. The percentage of diluent that
evaporates depends on the cure type.
The diluent in the three types of cutback asphalt that
evaporates represents the following average weight percent
of the asphalt mix:
Slow cure—25 percent
Medium cure—70 percent
Rapid cure—80 percent.
Total emissions from the use of cutback asphalt are
discussed below.
17.3.4 RACT Guidelines
The RACT guidelines specify that the manufacture,
storage and use of cutback asphalt may not be permitted
unless it can be shown that lifelong stockpile storage is
necessary, or the use of application at ambient temperatures
less than 50°F is necessary, or the cutback asphalt is to be
used solely as a penetrating prime coat. The RACT guidelines
advise the use of asphalt emulsion in place of cutback asphalt
Emissions from asphalt emulsion are negligible, and it has
been demonstrated in several parts of the country that as-
phalt emulsion is an adequate substitute for cutback asphalt.
To use asphalt emulsion in place of cutback asphalt,
it will be necessary to:
Retrain employees on the use of asphalt emulsions
Make minor modifications to equipment used in
applying cutback asphalt to accommodate asphalt
emulsions, including:
- The possible need for new nozzles on the truck
which applies the asphalt, called 2 distribu-
tor truck
- Adjustments to the pumps to apply the emul-
sion
Cleaning equipment prior to using emulsion
Create emulsion plant capacity to meet the in-
creased demand
17-10
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Provide asphalt manufacturing facilities with
venting for steam.
It is reported that asphalt emulsions cannot be applied in
the rain. This is currently true of rapid cure and medium
cure cutback asphalt. The same equipment that is used to
apply cutback asphalt can be used with asphalt emulsions,
with the exception of minor equipment modifications listed
previously.
17.3.5 VOC Emission Control Procedure for Ohio
The State of Ohio is preparing draft legislation on the
use of cutback asphalt which will be similar to the RACT
guideline.
17.3.6 Statewide Emissions
Total emissions from the use of cutback asphalt in Ohio
for 1977 are estimated at 53,100 tons. Exhibit 17-4, on the
following page, shows a breakdown of emissions for rapid,
medium and slow cure cutback asphalt.
17-11
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Exhibit 17—1
U.S. Environmental Protection Agency
ESTIMATED HYDROCARBON EMISSIONS FROM Tf
USE OF CUTBACK ASPHALT IN OHIO
Sales3
of
Cutback Estimated Hydrocarbon Emissions
Asphalt In 1977
(000 Tons) (000 Tons)
Rapid Medium Slow Rapid Medium Slow
Cure Cure Cure Cure Cure Cure Total
88 164 13 18.0 34.1 1.0 53.1
1977 sales were assumed to equal 1976.
Source; Mineral Industries Surveys, U.S. Dept. of the Interior, Bureau of Mines; "Control of
VolatiI Organic Compounds from the Use o Cutback Asphalt," EPA 450/2-77-OJ7
-------
17.4 COST AND HYDROCARBON REDUCTION BENEFIT EVALUATIONS FOR
RACT REQUIRMENTS
Costs for using asphalt emulsions in place of cutback
asphalts are presented in this section. Each cost item is
discussed and quantified and the total cost is then cal-
culated on a statewide basis.
17.4.1 Costs Associated with Using Asphalt Emulsions in
Place of Cutback Asphalt
Costs for using asphalt emulsions in place of cutback
asphalt were determined through interviews with asphalt trade
associations and asphalt manufacturers and previous studies
of asphalt. Costs will be incurred by both producers and
users of cutback asphalt and asphalt emulsions.
Asphalt producers may incur costs in building additional
emulsion plants for producing asphalt emulsions if current
plant capacity in inadequate to meet increased demand. These
costs would be incurred nationwide. These costs are not included
in this study.
Costs to users of cutback asphalt who must convert to
emulsions are primarily those expenditures associated with
retraining personnel and making minor equipment modifica-
tions. The existing price/gallon advantage accruing to
emulsions is approximately offset by the quantity advantage
accruing to cutbacks (in terms of required asphalt content
and comparitive durability). Put differently, expenditures
on materials should remain approximately constant, but those
on capital and labor should increase as users convert to
asphalt emulsions. The most significant cost to the user will
be for retraining personnel in the methods of asphalt emulsion
application. It is estimated that these training costs are $300
per person including the cost of supervision for the training
session.
Modification of trucks used in applying asphalt consists of
replacing nozzles at a cost of $5 per nozzle. An average truck is
equipped with 30 nozzles; therefore, the cost per truck would be
$150. Other equipment costs include adjusting pumps and cleaning
equipment before asphalt emulsions can be applied, and these are
considered to be minimal.
Total user costs are assumed to be incurred on a one time
basis. Minor equipment costs are generally not capitalized but
are expensed in the accounting period in w.iich they are incurred.
The paragraph which follows shows total costs to the state for
converting from the use of cutback asphalt to asphalt emulsion.
17-12
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17.4.2 Extrapolation to the Statewide Industry
The total costs to Ohio for converting from using
cutback asphalt to using asphalt emulsions are estimated
at $198,000, and the cost per ton of hydrocarbon emissions
reduced is estimated at $3.73. Annualized operating costs
are negligible, since minor equipment costs and retraining
costs are not capitalized. Summary of these costs is given
in Exhibit 17-5, on the following page. By way of comparison,
highway and street construction costs for all government
systems in Ohio, for 1976 were*:
Capital outlay - $452 million
Maintenance - $377 million
Administration - $35 million.
^Federal Highway Administration, Office of Highway Statistics,
Table HF-2
17-13
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Exhibit 17-5
U.S. Environmental Protection Agency
STATEWIDE COSTS FOR RACT
FOR USE OF CUTBACK ASPHALT
Direct Cost Summary
Cutback asphalt used 265
(thousands of tons)
Potential emissions 53,100
reduction from converting
to use of asphalt
emulsions a
(tons per year)
Retraining costs t> $158,400
Equipment modification costsc $ 39,600
Total one-time costs <3 $198,000
One-time costs per ton of $ 3.73
emissions reduced
Annualized operating cost per ton $ 0
of emission reduced
a. This represents the maximum emissions reduction if all cutback asphalt
were replaced with emulsion. However, some cutback asphalt is likely
to be used because of exemptions.
b. Cost based on retraining six employees per county.
c. Cost based on modifying three distributor trucks per county.
d. Assuming no county currently uses asphalt emulsions.
Source; Booz, Allen & Hamilton, Inc.
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17.5 ECONOMIC IMPACTS
This section presents a discussion of the economic
impacts and the technical feasibility of implementing RACT
for the use of cutback asphalt in Ohio. The technical
feasibility is primarily associated with whether asphalt
emulsions can be substituted for cutback asphalt in paving
applications. The use of asphalt emulsions in place of
cutback asphalt has been demonstrated to be technically
feasible in several states in the United States. New York
State, where the climate is similar to that of Ohio, has
converted from cutback to asphalt emulsions with little or
no difficulty. Economic impacts include the effects
of implementing RACT on cost, price, supply and demand; on
employment; on productivity; and on market structure.
The overall economic impact of implementing RACT for
use of cutback asphalt in Ohio is estimated to be minimal.
Specific economic impacts include impacts on:
Cost—The estimated one-time cost of $198,000
distributed over 88 counties in Ohio is small
compared to the total statewide cost of highway
construction.
Price—The prices of cutback asphalt and asphalt
emulsions are predicted to be unaffected by RACT.
Supply and Demand—The demand for asphalt emulsi.
is predicted to more than double by 1980 when RAC-
is scheduled for implementation, since the use of
asphalt emulsion will replace the current use of
cutback asphalt. Producers of asphalt emulsions
may have to build new emulsion plants to meet the
expanded demand when RACT is implemented nationally,
It is anticipated that sufficient lead time is
available to assure an adequate supply of asphalt
emulsion to meet the increased demand in Ohio.
Employment—No change in employment is predicted
from implementing RACT, although it will be neces-
sary to train approximately 528 employees in Ohio
on the use of asphalt emulsions.
Productivity—Worker productivity is not expected
to be substantially affected by implementation of
RACT.
17-14
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Market Structure—No change in market structure
for the use of asphalt emulsions in place of cut-
back asphalt is anticipated since the products
are procured in a similar manner.
Exhibit 17-6 presents a summary of the findings of this
report.
17-15
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EXHIBIT 17-6
U.S. Environmental Protection Agency
SUMMARY OF DIRECT ECONOMIC IMPLICATIONS OF
IMPLEMENTATING RACT FOR USE OF CUTBACK ASPHALT
IN THE STATE OF OHIO
Current Situation
Use potentially affected
Indication of relative importance
of industrial section to state
economy
Current industry technology trends
1977 VOC actual emissions
Industry preferred method of VOC
control to meet RACT guidelines
Discussion
In 1977, estimated use of cutback asphalt was
265,000 tons*
1977 sales of cutback asphalt were estimated
to be $24.3 million
Nationally, use of cutback asphalt has been
declining
53,100 tons annually
Replace with asphalt emulsions
Affected Areas in Meeting RACT
Capital investment (statewide)
Annualized cost (statewide)
Price
Energy
Productivity
Employment
Market structure
Problem area
VOC emission after control
Cost effectiveness of control
Discussion
SO.2 million
No change in paving costs are expected
No change in pavings costs are expected
No major impact to the user*"
No major impact
No major impact
No major impact
Winter paving
Short range supply of asphalt emulsions
Met VOC emission reduction is estimated to be
up to a maximum of 53,100 tons annually0
SO annualized cost/annual ton of VOC reduction
a.All of this use may not be affected by the regulations because of likely exemptions.
b. If all cutback asphalt were replaced with emulsions, up to 530,000 equivalent barrels
of oil savings might accrue to the manufacturer, not user. This is based on the
difference in total ene gy associated with manufacturing, processing and laying of
cutback asphalt (50,200 BTU per fallen) and emulsions (2,830 BTU per gallon).
One ton of cutback asphalt or emulsion contains 256 gallons and one barrel of
oil contains 6.05 million BTUs.
c. Baeed on replacing all cutback asphalt with emulsions.
Source; Booz Allen t Hamilton Inc.
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BIBLIOGRAPHY
"Control of Volatile Organic Compounds from Use of
Cutback Asphalt," EPA-450/2-77-037, December 1977.
"Air Quality and Energy Conservation Benefits from Using
Emulsions to Replace Asphalt Cutbacks in Certain Paving
Operations," EPA-450/2-78-004, January 1978.
"Mineral Industry Surveys," U.S. Department of the
Interior, Bureau of Mines, June 27, 1977.
"Magic Carpet, The Story of Asphalt," The Asphalt
Institute, 1977.
"Proposed Amendments to Pollution Control Regulations,"
Illinois Environmental Protection Agency.
"Technical Support for RACT Cutback Asphalt," Illinois
Environmental Protection Agency.
"World Use of Asphalt Emulsion," Cyril C. Landise,
Armak Company, Chicago, Illinois, March 5, 1975.
"Atmospheric Emissions from the Asphalt Industry,"
PB-227 372, National Environmental Research Center,
December 1973.
Asphalt, Its Composition, Properties and Uses, Ralph
N. Traxler, Reinhold Publishing Company, New York,
1961.
The Asphalt Handbook, The Asphalt Institute, April 1965.
Introduction to Asphalt, The As-ohalt Institute, Novem-
ber 1967.
Telephone interview with Mr. Charles Maday, U.S. EPA,
Telephone interview with Mr. Charles Owen, The Asphalt
Institute,
Telephone interview with Mr. Terry Drane, Emulsified
Asphalt/ Inc.
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9. PERFORMING ORGANIZATION NAME AND ADDRESS
Booz, Allen 6 Hamilton Inc.
Foster D. Snell Division (Florham Park, N.J.)
& Public Management Technology Center
(Bethesda, MD)
TECHNICAL REPORT DATA
J li'i!f>i(ii(* s on the rc
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