EPA-23D/l-75-DB5a
FEBRUARY 1976
ECONOMIC ANALYSIS OF
INTERIM FINAL EFFLUENT GUIDELINES
FOR SELECTED SEGMENTS OF
THE EXPLOSIVES INDUSTRY--GROUP H
QUANTITY
U.S. ENVIRONMENTAL PROTECTION AGENCY
Office of Water Planning and Standards
Washington, D.C. 20460
*•**!
USB,
^
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This document is available in limited quantities through the
U. S. Environmental Protection Agency, Economic Analysis
Section (WH-553), 401 M Street, S.W., Washington, D.C. 20460.
This document will subsequently be available through the
National Technical Information Service, Springfield, VA 22151.
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EPA 230/1-75-065a
ECONOMIC ANALYSIS OF INTERIM FINAL EFFLUENT GUIDELINES
FOR SELECTED SEGMENTS OF
THE EXPLOSIVES INDUSTRY - GROUP II
Contract No. 68-01-1541
Task Order No. 39
OFFICE OF WATER PLANNING AND STANDARDS
ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
February 1976
U.S. Environmental Protection Agency
Region V, Library
230 South Dearborn Street >
Chicago, Illinois 60604
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This report has been reviewed by the Office of Water Planning and Standards, EPA,
and approved for publication. Approval does not signify that the contents neces-
sarily reflect the views and policies of the Environmental Protection Agency, nor
does mention of trade names or commercial products constitute endorsement or
recommendation for use.
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TABLE OF CONTENTS
Page
List of Tables v
1.0 EXECUTIVE SUMMARY 1
1.1 INTRODUCTION 1
1.2 PURPOSE AND SCOPE 2
1.3 STUDY APPROACH 3
1.3.1 Prescreening 3
1.4 CHARACTERIZATION OF THE CIVILIAN
EXPLOSIVES INDUSTRY 4
1.5 CONCLUSIONS AS TO THE ECONOMIC IMPACT ON
THE COMMERCIAL SECTOR OF THE EXPLOSIVES
INDUSTRY 5
1.6 SUMMARY OF THE COSTS OF POLLUTION
ABATEMENT FOR SUBCATEGORIES A AND C 7
2.0 INDUSTRY CHARACTERIZATION 9
2.1 GENERAL INDUSTRY DESCRIPTION 9
2.2 DESCRIPTION OF SUBCATEGORIES OF THE
INDUSTRY 11
2.2.1 Subcategory A — Manufacture of Explosives 11
2.2.2 Subcategory B — Manufacture of Propellents 13
2.2.3 Subcategory C — Load, Assemble and Pack
Operations 13
2.2.4 Subcategory D — Manufacture of Initiating
Compounds 15
2.3 INDUSTRY PRODUCT PRICES BY SUBCATEGORY 16
3.0 PROPOSED TREATMENT TECHNOLOGY AND
ASSOCIATED COSTS 17
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TABLE OF CONTENTS (Continued)
Page
4.0 PRESCREEN OF ECONOMIC IMPACT OF EFFLUENT
GUIDELINES 21
4.1 PRESCREENING METHODOLOGY 21
4.2 ECONOMIC AND TECHNOLOGICAL FACTORS 23
5.0 ECONOMIC IMPACT OF THE INTERIM FINAL EFFLUENT
GUIDELINES ON THE CIVILIAN EXPLOSIVES INDUSTRY 27
w
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LIST OF TABLES
Table No. Page
1.4A Apparent Consumption of Industrial Blasting Agents
and Explosives 4
1.4B Estimated Industry Product Prices by Subcategory 5
1.5 Estimated BPCTCA Plus BATEA Costs as a Percent of
Selling Price for Products of the Explosives Industry 6
1.6 Cost of Pollution Abatement for Selected Subcategories
of the Explosives Industry 8
2.1 Apparent Consumption of industrial Blasting Agents
and Explosives 10
2.2.3 Changes in U.S. Civilian Markets for Explosives in
Subcategory C 14
2.3 Estimated Industry Product Prices by Subcategory 16
3.0A Wastewater Treatment Costs for BPCTCA, BADCT and
BATEA Effluent Limitations 18
3.0B Wastewater Treatment Costs for BPCTCA, BADCT and
BATEA Effluent Limitations 19
4.2 Information Table — Commercial Explosives Industry 24
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1.0 EXECUTIVE SUMMARY
1.1 INTRODUCTION
This report is one of a series of reports to be prepared by Arthur D. Little,
Inc. (ADL) for the Environmental Protection Agency (EPA) under Contract
No. 68-01-1541, Task No. 39. The overall objective of this task is the determina-
tion of the economic impact that EPA-proposed interim final effluent limitations
will have on eight point source categories. The EPA plans to name the following
industries as point source categories:
Pharmaceuticals (SIC 2831, 2833, and 2834);
Gum and Wood Chemicals (SIC 2861);
Pesticides and Agricultural Chemicals (SIC 2879 and those establish-
ments engaged in manufacturing agricultural pest-control chemicals
covered under SIC 281 and 286);
Adhesives (SIC 2891);
Explosives (SIC 2892);
Carbon Black (SIC 2895);
Photographic Processing (SIC 7221, 7333, 7395, 7819); and
Hospitals (SIC 8062, 8063, and 8069).
This report on selected segments of the explosives industry (SIC 2892) is
principally concerned with the civilian sector of the industry. A subsequent com-
plete report will deal in greater detail with the military sector of the industry as
well as the civilian sector.
The primary source of effluent treatment cost information is the Develop-
ment Document for the Explosives Manufacturing Point Source Category, dated
January 1976, by Roy F. Weston, Inc. The Development Document has broken
the industry into the following subcategories:
A. Manufacture of Explosives. Examples of explosives are dynamite,
nitroglycerin, cyclotrimethylenetrinitramine (RDX), cyclotetra-
methylenetetranitramine (HMX), trinitrotoluene (TNT), ammo-
nium perchlorate and nitroguanidine.
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B. Manufacture of Propellants. Examples of propellants are rolled
powder, high-energy ball powder, and nitrocellulose (NC). Pro-
pelJants can be single-based, double-based, or triple-based.
C. Load, Assemble, and Pack Operations. Includes plants which
blend explosives and market a final product, and plants that
fill shells and blasting caps. Examples of such installations would
be plants manufacturing ammonium nitrate and fuel oil (ANFO),
nitrocarbonitrate (NCN), slurries, wate;- gels, and shells.
D. Manufacture of initiating Compounds. Initiating compounds are
highly-sensitive explosives used for detonation. Examples are
pentaerythritol tetranitrate (PETN), lead styphnate, tetryl, mer-
cury fulminate, lead azide, and nitromannite (HMN).
1.2 PURPOSE AND SCOPE
The purpose of this report is to assess the economic impact on the U.S.
Explosives Industry (SIC 2892} of the cost of meeting EPA standards for pollu-
tion abatement applicable to the discharge of water effluents from point sources.
Compliance with the water pol'ution abatement standards may require the
industry to install new physical facilities in its present operations, modify its
current technical operations, or incorporate specialized facilities in new installa-
tions. Furthermore, the industry may have to install equipment and facilities
capable of three levels of effluent water treatment such that:
• Level I - by 1977, for current industry installations, the best
practicable control technology currently available (BPCTCA) is
being used to control the pollutant content in the streams dis-
charged by the industry;
• Level II - by 1983, for current industry installations, the best
available technology that is economically achievable (BATEA)
is being similarly used; and
• Level III - new source performance standards (NSPS) for new
industry installations discharging directly in navigable waters to
be constructed after the promulgation of applicable guidelines
for water pollution abatement; facilities will be incorporated
that will be capable of meeting these guidelines.
This report presents the results of a prescreening process and further tech-
nical and economic analyses applied to the Explosives Industry to determine the
economic impact of the proposed effluent limitations.
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1.3 STUDY APPROACH
1.3.1 Prescreening
In our October 1975 working draft report en selected segments of the eight
industries studied under this contract, we developed methodologies to aid our
industry experts in selecting those industry categories or subcategories that
probably would not be significantly impacted by the Interim Final Effluent
Guidelines.
ADL industry experts initiated the project by studying the Development
Document, compiling prescreen information, and preparing statements on factors
which they believed would have an economic impact on the industry. To aid
them in preparing their comments, the team of ADL experts wss supplied a table
describing the information to be covered, and they were directed to complete the
table with brief descriptions. In preparing their comments and completing the in-
formation table, the industry experts were also directed to use only their own per-
sonal knowledge, or information they could readi'y retrieve. This limitation was
invoked to prevent an excessive use of available -esources in conducting the pre-
screen exercise. The completed information tables and the accompanying industry
expert comments are contained in the body of this report.
To determine which industry subcategories we would recommend for elimina-
tion from further economic impact study, we analyzed the information of the in-
dustry experts against four criteria. If an industry subcategory met any one (or a
combination) of the following criteria, we considered its elimination. The criteria:
1. The industry subcategory was generating no wastewater.
2. The ratio of BPCTCA* plus BATEA** to selling price was Jess
than 2% and/or the ratio of BPCTCA plus BATEA to profits
was less than 15%.
3. Practically all of the plants in the subcategory were currently
discharging into municipal sewage systems and would continue
to do so with little or no pretreatment costs incurred.
4. The treatment facilities recommended in the Development Docu-
ment had already been installed in practically all oi the plants of
the subcategory.
*Best Practicable Control Technology Currently Available
'*Best Available Technology Economically Achievable
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1.4 CHARACTERIZATION OF THE CIVILIAN EXPLOSIVES INDUSTRY
Commercial explosives at present principally consist of "blasting agents"
instead of "dynamites" which formerly dominated the market. Blasting Agent
is a term now applied to explosives which consist principally of ammonium
nitrate in admixture with a variety of nonexplosive sensitizing fuels (e.g., fuel
oil, aluminum, dinitrotoluene). These explosives are more economical products
having significantly less hazardous properties (lacking sensitiveness) than those of
the dynamites.
For 1974 the U.S. Department of the Interior records the apparent con-
sumption of industrial blasting agents and explosives in the United States to be as
indicated in Table 1.4A.
TABLE 1.4A
APPARENT CONSUMPTION OF INDUSTRIAL BLASTING AGENTS
AND EXPLOSIVES
(U.S. 1974)
Class Pounds Metric Tons
1. Permissibles 42,331,000 19,200
2. Other High Explosives 257,735,000 116,900
3. Water Gels and Slurries 293,248,000 133,000
4. Cylindrically Packaged
Blasting Agents 301,261,000 136,600
5. Other Processed Blasting Agents 1,867,715,000 847,000
Totals 2,762,290,000 1,252,700
Source: U.S. Department of Interior, Mineral Industry Surveys.
Only two of the above classification - Classification 1 (Permissibles) and
Classification 2 (Other High Explosives) - relate to Subcategory A of the
Development Document. In these two classifications are included all the dyna-
mites, gelatin dynamites and semi-gelatin dynamites of both the permissible and
non-permissible species. Classification 2 (Other High Explosives) includes such
explosive mixtures as ammonium nitrate and trinitrotoluene (TNT) packaged in
(cylindrical) metal containers and would fall into Subcategory C (Load and Pack)
of the Development Document. Classifications 3, 4, and 5 also fall into Sub-
category C (Load and Pack) of the Development Document.
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The dynamite industry is presently in a state of decline. Dynamite manu-
facturers are redirecting their efforts towards the development of slurry explosives
and blasting agents. We estimate that dynamite will be essentially eliminated from
the explosives market in the next five years. We expect that eventually only two
types of explosive materials will dominate the explosives market. These two types
are: 1) ammonium nitrate-fuel oil (ANFO) and other ANFO related types, and
2) explosives and blasting agents based on slurries or water gels.
In the commercial explosives industry, only nitroglycerin and the associated
manufacture of dynamite are in Subcategory A (see Section 1.1) of the Develop-
ment Document. All other materials listed in Subcategory A are in the military
field. The military also uses a large number of propellants (Category B) but the
commercial applications are principally for shells for shotguns, rifles and pistols
used for sporting purposes.
The majority of commercial explosives industry operations belong in Sub-
category C where materials made in Subcategories A, B, and D and/or materials
from other industries are mixed, compounded and assembled into usable form.
Subcategory D includes primary explosives manufactured for use in making
detonators, primers, boosters and other initiating devices used in civilian applica-
tions.
Product prices vary with the wide range of products produced in the indus-
try and typical estimated prices by subcategory are shown in Table 1.4B.
TABLE 1.4B
ESTIMATED INDUSTRY PRODUCT PRICES BY SUBCATEGORY
Subcategory Price Range Per Metric Ton
A $ 334 - $ 667
B $ 1,800 - $220,000
C $ 242 - $ 8,500
D $22,000-$ 33,000
1.5 CONCLUSIONS AS TO THE ECONOMIC IMPACT ON THE
COMMERCIAL SECTOR OF THE EXPLOSIVES INDUSTRY
Estimated treatment costs due to the Interim Final Effluent Guidelines are
shown in Table 1.5 for the various subcategories.
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TABLE 1.5
ESTIMATED BPCTCA PLUS BATEA COSTS AS A PERCENT OF SELLING
PRICE FOR PRODUCTS OF THE EXPLOSIVES INDUSTRY
Treatment Cost
Subcategory As Percent of Sales
A 1.7 to 3.4
B O.IOto 12.5
C 0.05to 1.7
D 195.0 to 293.0
We do not expect that the Interim Final Effluent Guidelines will have a
significant economic impact on Subcategory A - Manufacture of Explosives -
in the commercial sector. For other reasons, nitroglycerin dynamites are rapidly
losing their share of the market. We expect that the companies still producing
nitroglycerin dynamites will gradually shift to production of blasting agents
based on slurries and water gels as well as ANFO products. Accordingly we see
no significant effects of the Guidelines on price or production of explosives in
Subcategory A. Effects on employment and communities would be insignificant.
The Development Document indicates a BPCTCA treatment for Subcate-
gory C that costs $2.14 per metric ton. On the cheapest packaged ANFO products
this treatment cost amounts to 0.9 percent of their sales prices. This cost is judged
to be economically nonimpactive, especially since the cost appears to be over-
stated for the reasons given in Section 3.0 of this report.
The BATEA process presented in the Development Document was based on
carbon absorption while the BATEA technology now recommended is based on
multi-media filtration. Addition of the presently recommended BATEA process
brings the total treatment costs to $4.05 per metric ton or a maximum of 1.7 per-
cent of the selling price of the cheapest ANFO products. Under our criteria, the
Interim Final Guidelines are not considered to be economically impactive.
Had the original carbon adsorption BATEA step been retained, the costs
would have been $13.17 per metric ton or 5.4% of the ANFO sales price. Carbon
adsorption may be reinstituted for Subcategory C, if data gathered before
promulgation of the 1983 effluent limitations show that carbon adsorption pro-
vides effluent load reduction commensurate with the costs.
The importance of determining the appropriateness of the BATEA treatment
costs attributed to ANFO and other NCN products is obvious when it is realized
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that products of this type make up almost 90% of the tonnage of civilian explo-
sives products. If the higher BATEA treatment costs are necessary, the shift from
off-site mixing to on-site mixing will be accelerated due to the fact that on-site
mixing is not covered by the guidelines and will not incur the concomitant treat-
ment costs.
Because of the wide range of treatment costs versus selling prices in Sub-
categories B and D, it is not possible to state that plants in these subcategories
will not experience an economic impact from the Interim Final Effluent Guide-
lines. Certain plants in these subcategories will undoubtedly have very small
impacts, but on an overall basis the subcategories will apparently be impacted.
Further study of plants in Subcategories B and D will be required.
1.6 SUMMARY OF THE COSTS OF POLLUTION ABATEMENT FOR
SUBCATEGORIES A AND C
The costs of pollution abatement for Subcategories A and C are summarized
in Table 1.6. All treatment costs and investment costs were adjusted to 1975
levels by use of the Engineering News Record Construction Index (1972 = 1780,
1975 = 2276). Annual costs were calculated using treatment costs per metric ton
and the estimated production in the subcategory. Total investment costs were
calculated using costs given for the model plant in the Development Document
multiplied by the number of such plants required to produce the estimated
production of the subcategory.
The number of plants engaged in the manufacture of products falling into
Subcategories A and C are preliminary estimates. The actual number of plants in
Category C (especially for slurry and water gel production) is difficult to deter-
mine because of the changing status in the application of techniques used for
blasting services. Some large producers of slurry blasting agents and water gel
explosives have facilities captively committed to single large mining operations.
We have included such sites in our estimate of the number of plants.
A complex facility producing a variety of products falling into Subcate-
gory C (e.g., NCN's, boosters and water gels) is counted as one site for our
estimate.
Most of the large "producers" of ANFO do not undertake the manufacture
of this product at their complex facilities. Instead, companies like Hercules,
DuPont and Atlas license distributors throughout the country to compound this
product and to package it (or bulk produce it) under their respective company
labels. We have not made any estimate of the number of distributor-manu-
facturers engaged in these operations.
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TABLE 1.6
COST OF POLLUTION ABATEMENT FOR SELECTED SUBCATEGORIES OF THE EXPLOSIVES INDUSTRY1
00
Subcategories
A
C
Estimated
Number
of Plants
14
50
Estimated
Production
(metric tons)
135,000
590,000
Treatment Cost
as a Percent of
1975 Selling Price
BPCTCA
BPCTCA & BATEA
0.9 to 1.9 1.7 to 3.4
0.92 1.72
Annual Cost
(in millions
BPCTCA
BPCTCA & BATEA
0.8 1.5
1.3 2.4
Total
of dollars)
BPCTCA
3.5
2.8
Investment
BPCTCA
& BATEA
5.5
75
Total Costs:
2.1
3.9
6.3
13.0
1. Treatment costs were obtained from the "Development Document" and adjusted to 1975 values by the use of the Engineering News Record Con-
struction Index. 1972=1780. 1975=2276.
2. Calculated for ANFO only.
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2.0 INDUSTRY CHARACTERIZATION
2.1 GENERAL INDUSTRY DESCRIPTION
The general industry description will deal with the major parts of the com-
mercial explosives manufacture and load and pack operations (Subcategories A
and C). These comprise the bulk of the commercial explosives industry. Propel-
lant manufacture and initiator manufacture which comprise a much smaller part
of the civilian explosives industry are discussed briefly in the appropriate section
of this report. The government sponsored explosives industry is to be the subject
of a future report; however, it is briefly discussed in the following sections where
appropriate.
The principal explosives manufacturers (Subcategories A and C) in the
United States are: DuPont, Hercules, Austin, Gulf, Atlas, Trojan, Dow and Ireco.
With the exception of Ireco, Dow and Gulf, these companies have been traditional
dynamite producers. Now they all produce a line of ammonium nitrate-fuel oil
(ANFO) type blasting agents as well as bulk and packaged slurry and water gel
explosives and slurry blasting agents. DuPont has, as of about a year ago, ceased
the manufacture of nitroglycerin based explosives — dynamites and gelatin dyna-
mites — and has committed itself to the production of small diameter, water gel
type, specially sensitized products.
Commercial explosives in the United States may now be effectively charac-
terized by the term "blasting agents" instead of "dynamites" which may have
adequately described the industry as recently as 1960. In 1965 the consumption
of dynamite type explosives — those based on nitroglycerin (N/G) sensitizer -
was still approximately equivalent to the consumption of ammonium nitrate-fuel
oil (ANFO) type blasting agents.
Blasting Agent is a term now applied to explosives which consist principally
of ammonium nitrate in admixture with a variety of non-explosive sensitizing
fuels (e.g., fuel oil, aluminum, dinitrotoluene). These explosives are more eco-
nomical products having significantly less hazardous properties (lacking sensitive-
ness) than those of the dynamites. Within the category of blasting agents, two
principal types of industrial explosives are recognized. These are:
1. The "dry" ammonium nitrate-fuel oil mixture (ANFO) — a
nitrocarbonitrate species, and
2. The slurry blasting agents and water gels.
For 1974 the U.S. Department of the Interior records the apparent con-
sumption of industrial blasting agents and explosives in the United States to be as
follows:
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TABLE 2.1
APPARENT CONSUMPTION OF INDUSTRIAL BLASTING AGENTS
AND EXPLOSIVES
(U.S. 1974)
Class Pounds Metric Tons
1. Permissibles 42,331,000 19,200
2. Other High Explosives 257,735,000 116,900
3. Water Gels and Slurries 293,248,000 133,000
4. Cylindrically Packaged
Blasting Agents 301,261,000 136,600
5. Other Processed Blasting Agents 1,867,715,000 847,000.
Totals 2,762,290,000 1,252,700
Source: U.S. Department of Interior, Mineral Industry Surveys.
The five product classifications listed by the Mineral Industry Surveys bul-
letin now correspond to those used by the commercial manufacturers' organiza-
tion, the Institute of Makers of Explosives. These classifications are described as
follows:
1. Permissibles: Grades of high explosives approved by the Bureau
of Mines for use in underground coal mines.
2. Other High Explosives: All high explosives except:
a) permissibles and
b) any water gels or slurries that would otherwise be clas-
sified as high explosives.
Included in this classification are all formulations packaged in
metal containers.
3. Packaged and Bulk Water Gels and Slurries: All such materials
packaged or in bulk made by addition of more than 5% water to
high explosives or blasting agents.
4. Cylindrically Packaged Blasting Agents: Ammonium nitrate and
fuel mixtures packaged in cylindrical containers, trade name
identified with a diameter and weight or length measurement
and used for "down-the-hole" loading as distinguished from bulk
loading.
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5. Other Processed Blasting Agents and Unprocessed Ammonium
Nitrate (AN):
a) AN and fuel mixtures sold in bulk or packed in paper,
plastic or burlap bags designed for bulk loading and
b) Prilled or grained ammonium nitrate.
Explosives in the above list differ from Blasting Agents in the degree of
potential hazard associated with these materials during transportation, as well
as in their sensitivity to initiation by a blasting cap. Explosives can be initiated
by a blasting cap while blasting agents require high strength explosive priming.
Only two of the above classifications - Classification 1 (Permissibles) and
Classification 2 (Other High Explosives) - relate to Subcategory A of the
Development Document. In these two classifications are included all the dyna-
mites, gelatin dynamites and semi-gelatin dynamites of both the permissible and
non-permissible species. Classification 2 (Other High Explosives) includes such
explosive mixtures as ammonium nitrate and trinitrotoluene (TNT) packaged in
(cylindrical) metal containers and would fall into Subcategory C (Load and Pack)
of the Development Document. Classifications 3, 4, and 5 also fall into Sub-
category C (Load and Pack) of the Development Document.
The dynamite industry is presently in a state of decline. Dynamite manu-
facturers are redirecting their efforts towards the development of slurry explo-
sives and blasting agents. We estimate that dynamite will be essentially eliminated
from the explosives market in the next five years. We expect that eventually only
two types of explosive materials will dominate the explosives market. These two
types are: 1) ammonium nitrate-fuel oil (ANFO) and other ANFO related types,
and 2) explosives and blasting agents based on slurries or water gels.
2.2 DESCRIPTION OF SUBCATEGORIES OF THE INDUSTRY
2.2.1 Subcategory A — Manufacture of Explosives
Examples of explosives given in the Development Document are dynamite,
nitroglycerin, cyclotrimethylenetrinitramine (RDX), cyclotetramethylene-
tetranitramine (HMX), trinitrotoluene (TNT), ammonium perchlorate and
nitroguanidine.
There is a fairly strict division between the explosives in this subcategory
that are manufactured for military purposes and those produced for commercial
purposes. Traditionally, commercial explosives have been or are now charac-
terized by such compositional and component terms as:
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Dynamite
Nitroglycerin (N/G)
Nitrocarbonitrate (NCN)
Ammonium Nitrate-Fuel Oil (ANFO)
Slurry Blasting Agent (SBA)
Slurry High Explosive (SHE)
Water Gels
In the above list of terms, only dynamite and nitroglycerin fall into Sub-
category A. Nitroglycerin is an integral part of dynamites and its manufacture
for explosive purposes is almost exclusively for its use in dynamite compositions.
Nitroglycerin may, of course, be manufactured also on a commercial basis for
incorporation into propellants.
The military sector is not involved in the production of dynamite, nor does
it manufacture nitroglycerin for explosive purposes. The military is largely con-
cerned with the manufacture of the three essential explosives listed in Sub-
category A of the Document. These are:
Trinitrotoluene (TNT)
Cyclotrimethylenetrinitramine (RDX)
Cyclotetramethylenetetranitramine (HMX)
These three molecular explosives are largely used for incorporation into
cyclotols (RDX/TNT) and octols (HMX/TNT) for use in bomb fillings and pro-
jectile bursting charges.
TNT, the large volume "work horse" explosive, was for a long time manu-
factured at both military plants and at a very few commercial plants, but its
production on a commercial basis was terminated in 1971. It is now only pro-
duced at Government-owned facilities.
RDX and HMX, of which the former is produced in greater volume, are
produced on a large scale only at one Government-owned facility (Holston) and,
to our knowledge, are not manufactured in significant quantities at any privately
owned facility.
Nitroguanidine, listed in Subcategory A of the Development Document, is
not used as an explosive compound, principally because it is too difficult to
detonate. However, it is used as a military propellant ingredient (Subcategory B).
Nitroguanidine, as far as we know, has not been manufactured by either the
military or commercial sectors but has always been imported from Canadian pro-
ducers. This non-domestic source has now terminated its production and plans
are under way to erect a facility in the U.S. under military auspices scheduled to
be on-stream in late 1979.
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Ammonium perchlorate (AP) is manufactured in the commercial sector and
like ammonium nitrate is regarded as non-explosive and should not be included in
this subcategory. Ammonium perchlorate is covered by the Kffluent Guidelines
for the Industrial Organic Chemicals (NEC) under SIC 2819.
2.2.2 Subcategory B — Manufacture of Propellants
Examples of propellants are rolled powder, high energy ball powder and
nitrocellulose (N/C). Propellants can be single-based, double-based or triple-based.
Single-based powders contain colloided nitrocellulose but do not contain nitro-
glycerin. Nitrocellulose and nitroglycerin are the principal explosive ingredients
in double-based powders. Triple-based powders contain three explosive ingre-
dients, nitrocellulose, nitroglycerin and nitroguanidine.
All the propellants listed above are based on nitrocellulose in association
with various property-modifying ingredients such as nitroguanidine, ammonium
perchlorate and aluminum. The propellants listed are all used extensively by the
military for propulsion of missiles and rockets The civilian commercial applica-
tions are confined largely to the powders used in shotgun shells and rifle and
pistol ammunition; these are predominantly single-based powders, although
double-based powders are also employed.
In the commercial sector, companies such as Atlantic Research, Hercules,
Olin, Aerojet General, DuPont and Thiokol are involved in a variety of propel-
lant manufacturing processes. The diversity of finished products is extremely
great and processes for manufacture are often complex in order to obtain the
desired combustion properties for specific applications.
The majority of the plants manufacturing military propellants are govern-
ment-owned plants which are often operated by companies such as those previ-
ously listed, but other government plants may be government operated. In some
instances the propellants for special military application are manufactured in
company-owned plants.
2.2.3 Subcategory C — Load, Assemble and Pack Operations
Load, assemble and pack operations take materials that are manufactured
in operations defined in Subcategories A, B, and D and/or materials derived from
other industries and mix, compound, and assemble them into a usable form.
Often it is impossible to distinguish between the load and pack operations of
Subcategory C and the manufacturing operations of Subcategories A, B, and D.
One example of this difficulty occurs in the manufacture of propellants at large,
integrated plants. In these plants the materials making up the propellant are con-
tinuously mixed together and loaded into the finished units.
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Examples of companies engaged in load, assemble and pack operations are
Ircco, DuPont, Hercules, Olin and Aerojet General. In some instances, a company
in the explosives industry may not be engaged in the manufacture of any mate-
rial in Subcategory A. For example, a slurry blasting agent producer brings
together a large variety of components prepared by other producers to formulate
these into a wide spectrum of slurry type explosives and blasting agents.
Analogously in some Government-owned-Government-operated plants,
materials are not manufactured but are obtained from outside suppliers (civilian,
foreign and other military suppliers) and formulated into the desired munitions
items. For example, at some U.S. Naval Ammunition Depots, TNT, and/or
cyclotols are brought in and formulated with other additives into a variety of
cast explosives for filling projectiles and bombs.
The civilian market in Subcategory C type explosives has grown or declined
at the following rates for the years indicated:
TABLE 2.2.3
CHANGES IN U.S. CIVILIAN MARKETS FOR EXPLOSIVES IN SUBCATEGORY C
Percent Change Percent Change
Explosive or Blasting Agent From 1972 to 1973 From 1973 to 1974
Permissibles - 4.1 - 4.4
Other High Explosives -2.4 - 1.8
Water Gels/Slurries +16.5 +11.0
Processed Blasting Agents
and Unprocessed AN + 2.0 - 2.0
Cylindrically Packaged
Blasting Agents + 4.7 + 8.0
Total Apparent Consumption of
Industrial Explosives and
Blasting Agents in the United
States + 3.2 + 0.3
Source: U.S. Department of Interior, Mineral Industry Surveys.
14
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Another kind of load, assemble and pack operation performed in the civilian
sector of explosive manufacturing involves the remelting and recasting of
cyclotols and octols (RDX/TNT and HMX/TNT respectively). Such plants do not
synthesize the component explosives of such mixtures but acquire these (in flake
or pellet form for example) from non-domestic sources or from domestic military
surpluses and by "melt and pour" techniques cast the explosives into boosters and
primers for use in initiating charges of blasting agents.
RDX in homogeneous admixture with wax may also be hydraulically pressed
at such plants into shaped charge configuration for use as jet tappers (perforators)
in the steel industry.
2.2.4 Subcategory D — Manufacture of Initiating Compounds
This subcategory includes initiating compounds and a large variety of small-
volume compounds which are usually classified as primary explosives, such as
those used in the preparation of detonators, primers, boosters, detonating cord,
and other initiating devices. Examples of highly sensitive explosives used for
detonation include PETN, lead styphnate, tetryl, mercury fulminate, lead azide,
and nitromannite (HMN). The subcategory does not include the loading of these
compounds into specially designed containers for use as initiating devices.
Examples of companies who make initiating compounds are Hercules, Com-
mercial Solvents, and DuPont. As far as we know, no initiating compounds are
presently made at Government-owned-Government-operated facilities.
As noted in the Development Document, this subcategory is characterized
by high waste loads per unit of product, probably due to batch processing of
small quantities. The preparation of initiating compounds also requires the use of
large quantities of water to thoroughly stabilize these sensitive products. The
water is used to wash away trace impurities which contribute to the hazardous
sensitization of these products during storage. Another significant contribution
to the effluent waste load is made by the necessity for thorough cleanup
procedures for equipment after each run. Generally such cleanup often requires
the use of strong oxidizing or reducing agents, or caustic solutions, to effect
rapid decomposition of solid waste materials.
The diversity of compounds in this subcategory makes it difficult to provide
a framework which will assure uniformity of treatment methodology. The eco-
nomic impact of effluent treatment costs will vary widely among the groups of
firms engaged in these operations; single plants that manufacture a spectrum of
such compounds will likely be heavily impacted by the need for separate treat-
ment technologies.
15
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Lead styphnate can be used as an example of the complexity of assessing
the economic impact of wastewater treatment on a subcategory. For the waste
material derived from cleanup and scrap collection procedures of this compound,
there are at least three current and near future treatment processes (apart from
detonation and combustion). These treatments handle such wastewater pollutants
as trinitroresorcinol, sodium hydroxide, sodium dichromate, sodium carbonate,
sodium aluminate, and sodium aminoresorcinol. Dissolved lead salts (and, more
rarely, suspended solids) are also present in amounts determined by the efficacy
of treatment. With PETN manufacture, a totally different and simpler array of
wastewater pollutants is derived from the processing and cleanup operations
associated with its manufacture.
2.3 INDUSTRY PRODUCT PRICES BY SUBCATEGORY
Because of the diversity of products produced in the explosives industry,
individual manufacturing plants may have product prices that differ drastically
from those of other plants. Estimated price ranges for products in the various
subcategories of the industry are shown in the following table.
TABLE 2.3
ESTIMATED INDUSTRY PRODUCT PRICES
BY SUBCATEGORY
Subcategory Price Range Per Metric Ton
A $ 334-$ 677
B $ 1,800 - $220,000
C $ 242-$ 8,500
D $22,000-$ 33,000
The extreme range in price of products in Subcategory B is due to the price
of simple nitrocellulose at the low end of the range and by the price of specially
formed high energy propellants (often requiring costly catalyst components) at
high end of the range.
Subcategory C has a range which includes the prices of ANFO at the lower
extreme and electric blasting caps at the higher extreme.
16
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3.0 PROPOSED TREATMENT TECHNOLOGY AND ASSOCIATED COSTS
For this report, we have accepted the information on hydraulic loads, treat-
ment technologies and associated costs contained in the Development Document.
We have adjusted the effluent treatment costs from the 1972 level used in the
Development Document to the 1975 level using the respective values of the
Engineering News Record Construction Cost Index (1972 = 1780, 1975 = 2276)
to allow comparison of treatment costs versus selling prices of explosives.
The Development Document presents treatment technologies and treatment
costs for typical plants in each industry subcategory as shown in Tables 3.0A and
3.OB. It is obvious that some actual plants may have costs higher than the typical
models while others may have extremely low costs. Wastewater treatment costs
based on a model plant that covers an entire subcategory can become apparently
economically impactive on a plant that is producing a low cost item in the sub-
category. The wastewater volumes and treatment costs given in the Development
Document appear to be logical for Subcategory A — Manufacture of Explosives.
However, we would like to comment on corresponding data for Subcategory C -
Load, Assemble and Pack Operations.
As will be described in the next section of this report, the production of
ANFO blasting agents makes up a major portion of Subcategory C. The normal
cleanup procedure in ANFO plants consists of dry cleanup techniques employing
shovels, brooms and vacuum pickup. Very little water is used in cleaning ANFO
plants so the 26,000 liters (6,810 gallons) per day figure given for a Subcate-
gory C plant in the Development Document is far in excess of normal usage. We
estimate that actual process contact wastewater in ANFO plants will only be
from one to four percent of the Development Document estimate. Therefore any
economic impact calculations will overstate the apparent cost of meeting Interim
Effluent Guidelines, so the actual costs charged against the low priced ANFO
product will be even less than indicated per unit of production.
While wastewater production of other types of plants in Subcategory C is
larger than for ANFO plants, the volumes and costs appear to be large enough to
cover other plants in this subcategory.
The January 1976 version of the Development Document includes multi-
media filtration as the final process in the BATEA system for the model plant of
Subcategory C. Originally this treatment technology included carbon adsorption
as a final step, which caused the incremental annual cost of achieving the BATEA
level to be $33,200 for the Subcategory C model plant. The incremental invest-
ment cost for carbon adsorption was $117,000. Carbon adsorption may be rein-
stituted for Subcategory C, if data gathered before promulgation of the 1983
effluent limitations show that carbon adsorption provides effluent load reduction
commensurate with these costs. However, the present cost analyses have been
done for Subcategory C by substituting the costs presented under BADCT for
those shown under BATEA in Table 3.OB.
17
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TABLE 3.0A
WASTEWATER TREATMENT COSTS FOR BPCTCA, BADCT AND BATEA EFFLUENT LIMITATIONS
(ENR 1780 - August, 1972 Costs)
Explosive Industry — Subcategory A
RWL
Average Production 36.2 x 103 kg/day
(79.6 x 103 Ibs/day)
Production Days 260
Wastewater Flow - kL/day 61
(gpd) (16,000)
kL, 1,000 kg Product
(gal/1,000 Ibs)
BOD Effluent Limitation - kg BOD/1,000 kg product3
mg/L
COD Effluent Limitation — kg COD/1,000 kg product3
mg/L
Total Capital Costs
Annual Costs
Capital Recovery plus return at 10% at 10 years
Operating + Maintenance
Energy + Power
Total Annual Cost
Cost1 $/1,000 kg Product
($/1,000 Ibs Product)
1. Cost based on total annual cost
2. Incremental cost over BPCTCA cost
3. kg/kkg product is equivalent to lbs/1,000 Ibs product
1.68
(201)
Technology Level
BPCTCA
BADCT2
$192,000
$35,200
BATEA-
1.46
871
3.87
2,310
0.10
61
1.08
647
0.092
55
0.94
560
0.028
17
0.23
137
$108,000
$ 31,400
11,400
3,000
$ 45,800
4.87
(2.21)
$ 5,800
2,000
—
$ 7,800
0.83
(0.38)
S 31,600
6.400
—
S 38,400
404
n 84)
Source: Development Document, January 1976
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IMBL.tIJ.UD
WASTEWATER TREATMENT COSTS FOR BPCTCA, BADCT AND BATEA EFFLUENT
(ENR 1780 - August, 1972 Costs)
Explosive Industry — Subcategory C
RWL BPCTCA
Average Production 14.8 x 103 kg/day
(32.6 x 103lbs/day)
Production Days 260
Wastewater Flow - kL/day 26
(gpd) (6,810)
kL/ 1,000 kg Product 1.76
(gal/1, 000 Ibs) (211)
~ BOD Effluent Limitation - kg BOD/1 ,000 kg product3 0.0005 **
mg/L less than 1 **
COD Effluent Limitation - kg COD/1,000 kg product3 0.08 **
mg/L 45
TSS Effluent Limitation - kg TSS/1,000 kg product3 0.92
mg/L 523 50 mg/L
Total Capital Costs $14,300
Annual Costs
Capital Recovery plus return at 10% at 10 years $ 2,350
Operating + Maintenance $ 3,360
Energy + Power 700
Total Annual Cost $ 6,410
Cost1 $/1, 000 kg Product 1.67
(S/1, 000 Ibs Product) (0.76)
LIMITATIONS
Technology Level
BADCT2
* *
* *
* *
* *
20 mg/L
$24,100
$ 3,910
$ 1,250
550
$ 5,710
1.49
(0.67)
BATEA2
0.00014
less than 1
0.017
10
10 mg/L
$117,000
$ 19,100
$ 14,100
$ 33,200
8.63
(3.92)
1. Cost based on total annual cost
2. Incremental cost over BPCTCA cost
3. kg/kkg product is equivalent to lbs/1,000 Ibs product
Source: Development Document, January 1976
-------
WASTEWATER TREATMENT COSTS FOR BPCTCA, BADCT AND BATEA EFFLUENT
(ENR 1780 - August, 1972 Costs)
Explosive Industry — Subcategory C
RWL BPCTCA
Average Production 14.8 x 103 kg/day
(32.6 x 103 Ibs/day)
Production Days 260
Wastewater Flow - kL/day 26
(gpd) (6,810)
kL/1, 000 kg Product 1.76
(gal/1 ,000 Ibs) (211)
— BOD Effluent Limitation - kg BOD/1,000 kg product3 0.0005 **
mg/L less than 1 **
COD Effluent Limitation - kg COD/1,000 kg product3 0.08 **
mg/L 45
TSS Effluent Limitation - kg TSS/1, 000 kg product3 0.92
mg/L 523 50 mg/L
Total Capital Costs $14,300
Annual Costs
Capital Recovery plus return at 10% at 10 years $ 2,350
Operating + Maintenance $ 3,360
Energy + Power 700
Total Annual Cost $ 6,410
Cost1 $/ 1,000 kg Product 1.67
($/1, 000 Ibs Product) (0.76)
LIMITATIONS
Technology Level
BADCT2
* *
* *
* *
* *
20 mg/L
$24,100
$ 3,910
$ 1,250
550
$ 5,710
1.49
(0.67)
BATEA2
0.00014
less than 1
0.017
10
10 mg/L
$117,000
$ 19,100
$ 14,100
$ 33,200
8.63
(3.92)
1. Cost based on total annual cost
2. Incremental cost over BPCTCA cost
3. kg/kkg product is equivalent to tbs/1,000 Ibs product
Source: Development Document, January 1976
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4.0 PRESCREEN OF ECONOMIC IMPACT OF EFFLUENT GUIDELINES
4.1 PRESCREENING METHODOLOGY
The objective of the prescreen was to provide EPA with sufficient informa-
tion to permit it to choose which industry subcategories it could eliminate from
further study by ADL. Of course, eliminating some of the subcategories would
permit a more cost-effective utilization of the available resources for studying
the economic impact of the proposed effluent guidelines.
For any prescreen process to be effective, it must:
• Exclude only those subcategories for which there is strong
evidence readily available that the economic impact would be
insignificant; and
• Not consume a large amount of the available resources.
Initiating the study, ADL interviewed its own experts for each industry
category to develop information which characterized the industry, its markets,
its pollution control practices, and any consideration the industry expert felt
EPA should know about respective industry subcategories. To guide the experts
on the kind of information they should provide, we developed an outline in
tubular form of the information needed.
The experts were instructed to prepare their comments utilizing only
personal knowledge or information that was immediately available to them in
completing the information table for their respective industry subcategories. In
many instances, there were areas in the information table on which no comment
was possible, either because the expert did not have the requisite information
immediately available to him, or because the answer was too complex for answer-
ing at the prescreen level.
The information contained in the experts' comments and on the information
table not only provided the basis for our recommendations concerning the cate-
gories EPA should consider eliminating, but also generalized the condition of the
industry with respect to the proposed regulations.
In developing our recommendations, we wanted to have a high degree of
certainty that any category we recommended for elimination could not, on
further study, be shown to be seriously impacted. Thus, we developed four
criteria, any one of which, if met by an industry subcategory, would be enough
to give a tentative classification as a subcategory for elimination. Before we
21
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recommended that IvPA consider elimination of a subcategory from further
study, we made an overall assessment involving other data known to the industry
expert. The criteria are as follows:
(1) The industry subcategory is generating no wastewater.
(2) The ratio of BPCTCA plus BATEA to selling price is less than 2%
and/or the ratio of BPCTCA plus BATEA to profits is less than
15%.
(3) Most of the plants in the subcategory are currently discharging
into municipal sewage systems and may continue to do so with
little or no pretreatment costs incurred.
(4) Most of the recommended treatment facilities have already been
installed in most of the plants in the subcategory.
Criterion (1) obviously represents the strongest reason for eliminating an
industry from further study. If the industry does not discharge wastewater, water
pollution regulations will have no impact upon the industry.
Criterion (2) is based on discussions with ADL economic experts. We
decided that, if this criterion were met, the proposed standards would likely
not result in a significant economic impact. Often, our experts had no profit
margin information available. In those instances, when the ratio of treatment
cost to selling price was less than 2%, we still recommended that EPA consider
removing the subcategory from further study. However, this recommendation is
not so strong as the recommendations made using profit information.
In considering treatment cost/selling price and treatment cost/profit margin
ratios, it is important to realize that the treatment costs presented in the Develop-
ment Document are for a total treatment system and represent the costs incurred
by a plant having no wastewater treatment already in place. Most facilities within
the eight industries studied under this contract have some form of wastewater
treatment already installed.
Criterion (3) also represents a very strong reason for eliminating a sub-
category from further study. If the wastewater treatment practice within a sub-
category consists mainly of discharging to municipal sewage systems, the cost of
that treatment is already being incurred via sewer charges. If the subcategory can
continue this practice, be consistent with the pretreatment standards set forth in
the Development Document, and yet incur little or no pretreatment cost, then the
incremental economic impact to that subcategory will be nil. Since the Develop-
ment Document does not provide pretreatment costs, Criterion (3) was used to
eliminate a category only when it was very clear that pretreatment would be
either unnecessary or minimal.
22
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Criterion (4) represents a reason for eliminating an industry from further
study on the basis that, should the industry meet Criterion (4), it will not have
to expend as much money as the Development Document indicates to meet the
proposed standards.
The wastewater treatment already installed to meet other Federal or State
regulations may be adequate to meet the requirements of the proposed guidelines.
Therefore, the incremental treatment costs attributable to the guidelines may be
zero for many facilities. In any event, the treatment costs in the Development
Document represent maximum costs, so that for plants with treatment facilities
in place we expect that actual costs will be less than indicated by the Develop-
ment Document and the 2 percent or 15 percent criteria used in the prescreen
process are therefore conservative.
4.2 ECONOMIC AND TECHNOLOGICAL FACTORS
Economic and technological information is presented in Table 4.2. In Sub-
category A, the only commercial explosive is nitroglycerin and the associated
production of dynamite. The total of BPCTCA plus BATEA unit treatment
costs is estimated to be 1.7 to 3.4% of estimated selling prices. The correspond-
ing figures for BPCTCA alone are 0.9 to 1.9% of selling price. These estimated
costs are low enough so that we do not judge them to be economically impactive.
As mentioned in Section 2.1, we expect that the nitroglycerin dynamites will
essentially disappear from the market in the next five years so that only the
BPCTCA cost is likely to be felt by the industry.
BPCTCA plus BATEA treatment costs versus selling prices vary from 0.10
to 12.5% for Subcategory B, from 0.05% to 1.7% for Subcategory C and from
195 to 293% for Subcategory D.
The Development Document indicates a BPCTCA treatment for Subcate-
gory C that costs $2.14 per metric ton. On the cheapest packaged ANFO products
this treatment cost amounts to 0.9 percent of their sales prices. This cost is judged
to be economically nonimpactive, especially since the cost appears to be over-
stated for the reasons given in Section 3.0 of this report.
The BATEA process presented in the Development Document was based on
carbon adsorption while the BATEA technology now recommended is based on
multi-media filtration. Addition of the presently recommended BATEA process
brings the total treatment costs to $4.05 per metric ton or a maximum of 1.7
percent of the selling price of the cheapest ANFO products. Had the original
carbon adsorption step been retained, the costs would have been $13.17 per
metric ton or 5.4% of the ANFO sales price. Since ammonium nitrate is the
23
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TABLE 4.2
INFORMATION TABLE ~ COMMERCIAL EXPLOSIVES INDUSTRY
Subcategories
I ndustry Data
1. Annual Production (units/yr)
2. Production Value ($MM sales)
3. Representative Range of Unit Selling
Price,* ($/metric ton)
4. Estimated Prolit Margin i% of selling
price)
5. BPCTCA (1977) Treatment Cost**
($/metnc ton)
6. BATE A (1983) Treatment Cost**
($/metric ton)
Technical and Economic Factors Pertinent
to Economic Impact Analysis
Technical Factors
7. Possibility of drastically reducing or
totally eliminating wastewater flow
rate, compared to Development
Document.
8. Possibility of substantially reducing
cost of end-of-pipe treatment via
m-plant changes and/or process
modifications.
9. Fraction of plants with substantial
wastewater treatment facilities in
place.
10. Fraction of plants presently discharging
into municipal wastewater treatment
facilities.
11. Frequency or likelihood of plants
sharing waste treatment facilities.
with other manufacturing operations
12. Degree to which proposed treatment
departs from currently employed
treatment.
13. Seriousness of other pending
environmental control problems
(including OSHA).
Economic Factors
14. BPCTCA plus BATEA unit treatment
cost as percent of unit selling price.
15. BPCTCA plus BATEA unit treatment
cost as percent of unit profit margin.
16 Would the demand for the industry's
product be significantly affected by
a 10% increase in price?
A. Manufacture of
Explosives
See Section 2.1
$334-677
16%
$6.22
$5.17
B. Manufacture of C. Load and Pack
Low
Low
Low
Low
Low
High
High
1.7%-3.4%
11.3%-22.7%
No
Propellents
Not Determined
Not Determined
$1800-220,000
Not Determined
$162
$62.1
Low
High
Low
Low
Low
High
High
0.10%-12.5%
No
Plants
See Section 2,1
$242-8500
7-15%
$2.14
$1.91
High
Low
Low
Low
Low
High
Probably Low
0.05-1.7%
0.3-24%
No
D. Manufacture of
Initiating Compounds
Not Determined
Not Determined
$22,000-$33,000
Not Determined
$47,180
$17,260
Low
Low
Low
Low
Low
High
Probably Low
195%-293%
No
'Selling prices are based on 1975 estimates.
•BPCTCA and BATEA treatment costs have been adjusted from 1972 to the 1975 level using the Engineering News Record Construction
Cost Index (1972 = 1780, 1975 = 2276).
24
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principal ingredient in wastewaters from the civilian sector Subcategory C plants,
it is doubtful that a carbon adsorption process would be cost effective. Neverthe-
less, carbon adsorption may be reinstituted for Subcategory C, if data gathered
before promulgation of the 1983 effluent limitations show that carbon adsorp-
tion provides effluent load reduction commensurate with the costs.
The importance of determining the appropriateness of the BATEA treatment
costs attributed to ANFO and other NCN products is obvious when it is realized
that products of this type make up almost 90% of the tonnage of civilian explo-
sives products. If the higher BATEA treatment costs are necessary, the shift from
off-site mixing to on-site mixing will be accelerated due to the fact that on-site
mixing is not covered by the guidelines and will not incur the concomitant treat-
ment costs.
Because of the wide range of treatment costs versus selling prices in Subcate-
gories B and D, it is not possible to state that plants in these subcategories will not
experience an economic impact from the Interim Final Effluent Guidelines. Cer-
tain plants in these subcategories will undoubtedly have very small impacts, but
on an overall basis the subcategories will apparently be impacted. Further study
of plants in Subcategories B and D will be required.
25
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5.0 ECONOMIC IMPACT OF THE INTERIM FINAL EFFLUENT GUIDELINES
ON THE CIVILIAN EXPLOSIVES INDUSTRY
As stated in Section 4.2, we do not expect that the Interim Final Effluent
Guidelines will have a significant economic impact on the civilian sector of Sub-
category A, Manufacture of Explosives. The BPCTCA costs amount to 0.9 to
1.9% of the selling prices of products in this subcategory. The total of BPCTCA
plus BATEA unit treatment costs is estimated to be 1.7 to 3.4% of estimated
selling prices. These costs are low enough so we do not judge them to be eco-
nomically impactive. As mentioned in Section 2.1, the dynamite industry is
presently in a state of decline. In 1960 dynamites based on nitroglycerin were the
major commercial explosives in the United States. Even as recently as 1965 the con-
sumption of dynamite type explosives (based on nitroglycerin) was still approxi-
mately equal to the consumption of ammonium nitrate-fuel oil (ANFO) blasting
agents. At the present time, blasting agents based on ammonium nitrate in admix-
ture with a variety of nonexplosive sensitizing fuels have taken over approxi-
mately 90% of the civilian explosives market. We estimate that dynamite will be
essentially eliminated from the explosives market in the next five years. (Manu-
facture of nitroglycerin for propellants in Subcategory B will continue.)
Because of the above-mentioned industry sales trends as well as increased
costs to meet OSHA regulations, we expect that compajnAt?, ^f,'A» pioQutuig nitro-
glycerin dynamites will gradually shift to production of blasting agents based on
slurries or water gels as well as ANFO products. Therefore we do not expect this
industry to sec the effect of the Subcategory A BATEA costs because the
industry would be converted into the Subcategory C classification by 1983.
Because the plants would be expected to remain in the same locations, effects
on employment and communities would be insignificant.
The BPCTCA treatment costs for Subcategory C (Load, Assemble and Pack
Operations) will only amount to 0.9% of sales prices of the cheapest ANFO
products. The presently contemplated BATEA process would give a combined
cost for BPCTCA and BATEA that would be 1.7% of the ANFO selling price.
Under our criteria neither the liPCTCA cost nor the combined costs are judged
to be economically impactive.
As was discussed in Section 3.0 of this report, the typical ANFO plants will
not have the volume of wastewater indicated in the model plant of the Develop-
ment Document. Therefore, the costs will be even lower than calculated above.
Other plants in this subcategory producing water gels and slurries may approach
the water usage of the model plant. Prices for water gels and slurries are higher
than for ANFO so we are confident that all Subcategory C plants will snow no
significant economic impact from the Interim Final Effluent Guidelines.
27
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Within relatively wide limits, the demand for blasting agents is price inelastic.
Our contacts with several distributors indicated that the 15% rise in prices for
blasting agents in 1975 due to rises in ingredient costs had no apparent effect on
sales volume. Therefore we expect that the added costs of treatment would be
passed on directly to consumers in the form of modest price increases. We do not
believe that these relatively small treatment costs of 0.9 to 1.7% would be taken
from company profits nor would they cause significant shifts in modes of opera-
tion in the industry. On the other hand, if large increases in costs due to effluent
controls were imposed, the prevailing shift from off-site mixing to on-site mixing
of ANFO at mines would accelerate because on-site mixing is not covered by the
guidelines. A corresponding shift from off-site to on-site mixing of packaged
water gels and slurries is not envisioned because of the greater difficulty of
processing these materials at a mine site. The large business in on-site mixing of
slurries and water gels for direct addition to bore holes is expected to continue.
These operations are conducted by the companies that have patents on blasting
agent compositions or by their licensees working on a royalty basis.
Subcategory C plants have few pressing OSHA problems and plants in this
subcategory should be able to accomodate tne costs of meeting the Interim Final
Effluent Guidelines with a minimum of difficulty. Therefore, we anticipate no
significant effects on employment or on communities. Because of the highly com-
pcuuve conditions in areas that use large amounts of blasting agents, the price
changes should be minJ.'nal and will probably consist of a simple pass through of
the minor treatment costs to be borne.
28
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