United States
Environmental Protection
Agency
Office of Air Quality
Planning and Standards
Research Triangle Park, NC 2771 1
EPA-452/R-96-011
June 1996
Air
EPA Off-Site Waste and Recovery Operations
NESHAP: Economic Impact Analysis
FINAL
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TABLE OF CONTENTS
Section Page
1 INTRODUCTION AND SUMMARY 1-1
1.1 Background 1-1
1.2 Analytical Approach 1-3
1.3 Summary of Results 1-4
1.3.1 Estimated Impacts on Markets
and Facilities 1-5
1.3.2 Impacts on Employment and Economic
Welfare 1-6
1.3.3 Company-Level Impacts 1-7
1.3.4 Regulatory Flexibility Impacts 1-8
2 DEMAND FOR OWR SERVICES 2-1
2.1 Demand for Waste Services 2-1
2.1.1 Types of OWR Services Affected by
this Regulation 2-2
2.1.2 Data Sources 2-2
2.1.3 Industries Demanding OWR
Services 2-3
2.2 Trends in the Demand for OWR Services 2-7
2.2.1 The Land Disposal Restrictions (LDR) . . . 2-7
2.2.2 The Toxicity Characteristics Leachate
Procedure (TCLP) Test 2-8
2.2.3 Pollution Prevention 2-9
2.2.4 Evidence from the Toxics Release
Inventory (TRI) 2-9
2.2.5 Other Evidence of Trends in Demand for
OWR Services 2-10
2.3 Demand for Management of Specific Types
of Waste 2-11
2.4 Characteristics of Demand as Reflected by
the Market Model 2-14
3 SUPPLY OF OWR SERVICES 3-1
3.1 Description of Suppliers 3-2
3.1.1 Data Limitations 3-2
ill
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TABLE OF CONTENTS (continued)
Section Page
3.2 Types of OWR Services 3-3
3.3 Commercial Status 3-4
3.4 Quantities of Waste Managed by OWR
Facilities 3-11
3.5 Location of OWR Facilities 3-14
3.6 Facility Size 3-14
3.6.1 Facility Throughput 3-14
3.6.2 Number of Employees 3-18
3.6.3 Facility Revenues 3-19
3.7 Company Financial Profile 3-22
3.7.1 Data Sources 3-22
3.7.2 Company Size Distribution 3-26
3.7.3 Vertical and/or Horizontal
Integration 3-29
3.7.4 Cost of Capital and Capital
Structure 3-32
4 DEVELOPMENT OF THE OWR INDUSTRY BASELINE 4-1
4.1 Baseline Facility Conditions 4-2
4.1.1 Estimating Baseline Quantities 4-3
4.1.2 Estimating Baseline Costs 4-5
4.1.3 Estimating Baseline Prices 4-7
4.2 Baseline Company Financial Conditions 4-9
4.2.1 Financial Ratio Analysis 4-12
4.2.1.1 Profitability 4-15
4.2.1.2 Market Value 4-20
4.2.2 Bankruptcy Analysis 4-22
5 THE OFF-SITE WASTE OPERATIONS STANDARD 5-1
5.1 Controls for Emission Point Categories 5-2
5.1.1 Regulatory Baseline 5-2
5.1.2 Emission Point Category Floor 5-2
5.2 Regulatory Alternatives Selected for
Analysis 5-3
5.3 Costs of Regulatory Alternatives 5-5
5.3.1 Estimated Facility Compliance Costs .... 5-5
5.3.2 Fixed Costs 5-9
5.4 Compliance Costs of Each Regulatory
Alternative, by Waste Type 5-10
5.5 Enhanced Monitoring Costs 5-27
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TABLE OF CONTENTS (continued)
Section
6 IMPACTS OF THE REGULATORY ALTERNATIVES 6-1
6.1 Market Impacts 6-2
6.1.1 Analytical Method used to Estimate
Market Impacts of Regulatory
Alternatives 6-3
6.1.2 Scope of Market Analysis 6-3
6.1.3 Baseline Quantities of OWR Services .... 6-5
6.1.3.1 Facility Supply 6-5
6.1.3.2 Market Supply 6-8
6.1.3.3 Implications of the
Assumptions. 6-8
6.2 Compliance with the Standard 6-9
6.3 New Market Equilibrium Prices and
Quantities 6-10
6.3.1 Model Description 6-10
6.4 Results 6-13
6.4.1 Market and Facility Impacts of the
Regulatory Alternatives 6-13
6.4.1.1 Changes in Price and
Quantity 6-13
6.4.1.2 Facility Closures and
Process Shut-Downs 6-30
6.4.2 Employment Impacts 6-34
6.4.3 Economic Welfare Impacts 6-35
6.5 Company Impacts 6-39
6.5.1 Owners' Responses 6-40
6.5.2 Impacts of the Regulation 6-49
6.5.2.1 Changes in the Cost of Capital
and Capital Structure 6-50
6.5.2.2 Changes in Financial Status . . . 6-62
6.5.2.3 Projected Financial Failure . . . 6-70
6.6 Initial Regulatory Flexibility Analysis 6-70
6.6.1 Potentially Affected Entities 6-71
6.6.2 Distribution of Impacts 6-72
6.6.3 Mitigating Measures 6-84
REFERENCES R-l
V
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TABLE OF CONTENTS (continued)
Appendices Page
A List of SIC Codes Provided to Respondents
to the National Survey of Hazardous Waste
Treatment, Storage, Disposal, and Recycling
Facilities A-1
B Program Defining Waste Forms B-l
C Elasticity of Demand for Off-site Waste
and Recovery Operations C-l
D Financial Analysis Method D-l
E Estimating Companies' Weighted Average
Cost of Capital E-l
F Estimating Facilities' Baseline Waste
Management Quantities F-l
G Technique for Estimating Facilities'
Average Variable Costs G-l
H Documentation and Summary of Methods Used
to Impute Missing Financial Statement Values H-l
VI
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LIST OF FIGURES
Number Page
3-1 Size distribution of potentially affected companies . . 3-27
3-2 Share of commercial versus noncommercial waste
treatment services 3-30
3-3 Share of total receipts from waste treatment and
all other activities 3-31
4-1 Treatment categories most commonly used to manage
each waste form 4-4
4-2 Percentage of f,irms equal to or below the industry
benchmark ratio: return on sales 4-16
4-3 Percentage of firms equal to or below the industry
benchmark ratio: return on equity 4-18
4-4 Percentage of firms equal to or below the industry
benchmark ratio: return on assets 4-20
6-1 Off-site waste flows to a sample OWR process,
incineration 6-6
6-2 The effect of the emissions standard on the market
for OWR service i 6-11
6-3 Change in consumer surplus with regulation 6-36
6-4 Change in producer surplus with regulation 6-37
6-5 Characterization of owner responses to regulatory
actions 6-47
6-6 Marginal cost of capital schedule 6-53
6-7 Projected share of compliance capital costs by
type of financing 6-59
6-8 Percentage of firm financial ratios equal to or below
the industry lower quartile ratio: return on sales. . 6-67
6-9 Percentage of firm financial ratios equal to or below
the industry median quartile ratio: return on sales. . 6-67
6-10 Percentage of firm financial ratios equal to or below
the industry lower quartile ratio: return on equity. . 6-68
6-11 Percentage of firm financial ratios equal to or below
the industry median quartile ratio: return on equity. 6-68
6-12 Percentage of firm financial ratios equal to or below
the industry lower quartile ratio: return on assets. . 6-69
6-13 Percentage of firm financial ratios equal to or below
the industry median quartile ratio: return on assets. 6-69
VI1
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LIST OF TABLES
Number Page
2-1 1986 Waste Generation by SIC Code, by Treatment
Location 2-5
2-2 Waste Forms for Which OWR Services Are Demanded .... 2-13
2-3 Treatment Processes at OWR Facilities 2-14
3-1 Waste Type Definitions 3-5
3-2 Number of Facilities Treating Waste, by Process
and Commercial Status 3-9
3-3 Quantities of Waste Managed at OWR Facilities,
by Process and Commercial Status 3-12
3-4 Location of OWR Facilities, by State 3-15
3-5 Facility Size by Throughput 3-16
3-6 Employment at OWR Facilities 3-20
3-7 Facility Commercial OWR Revenues 3-21
3-8 Data Sources 3-24
3-9 Size Distribution of Potentially Affected Companies . . 3-27
3-10 Average Size of OWR Facility by Company Size 3-28
3-11 Distribution of Firms by Number of OWR Facilities
Owned 3-29
3-12 Summary Statistics by Firm Size Category of Weighting
Factors Used to Calculate Firms' Baseline WACC . . . . 3-35
3-13 Summary Statistics by Firm Size Category of Firms'
Baseline WACC 3-36
4-1 Estimated Aggregate Quantities of Each Waste Form
Processed in Each Treatment Category by the 710
OWRs That Responded to the TDSR Survey 4-3
4-2 Model Processes Used to Estimate Costs 4-6
4-3 Estimated Market Prices for Management of 60
Waste Types Profiled 4-10
4-4 Baseline Financial Ratio: Return on Sales 4-15
4-5 Baseline Financial Ratio: Return on Equity 4-17
4-6 Baseline Financial Ratio: Return on Assets 4-19
4-7 Baseline Financial Ratio: Market-to-Book Ratio .... 4-21
4-8 Baseline Bankruptcy Prediction 4-24
5-1 Emission Point Control Options 5-4
5-2 OWR Standard Regulatory Alternatives Selected for
Economic Analysis 5-6
5-3 National Compliance Costs and Emissions by
Regulatory Alternative 5-7
vi±l
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LIST OF TABLES
Number Page
2-1 1986 Waste Generation by SIC Code, by Treatment
Location 2-5
2-2 Waste Forms for Which OWR Services Are Demanded .... 2-13
2-3 Treatment Processes at OWR Facilities 2-14
3-1 Waste Type Definitions 3-5
3-2 Number of Facilities Treating Waste, by Process
and Commercial Status 3-9
3-3 Quantities of Waste Managed at OWR Facilities,
by Process and Commercial Status 3-12
3-4 Location of OWR Facilities, by State 3-15
3-5 Facility Size by Throughput 3-16
3-6 Employment at OWR Facilities 3-20
3-7 Facility Commercial OWR Revenues 3-21
3-8 Data Sources 3-24
3-9 Size Distribution of Potentially Affected Companies . . 3-27
3-10 Average Size of OWR Facility by Company Size 3-28
3-11 Distribution of Firms by Number of OWR Facilities
Owned 3-29
3-12 Summary Statistics by Firm Size Category of Weighting
Factors Used to Calculate Firms' Baseline WACC .... 3-35
3-13 Summary Statistics by Firm Size Category of Firms'
Baseline WACC 3-36
4-1 Estimated Aggregate Quantities of Each Waste Form
Processed in Each Treatment Category by the 710
OWRs That Responded to the TDSR Survey 4-3
4-2 Model Processes Used to Estimate Costs 4-6
4-3 Estimated Market Prices for Management of 60
Waste Types Profiled 4-10
4-4 Baseline Financial Ratio: Return on Sales 4-15
4-5 Baseline Financial Ratio: Return on Equity 4-17
4-6 Baseline Financial Ratio: Return on Assets 4-19
4-7 Baseline Financial Ratio: Market-to-Book Ratio .... 4-21
4-8 Baseline Bankruptcy Prediction 4-24
5-1 Emission Point Control Options 5-4
5-2 OWR Standard Regulatory Alternatives Selected for
Economic Analysis 5-6
5-3 National Compliance Costs and Emissions by
Regulatory Alternative 5-7
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LIST OF TABLES (continued)
Number
5-4 Compliance Costs, Regulatory Alternative I by
Waste Management Process 5-11
5-5 Compliance Costs, Regulatory Alternative 2 by
Waste Management Process 5-14
5-6 Compliance Costs, Regulatory Alternative 3 by
Waste Management Process 5-17
5-7 Compliance Costs, Regulatory Alternative 4 by
Waste Management Process 5-20
5-8 Compliance Costs, Regulatory Alternative 5 by
Waste Management Process 5-23
6-1 Variables Used in the OWR Model 6-4
6-2 Price and Quantity at Baseline and Under
Regulatory Alternative 1, by OWR Process 6-14
6-3 Price and Quantity at Baseline and Under
Regulatory Alternative 2, by OWR Process 6-17
6-4 Price and Quantity at Baseline and Under
Regulatory Alternative 3, by OWR Process 6-20
6-5 Price and Quantity at Baseline and Under
Regulatory Alternative 4, by OWR Process 6-23
6-6 Prices and Quantities of OWR Services
at Baseline and Under Regulatory Alternative 5 .... 6-26
6-7 Closures Under Each Regulatory Alternative 6-31
6-8 Changes in Employment Under the Regulatory
Alternatives (for 551 Commercial Facilities) 6-35
6-9 Changes in Economic Welfare with the Regulatory
Alternatives 6-40
6-10 Projected Change in Revenue 6-43
6-11 Projected Change in Operating Costs 6-44
6-12 Projected Capital Compliance Costs 6-45
6-13 Projected Change in Firm Value 6-52
6-14 Number of Firms with Compliance Capital Costs (CO
Above the Retained Earnings Breakpoint (B) 6-55
6-15 Estimated With-Regulation WACC 6-60
6-16 Estimated Change in the Cost of Capital 6-61
6-17 Baseline and With-Regulation Financial Ratio:
Return on Sales 6-64
6-18 Baseline and With-Regulation Financial Ratio:
Return on Equity 6-65
6-19 Baseline and With-Regulation Financial Ratio:
Return on Assets 6-66
6-20 Annual Compliance Costs as a Percentage of
Baseline Waste Treatment Costs 6-75
6-21 Annual Compliance Costs as a Percentage of
Baseline Production Costs 6-77
6-22 Annual Compliance Costs as a Percentage of Sales:
Excluding Firms with Zero Compliance Costs 6-80
6-23 Annual Compliance Costs as a Percentage of Sales:
Including Firms with Zero Compliance Costs 6-82
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SECTION 1
INTRODUCTION AND SUMMARY
This report analyzes the economic and financial impacts
projected to result from a national emission standard for
hazardous air pollutants (NESHAP) for the control of hazardous
air pollutant (HAP) emissions from off-site waste operations
that are major sources under Section 112 of the Clean Air Act
(the Act) as amended in 1990. Facilities performing off-site
waste operations are referred to in this report as off-site
waste and recovery (OWR) facilities. The rulemaking
specifically addresses organic HAP emissions from OWR
facilities that receive waste from off site.
1.1 BACKGROUND
The Clean Air Act Amendments of 1990 (P.L.101-549)
establish a list of 189 HAPs and gives the Administrator of
the Environmental Protection Agency (EPA) the authority to
revise and update the list as necessary. The Act also
requires the EPA to develop and publish a list of all
categories and subcategories of major and area sources of
HAPs. A current list of these source categories, including
OWR facilities, was published in the Federal Register
(July 16, 1992) (57 FR 31576). The Act calls for the
development of standards to control HAP emissions from these
source categories over the 10-year period starting November
1990.
The off-site waste operation NESHAP will regulate organic
HAP emissions from facilities that receive waste from off site
for the purpose of treatment, storage, recovery, recycling,
and/or disposal. Facilities excluded from the scope of this
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regulation include facilities that manage only waste generated
on site, publicly owned treatment works (POTWs), hazardous
waste incinerators, sewage sludge incinerators., municipal
waste combustors, landfills, and site remediation activities.
The NESHAP, while it will reduce releases of HAPs and
therefore protect the health of the public and the
environment, will also increase the cost of performing OWR
services. The increased costs of waste management operations
resulting from complying with the regulation may reduce the
profits of OWR facilities. Economic theory suggests that the
increased costs will, to some extent, be passed on the OWR
facilities' customers in higher prices for their services.
Thus, the regulation is expected to result in higher prices
for OWR services and a smaller overall quantity of those
services being performed.
At some affected facilities, increased costs in some
processes may mean that those processes are no longer
profitable and should be shut down. The shutting down of
processes, or fixed compliance costs not directly related to
individual processes, may cause some whole facilities to
become unprofitable. If this occurs, facilities may close.
Both process closures and facility closures will lead, at
least in the short run, to decreased employment. Unemployment
results in real costs to the unemployed individual and to
society. In addition, lost income in the communities where
the facilities are located may cause repercussions throughout
the community.
The purpose of this analysis is to estimate the changes
in prices and quantities in affected markets for OWR services,
the changes in profitability of OWR processes and facilities,
and the closures, if any, of OWR processes and facilities.
Special attention is paid to the impacts of the regulation on
small businesses and communities. Information from the
economic analysis enables EPA to ensure that regulations not
only will be cost-effective but also will not unnecessarily
impose a disproportionate burden on anyone. For this
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.analysis, costs were estimated and impacts assessed assuming
that all OWRs facilities including both major and area
emissions sources, will be affected. If only major sources
are affected, the economic impacts will be much lower than
estimated here.
1.2 ANALYTICAL APPROACH
The Agency has identified 725 OWR facilities expected to
be affected by this regulation, including 86 major sources and
639 area sources. Data were provided for 710 of them from the
National Survey of Hazardous Waste Treatment, Storage,
Disposal, and Recycling Facilities (TSDR Survey) and the
National Survey of Hazardous Waste Generators (GENSUR)
describing the quantities of waste they process in each of 60
waste management processes in 1986. Prices for these
processes were also provided by this survey and updated to
reflect 1991 prices. Costs of the waste management operations
were estimated using an engineering cost approach and
similarly were updated to reflect 1991 prices. For the other
15 facilities, data on 1989 quantities and costs of waste
management were provided by the Centralized Waste Treatment
Industry Survey (CWT Survey), and the costs were updated to
1991 prices.
A market simulation model was developed to estimate
facility and market responses to the compliance costs.
Changes in prices and quantities in each of the 60 waste
management markets were estimated under each of five
regulatory alternatives. Process and facility closures under
each regulatory alternative were estimated. Facility impacts
were aggregated to estimate impacts on the companies owning
affected OWR facilities. Impacts on communities on which
affected OWR facilities are located were evaluated.
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1.3 SUMMARY OF RESULTS
Complying with the regulatory alternatives increases the
cost of providing OWR services at each affected OWR facility.
•
The magnitude of the increase in costs depends on
• the waste management processes present at the
facility,
• the waste types treated in each process,
• the number and type of emission points present at each
process, and
• the baseline level of control for each emission point.
Facilities may perform off-site waste operations on a
commercial or noncommercial basis. Commercial OWR facilities
accept waste from off-site generators that are not under the
same ownership as the OWR facility. Noncommercial OWR
facilities accept waste only from off-site facilities under
the same ownership as the OWR facility. Only commercial OWR
facilities incurring compliance costs are assumed to adjust
their output of OWR services to maximize their profits in
response to the compliance costs. The off-site noncommercial
operations, which may also incur increased costs, are assumed
to be viewed as part of company overhead, similar to a company
legal or accounting division. It is assumed that
noncommercial OWR operations will continue at their
unregulated level; the costs of complying with the regulation
will be absorbed by the entire company. On-site waste
operations are not affected by the regulation.
Facilities providing commercial OWR services are assumed
to compare the average variable cost (AVC) of providing those
services (including the AVC of complying with the regulatory
alternative being analyzed) with the market price (P) for the
services. If AVC < P, the facility will continue to provide
that service at its unregulated level. If, on the other hand,
AVC > P, the facility will find provision of that OWR service
unprofitable and will shut down that process. In addition to
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requiring that P >. AVC for each OWR service at each facility,
the analysis checks to see that the facility as a whole is
profitable, taking into account fixed costs (annualized
capital costs) of complying with the regulation. Facilities
that are unprofitable are assumed to shut down. These
adjustments in output decrease the supply of the OWR service,
and the interaction of supply and demand for the service
results in a new, higher price for the service. The model
solves iteratively for the ultimate with-regulation
equilibrium values of price and quantity in each OWR market,
and determines which facilities will close processes or shut'
down entirely.
Based on the results of the market/facility model, the
Agency then estimates changes in employment and economic
welfare resulting from the regulatory alternative. Changes in
company financial status are assessed, including a
distributional analysis that examines impacts on companies of
various sizes.
1.3.1 Estimated Impacts on Markets and Facilities
The regulatory alternatives increase the prices of
affected OWR services and decrease the quantities provided.
Regulatory Alternative 1 (RAl) imposes costs in only 10
markets: the markets for landfilling and underground
injection of five waste forms. Price increases range from
less than 0.01 percent of baseline price to more than 40
percent of baseline price. Because of the very low elasticity
of demand for OWR services, quantities of OWR services fall by
less than 0.01 percent in all affected markets under RAl. No
facilities are projected to close under RAl, but four OWR
process lines are shut down (one process is shut down at each
of four facilities).
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Under Regulatory Alternatives 2 through 5 (RA2 through
RA5), almost all markets are affected, and' compliance costs
are somewhat higher than under RA1. Under these regulatory
alternatives, some markets are unaffected or experience very
small changes. The most severely affected market (in
percentage terms), underground injection of inorganic solids,
experiences a 181 percent increase in price and a 48 percent
decrease in quantity processed annually under RA4 and RA5.
The next largest percentage increase in price under RA2
through RA5 is experienced in the market for reuse as fuel of
inorganic solids, which incurs an increase of 15.2 percent to
30.2 percent. The market for fuel blending of inorganic
solids experiences the second largest percentage decrease in
annual quantity, 0.63 percent under RA2 through RA5.
The total annual quantity of waste processed commercially
at OWR facilities decreases by 21.7 Mg under RA1, by 1,548 Mg
under RA2, by 1,677 Mg under RA3, by 1,581 Mg under RA4, and
by 1,592 Mg under RA5. These quantities represent at most
0.009 percent of the 18,999,437 Mg of waste estimated to be
managed commercially each year at OWR facilities at baseline.
Ten facilities, all of which were just breaking even at
baseline, become unprofitable and six or seven facilities may
shut down under RA2 through RA5. None of the facilities
projected to close are major sources. However, it is not
conclusive from the data whether or not these OWR facilities
projected for closure are co-located at major sources. If so,
they would still be subject to this regulation. Process
closures, including those at closed facilities, range from 90
under RA2 to 112 under RA5, out of a total of 1,636 viable
commercial OWR processes at baseline.
1.3.2 Impacts on Employment and Economic Welfare
Employment is estimated to decrease by 272 to 278
employees out of a total of 951,000 employed at affected OWR
facilities at baseline. Economic welfare is anticipated to
decrease by between $87 million and $107 million per year.
These estimated decreases in economic welfare represent the
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net effect of changes in prices, quantities, and profits in
all the affected markets. They must be combined with changes
in welfare associated with the environmental benefits
resulting from the regulatory alternatives to get a complete
assessment of the effect of the regulation on overall well-
being .
1.3.3 Company-Level Impacts
Companies that own the OWR facilities are legal business
entities that have the capacity to conduct business
transactions and make business decisions that affect the
facility. Thus, the legal and financial responsibility for
compliance with a regulatory action rests with the owners of
the OWR facility. The analysis of the company-level impacts
of the OWR regulation involves identifying and characterizing
affected entities, assessing their response options and
characterizing the decisionmaking process, and analyzing the
impacts of those decisions.
The company-level analysis is based on the assumption
that owners respond to the regulation by installing and
operating pollution control equipment, discontinuing regulated
processes within the facility, or closing the facility. Under
each of these three options identified for analysis, affected
firms will potentially experience changes in the costs of
providing waste treatment services as well as changes in the
revenues generated by providing these services. The cost
impacts associated with the response options include the costs
of installing and operating control equipment, closure costs,
and change in baseline production costs that occur because of
a change in the quantity of waste services provided. The
revenue impacts associated with the regulation stem from
changes in the market price due to a shift in the supply of
waste treatment services. These cost and revenue impacts may
result in a change in the financial status of the firm or even
financial failure of the firm.
Financial ratio impacts provide a measure of the change
in financial status due to the regulation. To compute the
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with-regulation financial ratios, pro-forma income statements
and balance sheets reflecting the with-regulation condition of
affected firms were developed based on projected regulatory
cost and revenue impacts. Profitability is the most commonly
used measure of the firm's performance. Three profitability
measures were estimated: return on sales (ROS), return on
equity (ROE), and return on assets (ROA). For most of the
firms in this analysis, profits either remain unchanged (no
revenue or cost impacts) or decrease in response to the
regulation. For a few firms, however, profits actually
increase in response to the regulation. Increasing profits
occur where positive revenue impacts (price increases that
more than offset the quantity decreases) exceed any cost
impacts. Under each of the regulatory alternatives,
profitability ratios decline from baseline levels for small
firms with less than $6 million in annual receipts.
Profitability ratios for larger firms are generally unchanged
from baseline or only slightly lower because of regulation.
Thus, the regulation is likely to have the greatest impact on
small firms.
A composite ratio of financial condition, called the Z-
score, was also computed to characterize the financial impact
of the regulation on potentially affected firms. The Z-score
is a multi-discriminant function used to assess bankruptcy
potential.1 Data were sufficient to project bankruptcy
potential for only 154 of the potentially affected firms
identified in this analysis. The analysis estimated that
approximately 23 out of these 154 firms are likely to
experience bankruptcy in the absence of the regulation.
However, no additional financial failures due to the
regulation were projected for these firms.
1.3.4 Regulatory Flexibility Impacts
The Regulatory Flexibility Act of 1980 (-RFA) requires
that Federal agencies consider whether regulations they
develop will affect small entities (which may include
nonprofit organizations, small governmental jurisdictions, and
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small businesses) .2 Under the RFA, for a rule to be proposed,
EPA must prepare an initial Regulatory Flexibility Analysis,
or certify that the proposed rule is not expected to exert "a
significant economic impact on a substantial number of small
entities." In keeping with this requirement, this analysis
identifies potentially affected small entities, reports the
distribution of impacts across affected entities of all sizes,
and identifies mitigating measures considered for small
entities. For this analysis, firms with revenues less than $6
million per year are considered small.
The EPA specifically identified 388 firms that own 621
potentially affected OWR facilities. These 388 firms include
110 small businesses that own 112 OWR facilities. However,
this analysis does not include the following:
• facilities that treat exclusively nonhazardous waste,
and
• facilities that treat exclusively on site wastes.
Because of resource constraints, data required to identify all
potentially affected facilities and the entities that own them
were not collected. Consequently, the precise number of
potentially affected entities and the share of small entities
that incur an economic impact are unknown.
The distribution of impacts presented in this report is
based on the 388 potentially affected firms identified for
analysis. EPA provides guidelines for defining a "significant
economic impact."3 Impacts may be considered significant
whenever any of the following criteria are satisfied:
• Annual compliance costs increase total costs of
production for small entities for the relevant process
or product by more than 5 percent.
• Compliance costs as a percentage of sales for small
entities are at least 10 percent higher than
compliance costs as a percentage of sales for large
entities.
• Capital costs of compliance represent a significant
portion of capital available to small entities,
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considering internal cash flow plus external financing
capabilities.
• The requirements of the regulation are likely to
result in closures of small entities.
EPA computed the distribution of impacts on companies of all
sizes using the measures described above.
Annual compliance costs were computed as a percentage of
baseline production costs using two alternative methods to
determine whether the first criterion identified above is
satisfied. Under the first method, annual compliance costs
are computed as a percentage of baseline waste treatment
production costs. Under the second method EPA computes annual
compliance costs as a percentage of total production costs.
Impacts measured using the first method are the greatest
for firms with $6 million to $1 billion in annual revenues.
Under RAl, only two companies are projected to incur
compliance costs that will increase their baseline waste
treatment costs by more than 5 percent. This number jumps to
over 100 under the other regulatory alternatives. If the
relevant measure of baseline costs is total costs of
production (under the second method) rather than waste
treatment costs, the impacts are highest for small firms with
less than $6 million in annual receipts. Virtually all of the
firms projected to incur annual compliance costs totaling more
than 5 percent of their baseline production costs are small
firms. Under RAl, only one small firm has estimated annual
compliance costs greater than 5 percent of baseline total
production costs. Under the more stringent regulatory
alternatives, this number jumps to between 20 and 30. Only
two large firms are projected to incur compliance costs
greater than 5 percent of baseline production costs.
The second measure identified above is a relative measure
designed to compare the impacts for small entities to those
for larger entities. Annual costs as a percentage of sales
average less than 1 percent for large firms. This percentage
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compares to impacts ranging from about 4 percent under RAl to
175 percent under RA5 for small firms.
The criterion for significant impacts under the third
measure identified above is not as straightforward as the
criterion given for each of the first two measures. The
relevant measure of the "capital available" is not explicitly
stated in the guidance. Furthermore, no specific numerical
benchmark is provided to determine whether the capital costs
of regulation represent a "significant" portion of capital
available to the firm. One measure of the capital available
to companies is the retained earnings breakpoint. This
breakpoint refers to the capital available to the firm
assuming that the firm does not issue new equity or change its
capital structure. Between 20 and 50 percent of the firms
with compliance capital costs have costs that exceed the
retained earnings breakpoint. However, these firms represent
less than 3 percent of all potentially affected firms under
RAl and between 12 and 30 percent of all potentially affected
firms under the most stringent alternatives. Small firms fare
slightly worse than large firms under all of the regulatory
alternatives except RAl.
The final measure states that impacts are significant if
the proposed rule is likely to result in the closure of small
entities. No plant closures are projected under RAl.
However, 10 plants are projected to close under each of the
other regulatory alternatives. A plant closure does not
necessarily translate into a financial failure for large,
multi-facility companies. However, for small, single-facility
companies, plant closure is likely to be synonymous with
financial failure. Of the 10 plants projected to close, three
are owned by small, single-facility companies.
The initial Regulatory Flexibility Analysis indicates
that businesses of all sizes will experience impacts because
of the regulation. However, the impacts on small businesses
are generally greater than the impacts on larger entities.
The EPA is particularly concerned about these impacts on small
1-11
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entities. To address these concerns, several measures
designed to mitigate the impacts on small entities were
considered.*
"Subsequent to the economic impact analysis reported in this document,
EPA decided to limit the applicability of the proposed regulations just to
major sources -- off-site waste operations with the potential to emit at
least 9.7 Mg (10 tons) per year of any one hazardous air pollutant, or at
least 22.7 Mg (25 tons) per year of any combination of hazardous air
pollutants. This decision to drop area (smaller) sources from the
regulatory scope will cut the number of affected facilities by a
substantial but unknown amount. The amount is unknown because some
facilities that may not be major sources because of their off-site waste
operations may nevertheless be major sources because of other on-site
activities not described in data sources currently available to EPA.
Also, EPA decided to limit applicability of the proposed regulations
to facilities accepting from off site at least 1 Mg of organic compounds
listed as hazardous air pollutants. This means that over 100 facilities
owned by large businesses, and an unknown number of facilities owned by
small businesses, will be exempt from the regulations.
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SECTION 2
DEMAND FOR OWR SERVICES
Waste is generated during the course of nearly all of
life's activities. For example, producing goods and services
almost always involves the simultaneous production of waste
materials. During the process of manufacturing goods or
providing services, the material inputs that are not embodied
in the products become waste. Environmental regulations
require that these wastes, once generated, be treated and
disposed of in an environmentally sound manner.
2.1 DEMAND FOR WASTE SERVICES
The demand for waste services is a derived demand since
waste is a by-product of manufacturing or other production
activities. For example, the higher the demand for plastic
wrap, the greater the quantity of plastic wrap produced, and,
in turn, the greater the quantity of by-products of plastic
wrap manufacturing that must be treated and disposed.
Producers generating waste have three choices when they
determine how to treat and dispose of the waste properly.
First, they may invest in capital equipment and hire labor to
manage the waste on site, that is, at the same site where it
is generated. For large volumes of waste, this is often the
least expensive way to manage the waste because producers can
avoid the cost of transporting it. Managing waste on site
also enables producers to manage their ultimate liability
under environmental laws.
Another choice is for producers to treat waste on site
initially and then to send it off site for ultimate treatment
and disposal; this method is known as on site/off site.
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Finally, producers may choose to send some or all of the waste
they generate directly to another site, a method that is
called off-site. The producers of waste who choose either the
on site/off-site or the off-site method create the demand for
OWR facilities.
2.1.1 Types of OWR Services Affected by this Regulation
The regulation addresses all facilities accepting waste
from off site for management, except the following types of
facilities:
• municipal landfills,
• incinerators,
• site remediation, and
• POTWs.
Therefore, OWR facilities affected by this regulation include
hazardous waste management facilities, oil re-refining
facilities, off-site wastewater treatment facilities,
industrial landfills, and so on. Because of data limitations,
this analysis estimated impacts on only two of those
categories: hazardous waste management facilities and off-
site wastewater treatment facilities.
2.1.2 Data Sources
Most of the data used for this analysis came from three
sources:
• the TSDR Survey,4
• the GENSUR Survey,5 and
• the CWT Survey.6
EPA's Office of Solid Waste and Emergency Response conducted
the GENSUR and TSDR Surveys in 1987 and 1988. Their goal was
to collect 1986 data from a sample of hazardous waste
generators and all hazardous waste treatment, recycling, or
disposal facilities regulated by the Resource Conservation and
Recovery Act (RCRA). Together the surveys provide a detailed
portrait of the types of facilities generating and managing
wastes in 1986, the types of waste generated, and ways in
which those wastes were managed. The TSDR Survey is a census
of all RCRA-regulated facilities that treated, disposed, or
2-2
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recycled hazardous waste in 1986 and a 50 percent sample of
all facilities that stored hazardous waste in RCRA-permitted
units in 1986, but did not treat, dispose, or recycle on site.
This survey provides information about the types of waste
management operations a facility has on site; the quantities
of waste managed in each operation; and the source of those
wastes (generated on site, generated off site by facilities
under the same ownership, or generated off site by facilities
not under the same ownership) . The GENSUR provides, among
other things, a detailed characterization of the hazardous
wastes generated in 1986 and where and how they were treated,
disposed, or recycled.
EPA's Office of Water conducted the CWT Survey in 1991
and 1992 to collect 1989 data about facilities that accept
waste from off site for treatment and that discharge water
either directly or indirectly to surface water. These data
were collected to support the development of an effluent
guideline for that industry. Approximately 83 percent of the
facilities covered by the CWT Survey were also contacted for
the TSDR and GENSUR Surveys.
2.1.3 Industries Demanding OWR Services
Data from GENSUR can be used to characterize the
generators of hazardous waste by industry and to profile the
types of waste generated. This extensive survey database
gives the most detailed information on the generation of waste
available. The survey was designed to collect information on
the generation of wastes defined as hazardous under Subtitle C
of RCRA. Thus, this pattern of generation by industry may not
correspond to the generation pattern for the customers of OWR
facilities because their customers include generators of
nonhazardous wastes. Some overall patterns, however, may be
instructive.
Each RCRA regulated facility's Standard Industrial
Classification (SIC) code was identified from its response to
Question 17 of the TSDR Survey. Non-RCRA-regulated facilities
primary SIC code was identified from their responses to
2-3
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Question N.2 of the CWT Survey.• For a complete list of 4-
digit SIC codes provided to TSDR Survey respondents see
Appendix A. Table 2-1 shows SIC codes and the quantities of
waste those industries generate and ultimately send off site
for treatment, recovery, and/or disposal. This is the portion
of total waste generated in 1986 that was managed off site.
Two types of treatment locations are specified: Off Site Only
and On Site/Off Site. As explained earlier, wastes that, once
generated, are sent directly to an off-site management
facility are called Off Site Only. Wastes generated and
treated initially on site, then sent off site for additional
treatment or disposal, are called On Site/Off Site. Most of
the first page of the table shows wastes shipped off site
without prior treatment, while the remaining rows at the
bottom and the second page show wastes shipped off site after
initial on-site treatment.
Clearly, many manufacturing industries send waste off
site for management and/or recovery as shown in Table 2-1.
The most frequently appearing SIC codes are those in the 2800s
(chemicals manufacturing) and the 3300s (primary metals
manufacturing). Industrial organic chemicals (2869) ships the
greatest quantity of waste off site, followed by plastics and
resins (2821), inorganic pigments (2816), and semiconductor
manufacturing (3674). The SIC code with the most generators
is plating and polishing (3471). Other industries with many
generators include electronic components (3679) and
semiconductors (3674). Wastes shown in Table 2-1 may be
doublecounted; that is, the quantities generated at a facility
are listed on a waste-specific basis. At some facilities,
wastes generated by the treatment of other wastes are listed
separately, so the summed waste quantities for the facility
may exceed the total quantity of raw waste generated. Thus,
the total quantity of waste generated by a particular SIC code
may be overstated.
These quantities do not correspond exactly to the
quantity of waste management demanded by generators from OWR
2-4
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TABLE 2-1.
1986 WASTE GENERATION BY SIC CODE,
BY TREATMENT LOCATION
Treatment
location
Off site
only
All other
SICs, off
site only
Off site
total, only
On site,
then
off site
SIC
code
2816
2821
3851
2813
3484
2869
2911
2833
2879
3644
4931
3317
4953
3714
3721
3471
3600
5983
2819
3661
2899
3441
4463
3312
3452
3679
3585
3728
3479
1311
5171
2869
2821
3674
3361
3714
2611
Quantity
generated
(103 Mg)
3,816.7
308.1
288.4
249.3
176.9
101.6
31.6
20.1
16.0
15.7
14.0
9.8
8.8
7.5
5.8
4.9
4.7
3.2
3.1
2.3
2.2
2.2
2.0
1.9
1.8
1.3
1.2
1.1
1.0
1.0
1.0
52.4
5,157.7
14,637.0
9,028.9
7,985.1
4,514.2
3,264.9
2,899.1
Quantity sent
off site
(103 Mg)
3,816.7
308.1
288.4
55.8
176.9
101.2
31.2
20.1
16.0
15.7
14.0
9.8
8.8
2.9
5.8
4.9
4.5
3.2
3.1
2.3
2.2
2.2
2.0
1.9
1.8
1.3
1.2
1.1
1.0
1.0
1.0
52.0
4,958.7
10,674.1
9,000.8
2,843.3
3.9
816.5
2,899.1
Number of
generators
1
2
1
1
5
8
16
2
2
1
9
4
22
6
6
29
14
7
5
7
14
9
1
6
15
14
2
49
5
4
21
165
71
151
5
123
8
(continued)
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TABLE 2-1. 1986 WASTE GENERATION BY SIC CODE,
BY TREATMENT LOCATION (continued)
Treatment
SIC
location code
On site, then
off site (cont.)
All other SIC
codes, on then off
On then off total
Total waste in 1986
2819
3312
2865
2911
3429
3585
2800
3700
9511
3711
3471
4953
3573
3321
3679
3479
2899
3815
3291
2842
3721
2834
3691
3079
3341
3713
2879
3548
3678
3531
3639
7391
3316
3452
7535
3497
3592
3552
3351
3825
3317
2542
Quantity
generated
(103 Mg)
2,368.2
2,306.8
2,290.4
2,170.7
2,056.5
1,880.1
1,574.6
1,364.5
1,323.4
1,102.6
942.2
843.5
828.4
758.2
757.0
631.2
607.9
583.3
575.0
571.0
517.1
475.2
376.6
371.0
345.2
332.1
283.4
179.8
170.3
170.2
169.3
159.1
156.6
150.4
142.7
138.6
122.9
122.0
120.2
105.0
98.4 '
96.1
2,209.9
76,000.7
590,935.1
Quantity sent
off site
(103 Mg)
1,009.4
644.4
1,811.4
891.0
62.1
19.3
63.3
1,364.5
1,323.4
736.0
116.8
797.2
34.5
23.4
747.8
571.8
293.2
0.9
3.9
571.0
525.4
475.1
19.6
13.9
342.0
2.3
29.9
0.1
170.3
1.5
169.3
10.6
155.6
134.6
1.9
138.6
15.1
0.4
4.3
102.9
52.0
0.0
2,020.0
41,163.0
46,121.8
Number of
generators
40
78
31
132
51
32
41
1
13
66
352
49
63
11
256
133
93
5
16
13
59
53
27
156
43
3
46
1
34
8
4
125
13
40
1
2
6
15
22
10
36
2
2-6
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facilities in 1986. Some of the wastes in Table 2-1 sent off
site were sent for management at facilities not covered by
this NESHAP. Also, some of the wastes treated in off-site
waste operations covered by this NESHAP are not hazardous
under RCRA and thus would not appear in Table 2-1. But the
overall patterns of generation by SIC code shown in Table 2-1
are expected to be similar to the patterns of waste generation
for wastes being managed at OWR facilities.
Of 678 million Mg of EPA-regulated hazardous waste
generated in 1986, only 46 million Mg were sent off site.
Thus, the vast majority of the volume of RCRA hazardous waste
generated in 1986 was treated and disposed on site and is
outside the scope of this analysis. Relying on on-site
treatment is typical of waste management patterns: to avoid
transportation costs, the largest volume wastes are treated on
site. Waste that is sent off site for management tends to be
relatively low in volume although it may be highly toxic.
2.2 TRENDS IN THE DEMAND FOR OWR SERVICES
The data described above reflect demand for hazardous
waste management services in 1986. They demonstrate that the
demanders of OWR services are diverse, including most
manufacturing and many service sectors. This pattern is
probably true for all waste as well and is probably still
true today. The overall quantity of OWR services demanded and
the pattern of off-site waste management, however, have
probably changed since 1986.
The late 1980s were a period of transition for the waste
management industry, particularly the RCRA hazardous waste
industry. Several regulatory and policy changes combined to
change the framework for waste generation and management.
2.2.1 The Land Disposal Restrictions (LDR)
First, regulations authorized by the Hazardous and Solid
Waste Amendments to RCRA and promulgated by EPA since 1986
prohibit the land disposal of hazardous waste unless hazardous
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chemicals and characteristics have been removed, reduced, or
stabilized to the greatest extent possible or unless EPA
determines on a site-specific basis that there will be no
migration of hazardous constituents from the land disposal
unit. Beginning in July 1987, wastes banned from land
disposal in California were subject to these national
restrictions (LDR). By August 1988, the most hazardous 33
percent of RCRA hazardous wastes were banned; beginning in
June 1990, the "second third" of RCRA hazardous wastes were
banned. In May 1991, the final third were banned from land
disposal. Thus, the LDR (or "land ban") has changed the
pattern of hazardous waste management, increasing the amount
of treatment prior to disposal. In addition, smaller
quantities of some types of waste will be land-disposed (waste
that must be thermally treated, for example), while greater
quantities of other wastes will be land-disposed (such as
wastewater treatment sludges, which must now be mixed with
stabilizing agents). The average per-unit costs of waste
management have increased.
2.2.2 The Toxicity Characteristic Leachate Procedure
(TCLP) Test
In addition to the LDR, the introduction of the TCLP test
to determine if a waste is toxic under RCRA changed the
classification of many wastes from nonhazardous to hazardous.
Since September 1990, facilities have been required to use
this test rather than the extraction procedure (EP) leaching
test to determine whether wastes are hazardous. The most
notable distinction between the tests is that the EP test
estimates the leaching of metals only while the TCLP also
estimates the leaching of organic compounds. Many organic
chemicals will ultimately be added to the characteristic list
of RCRA hazardous wastes as a result of this rule change.
Facilities managing these wastes must now have a RCRA permit.
Thus, the TCLP increases the demand for RCRA-permitted OWR
services relative to other, non-RCRA-permitted types of waste
management because these wastes can no longer be treated by a
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POTW or disposed in a municipal landfill without prior
treatment.
2.2.3 Pollution Prevention
Another recent policy change is EPA's and state agencies'
greatly increased emphasis on pollution prevention.
Generators are encouraged to modify their processes, improve
their housekeeping, increase their reuse and recycling of
production by-products, and generally reduce the amount of
waste they release to the environment. Many facilities have
found cost-effective ways to modify their operations and
decrease the quantity of waste they generate for a given level
of production of their primary good or service. This trend
has, other things equal, reduced the demand for OWR services.
To assess the overall trend in the demand for OWR
services, EPA would need a time-series database giving several
years' data about the quantity of waste sent off site for
management each year. Unfortunately, no database corresponds
exactly to the data needed. No national data source provides
time-series information about the quantity of RCRA-regulated
waste sent off site for management. Because of the lack of
detailed national time-series data on hazardous waste
generation and management, quantifying the overall trend in
demand for OWR services over the past five years is
impossible. If the increasingly stringent regulation of
pollution releases to the environment has dominated, the
quantity of waste that must be managed by specialists (OWR
facilities) for a given level of production may have
increased. If, on the other hand, the emphasis on pollution
prevention has dominated, a given level of production may have
resulted in a smaller quantity of waste being generated, and
the demand for OWR services may have declined.
2.2.4 Evidence from the Toxics Release Inventory (TRI)
The TRI does provide a time series of data on releases of
materials, but the materials are chemicals of concern rather
than RCRA-regulated wastes. Many of the TRI chemicals, if
discarded, are RCRA-regulated hazardous wastes. Thus, the TRI
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database does provide information from which inferences may be
drawn about the quantities of waste being generated.
A recent study done for EPA's Office of Pollution
Prevention and Toxics assesses the changes in reported TRI
releases and transfers between 1989 and 1990.7 This study
collected data from a sample of TRI-reporting facilities to
attempt to quantify the changes in releases and transfers
reported in TRI between 1989 and 1990, and to assess the
contribution of "real" changes in releases as opposed to
"paper" changes in releases. Real changes in releases
represent actual changes in the physical quantities of a
chemical sent off site. Paper changes, on the other hand,
represent changes in reported quantities of chemicals released
that are not actual changes in physical releases but occur
because of changes in measurement or data errors.
A sample of facilities was drawn from the population of
facilities in two-digit SIC codes between 20 and 39 that
reported releases in the TRI in both 1989 and 1990. Based on
survey results, the target population reported a 15.4 percent
decrease in TRI releases and transfers between 1989 and 1990.
Of the 15 percent, approximately half (6.9 percentage points)
is attributed to source reduction. The rest is attributed to
measurement changes, changes in production, and other factors.
Based on these results, it appears likely that, overall, the
demand for OWR services may be declining.
2.2.5 Other Evidence of Trends in Demand for OWR Services
Anecdotal evidence abounds that indicates a declining
demand for OWR services, especially for hazardous waste OWR
services. Numerous case studies have been performed
documenting pollution prevention activities and the resulting
decreases in quantities of waste being generated. For
example, Motorola, in conjunction with two U.S. Department of
Energy laboratories, developed a no-clean soldering process
for circuit board production that eliminates all solvent
cleaning, eliminates the use of chlorofluorocarbons (CFCs),
speeds up production, decreases energy use, reduces production
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costs, and produces reliable hardware.8 Additionally, in a
recent assessment of pollution prevention in the chemicals
industry for INFORM, Dorfman, Muir, and Miller cite dozens of
examples of companies making changes to production processes,
inputs, or products to reduce their waste generation. DuPont,
for example, reduced solvent waste at their Deepwater, New
Jersey, Chambers Works plant by approximately 40 million
pounds per year. Most of their pollution prevention
activities involve in-process recycling. The company
estimates that these activities save DuPont $3.75 million each
year. Dow Chemical's Pittsburg, California, plant modified
its inputs and production processes and reduced its waste
generation by approximately 12 million pounds per year.9
A recent article in the Wall Street Journal stated that,
contrary to concerns in the late 1980s, hazardous waste
disposal capacity seems abundant:
Existing dumps have about 50 years of capacity
left. . . . Licensed hazardous waste in-
cinerators ran at 74 percent of capacity in
1990. . . . Hazardous waste disposal capacity
went from a feared shortage to an actual glut
in part because companies . . ., facing rising
disposal costs and potential cleanup
liability, overhauled production methods to
reduce waste volume.10
For all of the reasons cited above, it is probable that
the pattern and total volume of OWR demanded in 1991 are very
different from that reported in the TSDR/GENSUR database. No
data sources reflect OWR demand in 1991; the data used in this
analysis, although out of date, are the best available.
2.3 DEMAND FOR MANAGEMENT OF SPECIFIC TYPES OF WASTE
Generators of wastes demand the management of the wastes
they generate by OWR facilities. For example, a generator may
produce wastewater contaminated with metals, sludges or
solids, or spent solvents as a result of the production of
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other goods or services. The generator demands the
management of a particular type of waste.• Over 400 specific
RCRA waste codes describe hazardous wastes of particular
types. In addition, many other wastes are not hazardous under
RCRA. For simplicity, this analysis grouped the wastes into
six general types, or waste forms. Table 2-2 defines these
waste forms. Appendix B provides more detailed information
about the specific wastes included in each waste form.
Within each waste form, some of the specific wastes may
be suitable for management using one waste management process
while other wastes are suitable for management using other
processes. This analysis assumed that the process used to
manage a particular waste is a function of its
characteristics. Waste of Form 1 that is incinerated is
assumed to be different from waste of Form 1 that is
landfilled or that undergoes wastewater treatment. Thus, the
specific waste types for which OWR services are demanded are
described by the combination of the waste form and the
treatment process. Table 2-3 lists the types of OWR
management processes included in the analysis.
Waste type (i_j) = waste of Form i managed in process j
i = 1 6
j = 1 10
Because ten waste management processes and six waste forms are
being analyzed, the analysis groups waste into a total of 60
individual waste types for which waste management services are
demanded.
Only commercially treated wastes constitute a demand in
the market for OWR services although noncommercial off-site
waste management activities are also subject to this
regulation. The regulation does not affect the wastes that
are generated and treated on site.
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TABLE 2-2. WASTE FORMS FOR WHICH OWR SERVICES ARE
DEMANDED
Waste
Waste description
form code Definition
1 B37-B56 Inorganic solids
AID Incinerator ash
All Solidified treatment residuals
2 B20-B35 Inorganic sludges
3 B77-B78 Biological treatment or sewage
sludge
B19 Lime sludge without metals
A05 Wastewater or aqueous mixture
4 B58-B70 Organic liquids
A01 Spent solvents
A02 Other organic liquid
5 B28 Degreasing sludge with metals
B36 Soil contaminated with organics
B71-B90 Organic sludges and solids
A03 Still bottoms
A04 Other organic sludge
A06 Contaminated soil or cleanup
residue
6 B57 Inorganic gases
B91 Organic gases
A07 Other F or K wastea exactly as
described
A08 Concentrated off-spec or discarded
product
A09 Empty containers
A12 Other treatment residue
A13 Other untreated wastes
a Wastes whose RCRA codes begin with F or K.
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TABLE 2-3. TREATMENT PROCESSES AT OWR FACILITIES
Management
process number Process description
1 Incineration
2 Reuse as fuel
3 Fuel blending
4 Solidification stablization
5 Solvent recovery
6 Metals recovery
7 Wastewater treatment
8 Landfill disposal
9 Underground injection
10 Other waste management
process
2.4 CHARACTERISTICS OF DEMAND AS REFLECTED BY THE MARKET
MODEL
As explained above, waste management is an input into the
production of other goods and services, whose production
simultaneously creates waste. The demand for the OWR input is
derived from the demand for the other goods and services . In
the market model, the demand for OWR services is given by
-Y-P8 (2-D
where Y is a constant parameter and E is the elasticity of
market demand of waste management operations.
The price elasticity of demand (which is referred to as
the elasticity of demand from here on) measures the
responsiveness of demand for a service to changes in its
price. It is defined as the percentage change in the quantity
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demanded of a service divided by the percentage change in its
price.
Economic theory states that the elasticity of the derived
demand for an input is a function of the following:
• demand elasticity for the final good it will be used
to produce,
• the cost share of the input in total production cost,
• the elasticity of substitution between this input and
other inputs in production, and
• the elasticity of supply of other inputs.11'12'13
As explained in Appendix C, the magnitude of the elasticity of
demand for OWR services depends on the cost share of OWR
services in the production of the generators' primary goods
and services. Other analyses done on the OWR industry show
that the cost share for waste management is usually very
small, frequently hundredths of a percent of total production
costs. Accordingly, the elasticity of demand for waste
management is expected to be small. A uniform -0.1 elasticity
of demand is assumed for each of the types of OWR services.
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SECTION 3
SUPPLY OF OWR SERVICES
OWR services are waste management services performed at
facilities that accept waste from off site (i.e., generated at
other facilities). While some waste is generated at these
facilities as a result of the treatment of other waste (and,
in some cases, as the result of manufacturing), much of the
waste treated there is generated elsewhere and transported to
the OWR facility for treatment and/or disposal. Producers of
OWR services include both RCRA-regulated hazardous waste
management facilities and non-RCRA-regulated off-site waste
management facilities.
The EPA believes that organic HAP air emissions from the
hazardous waste management activities at RCRA-regulated waste
management facilities provide the best estimate available for
organic HAP emissions from OWR facilities.14 Another type of
facility believed to emit organic HAPs in fairly large
quantities is off-site wastewater treatment facilities that
are not RCRA-regulated. Because these two types of facilities
are believed to be the major OWR emitters of organic HAPs, the
economic impact analysis treats these facility types in the
greatest detail. Other types of OWR activities (such as
industrial landfills or oil re-refiners) are discussed
qualitatively.
OWR facilities differ widely from one another in terms of
their size, the types of waste management services they offer,
and their profitability. They differ in terms of their
ownership type and the financial health of the companies
owning them. This section profiles the suppliers of OWR
services.
3-1
-------
3.1 DESCRIPTION OF SUPPLIERS
As described in Section 2, the regulation affects all
facilities that accept waste from off site for management,
with a few exceptions. OWR facilities thus include hazardous
waste management facilities, off-site wastewater treatment
facilities, oil re-refining facilities, industrial landfills,
and so on. The impact analysis focuses on RCRA-regulated
hazardous waste management facilities and non-RCRA-regulated
off-site wastewater treatment facilities because the Agency
believes that these two subsets represent the most significant
sources of organic HAP air emissions and because the data on
these two subsets are the most complete. Using the TSDR and
GENSUR Surveys, EPA collected the data that form the basis for
characterizing RCRA-regulated facilities that manage hazardous
wastes from off site. This analysis also used data from the
CWT Survey.
Of the 87 facilities identified by the CWT Survey, 72
also are covered by the TSDR/GENSUR database. Only 15 of the
CWT facilities were not also RCRA-regulated in 1986. For the
72 for which data are contained in both data sources, TSDR and
GENSUR data were used to characterize their waste management
operations because those data are more detailed. For the 15
CWT-only facilities, data from the CWT Survey were used.
3.1.1 Data Limitations
The data used to characterize the supply of OWR services
in 1991 combine data collected in 1986 and data collected in
1989. The 1989 data have been checked to ensure that they are
still reasonably accurate. The 1986 data, on the other hand,
may be very out of date. In particular, the LDR, or "land
ban," discussed in Section 2, have significantly transformed
the pattern of management for organic waste forms. Wastes
that were legally managed in land-based operations in 1986
must now be managed in a different way. Some waste management
operations are no longer used to manage hazardous wastes, such
3-2
-------
as surface impoundments, waste piles, and land, treatment. In
an attempt to make the data correspond to current practices,
wastes that were reported in the TSDR/GENSUR as going to those
OWR operations were reassigned to landfills. Other
discrepancies, such as assigning organics to land-based
management operations still in use but not legal for organics,
have not been corrected because no data exist to indicate the
relative quantities of those wastes now managed in other
practices.
The TSDR/GENSUR database, although out of date, still
represents the most recent and detailed characterization of
hazardous waste management practices. For this reason, it
forms the basis for characterizing waste management patterns
in the absence of the regulations. However, recognizing its
shortcomings is important, so they will be noted as relevant
throughout this document.
3.2 TYPES OF OWR SERVICES
To be subject to the regulation, facilities must accept
waste from off site. Generally, they also treat at least some
waste that is generated on site. They offer waste generators
the service of managing their wastes that, for the purposes of
this analysis, fall into one of six general waste forms:
inorganic solids,
inorganic sludges,
aqueous liquids or sludges,
organic liquids,
organic sludges or solids, and
other wastes.
These waste forms were further divided based on treatability,
as discussed in Section 2. Thus, for each of the six waste
forms, as many as 10 waste types reflect how the waste is
treated.
3-3
-------
Each OWR facility may manage those wastes in one of the
following waste management processes (not all general waste
types are managed in all processes) :
• incineration,
• reuse as fuel,
• fuel blending,
• solidification and stabilization,
• solvent recycling,
• metals recovery,
• wastewater treatment,
• landfill disposal,
• underground injection, and
• other waste management.
For purposes of this analysis, the Agency assumed that
each waste form and management operation constitute a unique
waste management service that is marketed. This assumption
reflects the belief that the wastes within each broad waste
form are in fact quite variable and that different waste
management operations would be appropriate for different
wastes within the broad category. Therefore, for example, the
Agency believes that organic liquid waste treated in
incineration is really a different waste than organic liquid
waste treated in wastewater treatment. Because there are six
waste forms, each of which may be managed in each of 10
processes, the model estimates market effects in each of 60
markets. Table 3-1 shows the waste type definitions; each
market analyzed represents supply and demand for management of
one waste type.
3.3 COMMERCIAL STATUS
OWR facilities accept waste from off site for treatment,
storage, and disposal or for recycling; that is, they manage
waste that was generated at other facilities. An OWR facility
may or may not be owned by the same company that generates the
waste. OWR facilities fall into one of three commercial
status categories:
3-4
-------
TABLE 3-1. WASTE TYPE DEFINITIONS
Waste
type
Ql_l
Ql_2
Ql_3
Ql_4
Ql_5
Ql_6
Ql_7
Ql_8
Ql_9
Ql_10
Q2_l
Q2_2
Q2_3
Q2_4
Q2_5
Q2_6
Q2_7
Q2_8
Q2_9
Q2_10
Q3_l
Q3_2
Q3_3
Q3_4
Q3_5
Q3_6
Q3_7
Q3_8
Q3_9
Q3_10
Definition
waste form
Inorganic solids
Inorganic solids
Inorganic solids
Inorganic solids
Inorganic solids
Inorganic solids
Inorganic solids
Inorganic solids
Inorganic solids
Inorganic solids
Inorganic sludges
Inorganic sludges
Inorganic sludges
Inorganic sludges
Inorganic sludges
Inorganic sludges
Inorganic sludges
Inorganic sludges
Inorganic sludges
Inorganic sludges
Aqueous liquids or
sludges
Aqueous liquids or
sludges
Aqueous liquids or
sludges
Aqueous liquids or
sludges
Aqueous liquids or
sludges
Aqueous liquids or
sludges
Aqueous liquids or
sludges
Aqueous liquids or
sludges
Aqueous liquids or
sludges
Aqueous liquids
Waste management process
Inc iner a t i on
Reuse as fuel
Fuel blending
Solidification/ stabilization
Solvent recovery
Metals recovery
Wastewater treatment
Landfill disposal
Underground injection
Other waste management
process
Incineration
Reuse as fuel
Fuel blending
Solidification/ stabilization
Solvent recovery
Metals recovery
Wastewater treatment
Landfill disposal
Underground injection
Other waste management
process
Incineration
Reuse as fuel
Fuel blending
Solidification/ stabilization
Solvent recovery
Metals recovery
Wastewater treatment
Landfill disposal
Underground injection
Other waste management
process
(continued)
3-5
-------
TABLE 3-1. WASTE TYPE "DEFINITIONS (continued)
Waste
type
Q4_l
Q4_2
Q4_3
Q4_4
Q4_5
Q4_6
Q4_7
Q4_8
Q4_9
Q4_10
Q5_l
Q5_2
Q5_3
Q5_4
Q5_5
Q5_6
Q5_7
Q5_8
Q5_9
Q5_10
Q6_l
Q6_2
Q6_3
Q6_4
Q6_5
Q6_6
Q6_7
Q6_8
Q6_9
Q6_10
Definition
waste form
Organic liquids
Organic liquids
Organic liquids
Organic liquids
Organic liquids
Organic liquids
Organic liquids
Organic liquids
Organic liquids
Organic liquids
Organic sludges or solids
Organic sludges or solids
Organic sludges or solids
Organic sludges or solids
Organic sludges or solids
Organic sludges or solids
Organic sludges or solids
Organic sludges or solids
Organic sludges or solids
Organic sludges or solids
Other wastes
Other wastes
Other wastes
Other wastes
Other wastes
Other wastes
Other wastes
Other wastes
Other wastes
Other wastes
Waste management process
Incineration
Reuse as fuel
Fuel blending
Solidification/ stabilization
Solvent recovery
Metals recovery
Wastewater treatment
Landfill disposal
Underground injection
Other waste management
process
Incineration
Reuse as fuel
Fuel blending
Solidification/ stabilization
Solvent recovery
Metals recovery
Wastewater treatment
Landfill disposal
Underground injection
Other waste management
process
Incineration
Reuse as fuel
Fuel blending
Solidification/ stabilization
Solvent recovery
Metals recovery
Wastewater treatment
Landfill disposal
Under ground injection
Other waste management
process
3-6
-------
• commercial—facilities that accept waste from off-site
generators not under the same ownership as their '
facility;
• noncommercial—facilities that accept waste only from
off-site generators under the same ownership as their
facility; and
• mixed commercial and noncommercial—facilities that
treat waste generated by other facilities under the
same ownership as their facility and also accept waste
from off-site generators not owned by the same
company.
Commercial waste treatment facilities are specialists in
waste treatment; it is their business. They generally do not
have manufacturing or other activities on site. They offer
one or more waste management services on a commercial basis
and accept waste from customers that are not part of the same
company. They compete with other commercial or mixed
commercial and noncommercial OWR facilities offering the same
services. Only waste that is managed commercially passes
through the market for OWR services.
Noncommercial waste treatment facilities are typically
located at manufacturing sites. The noncommercial waste
treatment operations at these sites manage waste generated on
site and also manage waste generated at other sites owned by
the same company. Because of the potentially large
liabilities associated with hazardous waste, companies
sometimes choose to manage their waste internally rather than
employ commercial waste management services. To take
advantage of economies of scale in waste management
operations, they may choose to centralize their waste
management operations. For such facilities, managing waste
generated by off-site facilities under the same ownership is
frequently regarded as a "cost of doing business," similar to
centralized accounting or legal services provided for the
entire company by a company division. The facilities may
receive revenues directly for the treatment services (usually
at a lower price than would be charged by a commercial
3-7
-------
treater) , or they maiy be reimbursed for expenses. Changes in
the quantities of waste managed noncommercially do not affect
the market for OWR services.
Finally, some facilities offer both commercial and
noncommercial services. Generally, these facilities have
excess treatment capacity and choose to use it to manage waste
generated by facilities not under the same ownership. These
facilities are referred to as mixed commercial and
noncommercial OWR facilities.
In addition to managing wastes generated off site on a
commercial, noncommercial, or mixed commercial and
noncommercial basis, most OWR facilities manage waste
generated on site. Some treatment processes generate
residuals, which are new wastes that are usually smaller in
volume and/or less toxic than the original waste, but which
must still be managed as hazardous wastes. Such residuals
include stabilized sludges from wastewater treatment, still
bottoms from solvent recovery, and scrubber water from
incineration. Also, many OWR facilities are also
manufacturing sites, and the manufacturing activities generate
waste that must be managed.
The TSDR Survey includes information about the commercial
status of facilities. In each treatment process
questionnaire, facilities were asked for the quantity of waste
managed in each process that is generated on site and treated
on site, the quantity that is received from another off-site
facility under the same ownership and treated on site, and the
quantity received from an off-site facility not under the same
ownership and treated on site.
Table 3-2 shows the number of facilities managing each
type of waste commercially and the number of facilities
managing each type noncommercially on an off-site basis, as
well as the number of facilities generating each waste type on
site and managing it on site. Waste type Qi_j represents
waste of form i managed in process j, as defined in Table 3-1.
3-8
-------
TABLE 3-2. NUMBER OF FACILITIES TREATING WASTE, BY
PROCESS AND COMMERCIAL STATUS3
Waste
type Commercial Noncommercial
Ql_l
Ql_2
Ql_3
Ql_4
Ql_5
Ql_6
Ql_7
Ql_8
Ql_9
Ql_10
Q2_l
Q2_2
Q2_3
Q2_4
Q2_5
Q2_6
Q2_7
Q2_8
Q2_9
Q2_10
Q3_l
Q3_2
Q3_3
Q3_4
Q3_5
Q3_6
Q3_7
Q3_8
Q3_9
Q3 10
22
9
7
23
14
26
27
46
2
25
12
9
7
19
4
14
37
37
1
18
19
13
29
26
29
19
78
37
9
31
25
18
4
8
7
10
28
40
1
22
13
18
0
6
2
5
32
33
0
18
21
20
5
9
11
10
67
34
6
25
On site
25
10
8
13
8
14
31
40
1
33
14
10
3
11
1
8
31
31
1
29
22
12
13
14
10
13
65
33
7
37
Total
35
26
11
24
20
30
50
68
2
44
21
26
7
20
6
18
60
55
1
37
32
31
32
27
37
26
113
56
10
52
(continued)
3-9
-------
TABLE 3-2. NUMBER OF FACILITIES TREATING WASTE,
BY PROCESS AND COMMERCIAL STATUS* (continued)
Waste
type
Q4_l
Q4_2
Q4_3
Q4_4
Q4_5
Q4_6
Q4_7
Q4_8
Q4_9
Q4_10
Q5_l
Q5_2
Q5_3
Q5_4
Q5_5
Q5_6
Q5_7
Q5_8
Q5_9
Q5_10
Q6_l
Q6_2
Q6_3
Q6_4
Q6_5
Q6_6
Q6_7
Q6_8
Q6_9
Q6_10
Commercial
25
36
66
23
98
10
38
34
8
32
22
24
43
28
60
10
23
38
4
24
18
15
14
25
24
20
52
43
5
129
Noncommercial
32
23
14
7
33
5
32
32
6
27
26
21
11
7
15
5
27
39
4
25
20
23
6
6
12
6
41
35
5
146
On site
32
16
33
15
27
6
32
29
5
39
26
13
21
16
16
6
30
34
3
36
22
15
13
15
12
10
44
33
5
272
Total
45
56
71
24
117
13
61
51
9
56
37
42
47
29
67
13
44
60
6
48
32
36
19
26
33
24
83
63
7
341
a As noted in Section 3.2, the majority of the data used to construct
this table come from the TSDR/GENSUR database and reflect waste
management patterns in 1986. Regulatory and other changes since
1986 have resulted insignificant changes in both the quantities and
patterns of hazardous waste management. Thus, the patterns
reflected in Tables 3-2 and 3-3 may no longer be accurate. They do
reflect the best and most current data available to the Agency.
3-10
-------
OWR services offered on a commercial basis are shown in the
first column. This column represents the numbers of
facilities active in each OWR market at baseline. The second
column shows the number of facilities offering OWR services on
a noncommercial basis. The third column shows the number of
wastes generated on site and treated on site. Finally, the
total column shows the number of facilities managing each
waste form in each process, regardless of the source of the
waste. Note that the individual columns do not sum to the
total because one facility may manage the same waste form in
the same process on a commercial, noncommercial, and on-site
basis. Summing across the columns would triple-count that
facility.
3.4 QUANTITIES OF WASTE MANAGED BY OWR FACILITIES
Table 3-3 provides quantities of each waste type managed
in 1986. Several overall observations should be made about
this table. First, the table shows the total quantities of
each waste type managed in 1986 at OWR facilities that will be
affected by the regulation. Of that quantity, the wastes
shown in the first two columns originate off site and are thus
subject to the regulation. A share of the waste shown in the
third column, derived from the treatment of off-site waste, is
also covered by this regulation. Only the treatment of
commercial waste, shown in the first column, is traded in the
market. The first column thus represents the quantity
supplied in each waste management market. Of specified waste
types (not counting "other") aqueous waste managed in
wastewater treatment is the highest volume category, both for
commercial waste management and overall. This is reasonable
because aqueous waste is usually relatively dilute and
correspondingly high in volume. The second largest quantity
of waste managed commercially in 1986 is organic liquids
managed in fuel blending.
3-11
-------
TABLE 3-3.
QUANTITIES OF WASTE MANAGED AT OWR FACILITIES,
BY PROCESS AND COMMERCIAL STATUS3
Waste
type
Ql_l
Ql_2
Ql_3
Ql_4
Ql_5
Ql_6
Ql_7
Ql_8
Ql_9
Ql_10
Q2_l
Q2_2
Q2_3
Q2_4
Q2_5
Q2_6
Q2_7
Q2_8
Q2_9
Q2_10
Q3_l
Q3_2
Q3_3
Q3_4
Q3_5
Q3_6
Q3_7
Q3_8
Q3_9
Q3_10
Q4_l
Q4_2
Q4_3
Q4_4
Q4_5
Q4_6
Q4_7
Q4_8
Q4_9
Q4_10
Commercial
(Mg)
6,659
107
392
38,992
3,841
234,918
9,247
1,004,531
74
5,497
853
8,351
16,797
87,618
4,720
9,894
101,757
688,666
2,382
84,814
15,417
22,600
15,364
78,025
13,444
52,135
2,945,628
454,460
234,539
181,833
124,216
196,986
1,427,190
20,738
1,353,433
4,647
139,811
125,291
11,685
40,902
Noncommercial
(Mg)
13,585
389
0
338
9
39,344
6,561
76,658
1
1,702
138
461
0
1,367
132
263
23,172
45,257
0
170
6,626
107,836
30
278
26,065
2,080
29,274,964
69,621
131,783
36,837
38,090
5,942
3,239
64
104,770
49
9,046
9,142
2,404
762
On site
(Mg)
1,681,956
12,053
43
62,970
653
139,394
181,503
8,672,851
11
350,824
906,634
12,075
607
147,409
93
120,470
2,175,835
8,707,414
1,852
126,357
1,427,131
62,586
8,333
68,594
2,870
134,605
49,328,691
679,314
1,528,316
4,766,706
2,384,496
313,408
43,731
146,941
177,765
20,194
5,413,749
634,048
4,158
129,344
Total
(Mg)
1,702,201
12,548
435
102,299
4,503
413,656
197,311
9,754,040
86
358,023
907,626
20,888
17,405
236,395
4,946
130,628
2,300,764
9,441,337
4,235
211,341
1,449,173
193,023
23,727
146,897
42,379
188,820
81,549,282
1,203,395
1,894,638
4,985,375
2,546,802
516,335
1,474,160
167,743
1,635,969
24,889
5,562,606
768,480
18,248
171,008
(continued)
3-12
-------
TABLE 3-3. QUANTITIES OF WASTE MANAGED AT OWR FACILITIES,
BY PROCESS AND COMMERCIAL STATUS* (continued)
Waste
type
Q5_l
Q5_2
Q5_3
Q5_4
Q5_5
Q5_6
Q5_7
Q5_8
Q5_9
Q5_10
Q6_l
Q6_2
Q6_3
Q6_4
Q6_5
Q6_6
Q6_7
Q6_8
Q6_9
Q6_10
Totalb
Commercial
(Mg)
35,207
97,654
1,198,104
139,339
1,136,392
6,719
64,459
503,721
7,968
19,841
11,283
7,392
3,720
69,718
7,465
126,200
2,869,826
2,308,437
4,580
612,957
18,999,436
Noncommercial
(Mg)
11,714
1,155
3,696
601
4,439
323
2,490
144,653
26,076
270
7,764
1,661
577
55
757
1,235
1,689,773
333,521
8,940
73,619
32,352,494
On Site
(Mg)
1,622,216
1,395,629
10,660
162,745
3,186
23,610
2,417,021
3,683,509
283,650
6,686,798
2,954,280
67,411
10,395
69,125
142,157
96,970
55,343,005
37,620,514
596,015
36,745,122
240,510,002
Total
(Mg)
1,669,137
1,494,438
1,212,460
302,685
1,144,017
30,652
2,483,969
4,331,883
317,694
6,706,908
2,973,327
76,463
14,692
138,898
150,379 •
224,406
59,902,603
40,262,472
609,535
37,431,698
291,861,932
a As noted in Section 3.2, the majority of the data used to construct
this table come from the TSDR/GENSUR database and reflect waste
management patterns in 1986. Regulatory and other changes since 1986
have resulted in significant changes in both the quantities and
patterns of hazardous waste management. Thus, the patterns reflected
in Tables 3-2 and 3-3 may no longer be accurate. They do reflect the
best and most current data available to the Agency.
b The totals of these columns do not correspond to the totals shown in
Table 2-1 because some of the wastes in 2-1 are not treated at OWR
facilities.
3-13
-------
Historically, more waste is generated and managed on site
than is sent off site for management. Because the waste
management facilities subject to this regulation are only
those that accept waste from off site, this pattern is not
true for some of the waste types they manage. For many of the
waste types shown in Table 3-3, the largest share of the waste
managed at OWR facilities comes from off-site facilities not
under the same ownership; that is, it is managed commercially.
3.5 LOCATION OF OWR FACILITIES
OWR facilities are located in 46 states and Puerto Rico.
The states with the highest concentration of waste management
facilities are California, Ohio, Texas, and Michigan. Table
3-4 shows the number of facilities located in each state.
Since OWR facilities offer different services, facilities
located near one another may not be in the same markets.
Likewise, an OWR facility may compete with facilities located
a long distance away, if the services offered are similar.
Section 4 examines the structure of the markets in which OWR
facilities interact.
3.6 FACILITY SIZE
Facility size can be defined in terms of total quantity
of waste treated (throughput), number of employees, or total
revenues and costs. OWR facilities vary widely in size, no
matter which measure is used. This section examines facility
size using each definition in turn.
3.6.1 Facility Throughput
Table 3-5 shows the number of OWR facilities in various
size categories, defined by facility throughput. OWR
facilities responding to the TSDR Survey were asked to list
the total quantity of waste managed on site for three "where-
was-it-generated" categories:
3-14
-------
TABLE 3-4. LOCATION OF OWR FACILITIES, BY STATE
State
AK
AL
AR
AZ
CA
CO
CT
DE
FL
GA
HI
IA
ID
IL
IN
KS
KY
LA
MA
MD
MI
MN
MO
MS
MT
NC
ND
NE
NH
NJ
NV
NY
OH
OK
OR
PA
PR
RI
SC
TN
TX
UT
VA
VT
WA
WI
WV
Total
Number
3
11
7
10
74
2
22
2
13
13
3
8
2
33
26
6
16
17
10
9
31
14
17
6
2
17
1
1
1
32
2
36
57
13
4
33
8
6
18
10
54
8
17
2
16
20
12
725
Percent
0.41
1.52
0.97
1.38
10.21
0.28
3.03
0.28
1.79
1.79
0.41
1.10
0.28
4.55
3.59
0.83
2.21
2.34
1.38
1.24
4.28
1.93
2.34
0.83
0.28
2.34
0.14
0.14
0.14
4.41
0.28
4.97
7.86
1.79
0.55
4.55
1.10
0.83
2.48
1.38
7.45
1.10
2.34
0.28
2.21
2.76
1.66
100.00
3-15
-------
TABLE 3-5. FACILITY SIZE BY THROUGHPUT
3-5a. Total Quantity of Waste Managed
Number
0 Mg or missing response
500 Mg or less
501 to 1,000 Mg
1,001 to 50,000 Mg
50,001 to 1,000,000 Mg
Over 1,000,000 Mg
Total
725
Percent
4
174
54
332
122
39
0.6
24.0
7.4
45.8
16.8
5.4
100.0
3-5b. Quantity of Waste Generated on Site and Managed
on Site*
Number
0 Mg or missing response
1 to 100 Mg
101 to 500 Mg
501 to 10,000 Mg
10,000 to 100,000 Mg
Over 100,000 Mg
Total
213
123
66
141
93
89
725
Percent
29.4
17.0
9.1
19.4
12.8
12.3
100.0
3-5c. Quantity of Noncommercial Waste Managed at OWR
Facilities
0 Mg or missing response
1 to 10 Mg
11 to 100 Mg
101 to 500 Mg
501 to 1, 000 Mg
Over 1,000 Mg
Total
Number
351
92
85
59
19
119
725
Percent
48.5
12.7
11.7
8.1
2.6
16.4
100.0
3-5d. Quantity of Commercial Waste Managed at OWR
Facilities
Number
0 Mg or missing response
1 to 100 Mg
101 to 500 Mg
501 to 5,000 Mg
5,001 to 10,000 Mg
Over 10,000 Mg
Total
275
57
73
129
43
148
725
Percent
37.9
7.9
10.1
17.8
5.9
20.4
100.0
a Includes waste generated by manufacturing and waste
management.
3-16
-------
• waste that was managed on site and was also generated
on site,
• waste that was managed on site but was generated off
site at a facility under the same ownership as the OWR
facility, and
• waste that was managed on site but was generated
off site at a facility not under the same ownership as
the OWR facility.
Facilities included in the analysis include 710 with data
from the TSDR Survey and 15 with data from the CWT Survey. Of
these 725 facilities, 721 reported positive quantities treated
or recovered on site. These 721 facilities reported total
quantities managed on site ranged from a fraction of a metric
ton to 89.4 million Mg. As shown in Table 3-5a, only 39
facilities reported managing more than 1 million Mg of
hazardous waste in 1986; 178 facilities reported managing less
than 500 Mg on site in 1986. Only 54 facilities managed
between 501 and 1,000 Mg, while 332 managed between 1,001 and
50,000 Mg.
Of the 725 facilities in the database, 512 report
managing some positive quantity of waste that was also
generated on site. The quantities of waste generated range
from fractions of a Mg to 88.9 million Mg (see Table 3-5a).
As described above, many facilities that manage waste from off
site also manufacture products at the same site and generate
waste in their manufacturing processes. Not all facilities
reporting on-site generation are manufacturing sites, however.
As noted earlier, most waste treatment processes generate
waste in the course of treating it. For example, incineration
generates ash; wastewater treatment generates sludge; solvent
recovery generates still bottoms. Thus, almost all waste
management facilities are also waste generators. Table 3-5b
shows the number of facilities managing waste generated on
site.
3-17
-------
Accepting waste from off-site qualifies facilities for
coverage under the regulation. There are two categories of
off-site waste:
• off-site waste generated by other facilities under the
same ownership as the OWR facility (waste accepted on
a noncommercial basis) and
• off-site waste generated by a facility not under the
same ownership as the OWR facility (waste accepted on
a commercial basis).
Table 3-5c shows numbers of facilities treating various
quantities of off-site noncommercial waste, while Table 3-5d
shows numbers of facilities treating various quantities of
off-site commercial waste. Only 384 facilities report
managing positive quantities of off-site waste on a
noncommercial basis while 450 facilities manage positive
quantities of off-site waste commercially. Overall,
facilities tend to manage larger quantities of waste on a
commercial basis than on a noncommercial basis.
Quantities of noncommercial waste range from fractions of
a Mg to 18.7 million Mg. Many facilities accept only small
quantities of off-site noncommercial waste; 236 of the 374
accept less than 500 Mg, and only 119 facilities manage more
than 1,000 Mg of noncommercial off-site waste.
Quantities of commercial waste managed range from a
fraction of a Mg to 4.2 million Mg; 148 facilities manage more
than 10,000 Mg.
3.6.2 Number of Employees
OWR facilities were asked in the TSDR, GENSUR, and CWT
Surveys to list the number of employees they had in several
employment categories: waste management, production,
administrative, and total. Table 3-6 gives employment
information for OWR facilities. For the 551 facilities
providing employment data, employment at OWR facilities ranged
from one employee to 45,000 employees. Nearly 50 percent of
facilities had fewer than 100 employees. Most commercial
3-18
-------
waste management facilities with no nonwaste-based
manufacturing on site have relatively few employees. The-
facilities with large numbers of employees include
manufacturing facilities in the chemicals and refining
industries and a Naval base. Frequently, their waste
management operations are fairly small. Table 3-6a shows the
pattern of total employment at OWR facilities.
As Table 3-6b indicates, waste management employment is
much less than total employment for some facilities.
Employment in this category ranges from one to 2,000; 50
percent of facilities have fewer than ten employees and 75
percent have 20 or fewer employees in waste management
operations. Other (nonwaste-management) employment varies
widely, ranging from zero to 44,991, as Table 3-6c
demonstrates. Many OWR facilities specialize in waste
management and have relatively few employees in the "other"
category. Thus, more than 30 percent of facilities have 25 or
fewer nonwas te-management employees, and 50 percent have fewer
than 120. At the other end of the spectrum are large
manufacturing or federal facilities, for whom waste management
is a small share of the total employment. Thus, more than 25
percent of facilities have more than 1,000 "other" employees,
and 5 percent have more than 22,000.
In addition to being a measure of facility size,
facility-level employment is of interest to the Agency
because, if production falls at a facility as a result of a
regulation, some of its employees may become unemployed. As
residents of the community, these people who are now
unemployed would consume fewer goods and services, thereby
affecting the economic health of the entire community.
Unemployment results in real costs are discussed in Section
6.4.
3.6.3 Facility Revenues
Facility size may also be defined in terms of facility
revenues. Facility revenues were estimated for all OWR
3-19
-------
TABLE 3-6. EMPLOYMENT AT OWR FACILITIES
3-6a. Total Employment
25 or fewer
26 to 100
101 to 500
501 to 1,000
1,001 to 5,000
Over 5,000
Total
3-6b. Waste Management Employment
5 or fewer
6 to 10
11 to 20
21 to 100
Over 100
Total
3-6c. Other Employment
10 or fewer
11 to 25
26 to 100
101 to 1,000
1,001 to 5,000
Over 5,000
Total
Number
137
122
103
44
81
57
544
Number
181
120
97
112
23
533
Number
113
61
88
133
81
56
532
Percent
25.2
22.4
18.9
8.1
14.9
10.5
100.0
Percent
34.0
22.5
18.2
21.0
4.3
100.0
Percent
21.2
11.5
16.5
25.2
15.1
10.5
100.0
3-20
-------
facilities with commercial operations by multiplying the
quantity of waste managed commercially in each process times
the price per Mg for managing waste in that process, and
summing across all the commercial processes at the facility.
Obviously, facilities may obtain revenues from other sources
(manufacturing operations, noncommercial OWR operations), but
the Agency has no data on those revenues. Of 725 OWR
facilities, 275 have no commercial operations on site and
therefore no commercial revenues. For the remaining 450
facilities, estimated OWR commercial revenues range from less
than $100 to more than $3 billion. Table 3-7 shows facility
revenues from commercial OWR operations.
As shown in Table 3-7, more than 22 percent of OWR
facilities have commercial revenues less than $250,000.
Approximately 40 percent of facilities have commercial
revenues less than $1 million. Approximately 24 percent have
revenues between $5 million and $20 million. Only 14 percent
have revenues exceeding $20 million.
Revenues are also important in defining company size.
Section 4.2 discusses company revenues.
TABLE 3-7. FACILITY COMMERCIAL OWR REVENUES3
Less than $250,000
$250,000 to $1 million
$1 million to $5 million
$5 million to $20 million
Over $20 million
Total
Number of
facilities
103
88
89
107
63
450
Percent
22.9
19.6
19.8
23.8
14.0
100.0
a 275 OWR facilities have no commercial OWR revenues.
3-21
-------
3.7 COMPANY FINANCIAL PROFILE
OWR facilities, which include a site of land with plant
and equipment, combine inputs (materials, energy, and labor)
to produce outputs (waste treatment services, clean solvents,
and residuals). Companies that own the OWR facilities are
legal business entities that have the capacity to conduct
business transactions and make business decisions that affect
the facility. The terms facility, establishment, and plant
are synonymous in this analysis and refer to the physical
location where waste treatment and disposal services are
performed. Likewise, the terms company and firm are
synonymous and refer to the legal business entity that owns
one or more facilities. Section 3.7.1 of this report
describes the data sources used to compile the company
financial profile. Following the description of data sources,
the population of potentially affected companies is described
using three characteristics:
• company size expressed in annual receipts,
• degree of vertical and/or horizontal integration, and
• cost of capital and capital structure.
Each of these characteristics influences how a regulatory
action affects firms and how the company-level analysis is
approached.
3.7.1 Data Sources
Of the 725 OWR facilities initially identified as
affected by the proposed regulation, 61 are owned by
government entities and are therefore excluded from the
company-level impacts analysis. The Agency identified 406
companies as owners of the remaining 664 OWR facilities.
Analysis of the financial impacts of the regulation on these
406 companies using the techniques adopted for this analysis
involves comparing these companies' baseline financial
statements with Agency projections of their financial
statements after the regulation is in place. Income
3-22
-------
statements and balance sheets are the two basic financial
statements kept by firms. The former reports the results of a
firm's operation during a period of time—usually 1 year. The
latter is a statement of the financial condition of the firm
at a point in time—usually December 31, or the last day of
the firm's fiscal year. These sources of data were not
available from reliable published sources for all firms
included in this analysis.* Data collection efforts for each
of the 406 potentially affected companies identified for this
analysis correspond to one of the following four approaches:
• Obtain complete (or nearly complete) financial
statements from reliable published sources.
• Identify the company's SIC code and obtain a point
estimate for the company's level of sales or assets
from published sources. Assign a financial health
indicator (above average, average, or below average)
to each company and construct the company's financial
statements using published financial ratios for an
"above average," "average," or "below average" company
in the corresponding industry (SIC code).
Identify the company's SIC code and assume that the
company's only source of revenue is commercial sales
of OWR services at the market prices used for the
facility-level analysis. Assign a financial health
indicator (above average, average, or below average)
to each company and construct the company's financial
statements using published financial ratios for an
"above average," "average," or "below average" company
in the corresponding industry (SIC code).
• Exclude from the company-level impacts analysis
because of insufficient knowledge of company finances.
Table 3-8 presents the sources of company-level financial
information used in this analysis, the number of firms and
associated facilities for which each source was used, and the
types of data available from each.
*For a more detailed description of how financial statements were
constructed for companies with limited financial information available from
published sources, please turn to Appendix D.
3-23
-------
TABLE 3-8. DATA SOURCES
u>
i
M
Data source
Dun and Bradstreet Dun's Market Identifiers
(1993)
Moody 's Industrial Manual (1992)
Waste Treatment Industry Questionnaire
(EPA, 1989)
Ward's Business Directory of U.S. Private
and Public Companies (1993)
Business America Online (1993-94)
Other commercial operations
Other noncommercial operations
Subtotal
Government -owned facilities
Total
Other sources :
Dun & Bradstreet. Industry Norms and Key Business
Firms
2
100
58
86
47
97
16
406
406
Ratios .
Facilities
2
240
144
114
51
97
16
664
61
725
New York, Dun
Type of data
Complete
financial
statements
Complete
financial
statements
Nearly complete
financial
statements
Annual sales or
total assets
Annual sales
range , number
of employees
Facility level
revenues
No financial
data
& Bradstreet.
1992-1993.
EPA National Computation Center. National Survey of Hazardous Waste Treatment, Storage,
Disposal, and Recycling Facilities. EPA Computer Database. Durham, NC. 1986.
Who Owns Whom? Dun & Bradstreet. New York, Dun & Bradstreet. 1990.
-------
Two of the sources identified in Table 3-8, Moody's
Industrial Manual15 and Dun's Market Identifiers,16 contain
complete financial statements for 102 firms. However, two of
•these firms are excluded from this analysis because they are
foreign based and have different accounting practices from
U.S. firms. Data gathered through the CWT Survey are
sufficient to construct nearly complete financial statements
for another 58 firms. Consequently, complete (or nearly
complete) financial data are available for only 158 of the
potentially affected companies.
Financial statements were constructed using the approach
described in Appendix D for another 133 firms using total
revenues and/or total assets data available from Ward's
Business Directory of U.S. Private and Public Companies17 and
Business America Online.18
Company-level data are unavailable for the remaining 113
facilities. However, rough estimates of facility-level
revenues for commercial facilities are available from the
estimates of baseline quantities and prices described in
Section 4.* The remaining 113 facilities include 97
commercial facilities and 16 noncommercial facilities.
Financial statements were constructed for the firms that own
the 97 commercial facilities using the estimated facility-
level revenues and the approach described above. Implicit in
the methodology is the assumption that these firms own only
one facility and that firm-level revenues equal facility-level
waste management revenues. The 16 noncommercial facilities
and the firms that own them are not included in the company-
level analysis because data on revenues at either the company-
or facility-level are unavailable.
The 388 companies evaluated in this analysis include the
following:
*The revenue estimates used for these 97 firms were obtained by
multiplying estimated waste quantities from the 1986 TSDR/GENSUR-databases
times the corresponding average prices for each waste from Table 4-3.
3-25
-------
• 158 for which financial statements, were available from
published sources,
• 133 for which company-level revenues or total assets
are used in combination with D&B data to construct
financial statements, and
• 97 for which facility-level revenues are used in
combination with D&B data to construct financial
statements.
The baseline financial profile that follows is based on these
388 companies.
3.7.2 Company Size Distribution
The first characteristic by which companies are described
is company size expressed in annual receipts. Firm size is
likely to be a factor in the distribution of the regulatory
action's financial impacts. Grouping the firms by size
facilitates the analysis of small business impacts.
Furthermore, reporting the distribution of impacts by size
category helps ensure that sensitive, proprietary data are not
revealed for an individual firm.
The financial impacts of a regulatory policy depend not
only on the size distribution of potentially affected firms
but also on the size distribution of the potentially affected
facilities owned by these firms. For example, a firm with six
uncontrolled facilities with average annual receipts of $1
million per facility may face approximately six times the
control capital requirements of a firm with one uncontrolled
facility whose receipts total $6 million per year.
Alternatively, two firms with the .same number of facilities
facing approximately the same control capital costs may be
affected very differently financially if one firm is
significantly larger than the other.
Potentially affected firms range in size from $100,000 to
over $116 billion in annual receipts. Table 3-9 shows the
size distribution of potentially affected companies by annual
receipts. Firms in the largest receipts category account for
approximately 98 percent of receipts for all potentially
3-26
-------
TABLE 3-9.
SIZE DISTRIBUTION OF POTENTIALLY AFFECTED
COMPANIES19'25
Company size in
annual receipts
($106)
<6
6 to 60
60 to 1,000
Over 1,000
Total
Number of
companies
110
93
80
105
388
Total annual
receipts
($10*)
207
1,882
26,319
1,236,640
1,265,049
Average annual
receipts per
company ($106)a
1.9
20.2
329.0
11,777.5
3,260.4
a Computed by dividing total annual receipts by the number of
companies.
affected firms. Figure 3-1 shows the size distribution of
potentially affected companies in percentage terms. Ninety
percent of the (smallest) firms account for only about 20
percent of total annual receipts. Conversely 10 percent of
100% T
w
0)
0)
ct
o
EH
0)
0)
(0
OJ
C
0)
8
&
80% t
60% ••
40% •'
20% •'
0%
•h
0%
20% 40% 60% 80% 100%
Percentage of Potentially Affected Companies
Figure 3-1. Size distribution of potentially affected companies,
3-27
-------
the (largest) firms account for about 80 percent of total
annual receipts.
Firms may differ in size for one or both of the following
reasons:
• Potentially affected facilities vary widely by
receipts. All else being equal, firms with large
facilities are larger than firms with small
facilities.
• Firms vary in the number of facilities they own. All
else being equal, firms with more facilities are
larger than those with fewer facilities.
Table 3-10 shows the average size OWR facility (measured
in annual receipts) represented in each company size category.
Two estimates of facility receipts are presented in
Table 3-10. The first column of facility receipts corresponds
to commercial waste treatment only. The second column
corresponds to commercial as well as noncommercial waste
treatment. (Note that noncommercial waste treatment is valued
using market prices.) On average, large firms own larger
facilities based on the measure of facility receipts that
reflects both commercial and noncommercial waste treatment.
However, most of the output for facilities owned by firms in
the largest size category is from noncommercial waste
treatment. Consequently, facility receipts from commercial
TABLE 3-10. AVERAGE SIZE OF OWR FACILITY BY COMPANY SIZE
($106/facility)a'26'27
Company size in
annual receipts
($106)
<6
6 to 60
60 to 1,000
Over 1,000
Commercial
operations
2.9
12.6
20.9
92.4
Commercial and
noncommercial
operations
4.8
15.9
166.0
840.5
a All dollar figures expressed in $1991
3-28
-------
waste treatment decline as firm size increases for firms over
$600 million in annual receipts.
Table 3-11 shows the distribution of firms by the number
of OWR facilities owned. Over three-fourths of the firms in
this analysis own only one OWR facility. Only two firms in
the smallest size category own more than one facility, and no
firms in the smallest size category own more than two
facilities. At the other end of the spectrum, approximately
40 percent of the firms in the largest size category own more
than one facility. Firms in the two largest size categories
account for over 85 percent of the multi-facility firms in
this analysis. Unaffected facilities (facilities that do not
perform off-site waste management) are not reflected in the
distributions shown in Tables 3-10 and 3-11.
3.7.3 Vertical and/or Horizontal Integration
Vertical integration is a potentially important dimension
in firm-level impacts analysis because the regulation could
affect a vertically integrated firm on several levels. For
example, the regulation may affect companies for whom waste
treatment is not the company's primary focus but rather is an
TABLE 3-11.
DISTRIBUTION OF FIRMS BY NUMBER OF OWR
FACILITIES OWNED28'34
Company size
at baseline
by volume of
annual
receipts
(106)a
<6
6 to 60
60 to 1,000
Over 1,000
Total
Number of
facilities owned
per firm
1
108
85
57
61
311
2
2
5
9
18
34
3
0
0
4
11
15
4 or
more
0
3
10
15
28
Total
number
of firms
in size
category
110
93
80
105
388
Total
number of
facilities
in size
category
112
121
171
239
643
Average
number
of
facili-
ties/
firmb
1.02
1.30
2.14
2.28
1.66
a All dollar figures expressed in $1991.
b Computed by dividing total number of facilities by the total
number of firms in each size category.
3-29
-------
input into the company's other production processes such as
chemical manufacturing. Consequently, vertically integrated
companies tend to have proportionately more noncommercial
waste treatment services than those for whom waste treatment
is their primary business.
Figure 3-2 shows the value of commercial waste treatment
services compared to the value of noncommercial waste
treatment services for firms in each size category.
Noncommercial waste treatment services are valued at market
prices for the purposes of comparison. Noncommercial waste
treatment services account for more than 90 percent of total
waste treatment services in the largest size category compared
to approximately 40 percent of total waste treatment services
in the smallest size category and 20 percent of total OWR
services in the second smallest size category. This
difference in the share of noncommercial waste treatment is
evidence that larger firms tend to be more vertically
integrated than smaller firms. A regulation that increases
01
.u
n
& «
* 0)
•3 "
" t
01
w
o
100%
80% ' '
60% • '
v
40% • '
20% • •
$0 to $6 $6 to $60 $60 to $1,000 Over $1,000
Firm Size in Annual Receipts ($106/year)
Commercial
Noncommercial
Figure 3-2. Share of commercial versus noncommercial waste
treatment services.
3-30
-------
the cost of waste treatment for vertically integrated firms
will also affect the cost of producing the primary products.
This cost increase may be reflected in higher prices for the
primary products. Horizontal integration is also a potentially
important dimension in firm-level impact analysis, because a
diversified firm may own facilities in unaffected industries.
This type of diversification would help mitigate the financial
impacts of the regulation.
Figure 3-3 shows the share of total receipts from
business activities other than commercial waste treatment for
firms in each receipts size category. Firms in the two
largest size categories receive more than 90 percent of their
revenues from activities other than waste treatment. As noted
above, this high degree of diversification will help mitigate
the financial impacts of the regulation for large firms.
Firms with $6 million to $60 million in annual receipts
100%
a
•H
o
a;
-------
receive approximately 75 percent of their receipts' from waste
treatment, and firms in the smallest size category receive
less than 20 percent of their revenues from activities other
than waste treatment. Consequently, smaller firms are likely
to be more directly affected by the regulation because a
higher proportion of their revenues are from waste treatment.
3.7.4 Cost of Capital and Capital Structure
A firm's cost of capital and its capital financing policy
will potentially affect the firm-level responses to the
regulation and the magnitude of the financial impacts
associated with those responses. This section presents a
framework for estimating the firm-specific cost of capital
used to evaluate investment decisions and a description of
capital structure employed by potentially affected firms.
In making investments, companies generally use two
sources of funds: equity and debt. Each source differs in
its exposure to risk, its taxation, and its cost. Equity
financing involves obtaining additional funds from owners:
proprietors, partners, or shareholders. Partners and
shareholders, in turn, can be existing owners or new owners.
Obtaining new capital from existing owners can be further
dichotomized into internal and external financing. Using
retained earnings is equivalent to internal equity financing.
Obtaining additional capital from the proprietor, one or more
existing partners, or existing shareholders constitutes
external equity financing. Debt financing involves obtaining
additional funds from lenders who are not owners; they include
buyers of bonds, banks, or other lending institutions.
EPA's CWT Survey contains firm-specific data on the cost
of capital used to evaluate investments in pollution control
equipment for a portion of the firms included in this
analysis.35 To estimate the cost of capital for the remaining
firms, the weighted average costs of equity and debt financing
(after tax) were computed using information from firms'
financial statements and assumptions grounded in financial
3-32
-------
theory. -The cost of debt financing was estimated for these
firms using the following equation:
WACC = Wd(l-t)»Kd + We»Ke, (3-1)
where
WACC = weighted average cost of capital
Wd = weighting factor on debt
t = marginal effective State and Federal corporate
tax rate averaged for U.S. firms
Kd = the cost of debt or interest rate
We = weighting factor on equity.
Ke = cost (required rate of return) of equity
This formula implicitly assumes that investments in pollution
control equipment are similar in risk to other projects that
the company has taken or is considering. In addition, the
formula assumes that the method of financing for control
equipment is similar to other investments by the firm.
To estimate the WACC, first values for Kd and Ke were
estimated. All else being equal, the cost of both debt and
equity capital is generally higher for firms in below-average
financial condition than for firms in above-average financial
condition. This analysis estimated the cost of debt for firms
in above-average, average, and below-average financial health
categories to be 8.29 percent, 9.16 percent, and 12.91
percent, respectively. However, because debt interest
payments are deductible for State and Federal income tax
purposes, a more meaningful measure of the cost of debt
financing is the after-tax cost of debt capital. The after-
tax debt costs used in this analysis for firms in three
different financial health conditions are
• 5.78 percent for firms in above-average financial
condition,
3-33
-------
• 6.38 percent for firms in average financial condition,
and
• 9.00 percent for firms in below-average financial
condition.
The Agency used the Capital Asset Pricing Model described
in detail in Appendix E, and assumptions based on data
obtained from the literature to estimate the cost of equity
capital for firms in each of three financial conditions. The
following equity capital costs were chosen as most
appropriate:
• 14.57 percent for firms in above-average financial
condition,
• 15.96 percent for firms in average financial
condition, and
• 19.88 percent for firms in below-average financial
condition.
Next, the weighting factors for debt (Wd) and equity (We)
were calculated for each company. These weights reflect the
share of firm assets that are financed with debt and equity.
The theoretically correct weights are target weights rather
than historical weights. Target weights reflect individual
firms' subjective preferences in the tradeoff between the tax
advantages of debt financing vs. the financial distress costs
associated with higher levels of debt.* For this analysis the
Agency assumed that the capital structure witnessed for firms
at baseline approximates their target or optimal capital
structure and that firms minimize their cost of capital at
baseline. Furthermore, it was assumed that book-value weights
approximate market-value weights in instances where market
value weights are not available.
Table 3-12 summarizes the capital structure of
potentially affected firms in this analysis. The debt-to-
*See Appendix E for a more detailed discussion of a firm's optimal
capital structure.
3-34
-------
TABLE 3-12. SUMMARY STATISTICS BY FIRM SIZE CATEGORY OF
WEIGHTING FACTORS FOR DEBT USED TO CALCULATE FIRMS'
BASELINE WACC36'43
Company size in annual receipts ($106/year)
Number of
observations
Mean
Standard
deviation
Quartiles
Upper
Median
Lower
$0 to $6
110
0.2751
0.1554
0.3364
0.2745
0.166
$6 to $60
93
0.2977
0.188
0.375
0.2679
0.166
$60 to
$1,000
80
0.2888
0.2082
0.3823
0.2682
0.166
Over
$1,000
105
0.3945
0.1986
0.5317
0.379
0.2691
firm-value ratios summarized in Table 3-13 are the weighting
factors for debt (Wd) used to compute the WACC. The equity
weighting factors are simply 1 - Wd. Some of the potentially
affected firms in this analysis have a Wd greater than 100
percent, indicating that the book value of equity is actually
negative. It was assumed that the correct Wd for these firms
is 0 percent, reflecting the assumption that the debtholders
are, in effect, the owners of the firm. Consequently, the
required return is equal to Ke with We at 100 percent.
A real (inflation-adjusted) cost of capital is desired,
so employing the gross national product (GNP) implicit price
deflator for the 10-year period 1983 to 1992 adjusts nominal
rates to real rates. Using an adjustment factor of 3.72
percent assumes that the inflation premium on real rates is
the actual rate of inflation averaged over the last 10 years.44
Table 3-13 summarizes the baseline WACC for potentially
affected firms as reported in the CWT Survey or estimated as
described above.
3-35
-------
TABLE 3-13
SUMMARY STATISTICS BY FIRM SIZE CATEGORY OF
FIRMS' BASELINE WACC45"52
Company size in annual receipts ($106/year)
$0 to $6 $6 to $60
$60 to
$1,000
Over $1,000
Number of
obs erva t i ons
Mean
110
0.0988
93
0.0968
80
0.0904
105
0.083
Standard
deviation
Quartiles
Upper
Median
Lower
0.0194
0.103
0.0963
0.0875
0.0178
0.103
0.0955
0.0869
0.0186
0.1015
0.0926
0.0816
0.0185
0.0932
0.0822
0.0687
3-36
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SECTION 4
DEVELOPMENT OF THE OWR INDUSTRY BASELINE
Estimating the impacts of the regulatory alternatives on
the OWR facilities managing the 60 waste types introduced in
Section 2 of this report requires detailed information about
the quantity of individual types of waste that are treated at
each OWR facility, as well as an understanding of how the
average costs of treating different types of waste may vary.
Much of the waste managed at some OWR facilities is
either generated on site or is generated at off-site
facilities owned by the same company as the OWR facility. For
several reasons, EPA chose to analyze the impacts of the
regulatory alternatives on commercial OWR activities
separately from its analysis of impacts on noncommercial OWR
services. Many companies owning OWR facilities treating off-
site noncommercial waste may elect to continue treating those
wastes regardless of the profitability of their commercial
waste management operations (if any) and the increased costs
of treating the off-site noncommercial wastes. Also,
facilities may or may not receive revenue for managing
noncommercial waste. Thus, although the analysis of impacts
on commercial OWR services estimates impacts for each facility
managing off-site waste commercially, the increased costs of
noncommercial OWR services were assumed to be felt by the
company as a whole. Most of the computations described in
this section were performed for all affected facilities.
This section profiles baseline conditions at the facility
level, market level, and the company level.
4-1
-------
4.1 BASELINE FACILITY CONDITIONS
Baseline conditions at the facility level can be
characterized in terms of the quantity of specific waste types
managed at each OWR facility, the costs associated with
treating or disposing of each waste type managed, and the
market prices charged for each management service provided
commercially.
4.1.1 Estimating Baseline Quantities
Three sources of information were used to estimate the
baseline quantity of individual waste types managed at
affected OWR facilities. Baseline quantities managed at the
710 RCRA-regulated facilities were estimated by combining
information from the TSDR and GENSUR Surveys. As described in
Section 2 of this report, the TSDR Survey provides the total
quantity of waste managed commercially and noncommercially in
each treatment process at each facility but does not provide
any information on the characteristics of specific waste
streams managed in each process. The GENSUR, on the other
hand, offers a detailed characterization of wastes generated
in 1986 and identifies the quantity of each waste sent off
site for management. The GENSUR also asks generators to
identify the OWR facilities to which each waste stream was
sent as well as for the generators' best guess of which
treatment, recovery, or disposal processes would be used to
manage each waste stream at the destination OWR facility.
The Agency employed a very elaborate approach (described
in great detail in Appendix F) to combine useful information
from both surveys to prepare its best estimate of the quantity
of each of the 60 waste types described in Section 2 that was
managed, commercially and noncommercially, at each OWR
facility. In this approach, the Agency used waste form
information from the GENSUR to disaggregate the total process
quantities reported in the TSDR Survey into different waste
types based on composition. Table 4-1 presents these
4-2
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TABLE 4-1. ESTIMATED AGGREGATE QUANTITIES OF EACH WASTE FORM
PROCESSED IN EACH TREATMENT CATEGORY BY THE 710 OWRs THAT
RESPONDED TO THE TSDR SURVEY (Mg)
Process
Ql
Q2
Q3
Q4
Q5
Q6
Q7
Q8
Q9
"f Q10
U)
Total
Form 1
1,702,201
12,548
436
102,299
4,504
413,656
197,312
9,754,040
86
358,023
12,545,105
Form
907,
20,
17,
236,
4,
130,
2,300,
9,441,
4,
211,
13,275,
2
625
887
404
395
946
628
764
337
234
342
561
Form
1,449
193
23
146
42
188
56,502
1,203
1,894
4,985
66,629
3
,173
,023
,726
,897
,380
,821
,062
,394
,638
,376
,490
Form
2,546,
516,
1,474,
167,
1,635,
24,
5,562,
768,
18,
171,
12,886,
4
803
336
160
743
969
890
605
480
248
007
241
Form 5
1,669,137
1,494,438
1,212,459
302,685
1,144,017
30,651
2,483,969
4,331,883
317,694
6,706,910
19,693,843
Form 6
2,973,327
76,463
14,692
138,899
150,379
224,405
59,902,603
40,262,473
609,535
37,431,697
141,784,473
11
2
2
1
2
1
126
65
2
49
266
Total
,248,266
,313,695
,742,877
,094,918
,982,195
,013,051
,949,315
,761,606
,844,435
,864,355
,814,713
-------
estimates for the 710 RCRA-regulated OWR facilities. Figure
4-1 presents the same information graphically. Approximately
half of the 266,814,713 Mg of waste that was reportedly
managed in regulated processes at affected RCRA-regulated OWR
facilities was managed using wastewater treatment (process Q7}
and about a quarter was managed in OWR facility landfills
(process Q8).
140
120
100
S
I 8°
O)
60
40
20
Q8
Q10
Q7
Q10
Q8
Q10
Q8
Q7
Form 1
Form 2
FormS
Form 4
FormS
Form6
Figure 4-1. Treatment categories most commonly used to manage each
waste form.
4-4
-------
All waste quantity information for the 15 non-RCRA
wastewater treatment OWR facilities was obtained from the 1989
CWT Survey conducted by EPA's Office of Water. These
facilities manage an estimated 22,067,009 Mg of waste from off
site annually. The Agency assumes that all of this waste is
of Form 3 and is managed in wastewater treatment (process Q7).
4.1.2 Estimating Baseline Costs
Process-specific waste management costs were estimated
using production and cost functions developed by Research
Triangle Institute (RTI) and published in A Profile of the
Market for Hazardous Waste Management Services for EPA' s
Office of Air Quality Planning and Standards. The waste
treatment categories for which production and cost functions
were developed include rotary kiln/hearth incineration,
chemical precipitation, chemical stabilization/fixation, steam
stripping, and landfills. Using these functions, the Agency
estimates baseline cost per Mg of treatment that vary with the
quantity treated. Appendix G provides a more detailed
description of these production and cost functions and their
use in estimating costs per Mg for each process at each OWR
facility.
Table 4-2 identifies which of these production and cost
functions was used to estimate costs for each of the 10 OWR
treatment processes affected by the proposed regulation. Each
production function was used to estimate the quantity of each
management process input that is required to treat, recover,
or dispose of 1 Mg of waste; the required input quantity per
unit of waste throughput as specified as a function of the
waste volume managed. The Agency has limited information
about how the required quantity of each input to a given
treatment process may vary across each of the six waste forms
potentially managed in the given process. Because of these
data limitations, the Agency used a single production function
to estimate input requirements for each waste form managed in
each treatment process at each facility. The estimated
4-5
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TABLE 4-2. MODEL PROCESSES USED TO ESTIMATE COSTS
OWR treatment
category
Process used for input factor quantity
and cost estimation
Ql Incineration
Q2 Reuse as fuel
Q3 Fuel blending
Q4 Solidification
Q5 Solvent recovery
Q6 Metals recovery
Q7 Wastewater treatment
Q8 Landfills
Q9 Underground injection
Q10 Other
Rotary kiln/hearth incineration
Rotary kiln/hearth incineration
without fuel as a required input8
Chemical precipitation without
chemicals as required inputsb
Chemical stabilization/fixation
Steam stripping
Chemical precipitation with doubled
lime and polymer requirements0
Chemical precipitation
Landfills
Underground injection
Average unit costs of all other
processes
a Fuel is omitted from the list of input factors because the wastes
managed in this process have a high enough Btu content to fuel the
kiln or furnace.
b A production function specifically for fuel blending was not
available. Fuel blending generally involves storage tanks with
mixing and transfer capabilities. If chemicals are not included,
the remaining input requirements of labor, electricity, water, and
indirect operation and maintenance (O&M) are roughly comparable to
a chemical precipitation process.
c The greater the concentration of the waste stream processed, the
greater the chemical requirements for chemical precipitation.
4-6
-------
quantity of each required input to a given treatment process
will vary across each waste form managed in the process,
because the input requirements are estimated as a function of
the quantity managed. Input requirements for individual waste
forms were estimated separately for each treatment process,
based on the volume of each waste form managed in each
process.
After identifying the input quantities needed to manage 1
Mg of each waste form in each process at a given OWR facility,
the Agency calculates the average variable cost per Mg of each
waste type managed at the facility by multiplying the relevant
input quantities by mid-year 1991 input factor prices for each
input to the process, and then summing across all process
inputs. Total variable costs of managing each of the 60 waste
types at each facility were calculated by multiplying the
estimated cost per Mg by the facility's total throughput
volume (Mg) of the corresponding waste type.
4.1.3 Estimating Baseline Prices
For this analysis, the Agency grouped the 27,000 OWR
transactions identified from the 1986 GENSUR and TSDR Surveys
into 60 competitive markets for OWR services. Modeling the
OWR industry as a competitive market assumes that individual
facilities are price-takers not price-setters. Each waste
type (waste form-treatment category combination) was assumed
to be a homogeneous service with a single market price. Thus
the Agency selected 60 market prices for the 60 waste types
defined in this analysis. This simplifying assumption
recognizes the competitive forces at work in the OWR industry
but doesn't account for the complexity of actual operations at
OWR facilities. In fact, OWR facilities may set prices on a
batch-by-batch basis, based on the characteristics of each
batch accepted, such as the following:
• concentration (percentage of solids),
• percentage of oil,
• percentage of total organic carbon,
4-7
-------
• content of various metals, and
• Btu content.
In addition, the per-batch price of a given waste type
may vary based on the way it is packaged upon delivery to the
OWE facility. For example, a batch of waste of a given volume
and constituent make-up will generally be accepted at a
somewhat lower price if it is delivered to an OWR facility in
bulk form aboard a tanker or a dump-truck, than if it is
packaged in 55 gallon drums. A batch will be accepted at an
even higher price per megagram if it is delivered as the
residue left in "empty" 5 or 1 gallon containers, as lab-
packs, or in small vials. The market prices chosen for this
analysis reflect the prices of managing representative wastes
when delivered in bulk form.
Therefore, although all wastes of a given waste type are
similar, enough difference in the constituent make-up within
each market exists that a wide range of competitive prices may
actually be charged for managing wastes treated here as
homogeneous. The price information that was available from
the TSDR Survey was found to be incorrect, either because it
had never been satisfactorily verified or because prices have
changed considerably since 1986.
To estimate the "market price" for waste management in
each of the 60 markets, the Agency performed a statistical
comparison of all wastes managed in each of the 60 OWR markets
in terms of the constituent characteristics listed above. The
Agency then identified a model waste for 48 of the 60 markets
and asked several OWR facilities how much they would charge to
accept each of the model wastes that they are equipped to
manage.53 Interpretation of the responses received from
industry representatives was the basis for choosing market
prices for the six waste forms managed in each of the
following processes:
• incineration,
• reuse as fuel,
4-8
-------
• fuel blending,
• solidification/stabilization,
• solvent recovery,
• metals recovery,
• wastewater treatment, and
• landfills.
The estimated market prices for each of the waste forms
managed with underground injection were determined by setting
the market price of managing each waste form equal to the
estimated unit cost of the highest cost facility in operation
at baseline. The market prices for managing each of the six
waste forms with "other treatments" were estimated by
averaging the chosen market prices for managing the
corresponding waste form in the other nine processes.
In simplifying the complex pricing mechanism at work in
this industry to a single market price per Mg for each of the
60 OWR services, the Agency recognizes that the analysis may
be understating the waste management revenues (and costs) of
facilities that accept wastes not delivered in bulk form. EPA
also may over- or underestimate revenues from waste management
at facilities that specialize in treating wastes that differ
significantly from our model wastes. Table 4-3 lists the
selected market prices for management of each of the 60 waste
types modeled in this analysis.
4.2 BASELINE COMPANY FINANCIAL CONDITIONS
Several firms in this analysis reported very low earnings
or net losses for the period 1987 through 1991. Factors that
may contribute to this poor performance include the following:
• a changing regulatory environment, including
regulations affecting hazardous waste generators as
well as regulations affecting waste treaters;
• uneven demand patterns due to recessionary pressures
that resulted in less waste generation and delay in
cleanup activities;
• increased source reduction and recycling;
4-9
-------
TABLE 4-3. ESTIMATED MARKET PRICES FOR MANAGEMENT OF 60
WASTE TYPES PROFILED
Waste type Market price ($/Mg)
Incinerated wastes
pl_l 3,528.00
p2_l 3,528.00
p3_l 2,072.00
p4_l 2,072.00
p5_l 3,528.00
p6_l 3,528.00
Wastes reused as fuel
pl_2 1,654.00
p2_2 1,830.00
p3_2 1,047.00
p4_2 331.00
p5_2 1,654.00
p6_2 1,830.00
Wastes blended for fuel
pl_3 64.00
p2_3 64.00
p3_3 1,047.00
p4_3 331.00
p5_3 195.00
p6_3 191.00
Solidified wastes
pl_4 388.00
p2_4 388.00
p3_4 388.00
P4_4 682.00
p5_4 682.00
p6_4 682.00
Wastes managed in solvent recoverv
pl_5 275.00
p2_5 240.00
p3_5 1,047.00
p4_5 928.00
p5_5 933.00
p6_5 268.00
(continued)
4-10
-------
TABLE 4-3. ESTIMATED MARKET PRICES FOR MANAGEMENT OF 60
WASTE TYPES PROFILED (continued)
Waste type Market price($/Mg)
Wastes managed in metals recovery
pl_6 495.00
p2_6 426.00
p3_6 550.00
p4_6 125.00
p5_6 880.00
p6_6 125.00
Wastes managed in wastewater treatment
pl_7 817.00
p2_7 555.00
p3_7 211.00
p4_7 206.00
p5_7 1,654.00
p6_7 1,276.00
Wastes landfilled
pl_8 251.00
p2_8 303.00
p3_8 481.00
p4_8 550.00
p5_8 550.00
p6_8 661.00
Underqround injected wastes
pl_9 8.28
p2_9 7.03
p3_9 8.52
p4_9 8.75
p5_9 8.75
p6_9 8.52
Wastes managed with other types of treatment
p_110 1,015.00
p_210 1,028.00
p_310 768.00
p_410 672.00
p_510 1,289.00
p_610 1,225.00
4-11
-------
• uncertainty regarding costs; and
• new competitive forces in the industry, including the
threat of entry by large generators and other
nontraditional players.54
According to a recent Standard and Poor's report, the
industry's overall credit quality has improved in the last few
years, and the industry is expected to rebound.55 This analy-
sis evaluated the baseline financial status using data from
the firm's financial statements reported for the period 1989
through 1992. Consequently, potentially affected firms are
likely to be in better baseline financial condition than this
analysis indicates.
Baseline financial condition was evaluated using
financial ratio analysis. Financial ratio analysis is a
widely accepted way of summarizing the financial condition of
a firm using statistics reported on the firm's financial
statements. In addition, the financial failure was predicted
using a multidiscriminant function called the Z-score.56 The
Z-score is a measure used to assess bankruptcy potential
developed specifically for manufacturing firms.
4.2.1 Financial Ratio Analysis
Financial ratios are computed using data contained in
company financial statements. As mentioned in Section 3.7.1,
authentic financial statements were available from reliable
published sources for only 158 of the companies included in
this company-level impacts analysis. The financial statement
data used for each of the remaining 230 potentially affected
firms were constructed from a single point estimate of the
target company's level of sales (or in some cases assets) and
published financial ratios of the "statistically typical"
company in each of three financial health categories (above
average = 75th percentile, average = median, or below
average = 25th percentile) for the target firm's SIC code.
Each of these 230 firms was assigned to its financial health
category at random, in such a way as to have a realistic
4-12
-------
distribution of firms in each of the financial health
categories for each SIC code, but not necessarily to have 'an
accurate assessment of each firm's financial health. Thus,
for over half of the companies for which impacts are assessed
in this analysis, the Agency is using baseline financial data
that, while not accurate for individual firms, are
representative of actual baseline financial conditions among
firms potentially affected by the regulation.
The five fundamental types of financial ratios each
address a specific component of a firm's financial well-being.
The five areas of company finances for which financial ratios
are most commonly used are the following:
• liquidity: the ability of a firm to meet its near-
term financial obligations as they come due;
• asset management: the efficiency with which a firm
uses its resources to generate revenues;
• debt management: the degree to which a firm uses debt
(vs. equity) to finance its operations;
• profitability: comprehensive measures of firm
operating efficiency that compare a firm's net income
(profits or losses) to other financial stocks (such as
assets or equity) or flows (such as annual sales) that
result from the interplay of the firm's historical
liquidity, asset management, and debt management
decisions; and
• market value: a comparison of measures of a firm's
past performance (book value) with indicators of
investors' expectations of its potential for future
cash flows (market value).
The first three types of financial ratios listed are
ambiguous indicators of a firm's overall financial well-being.
They are difficult to interpret when considered in isolation
of other indicators of financial health. Potential creditors,
for example, might offer preferential credit to a firm with a
low debt-to-total-assets ratio (one of the more common debt
management ratios), while a potential stockholder might prefer
a higher value for that same ratio, in expectation of greater
4-13
-------
returns on his investment due to the tax advantages of debt
financing. Profitability ratios and market value ratios, on
the other hand, are much clearer indicators of a firm's
financial health. Higher values for profitability ratios are
unambiguously preferred over lower values. For this reason,
the Agency has limited its analysis of individual financial
ratios to profitability and market-value ratios. The Agency
has also investigated a composite measure of financial con-
dition, called the Z-score, which simultaneously addresses
firm liquidity, asset management, debt management, profit-
ability, and market value to provide a discrete indicator of
firms' financial viability. Section 4.2.2 discusses the
baseline analysis of affected firms' Z-scores.
The analysis evaluates the baseline financial status of
potentially affected firms by comparing the firms' financial
ratios with specific industry benchmark ratios such as those
reported in Dun & Bradstreet's Industry Norms and Key Business
Ratios. Tables H-l and H-2 in Appendix H contain the
benchmark ratios for profitability (by SIC code) used to
evaluate the financial condition of potentially affected
firms. Where specific industry benchmarks are not available,
benchmarks reported for SIC 4953, Refuse Systems, were used.
The firms evaluated for this analysis are larger on
average than those used to compute the benchmark ratios
reported in Tables H-l and H-2. Although most financial
ratios are generally insensitive to differences in size, some
industry ratios may not represent appropriate benchmarks for
evaluation because of the size differences. In addition, SIC
4953 (the default industry classification) represents firms
involved in waste disposal, sewage treatment and disposal, and
other waste treatment processes not directly affected by the
OWR regulation. Notwithstanding these qualifications, an
evaluation of the baseline financial condition of potentially
affected firms is useful. In particular, a comparison of the
4-14
-------
baseline ratios and the "with-regulation" ratios may provide
insight into the financial impacts of the regulation.
4.2.1.1 Profitability. Profitability is the most
comprehensive measure of the firm's performance because it
measures the combined effects of liquidity, asset management,
and debt management. Several ratios are commonly used to
measure profitability, including return on sales (ROS), return
on equity (ROE) , and return on assets (ROA) . For all these
measures, higher values are unambiguously preferred over lower
values.
ROS, computed by dividing net income or net loss by
annual sales, shows the operating efficiency of the firm.
Negative values result if the firm experiences a loss. Median
ROS values reported in Table 4-4 range from a 3.2 to 5.5
percent. Mean ROS values range from -21 percent to 4.1
percent. Under both measures, firms in the smallest size
TABLE 4-4. BASELINE FINANCIAL RATIO: RETURN ON
SALES57"64
Firm size
Statistic
Number of
obs e rva t i ons
Mean (percent)
Standard deviation
(percentage points)
Quartiles (percent)
Upper
Median
Lower
$0 to $6
110
4
18
6
5
2
.1
.2
.7
.5
.1
in annual receipts
$6 to
93
-12
66
6
3
1
$60
.0
.0
.7
.3
.3
($10
$60 to
$1,000
80
-21.
132.
5.
3.
0.
40
00
85
20
40
5 /year)
Over
$1,000
105
0
25
5
3
-0
.04
.10
.90
.50
.40
Notes:
1. The ROS ratio is a measure of a firm's profitability and is
computed by dividing net income by sales revenue. A value of 10
percent indicates that net income is equal to 10 percent of
sales. Negative values indicate net losses.
2. High ratios indicate that the firm is operating efficiently.
4-15
-------
category have the highest ROS. The mean profit-to-sales ratio
is lower than the median for all four firm size' categories,
and for very large firms the difference is substantial. This
substantial difference indicates that the distribution
contains one or more outlier firms with very negative ROS
values. Consequently, the median is a better measure of
central tendency.
Figure 4-2 compares the ROS values computed for
potentially affected firms with industry-specific benchmark
w
^
•H
fc
0)
0)
(8
.u
C
0)
U
M
01
O<
100%
80% •
60% -
40% •
20% •
$0 to $6 $6 to $60 $60 to $1,000 Over $1,000
Firm Size in Annual Receipts ($106/year)
% < median ratio
% < lower quartile ratio
Figure 4-2. Percentage of firms equal to or below the industry
benchmark ratio: return on sales.
1. The ROS ratio is a measure of a firm's profitability. It is
the ratio of a company's net income to its total sales,
expressed as a percentage. For example, a value of 6.5
indicates that a company's net income is equal to 6.5 percent
of its total sales. A high ROS value is preferable to a
lower value.
2. Each company's ROS ratio is compared to the Dun & Bradstreet
published median and lower quartile benchmarks for companies
sharing the same SIC code. If the SIC code is not known, the
company ratio is compared to the benchmark ratios for SIC
code 4953: Refuse Systems.
4-16
-------
(median and lower quartile) values. Approximately 60 to 70
percent of firms in all size categories have ROS ratios that
are equal to or below the industry median benchmarks. Firms
in the two smallest size categories performed slightly better
than firms in the larger size categories.
The second profitability ratio referred to above, ROE, is
computed by dividing net income or loss by owners' equity and
measures the return on capital invested by the owners of the
firm. Table 4-5 reports a statistical summary of ROE values
for potentially affected firms in each size category. Median
values range from 9.5 to 22.4 percent. Mean values are much
more variable and range from -61.4 percent to a +41.9 percent.
TABLE 4-5. BASELINE FINANCIAL RATIO: RETURN ON EQUITY65"72
Firm size in annual receipts ($106/year)
Statistic
Number of observations
Mean (percent)
Standard deviation
(percentage points)
Quartiles (percent)
Upper
Median
Lower
$0 to $6
109
41.9
236.4
25.8
20.4
7.6
$6 to $60
92
-61.4
323.8
25.5
14.4
5.1
$60 to
$1,000
77
-55.9
341.2
17.2
9.5
1.2
Over
$1,000
104
2
61
15
9
1
.1
.2
.4
.9
.2
Notes:
1. The ROE ratio is a measure of a firm's profitability and is
computed by dividing net income by the owners' equity. A value
of 20 percent indicates that net income is equal to 20 percent
of the owners' equity. Negative values indicate net losses.
2. High ratios indicate that the firm is operating efficiently.
4-17
-------
Again, the presence of outliers makes the median values the
preferred measure.
Figure 4-3 shows the share of firms with ROE values equal
to or below the industry median benchmark and the industry
lower quartile benchmark values. Approximately 40 percent of
the firms in the two smallest size categories have ROE values
equal to or below the industry median benchmark. Larger firms
are not performing as well with 66 to 78 percent equal to or
below the industry benchmark.
100%
0%
$0 to $6 $6 to $60 $60 to $1,000 Over $1,000
Firm Size in Annual Receipts ($106/year)
I I % < median ratio || % < lower quartile ratio
Figure 4-3. Percentage of firms equal to or below the industry
benchmark ratio: return on equity.
1. The ROE ratio is a measure of a company's profitability. It
is the ratio of a company's net income to its total net
worth, expressed as a percentage. For example, a value of
3.9 indicates that a company's net income is equal to 3.9
percent of its total net worth. A high ROE value is
preferable to a lower value.
2. Each company's ROE ratio is. compared to the Dun & Bradstreet
published median and lower quartile benchmarks for companies
sharing the same SIC code. If the SIC code is not known, the
company ratio is compared to the benchmark ratios for SIC
code 4953: Refuse Systems.
4-18
-------
ROA, the final measure of profitability, is net profit or
loss divided by total assets. ROA measures how efficiently a
firm is using its assets to earn a return. Table 4-6 reports
the distribution of ROA values for potentially affected firms.
Median values range from 3.5 for firms in the largest size
category to 11 percent for firms in the smallest size
category. Figure 4-4 shows the share of firms performing
equal to or below the industry benchmarks for ROA. Again, a
higher proportion of large firms is below the benchmark,
indicating that small firms appear to be performing better on
average than large firms.
TABLE 4-6. BASELINE FINANCIAL RATIO: RETURN ON
ASSETS
73-80
Statistic
Number of
observations
Mean (percent)
Standard deviation
(percentage points)
Quartiles (percent)
Upper
Median
Lower
Firm
$0 to $6
110
13.1
35.6
17.1
11.0
2.6
size in annual receipts
($106/year)
$6 to $60
93
-6.4
64.5
12.7
7.3
1.8
$60 to
$1,000
80
-11.1
63.8
10.1
5.8
0.5
Over
$1,000
105
1.1
20.9
6.4
3.5
-0.6
Notes:
1. The ROA ratio is a measure of a firm's profitability and is
computed by dividing net income by total assets. A value of 15
percent indicates that net income is equal to 15 percent of
total assets. Negative values indicate net losses.
2. High ratios indicate that the firm is operating efficiently.
4-19
-------
100%
0%
$0 to $6 $6 to $60 $60 to $1,000 Over $1,000
Firm Size in Annual Receipts ($106/year)
% < median ratio
% < lower quartile ratio
Figure 4-4.
Percentage of firms equal to or below the industry
benchmark ratio: return on assets.
The ROA ratio is a measure of a company's profitability. It
is the ratio of a company's net income to its total assets,
expressed as a percentage. For example, a value of 4.3
indicates that a company's net income is equal to 4.3 percent
of its total assets. A high ROA value is preferable to a
lower value.
Each company's ROA ratio is compared to the Dun & Bradstreet
published median and lower quartile benchmarks for companies
sharing the same SIC code. If the SIC code is not known, the
company ratio is compared to the benchmark ratios for SIC
code 4953: Refuse Systems.
4.2.1.2 Market Value. Market value ratios indicate
investors' expectations regarding the firm's past performance
and future cash flows. Generally, if a firm's financial
ratios in each of the other four categories of performance are
good, then the market value ratios will also be good. The
4-20
-------
market-value-of-equity to book-value-of-equity ratios are
particularly useful for evaluating investors' expectations.
Market-to-book ratios less than one clearly indicate that
investors believe the firm's value is deteriorating.
Conversely, ratios greater than one indicate that investors
believe that the firm's operations are adding value to the
firm.
Table 4-7 reports market-to-book ratios for firms in the
two largest size categories only because very few firms in the
TABLE 4-7. BASELINE FINANCIAL RATIO: MARKET-TO-BOOK
RATIO81'88
Firm size in annual receipts
($106/year)
Statistic
Number of
observations
Mean
Standard deviation
(percentage points)
Quartiles
Upper
Median
Lower
$0 to $6
N/A
N/A
N/A
N/A
N/A
$6 to $60
0 0
N/A
N/A
N/A
N/A
N/A
$60 to
$1,000
7
3.32
2.25
5.57
3.68
1.02
Over
$1,000
45
1.99
1.38
2.12
1.62
1.21
Notes:
1. The market-value-of-equity to book-value-of-equity ratio is a
measure of the firm's market value and is computed by dividing
average price per share by net worth per share.
2. Values above one indicate that investors value the firm above
the book value of its equity. Conversely, values below one
indicate that investors value the firm below the book value of
its equity.
3. Values are not reported for the $6 to $60 million firm size
category because data are available for only one firm in this
category.
4-21
-------
other size categories have publicly traded stock. Consequent-
ly, stock price data are largely unavailable for firms in the
two smallest size categories. The quartile values for firms
with $60 million to $1 billion in sales range from 1 for the
lower quartile to 5.57 for the upper quartile. This
difference indicates that investors value most of the
potentially affected firms in this size category at about 100
percent to 557 percent of the firm's book value. Quartile
values for the largest size category range from 1.21 to 2.12.
Investors value these firms at about 121 percent to 212
percent of book value. Benchmark values are not reported for
this ratio.
4.2.2 Bankruptcy Analysis
A composite ratio of financial condition, called the Z-
score, was also computed to characterize baseline financial
conditions of potentially affected firms. Developed
specifically for manufacturing firms, the Z-score is a multi-
discriminant function used to assess bankruptcy potential.89
It simultaneously addresses liquidity, asset management, debt
management, profitability, and market value.
The function is given in Eq. (4-4):
Z = 1.2X3, + !-4x2 + 3.3X3 + 0.6X4 + 0.999X5 (4-4)
where
Z = overall index
X-L = working capital/total assets
X2 = retained earnings/total assets
X3 = earnings before interest and taxes/total assets
X4 = market value of equity/book value of total debt
X5 = sales/total assets.
The market value component (X4) uses stock price data.
Consequently, the Z-score is only applicable to firms with
publicly traded stock. This analysis used a modified function
developed for private firms referred to as the Z"-score, given
in the following equation:
4-22
-------
Z" = 6.56X! + 3.26X2 + 6.72X3 + 1.05X4 (4-5)
where Z" is the overall index, Xx through X3 are as defined for
Z above, and X4 is net worth to total liabilities.
Taken individually, each of the ratios given above is
higher for firms in good financial condition and lower for
firms in poor financial condition. Consequently, the greater
a firm's bankruptcy potential, the lower its discriminant
score. A Z-score below 1.81 indicates that bankruptcy is
likely, and a score above 2.99 indicates that bankruptcy is
unlikely. Z-scores between 1.81 and 2.99 are indeterminate.
Similarly, a Z"-score below 1.10 indicates that bankruptcy is
likely, and a score above 2.60 indicates that bankruptcy is
unlikely. Z"-scores between 1.10 and 2.60 are indeterminate.
Table 4-8 shows the distribution of publicly traded firms
by Z-score prediction and the distribution of firms that do
not issue publicly traded stock by Z"-score prediction.
Financial failure is predicted for less than approximately 10
percent of firms in the two smallest size categories. By
contrast, bankruptcy is predicted for approximately 15 to 17
percent of the firms in the two largest size categories.
Overall, the model predicts that approximately one in seven
potentially affected firms is likely to fail even without the
regulation. These predicted failure rates do not compare
favorably with average reported failure rates for the U.S.
The 1990 failure rate averaged 0.92 percent for all
manufacturing firms, 0.49 percent for all service firms, and
0.76 percent for all U.S. firms.90 As noted in the previous
section, firms in the waste treatment business performed
poorly during the 1987 to 1990 time period. Consequently, it
is not surprising that the predicted failure rates computed
for the waste treatment firms in this analysis are
significantly higher than average 1990 rates for U.S. firms in
general.
4-23
-------
TABLE 4-8. BASELINE BANKRUPTCY PREDICTION
Firm size in annual receipts (106/year)
Bankruptcy
prediction
Publicly traded
companies3
Likely
Indeterminate
Unlikely
Subtotal
Other companies13
Likely
Indeterminate
Unlikely
Subtotal
All companies
Likely
Indeterminate
Unlikely
Subtotal
$0 to
$6
0
0
0
0
1
0
10
11
1
0
10
11
$6 to
$60
0
1
0
1
2
7
11
20
2
8
11
21
$60 to
$1,000
2
1
5
8
4
5
17
26
6
6
22
34
Over
$1,000
9
22
14
45
6
11
26
43
15
33
40
88
Total
11
24
19
54
12
23
65
100
23
47
84
154
a Bankruptcy prediction is based on the Z-score for companies with
publicly traded stock. If a company's Z-score is less than 1.81,
the model predicts that bankruptcy is likely. If a company's Z-
score is greater than 2.99, the model predicts that bankruptcy is
unlikely. Z-scores between 1.81 and 2.99 fall in the
indeterminate range, and the model makes no prediction for these
companies.
b Bankruptcy prediction is based on the Z"-score for companies that
do not issue publicly traded stock. If a company's Z"-score is
less than 1.10, the model predicts that bankruptcy is likely. If
a company's Z"-score is greater than 2.60, the model predicts that
bankruptcy is unlikely. Z"-scores between 1.10 and 2.60 fall in
the indeterminate range, and the model makes no prediction for
these companies.
4-24
-------
SECTION 5
THE OFF-SITE WASTE OPERATIONS STANDARD*
Off-site waste operations (OWO) comprise one of the major
source categories of HAPs established under Section 112 of the
Clean Air Act, as shown in the current list of source
categories provided in the Federal Register notice entitled
"Initial List of Categories of Sources Under Section 112(c)(l)
of the Clean Air Act Amendments of 1990" (57 FR 3176, July 16,
1992). The Act calls for the development of standards to
control HAP emissions from these source categories and
subcategories over the ten-year period starting November 1990.
A major source is defined as any stationary source, or
group of stationary sources (including all emission points and
units located within a contiguous area and under common
control) of air pollution, that emits or has the potential to
emit, considering controls, 10 tons or more per year of any
one HAP or 25 tons or more per year of any combination of
HAPs.
The Act requires EPA to establish air emissions standards
for each major source category and to promulgate emission
standards based on the level of control that would be obtained
through air emissions standards. To that end, EPA has
developed five regulatory alternatives whose impacts must be
analyzed.
*This section describes the OWR standard that is evaluated in
this report. It was changed somewhat prior to proposal. For the
details of the rule the Agency is promulgating, please see the
preface.
5-1
-------
•5.1 CONTROLS FOR EMISSION POINT CATEGORIES
The regulatory alternatives establish controls for
emissions from five categories of emission points present at
OWR facilities:
tanks,
wastewater treatment,
process vents,
waste transfer, and
equipment leaks.
Each regulatory alternative represents a unique
combination of controls specified for each emission point
category. Waste management practices were simulated by
emission point category using organic HAP composition data
from the GENSUR and site-specific information on waste
management operations from the TSDR Survey.
5.1.1 Regulatory Baseline
The regulatory baseline represents the reductions in
organic HAP emissions at the affected OWR facility due to the
operation of air emission controls that will be used in the
absence of any regulation being applicable to the facilities.91
These controls include controls reported to be in place at OWR
facilities in 1986 and controls resulting from the
implementation of promulgated RCRA air standards and Clean Air
Act standards applicable to waste management activities at OWR
facilities. These applicable regulations include RCRA Air
Standards for TSDF Facility Process Vents and Equipment Leaks
and the NESHAP for Benzene Waste Operations.
5.1.2 Emission Point Category Floor
The Act requires that regulations for existing sources be
at least as stringent as the average emission limitation
achieved by the best-performing 12 percent of existing sources
in a source category. This level of control is referred to as
the MACT "floor" for the source category. For the OWR
regulation, an individual "floor" is defined for each of the
five emission point categories. The floor determination is
5-2
-------
based on - the organic HAP air emission controls used under the
regulatory baseline at the individual OWR locations listed in
the computer model database. The control option representing
the floor for each of the five emission point categories is
listed below:
• Tanks—The tank control option at the floor is the use
of fixed-roof tanks for wastes with a volatile organic
HAP concentration equal to or greater than 10 ppmw.
• Wastewater Treatment—The wastewater treatment control
option at the floor is the absence of organic HAP air
emission controls.
• Process Vents--The process vent control option at the
floor is determined to be control of treatment units
with total organic mass emissions equal to or greater
than 3 tons per year by connecting the process vents
to an add-on organic control device with at least a 95
percent organic emission control efficiency.
• Waste Transfer—The waste transfer control option at
the floor is determined to be the absence of organic
HAP air emission controls.
• Equipment Leaks--The equipment leaks control option at
the floor is determined to be control of emissions
from leaks in equipment handling waste streams with
total organic concentrations equal to or greater than
10 percent by implementing leak detection and repair
(LDAR) work practices that follow the procedures
specified in the rules for New Source Performance
Standards (NSPS). The organic control efficiency
assigned to this LDAR program is 70 to 75 percent,
depending on the volatility of the organics in the
waste stream.92
5.2 REGULATORY ALTERNATIVES SELECTED FOR ANALYSIS
Ten candidate regulatory alternatives were developed,
representing combinations of varying control levels at each of
the five emissions categories. For each emissions category,
several possible levels of control were specified. Table 5-1
shows the alternative levels of control suggested for each
emissions point category.93 For each emissions point category
except process vents, the floor is at least as stringent as
5-3
-------
TABLE 5-1. EMISSION POINT CONTROL OPTIONS
Emissions
point
Control
option
Description
Tanks
Wastewater
treatment
Process
vents
Waste
transfer
Equipment
leaks
Baseline
Floor (Tl)
T2
T3
Baseline
Floor (WW1)
WW2
WW3
WW4
Baseline
Floor (PV1)
Baseline
Floor (WT1)
WT2
WT3
Baseline
Floor (ELI)
EL2
EL3
Open and covered tanks
Fixed roof tanks for wastes with VOHAP >10 ppmw
Tl plus vent to 95 percent control device for VP-HAP
>0.75 psia
Tl plus vent to 95 percent control device for VP-HAP
>0.1 psia
No controls
Pretreat by steam stripping VO-HAP >1,000 ppmw
Pretreat by steam stripping VO-HAP >500 ppmw
Pretreat by steam stripping VO-HAP >100 ppmw
Vent to a 95 percent control device if TO-vent >3
tons/year
Same as baseline
No controls
No controls
Submerged fill for VO-HAP >1,000 ppmw
Submerged fill for VO-HAP >10 ppmw
Varying degrees of LDAR
NSPA LDAR, TO >10 percent
REGNEG LDAR, TO-HAP >10 percent
REGNEG LDAR, TO-HAP >5 percent
-------
the baseline, and two or three increasingly stringent levels
of control above the floor are specified. Regulatory
alternatives may be selected by combining varying levels of
control at each emissions point category.
The five regulatory alternatives represent combinations
of the individual emission point control options for impacts
analysis. Table 5-2 shows the levels of control
characterizing each emissions point category for each
regulatory alternative.94 Thus, the five regulatory
alternatives combine the following control options for each
emissions point category:
(1) "Floor" Tl, WW1, PV1, WT1, and ELI;
(2) T2, WW1, PV1, WT2, and EL2;
(3) T2, WW2, PV1, WT3, and EL2;
(4) T3, WW2, PV1, WT3, and EL3; and
(5) T3, WW4, PV1, WT3, and EL3.
5.3 COSTS OF REGULATORY ALTERNATIVES
Emissions and compliance costs are estimated for the
baseline and each of the five regulatory alternatives.
Nationwide emissions and costs are shown in Table 5-3. A
detailed description of the assumptions and analyses used to
develop these costs may be found in Appendix C of the
Background Information Document.
5.3.1 Estimated Facility Compliance Costs
For analysis of impacts by OWR process, facility-specific
compliance costs and emissions are computed by OWR process for
the baseline and each regulatory alternative for 464
facilities with detailed waste characterization data. The
costs and emissions are estimated based on the larger of the
following two quantities:
• the quantity the OWR facility reported in its TSDR
Survey response as being managed in that process; or
5-5
-------
TABLE 5-2.
OWR STANDARD REGULATORY ALTERNATIVES SELECTED FOR
ECONOMIC ANALYSIS
Regulatory
alternative
Emission point category
Tanks
Wastewater
treatment
Process
vents
Waste
transfer
Equipment leaks
"Floor" (1)
(2)
(3)
(4)
(5)
Tl
fixed- roof tank
VO-HAP > 10 ppmw
T2
fixed-roof tank
VO-HAP 2: 10 ppmw
+
95 percent control
device
VP-HAP S 0.1 psia
T3
fixed-roof tank
VO-HAP > 10 ppmw
95 percent control
device
WP-HAP £ 0.1 psia
WW1
no controls
WW2
steam stripping
VO-HAP > 1000
ppmw
WW4
steam stripping
VO-HAP S 100 ppmw
PV1
95 percent
control device
TO-vent > 3
ton/yr
WT1
no controls
WT2
submerged fill
VO-HAP > 1,000
ppmw
WT3
submerged fill
VO-HAP S 10
ppmw
ELI
NSPS LDAR
to > 10 percent
EL2
REGNEG LDAR
TO-HAP > 10
percent
EL3
REGNEG LDAR
TO-HAP £ 5
percent
cn
i
a\
HAP
VO-HAP
VP-HAP
TO
TO-HAP
To-vent
NSPS LDAR
REGNEG LDAR
hazardous air pollutant
action level based on total volatile organic HAP concentration by weight (ppmw) in waste
stream
action level based on organic HAP vapor pressure of waste stream
action level based on total organic concentration by weight percent in waste stream
action level based on total organic HAP concentration by weight percent in waste stream
action level based on total organic mass emissions vented to atmosphere from process unit
equipment leak detection and repair work practices per NSPS rule requirements
equipment leak detection and repair work practices per negotiated rule requirements
-------
Ul
I
-J
TABLE 5-3. NATIONAL COMPLIANCE COSTS AND EMISSIONS
BY REGULATORY ALTERNATIVE9 ($1991)
Regulatory Alternative
Variable 1234
Total 53,000 10,875,000 16,913,000 22,866,000
annual i zed
cost
Total capital 3,166,683 19,135,677 27,236,438 40,051,246
investment
Annual 233,166 5,259,213 12,787,333 16,820,084
operating
costs
Emissions 31,910 12,217 4,809 3,649
5
33,496,000
51,805,019
25,762,816
3,544
aExcludes compliance costs associated with accumulation and storage.
-------
• the quantity that waste generators reported sending to
that OWR facility in their Generator Survey responses.
This approach ensures that the analysis will not underestimate
the costs or emissions associated with each process. For
purposes of estimating national costs and emissions, the
actual location of management is unimportant.
For the purpose of estimating facility-specific impacts
of the regulatory alternatives, however, the actual location
of waste management is critical. For this purpose, the
quantity of waste managed in a given process is assumed to be
the OWR facility's reported quantity from the TSDR Survey.
In many cases, the two quantities mentioned above are
close to equal. The Agency believes that the TSDR Survey
quantity of waste managed most accurately reflects the
quantity the OWR facility actually managed. Generators of
waste may have sent the waste directly to an OWR facility, and
the generators may know that ultimately it was managed in a
given process. A comparison of the quantities of waste
reported as being managed at a facility in a given process in
the Generator Survey and the TSDR Survey reveals that in some
instances the quantity reported in the Generator Survey
exceeds the quantity reported in the TSDR Survey. There are
even instances in which the Generator Survey reports waste
being sent to an OWR facility for management in a process that
the OWR facility does not report having on site in its TSDR
Survey response. This discrepancy results in compliance costs
being estimated for processes that facilities do not report
having on site in the TSDR Survey. Such cases probably
reflect waste brokerage. Many OWR facilities accept waste
from off site, then broker the waste to other OWR facilities
for management in processes that they do not offer. In such
cases, it is not the broker OWR facility that will incur the
compliance costs but the managing OWR facility. It was
necessary, therefore, to attempt to estimate costs of
compliance for the managing facilities.
5-8
-------
To estimate the quantity of waste managed'in each process
at each OWR facility, the Agency used the following approach:
1. When compliance costs were estimated for on-site
processes of one of the 464 facilities, those
compliance costs were allocated to the waste types
managed in the process based on the relative
quantities of each of those waste types.
2. When compliance costs were estimated for processes
that the facility did not report having on site, the
wastes were assumed to be brokered, and sent to one of
the 246 facilities for which no facility-specific
compliance costs were provided.
3. For 246 facilities for which no waste characterization
was available in the GENSUR database, but for which
process quantities were available from their TSDR
responses, costs and emissions were estimated for each
process for the group of 246 facilities together.
These costs and emissions, by process, together with
the costs and emissions for brokered wastes, were
allocated across waste types and processes at the 246
facilities, based on the relative quantities of each
waste form sent off site for management at unnamed OWR
facilities.
5.3.2 Fixed Costs
In addition to the ten waste management processes
described above, emissions and compliance costs were
estimated for storage operations and for discharge to POTWs or
surface water. No controls are applied to discharge
emissions, so no costs are incurred. For storage, on the
other hand, controls are imposed and costs are incurred. This
analysis assumes that waste storage is not a service that is
traded in the market. That is, facilities store wastes until
they have enough to make a batch or a shipment. In addition,
they do not charge the generators separately for storing the
wastes; rather, it is part of the overall costs of treating,
recycling, or disposing of the waste. The compliance costs
associated with controlling emissions from storage units is
assumed to be a fixed cost, unrelated to the quantities
managed in other processes, or even in the storage units
themselves. This is a simplifying assumption that allows the
5-9
-------
model to 'treat the costs as facility-wide costs, of doing
business; if the facility operates other processes and stores
waste at all, the costs are incurred. Unlike compliance costs
associated with the operation of other waste management
processes, storage compliance costs do not enter into the
decision of how much waste to manage in each process; they
only affect overall facility profitability. Section 6 offers
further discussion of the model's treatment of fixed costs.
5.4 COMPLIANCE COSTS OF EACH REGULATORY ALTERNATIVE,
BY WASTE TYPE
Compliance costs by waste type (unique waste form/waste
management process combination), for each regulatory
alternative, are shown in Tables 5-4 through 5-8. The total
columns show the total compliance costs (total annualized
costs, total capital costs, or annual operating and
maintenance costs) associated with managing the waste type.
The Mean column shows the average cost incurred by OWR
facilities managing that waste type. The columns for number
of facilities show the number of facilities managing that
waste type on site. For the first regulatory alternative,
compliance costs for many of the waste types are zero although
facilities do offer that OWR service. For the more stringent
regulatory alternatives, processes managing almost all waste
types incur compliance costs.
The reader may notice that the total compliance costs
reported in Tables 5-4 through 5-8 slightly exceed the totals
reported in Table 5-3. The national compliance cost estimate
in Table 5-3 resulted from an estimate of quantities that
required considerable adjustment for use in a facility-
specific analysis. In addition, because of the assumptions
used in initially assigning facility-specific compliance costs
(that waste generators accurately reported where and how waste
was treated), some facilities were assigned compliance costs
for OWR processes they do not have.
5-10
-------
TABLE 5-4. COMPLIANCE COSTS, REGULATORY ALTERNATIVE 1 BY
WASTE MANAGEMENT PROCESS ($1991)
Total annual i zed
costs
Market
Ql_l
Ql_2
Ql_3
Ql 4
Ql_5
Ql 6
Ql_7
Ql_8
Ql_9
Ql 10
V Q2_l
£ Q2_2
Q2_3
Q2_4
Q2_5
Q2_6
Q2_7
Q2_8
Q2_9
Q2_10
Q3_l
Total
0
0
0
0
0
0
0
3,191
81
0
0
0
0
0
0
0
0
673
4,194
0
0
Mean
0
0
0
0
0
0
0
47
40
0
0
0
0
0
0
0
0
12
4,194
0
0
Total capital costs
Total
0
0
0
0
0
0
0
18,994
479
0
0
0
0
0
0
0
0
4,005
24,959
0
0
Mean
0
0
0
0
0
0
0
279
240
0
0
0
0
0
0
0
0
73
24,959
0
0
Annual operating and
maintenance costs
Total
0
0
0
0
0
0
0
1,398
35
0
0
0
0
0
0
0
0
295
1,838
0
0
Mean
0
0
0
0
0
0
0
21
18
0
0
0
0
0
0
0
0
5
1,838
0
0
Number of
facilities
35
26
11
24
20
30
50
68
2
41
21
26
7
20
6
18
60
55
1
34
32
(continued)
-------
TABLE 5-4. COMPLIANCE COSTS, REGULATORY ALTERNATIVE 1 BY
WASTE MANAGEMENT PROCESS ($1991) (continued)
Total annualized
costs
Market
Q3_l
Q3_2
Q3_3
Q3_4
Q3_5
Q3_6
Q3_7
Q3_8
Q3 9
T Q3_iO
to" Q4_l
Q4_2
Q4_3
Q4_4
Q4_5
Q4_6
Q4_7
Q4_8
Q4_9
Q4_10
Total
0
0
0
0
0
0
0
104,098
359,392
0
0
0
0
0
0
0
0
4,632
16,487
0
Mean
0
0
0
0
0
0
0
1,859
35,939
0
0
0
0
0
0
0
0
91
1,832
0
Total capital
costs
Total
0
0
0
0
0
0
0
619,546
2,138,906
0
0
0
0
0
0
0
0
27,566
98,122
0
Mean
0
0
0
0
0
0
0
11,063
213,891
0
0
0
0
0
0
0
0
541
10,902
0
Annual operating and
maintenance costs
Total
0
0
0
0
0
0
0
45,617
157,493
0
0
0
0
0
0
0
0
2,029
7,225
0
Mean
0
0
0
0
0
0
0
815
15,749
0
0
0
0
0
0
0
0
40
803
0
Number of
facilities
32
31
32
27
37
26
98
56
10
49
45
56
71
24
117
13
61
51
9
51
(continued)
-------
TABLE 5-4. COMPLIANCE COSTS, REGULATORY ALTERNATIVE 1 BY
WASTE MANAGEMENT PROCESS ($1991) (continued)
en
Total annualized Total capital
costs costs
Market
Q5_l
Q5_2
Q5_3
Q5_4
Q5_5
Q5_6
Q5_7
Q5_8
Q5_9
Q5_10
Q6_l
Q6_2
Q6_3
Q6_4
Q6_5
Q6_6
Q6_7
Q6_8
Q6_9
Q6_10
Storage
Total
Total
0
0
0
0
0
0
0
2,278
13,244
0
0
0
0
0
0
0
0
61
5,061
0
0
513,391
Mean
0
0
0
0
0
0
0
38
2,207
0
0
0
0
0
0
0
0
1
723
0
Total
0
0
0
0
0
0
0
13,558
78,820
0
0
0
0
0
0
0
0
365
30,122
0
0
3,055,443
Mean
0
0
0
0
0
0
0
226
13,137
0
0
0
0
0
0
0
0
6
4,303
0
Annual operating and
maintenance costs
Total
0
0
0
0
0
0
0
998
5,804
0
0
0
0
0
0
0
0
27
2,218
0
0
224,978
Number o f
Mean facilities
0
0
0
0
0
0
0
17
967
0
0
0
0
0
0
0
0
0
317
0
37
42
47
29
67
13
44
60
6
44
32
36
34
26
33
24
83
63
7
256
710
•
-------
TABLE 5-5.
COMPLIANCE COSTS, REGULATORY ALTERNATIVE 2 BY
WASTE MANAGEMENT PROCESS ($1991)
Total annual i zed
costs
Market
Ql_l
Ql_2
Ql_3
Ql_4
Ql_5
Ql_6
Ql_7
Ql_8
Ql_9
Ql_10
Q2_l
Q2_2
Q2_3
Q2_4
Q2_5
Q2_6
Q2_7
Q2_8
Q2_9
Q2_10
Total
26,420
929
306
8,391
5,268
29
0
176,180
362
9,178
5,310
19,597
2,862
13,659
10,138
6
0
57,450
13,264
102,186
Mean
755
36
28
350
263
1
0
2,591
181
224
253
754
409
683
1,690
0
0
1,045
13,264
3,005
Total capital
costs
Total
57,709
2,086
832
20,789
12,387
37
0
331,519
726
18,149
11,418
44,515
7,360
33,843
24,397
8
0
112,703
33,720
196,185
Mean
1,649
80
76
866
619
1
0
4,875
363
443
544
1,712
1,051
1,692
4,066
0
0
2,049
33,720
5,770
Annual operating and
maintenance costs
Total
18,204
632
193
6,428
3,535
24
0
129,632
261
6,637
3,685
13,259
1,864
10,464
6,714
5
0
41,511
9,052
74,614
Number of
Mean facilities
520
24
18
268
177
1
0
1,906
130
162
175
510
266
523
1,119
0
0
755
9,052
2,195
35
26
11
24
20
30
50
68
2
41
21
26
7
20
6
18
60
55
1
34
(continued)
-------
TABLE 5-5. COMPLIANCE COSTS, REGULATORY ALTERNATIVE 2 BY
WASTE MANAGEMENT PROCESS ($1991) (continued)
Total annual i zed
costs
U1
i
M
ui
Market
Q3_l
Q3_2
Q3_3
Q3_4
Q3_5
Q3_6
Q3_7
Q3_8
Q3_9
Q3_10
Q4_l 1
Q4_2 1
Q4_3
Q4_4
Q4_5 2
Q4_6
Q4_7
Q4_8
Q4_9
Q4_10
Total
202,034
286,257
41,239
14,212
52,234
1
0
562,604
812,531
225,327
,016,202
,059,442
714,580
7,425
,990,192
1
0
23,280
54,995
32,655
Mean
6,314
9,234
1,289
526
1,412
0
0
10,047
81,253
4,599
22,582
18,919
10,065
309
25,557
0
0
456
6,111
640
Total capital
costs
Total
374,859
639,432
100,578
35,212
137,721
1
0
1,336,112
2,625,861
431,900
2,288,376
2,380,179
1,735,791
18,397
7,215,339
1
0
62,760
134,027
65,280
Mean
11,714
20,627
3,143
1,304
3,722
0
0
23,859
262,586
8,814
50,853
42,503
24,448
767
61,670
0
0
1,231
14,892
1,280
Annual operating and
maintenance costs
Total
148,662
195,216
27,261
10,888
33,768
1
0
401,312
515,066
164,628
690,386
720,560
473,836
5,688
1,979,330
1
0
15,551
37,955
23,466
Mean
4,646
6,297
852
403
913
0
0
7,166
51,507
3,360
15,342
12,867
6,674
237
16,917
0
0
305
4,217
460
Number of
facilities
32
31
32
27
37
26
98
56
10
49
45
56
71
24
117
13
61
51
9
51
(continued)
-------
TABLE 5-5. COMPLIANCE COSTS, REGULATORY ALTERNATIVE 2 BY
WASTE MANAGEMENT PROCESS ($1991) (continued)
Total annual i zed
costs
Market
Q5_l
Q5_2
Q5_3
Q5_4
Q5_5
Q5_6
Q5_7
Q5_8
Q5_9
Q5_10
Q6_l
Q6_2
Q6_3
Q6_4
Q6_5
Q6_6
Q6_7
Q6_8
Q6_9
Q6_10
Storage
Total
Total
272,032
348,166
515,425
21,543
423,375
8
0
92,271
42,076
12,285
55,477
965
6,016
25,680
14,350
19
0
56,173
9,625
133,596
156,810
10,732,638
Mean
7,352
8,290
10,966
743
6,319
1
0
1,538
7,013
279
1,734
27
163
988
435
1
0
892
1,375
522
Total capital
costs
Total
590,516
766,434
1,168,380
53,376
974,644
10
0
185,677
107,165
25,419
121,862
2,168
15,384
63,625
34,939
25
0
112,930
34,933
262,623
376,078
25,386,400
Mean
15,960
18,248
24,859
1,841
14,547
1
0
3,095
17,861
578
3,808
60
416
2,447
1,059
1
0
1,793
4,990
1,026
Annual operating and
maintenance costs
Total
187,955
239,044
352,812
16,503
288,059
6
0
66,203
28,718
8,768
38,126
657
3,875
19,674
9,450
16
0
40,103
5,819
96,704
103,372
7,276,154
Mean
5,080
5,692
7,507
569
4,299
0
0
1,103
4,786
199
1,191
18
105
757
286
1
0
637
831
378
Number of
facilities
37
42
47
29
67
13
44
60
6
44
32
36
37
26
33
24
83
63
7
256
-------
TABLE 5-6.
COMPLIANCE COSTS, REGULATORY ALTERNATIVE 3 BY
WASTE MANAGEMENT PROCESS ($1991)
Total annualized
costs
Market
Ql_l
Ql_2
Ql_3
Ql_4
Ql_5
Ql_6
Ql_7
Ql_8
Ql_9
Ql_10
Q2_l
Q2_2
Q2_3
Q2_4
Q2_5
Q2_6
Q2_7
Q2_8
Q2_9
Q2_10
Total
26,397
928
306
8,391
5,279
29
19,004
174,576
362
12,826
5,306
19,577
2,878
13,659
10,125
6
257,085
55,737
13,105
146,904
Mean
754
36
28
350
264
1
380
2,567
181
313
253
753
411
683
1,687
0
4,285
1,013
13,105
4,321
Total capital
costs
Total
57,654
2,084
833
20,789
12,456
37
1,950
329,023
726
25,295
11,408
44,466
7,454
33,843
24,409
8
109,297
110,034
33,416
283,747
Mean
1,647
80
76
866
623
1
39
4,839
363
617
543
1,710
1,065
1,692
4,068
0
1,822
2,001
33,416
8,346
Annual operating and
maintenance costs
Total
18,188
631
193
6,428
3,538
24
18,790
128,384
261
9,290
3,682
13,246
1,869
10,464
6,702
5
245,084
40,178
8,936
107,124
Mean
520
24
18
268
177
1
376
1,888
130
227
175
509
267
523
1,117
0
4,085
731
8,936
3,151
Number of
facilities
35
26
11
24
20
30
50
68
2
41
21
26
7
20
6
18
60
55
1
34
(continued)
-------
TABLE 5-6.
COMPLIANCE COSTS, REGULATORY ALTERNATIVE 3 BY
WASTE MANAGEMENT PROCESS ($1991)
Total annual i zed
costs
Market
Q3_l
Q3_2
Q3_3
Q3_4
Q3_5
Q3_6
Q3_7
Q3_8
ui Q3 9 •
£ Q3_10
Q4_l
Q4_2
Q4_3
Q4_4
Q4_5
Q4_6
Q4_7
Q4_8
Q4_9
Q4 10
Total
201,942
285,957
41,255
14,212
52,259
1
6,470,219
562,282
810,191
95,438
1,015,547
1,059,019
715,056
7,425
2,991,119
1
465,050
23,167
54,754
38,852
Mean
6,311
9,224
1,289
526
1,412
0
57,259
10,041
81,019
1,948
22,568
18,911
10,071
309
25,565
0
7,624
454
6,084
762
Total capital
costs
Total
374,638
638,708
100,673
35,212
138,017
1
2,186,389
1,335,553
2,621,228
185,484
2,286,794
2,379,158
1,742,786
18,397
7,224,182
1
43,929
62,581
133,566
77,572
Mean
11,707
20,603
3,146
1,304
3,730
0
19,349
23,849
262,123
3,785
50,818
42,485
24,546
767
61,745
0
720
1,227
14,841
1,521
Annual operating and
maintenance costs
Total
148,602
195,020
27,266
10,888
33,762
1
6,229,432
401,069
513,374
69,441
689,956
720,282
473,624
5,688
1,979,355
1
460,227
15,463
37,780
27,959
Mean
4,644
6,291
852
403
912
0
55,128
7,162
51,337
1,417
15,332
12,862
6,671
237
16,918
0
7,545
303
4,198
548
Number of
facilities
32
31
32
27
37
26
113
56
10
49
45
56
71
24
117
13
61
51
9
51
(continued)
-------
TABLE 5-6. COMPLIANCE COSTS, REGULATORY ALTERNATIVE 3
WASTE MANAGEMENT PROCESS ($1991) (continued)
BY
V£>
Total annual i zed
costs
Market
Q5_l
Q5_2
Q5_3
Q5_4
Q5_5
Q5_6
Q5_7
Q5_8
Q5_9
Q5_10
Q6_l
Q6_2
Q6_3
Q6_4
Q6_5
Q6_6
Q6_7
Q6_8
Q6_9
Q6_10
Storage
Total
Total
271,837
347,982
515,730
21,543
424,397
8
180,438
91,506
41,588
16,895
55,426
964
6,036
25,680
14,363
19
209,261
55,779
9,624
205,658
157,109
18,328,068
Mean
7,347
8,285
10,973
743
6,334
1
4,101
1,525
6,931
384
1,732
27
163
988
435
1
2,521
885
1,375
803
Total capital
costs
Total
590,045
765,990
1,170,265
53,376
981,298
10
131
184,480
106,235
34,481
121,738
2,165
15,506
63,625
35,019
25
124,680
112,272
34,931
403,382
377,931
27,871,383
Mean
15,947
18,238
24,899
1,841
14,646
1
3
3,075
17,706
784
3,804
60
419
2,447
1,061
1
1,502
1,782
4,990
1,576
Annual operating and
maintenance costs
Total
187,827
238,923
352,911
16,503
288,359
6
180,424
65,609
28,362
12,116
38,093
656
3,882
19,674
9,454
16
195,573
39,803
5,818
149,125
103,467
14,598,808
Mean
5,076
5,689
7,509
569
4,304
0
4,101
1,093
4,727
275
1,190
18
105
757
286
1
2,356
632
831
583
Number of
facilities
37
42
47
29
67
13
44
60
6
44
32
36
37
26
33
24
83
63
7
256
-------
TABLE 5-7.
COMPLIANCE COSTS, REGULATORY ALTERNATIVE 4 BY
WASTE MANAGEMENT PROCESS ($1991)
Total annual i zed
costs
Market
Ql_l
Ql_2
Ql_3
Ql_4
Ql_5
Ql_6
Ql_7
Ql_8
Ql_9
Ql_10
Q2_l
Q2_2
Q2_3
Q2_4
Q2_5
Q2_6
Q2_7
Q2_8
Q2_9
Q2_10
Total
58,449
2,021
572
17,760
7,329
188
19,010
321,549
385
11,365
8,107
39,032
5,222
26,444
12,515
41
257,103
105,701
17,193
117,709
Mean
1,670
78
52
740
366
6
380
4,729
193
277
386
1,501
746
1,322
2,086
2
4,285
1,922
17,193
3,462
Total capital
costs
Total
129,809
4,396
1,440
44,002
16,570
241
1,965
655,300
760
23,619
17,534
85,947
12,671
65,520
29,357
52
109,343
220,545
38,760
236,520
Mean
3,709
169
131
1,833
828
8
39
9,637
380
576
835
3,306
1,810
3,276
4,893
3
1,822
4,010
38,760
6,956
Annual operating and
maintenance costs
Total
39,967
1,395
373
13,606
5,003
155
18,794
228,821
278
8,052
5,611
26,795
3,470
20,260
8,388
34
245,096
74,393
12,149
84,442
Mean
1,142
54
34
567 '
250
5
376
3,365
139
196
267
1,031
496
1,013
1,398
2
4,085
1,353
12,149
2,484
Number of
facilities
35
26
11
24
20
30
50
68
2
41
21
26
7
20
6
18
60
55
1
34
(continued)
-------
TABLE 5-7. COMPLIANCE COSTS, REGULATORY ALTERNATIVE 4 BY
WASTE MANAGEMENT PROCESS ($1991) (continued)
Total annualized
costs
Market
Q3_l
Q3_2
Q3_3
Q3_4
Q3_5
Q3_6
Q3_7
Q3_8
Q3_9
Q3_10
Q4_l
Q4_2
Q4_3
Q4_4
Q4_5
Q4_6
Q4_7
Q4_8
Q4_9
Q4_10
Total
274,104
574,646
74,076
29,159
80,477
4
6,470,478
610,733
931,423
261,428
1,863,319
1,610,338
1,298,857
15,556
4,117,674
6
465,091
46,900
64,912
58,297
Mean
8,566
18,537
2,315
1,080
2,175
0
57,261
10,906
93,142
5,335
41,407
28,756
18,294
648
35,194
0
7,624
920
7,212
1,143
Total capital
costs
Total
536,457
1,250,421
178,788
72,247
199,200
6
2,187,251
1,434,995
2,762,963
526,712
4,224,657
3,583,539
3,026,143
38,541
9,795,741
8
44,031
112,343
146,602
122,941
Mean
16,764
40,336
5,587
2,676
5,384
0
19,356
25,625
276,296
10,749
93,881
63,992
42,622
1,606
83,724
1
722
2,203
16,289
2,411
Annual operating and
maintenance costs
Total
197,725
396,614
48,967
22,340
53,269
4
6,229,658
434,945
608,748
187,349
1,261,822
1,100,123
874,705
11,918
2,739,781
5
460,253
31,942
45,706
40,956
Mean
6,179
12,794
1,530
827
1,440
0
55,130
7,767
60,875
3,823
28,041
19,645
12,320
497
23,417
0
7,545
626
5,078
803
Number of
facilities
32
31
32
27
37
26
113
56
10
49
45
56
71
24
117
13
61
51
9
51
(continued)
-------
TABLE 5-7. COMPLIANCE COSTS, REGULATORY ALTERNATIVE 4 BY
WASTE MANAGEMENT PROCESS ($1991) (continued)
to
Total annualized
costs
Market
Q5_l
Q5_2
Q5_3
Q5_4
Q5_5
Q5_6
Q5_7
Q5_8
Q5_9
Q5_10
Q6_l
Q6_2
Q6_3
Q6_4
Q6_5
Q6_6
Q6_7
Q6_8
Q6_9
Q6_10
Storage
Total
Total
461,867
632,931
889,394
42,933
932,816
47
180,462
191,606
54,575
17,536
96,281
19,983
11,276
38,509
18,964
107
209,288
113,385
13,868
184,613
211,973
24,197,590
Mean
12,483
15,070
18,923
1,480
13,923
4
4,101
3,193
9,096
399
3,009
555
305
1,481
575
4
2,522
1,800
1,981
721
Total capital
costs
Total
1,015,058
1,374,417
1,965,230
106,374
2,033,140
61
190
406,087
123,463
37,281
213,123
44,062
28,016
95,413
45,097
140
124,747
244,855
38,968
384,963
475,505
40,694,126
Mean
27,434
32,724
41,813
3,668
30,345
5
4
6,768
20,577
847
6,660
1,224
757
3,670
1,367
6
1,503
3,887
5,567
1,504
Annual operating and
maintenance costs
Total
317,345
437,244
613,391
32,893
647,019
39
180,439
134,108
38,541
12,340
65,937
13,710
7,340
29,504
12,620
88
195,590
78,531
9,198
130,440
144,468
18,644,694
Number of
Mean facilities
8,577
10,411
13,051
1,134
9,657
3
4,101
2,235
6,423
280
2,061
381
198
1,135
382
4
2,357
1,247
1,314
510
37
42
47
29
67
13
44
60
6
44
32
36
37
26
33
24
83
63
7
256
-------
TABLE 5-8.
COMPLIANCE COSTS, REGULATORY ALTERNATIVE 5
WASTE MANAGEMENT PROCESS ($1991)
BY
Total annual i zed
costs
Market
Ql_l
Ql_2
Ql_3
Ql_4
Ql_5
Ql_6
Ql_7
Ql_8
Ql_9
Ql 10
Q2_l
Q2_2
Q2_3
Q2_4
Q2_5
Q2_6
Q2_7
Q2_8
Q2_9
Q2_10
Total
58,449
2,021
572
17,760
7,329
188
45,629
321,549
385
11,365
8,107
39,032
5,222
26,444
12,515
41
886,662
105,701
17,193
117,709
Mean
1,670
78
52
740
366
6
913
4,729
193
277
386
1,501
746
1,322
2,086
2
14,778
1,922
17,193
3,462
Total capital
costs
Total
129,809
4,396
1,440
44,002
16,570
241
1,965
655,300
760
23,619
17,534
85,947
12,671
65,520
29,357
52
1,978,275
220,545
38,760
236,520
Mean
3,709
169
131
1,833
828
8
39
9,637
380
576
835
3,306
1,810
3,276
4,893
3
32,971
4,010
38,760
6,956
Annual operating and
maintenance costs
Total
39,967
1,395
373
13,606
5,003
155
45,413
228,821
278
8,052
5,611
26,795
3,470
20,260
8,388
34
669,456
74,393
12,149
84,442
Number of
Mean facilities
1,142
54
34
567
250
5
908
3,365
139
196
267
1,031
496
1,013
1,398
2
11,158
1,353
12,149
2,484
35
26
11
24
20
30
50
68
2
41
21
26
7
20
6
18
60
55
1
34
(continued)
-------
TABLE 5-8. COMPLIANCE COSTS, REGULATORY ALTERNATIVE 5 BY
WASTE MANAGEMENT PROCESS ($1991) (continued)
Total annual i zed
costs
Market
Q3_l
Q3_2
Q3_3
Q3_4
Q3_5
Q3_6
Q3_7
Q3_8
Q3 9
Q3_10
Q4_l
Q4_2
Q4_3
Q4_4
Q4_5
Q4_6
Q4_7
Q4_8
Q4_9
Q4 10
Total
274,104
574,646
74,076
29,159
80,477
4
6,470,478
610,733
931,423
261,428
1,863,319
1,610,338
1,298,857
15,556
4,117,674
6
465,091
46,900
64,912
58,297
Mean
8,566
18,537
2,315
1,080
2,175
0
57,261
10,906
93,142
5,335
41,407
28,756
18,294
648
35,194
0
7,624
920
7,212
1,143
Total capital
costs
Total
536,457
1,250,421
178,788
72,247
199,200
6
2,187,251
1,434,995
2,762,963
526,712
4,224,657
3,583,539
3,026,143
38,541
9,795,741
8
44,031
112,343
146,602
122,941
Mean
16,764
40,336
5,587
2,676
5,384
0
19,356
25,625
276,296
10,749
93,881
63,992
42,622
1,606
83,724
1
722
2,203
16,289
2,411
Annual operating and
maintenance costs
Total
197,725
396,614
48,967
22,340
53,269
4
6,229,658
434,945
608,748
187,349
1,261,822
1,100,123
874,705
11,918
2,739,781
5
460,253
31,942
45,706
40,956
Number of
Mean facilities
6,179
12,794
1,530
827
1,440
0
55,130
7,767
60,875
3,823
28,041
19,645
12,320
497
23,417
0
7,545
626
5,078
803
32
31
32
27
37
26
113
56
10
49
45
56
71
24
117
13
61
51
9
51
(continued)
-------
TABLE 5-8. COMPLIANCE COSTS, REGULATORY ALTERNATIVE 5 BY
WASTE MANAGEMENT PROCESS ($1991) (continued)
Total annual i zed
costs
Market Total
Q3_l
Q3_2
Q3_3
Q3_4
Q3_5
Q3_6
Q3_7
Q3_8
Q3_9
Q3_10
Q4_l
Q4_2
Q4_3
Q4_4
Q4_5
Q4_6
Q4_7
Q4_8
Q4_9
Q4_10
274,104
574,646
74,076
29,159
80,477
4
17,824,793
610,733
931,406
261,428
1,863,319
1,610,338
1,298,857
15,556
4,117,674
6
1,152,511
46,900
64,911
58,297
Mean
8,566
18,537
2,3315
1,080
2,175
0
157,742
10,906
93,141
5,335
41,407
28,756
18,294
648
35,194
0
18,894
920
7,212
1,143
Total capital
costs
Total
536,457
1,250,421
178,788
72,247
199,200
6
12,051,363
1,434,995
2,762,931
526,712
4,224,657
3,583,539
3,026,143
38,541
9,795,741
8
1,839,979
112,343
146,600
122,941
Mean
16,764
40,336
5,587
2,676
5,384
0
106,649
25,625
276,293
10,749
93,881
63,992
42,622
1,606
83,724
1
30,164
2,203
16,289
2,411
Annual operating and
maintenance costs
Total
197,725
396,614
48,967
22,340
53,269
4
16,500,220
434,945
608,735
187,349
1,261,822
1,100,123
874,705
11,918
2,739,781
5
950,488
31,942
45,705
40,956
Number of
Mean facilities
6,179
12,794
1,530
827
1,440
0
146,020
7,767
60,874
3,823
28,041
19,645
12,320
497
23,417
0
15,582
626
5,078
803
32
31
32
27
37
26
113
56
10
49
45
56
71
24
117
13
61
51
9
51
(continued)
-------
TABLE 5-8. COMPLIANCE COSTS, REGULATORY ALTERNATIVE 5 BY
WASTE MANAGEMENT PROCESS ($1991) (continued)
cr>
Total annual i zed
costs
Market
Q5_l
Q5_2
Q5_3
Q5_4
Q5_5
Q5_6
Q5_7
Q5_8
Q5_9
Q5_10
Q6_l
Q6_2
Q6_3
Q6_4
Q6_5
Q6_6
Q6_7
Q6_8
Q6_9
Q6_10
Storage
Total
Total
461,867
632,931
889,394
42,933
932,816
47
300,222
191,606
54,575
17,536
96,281
19,983
11,276
38,509
18,964
107
958,958
113,385
13,866
184,613
211,973
37,764,913
Mean
12,483
15,070
18,923
1,480
13,923
4
6,823
3,193
9,096
399
3,009
555
305
1,481
575
4
11,554
1,800
1,981
721
Total capital
costs
Total
1,015,058
1,374,417
1,965,230
106,374
2,033,140
61
190
406,087
123,463
37,281
213,123
44,062
28,016
95,413
45,097
140
2,176,476
244,855
38,964
384,963
475,505
56,274,810
Mean
27,434
32,724
41,813
3,668
30,345
5
4
6,768
20,577
847
6,660
1,224
757
3,670
1,367
6
26,223
3,887
5,566
1,504
Annual operating and
maintenance costs
Total
317,345
437,244
613,391
32,893
647,019
39
300,199
134,108
38,541
12,340
65,937
13,710
7,340
29,504
12,620
88
719,991
78,531
9,196
130,440
144,468
30,500,615
Number of
Mean facilities
8,577
10,411
13,051
1,134
9,657
3
6,823
2,235
6,423
280
2,061
381
198
1,135
382
4
8,675
1,247
1,314
510
37
42
47
29
67
13
44
60
6
44
32
36
37
26
33
24
83
63
7
256
-------
The'Agency assumed that the generators co.rrectly reported
the process used but that the OWR facility initially receiving
the waste then brokered it to another OWR facility for
treatment.
Based on that assumption, all such compliance costs were
summed by process and shared out proportionally to the off
site quantity treated among facilities that
• accept waste from off site for management using that
process and
• already incur compliance costs associated with the .
process.
These adjustments result in a very different pattern of
facility-specific wastes and compliance costs and also result
in a slight escalation of compliance costs. The most precise
national total is that shown in Table 5-3.
5.5 ENHANCED MONITORING COSTS
In addition to the costs of installing and operating air
pollution controls, OWR facilities are expected to incur costs
associated with enhanced monitoring of their processes and
controls to ensure that compliance is attained. Final
estimated enhanced monitoring costs were not available for
inclusion in this economic impact assessment. However, draft
national costs for enhanced monitoring have been estimated,
which total $1.3 million under RA1, $3.6 million under RA2,
$3.9 million under RA3, $4.2 million under RA4, and $4.3
million under RA5. Dividing these total costs by the 725
affected facilities gives an average enhanced monitoring cost
per facility of $1,800 under RA1, $5,000 under RA2, $5,300
under RA3, $5,800 under RA4, and $5,900 under RA5. Obviously,
the actual facility-specific monitoring costs will vary widely
depending on the processes each facility has on site.
5-27
-------
SECTION 6
IMPACTS OF THE REGULATORY ALTERNATIVES
The OWR operations standard will generally increase the
costs of performing various OWR services. The regulatory
alternatives will increase the costs of waste management and
recovery processes at most OWR facilities, depending on
• the waste management and/or recovery processes present
at the facility,
• the waste types treated in each process,
• the number and type of emission points present at each
process, and
• the baseline level of control for each emission point.
For each regulatory alternative to be analyzed,
compliance costs were estimated for each process, based on
facility-specific information and process models developed for
the analysis. The regulatory alternatives and the compliance
costs are described in detail in Section 5. The EPA expects
that most facilities affected by the standard will be required
to undertake capital investments and annual operating and
maintenance expenses to comply with the standard.
Compliance costs are expected to result in changes in
behavior at OWR facilities as owners of affected facilities
attempt to maximize profits. This analysis assumed that, at
baseline, the markets for OWR services were in equilibrium.
The increased costs associated with affected waste management
operations will result in a decrease in the market supply of
affected OWR services because facilities will now be willing
to treat smaller quantities at a given price than they were
before incurring the compliance costs. Thus, there will be a
6-1
-------
new, higher equilibrium price for each OWR service and a
smaller total quantity of each service being provided, other
market forces remaining equal.
Under the "with-regulation" conditions, some facilities
may find that certain services are no longer profitable for
them to perform. Other facilities may find that they can no
longer earn enough revenue from all their OWR operations to
cover their costs and may choose to close all their waste
management operations. Such changes in facility activities
result in changes in employment at the facility, that, in
turn, impose costs on not only the workers directly affected
but also the communities in which they live.
Finally, changes in the revenues received and costs
incurred by facilities for OWR services will, in turn, change
the financial status of the companies owning the OWR
facilities. Some companies may be pushed into financial
difficulties as a result of the changing profitability of the
facilities they own.
This section estimates the impacts that could result from
the various regulatory alternatives. First, the section
describes the market model used to estimate changes in
equilibrium price and quantity in each OWR service market as a
result of each regulatory alternative. Then, it describes the
effects of complying with the standard. Next, this section
addresses the new market equilibrium prices and quantities.
Finally, it describes the results of the analysis.
6.1 MARKET IMPACTS
As described earlier, the model has 60 markets for
differentiated OWR services, where each market is
characterized by a unique waste form-waste management process
combination. Each OWR facility participates in one or more of
the OWR service markets. The increased costs of OWR services,
resulting from the regulatory alternatives, cause
disequilibrium in the markets for OWR services. The prices
6-2
-------
•and quantities of OWR services adjust until a new equilibrium
quantity is found in all markets.
The following section describes the model used to
estimate the changes in price and quantity that occur in each
market. Then it summarizes the impacts estimated using the
model.
6.1.1 Analytical Method Used to Estimate Market Impacts of
Regulatory Alternatives
As described above, complying with the regulatory
alternatives is expected to increase the cost of providing OWR
services, causing the supply of OWR services to decrease,
other market forces remaining equal. The interaction of the
reduced market supply with market demand will result in new,
higher equilibrium prices for OWR services and lower
equilibrium quantities of the services being provided. The
OWR market model attempts to quantify the changes in market
price and quantity for each affected waste management market,
and to estimate the number of processes and facilities
projected to close as a result of the standard. Table 6-1
lists the commodities and prices included in the model.
6.1.2 Scope of Market Analysis
Facilities that accept waste from off site for treatment,
storage, disposal, or recycling are covered by this
regulation. As shown in Table 6-1, OWR services include
incineration, reuse as fuel, fuel blending, solidification and
stabilization, solvent or liquid organic recovery for reuse,
metals recovery for reuse, wastewater treatment, landfill
disposal, disposal in an underground injection well, or other
treatment and recovery, each of which may be performed on one
of six waste forms. The list of commodities and prices in
Table 6-1 is based on the categories of waste management
operations for which quantity data are provided from the TSDR
and GENSUR databases. There are other types of waste
management activities for which no data are available in the
TSDR/GENSUR database, such as waste oil re-refiners and
industrial subtitle D landfills. These types of waste
6-3
-------
TABLE 6-1. VARIABLES USED IN THE OWR MODEL
Commodities in the model
Wastes managed at facility j (i subscript suppressed)
Qi_j Waste form i accepted for management in process
i waste forms 1 through 6, where
i=l inorganic soils
i=2 inorganic sludges
i=3 aqueous liquids or sludges
i=4 organic liquids
i=5 organic sludges or solids
i=6 other wastes
j treatment processes 1 through 10, where
j=l incineration
j=2 reuse as fuel
j=3 fuel blending
j=4 solidification/stabilization
j=5 solvent recovery for reuse
j=6 metals recovery for reuse
j=7 wastewater treatment
j=8 landfill disposal
j=9 underground injection
j=10 other treatment
Total Wastewater treated on site (Q7)
Q7=Z(Q1_7 ,Q6_7)
Prices in the model
Pi_j Price for treatment process j of waste form i;
i = l, ... ,6; j = l, ... ,10
6-4
-------
management operations will be addressed in a qualitative
manner, because no data sources have been identified that
would enable the Agency to quantify their impacts.
As shown in Figure 6-1 a typical OWR facility accepts
wastes of various forms from off site into assorted waste
management processes. Some of these processes produce salable
products. Some of them result in the generation of
wastewater, which must then be treated. In addition, possibly
some wastes generated on site must be treated but are not
affected by this regulation. All of these wastes pass through
the facilities' waste management operations, but only the
wastes accepted from off-site facilities not under the same
ownership enter markets for waste management services.
6.1.3 Baseline Quantities of OWR Services
The basic approach being used to model the supply of OWR
services is a stepped supply function of the type the Agency
has used frequently in the past. The market supply of each
type of OWR service equals the sum of all the quantities
supplied by facilities offering the service on a commercial
basis. The market is assumed to accept waste management
services in order of "lowest cost first." Facility supply, in
turn, is assumed to be a perfectly elastic function of the
costs of treatment. Because the facility is constrained not
to offer more than its capacity output of each service and is
assumed to be producing at capacity at baseline, this
assumption causes the facility to offer the baseline quantity
supplied of each service, if it produces any of the OWR
service at all. A more detailed characterization follows.
6.1.3.1 Facility Supply. Each facility is assumed to
solve a constrained optimization problem in each market, where
the objective function for facility k (k subscript suppressed)
is
n = TR - TC, or
n = EPijQij -Ec^tQij), i=l, 6; j=l 10 (6-1)
subject to 0 < Qi:j < QJi_capacity
6-5
-------
Off-site waste generators
Inorganic
Solids
(Q1_D
I
Inorganic
Sludges
Aqueous
Liquids or
Sludges
Organic
Liquids
Organic
Sludges
or Solids
Other
Wastes
(Q6_D
Incineration at OWR facilities
(OWR process 1)
Figure 6-1.
Off-site waste flows to a sample OWR
process, incineration
6-6
-------
where
7t = profit,
TR = total revenue,
TC = total costs,
P = price to manage waste form i in process j,
Q = quantity of waste from i managed in process j, and
C^ = cost of managing waste i in process j (a function
of the quantity managed).
The subscript indicates waste form i managed in OWR process j.
The profit function may be expanded to include other costs and
other revenues, which would not vary with output and would be
assumed constant throughout the analysis. (They include, for
example, income from other waste management operations not in-
scope for the OWR regulation, interest income and expense,
selling and general administrative expenses, depreciation, and
so on.)
In the analysis, this optimization decision is equivalent
to each facility's selecting the optimal quantity supplied of
each waste management service, given its costs and the market
price, and subject to the constraints that output of each
service must be nonnegative and less than or equal to
capacity. Thus, if the price of an OWR service is less than
its average variable cost at a facility, the facility will not
provide the service. If, on the other hand, the price exceeds
the average variable cost, the facility will produce at its
capacity (baseline) level.
The operational model introduces a very small slope into
the horizontal section of the facility's step. This slope
makes it possible to solve for a unique quantity of output for
the marginal facility. Thus each facility solves for the
optimal unconstrained quantity of each service it wishes to
provide, using the following expression:
Qij =
-------
Qij = optimal quantity supplied of OWR service ij ,
Q-ki-baseiine = baseline quantity of OWR service i j ,
?ij = price of OWR service ij ,
= average variable cost of OWR service i j , and
= the vertical displacement from AVCij at the
vertical intercept of the AVC^ curve.
This expression, if AVC.^ < P^ , will yield a very large Q^.
The facility is then constrained to produce its capacity
(baseline) quantity. If, on the other hand, AVC^ > Pi j , the
expression returns a negative Qij, and the facility is then
constrained to produce Q^ = 0 .
The facility is assumed to face production constraints,
such that each service must be operating at or below its
capacity and the quantities of each product or service
produced must be nonnegative. As described above, "a" is
chosen to yield an almost infinitely elastic supply function
for the facility. In this analysis, the Agency used a value
of "a" equal to 0.0000001.
6.1.3.2 Market Supply. Market supply of service ij is
given by summing the quantities of waste treatment services
supplied by each of the k facilities:
The above specification of market supply represents a
modified "stepped supply function" in each market. Each
facility is assumed to be producing at capacity, and its
average variable cost is assumed (nearly) constant at all
output levels. Thus, the facility will either produce service
ij at capacity (if P^ £ AVCi:J) or it will not produce at all
(if Pi:j < AVCi:j) .
6.1.3.3 Implications of the Assumptions . The result of
this construction of market supply is that all the adjustments
in output resulting from changes in market conditions occur at
6-8
-------
the margin (the facilities with the highest AVCi;j) '. In this
case, for example, reductions in output will start with the
highest cost producer. If the reduction in equilibrium
quantity exceeds the output of the highest cost producer, that
facility will shut down process i, and the next highest AVC
facility will reduce its output of process ij. This
construction, therefore, overstates the impact on the marginal
facilities and understates the impact on inframarginal
facilities.
6.2 COMPLIANCE WITH THE STANDARD
Facilities subject to the standard will invest in capital
equipment and modify their processes that manage in-scope
wastes. Thus, the compliance costs will increase the AVC of
each affected process. Both fixed and variable compliance
costs were estimated for each facility, broken down by the
service categories affected. The fixed types of compliance
costs include the costs of installed capital equipment. The
variable costs of compliance include annual operating and
maintenance costs associated with the emissions controls.
Variable compliance costs were allocated to each process and
to each waste form within each process, as described in
Section 5. Compliance will increase the AVC of each affected
process. The variable compliance costs will affect the
profitability of each affected process and will therefore
affect the process-closure decision. The fixed compliance
costs (capital, land, and RCRA modification costs) will be
added to the other fixed costs experienced by the facility.
These will therefore be considered by the facility in
evaluating whether the entire facility can profitably remain
in operation.
6-9
-------
6.3 NEW MARKET EQUILIBRIUM PRICES AND QUANTITIES
The model determines new equilibrium prices and
quantities in each of the 60 markets.
6.3.1 Model Description
As described above, the compliance costs increase the
costs of doing the in-scope waste management services,
shifting each facility's AVC^ upward, and therefore shifting
upward the market supply curve for OWR process ij . In terms
of the equation for optimal Qi:j , above, the AVC^ terms now
include the average variable cost of complying with the
regulation. At the baseline prices for these services,
therefore, Qi:jD exceeds Qi:js. In Figure 6-2 at P^1, the
quantity demanded is Qij1, but with the regulation in place,
the quantity supplied is only Qij2. A price-setting algorithm
is used to adjust the price (upward, if market demand exceeds
market supply) . Specifically, the analysis employs a price-
setting algorithm proposed by Kimball and Harrison95 that is
used in computable general equilibrium models. The price
revision rule is
Pij = pij(oid) ' (QijD / QijS)b- (6-3)
The parameter b was set equal to 1 initially but can be
adjusted to give bigger or smaller price adjustments in
response to a given level of excess demand or excess supply,
as needed. The magnitude of the price revision, for a given
ratio of Q^ and QijS, is determined by the b parameter: a high
value causes more extreme variations in price than a small
value. New market QijD's will be determined based on the new
market prices and the market elasticity of demand. Each
facility now faces a new market price for each process it
supplies. Each facility determines its profit-maximizing set
of Qij's (which will either be baseline quantity or zero) .
These are summed to the market level to find market supply.
Again, market supply and demand are compared. For each market
for which market supply and market demand are not equal, the
6-10
-------
Q^/t
Figure 6-2.
The effect of the emissions standard on the
market for OWR service i.
6-11
-------
market's price-setting algorithm returns a new price, and so
on, until all the markets are in equilibrium, at points such
as (Pjj*, Qij*) in Figure 6-2.
As noted above, the quantity supplied of each service by
each facility will either be zero or the baseline quantity,
except for the marginal facility. Those facilities for which
the new AVC (with compliance costs) exceeds the new price will
stop offering that service. In other words, they will shut
down that process.
The analysis also requires that the facility as a whole
be profitable for production of any of its services to
continue. Thus, after each facility has selected its profit-
maximizing level of output for each service, the facility is
checked for profitability, taking into account fixed revenues
and fixed costs. Facilities that are not profitable will shut
down all their operations; their quantity supplied for all
services is set to zero, and the analysis continues. This
constitutes a facility shut down.
As shown in Figure 6-2, the Agency expects the market
prices to increase and the quantity supplied to decrease in
each of the affected waste management markets as a result of
the regulation. Because of the relatively low elasticity of
demand being assumed, the price is generally expected to
increase by almost as much as the costs have increased for the
marginal facility. For some inframarginal facilities, it is
possible that the price increase will exceed the compliance
cost increase. Thus, some facilities will actually find some
processes more profitable with the regulation in effect.
Once the estimation of changes in output, process shut
downs, and facility shut downs was completed, the Agency
projected changes in employment based on baseline employment
data given in the two surveys and on estimating reductions in
employment proportional to the reductions in output projected
by the model.
6-12
-------
6.4 RESULTS
The following section summarizes the results of the OWR
economic impact assessment model. Impacts estimated include
changes in prices and quantities of OWR services, facility and
process closures, changes in employment, and changes in
economic welfare.
6.4.1 Market and Facility Impacts of the Regulatory
Alternatives
6.4.1.1 Changes in Price and Quantity. The compliance
costs associated with the regulatory alternatives mean that
the cost of providing OWR services is higher with the
regulation than without. This increase in costs results in
decreased supply in affected OWR markets. As facilities
respond to their increased costs, some may decide to produce
fewer of some OWR services or to produce none at all. At
existing prices, the demand for these services exceeds the
supply, and the price of the services increases. The
interaction of the forces of supply and demand in the markets
will result in with-regulation equilibria characterized by
higher market prices and smaller quantities in affected
markets.
Tables 6-2 through 6-6 show the effects of the regulatory
alternatives on market prices and quantities. These tables
show the baseline price and quantity, and the price and
quantity under each regulatory alternative, for each of 60 OWR
markets. RA1 imposes compliance costs only in markets for
landfilling and underground injection services. Price
increases range from $0.02 per Mg for landfilling organic
solids and organic solids and sludges to $3.84 per Mg for
underground injection of inorganic solids. No market
experiences a quantity decrease of more than 0.01 percent,
because of the low price elasticities of demand being used in
the model.
6-13
-------
TABLE 6-2. PRICE AND QUANTITY AT BASELINE AND UNDER
REGULATORY ALTERNATIVE 1, BY OWR PROCESS
Baseline
OWR
market
Ql_l
Ql_2
Ql_3
Ql_4
Ql_5
Ql_6
Ql_7
Ql_8
Ql_9
Ql_10
Q2_l
Q2_2
Q2_3
Q2_4
Q2_5
Q2_6
Q2_7
Q2_8
Q2_9
Q2_10
Q3_l
Q3_2
Q3_3
Q3_4
Q3_5
Q3-6
Price
($1991)
3,528.00
1,654.00
64.00
388.00
275.00
495.00
817.00
251.00
8.28
1,015.00
3,528.00
1,830.00
64.00
388.00
240.00
426.00
555.00
303.00
7.03
1,028.00
2,072.00
1,047.00
1,047.00
388.00
1,047.00
550.00
Quantity
(Mg)
6,659
107
392
38,992
3,841
234,918
9,247
1,004,531
74
5,497
853
8,351
16,797
87,618
4,720
9,894
101,757
688,666
2,382
84,814
15,417
22,600
15,364
78,025
13,444
52,135
Regulatory
Alternative 1
Price
($1991)
3,528.00
1,654.00
64.00
388.00
275.00
495.00
817.00
251.02
12.12
1,015.00
3,528.00
1,830.00
64.00
388.00
240.00
426.00
555.00
303.00
7'. 03
1,028.00
2,072.00
1,047.00
1,047.00
388.00
1,047.00
550.00
Quantity
(Mg)
6,659
107
392
38,992
3,841
234,918
9,247
1,004,518
74
5,497
853
8,351
16,797
87,618
4,720
9,894
101,757
688,666
2,382
84,814
15,417
22,600
15,364
78,025
13,444
52,135
(continued)
6-14
-------
TABLE 6-2. PRICE AND QUANTITY AT BASELINE AND UNDER'
REGULATORY ALTERNATIVE 1, BY OWR PROCESS (continued)
Baseline
OWR
market
Q3_7
Q3_8
Q3_9
Q3_10
Q4_l
Q4_2
Q4_3
Q4_4
Q4_5
Q4_6
Q4_7
Q4_8
Q4_9
Q4_10
Q5_l
Q5_2
Q5_3
Q5_4
Q5_5
Q5_6
Q5_7
Q5_8
Q5_9
Q5_10
Price
($1991)
211.00
481.00
8.52
768.00
2,072.00
331.00
331.00
682.00
928.00
125.00
206.00
550.00
8.75
672.00
3,528.00
1,654.00
195.00
682.00
933.00
880.00
1,654.00
550.00
8.75
1,289.00
Quantity
(Mg)
2,945,628
454,460
234,539
181,833
124,216
196,986
1,427,190
20,738
1,353,433
4,647
139,811
125,291
11,685
40,902
35,207
97,654
1,198,104
139,339
1,136,392
6,719
64,459
503,721
7,968
19,841
Regulatory
Alternative 1
Price
($1991)
211.00
481.00
8.97
768.00
2,072.00
331.00
331.00
682.00
928.00
125.00
206.00
550.02
8.95
672.00
3,528.00
1,654.00
195.00
682.00
933.00
880.00
1,654.00
550.04
9.88
1,289.00
Quantity
(Mg)
2,945,628
454,460
234,539
181,833
124,216
196,986
1,427,190
20,738
1,353,433
4,647
139,811
125,290
11,685
40,902
35,207
97,654
1,198,104
139,339
1,136,392
6,719
64.459
503,714
7.968
19.841
(continued)
6-15
-------
TABLE 6-2. PRICE AND QUANTITY AT BASELINE AND UNDER
REGULATORY ALTERNATIVE 1, BY OWR PROCESS (continued)
OWR
market
Baseline
Price
($1991)
Quantity
(Mg)
Regulatory
Alternative 1
Price
($1991)
Quantity
(Mg)
Q6_l
Q6_2
Q6_3
Q6_4
Q6_5
Q6_6
Q6_7
Q6_8
Q6_9
Q6-10
3,528.00
1,830.00
191.00
682.00
268.00
125.00
1,276.00
661.00
8.52
1,225.00
11,283
7,392
3,720
69,718
7,465
126,200
2,869,826
2,308,437
4,580
612,957
3,528.00
1,830.00
191.00
682.00
268.00
125.00
1,276.00
661.00
8.63
1,225.00
11,283
7,392
3,720
69,718
7,465
126,200
2,869,826
2,308,437
4,580
612,957
6-16
-------
TABLE 6-3. PRICE AND QUANTITY AT BASELINE AND UNDER
REGULATORY ALTERNATIVE 2, BY OWR PROCESS
Baseline
OWR
market
Ql_l
Ql_2
Ql_3
Ql_4
Ql_5
Ql_6
Ql_7
Ql_8
Ql_9
Ql_10
Q2_l
Q2_2
Q2_3
Q2_4
Q2_5
Q2_6
Q2_7
Q2_8
Q2_9
Q2_10
Q3_l
Q3_2
Q3_3
Q3_4
Q3_5
Q3_6
Price
($1991)
3,528.00
1,654.00
64.00
388.00
275.00
495.00
817.00
251.00
8.28
1,015.00
3,528.00
1,830.00
64.00
388.00
240.00
426.00
555.00
303.00
7.03
1,028.00
, 2,072.00
1,047.00
1,047.00
388.00
1,047.00
550.00
Quantity
(Mg)
6,659
107
392
38,992
3,841
234,918
9,247
1,004,531
74
5,497
853
8,351
16,797
87,618
4,720
9,894
101,757
688,666
2,382
84,814
15,417
22,600
15,364
78,025
13,444
52,135
Regulatory
Alternative 2
Price
($1991)
3,550.20
1,905.17
69.39
393.48
285.29
495.00
817.03
251.05
23.33
1,020.41
3,955.11
1,838.86
64.07
389.26
240.00
427.20
555.01
303.45
7.03
1,028.00
2,083.12
1,051.27
1,048.92
389.37
1,057.02
550.04
Quantity
(Mg)
6,659
107
390
38,920
3,841
234,918
9,247
1,004,518
39
5,497
847
8,351
16,795
87,583
4,720
9,894
101,757
688,407
2,382
84,814
15,416
22,600
15,356
77,986
13,439
52,135
(continued)
6-17
-------
TABLE 6-3 . PRICE AND QUANTITY AT BASELINE AND UNDER
REGULATORY ALTERNATIVE 2, BY OWR PROCESS (continued)
Baseline
OWR
market
Q3_7
Q3_8
Q3_9
Q3_10
Q4_l
Q4_2
Q4_3
Q4_4
Q4_5
Q4_6
Q4_7
Q4_8
Q4_9
Q4_10
Q5_l
Q5_2
Q5_3
Q5_4
Q5_5
Q5_6
Q5_7
Q5_8
Q5_9
Q5_10
Price
($1991)
211.00
481.00
8.52
768.00
2,072.00
331.00
331.00
682.00
928.00
125.00
206.00
550.00
8.75
672.00
3,528.00
1,654.00
195.00
682.00
933.00
880.00
1,654.00
550.00
8.75
1,289.00
Quantity
(Mg)
2,945,628
454,460
234,539
181,833
124,216
196,986
1,427,190
20,738
1,353,433
4,647
139,811
125,291
11,685
40,902
35,207
97,654
1,198,104
139,339
1,136,392
6,719
64,459
503,721
7,968
19,841
Regulatory
Alternative 2
Price
($1991)
211.01
481.23
8.99
773.98
2,073.25
335.56
331.00
695.18
929.17
126.53
206.00
553.76
8.96
673.26
3,530.33
1,655.32
195.00
683.83
933.50
880.88
1,654.01
550.15
9.93
1,295.22
Quantity
(Mg)
2,945,602
454,428
234,539
181,833
124,210
196,607
1,427,190
20,684
1,353,234
4,647
139,811
125,168
11,685
40,902
35,207
97,654
1,198,103
139,284
1,136,309
6,719
64,459
503,714
7,968
19,841
(continued)
6-18
-------
TABLE 6-3. PRICE AND QUANTITY AT BASELINE AND UNDER
REGULATORY ALTERNATIVE 2, BY OWR PROCESS (continued)
OWR
market
Baseline
Regulatory
Alternative 2
Price
($1991)
Quantity
(Mg)
Price
($1991)
Quantity
(Mg)
Q6_l
Q6_2
Q6_3
Q6_4
Q6_5
Q6_6
Q6_7
Q6_8
Q6_9
Q6_10
3,528.00
1,830.00
191.00
682.00
268.00
125.00
1,276.00
661.00
8.52
1,225.00
11,283
7,392
3,720
69,718
7,465
126,200
2,,869,826
2,308,437
4,580
612,957
3,593.28
1,839.42
192.99
684.27
268.94
125.08
1,276.00
661.01
8.85
1,225.59
11,253
7,392
3,718
69,689
7,463
126,200
2,869,825
2,308,437
4,580
612,915
6-19
-------
TABLE 6-4. PRICE AND QUANTITY AT BASELINE AND UNDER
REGULATORY ALTERNATIVE 3, BY OWR PROCESS
Baseline
OWR
market
Ql_l
Ql_2
Ql_3
Ql_4
Ql_5
Ql_6
Ql_7
Ql_8
Ql_9
Ql_10
Q2_l
Q2_2
Q2_3
Q2_4
Q2_5
Q2_6
Q2_7
Q2_8
Q2_9
Q2_10
Q3_l
Q3_2
Q3_3
Q3_4
Q3_5
Q3_6
Price
($1991)
3,528.00
1,654.00
64.00
388.00
275.00
495.00
817.00
251.00
8.28
1,015.00
3,528.00
1,830.00
64.00
388.00
240.00
426.00
555.00
303.00
7.03
1,028.00
2,072.00
1,047.00
1,047.00
388.00
1,047.00
550.00
Quantity
(Mg)
6,659
107
392
38,992
3,841
234,918
9,247
1,004,531
74
5,497
853
8,351
16,797
87,618
4,720
9,894
101,757
688,666
2,382
84,814
15,417
22,600
15,364
78,025
13,444
52,135
Regulatory
Alternative 3
Price
($1991)
3,539.95
2,154.23
68.82
394.32
280.42
495.00
820.62
251.09
14.36
1,017.88
3,888.62
1,834.71
64.08
389.39
240.00
426.64
555.43
303.44
7.03
1,028.00
2,078.32
1,049.27
1,048.92
389.63
1,054.02
550.09
Quantity
(Mg)
6,659
107
390
38,920
3,841
234,518
9,246
1,004,349
74
5,497
847
8,351
16,795
87,583
4,720
9,894
101,755
688,407
2,382
84,814
15,416
22,600
15,356
77,986
13,439
52,135
(continued)
6-20
-------
TABLE 6-4. PRICE AND QUANTITY AT BASELINE AND UNDER
REGULATORY ALTERNATIVE 3, BY OWR PROCESS (continued)
Baseline
OWR
market
Q3_7
Q3_8
Q3_9
Q3_10
Q4_l
Q4_2
Q4_3
Q4_4
Q4_5
Q4_6
Q4_7
Q4_8
Q4_9
Q4_10
Q5_l
Q5_2
Q5_3
Q5_4
Q5_5
Q5_6
Q5_7
Q5_8
Q5_9
Q5_10
Price
($1991)
211.00
481.00
8.52
768.00
2,072.00
331.00
331.00
682.00
928.00
125.00
206.00
550.00
8.75
672.00
3,528.00
1,654.00
195.00
682.00
933.00
880.00
1,654.00
550.00
8.75
1,289.00
Quantity
(Mg)
2,945,628
454,460
234,539
181,833
124,216
196,986
1,427,190
20,738
1,353,433
4,647
139,811
125,291
11,685
40,902
35,207
97,654
1,198,104
139,339
1,136,392
6,719
64,459
503,721
7,968
19,841
Regulatory
Alternative 3
Price
($1991)
211.04
481.28
9.01
771.17
2,073.16
335.53
331.00
697.42
929.26
125.81
206.20
554.54
8.97
673.46
3,529.88
1,655.45
195.00
684.22
933.45
880.47
1,654.81
550.15
9.97
1,297.84
Quantity
(Mg)
2,945,602
454,428
234,539'
181,833
124,210
196,607
1,427,190
20,684
1,353,234
• 4,647
139,808
125,168
11,685
40,902
35,207
97,654
1,198,103
139,284
1,136,377
6,719
64,455
503,714
7,968
19,803
(continued)
6-21
-------
TABLE 6-4. PRICE AND QUANTITY AT BASELINE AND UNDER,
REGULATORY ALTERNATIVE 3, BY OWR PROCESS (continued)
OWR
market
Baseline
Price
($1991)
Quantity
(Mg)
Regulatory
Alternative 3
Price
($1991)
Quantity
(Mg)
Q6_l
Q6_2
Q6_3
Q6_4
Q6_5
Q6_6
Q6_7
Q6_8
Q6_9
Q6_10
3,528.00
1,830.00
191.00
682.00
268.00
125.00
1,276.00
661.00
8.52
1,225.00
11,283
7,392
3,720
69,718
7,465
126,200
2,869,826
2,308,437
4,580
612,957
3,606.63
1,835.00
192.54
684.54
268.88
125.05
1,276.06
661.01
9.16
1,225.71
11,253
7,392
3,718
69,689
7,463
126,200
2,869,810
2,308,437
4,580
612,915
6-22
-------
TABLE 6-5. PRICE AND QUANTITY AT BASELINE AND UNDER
REGULATORY ALTERNATIVE 4, BY OWR PROCESS
Baseline
OWR
market
Ql_l
Ql_2
Ql_3
Ql_4
Ql_5
Ql_6
Ql_7
Ql_8
Ql_9
Ql_10
Q2_l
Q2_2
Q2_3
Q2_4
Q2_5
Q2_6
Q2_7
Q2_8
Q2_9
Q2_10
Q3_l
Q3_2
Q3_3
Q3_4
Q3_5
Q3_6
Price
($1991)
3,528.00
1,654.00
64.00
388.00
275.00
495.00
817.00
251.00
8.28
1,015.00
3,528.00
1,830.00
64.00
388.00
240.00
426.00
555.00
303.00
7.03
1,028.00
2,072.00
1,047.00
1,047.00
388.00
1,047.00
550.00
Quantity
(Mg)
6,659
107
392
38,992
3,841
234,918
9,247
1,004,531
74
5,497
853
8,351
16,797
87,618
4,720
9,894
101,757
688,666
2,382
84,814
15,417
22,600
15,364
78,025
13,444
52,135
Regulatory
Alternative 4
Price
($1991)
3,553.14
1,905.17
69.39
394.49
285.29
495.00
821.25
251.09
23.33
1,020.41
3,980.40
1,838.86
64.07
389.26
240.00
427.32
555.44
303.50
7.03
1,028.00
2,090.24
1,051.27
1,048.88
389.51
1,057.02
550.21
Quantity
(Mg)
6,659
107
390
38,901
3,841
234,918
9,232
1,004,518
39
5,497
847
8,351
16,795
87,583
4,720
9,894
101,755
688,666
2,382
84,814
15,416
22,600
15,364
77,981
13,439
52,135
(continued)
6-23
-------
TABLE 6-5. PRICE AND QUANTITY AT BASELINE AND UNDER
REGULATORY ALTERNATIVE 4, BY OWR PROCESS (continued)
Baseline
OWR
market
Q3_7
Q3_8
Q3_9
Q3_10
Q4_l
Q4_2
Q4_3
Q4_4
Q4_5
Q4_6
Q4_7
Q4_8
Q4_9
Q4_10
Q5_l
Q5_2
Q5_3
Q5_4
Q5_5
Q5_6
Q5_7
Q5_8
Q5_9
Q5_10
Price
($1991)
211.00
481.00
8.52
768.00
2,072.00
331.00
331.00
682.00
928.00
125.00
206.00
550.00
8.75
672.00
3,528.00
1,654.00
195.00
682.00
933.00
880.00
1,654.00
550.00
8.75
1,289.00
Quantity
(Mg)
2,945,628
454,460
234,539
181,833
124,216
196,986
1,427,190
20,738
1,353,433
4,647
139,811
125,291
11,685
40,902
35,207
97,654
1,198,104
139,339
1,136,392
6,719
64,459
503,721
7,968
19,841
Regulatory
Alternative 4
Price
($1991)
211.07
481.31
8.99
773.98
2,073.29
335.76
331.00
696.22
929.31
126.53
206.22
557.73
8.96
673.66
3,535.37
1,657.00
195.00
683.83
933.54
883.15
1,654.67
550.21
9.93
1,295.22
Quantity
(Mg)
2,945,602
454,418
234,539
181,833
124,210
196,607
1,427,190
20,684
1,353,217
4,647
139,763
125,044
11,685
40,874
35,199
97,654
1,198,103
139,284
1,136,309
6,715
64,455
503,714
7,968
19,841
(continued)
6-24
-------
TABLE 6-5. PRICE AND QUANTITY AT BASELINE AND UNDER
REGULATORY ALTERNATIVE 4, BY OWR PROCESS (continued)
OWR
market
Baseline
Price
($1991)
Quantity
(Mg)
Regulatory
Alternative 4
Price
($1991)
Quantity
(Mg)
Q6_l
Q6_2
Q6_3
Q6_4
Q6_5
Q6_6
Q6_7
Q6_8
Q6_9
Q6_10
3,528.00
1,830.00
191.00
682.00
268.00
125.00
1,276.00
661.00
8.52
1,225.00
11,283
7,392
3,720
69,718
7,465
126,200
2,869,826
2,308,437
4,580
612,957
3,594.03
1,839.42
192.99
684.45
269.84
125.08
1,276.05
661.01
8.85
1,225.59
11,253
7,392
3,718
69,689
7,463
126,200
2,869,810
2,308,437
4,580
612,915
6-25
-------
TABLE 6-6. PRICE AND QUANTITY OF OWR SERVICES
AT BASELINE AND UNDER REGULATORY ALTERNATIVE 5
Baseline
OWR
market
Ql-1
Ql_2
Ql_3
Ql_4
Ql_5
Ql_6
Ql_7
Ql_8
Ql_9
Ql_10
Q2_l
Q2_2
Q2_3
Q2_4
Q2_5
Q2_6
Q2_7
Q2_8
Q2_9
Q2_10
Q3_l
Q3_2
Q3_3
Q3_4
Q3_5
Q3_6
Price
($1990)
3,528.00
1,654.00
64.00
388.00
275.00
495.00
817.00
251.00
8.28
1,015.00
3,528.00
1,830.00
64.00
388.00
240.00
426.00
555.00
303.00
7.03
1,028.00
2,072.00
1,047.00
1,047.00
388.00
1,047.00
550.00
Quantity
(Mg)
6,659.2
106.8
392.1
38,992.0
3,840.9
234,918.4
9,246.8
1,004,530.5
74.2
5,497.4
853.2
8,351.2
16,797.3
87,618.3
4,720.2
9,894.4
101,757.0
688,665.5
2,382.5
84,814.4
15,416.5
22,600.5
15,363.7
78,025.3
13,444.1
52,134.7
Regulatory
Alternative 5
Price
($1990)
3,553.14
1,905.17
69.39
394.49
285.29
495.00
821.25
251.09
23.33
1,020.41
3,980.40
1,838.86
64.07
389.26
240.00
427.32
555.50
303.50
7.03
1,028.00
2,090.24
1,051.27
1,048.88
389.51
1,057.02
550.21
Quantity
(Mg)
6,659..!
106.8
389.6
38,900.7
3,840.9
234,918.4
9,232.0
1,004,517.7
39.0
5,497.4
846.6
8,351.2
16,794.8
87,583.5
4,720.2
9,894.4
101,743.6
688,665.5
2,382.5
84,814.3
15,415.9
22,600.5
15,363.7
77,981.1
13,439.4
52,134.7
(continued)
6-26
-------
TABLE 6-6. PRICE AND QUANTITIES OF OWR SERVICES
AT BASELINE AND UNDER REGULATORY ALTERNATIVE 5 (continued)
Baseline
OWR
market
Q3_7
Q3_8
Q3_9
Q3_10
Q4_l
Q4_2
Q4_3
Q4_4
Q4_5
Q4_6
Q4_7
Q4_8
Q4_9
Q4_10
Q5_l
Q5_2
Q5_3
Q5_4
Q5_5
Q5_6
Q5_7
Q5_8
Q5_9
Q5_10
Price
($1990)
211.00
481.00
8.52
768.00
2,072.00
331.00
331.00
682.00
928.00
125.00
206.00
550.00
8.75
672.00
3,528.00
1,654.00
195.00
682.00
933.00
880.00
1,654.00
550.00
8.75
1,289.00
Quantity
(Mg)
2,945,627.8
454,459.8
234,539.3
181,832.8
124,216.3
196,985.7
1,427,189.8
20,738.2
1,353,433.1
4,646.9
139,811.0
125,290.6
11,685.5
40,902.1
35,207.2
97,653.6
1,198,104.1
139,338.5
1,136,391.8
6,718.8
64,459.1
503,721.3
7,967.9
19,840.7
Regulatory
Alternative 5
Price
($1990)
211.07
481.31
8.99
773.98
2,073.29
335.76
331.00
696.22
929.31
126.53
206.22
557.73
8.96
673.66
3,535.37
1,657.00
195.00
683.83
933.54
883.15
1,654.67
550.21
9.93
1,295.22
Quantity
(Mg)
2,945,601.6
454,417.8
234,539.3
181,832.8'
124,209.9
196,606.6
1,427,189.8
20,684.3
1,353,217.3
4,646.9
139,763.1
125,044.2
11,685.5
40,873.5
35,199.5
97,653.6
1,198,103.0
139,284.1
1,136,309.4
6,714.8
64,455.3
503,713.6
7,967.6
19,840.7
(continued)
6-27
-------
TABLE 6-6. PRICE AND QUANTITIES OF OWR SERVICES •
AT BASELINE AND UNDER REGULATORY ALTERNATIVE 5 (continued)
OWR
market
Baseline
Regulatory
Alternative 5
Price
($1990)
Quantity
(Mg)
Price
($1990)
Quantity
(Mg)
Q6_l
Q6_2
Q6_3
Q6_4
Q6_5
Q6_6
Q6_7
Q6_8
Q6_9
Q6_10
3,528.00
1,830.00
191.00
682.00
268.00
125.00
1,276.00
661.00
8.52
1,225.00
11,282.7
7,391.6
3,719.9
69,718.2
7,465.3
126,200.3
2,869,825.5
2,308,436.7
4,580.0
612,957.5
3,594.03
1,839.42
192.99
684.45
269.84
125.08
1,276.05
661.01
8.85
1,225.59
11,253.2
7,391.6
3,717.9
69,689.3
7,463.1
126,200.3
2,869,810.4
2,308,436.7
4,580.0
612,914.7
6-28
-------
Under RA2 through 5, markets for most OWE services are
affected. Under RA2, some markets are unaffected and others
experience price increases of only pennies per Mg. On the
other hand, some markets, such as the markets for underground
injection of inorganic solids and the market for reuse as fuel
of inorganic solids, experience relatively large percentage
changes in price and quantity under RA2. A 181 percent
increase in price and a 48 percent decrease in quantity are
projected to occur in the market for underground injection of
inorganic solids. This market has only two facilities
participating in it. In fact, the market is unlikely to
exist, because solids would have to be diluted enough to be
pumpable before being injected underground. Thus, other
disposal methods would likely be less costly. The market
price for reuse of inorganic solids as fuel increases by 15.2
percent, the next largest percentage increase in price. The
next largest percentage decrease in quantity treated is a 0.63
percent decrease in the quantity of fuel blending of inorganic
solids. Overall, the quantity of waste managed in OWR
operations is projected to decrease by 0.008 percent (1,548.4
Mg) under RA2.
Under RA3, the quantity of waste managed in OWR
operations is projected to fall by 1,677 Mg or 0.009 percent.
The price of underground injection of inorganic solids is
projected to increase by 73 percent, while the quantity of
inorganic sludges incinerated experiences the largest
percentage decrease, 0.78 percent.
RA4 and RA5 produce very similar results. Under RA4, the
overall quantity of waste managed in OWR operations is
projected to decline by 1,581 Mg; under RA5 it is projected to
decline by 1,592 Mg. Both quantities constitute approximately
0.008 percent of baseline commercial OWR quantities. The
market for underground injection of inorganic solids is
projected to incur a 182 percent increase in price and a 48
percent decrease in quantity under both RA4 and RA5. The next
largest impacts are projected to occur in the markets for
6-29
-------
reuse of, inorganic solids as fuel (a 15.2 percent increase in
price) and fuel blending of inorganic solids (a 0.63 percent
decrease in quantity).
6.4.1.2 Facility Closures and Process Shut-Downs.
Another measure of the economic impact of a regulation is the
number of facility closures it causes. If a facility's
compliance costs associated with a regulatory alternative
raise the average variable cost of providing an OWR service
above its market price, it is no longer profitable for the
facility to offer that service. This is defined as a process
shut-down at that facility. At a facility that shuts down one
or more OWR processes, other activities may continue. On the
other hand, the entire facility may become unprofitable. This
may occur for one of two reasons:
• all the processes at a facility become unprofitable;
or
• the processes remain profitable, but the annualized
capital costs cause the facility as a whole to be
unprofitable.
Thus, the model identifies both processes and facilities that
become unprofitable under various regulatory alternatives.
Table 6-7 shows the number of facility and process closures
projected to occur under each regulatory alternative. If
either all the commercial processes at a facility are shut
down or the fixed costs are so high that the facility becomes
unprofitable as a whole even though all of its OWR processes
are profitable, the model predicts a facility closure.
The impacts predicted by the model to result from the air
emission standards reflected by RA1 through RA5 range from no
facilities becoming unprofitable under RA1 to 10 facilities
becoming unprofitable under each of the other RAs. Although
the model operates as though all 10 of the unprofitable
facilities will cease operations, several are government-owned
or captive facilities, which are unlikely to close. Thus, of
the 10 unprofitable facilities, under RA3 through RAS, at most
six are likely to be facility closures. The number of process
6-30
-------
TABLE 6-7. CLOSURES UNDER EACH REGULATORY ALTERNATIVE
RA1
Unprofitable 0
facilities
Process shut-downs at
Ql_l
Ql_2
Ql_3
Ql_4
Ql_5
Ql_6
Ql_7
Ql_8 1
Ql_9
Ql_10
Q2_l
Q2_2
Q2_3
Q2_4
Q2_5
Q2_6
Q2_7
Q2_8
Q2_9
Q2_10
Q3_l
Q3_2
Q3_3
Q3_4
Q3_5
Q3_6
RA2
10
RA3
10
RA4
10
RA5
10
facilities remaining open
1
--
1
2
—
--
2
1
1
1
2
--
1
3
—
--
2
3
--
3
1
—
1
2
1
—
1
—
1
2
--
--
4
4
--
1
2
—
1
3
--
--
4
3
--
3
1
—
1
2
1
—
1
—
1
4
—
1
5
1
1
1
2
--
1
3
--
—
4
--
--
3
1
--
—
3
1
—
1
—
1
4
—
1
5
1
1
1
2
--
1
3
--
—
5
--
--
3
1
—
—
3
1
--
(continued)
6-31
-------
TABLE 6-7.
CLOSURES UNDER EACH REGULATORY ALTERNATIVE
(continued)
RA1
Unprofitable 0
facilities
Q3_7
Q3_8
Q3_9
Q3_10
Q4_l
Q4_2
Q4_3
Q4_4
Q4_5
Q4_6
Q4_7
Q4_8 1
Q4_9
Q4_10
Q5_l
Q5_2
Q5_3
Q5_4
Q5_5
Q5_6
Q5_7
Q5_8 1
Q5_9 1
Q5_10
RA2
10
2
6
--
1
2
1
--
3
3
--
2
3
--
1
2
--
1
3
2
--
2
1
1
1
RA3
10
2
6
—
1
2
1
--
3
3
—
3
3
—
1
2
--
1
3
1
--
4
1
1
2
RA4
10
2
7
'
1
3
1
--
3
4
--
4
5
—
2
4
--
1
3
2
1
4
1
1
1
RA5
10
2
7
—
1
3
1
—
3
4
--
4
5
--
2
4
—
1
3
2
1
4
1
1
1
(continued)
6-32
-------
TABLE 6-7. CLOSURES UNDER EACH REGULATORY ALTERNATIVE
(continued)
RA1
Unprofitable
facilities 0
Q6_l
Q6_2
Q6_3
Q6_4
Q6_5
Q6_6
Q6_7
Q6_8
Q6_9
Q6_10
Total process 4
closures
RA2
10
4
--
2
3
9
--
2
--
—
5
90
RA3
10
4
—
2
3
9
--
5
--
--
5
102
RA4
10
4
--
2
3
9
--
5
--
—
5
111
RA5
10
4
—
2
3
9
—
5
--
--
5
112
6-33
-------
closures ranges from four under RAl to 90 under RA2, 102 under
RA3, 111 under RA4, and 112 under RA5. This count of process
shut-downs includes both process closures at facilities that
remain in operation and process closures associated with
facility closures. Thus, only a few facilities are predicted
to close, and under the most stringent regulatory
alternatives, fewer than 7 percent of commercial processes
that at least broke even at baseline are predicted to become
unprofitable.
For facilities that remain in operation, profits may
change as a result of the regulatory alternatives. These
facilities may experience decreases in profitability, if
market prices do not increase as much as their average
variable costs have increased, or they may experience
increased profitability if prices increase by more than their
average variable costs. The column labeled "Change in
producer surplus" in Table 6-9 (discussed in Section 6.4.3)
shows the estimated changes in profits experienced under each
regulatory alternative.
6.4.2 Employment Impacts
Because of the changes in the quantity of off-site
commercial waste being managed (described in the previous
section), changes in employment at OWR facilities are also
predicted to result from the regulatory alternatives. Data on
employment in hazardous waste management operations and other
operations (e.g., manufacturing, administrative) were provided
in both the TSDR Survey and the CWT Survey. Employment data
were provided by 551 of the 725 OWR facilities under analysis.
Using these baseline data and predicted changes in the
quantities of waste managed at OWR facilities, the model
predicts changes in employment resulting from each regulatory
alternative.
Under the assumption that noncommercial waste management
operations (both on site and off site) will continue at their
baseline levels under the regulatory alternatives, the
projected changes on the total quantity of waste managed equal
6-34
-------
the changes in commercial waste management projected by the
market model. Changes in employment (direct job loss)
resulting from a regulatory alternative were computed using
the following formula:
t0tal WaStS
^tota waste managedbaseline
Table 6-8 shows the predicted job losses at OWR
facilities under each regulatory alternative. Of 951,216
workers reported to be employed at baseline by the 551
facilities giving employment information, approximately 275
employees are expected to be displaced at OWR facilities under
all of the regulatory alternatives.
6.4.3 Economic Welfare Impacts
The value of environmental improvements that result from
regulatory policy can be measured against the change in
economic welfare resulting from the costs of compliance.
Welfare impacts resulting from the regulatory controls on the
OWR industry will accrue to the consumers and producers of OWR
services. Consumers of OWR services experience welfare
impacts due to the adjustments in prices and quantities of OWR
services caused by imposing the regulations. Producer welfare
impacts result from the changes in profits associated with the
additional costs of production and the corresponding market
adjustments. This section describes the theoretical methods
TABLE 6-8. CHANGES IN EMPLOYMENT UNDER THE REGULATORY
ALTERNATIVES (FOR 551 COMMERCIAL FACILITIES)
Regulatory Alternative Job losses
RA1 272
RA2 275
RA3 278
RA4 276
RA5 276
6-35
-------
of applied welfare economics used to evaluate public policies
and the specific approach used to estimate changes in economic
welfare resulting from the OWR regulatory alternatives.
The economic welfare implications of the post-compliance
market price and quantity changes in the markets for OWR
services are measured by estimating changes in the net
benefits of consumers and producers resulting from the price
and quantity changes.
Figures 6-3 and 6-4 depict the changes in welfare by
measuring the changes in consumer surplus and producer
surplus. In essence, the demand and supply curves previously
used as predictive devices are now being used as a valuation
tool.
This method of estimating the post-regulatory change in
economic welfare divides society into consumers and producers.
In a market environment, consumers and producers of the
service being traded derive welfare from the transaction.
Consumer surplus is defined as the difference between the
maximum amount consumers are willing to pay for an amount of a
good or service and the amount they actually pay. Consumer
$/Q
Q2 Qi
Market for • r«pr*««atBtiv* OHM ••rrie*
Q/t
Figure 6-3. Change in consumer surplus with regulation.
6-36
-------
$/Q
Pi
Qi
Market for a representative OWM service
Q/t
Figure 6-4. Change in producer surplus with regulation.
surplus is measured as the area under the demand curve and
above the price of the product. Similarly, the difference
between the minimum amount producers are willing to accept for
a given amount of the good or service and the price they
actually receive is referred to as producer surplus. Producer
surplus is measured as the area above the supply curve and
below the price. These areas may be thought of as consumers'
net benefits of consuming the good or service and producers'
net benefits of producing it.
In Figure 6-3, baseline equilibrium occurs at the
intersection of the demand and supply curves for a given OWR
service. Baseline equilibrium price is P^ and baseline
equilibrium quantity is Q^. The increased cost of production
with the regulation will cause the market supply curve to
shift upward to Sy. The new equilibrium price of the OWR
service is P2. Higher prices for OWR services mean less
welfare for the consumers of the service, all else being
unchanged. In Figure 6-3, area A represents the dollar value
of the annual net loss in consumers' benefits with the
6-37
-------
increased price of OWR services. The rectangular portion
represents the loss in consumer surplus on the quantity still
consumed, Q2, while the triangular area represents the
foregone surplus resulting from the reduced amount of the OWR
service consumed.
As discussed previously, OWR services are intermediate
goods that contribute to the production of other goods and
services. This study does not assess economic impacts or
changes in welfare in the markets for the goods and services
in whose production OWR services are an input. Rather, this
study focuses on changes in economic welfare resulting from
impacts in the markets for OWR services.
In addition to the changes in consumers' welfare,
producers' welfare also changes with the regulations. With
the increase in market prices for OWR services, producers
receive higher revenues for the quantity still purchased, Q2.
In Figure 6-4, area B represents the increase in revenues due
to this increase in prices. The difference in the areas under
the two supply curves up to the original market price, area C,
measures the loss in producer surplus, which includes the loss
associated with the quantity no longer produced. The net
change in producers' welfare is calculated as area B - C.
The change in economic welfare attributable to the
compliance costs associated with the regulatory alternatives
is the sum of consumer and producer surplus changes. The
change is (-A) + (B - C) .
As shown in Table 6-9, the changes in consumer surplus
are relatively small, ranging from a decrease of $155,000
under RA1 to a decrease of $11,334,000 under RA5. The changes
in producer surplus are much larger, ranging from a decline of
$86,855,000 under RA1 to a decline of $96,170,000 under RA4.
The overall changes in economic welfare range from a decline
of $87,010,000 under RA1 to a decline of $107,498,000 under
RA4. The changes in economic welfare are very similar under
RA4 and RA5: declines of $107,498,000 and $107,369,000,
respectively.
6-38
-------
TABLE 6-9. CHANGES IN ECONOMIC WELFARE WITH THE REGULATORY
ALTERNATIVES
Regulatory
Alternative
RA1
RA2
RA3
RA4
RA5
Change in
consumer
surplus
-155,347
-9,328,426
-9,505,124
-11,327,708
-11,333,814
Change in
producer
surplus
-86,855,094
-95,057,764
-95,145,454
-96,169,797
-96,035,168
Change in
economic
welfare
-87,010,491
-104,386,190
-104,650,578
-107,497,505
-107,368,982 •
This analysis measures changes in economic welfare
associated with the production and consumption of OWR
services. The reader may notice that these numbers are
considerably higher than the national costs shown in Table
5-3. The national annual costs measure the economic impacts
incurred by the regulated industry. The welfare impacts
reported in Table 6-9 include not only those costs but also
changes in welfare incurred by the industry's customers and
others in society. These social costs should be compared with
estimated benefits—the value of the reduced levels of air
pollution resulting from the regulation—to assess the overall
net impact of the regulation on society's welfare.
6.5 COMPANY IMPACTS
The legal and financial responsibility for compliance
with a regulatory action rests with the owners of the OWR
facility who must bear the financial consequences of their
decisions. Thus, an analysis of the company-level impacts in
the context of EPA regulations involves identifying and
characterizing affected entities, assessing their response
options and modeling or characterizing the decision-making
process, and analyzing the impacts of those decisions.
6-39
-------
Sections 3.7 and 4.2 of this report identify'the affected
entities and characterize them according to relevant
characteristics including size, degree of horizontal or
vertical integration, capital structure, and baseline
financial condition. In this section, EPA addresses the other
components of an analysis of company-level impacts. First,
this section identifies the owners' response options and
characterizes their decision-making process. It then presents
the company-level impacts including potential changes in the
capital structure and cost of capital, changes in financial
status, and financial failure.
6.5.1 Owners' Responses
Companies have many options in deciding how to respond to
the proposed regulatory alternatives. For some companies,
some compliance approaches may be more profitable than
installing the control equipment upon which the Agency's
compliance costs are based. These other possible responses
include the following:
complying with the regulation via process and/or input
substitution (as opposed to installing the Agency's
prescribed control equipment),
• ceasing to accept troublesome wastes from off-site for
treatment in one or more of the processes they offer,
and
• choosing another—less costly--control technology that
would meet the emissions contrc-_ requirements of the
regulation.
The Agency lacks sufficient information however, to evaluate
facility and market impacts of complying with the alternative
approaches. Consequently, the company-level analysis is based
on the assumption that owners are limited to the following
three response options:
• discontinuing regulated processes within the facility
if the owners expect them to become unprofitable,
• closing the facility if all OWR processes are expected
to become unprofitable, and
6-40
-------
• installing and operating the specific control
technologies on which the Agency has based its costs
of compliance for each OWR process that owners
continue to offer with the regulation in place.
Limiting owners' response options to the three listed above
enables the Agency to model the financial impacts of the
regulation in a systematic way that is logically consistent
across all facilities owned by companies included in this
analysis. The impacts presented in this analysis are perhaps
best interpreted as an upper bound on expected impacts,
because other approaches to compliance may be less costly for
some facility owners.
The market model developed in Section 6.3.1 simulates
facility and market impacts under the three response options
listed above. Under each of these options affected firms will
potentially experience changes in the costs of providing waste
treatment services as well as changes in the revenues
generated by providing these services. The cost impacts
associated with the response options include the costs of
installing and operating control equipment, closure costs, and
changes in baseline production costs that occur because of a
change in the quantity of OWR services provided. The revenue
impacts associated with the regulation stem from the combined
effects of changes in the quantity of OWR services provided by
facilities owned by each affected company and changes in
market prices for OWR services that result from a shift in the
market supply of waste treatment services.
This analysis assumed that the owners of an affected
facility will select the course of action from the response
options listed that maximizes the value of the firm, subject
to uncertainties regarding actual costs of compliance,
behavior changes among OWR service demanders, and the response
behaviors of other firms. Each owner's expected cost and
revenue impacts will motivate the changes in operations that
they make to their baseline OWR operations. The Agency has no
way of knowing the types of assumptions individual OWR owners
6-41
-------
will make to predict the behavior changes of OWR demanders and
of other OWR service providers. Owner expectations as to the
direction and magnitude of price and quantity changes that the
proposed regulatory alternatives would cause in each OWR
service market will vary from one owner to the next with
differences in their knowledge of the following:
• their customers' elasticities of demand for the
services they offer,
their competitors' baseline costs of providing
service,
their competitors' costs of complying with the
regulation for each service they offer, and
• economic theory.
The Agency assumed for this analysis that the assumptions
governing demanders' and competitors' behavior changes in the
market model mirror OWR facility owners' expectations of their
responses. Thus, we assumed that the market model correctly
identifies the appropriate response, from the three response
options identified for this analysis, that profit-maximizing
firms would choose for each OWR service offered at each of
their OWR facilities.
Tables 6-10 through 6-12 summarize the projected revenue
and cost impacts for potentially affected firms in each size
category. The distribution of impacts reported in Tables 6-10
through 6-12 excludes firms that are not projected to incur
impacts. Revenue impacts are generally positive, indicating
that the projected price increases more than offset the
corresponding quantity decreases for most firms. Where
product line or facility shut down occurs, the revenue losses
associated with these decisions are included in the estimated
revenue impacts. The operating cost impacts reflect both
increases in production costs associated with operating
control equipment as well as decreases in baseline production
costs due to a reduction in the quantity of waste treatment
services provided. Consequently, the net change in operating
6-42
-------
TABLE 6-10. PROJECTED CHANGE IN REVENUE ($/year)
Firm size in annual
Regulatory Alternative
Reg Alt 1
Facilities with costs
Mean
Standard deviation
Quartiles
Upper
Median
Lower
Reg Alt 2
Facilities with costs
Mean
Standard deviation
Quartiles
Upper
Median
Lower
Reg Alt 3
Facilities with costs
Mean
Standard deviation
Quartiles
Upper
Median
Lower
Reg Alt 4
Facilities with costs
Mean
Standard deviation
Quartiles
Upper
Median
Lower
Reg Alt 5
Facilities with costs
Mean
Standard deviation
Quartiles
Upper
Median
Lower
$0 to $6
8
1,060
1,860
1,792
102
26
106
1,704
19,101
3,037
111
132
107
680
18,467
3,068
846
217
106
2,381
23,283
3,999
1,038
177
106
2,383
23,283
3,999
1,063
111
$6 to $60
13
4,722
7,610
4,564
1,190
734
78
18,082
64,867
21,200
6,525
501
80
20,008
72,359
21,470
6,354
427
79
23,317
N/A
23,610
6,069
505
79
23,267
77,962
23,610
6,069
399
receipts ($106/year)
$60 to
$1,000
10
4,911
6,912
6,626
1,894
66
48
85,840
199,131
59,204
18,858
1,434
49
79,699
170,489
52,282
18,005
927
49
101,677
231,120
60,837
16,881
1,746
49
101,739
231,181
60,837
16,881
1,746
Over
$1,000
7
4,045
7,713
7,176
186
36
39
64,317
287,376
7,516
1,715
59
39
70,186
294,526
17,472
1,850
72
39
77,713
320,017
20,736
2,219
251
39
77,729
320,016
20,736
2,219
251
6-43
-------
TABLE 6-11. PROJECTED CHANGE IN OPERATING COSTS ($/year)
Firm size in annual receipts
($106/year)
Regulatory
Alternative
Reg Alt 1
Facilities with costs
Mean
Standard deviation
Quartiles
Upper
Median
Lower
Reg Alt 2
Facilities with costs
Mean
Standard deviation
Quartiles
Upper
Median
Lower
Reg Alt 3
Facilities with costs
Mean
Standard deviation
Quartiles
Upper
Median
Lower
Reg Alt 4
Facilities with costs
Mean
Standard deviation
Quartiles
Upper
Median
Lower
Reg Alt 5
Facilities with costs
Mean
Standard deviation
Quartiles
Upper
Median
Lower
$0 to $6
1
43
N/A
43
43
43
39
-729
31,250
1,187
117
-38
41
-982
32,867
1,521
171
-26
44
4,019
57,789
1,393
122
3
44
4,032
57,789
1,393
122
3
$6 to $60
4
191
264
337
68
45
29
-3,051 1
42,125 4
4,415
616
32
31
502 1
44,770 4
6,372
1,201
32
33
7,920 2
52,089 13
8,083
1,013
64
33
11,406 2
54,557 13
15,386
702
28
$60 to
$1,000
2
3,819
5,386
7,627
3,819
10
24
,262,832
,696,779
84,869
7,624
630
26
,163,756
,514,095
89,556
3,081
450
30
,796,727
,526,758
116,449
5,677
387
30
,796,773
,526,749
116,449
5,677
387
Over
$1,000
1
-7,894
N/A
-7,894
-7,894
-7,894
19
666,671
2,061,244
76,790
2,081
32
19
1,131,549
2,642,722
172,314
3,302
47
22
1,194,588
3,379,758
133,527
3,115
294
22
1,221,699
3,429,232
141,602
3,115
294
6-44
-------
TABLE 6-12. PROJECTED CAPITAL COMPLIANCE C6STS ($/year!
Regulatory Alternative
Reg Alt 1
Facilities with costs
Mean
Standard deviation
Quartiles
Upper
Median
Lower
Reg Alt 2
Facilities with costs
Mean
Standard deviation
Quartiles
Upper
Median
Lower
Reg Alt 3
Facilities with costs
Mean
Standard deviation
Quartiles
Upper
Median
Lower
Reg Alt 4
Facilities with costs
Mean
Standard deviation
Quartiles
Upper
Median
Lower
Reg Alt 5
Facilities with costs
Mean
Standard deviation
Quartiles
Upper
Median
Lower
Firm size
$0 to $6
3
9,431
16,158
28,089
191
14
86
68,416
75,645
156,313
21,473
3,176
88
195,158
265,776
574,000
21,232
2,968
93
235,604
318,146
693,922
31,644
7, 858
93
235,733
318,053
693,922
31,644
7,903
in annual
$6 to $60
6
133,736
185,179
167,957
79,321
359
65
134,280
190,234
179,210
82,447
6,354
69
236,937
418,664
250,998
81,906
6,395
71
300,820
507,408
400,255
130,015
11,755
71
311,865
579,531
400,255
130,015
12,773
receipts ($106
$60 to
$1,000
4
113,925 1,
108,372
195,993 1,
100,925 1,
31,857 1,
66
287,243
677,134
179,210
179,210
27,593
69
561,176
977,570
596,922 1,
596,922
10,290
73
661,085
1,188,638 1,
736,660 1,
736,660
7,161
73
800,713
1,594,949 1,
736,660 1,
736,660
12,261
/year)
Over
$1,000
1
070,940
N/A
070,940
070,940
070,940 '
84
292,770
363,484
358,420
179,210
179,210
88
766,723
875,921
193,844
596,922
276,933
92
946,197
313,288
011,686
736,660
145,706
92
996,106
348,438
374,164
736,660
221,804
6-45
-------
cost impacts may be negative, indicating a net reduction in
baseline operating costs, or positive, indicating an increase
in operating costs over the baseline values. Typically,
however, firms with a net reduction in operating costs also
incur a loss in revenue that more than offsets the operating
cost savings. Thus, the impact on a firm's bottom line may be
negative (cost increases that exceed revenue increases) or
positive (revenue increases that exceed cost increases). For
most firms in this analysis, cost increases exceed revenue
increases .
The with-regulation prices of the relevant waste
treatment services are market-determined and estimated using a
market model based on the principles of microeconomics. These
market-price estimates were assumed to match each OWR owner's
expectations of the with-regulation equilibrium prices for
each OWR service. The Agency then modeled each owner's
decisions by comparing Agency estimates of the facility-
specific average total avoidable cost (ATAC) of providing each
treatment service to the corresponding with-regulation
equilibrium price estimates. Figure 6-5 shows the decision
process. In this context, ATAC includes all costs that would
fall to zero if the facility were to discontinue operations in
the given OWR service and reflects any post-closure costs as
well as the salvage value of assets. Debt obligations, which
must be met regardless of whether the facility continues to
operate, are not included in ATAC. If the expected with-
regulation price for a particular service is less than the
ATAC for that service, the firm maximizes the present value of
the facility by exiting the market for that service. If the
expected with-regulation price is lower than the corresponding
ATAC for all OWR services that the OWR facility offered at
baseline, the firm maximizes its present value by
discontinuing all regulated operations within the facility or
by closing the facility altogether. These decisions are
referred to as voluntary exit decisions, because owners of the
firm, as opposed to creditors, make the exit decision. Exit
6-46
-------
Assume EPA's Pollution Control
Technology for OWR Service #1 is
the Lowest Cost Compliance Option
for OWR Service #1
Estimate New Equilibrium
Market Price (Pf1) for
OWR Service #1
P, = Expected With-Regulation Equilibrium
Market Price for OWR Service,
ATAC, = Average Total Avoidable Cost of Providing
OWR Service, with the Regulation in Place
DM = Market Value of Debt
DL = Liquidation Value of Debt
Owner Responses Projected
in the Market Model
Owner Responses Evaluated
in Company Impacts Mode!
Select Voluntary Exit from
Market for OWR Service #1
as Profit-Maximizing
Compliance Option
Yes
Select EPA Compliance
Option as Profit-Maximizing
Compliance Option
IsP
ATAC for Any
Other OWR
Service?
Voluntary Exit
from OWR
Industry
Select EPA Compliance
Option for All OWR Services
where P, ATACj as Profit-
Maximizing Compliance
Option
Choose Financing
Approach that Best
Maintains the Firm's
Desired Capital Structure
Involuntary Exit from
OWR Industry
Can
Firm Cover
Its Debt
Obligations?
Implement EPA
Compliance Option(s)
for all OWR Services
Continue Operations
Figure 6-5.
Characterization of owner responses
to regulatory actions.
6-47
-------
may take the form of liquidation of assets, a distressed sale
of the facility to another firm, or conversion of the facility
or production lines within the facility to other uses.
The with-regulation prices of the relevant waste
treatment services are market-determined and are estimated
using a market model based on the principles of micro-
economics. To model the owners' decisions, the with-
regulation price of waste treatment services was compared to
the average total avoidable cost (ATAC) of providing these
services. Figure 6-5 shows the decision process. In this .
context, ATAC includes all costs that fall to zero when the
facility discontinues operations and reflects any post-closure
costs as well as the salvage value of assets. Debt
obligations, which must be met regardless of whether the
facility continues to operate, are not included in ATAC. If
the persistent with-regulation price is less than ATAC, the
firm maximizes its present value by discontinuing regulated
operations within the facility or closing the facility. This
decision is referred to as voluntary exit because owners of
the firm, as opposed to creditors, make the exit decision.
Exit may take the form of liquidation of assets, a distressed
sale of the facility to another firm, or conversion of the
facility or production lines within the facility to other
uses .
If price is greater than or equal to ATAC, the firm will
likely implement the cost-minimizing compliance option and
continue to operate the facility. As long as the firm
continues to meet its debt obligations, operations will
continue. However, if the firm cannot meet its interest
payments or is in violation of its debt covenants, the firm's
creditors take control of the exit decision and forced exit
may occur. If. the market value of debt (Dy) under continued
operations is greater than the liquidation value of debt (D^),
creditors will probably allow the facility to continue to
operate. Under these conditions, creditors may renegotiate
the terms of debt. Either way the owners will implement the
6-48
-------
profit-maximizing compliance option and continue to operate
the facility. If, however, the market value of debt under
continued operations is less than its liquidation value,
involuntary exit will result and the facility will discontinue
operations. Exit will likely take the form of liquidation of
assets or distressed sale of the facility.
In the decision-making process outlined above, current
owners either implement the profit-maximizing compliance
option and continue to operate the facility, discontinue the
regulated operations or close the facility voluntarily, or
close the facility involuntarily. The first two outcomes are
the result of operating decisions by the owners of the firm.
The decision to continue to operate may be accompanied by a
change in the cost of capital, capital structure, and
financial status of the firm. The market model described in
Section 6.3.1 projects the second decision identified above
(facility or product line closure). This decision will
certainly result in a change in the financial status of the
firm and may result in the financial failure of the firm. The
last outcome is the result of a decision by the firm's
creditors. This decision will result in a change in the
financial status of the firm and may result in financial
failure. Indeed, in the case of a single-facility firm, this
last outcome is synonymous with financial failure. The
impacts of the regulation evaluated in the following section
include the projected changes in the cost of capital and
capital structure, changes in financial status, and projected
financial failure for the potentially affected firms
identified for analysis.
6.5.2 Impacts of the Regulation
This analysis evaluated the change in financial status by
first projecting the change in the cost of capital and the
capital structure for potentially affected firms. Next, the
with-regulation financial ratios of potentially affected firms
were computed and compared to industry benchmarks and the
corresponding baseline ratios. (See Section 4.2 for a
6-49
-------
description of the financial ratios used in this analysis.)
Finally, the analysis projected financial failure due to the
regulation based on Z-score ratios.
Three firms are excluded from the distribution of impacts
presented in this section. These firms are single-facility
firms that own a facility projected to close because of the
regulatory impacts. As noted above, facility closure is
synonymous with firm financial failure for single-facility
firms. Thus, the projected with-regulation annual sales and
operating costs are zero. Estimation of with-regulation
capital structure, cost of capital, and financial ratios for
these firms is meaningless and, in some cases, impossible.
Consequently, the impacts presented in this section are based
on 385 of the 388 firms identified as potentially affected
firms for this analysis.
6.5.2.1 Changes in the Cost of Capital and Capital
Structure. Investments in pollution control equipment
required to comply with the regulation will potentially reduce
the debt capacity of the firm, change its capital structure,
and increase its cost of capital. This section describes the
framework used for projecting the impacts of the regulation on
the firm's capital structure and its cost of capital. In
addition, estimates of the change in firm-specific costs of
capital due to the regulation are presented.
In financial theory, the value of an investment is
measured as the present value of its future cash flows. The
cash flows associated with an investment in pollution control
equipment are generally negative. Thus, pollution control
investments tend to reduce the firm's value.* Furthermore,
""Reduce" here means reduce from what the firm's value would be
if there were no legal requirement to invest in pollution control
equipment. However, the promulgation of a regulation should trigger
a reassessment of the value of an affected firm's facilities. Thus.
if there is a regulation, and the alternative to control equipment
is facility shut-down, and shut-down would be very costly, then
investment in pollution control equipment probably would increase
the firm's value.
6-50
-------
pollution control investments generally reduce -the debt
capacity of potentially affected firms by reducing the firm's
profitability and, thus, the overall ability of the firm to
support debt service.96 The change in firm value can be
estimated using the following equation:
AV = K + I (R + 0)/(l+r) (6-5)
where
AV = the change in firm value,
K = the installed capital costs of the regulation,
R = the change in the firm's annual revenue stream,
0 = the change in the firm's annual operating cost cash
flows, and
r = the firm's WACC.
Table 6-13 reports the change in firm value estimated in this
manner. Firm value actually increases for some firms because
of an increase in their revenue stream that exceeds the costs
incurred because of the regulation. However, most firms
experience a reduction in value because of the regulation.
Firms may issue new debt or equity depending on the
magnitude of the compliance capital requirements relative to
the value of the firm's earnings. If an affected firm has no
unused debt capacity and is making no other investments
besides the investment in pollution control equipment, it
would be forced to retire existing debt in response to the
regulation to maintain its target capital structure. In
practice, however, firms will likely be carrying out other
investment and financing programs along with the pollution
control requirements. Rather than retiring existing debt, the
firm would change its financing mix to issue more equity and
less debt than otherwise. If an affected firm has unused debt
capacity, it will potentially use this capacity to finance the
required investment in pollution control equipment. However,
using this debt capacity potentially displaces investment in
other assets that increase the firm's value rather than
decrease it.
6-51
-------
TABLE 6-13. PROJECTED CHANGE IN FIRM VALUE
Regulatory Alternative
Firm size in annual receipts (S10f/year)
Over
$0 to $6 $6 to $60 $60 to $1,000 $1,000
Reg Alt 1
Facilities with costs
Mean
Standard deviation
Quartiles
Upper
Median
Lower
Reg Alt 2
Facilities with costs
Mean
Standard deviation
Quartiles
Upper
Median
Lower
Reg Alt 3
Facilities with costs
Mean
Standard deviation
Quart iles
Upper
Median
Lower
Reg Alt 4
Facilities with costs
Mean
Standard deviation
Quartiles
Upper
Median
Lower
Reg Alt 5
Facilities with costs
Mean
Standard deviation
Quartiles
Upper
Median
Lower
9
7,049
13,368
2,149
707
60
108
-38,219
165,482
5,217
-1,833
-60,062
108
-162,608
302,869
5,700
-2,795
-343,624
108
-214,563
432,848
3,183
-8,274
-348,660
108
-214,733
432,835
3,183
-8,465
-348,663
14
-13,982
84,772
13,440
7,563
497
86
141,072
941,356
73,374
468
-89,213
88
57,929
920,687
60,457
96
-107,719
90
-3,901
942,791
44,545
-5,265
-137,244
90
-38,401
803,897
44,545
-5,273
-137,244
12
-4,897
105,857
22,224
1,487
6
72
-5,249,574
33,962,759
231,918
-172,409
-202,629
74
-5,405,348
33,466,742
150,978
-499,353
-662,328
76
-13,780,000
101,650,000
99,889
-623,067
-816,524
76
-13,930,000
101,640,000
99,889
-623,067
-816,524
7
-107,280
322,368
4,862
2,213
160
93
-1,617,476
11,081,905
-3,815
-196,673
-393,382
96
-3,943,032
19,989,673
-3,281
-652,403
-793,842
98
-4,527,209
22,768,127
-3,817
-801,705
-1,056,274
98
-4,719,627
23,673,921
-7,508
-805,129
-1,562,243
6-52
-------
For this analysis, it was assumed that a firm has access
to capital from three sources: debt, new internal equity
(current portion of retained earnings), and new external
equity. To project the financing mix used for pollution
control investments, EPA must make assumptions regarding the
firm's capital structure policy, dividend policy, and the
relative cost of capital raised from each of the three
sources.
Responses to the regulatory requirements hinge on the
cost of new, or marginal, capital. Thus, the relevant costs
of capital are not historical but rather the marginal costs of
new funds that must be raised to finance the control
equipment. Capital structure theory holds that a specific
breakpoint exists in the firm's marginal cost of capital (MCC)
schedule as shown in Figure 6-6. The point labeled "B" in the
figure illustrates the increase in the firm's WACC when the
firm raises new external equity to meet its capital require-
ments while maintaining an optimal capital structure. This
breakpoint is referred to as the retained earnings breakpoint
in financial literature97 and is identified using the following
equation:
WACC
0 B Dollars of New Capital
Figure 6-6. Marginal cost of capital schedule.
6-53
-------
B = RE/S (6-6)
where
B = the retained earnings breakpoint,
RE = the current year's retained earnings, and
S = the share of total firm value represented by
equity.
The breakpoint is based on several assumptions:
• The firm's current capital structure is optimal, and
new capital will be raised if necessary to maintain
this optimal capital structure.
• New equity could come from one of two sources: the
part of this year's profits that management decides to
retain (internal) or the sale of new stock (external).
• If the cost of equity obtained through retained
earnings = ke, the cost of equity obtained through the
issuance of new stock is ke + flotation (transaction)
costs.
The MCC schedule jumps at the point where the firm must raise
new external equity capital to meet its investment
requirements. Table 6-14 shows the number and share of firms
in each size category with capital costs of compliance that
exceed the retained earnings breakpoint. An estimated 20 to
40 percent of the firms projected to incur capital costs
because of the regulation will incur costs above their
retained earnings breakpoint. To maintain their current
capital structure, these firms must issue new external equity
to finance the compliance capital costs.
Empirical evidence shows that capital structure can vary
widely from the theoretical optimum and yet have little impact
on the value of the firm.98 Thus, firms typically focus on a
"prudent" level of debt rather than on setting a precise
optimal level. Brigham and Gapinski define a prudent level of
debt as one that captures most of the (tax) benefits of debt
financing yet keeps financial risk at a manageable level,
ensures financing flexibility, and maintains a favorable
credit rating. For this analysis, it was assumed that the
industry benchmark reflecting the 75th percentile for the debt
6-54
-------
TABLE 6-14. NUMBER OF FIRMS WITH COMPLIANCE CAPITAL COSTS
(CC) ABOVE THE RETAINED EARNINGS BREAKPOINT (B)
Regulatory Alternative
Reg
Alt I
Number with
Number with
Reg
Share
Alt 2
with
Number with
Number with
Reg
Reg
Reg
Share
Alt 3
Number
Number
Share
Alt 4
Number
Number
Share
Alt 5
Number
Number
Share
with
with
with
with
with
with
with
with
with
with
CC
CC > B
CC > B
CC
CC > B
CC > B
CC
CC > B
CC > B
CC
CC > B
CC > B
CC
CC > B
CC > B
Firm size
$0 to $6
3
1
33.33%
86
27
31.40%
88
35
39.7%
93
37
39.78%
93
38
40.86%
in annual receipts ($106/year)
$6 to $60
6
2
33.33%
65
12
18.46%
69
16
23.19%
71
16
22.54%
71
16
22.54%
$60 to
$1,000
4
2
50.00%
66
16
24.24%
69
20
28.99%
73
20
27.74%
73
21
28.77%
Over
$1,000
1
0
0%
84
26
30
88
28
31
92
32
34
92
32
34
.95%
.18%
.78%
.78%
6-55
-------
ratio (corresponding to the lower quartile debt ratio in
Appendix H) represents the upper bound of prudent debt
financing.
The debt ratio is similar to other debt management
financial ratios in that it is used to indicate the degree to
which a firm uses debt (versus equity) to finance operations.
The debt ratio is computed as total liabilities divided by
total assets. The 75th percentile debt ratio for firms in the
Refuse Systems industry (SIC 4953) is 68 percent. Thus, it
was assumed that firms in this SIC will seek to maintain a
level of debt that is equal to or below 68 percent of the
firm's with-regulation value. This assumption has several
implications for modeling decisions regarding the financing
mix chosen to cover the compliance capital costs. First, it
was assumed that firms with a baseline debt-to-firm value
ratio greater than the industry benchmark use equity financing
exclusively. Furthermore, this analysis assumes that the
maximum portion of compliance capital costs financed through
debt is computed based on the following formula:
D^ = [(D/V)LQ • (VB + AV)] - DB (6-7)
where
= the maximum level of new debt used to finance
compliance capital costs,
(D/V)LQ = the industry-specific lower quartile debt
ratio,
VB = the baseline value of the firm,
AV = the change in the value of the firm because of
regulation, and
DB = the baseline book value of long-term debt.
The baseline value of the firm (VB) is computed as the sum of
the market value of equity (measured as average share price
times average number of shares outstanding) and the book value
of long-term debt. Where data on share prices and number of
shares outstanding are not available, the value of equity is
measured as total assets minus total liabilities.
6-56
-------
Equation (6-7) above defines the estimated maximum amount
of new debt issued to cover the compliance capital costs.
However, a firm may employ a level of new debt that is less
than DMax in response to the regulation. In particular, where
the firm's baseline D/V ratio is less than the (D/V)LQ ratio,
it was assumed that the firm issues new debt up to a level
equivalent to its baseline D/V ratio times the installed
capital cost. Thus the share of the compliance capital costs
financed through debt does not exceed the firm's baseline D/V
ratio and may be less than the D/V ratio where the product of
D/V and the compliance capital costs exceed Dj^.
Compliance capital costs that are not financed using debt
are financed using internal or external equity funds.
External equity refers to newly issued equity shares.
Internal equity includes the current portion of the firm's
retained earnings that are not distributed in the form of
dividends to the owners (shareholders) of the firm. This
analysis assumed that the firm retains 100 percent of its
earnings unless data on dividends paid out are available.
Because data on dividends are generally available only for
large, publicly traded firms, the analysis implicitly assumed
that firms that are not publicly traded and small firms retain
a larger share of their earnings. This assumption is not
unreasonable because firms that are not publicly traded and
small firms, in particular, do not typically have a consistent
dividend payout policy. Thus, these firms are more likely to
retain a larger share of their earnings when faced with
regulatory cost than are publicly traded firms that are
potentially concerned about the signal that a change in
dividend policy sends to investors. This situation is
particularly true when the cost of new equity is higher than
the cost of current retained earnings due to flotation costs
(see Figure 6-6).
Flotation costs associated with new equity increase the
effective cost of these funds. It was assumed that flotation
costs for new equity average approximately 1 percent."
Because new equity is more costly than retained earnings, it
was assumed that firms use all of their available internal
6-57
-------
equity capital to finance the compliance capital costs before
issuing new equity. Figure 6-7 shows the projected share of
capital costs financed through debt, retained earnings, and
new equity.
As companies raise larger and larger sums of capital
during a given time period, the costs of both debt and equity
components may begin to rise, and as this occurs, the WACC
also rises. This increase in the cost of capital is shown as
an upward slope beyond the RE breakpoint in the hypothetical
marginal cost of capital schedule contained in Figure 6-6.
This upward sloping cost curve reflects the assumption that
investors' demand for securities is downward sloping. An
estimated elasticity of demand is required to project the
change in the cost of equity resulting from an increase in the
number of shares issued. However, estimating company-specific
elasticities is beyond the scope of this analysis. This
analysis assumed that the price elasticity of demand for an
individual firm's securities is 0.5. In other words, for each
1 percent increase in the quantity of shares outstanding, the
price of each share decreases by 0.5 percent. This decrease
in price is reflected in a corresponding increase in the
required return, or cost, of equity.
Under the assumptions regarding capital structure policy,
the share of debt in the firm's capital structure does not
change appreciably. Consequently, EPA does not project a
change in the cost of debt due to the regulation. Using the
baseline debt and equity weights (which are assumed to be the
firm's target weights), the baseline cost of debt, and the
with-regulation cost of equity, EPA computed a with-regulation
WACC.
The estimated baseline and with-regulation WACC are
reported in Table 6-15. Table 6-16 reports the estimated
change in the cost of capital due to the regulation. The
estimated average change in WACC is less than 1 percentage
point for firms in the three largest size categories under all
regulatory alternatives. The estimated average change in WACC
for firms in the smallest size category ranges from less than
6-58
-------
0
OJ
O
o
1C
o
4J
O
o
o
0
AJ
o
o
o
0)
o
y/////////.
y/////////.
80%
100%
Projected Share of Compliance Capital
Costs Financed Through Retained Earnings
Projected Share of Compliance Capital
Costs Financed Through Debt
Projected Share of Compliance Capital
Costs Financed Through New Equity
Figure 6-7. Projected share of compliance capital
costs by type of financing.
6-59
-------
TABLE 6-15. ESTIMATED WITH-REGULATION WACC
Firm size in annual receipts ($106/year)
Regulatory Alternative
Facilities with costs
Reg Alt 1
Mean (percent)
Standard deviation
(percentage points)
Quartiles (percent)
Upper
Median
Lower
Reg Alt 2
Mean (percent)
Standard deviation
(percentage points)
Quartiles (percent)
Upper
Median
Lower
Reg Alt 3
Mean (percent)
Standard deviation
(percentage points)
Quartiles (percent)
Upper
Median
Lower
Reg Alt 4
Mean (percent)
Standard deviation
(percentage points)
Quartiles (percent)
Upper
Median
Lower
Reg Alt 5
Mean (percent)
Standard deviation
(percentage points)
Quartiles (percent)
Upper
Median
Lower
$0 to $6
9.91
1.96
10.30
9.63
8.75
12.20
7.53
11.77
9.95
9.05
14.98
15.09
12.34
10.17
9.05
15.74
16.94
12.54
10.17
9.05
15.74
16.94
12.54
10.17
9.05
$6 to $60
9.70
1.81
10.30
9.55
8.69
9.75
1.83
10.30
9.56
8.69
9.81
1.88
10.30
9.59
8.69
9.83
1.89
10.31
9.59
8.69
9.83
1.89
10.31
9.59
8.69
$60 to
$1,000
9.05
1.87
10.16
9.27
8.17
9.14
1.80
10.16
9.33
8.27
9.19
1.81
10.21
9.33
8.27
9.19
1.81
10.21
9.33
8.27
9.20
1.81
10.21
9.33
8.35
Over
$1,000
8.30
1.85
9.32
8.22
6.87
8.43
1.88
9.38
8.42
6.87
8.44
1.88
9.38
8.42
6.87
8.46
1.88
9.38
8.42
6.87
8.46
1.88
9.38
8.42
6.87
6-60
-------
TABLE 6-16. ESTIMATED CHANGE IN THE COST OF CAPITAL
Regulatory Alternative
Firm size in annual receipts ($106/year
$0 to $6 $6 to $60
$60 to
$1,000
Over
$1,000
Facilities with costs 110
Reg Alt 1
Mean (percent) 0.03
Standard deviation 0.30
(percentage points)
Quartiles (percent)
Upper 0
Median 0
Lower 0
Reg Alt 2
Mean (percent) 2.32
Standard deviation 7.18
(percentage points)
Quartiles (percent)
Upper 0
Median 0
Lower 0
Reg Alt 3
93
0.02
0.14
0
0
0
0.08
0.24
0
0
0
80
0.02
0.12
0
0
0
0.10
0.24
105
0
0
0
0
0
0.13
0.25
0
0
0
Mean (percent)
Standard deviation
(percentage points)
Quartiles (percent)
Upper
Median
Lower
Reg Alt 4
Mean (percent)
Standard deviation
(percentage points)
Quartiles (percent)
Upper
Median
Lower
Reg Alt 5
Mean (percent)
Standard deviation
(percentage points)
Quartiles (percent)
Upper
Median
Lower
5.10
14.89
1.38
0
0
5.86 .
16.75
1.73
0
0
5.86
16.75
1.73
0
0
0.14
0.37
0
0
0
0.16
0.41
0
0
0
0.16
0.41
0
0
0
0.15
0.31
0.01
0
0
0.16
0.32
0.01
0
0
0.17
0.33
0.04
0
0
0.14
0.26
0
0
0
0.16
0.27
0.38
0
0
0.16
0.27
0.38
0
0
6-61
-------
1 percentage point under RA1 to approximately 6 percentage
points under RA5.
6.5.2.2 Changes in Financial Status. Financial ratio
impacts provide a measure of the change in financial status
due to the regulation. To compute the with-regulation
financial ratios, pro-forma income statements and balance
sheets reflecting the with-regulation condition of affected
firms were developed based on projected regulatory cost
impacts (including compliance costs and any change in baseline
operating costs due to a change in output level) and revenue
impacts (based on the with-regulation price and quantity
projected using the market model). Table H-6 in Appendix H
shows the adjustments made to the baseline financial
statements to develop the with-regulation financial statements
used for this analysis.
Profitability is the most commonly used measure of the
firm's performance. Three profitability measures were
estimated for this analysis: ROS, ROE, and ROA. Each of
these measures uses net profit as the numerator of the ratio,
and high values are unambiguously preferred over low values.
Changes in net profit arise from the combination of the change
in annual revenue and the change in costs. The change in
costs includes any reductions in baseline operating costs due
to a reduction in the quantity of waste treated, increased
operating costs resulting from regulatory requirements, a
depreciation expense associated with the pollution control
equipment, and any interest expense resulting from the
regulation. The depreciation expense is computed based on an
assumed 10 percent depreciation allowance (see Appendix H).
For most of the firms in this analysis, profits either remain
unchanged (no revenue or cost impacts) or decrease in response
to the regulation. For a few firms, however, profits actually
increase in response to the regulation. Profits increase when
positive revenue impacts (price increases that more than
offset the quantity decreases) exceed any cost impacts.
The regulatory alternatives may also affect the denomi-
nator of the profitability ratios. Sales (in the ROS ratio)
may increase or decrease, depending on the relative magnitude
6-62
-------
of the price and quantity effects. Assets.increase for those
firms that must purchase control equipment and remain
unchanged for the balance of the firms. Equity either remains
unchanged (for firms that do not purchase control equipment)
or increases (for firms that do purchase control equipment).
Equity is measured as total assets less total liabilities.
Total assets increase by an amount equal to the installed
capital costs of the control equipment. However, total
liabilities only increase by the portion of the capital costs
financed through debt. All else being equal, the increase in
equity or assets results in a lower profitability ratio.
The baseline and with-regulation profitability measures
are reported in Tables 6-17 through 6-19. Mean values are
considerably lower than corresponding median values reported
for firms in the two middle size categories. This difference
is due to a small number of firms in each of these size
categories that report large losses in the baseline. The
presence of these "outlier" firms makes the median values a
better measure of central tendency than the mean values.
Under each of the regulatory alternatives, profitability
ratios decline from baseline levels for firms in the smallest
size category. Profitability ratios for larger firms are
generally unchanged from baseline or only slightly lower due
to regulation. Thus, the regulation is likely to have the
greatest impact on small firms. However, small firms have the
highest baseline profitability ratios. Although their
profitability is eroded somewhat because of the regulation,
small firms still have higher profitability ratios on average
than the larger firms in this analysis even with the
regulation.
Figures 6-8 through 6-13 show the share of firms whose
profitability ratios are below the benchmarks for their
industry. Compared to firms in the three largest size
categories, a larger proportion of small firms shift below the
industry benchmarks as a result of the regulation. However, a
smaller proportion of these small firms are below their
industry benchmarks in the baseline. Consequently, even with
6-63
-------
TABLE 6-17. BASELINE AND WITH-REGULATION FINANCIAL RATIO:
RETURN ON SALES100"107
Firm size in annual
Regulatory Alternative
and statistic
Baseline
Mean (percent)
Median (percent)
Reg Alt 1
Mean (percent)
Median (percent)
Reg Alt 2
Mean (percent)
Median (percent)
Reg Alt 3
Mean (percent)
Median (percent)
Reg Alt 4
Mean (percent)
Median (percent)
Reg Alt 5
Mean
Median
$0 to $6
4
5
4
5
3
5
2
4
2
4
2
4
.2
.5
.2
.5
.7
.1
.6
.3
.2
.2
.2
.2
$6 to
-12
3
-12
3
-12
3
-12
3
-12
3
-12
3
$60
.4
.3
.4
.3
.1
.7
.1
.8
.1
.9
.1
.9
receipts (
$60 to
$1,000
-21
3
-21
3
-21
3
-21
3
-21
3
-21
3
.4
.2
.4
.2
.4
.2
.4
.2
.6
.2
.6
.2
$106/year)
Over
$1,000
0
3
-
0
3
0
3
0
3
0
3
0
3
.0
.5
.0
.5
.0
.5
.0
.5
.0
.5
.0
.5
Notes:
1. The return on sales ratio is a measure of a firm's
profitability and is computed by dividing net income by
sales revenue. A value of 10 percent indicates that net
income is equal to 10 percent of sales. Negative values
indicate net losses.
2. High ratios indicate that the firm is operating efficiently.
6-64
-------
TABLE 6-18. BASELINE AND WITH-REGULATION FINANCIAL RATIO:
RETURN ON EQUITY108"115
Firm size in annual receipts ($106/year)
Regulatory Alternative
and statistic
Baseline
Mean (percent)
Median (percent)
Reg Alt 1
Mean (percent)
Median (percent)
Reg Alt 2
Mean (percent)
Median (percent)
Reg Alt 3
Mean (percent)
Median (percent)
Reg Alt 4
Mean (percent)
Median (percent)
Reg Alt 5
Mean (percent)
Median (percent)
$60 to
$0 to $6 $6 to $60 $1,000
41.
20.
41.
20.
38.
14.
35.
13.
34.
13.
28.
13.
9
4
5
4
3
8
8
7
5
5
1
5
-61
14
-60
14
-56
14
-51
13
-50
13
-49
13
.4
.4
.8
.4
.0
.3
.4
.9
.2
.7
.5
.7
-55
9
-53
9
-53
9
-53
9
-53
9
-53
9
.9
.5
.8
.4
.8
.4
.5
.3
.5
.1
.6
.1
Over
$1,000
2
9
2
9
2
9
2
9
2
9
2
9
.1
.9
.0
.8
.0
.8
.0
.8
.0
.8
.0
.8
Notes:
1. The return on equity ratio is a measure of a firm's
profitability and is computed by dividing net income by
owner's equity. A value of 20 percent indicates that net
income is equal to 20 percent of owner's equity. Negative
values indicate net losses.
2. High ratios indicate that the firm is operating efficiently.
6-65
-------
TABLE 6-19. BASELINE AND WITH-REGULATION FINANCIAL RATIO:
RETURN ON ASSETS116"123
Firm size in annual receipts ($106/year)
Regulatory Alternative
and statistic
Facilities with costs
Baseline
Mean (percent)
Median (percent)
Reg Alt 1
Mean (percent)
Median (percent)
Reg Alt 2
Mean (percent)
Median (percent)
Reg Alt 3
Mean (percent)
Median (percent)
Reg Alt 4
Mean (percent)
Median (percent)
Reg Alt 5
Mean (percent)
Median (percent)
$0
13
11
13
11
10
9
10
9
9
8
9
8
to $6
110
.1
.0
.1
.0
.9
.8
.1
.1
.5
.6
.5
.6
$60 to
$6 to $60 $1,000
-6
7
-6
7
-6
7
-6
7
-6
7
-6
7
93
.4
.3
.4
.3
.5
.4
.4
.4
.4
.2
.4
.2
-11.
5.
-11.
5.
-11.
5.
-11.
5.
-11.
5.
-11.
5.
80
1
8
1
8
2
8
2
8
3
6
3
6
Over
$1,000
105
1
3
1
3
1
3
1
3
i_
3
1
3
.1
.5
.1
.5
^
.5
.1
.5
.1
.5
.1
.5
Notes:
1. The return on assets ratio is a measure of a firm's
profitability and is computed by dividing net income by
total assets. A value of 15 percent indicates that net
income is equal to 15 percent of total assets. Negative
values indicate net losses.
2. High ratios indicate that the firm is operating efficiently.
6-66
-------
100%
60% ••
60% ••
40% ••
12345
12345
20%
$0 to $6 $6 to $60 $60 to $1,000 Over $1,000
Firm Size in Annual Receipts ($106/year)
Figure 6-8. Percentage of firm financial ratios equal to
or below the industry lower quartile ratio: return on sales.
100%
80% ••
60%
40%
20%
$0 to $6 $6 to $60 $60 to $1,000 Over $1,000
Firm Size in Annual Receipts ($106/year)
Figure 6-9. Percentage of firm financial ratios equal to
or below the industry median quartile ratio: return on sales,
Notes for Figures 6-8 and 6-9:
1. The ROS ratio is a measure of a firm's profitability. It is the ratio of a
company's net income to its total sales, expressed as a percentage. For
example, a value of 6.5 indicates that a company's net income is equal to 6.5
percent of its total sales. A high ROS value is preferable to a lower value.
2. Each company's ROS ratio is compared to the D&B published median and lower
quartile benchmarks for companies sharing the same SIC code. If the SIC code
is not know, the company ratio is compared to the benchmark ratios for SIC code
4953: Refuse Systems.
6-67
-------
100%
80% ••
60% ••
40% ••
20% ••
12345 12345
4 5
$0 to $6 $6 to $60 $60 to $1,000 Over $1,000
Firm Size in Annual Receipts ($106/year)
Figure 6-10. Percentage of firm financial ratios equal to
or below the industry lower quartile ratio: return on equity,
100%
80% ••
60% ••
40% ••
20%
$0 to $6 $6 to $60 $60 to $1,000 Over $1,000
Firm Size in Annual Receipts ($106/year)
Figure 6-11. Percentage of firm financial ratios equal to
or below the industry median quartile ratio: return on equity.
Notes for Figures 6-10 and 6-11:
1. The ROS ratio is a measure of a company's profitability. It is the ratio of a
company's net income to its total net worth, expressed as a percentage. For
example, a value of 3.9 indicates that a company's net income is equal to 3.9
percent of its total net worth. A high ROS value is preferable to a lower
value.
2. Each company's ROS ratio is compared to the D&B published median and lower
quartile benchmarks for companies sharing the same SIC code. If the SIC code
is not know, the company ratio is compared to the benchmark ratios for SIC code
4953: Refuse Systems.
6-68
-------
100%
80% ••
60% ••
40% ••
20%
45 12345
12345
12345
SO to $6 $6 to $60 $60 to $1.000 Over $1,000
Firm Size in Annual Receipts ($106/year)
Figure 6-12. Percentage of firm financial ratios equal to
or below the industry lower quartile ratio: return on assets,
100%
80% ••
60% --
40% •-
20%
$0 to $6 $6 to $60 $60 to $1,000 Over $1,000
Firm Size in Annual Receipts ($106/year)
Figure 6-13. Percentage of firm financial ratios equal to
or below the industry median quartile ratio: return on assets.
Notes for Figures 6-12 and 6-13:
1. The ROS ratio is a measure of a company's profitability. It is the ratio of a
company's net income to its total assets, expressed as a percentage. For
example, a value of 4.3 indicates that a company's net income is equal to 4.3
percent of its total assets. A high ROS value is preferable to a lower value.
2. Each company's ROS ratio is compared to the D&B published median and lower
quartile benchmarks for companies sharing the same SIC code. If the SIC code
is not know, the company ratio is compared to the benchmark ratios for SIC code
4953: Refuse Systems.
6-69
-------
the regulation, small firms tend to have better profitability
ratios on average than larger firms.
6.5.2.3 Projected Financial Failure. With-regulation Z-
scores were computed to assess the probability that the
regulation will result in financial failure or bankruptcy for
potentially affected firms. The baseline analysis estimated
that approximately 23 out of 154 firms are likely to
experience some form of financial failure. No additional
financial failures resulting from the regulation are projected
for these 154 firms. However, this does not necessarily mean
that none of the potentially affected firms will experience
financial failure. Of particular concern to EPA are the small
firms identified in this analysis. The financial ratios
estimated above indicate that small firms may be more affected
by the regulation than larger firms. However, data were
sufficient to compute Z-scores for only 11 of the 110 small
firms in this analysis.
6.6 INITIAL REGULATORY FLEXIBILITY ANALYSIS
The Regulatory Flexibility Act of 1980 (RFA) requires
that Federal agencies consider whether regulations they
develop will affect small entities (which may include
nonprofit organizations, small governmental jurisdictions, and
small businesses).124 If the proposed rule is likely to have a
significant adverse economic impact on a substantial number of
small entities, a Regulatory Flexibility Analysis is required.
The Act allows some flexibility in defining small entities and
determining what a substantial number and significant impact
are.
Small businesses are identified by Small Business
Administration (SBA) general size standard definitions. For
SIC code 4953, Refuse Systems, small business concerns are
those receiving less than $6 million/year, averaged over the
most recent 3 fiscal years (Code of Federal Regulation, 1991).
Small government entities are defined in the RFA as those with
populations less than 50,000.
6-70
-------
The EPA (1982) provides guidelines for determining when a
"substantial number" of these small entities have been
"significantly affected." This EPA guidance states that a
"substantial number" is "more than 20 percent of these (small
entities) affected for each industry the proposed rule would
cover." However, each office may develop its own criterion
for defining a substantial number.
Under the RFA, for a rule to be proposed, EPA must
prepare an initial Regulatory Flexibility Analysis or certify
that the proposed rule is not expected to exert "a significant
economic impact on a substantial number of small entities."
In keeping with this requirement, the following sections
identify potentially affected small entities, report the
distribution of impacts across affected entities of all sizes.
and identify mitigating measures considered for small
entities.
6.6.1 Potentially Affected Entities
The impacts of the regulation may be direct or indirect
in nature. Direct impacts include impacts on the owners of
OWR facilities. Indirect impacts of the regulation include
impacts on consumers of the services offered by OWR facilities
(generators of hazardous waste) and suppliers of equipment and
services to these facilities. Hazardous wastes are generated
during the production process for many intermediate and final
products. A regulation that increases the costs of waste
disposal may increase the cost of producing these products.
However, projecting the impacts on all generators of hazardous
waste is beyond the scope of this analysis. In addition,
firms that supply services and equipment to potentially
affected entities but do not own a plant may actually benefit
from the regulation because demand for air pollution control
technology and equipment increases. Consequently, this
analysis is limited to directly affected entities.
Directly affected entities include governmental
jurisdictions and companies that own an OWR facility. Only 61
of the 725 potentially affected OWR facilities identified for
this analysis are owned by government entities. Almost all of
the government-owned facilities are owned by the Federal
6-71
-------
government, and none are owned by a small government entity.
Consequently, this analysis focuses on impacts incurred by
potentially affected companies. Directly affected companies
range from some of the largest companies in the U.S. to very
small, single-facility waste treatment firms.
The EPA specifically identified 388 firms that own 621
potentially affected OWR facilities. These 388 firms include
110 small businesses that own 112 OWR facilities. Excluded
from this analysis, however, are the following facilities:
• facilities that treat only nonhazardous waste and the
entities that own them and
• facilities that treat only on-site wastes.
The size exemption, in particular, potentially reduces the
share of small potentially affected entities that actually
incur costs due to the regulation. Because of resource
constraints, data required to identify all potentially
affected facilities and firms, including those that treat only
nonhazardous wastes, are below the HAP emission criterion, or
treat only on-site wastes, were not collected. Consequently,
the number of potentially affected entities and the share of
small entities that incur an economic impact are unknown. The
distribution of impacts presented in the following section is
based on the 388 firms identified for this analysis.
6.6.2 Distribution of Impacts
Affected entities typically incur two types of costs
because of the regulation: capital and operating. The
capital cost is an initial lump sum associated with purchasing
and installing pollution control equipment. Operating costs
are the annually recurring costs including costs associated
with operation and maintenance of the control equipment,
personnel training costs, emission monitoring costs, and
reporting and recordkeeping costs. Firms may elect to secure
a loan or redirect funds from other uses to cover the initial
and recurring costs. Part or all of the increase in costs may
be passed along to customers in the form of increased prices.
Directly affected companies face different prevailing
economic and financial conditions, and these differing
6-72
-------
conditions lead to different burdens. For example, firms can
experience different degrees of effects because of differences
in their cost structures, tax rates, technologies, past
investments in air pollution control equipment, size, and
degree of horizontal or vertical integration. Furthermore,
differences in local market conditions and contractual
arrangements, financial status, and method of financing result
in differing levels of impacts.
EPA provides guidelines for defining a "significant
economic impact." Impacts may be considered significant
whenever any of the following criteria are satisfied:
• annual compliance costs increase total costs of
production for small entities for the relevant process
or product by more than 5 percent;
• compliance costs as a percentage of sales for small
entities are at least 10 percent higher than
compliance costs as a percentage of sales for large
entities;
• capital costs of compliance represent a significant
portion of capital available to small entities,
considering internal cash flow plus external financing
capabilities; and
• the requirements of the regulation are likely to
result in closures of small entities.
This analysis computed the distribution of impacts on
companies of all sizes using the measures described above.
Annual compliance costs as a percentage of baseline
production costs were computed using two alternative methods
to determine whether the first criterion identified above is
satisfied. Under both methods, annual compliance costs were
computed as the sum of annualized capital costs of compliance
and annual operating costs of compliance. Capital compliance
costs were annualized using the estimated company-specific
with-regulation WACC over a 20-year time horizon. Annual
compliance costs computed in this manner were then divided by
two different estimates of the relevant baseline production
costs. Under the first method, annual compliance costs were
first divided by the baseline waste treatment production
costs. This quotient was then multiplied by 100 to present
6-73
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annual compliance costs as a percentage of baseline waste
treatment production costs. However, it may be argued that
the relevant process or product is broader than waste
treatment alone, particularly for companies that treat waste
on a noncommercial basis. For example, for companies that
treat waste generated as a result of a production process such
as chemical manufacturing, the relevant measure of production
costs should potentially include total production costs.
Therefore, under the second method, annual compliance costs as
a percentage of baseline production costs were computed using
total baseline production costs—not just waste treatment
costs.
Table 6-20 reports annual compliance costs as a
percentage of baseline waste treatment production costs. In
reporting the distribution of impacts, this analysis excluded
the three single-facility companies for which plant closure is
projected. Furthermore, companies that are not projected to
incur any compliance costs were also excluded. Consequently,
the number of observations differs by regulatory alternative
depending on the number of firms actually affected. Average
impacts range from less than 4 percent under RAl to more than
100 percent under RA5. The greatest impacts are incurred by
firms in the two middle size categories ($6 million to $1
billion in annual revenues). Under RAl, only two companies
are projected to incur compliance costs that will increase
their baseline waste treatment costs by more than 5 percent.
This number jumps to over 100 under the other regulatory
alternatives.
Table 6-21 reports annual compliance costs as a
percentage of total baseline production costs. If the
relevant measure of baseline costs is total costs of
production rather than waste treatment costs, the numbers are
significantly lower. Impacts average less than 1 percent for
large firms identified for this analysis. This percentage
compares to impacts for small firms that range from
approximately 4 percent under .RAl to nearly 270 percent under
RA4 and RA5. Virtually all of the firms projected to incur
annual compliance costs totaling more than 5 percent of their
6-74
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TABLE 6-20.
ANNUAL COMPLIANCE COSTS AS A PERCENTAGE OF
BASELINE WASTE TREATMENT COSTS
Firm size in annual receipts
($106/year)
Regulatory Alternative
and statistic
Reg Alt 1
Number with costs
Number >5%
Mean (percent)
Standard deviation
(percentage points)
Quartiles (percent)
Upper
Median
Lower
Reg Alt 2
Number with costs
Number >5%
Mean (percent)
Standard deviation
(percentage points)
Quartiles (percent)
Upper
Median
Lower
Reg Alt 3
Number with costs
Number >5%
Mean (percent)
Standard deviation
(percentage points)
Quartiles (percent)
Upper
Median
Lower
Reg Alt 4
Number with costs
Number >5%
Mean (percent)
Standard deviation
(percentage points)
Quartiles (percent)
Upper
Median
Lower
$0 to
$6
3
1
2.19
3.79
6.57
0.00
0.00
85
26
22.99
117.95
7.53
1.56
0.30
87
30
124.09
702.47
9.62
1.65
0.30
92
35
160.11
936.81
12.60
2.18
0.52
$6 to
$60
7
1
3.05
5.61
4.81
0.04
0.00
66
27
152.20
1,034.91
11.95
1.59
0.37
70
29
482.37
3,350.76
13.35
1.78
0.35
• 73
33
571.51
4,049.95
19.74
2.56
0.42
$60 to
$1,000
4
0
0.05
0.09
0.10
0.00
0.00
66
25
82.34
543.05
11.88
1.64
0.16
69
31
248.22
1,765.55
35.49
1.88
0.14
73
33
288.54
2,118.54
35.26
2.29
0.25
Over
$1,000
1
0
1.60
N/A
N/A
1.60
N/A
84
30
28.65
142.77
3.78
0.47
0.03
88
27
90.76
464.97
8.19
1.23
0.06
92
31
107.20
561.53
8.20
0.96
0.07
(continued)
6-75
-------
TABLE 6-20. ANNUAL COMPLIANCE COSTS AS A PERCENTAGE OF
BASELINE WASTE TREATMENT COSTS (continued)
Firm size in annual receipts
($106/year)
Regulatory Alternative
and statistic
$0 to $6
$6 to
$60
$60 to
$1,000
Over
$1,000
Reg Alt 5
Number with costs 92 73
Number >5% 35 34
Mean (percent) 160.13 571.68
Standard deviation 936.81 4,049.99
(percentage points)
Quartiles (percent
73 92
34 33
288.71 107.79
2,118.51 561.43
Upper
Median
Lower
12.62
2.24
0.52
19.74
2.73
0.64
35.26
2.72
0.35
12.39
1.35
0.08
Notes
1.
Companies that are not projected to incur compliance costs
are excluded from the impact. Three single-facility firms
projected to incur a plant closure are also excluded.
Annual compliance costs are the sum of capital costs
annualized over a 20-year time horizon at an estimated
company-specific cost of capital and annual operating
costs.
Baseline waste treatment costs were estimated using
facility-level data.
The large difference between the estimated mean and median
values indicate the presence of "outlier" observations.
Thus, the median values are the preferred measure of
central tendency.
6-76
-------
TABLE 6-21.
ANNUAL COMPLIANCE COSTS AS A PERCENTAGE OF
BASELINE PRODUCTION COSTS
Firm size in annual receipts
($106/year)
Regulatory Alternative
and statistic
Reg Alt 1
Number with costs
Number >5%
Mean (percent)
Standard deviation
(percentage points)
Quartiles (percent)
Upper
Median
Lower
Reg Alt 2
Number with costs
Number >5%
Mean (percent)
Standard deviation
(percentage points)
Quartiles (percent)
Upper
Median
Lower
Reg Alt 3
Number with costs
Number >5%
Mean (percent)
Standard deviation
(percentage points)
Quartiles (percent)
Upper
Median
Lower
Reg Alt 4
Number with costs
Number >5%
Mean (percent)
Standard deviation
(percentage points)
Quartiles (percent)
Upper
Median
Lower
$0 to $6
3
1
3.40
5.86
10.17
0.03
0.00
85
18
37.69
192.97
2.87
0.59
0.13
87
24
207.97
1,110.02
8.17
0.52
0.13
92
27
268.34
1,474.83
8.13
0.67
0.26
$6 to
$60
7
0
0.16
0.29
0.23
0.00
0.00
66
0
0.22
0.50
0.24
0.10
0.01
70
1
0.42
1.13
0.37
0.16
0.01
73
1
0.55
1.49
0.51
0.21
0.02
$60 to
$1,000
4
0
0.01
0.01
0.01
0.01
0.01
66
1
0.32
2.03
0.03
0.01
0.00
69
1
0.34
1.99
0.07
0.03
0.00
73
1
0.87
6.39
0.08
0.03
0.01
Over
$1,000
1
0
0.01
N/A
N/A
0.01
N/A
84
0
O.QO
0.01
0.00
0.00
0.00
88
0
0.00
0.01
0.01
0.00
0.00
92
0
0.01
0.02
0.01
0.00
0.00
(continued)
6-77
-------
TABLE 6-21. ANNUAL COMPLIANCE COSTS AS A PERCENTAGE OF
BASELINE PRODUCTION COSTS (continued)
Firm size in annual receipts
($106/year)
Regulatory Alternative $6 to $60 to Over
and statistic $0 to $6 $60 $1,000 $1,000
Reg Alt 5
Number with costs 92 73 73 92
Number >5% 27 1 1 0
Mean (percent) 268.35 0.60 0.88 0.01
Standard deviation 1,474.83 1.71 6.39 0.02
(percentage points)
Quartiles (percent)
Upper
Median
Lower
8.13
0.67
0.26
0.58
0.22
0.03
0.08
0.03
0.01
0.01
0.00
0.00
Notes:
1. Companies that are not projected to incur compliance costs
are excluded from the impact. Three single-facility firms
projected to incur a plant closure are also excluded.
2. Annual compliance costs are the sum of capital costs
(annualized over a 20-year time horizon at an estimated
company-specific cost of capital) and annual operating
costs.
3 . Baseline production costs are the sum of costs of goods
sold and general operating expenses as reported in or as
estimated for the company-level financial statements.
6-78
-------
baseline production costs are small firms. Under RAl, only
one small firm has estimated annual compliance costs greater
than 5 percent of baseline total production costs. Under the
more stringent regulatory alternatives, this number jumps to
between 20 and 30. Only two large firms are projected to
incur compliance costs greater than 5 percent of baseline
production costs.
The second measure identified above is a relative measure
designed to compare the impacts for small entities to those
for larger entities. To facilitate the comparison of impacts
at large versus small firms, all firms contained in the three
largest size categories were grouped into one category of
firms with annual sales over $6 million. As for the previous
measure, relative impacts were evaluated using two methods.
First, annual compliance costs were computed as a percentage
of sales excluding firms that are not projected to incur
compliance costs. Annual compliance costs were then computed
as a percentage of annual sales for all firms regardless of
whether they incur costs.
Table 6-22 reports the distribution of impacts for only
those firms that are projected to incur compliance costs.
Table 6-23 reports the impacts for all firms identified for
this analysis. Under both measurement methods, average annual
compliance costs as a percentage of sales are significantly
higher for small firms than for large firms. Annual costs as
a percentage of sales average less than 1 percent for large
firms. This percentage compares to impacts ranging from about
4 percent under RAl to 175 percent under RA5 for small firms.
However, if median values are used to gauge impacts, the
absolute value of the impacts as well as the relative
differences in impacts for small versus large firms is not as
significant.
The criterion for significant impacts under the third
measure identified above is not as straightforward as the
criterion given for each of the first two measures. The
relevant measure of the "capital available" is not explicitly
stated in the guidance. Furthermore, no specific numerical
benchmark is provided to determine whether the capital costs
6-79
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TABLE 6-22. ANNUAL COMPLIANCE COSTS AS A PERCENTAGE OF
SALES: EXCLUDING FIRMS WITH ZERO COMPLIANCE COSTS
Regulatory Alternative and
statistic
Firm size in annual receipts
($106/year)
$0 to $6
Over $6
Reg Alt 1
Facilities with costs
Mean (percent)
Standard Deviation
(percentage points)
Quartiles (percent)
Upper
Median
Lower
Reg Alt 2
Facilities with Costs
Mean (percent)
Standard Deviation
(percentage points)
Quartiles (percent)
Upper
Median
Lower
Reg Alt 3
Facilities with Costs
Mean (percent)
Standard Deviation
(percentage points)
Quartiles (percent)
Upper
Median
Lower
Reg Alt 4
Facilities with Costs
Mean (percent)
Standard Deviation
(percentage points)
Quartiles (percent)
Upper
Median
Lower
3
2.07
3.57
6.20
0.02
0.00
85
24.59
135.18
1.56
0.37
0.08
87
135.77
774.02
4.40
0.37
0.08
92
175.06
1,028.03
4.66
0.48
0.15
12
0.07
0.16
0.03
0.00
0.00
216
0.11
0.00
0.04
0.00
0.72
227
0.16
0.80
0.06
0.01
0.00
238
0.28
2.23
0.09
0.01
0.00
(continued)
6-80
-------
TABLE 6-22. ANNUAL COMPLIANCE COSTS AS A PERCENTAGE OF
SALES: EXCLUDING FIRMS WITH ZERO COMPLIANCE COSTS
(continued)
Regulatory Alternative and
statistic
Firm size in annual receipts
($106/year)
$0 to $6
Over $6
Reg Alt 5
Facilities with costs
Mean (percent)
Standard Deviation
(percentage points)
Quartiles (percent)
Upper
Median
Lower
92
175.07
1,028.03
4.66
0.48
0.15
238
0.30
2.26
0.10
0.01
0.00
6-81
-------
TABLE 6-23. ANNUAL COMPLIANCE COSTS AS A PERCENTAGE OF
SALES: INCLUDING FIRMS WITH ZERO COMPLIANCE COSTS
Firm size in annual receipts
($106/year)
Regulatory Alternative and
statistic
$0 to $6
Over $6
Reg Alt 1
Facilities with costs
Mean (percent)
Standard deviation
(percentage points)
Quartiles (percent)
Upper
Median
Lower
Reg Alt 2
Facilities with costs
Mean (percent)
Standard deviation
(percentage points)
Quartiles (percent)
Upper
Median
Lower
Reg Alt 3
Facilities with costs
Mean (percent)
Standard deviation
(percentage points)
Quartiles (percent)
Upper
Median
Lower
Reg Alt 4
Facilities with costs
Mean (percent)
Standard deviation
(percentage points)
Quartiles (percent)
Upper
Median
Lower
107
0.06
0.00
0
0
0
107
19.53
120.75
0.74
0.14
0
107
110.40
699.21
2.56
0.15
0.01
107
150.51
954.47
3.22
0.35
0.05
278
0.003
0.04
0
0
0
278
0.08
0.06
0.02
0
0
278
0.13
0.72
0.04
0
0
278
0.24
2.07
0.06
0
0
(continued)
6-82
-------
TABLE 6-23. ANNUAL COMPLIANCE COSTS AS A PERCENTAGE OF
SALES: INCLUDING FIRMS WITH ZERO COMPLIANCE COSTS
(continued)
Regulatory Alternative and
statistic
Firm size in annual receipts
($106/year)
$0 to $6
Over $6
Reg Alt 5
Facilities with costs
Mean (percent)
Standard deviation
(percentage points)
Quartiles (percent)
Upper
Median
Lower
107
150.51
954.47
3.22
0.35
0.05
278
0.26
2.09
0.06
0
0
Notes :
1
Three single-facility
firms projected to
incur a plant
2.
closure are also excluded.
Annual compliance costs are the sum of annualized
capital costs (annualized over a 20-year time horizon at
an estimated company-specific cost of capital) and
annual operating costs.
6-83
-------
of regulation represent a "significant" portion of capital
available to the firm. One measure of the capital available
to companies is the retained earnings breakpoint described in
Section 6.5. Table 6-14 reports the number of companies with
capital compliance costs that exceed the retained earnings
breakpoint. Impacts reported in this table exclude firms that
do not incur any compliance capital costs. Between 20 and 50
percent of the firms with compliance capital costs have costs
that exceed the retained earnings breakpoint. However, these
firms represent less than 3 percent of all potentially
affected firms under RA1 and between 12 and 30 percent of all
potentially affected firms under the more stringent
alternatives. Small firms fare slightly worse than large
firms under all of the regulatory alternatives except RA1.
The final measure states that impacts are significant if
the proposed rule is likely to result in the closure of small
entities. In Section 6.4 of this report, EPA projects
facility closures in response to the requirements of the
regulation. A plant closure does not necessarily translate
into a financial failure for large, multi-facility companies.
However, for small, single-facility companies, plant closure
is likely to be synonymous with financial failure. No plants
are projected to close under RA1. However, 10 plants are
projected to close under each of the other regulatory
alternatives. Of these 10 plants, three are owned by small,
single-facility companies.
6.6.3 Mitigating Measures
The impacts reported in this section indicate that
businesses of all sizes will experience impacts because of the
regulation. However, the impacts on small businesses are
generally greater than the impacts on larger entities. The
EPA is particularly concerned about these impacts on small
entities. To address these concerns, measures designed to
mitigate the impacts on small entities are being considered.
First, the regulatory alternatives are based on emission
standards rather than design, equipment, work practice, or
operational standards. This reduces impacts by giving the OWR
facility owner/operator the freedom to use the least costly
6-84
-------
control equipment that will satisfy the requirements of the
regulation. Note that this measure potentially reduces
impacts at all potentially affected OWR facilities regardless
of the size of the facility.
In addition, EPA is considering exempting all area source
facilities from the emission requirements. Area sources are
facilities that emit less than 22.7 Mg (25 tons) of hazardous
air pollutants per year. Note that this measure would exempt
small facilities not small companies per se. Some small
facilities owned by large companies would be exempted.
However, company size is related to facility size. Although
some small facilities are owned by large companies, small
companies own small facilities without exception. If the EPA
exempts all area sources from the emission requirements, only
10 small business entities will incur costs beyond reporting
and recordkeeping costs. Furthermore, all of the small,
single-facility companies that are projected to close under
RA2 through RA5 would be exempt. Thus, this second measure
would effectively mitigate impacts at all but a few small
entities.
6-85
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97. Brigham, Eugene F., and Louis C. Gapenski. 1991.
Financial Management: Theory and Practice. 6th Ed.
Orlando, FL: The Dryden Press.
98.
99.
100.
101.
102.
Ref.
Ref.
Ref
Ref.
Ref.
97.
97.
6.
16.
15.
103. Ref. 17.
R-5
-------
104.
105.
106.
107.
108.
109.
110.
111.
112.
113.
114.
115.
116.
117.
118.
119.
120.
121.
122.
123.
124.
Ref. 18.
Ref. 4.
Ref. 41.
Ref. 25.
Ref. 6.
Ref. 16.
Ref. 15.
Ref. 17.
Ref. 18.
Ref. 4.
Ref. 41.
Ref. 25.
Ref. 6.
Ref. 16.
Ref. 15.
Ref. 17.
Ref. 23.
Ref. 4.
Ref. 41
Ref. 25
Ref. 2.
R-6
-------
APPENDIX A
LIST OF SIC CODES PROVIDED TO RESPONDENTS TO THE NATIONAL SURVEY
OF HAZARDOUS WASTE TREATMENT, STORAGE, DISPOSAL, AND RECYLCING
FACILITIES
-------
INSTRUCTIONS
APPENDIX STANDARD INDUSTRIAL
CLASSIFICATION (SIC) CODES
The following list of Standard Industrial Classificalion (SIC) Codes should be used to complete Questions 17
and 18 from Questionnaire A, "General Facility Information."
A-l
-------
INSTRUCTIONS
APPENDIX SIC CODES
SIC
Code Industry
SIC
Code Industry
Agricultural Production—Crops
0111 Wheat
0112 Rice
0115 Corn
0116 Soybeans
0119 Cash grains, nee
0131 Cotton
0132 Tobacco
0133 Sugar crops
0134 Irish potatoes
0139 Field crops, except cash grains, nee
0161 Vegetables and melons
0171 Berry crops
0172 Grapes
0173 Tree nuts
0174 Citrus fruits
0175 Deciduous tree fruits
0179 Fruits and tree nuts, nee
0181 Ornamental nursery products
0182 Food crops grown under cover
0189 Horticultural specialties, nee
0191 General farms, pnmanly crops
Agricultural Production—Livestock
0211 Beef cattle feedlots
0212 Beef cattle, except feedlots
0213 Hogs
0214 Sheep and goats
0219 General livestock, nee
0241 Dairy farms
0251 Broiler, fryer, and roaster chickens
0252 Chicken eggs
0253 Turkeys and turkey eggs
0254 Poultry hatcheries
0259 Poultry and eggs, nee
0271 Fur-bearing animals and rabbits
0272 Horses and other equines
0279 Animal specialties, nee
0291 General farms, primarily livestock
Agricultural Services
0711 Soil preparation services
0721 Crop planting and protection
0722 Crop harvesting
0723 Crop preparation services for market
0724 Cotton ginning
0729 General crop services
0741 Veterinary services, farm livestock
0742 Veterinary services, specialties
0751 Livestock services, except specialties
0752 Animal specialty services
0761 Farm tabor contractors
0762 Farm management services
0781 Landscape counseling and planning
0782 Lawn and garden services
0783 Ornamental shrub and tree services
Forestry
0811 Timber tracts
0821 Forest nurseries and seed gathering
0843 Extraction of pine gum
0849 Gathering of forest products, nee
0851 Forestry services
Fishing, Hunting, and Trapping
0912 finfish
0913 Shellfish
0919 Miscellaneous marine products
0921 Fish hatcheries and preserves
0971 Hunting, trapping, game propagation
Mining
1011 Iron ores
1021 Copper ores
1031 Lead and zinc ores
1041 Gold ores
1044 Silver ores
1051 Bauxite and other aluminum ores
1061 Ferroalloy ores, except vanadium
1081 Metal mining services
1092 Mercury ores
1094 Uranium, radium, vanadium ores
1099 Metal ores, nee
1111 Anthracite
1112 Anthracite mining services
1211 Bituminous coal and lignite
1213 Bituminous and lignite services
1311 Crude petroleum and natural gas
1321 Natural gas liquids
1381 Drilling oil and gas wells
1382 Oil and gas exploration services
1389 Oil and gas field services, nee
1411 Dimension stone
1422 Crushed and broken limestone
1423 Crushed and broken granite
1429 Crushed and broken stone, nee
1442 Construction sand and gravel
1446 Industrial sand
1452 Bentonrte
1453 Fireclay
1454 Fuller's earth
1455 Kaolin and ball day
1459 Clay and related minerals, nee
1472 Barite
1473 Fluorspar
1474 Potash, soda and borate minerals
.Note: nee - not elsewhere classified.
A-2
-------
INSTRUCTIONS
APPENDIX SIC CODES
SIC
Code Industry
SIC
Code Industry
1475 Phosphate rock
1476 Rock salt
1477 Sulfur
1479 Chemical and fertilizer mining, nee
1481 Nonmetallic minerals services
1492 Gypsum
1496 Talc soapstone, and pyrophyllite
1499 Nonmetallic minerals, nee
Construction
1521 Single-family housing construction
1522 Residential construction, nee
1531 Operative builders
1541 Industrial buildings and warehouses
1542 Nonresidential construction, nee
1611 Highway and street construction
1622 Bridge, tunnel, and elevated highway
1623 Water, sewer, and utility lines
1629 Heavy construction, nee
1711 Plumbing, heating, air conditioning
1721 Painting, paper hanging, decorating
1731 Electrical work
1741 Masonry and other stonework
1742 Plastering, drywall. and insulation
1743 Temuzo, tile, marble, mosaic work
1751 Carpentering
1752 Floor laying and floor work, nee
1761 Roofing and sheet metal work
1771 Concrete work
1781 Water well drilling
1791 Structural metal erection
1793 Glass and glazing work
T794 Excavating and foundation work
1795 Wrecking and demolition work
1796 Installing building equipment, nee
1799 Special trade contractors, nee
Food Products
2011 Meat packing plants
2013 Sausages and other prepared meats
2016 Poultry dressing plants
2017 Poultry and egg processing
2021 Creamery butter
2022 Cheese, natural and processed
2023 Condensed and evaporated milk
2024 tee cream and frozen desserts
2026 Fluid mHk
2032 Canned specialties
2033 Canned fruits and vegetables
2034 Dehydrated fruits, vegetables, soups
2035 Pickles, sauces, end salad dressings
2037 Frozen fruits and vegetables
2038 Frozen specialties
2041 Rour and other grain mill products
2043 Cereal breakfast foods
2044 Rice milling
2045 Blended and prepared flour
2046 Wet com milling
2047 Dog, cat, and other pet food
2048 Prepared feeds, nee
2051 Bread, cake, and related products
2052 Cookies and crackers
2061 Raw cane sugar
2062 Cane sugar refining
2063 Beet sugar
2065 Confectionery products
2066 Chocolate and cocoa products
2067 Chewing gum
2074 Cottonseed oil mills
2075 Soybean oil mills
2076 Vegetable oil mills, nee
2077 Animal and marine fats and oils
2079 Shortening and cooking oils
2082 Man beverages
2083 Man
2084 Wines, brandy, and brandy spirits
2085 Distilled liquor, except brandy
2086 Bottled and canned soft drinks
2087 Flavoring extracts and syrups, nee
2091 Canned and cured seafoods
2092 Fresh or frozen packaged fish
2095 Roasted coffee
2097 Manufactured Ice
2098 Macaroni and spaghetti
2099 Food preparations, nee
Tobacco
2111 Cigarettes
2121 Cigars
2131 Chewing and smoking tobacco
2141 Tobacco stemming and redrying
Textile Mill Products
2211 Weaving mills, uutiuti
2221 Weaving mills, synthetics
2231 Weaving and finishing mills, wool
2241 Narrow fabric mills
2251 Women's hosiery, except socks
22S2 Hosiery, nee
2253 Knit outerwear mitts
2254 Knft underwear mills
2257 Circular knit fabrie mills
2258 Warp kntt fabric mills
2259 Knitting mitts, nee
2261 Finishing plants, cotton
2262 Finishing plants, synthetics
Note: nee » not elsewhere classified.
A-3
-------
INSTRUCTIONS
APPENDIX SIC CODES
SIC
Code Industry
SIC
Cod* Industry
2269
2271
2272
2279
2281
2282
2283
2284
2291
2292
2293
2294
2295
2296
2297
2298
2299
Finishing plants, nee
Woven carpets and rugs
Tufted carpets and rugs
Carpets and rugs, nee
Yarn mills, except wool
Throwing and winding mills
Wool yam mills
Thread mills
Felt goods, except woven felts and hats
Lace goods
Paddings and upholstery filling
Processed textile waste
Coated fabrics, not rubberized
Tire cord and fabric
Nonwoven fabrics
Cordage and twine
Textile goods, nee
Apparel and Related Textiles
2311 Men's and boys' suits and coats
2321 Men's and boy's shirts and nigntwear
2322 Men's and boys' underwear
2323 Men's and boys' neckwear
2327 Men's and boys' separate trousers
2328 Men's and boys' work clothing
2329 Men's and boys' clothing, nee
2331 Women's and misses' blouses and waists
2335 Women's and misses' dresses
2337 Women's and misses' suits and coats
2339 Women's and misses' outerwear, nee
2341 Women's and children's underwear
2342 Brassieres and allied garments
2351 Millinery
2352 Hats and caps, except millinery
2361 Children's dresses and blouses
2363 Children's coats and suits
2369 Children's outerwear, nee
2371 Fur goods
2381 Fabric dress and work gloves
2384 Robes and dressing gowns
2385 Waterproof outergarments
2386 Leather and sheep lined clothing
2387 Apparel belts
2389 Apparel and accessories, nee
2391 Curtains and draperies
2392 House furnishings, nee
2393 IcxtHebags
2394 Canvas and related products
2395 Pleating and stitching
2396 Automotive and apparel trimmings
2397 Schrffll machine embroideries
2399 Fabricated textile products, nee
Lumber and Wood Products
2411 Logging camps and logging contractors
2421 Sawmills and planing mills, general
Hardwood dimension and flooring
Special product sawmills, nee •
MUhvork
Wood kitchen cabinets
2426
2429
2431
2434
2435
2436
2439
2441
2448
2449
2451
2452
2491
2492
2499
Hardwood veneer and plywood
Softwood veneer and plywood
Structural wood members, nee
Nailed wood boxes and shook
Wood pallets and skids
Wood containers, nee
Mobfle homes
Prefabricated wood buildings
Wood preserving
Parbcleboard
Wood products, nee
Furniture and Fixtures
2511 Wood household furniture
2512 Upholstered household furniture
2514 Metal household furniture
2515 Mattresses and bedsprings
2517 Wood TV and radio cabinets
2519 Household furniture, nee
2521 Wood office furniture
2522 Metal office furniture
2531 Public building and related furniture
2541 Wood partitions and fixtures
2542 Metal partitions and fixtures
2591 Drapery hardware and blinds and shades
2599 Furniture and fixtures, nee
Paper Products
2611 Pulp mills
2621 Paper mitts, except building paper
2631 Paperboard mills
2641 Paper coating and glazing
2642 Envelopes
2643 Bags, except textile bags
2645 Die-cut paper and board
2646 Pressed and molded pulp goods
2647 Sanitary paper products
2648 Stationery products
2649 Convened paper products, nee
2651 Folding paperboaid boxes
265? Set-up paperboBfd boxes
2653 Corrugated and solid fiber boxes
2654 Sanitary food containers
2655 Ffcar cans, drums, and similar products
2661 Buikfing paper and board mill*
Note: nee « not elsewhere classified.
A-4
-------
INSTRUCTIONS
APPENDIX SIC CODES
SIC
Code Industry
SIC
Code Industry
Printing and Publishing Industries
2711 Newspapers
2721 Periodicals
2731 Book publishing
2732 Book printing
2741 Miscellaneous publishing
2751 Commercial priming, letterpress
2752 Commercial printing, lithographic
2753 Engraving and plate printing
2754 Commercial printing, gravure
2761 Manifold business forms
2771 Greeting card publishing
2782 Blankbooks and looseleaf binders
2789 Bookbinding and related work
2791 Typesetting
2793 Photoengraving
2794 Electrotyping and stereotyping
27V>5 Lithographic platemaking services
Chemical Products
2800 General chemical manufacturing
2812 Alkalies and chlorine
2813 Industrial gases
2816 Inorganic pigments
2818 Organic pesticide products
2819 Industrial inorganic chemicals, nee
2821 Plastics materials and resins
2822 Synthetic rubber
2823 Cellulosic man-made fibers
2824 Organic fibers, noncellulosic
2831 Biological products
2833 Medicinais and botanicals
2834 Pharmaceutical preparations
2841 Soap and other detergents
2842 Polishes and sanitation goods
2843 Surface active agents
2844 Toilet preparations
2851 Paints and allied products
2861 Gum and wood chemicals
2865 Cydic crudes and intermediates
2869 Industrial organic chemical, nee
2873 Nitrogenous fertilizers
2874 Phosphatic fertilizers
2875 Fertilizers, mixing only
2879 Agricultural chemicals, nee
2891 Adhesivas and sealants
2892 Explosives
2893 Printing ink
2895 Carbon blade
2899 Chemical preparations, nee
Petroleum and Coal Products
2911 Petroleum refining
2951 Paving mixtures and blocks
2952 Asphalt felts and coatings
2992 Lubricating oils and greases
2999 Petroleum and coal products, nee
Rubber and Plastic Products
3011 Tires and inner tubes
3021 Rubber and plastics footwear
3031 Reclaimed rubber
3041 Rubber and plastics hose and belting
3069 Fabricated rubber products, nee
3079 Miscellaneous plastics products
Leather Products
3111 Leather tanning and f shing
3131 Boot and shoe cut stock and findings
3142 House slippers
3143 Men's footwear, except a: ' etic
3144 Women's footwear, excep Athletic
3149 Footwear, except rubber, nee
3151 Leather gloves and mittens
3161 Luggage
3171 Women's handbags and purses
3172 Personal leather goods, nee
3199 Leather goods, nee
Stone, Clay, and Glass Products
3211 Flat glass
3221 Glass containers
3229 Pressed and blown glass, nee
3231 Products of purchased glass
3241 Cement, hydraulic
3251 Brick and structural day tile
3253 Ceramic wall and floor tile
3255 Clay refractories
3259 Structural day products, nee
3261 Vitreous plumbing fixtures
3262 Vitreous china food utensils
3263 Fine earthenware food utensils
3264 Porcelain electrical supplies
3269 Pottery products, nee
3271 Concrete block and brick
3272 Concrete products, nee
3273 Ready-mixed concrete
3274 Lime
3275 Gypsum products
3281 Cut stone and stone products
3291 Abrasive products
3292 Asbestos products
3293 Gaskets, packing, and sealing devices
3295 Minerals, ground or treated
3296 Mineral wool
'•&&} Monday refractories
3299 Nometallic mineral products, nee
Note: nee - not elsewhere classified.
A-5
-------
INSTRUCTIONS
APPENDIX SIC CODES
SIC
Code Industry
SIC
Code Industry
Primary Metal Industries
3312 Blast furnaces and steel mills
3313 Electrometailurgical products
3315 Steel wire and related products
3316 Cold finishing of steel shapes
3317 Steel pipe and tubes
3321 Gray iron foundries
3322 Malleable iron foundries
3324 Steel investment foundries
3325 Steel foundries, nee
3331 Primary copper
3332 Primary lead
3333 Primary zinc
3334 Primary aluminum
3339 Primary nonferrous metals, nee
3341 Secondary nonferrous metals
3351 Copper rolling and drawing
3353 Aluminum sheet, plate, and foil
3354 Aluminum extruded products
3355 Aluminum rolling and drawing, nee
3356 Nonferrous rolling and drawing, nee
3357 Nonferrous wire drawing arid insulating
3361 Aluminum foundries
3362 Brass, bronze, and copper foundries
3369 Nonferrous foundries, nee
3398 Metal heat treating
3399 Primary metal products, nee
Metal Fabrications
3411 Metal cans
3412 Metal barrets, drums, and pails
3421 Cutlery
3423 Hand and edge tools, nee
3425 Hand saws and saw blades
3429 Hardware, nee
3431 Metal sanitary ware
3432 Plumbing fittings and brass goods
3433 Heating equipment, except electric
3441 Fabricated structural metal
3442 Metal doors, sash, and trim
3443 Fabricated plate work (boiler shops)
3444 Sheet metal work
3446 Architectural metal work
3448 Prefabricated metal buildings
3449 Miscellaneous metal work
3451 Screw machine products
3452 Bolts, nuts, rivets, and washers
3462 Iron and steel forgings
3463 Nonferrous forgings
3465 Automotive stampings
3466 Crowns and closures
3469 Metal stampings, nee
3471 Plating and polishing
3479 Metal coating and allied services
3482 Small arms, ammunition
3483 Ammunition, except for small arms, nee
3484 Small arms
3489 Ordnance and accessories, nee
3493 Steel springs, except wire
3494 valves and pipe fittings
3495 Wire springs
3496 Miscellaneous fabricated wire products
3497 Metal foil and leaf
3498 Fabricated pipe and fittings
3499 Fabricated metal products, nee
Nonelectrical Machinery
3511 Turbines and turbine generator sets
3519 Internal combustion engines, nee
Farm machinery and equipment
Lawn and garden equipment
Construction machinery
Mining machinery
OH field machinery
Elevators and moving stairways
Conveyors and conveying machinery
Hoists, cranes, and monorails
Industrial trucks and tractors
Machine tools, metal cutting types
Machine tools, metal forming types
Special dies, toots, figs, and fixture
Machine tool accessories
Power driven hand tools
Rotting mill machinery
Metarworking machinery, nee
Food products machinery
Textile machinery
Woodworking machinery
Paper industries machinery
Printing trades machinery
Special industry machinery, nee
Pumps and pumping equipment
Bail and roller bearings
Air and gas compressors
Blowers and fans
Industrial patterns
Speed changers, drives, and gears
Industrial furnaces and ovens
Power ireiisiiiieeton equipment, nee
General industrial machinery, nee
Typewriters
Electronic computing equipment
Calculating and accounting machines
3523
3524
3531
3532
3533
3534
3535
3536
3537
3541
3542
3544
3545
•3546
3547
3549
3551
3552
3553
3554
3555
3559
3561
3562
3563
3564
3565
3566
3567
ICftfi
O3DO
3569
3572
3573
3574
3578
3579
3581
Scales and balances, except laboratory
Office machines, nee
Automatic merchandising machines
Note: nee > not elsewhere classified.
A-6
-------
INSTRUCTIONS
APPENDIX SIC CODES
SIC
Code Industry
SIC
Code Industry
35B2 Commercial laundry equipment
3585 Refrigeration and heating equipment
3586 Measuring and dispensing pumps
3589 Service industry machinery, nee
3592 Carburetors, pistons, rings, valves
3599 Machinery, except electrical, nee
Electrical and Electronic Machinery, Equipment,
and Supplies
3612 Transformers
3613 Swrtchgeax and switchboard apparatus
3621 Motors and generators
3622 Industrial controls
3623 Welding apparatus, electrical
3624 Carbon and graphite products
3623 Electrical industnai apparatus, nee
3631 Household cooking equipment
3632 Household refrigerators and freezers
3633 Household laundry equipment
3634 Bectnc housewares and fans
3635 Household vacuum deaners
3636 Sewing machines
3639 Household appliances, nee
3641 Electric lamps
3643 Current-carrying wiring devices
3644 Noncurrent-carrving wiring devices
3645 Residential lighting fixtures
3646 Commericai lighting fixtures
3647 Vehicular lighting equipment
3648 Lighting equipment, nee
3651 Radio and TV receiving sets
3652 Phonograph records
3661 Telephone and telegraph apparatus
3662 Radio and TV communication equipment
3671 Electron tubes, receiving type
3672 Cathode ray television picture tubes
3673 Electron tubes, transmitting
3674 Semiconductors and related devices
3675 Electronic capacitors
3676 Electronic resistors
3677 Electronic coils and transformers
3678 Electronic connectors
3679 Electronic components, nee
3691 Storage batteries
3692 Primary batteries, dry and wet
3693 X-ray apparatus and tubes
3694 Engine electrical equipment
3699 Electrical equipment and supplies, nee
Transportation Equipment
3711 Motor vehicles and car bodies
3713 Truck and bus bodies
3714 Motor vehicle parts and accessories
3715 Truck trailers
3716 Motor homes on purchased chassis
3721 Aircraft
3724 Aircraft engines and engine parts
3728 Aircraft equipment, nee
3731 Ship building and repairing
3732 Boat building and repairing
3743 Railroad equipment.
3751 Motorcycles, bicycles, and parts
3761 Guided missiles and space vehicles
3764 Space propulsion units and parts
3769 Space vehicle equipment, nee
3792 Travel trailers and campers
3795 Tanks and tank components
3799 Transportation equipment, nee
Instruments
3811 Engineering and scientific instruments
3822 Environmental controls
3823 Process control instruments
3824 Ruid meters and counting devices
3825 Instruments to measure electricity
3829 Measuring and controlling devices, nee
3832 Optical instruments and lenses
3841 Surgical and medical instruments
3842 Surgical appliances and supplies
3843 Dental equipment and supplies
3851 Ophthalmic goods
3861 Photographic equipment and supplies
3873 Watches, docks, and watchcases
Miscellaneous Manufacturing
3911 Jewelry, precious metal .
3914 Silverware and plated ware
3915 Jewelers' materials and lapidary work
3931 Musical instruments
3942 Dotts
3944 Games, toys, and children's vehicles
3949 Sporting and athletic goods, nee
3951 Pens and mechanical pencils
3952 Lead pencils and an goods
3953 Marking devices
3955 Carbon paper and faked ribbons
3961 Costume jewelry
3962 Artificial flowers
3963 Buttons
3964 Needles, pins, and fasteners
3991 Brooms and brushes
3997 Signs and advertising displays
3995 Burialcaskets
3996 Hard surface floor coverings
3999 Manufacturing industries, nee
Note: nee . not elsewhere classified.
A-7
-------
INSTRUCTIONS
APPENDIX SIC CODES
SIC
Code Industry
SIC
Code Industry
Railroad transportation
4011 Railroads, line-haul operating
4013 Switching and terminal devices
4041 Railway express service
Local Passenger Transportation
4111 Local and suburban transit
4119 Local passenger transportation, nee
4121 Taxicabs
4131 Intercity highway transportation
4141 Local passenger charter service
4142 Charter service, except local
4151 School buses
4171 Bus terminal facilities
4172 Bus service facilities
Trucking
4212 Local trucking, without storage
4213 Trucking, except local
4214 Local trucking and storage
4221 Farm product warehousing and storage
4222 Refrigerated warehousing
4224 Household goods warehousing
4225 General warehousing and storage
4226 Special warehousing and storage, nee
4231 Trucking terminal facilities
4311 U.S. Postal Service
Water Transportation
4411 Deep sea foreign transportation
4421 Noncontiguous area transportation
4422 Coastwise transportation
4423 Intercoastal transportation
4431 Great Lakes transportation
4441 Transportation on rivers and canals
4452 Ferries
4453 Lighterage
4454 Towing and tugboat service
4459 Local water transportation^ nee
4463 Marine cargo handling
4464 Canal operation
4469 Water transportation services, nee
Air Transportation
4511 Certified air transportation
4521 Noncerttfled air transportation
4682 Airports and flying fields
4583 Air terminal services
Pipelines
4612 Crude petroleum pipelines
4613 Refined petroleum pipelines
4619 Pipelines, nee
Transportation Services
4712 Freight forwarding
4722 Passenger transportation arrangement
4723 Freight transportation arrangement
4742 Railroad car rental with service
4743 Railroad car rental without service
4782 Inspection and weighing services
4783 Packing and crating
4784 Fixed facilities for vehicles, nee
4789 Transportation services, nee
Communications
4811 Telephone communication
4621 Telegraph communication
4832 Radio broadcasting
4833 Television broadcasting
4899 Communication services, nee
Electrical, Qaa, and Sanitary Services
4911 Electric services
4922 Natural gas transmission
4923 Gas transmission and distribution
4924 Natural gas distribution
4925 Gas production and/or distribution
4931 Electric and other services combined
4932 Gas and other services combined
4939 Combination utility services, nee
4941 Water supply
4952 Sewerage systems
4953 Refuse systems
4959 Sanitary services, nee
4961 Steam supply
4971 Irrigation systems
Wholesale Trade
5012 Automobiles and other motor vehicles
5013 Automotive parts and supplies
5014 Tires and tubes
5021 Furniture
5023 Home furnishings
5031 Lumber, plywood, and mlllwork
5039 Construction materials, nee
5041 Sporting and recreational goods
5042 Toys and hobby goods and supplies
5043 Photographic equipment and supplies
5051 Metals service centers and offices
5052 Coal and other minerals and ores
5063 Electrical apparatus and equipment
5064 Electrical appliances, TV and radios
5065 Electronic parts and equipment
5072 Hardware
5074 Plumbing and hydronta heating supplies
5075 Warm air heating and air conditioning
Note: nee • not elsewhere classified.
A-8
-------
INSTRUCTIONS
APPENDIX SIC COOES
SIC
Code Industry
SIC
Code Industry
Refrigeration equipment and supplies
Commercial machines and equipment
Construction and mining machinery
Farm machinery and equipment
Industrial machinery and equipment
Industrial supplies
Professional equipment and supplies
Service establishment equipment
Transportation equipment and supplies
Scrap and waste materials
Jewelry, watches, and precious stones
Durable goods, nee
Printing and writing paper
Stationery supplies
Industrial and personal service paper
Drugs, proprietaries, and sundries
Piece goods
Notions and other dry goods
Men's clothing and furnishings
Women's and children's clothing
Footwear
Groceries, general line
Frozen foods
Dairy products
Poultry and poultry products
Confectionery
Fish and seafoods
Meats and meat products
Fresh fruits and vegetables
Groceries and related products, nee
Cotton
Grain
Livestock
Farm-product raw materials, nee
Chemicals and allied products
Petroleum bulk stations and terminals
Petroleum products, nee
Beer and ale
Wines and distilled beverages
Farm supplies
Tobacco and tobacco products
Paints, varnishes, and supplies
Nondurable goods, nee
Retail Trade
5211 Lumber and other building materials
5231 Palm, glass, and wallpaper stores
5251 Hardware stores
5261 Retail nurseries and gardens
5271 Mobile home dealers
5311 Department stores
5331 Vkriety stores
5399 Miscellaneous general merchandise stores
5078
- 5081
5082
5083
5084
5085
5086
5087
5088
5093
5094
5099
5111
5112
5113
5122
5133
5134
5136
5137
5139
5141
5142
5143
5144
5145
5146
5147
5146
5149
5152
5153
5154
5159
5161
5171
5172
5181
5182
5191
5194
5198
5199
5411 Grocery stores
5422 Freezer and locker meat provisioners
5423 Meat and fish (seafood) markets .
5431 Fruit stores and vegetable markets
5441 Candy, nut and confectionery stores
5451 Dairy products stores
5462 Retail bakeries, baking and selling
5463 Retail bakeries, selling only
5499 Miscellaneous food stores
5511 New and used car dealers
5521 Used car dealers
5531 Auto and home supply stores
5541 Gasoline service stations
5551 Boat dealers
5561 Recreation and utility trailer dealers
5571 Motorcycle dealers
5599 Automotive dealers, nee
5611 Men's and boys' clothing and furnishings
5621 Women's ready-to-wear stores
5631 Women's accessory and specialty stores
5641 Children's and infants' wear stores
5651 Family clothing stores
5661 Shoe stores
5681 Furriers and fur shops
5699 Miscellaneous apparel and accessories
5712 Furniture stores
5713 Floor covering stores
5714 Drapery end upholstery stores
5719 Miscellaneous home furnishings stores
5722 Household appliance stores
5732 Radio and television stores
5733 Music stores
5812 Eating places
5613 Drinking places
5912 Drugstores and proprietary stores
5921 Liquor stores
5931 Used merchandise stores
5941 Sporting goods and bicycle shops
5942 Book stores
5943 Stationery stores
5944 Jewelry stores
5945 Hobby, toy, and game shops
5946 Camera and photographic supply stores
5947 Gift, novelty, and souvenir shops
5948 Luggage and leather goods stores
5949 Sewing, needlework, and piece goods
5961 Mail order houses
5962 Merchandising machine operators
5963 Direct selling organizations
5982 Fuel and tee dealers, nee
5983 Fuel oil dealers
5984 Liquefied petroleum gas dealers
Note: nee « not elsewhere classified.
A-9
-------
INSTRUCTIONS
APPENDIX SIC CODES
SIC
Code Industry
SIC
Code Industry
5992 Florists
5993 Cigar stores and stands
5994 News dealers and newsstands
5999 Miscellaneous retail stores, nee
Rnaneial
6011 Federal Reserve banks
6022 State banks. Federal Reserve
6023 State banks, not Federal Reserve. FDIC
6024 State banks, not Federal Reserve, not FDIC
6025 National banks, Federal Reserve
6026 National banks, not Federal Reserve, FDIC
6027 National banks, not FDIC
6028 Private banks, not incorporated, not FDIC
6032 Mutual savings banks. Federal Reserve
6033 Mutual savings banks, nee
6034 Mutual savings banks, not FDIC
6042 Nondeposit trusts. Federal Reserve
6044 Nondeposit trusts, not FDIC
6052 Foreign exchange establishments
6054 Safe deposit companies
6055 Clearinghouse associations
6056 Corporations for banking abroad
6059 Functions related to banking, nee
6112 Rediscounting, not for agricultural
6113 Rediscounting, for agricultural
6122 Federal savings and loan associations
6123 State associations, insured
6124 State associations, noninsured, FHLB
6125 State associations, noninsured. nee
6131 Agricultural credit Institutions
6142 Federal credit unions
6143 State credit unions
6144 Nondeposit industrial loan companies
6145 Licensed small loan lenders
6146 Installment sales finance companies
6149 Miscellaneous personal credit institutions
6153 Short-term business credit
6159 Miscellaneous business credit Institutions
6162 Mortgage bankers and correspondents
6163 Loan brokers
6211 Security brokers and dealers
6221 Commodity contracts broken, dealers
6231 Security and commodity exchanges
6281 Security and commodity services
Insurance
6311 Life insurance
6321 Accident and health insurance
6324 Hospital and medical service plans
6331 Fire, marine, and casualty insurance
6351 Surety insurance
6361 Title insurance
6371 Pension, health, and welfare funds
6399 Insurance carriers, nee
6411 Insurance agents, brokers, and service
Real Estate
6512 Nonresidential building operators
6513 Apartment building operators
6514 Dwelling operators, except apartments
6515 Mobile home site operators
6517 Railroad property lessors
6519 Real property lessors, nee
6531 Real estate agents and managers
6541 TWe abstract offices
6552 Sucdrviders and developers, nec
6553 Cemetery subdivides and developers
6611 Combined real estate, insurance, etc
Holding and Other Investment Offices
6711 Holding offices
.6722 Management investment, open-end
6723 Management investment, closed-end
6724 Unit investment trusts
6725 Face-amount certificate offices
6732 Educational, religious, etc. trusts
.6733 Trusts, nec
6792 OD royalty traders
6793 Commodity traders
6794 Patent owners and lessors
6798 Real estate investment trusts
•6799 Investors, nec
Hotels and Personal Services
7011 Hotels, motels, and tourist courts
7021 Rooming and boarding houses
7032 Sporting and recreational camps
7033 Trailering parks for transients
7041 Membership-basis organization hotels
7211 Power laundries, family and commercial
7212 Garment pressing and cleaners' agents
7213 Unen supply
7214 Diaper service
7215 Coin-operated laundries and cleaning
7216 Dry cleaning plants, except rug
7217 Carpet and upholstery cleaning
7218 Industrial launderers
7219 Laundry and garment services, nec
7221 Photographic studios, portrait
7231 Beauty shops
7241 Barbershops
7251 Shoe repair and hat cleaning shops
7261 Funeral service and crematories
7299 Miscellaneous personal services
Note: nec » not elsewhere classified.
A-10
-------
INSTRUCTIONS
APPENDIX SIC CODES
SIC
Code Industry
SIC
Code Industry
Business Services
7311 Advertising agencies
7312 Outdoor advertising services
7313 Radio, TV, publisher representatives
7319 Advertising, nee
7321 Credit reporting and collection
7331 Direct mail advertising services
7332 Blueprinting and photocopying
7333 Commerical photography and art
7339 Stenographic and reproduction, nee
7341 Window cleaning
7342 Disinfecting and exterminating
7349 Building maintenance services, nee
7351 News syndicates
7361 Employment agencies
7362 Temporary help supply services
7369 Personnel supply services, nee
7372 Computer programming and software
7374 Data processing services
7379 Computer related services, nee
7391 Research and development laboratories
7392 Management and public relations
7393 Detective and protective services
7394 Equipment rental and leasing
7395 Photofmtshing laboratories
7396 Trading stamp services
7397 Commercial testing laboratories
7399 Business services, nee
Automotive Repair, Services, and Ganges
7512 Passenger car rental and leasing
7513 Truck rental and leasing
7519 Utility trailer rental
7523 Parking lots
7525 Parking structures
7531 Top and body repair shops
7534 Tire retreading and repair shops
7535 Paint shops
7538 General automotive repair shops
7539 Automotive repair shops, nee
7542 Car washes
7549 Automotive services, nee
Miscellaneous Repair Service*
7622 Radio and television repair
7B23 Refrigeration service and repair
7829 Electrical repair shops, nee
7631 Watch, dock, and Jewelry repair
7641 Reuphotaery and furniture repair
7892 WeMing repair
7694 Armature rewinding shops
7699 Repair services, nee
Entertainment
7813 Motion picture production, except TV
7814 Motion picture production for TV
7819 Services allied to motion pictures
7823 Motion picture film exchanges
7824 Rm or tape distribution for TV
7829 Motion picture distribution services
7832 Motion picture theaters except drive-in
7833 Drive-in motion picture theaters
7911 Dance halls, studios, and schools
7922 Theatrical producers and services
7929 Entertainers and entertainment groups
7932 Billiard and pool establishments
7933 Bowling alleys
7941 Sports dubs and promoters
7948 Racing, including track operation
7992 Public golf courses
7993 Coin-operated amusement devices
7996 Amusement parks
7997 Membership sports and recreation dubs
7999 Amusement and recreation, nee
Health Services
8011 Offices of physicians
8021 Offices of dentists
8031 Offices of osteopathic physicians
8041 Offices of chiropractors
8042 Offices of optometrists
8049 Offices of health practitioners, nee
8051 Skilled nurse care facilities
8059 Nursing and personal care, nee
6062 General medical and surgical hospitals
8063 Psychiatric hospitals
8069 Specialty hospitals, except psychiatric
8071 Medical laboratories
8072 Dental laboratories
8061 Outpatient care facilities
8091 Hearth and allied services, nee
Legal, Educational, and Social Services
8111 Legal services
8211 Elementary and secondary schools
8221 Colleges and universities, nee
8222 Junior cottages-
6231 Libraries and information centers
8241 Correspondence schools
8243 Data processing schools
8244 Business and secretarial schools
6249 Vocational schools, nee
8299 Schools and educational services, nee
8321 Individual and family services
6331 Job training and related services
8351 CnBd day care services
Note: nee * not elsewhere classified.
A-ll
-------
APPENDIX B
PROGRAM DEFINING WASTE FORMS
-------
APPENDIX B
PROGRAM DEFINING WASTE FORMS
The Agency used waste composition descriptions provided
by respondents to the GENSUR to map each of the thousands of
individual waste streams generated in 1989 into one of the six
waste forms presented in Section B.I. Specifically, GENSUR
respondants were asked in Questions 1 and 2 of GENSUR
Questionnaire GB, the hazardous waste characterization section
of the GENSUR, to provide the RCRA Waste Code, and the Waste
Description Code that best describe each hazardous waste
generated in 1986. Respondents were provided with lists of
Waste Description Codes and definitions (shown in Section B.2)
and RCRA Waste Codes and definitions (shown in Section B.3) to
assist them in responding to Questions 1 and 2.
The Agency then used the computer program presented in
Section B.I to consolidate wastes that are similar in
composition into the six waste forms described in Section 2 of
this report.
B-l
-------
B.I
PROGRAM DEFINING WASTE FORMS
B-2
-------
595
IF
IF
IF
IF
IF
-S10 IF
620 IF
630 IF
J40 IF
IF
650 IF
S60 IF
£62 IF
IF
IF
IF
IF
IF
IF
665 IF
IF
IF
IF
IF
IF
IF
IF
IF
IF
IF
IF
IF
IF
IF
IF
IF
IF
IF
IF
IF
IF
IF
IF
IF
IF
IF
IF
IF
IT
IF
IF
IF
IF
IF
IF
IP
IT
XT
IF
' SET THE WASTE FORM BASED ON WASTE DESCRIPTION CODES
WDCS - " " GOTO 665
LEFTS(WDC$, 1) - "A" THEN 662
WDCS
WDCS
WDCS
WDCS
WDCS
WDCS
WDCS
WDCS
WDCS
WDCS
WDC$
WDC$
WDCS
WDCS
WDC$
WDCS
WDCS
"B19" THEN FORM - 3: GOTO 670
"B28" THEN FORM « 5: GOTO 670
"B36" THEN FORM « 5: GOTO 670
"B18" AND WDCS < "B36" THEN FORM - 2: GOTO 670
"B35" AND WDCS < "B57" THEN FORM - 1: GOTO 670
"B57" THEN FORM - 6: GOTO 670
"B57" AND WDC$ < "B71" THEN FORM - 4: GOTO 670
"B77" OR WDCS - "B78" THEN FORM - 3: GOTO 670
"B70" AND WDCS < "B91" THEN FORM » 5: GOTO 670
THEN FORM * 6: GOTO 670
OR WDCS - "A02" THEN FORM - 4:
CHECK FOR AQUEOUS OR ORGANIC FC
"B91"
"A01"
GOTO 670
"A03" OR WDCS - "A04" OR WDCS - "A06" THEN FORM - 5: GOTO 670
"A05" THEN FORM - 3: GOTO 670
6:
"A09"
"A10"
"All"
THEN FORM
THEN FORM
THEN FORM
1:
l:
GOTO 670
GOTO 670
GOTO 670
"A07" OR WDCS - "A08" OR WDCS
RCRAWCF • 0 THEN FORM - 6: GOTO 670
LEFTS(RCRAWCS, 1) « "D" THEN PORM - 3: GOTO 670
- "A12" OR WDCS - "A13" THEN 665 £U
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
RCRAWCS
"F019"
"F024"
"K001"
"F001" THEN FORM
"F002" THEN FORM
"F003" THEN PORM
"F004" THEN FORM
"F005" THEN FORM
"F006" THEN FORM
"F007" THEN FORM
"F008" THEN PORM
"F009" THEN FORM
"F010" THEN FORM
«F011" TEEN FORM
"P012" THEN FORM
THEN FORM
THEN FORM
THEN FORM
"K013" THEN PORM
•KOI6" THEN FORM
"K019" THEN FORM
"K022" THEN FORM
"K023" THEN FORM
"K024" THEN FORM
"K030" THEN PORM
"K031" THEN PORM
•K035" THEN FORM
"K037" THEN FORM
"K046" THEN FORM
"K047" THEN PORM
"K048" THEN FORM
"K049" THEN FORM
"K050" THEN FORM
"K051" THEN PORM
"K052" THEN FORM
"K061" THEN FORM
"K062" THEN PORM
"K069" THEN PORM
"K071" THEN PORM
"K073" THEN PORM
"K083" THEN FORM
4: GOTO 670
4: GOTO 670
4: GOTO 670
4: GOTO 670
4: GOTO 670
2: GOTO 670
3: GOTO 670
2: GOTO 670
3: GOTO 670
2: GOTO 670
3: GOTO 670
2: GOTO 670
2: GOTO 670
5: GOTO 670
5: GOTO 670
3: GOTO 670
5: GOTO 670
5: GOTO 670
5: GOTO 670
5: GOTO 670
5: GOTO 670
4: GOTO 670
1: GOTO 670
2: GOTO 670
2: GOTO 670
2: GOTO 670
3: GOTO 670
5: GOTO 670
5: GOTO 670
5: GOTO 670
5: GOTO 670
2: GOTO 670
2: GOTO 670
3: GOTO 670
2: GOTO 670
2: GOTO 670
4: GOTO 670
5: GOTO 670
B-3
-------
IF RCRXWC$
IF RCRAWC$
IF RCRAWCS
IF RCRAWCS
IF RCRAWC$
IF RCRAWC$
IF RCRAHC$
IF RCRAWCS
IF RCRAWC$
IF RCRAWC$
IF RCRAWCS
IF RCRAWC$
IF RCRAWC$
IF RCRAWCS
IF RCRAWCS
IF RCRAWC$
IF RCRAWC$
IF RCRAWC$
IF RCRAWCS
"K084" THEN FORM - 2: GOTO 670
"K085" THEK FORM - 5: GOTO €70
"K087" THEK FORM - 5: GOTO 670
"K093" THEK FORM
"K094" THEK FORM
"K101" THEK FORM
"K102" THEK FORM
"K106" THEK FORM
"Kill" THEK FORM
"K112" THEK FORM
"K113" THEK FORM
"K116" THEK FORM
•P001" THEK FORM
"P003" THEK FORM
"P010" THEK FORM
"P012" THEK FORM
"P015" THEK FORM
"P021" THEK FORM
"P022" THEK FORM
IF RCRAWCS - "P030" THEN FORM
IF RCRAWCS - "P037" THEK FORM
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWC$
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
"P039" THEN FORM
"P044" THEK FORM
"P051" THEK FORM
"P066" THEK FORM
"P071" THEK FORM
"P089" THEK FORM
•P094" THEK FORM
"P123" THEK FORM
"U007" THEK FORM
"U009" THEK FORM
"U012" THEK FORM
"UO 19" TREK FORM
"U028" THEK FORM
"U029" THEK FORM
"U031" THEK FORM
"U036" TffFK FORM
"D037" THEK FORM
"U041" THEK FORM
"004 4" THEK FORM
"U051" THEK FORM
"U053" TREK FORM
"U057" THEK FORM
"U067" THEK FORM
"U072" THEK FORM
"U073" THEK FORM
"U075" THEK FORM
"D079" THEN FORM
•U080" THEK FORM
"U095" TREK FORM
"U102" THEK FORM
"U107" THEK FORM
"U108" T*0*** FORM
"U115" THEK FORM
"U121" THEK FORK
•U122" TREK FORM
"U129" THEN FORM
"U131" THEN FORM
"U132" THEK FORM
"U134" THEK FORM
5: GOTO 670
5: GOTO 670
5: GOTO 670
5: GOTO 670
2: GOTO 670
3: GOTO 670
3: GOTO 670
4: GOTO 670
4: GOTO 670
5: GOTO 670
4: GOTO 670
1: GOTO 670
1: GOTO 670
1: GOTO 670
5: GOTO 670
4: GOTO 670
1: GOTO 670
5: GOTO 670
4: GOTO 670
5: GOTO 670
5: GOTO 670
5: GOTO 670
5: GOTO 670
4: GOTO 670
4: GOTO 670
5: GOTO 670
5: GOTO 670
4: GOTO 670
4: GOTO 670
4: GOTO 670
4: GOTO 670
6: GOTO 670
4: GOTO 670
4: GOTO 670
4: GOTO 670
4: GOTO 670
4: GOTO 670
4: GOTO 670
4: GOTO 670
4: GOTO 670
4: GOTO 670
5: GOTO 670
5: GOTO 670
6: GOTO 670
4: GOTO 670
4: GOTO 670
5: GOTO 670
4: GOTO 670
4: GOTO 670
4: GOTO 670
6: GOTO 670
4: GOTO 670
4: GOTO 670
5: GOTO 670
5: GOTO 670
5: GOTO 670
6: GOTO 670
B-4
-------
IF RCRAWCS
IF RCRAWC$
IF RCRAWC$
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWC$
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
IF RCRAWCS
FORM - 6
"U144" THEN FORM - 5: GOTO 670
"U147" THEN FORM - 5: GOTO 670
"U148" THEN FORM « 5: GOTO 670
"U151" THEN FORM - 3: GOTO 670
"U154" THEN FORM - 4: GOTO 670
"U158" THEN FORM - 5: GOTO 670
"D159" THEN FORM m 4: GOTO 670
"U165" THEN FORM « 5: GOTO 670
"U167" THEN FORM - 5: GOTO 670
"U169" THEN FORM • 4: GOTO 670
"U170" THEN FORM - 5: GOTO 670
"U182" THEN FORM « 4: GOTO 670
"U185" THEN FORM - 5: GOTO 670
"D188" THEN FORM - 5: GOTO 670
"U190" THEN FORM • 5: GOTO 670
"U201" THEN FORM « 5: GOTO 670
"U210" THEN FORM - 4: GOTO 670
"U211" THEN FORM » 4: GOTO 670
"D219" THEN FORM » 5: GOTO 670
"U220" THEN FORM - 4: GOTO 670
"U221" THEN FORM « 5: GOTO 670
"U223" THEN FORM - 4: GOTO 670
"U226" THEN FORM - 4: GOTO 670
"U228" THEN FORM - 4: GOTO 670
"U239" THEN FORM » 4: GOTO 670
B-5
-------
B.2
WASTE DESCRIPTION CODES
Source: U.S. EPA. National Survey of Hazardous Waste Generations
(Inside Cover). 1986.
B-6
-------
WASTE DESCRIPTION CODES
These waste description codes were developed specifically for this survey to supplement the descriptions listet
with the RCRA and other waste codes. (These waste description codes are not regulatory definitions.)
WASTE DESCRIPTION CODES FOR HAZARDOUS WASTE DESCRIBED BY A SINGLE RCRA F. K, P. OH U WASTE COOt
AOl Spent solvent (F001-F005.K066)
AO2 Other organic liouid (F001-F005. N086)
A03 Still bottom (F001-W05. KD66)
A04 Other organic sludge (FOOI-HXtt. NDM)
A05 Wssteweter or aqueous mature
A06 Contaminated sad or cleanup reetiue
A07 OtrwF or Kwastasncsry as described*
AM ConemnudofMpwordacaid*d
pfMuCI
A09 Empty containers
AlO IhCVlSfStOr eSh
A11 SoMitied treatment residue
A12 01
pecrryinihe
AM Other
*~Exaetry u described" means that the waste matches the oeeuipuon at the HCRA i
WASTE DESCRIPTION CODES FOR HAZARDOUS WASTE DESCRIBED BY A SINGLE RCRA D OR X WASTE CODE*
OR THAT DESCRIBED BY MORE THAN ONE RCRA OR X WASTE CODE
INORGANIC LIQUIDS Waste that o> prawn*
morganic and highly fluid (ag.. aqueous), with
to« suspended inorganic solids ana low organ*
833
834
835
Asbestos slurry or
Chloride or other e
jdge
Other inorganic sludge (speerty in the
answer space prc
Wane oil
Concentn
t Of Other
801 Aqueous waste with tow eofcents
802 Aqueous waste with low other toxic
organic*
803 Spent sod with mtttis
804 Spent acid without metals
805 Aodic aoueout waste
806 Caustic solution with metals but no
cyanioet
807 Causte solution with metals snd cyanides
808 Caustic solution with cyanioes out no
meuis
809 Spent caustic
810 Caustic aqueous waste
811 Aqueous waste wnn reactive sulMes
812 Aoueous waste wnn other reacuves (ag.,
explosives)
813 Other aqueous waste with high dissolved
•ends
Bu Other aqueous waste with low dissolved
solids
815 Scnjpper water
816 Leacnaie
817 Waste liquid mercury
818 Other inorganic liquid (specify in the
answer space provided)
INORGANIC SLUDGES—Wasw that is pnmar-
tty inorganic, with mooeraie-tc-nign water
content and tow organic content: pumpaoM.
819 bme sludge without metals
820 Ume sludge with metais/meui nydnxode
sludge
821 Wastewater treatment sludge with loxc
orgaracs
822 Other wastewater treatment sludge
823 Untreated plating sludge without cysndes
824 Untreated ptaung sludge with eyandes
825 Olhtr smdge wnn cyarwet
826 Stuoge with reactive sulMes
827 Sludge with other reacuves
82S Degreasmg sludge wnn metal scale or
fiangs
829 Air pollution control device sludge (ag..
Ay «sh. wet scniober studge)
830 Sediment or lagoon dragout
wim orgaracs
831 Sedanentor
MOROAMIC SOUPS Waste that is pnmanry
inorganw and sobd. with tow organc cortem
and tow-«eHT»oeraie water content; not
pumpawe.
836 Soil comammatM with orgaracs
837 Soil contaminated with inorganics onry
836 Ash. stag, or other resKlue from
•nCen^feUion Of WBCMC
839 Other "dry" ash. stag, or tfwrmaJ
resiooe
840 T)ry" lime or
865
866
867
866 ftattttwMsrorpsmeum
Orgamc pamt. **. laoquet or varwsh
870 Othei
fcqwd (spectty In the
orga
space provided)
ORGANIC StUDGES—Waste thai is pnmanry
orgarae. wry' Ume w met* hy*onde solids not
842 Metal scaia fiBngs. or scrap
843 Empty or crushed metal drums or
containers
844 Bsnenes or battery pans, casings, cores
845 Spent solid tutors or aosoroena
846 Asbestos sows and Oeons
847 Metaxyarade aaKs/enermcals
846 Reactive cyaraoe saasrcherraeais
849 Reactive sutftd* saKs/cnemcau
850 Other reaeove aatts/cfiemicals
851 Other metal aatts/chsmcais
852 Other waste morgarac cherwcals
853 UbpacRsotoMchermcaisonry
854 Lab packs ot deons onry
855 Mixed lap packs
856 Other morganiesobdstsoeatym the
answer space pronaed)
••ORGANIC CASES Waste that Is pnmanry
norgame with a low organic content and is a
gas at atmospheric pressure.
857 Inorgarac gaaes
ORGANIC UOU1DS Waste that » pnmanry
ofpanc arid is rnghry fluid, with low inorganic
i content ana I
or otfier organic
872 SMtteaomsotnonftalogenated
soKwvs or omet organic fcojwds
873 OBy sludge
874 Orgarae pamt or ink sludge
875 Reactive or uuyirteiuuoie orgaracs
876 Reems, tan, or tarry sludge
877 Biological ueaiment sludge
878 Sewage or other untreated biological
sludge (specrty in the
879 Oth
space provided)
ORGANIC SOUPS Watte that is pnmanrf
orgarae and sobd. with k»» 10 moderate
inorgarae content and water content: not
pumpaoia
860 Mategenaied pestiods soed
861 Norihatogenateo peeticaoe solid
882 Soed reevts or pmyinemsd orgaraes
863 Soencaroon
864 Re
865 Emptyfioerorptastici
866 Lao pacts of old ctierfHCaJs onry
867 Lao packs of Oeons onry
868 MtirttJ'at* pec*»
889 OtfwrhaJog+riated orgarae i
(soecrry in the answer apt
890 Other nonftalogenaied orgarae aotd
tepoafy in the •newer space provide*
856
859 Halogenaied (ag.. chionnaied) solvent
860 Nonriejogen«edaot««nt
861 Hatogena»dmonruuogenaiedsor«
-------
B.3
RCRA AND OTHER WASTE CODES
Source: U.S. EPA. National Survey of Hazardous Waste Generations
(Appendix C). 1986.
B-8
-------
INSTRUCTIONS
APPENDIX
RCRA AND OTHER WASTE CODES
The following list of codes is provided to assist you in completing the questions which ask about the types of
hazardous waste generated and managed onsite at your facility. This list of codes has two parts:
• A list of X waste codes which was developed specifically for this survey to describe (1) Waste that is
considered hazardous by some state or federal regulations, but not now considered hazardous by
RCRA regulations and (2) Hazardous waste residuals from onsite hazardous waste management oper-
ations.
• A list of codes for the waste considered hazardous by federal RCRA regulations—RCRA D, F, K, P, and
U waste codes.
If you generated or managed a type of waste that is considered hazardous by regulations in your state and a
waste code is not provided or if you have any questions about this list of waste codes, please call the Survey
Helpline (1-800-635-8850).
X WASTE CODES
This list of X waste codes was developed specifically for this survey. These X codes are not official RCRA
waste codes and should be used ONLY for this survey.
Code Wute dMcriptfon
Waste That Is Considered Hazardous by Some State and Federal Regulations,
But Not by RCRA Regulations
XPB1 Waste which has a concentration of polychlormated biphenyis less than SO pans per million
XPB2 Waste which has a concentration of polychlonnated biphenyis greater than or equal to SO parts per million but less
than 500 parts per million
XPB3 Waste which has a concentration of polychlonnated biphenyis greater than or equal to 500 parts per million
XAS8 Waste containing asbestos
XOIL Waste oil
XOXN Waste containing dioxins/furans ("See Note i)
Hazardous Waste Residuals from Onsite Hazardous Waste Management Operations (See Note 2)
XLEA Laaehate from hazardous waste landfills
XASH Hazardous incinerator, boiler, or furnace ash
XSCR Hazardous incinerator, boiler, or furnace scrubber water
XWWS Hazardous wastewater treatment sludge (See Note 3)
XWWL Hazardous wastewater treatment liquid (See Note 3)
NOTES:
1. Do not use XDXN to denote dioxin-containing wastes described by RCRA waste codes.
2. These waste codes were developed to describe hazardous waste raeMuata that result frem the onsite management of
many individual RCRA coded wastes which are no longer individually identifiable.
3. Do notuse XWWS or XWWL to denote hazardous wastewater treatment sludges or liquids that contain wastes
described by RCRA waste codes beginning with the letter F or K. Instead, list F or K waste codes separately and use
XWWS and/or XWWL to denote all other constituents.
B-9
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INSTRUCTIONS
APPENDIX RCRA AND OTHER WASTE CODES
RCRA WASTE CODES
Code Waste description
_
Characteristic Hazardous Waste (A description of the cnamcnnstic hazartous wastes can be found at 40 CFR 261.21-
261.24, July 1, 1986. Listed in the box below is the maximum concentration of contaminants, for the characteristic ofEP toucity.)
D001 Ignitable waste
0002 Corrosive waste
D003 Reactive waste
0004 Arsenic
0005 Barium
D006 Cadmium
0007 Chromium
0008 Lead
0009 Mercury
0010 Selenium
0011 Silver
D012 Er*irirXl£;KlO,lWiexachkxo-l7-«pc^M^ enob-5*
0004 Arsenic &0
0005 Barium 1000
0006 Cadmium 14
0007 Chromium SO
0008 Lead SO
0009 Mercury O2
0010 Selenium 1X>
0011 Saver SO
0012 EfK^1Za4,iaiO*e»chlCTO-1l7*pc^ 002
naphthalene)
0013 Undane (1^j5frftexa
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INSTRUCTIONS
APPENDIX
RCRA AND OTHER WASTE CODES
Coda Waste description
Hazardous Waste from Nonspecific Sources
F001 The following spent halogenated solvents used in degreasing: tetrachloroethyiene. trichlorethylene, methytene chlo-
ride. 1,1,1-tnchloroethane, carbon tetrachlonde and chlorinated fluorocarbons and all spent solvent mixtures/blends
used in degreasing containing, before use, a total of 10 percent or more (by volume) of one or more of the above
halogenated solvents or those solvents listed in F002. F004, and F005; and still bottoms from the recovery of these
spent solvents and spent solvent mixtures
F002 The following spent halogenated solvents: tetrachloroethyiene, methylene chloride, trichloroethylene,
1.1,1-trichloroethane, chlorobenzene, l,1,2-trichioro-l,2£-trtfluoroethane, ortho-dtahlorobenzene, trich-
lorofluoromethane. and 1,1,2, trichloroethane, ortho-dichlorobenzene, and trichtorofluoromethane; all spent solvent
mixtures/blends containing, before use, a total of 10 percent or more (by volume) of one or more of the above
halogenated solvents or those solvents listed in F001, F004, and F005; and still bottoms from the recovery of these
spent solvents and spent solvent mixtures
F003 The following spent nonhalogenated solvents: xylene, acetone, ethyl acetate, ethyl benzene, ethyl ether, methyl
isobutyl ketone, n-butyl alcohol, cydohexanone, and methanol; all spent solvent mixtures/blends containing, before
use. only the above spent nonhalogenated solvents; and all spent solvent mixtures/blends containing, before use,
one or more of the above nonhalogenated solvents, and a total of 10 percent or more (by volume) of one or more of
those solvents listed in F001, F002, F004, and F005; and still bottoms from the recovery of these spent solvents and
spent solvent mixtures
F004 The following spent nonhalogenated solvents: cresols and cresylic acid, and nitrobenzene; and the still bottoms from
the recovery of these solvents; all spent solvent mixtures/blends containing before use a total of 10% or more (by
volume) of one or more of the above nonhalogenated solvents or those solvents listed in F001, F002, and F005; and
still bottoms from the recovery of these spent solvents and spent solvent mixtures
F005 The following spent nonhalogenated solvents: toluene, methyl ethyl ketone, carbon disutfide, isobutanol, pyridine,
benzene, 2-«thoxyethanol, and 2-nitropropane; all spent solvent mixtures/blends containing, before use, a total of 10
percent or more (by volume) of one or more of the above nonhalogenated solvents or those solvents listed in F001,
F002, or F004; and still bottoms from the recovery of these spent solvents and spent solvent mixtures
F006 Wastewater treatment sludges from certain electroplating operations except from the following processes: (1) Sulfuric
acid anodizing of aluminum; (2) tin plating on carbon steel; (3) zinc plating (segregated basis) on carbon steel; (4) alu-
minum or zinc-aluminum plating on carbon steel; (5) cleaning/stripping associated with tin, zinc, and aluminum plat-
ing on carbon steel; and (6) chemical etching and milling of aluminum
F007 Spent cyanide plating bath solutions from electroplating operations
F008 Residues from electroplating operations where cyanides are used in the process
F009 Spent stripping and cleaning bath solutions from electroplating operations where cyanides are used in the process
F010 Quenching bath residues and sludges from oil baths from metal heat treating operations where cyanides are used in
the process
F011 Spent cyanide solutions from salt bath pot cleaning from metal heat treating operations (except for precious metals
heat treating spent cyanide solutions from salt bath pot cleaning)
F012 Quenching wastewater treatment sludges from metal heat treating operations where cyanides are used in the
process (except for precious metals heat treating quenching wastewater treatment sludges)
F019 Wastes from the chemical conversion coating of aluminum
F020 Wastes (except wastewater and spent carbon from hydrogen chloride purification) from the production or manufactur-
ing use (as a reactant, chemical intermediate, or component in a formulating process) of tri- or tetrachlorophenol or of
intermediates used to produce their pesticide derivatives. (This listing does not include wastes from the production of
hexachlorophene from highly purified 2.4,5-trichlorophenol.)
F021 Wastes (except wastewater and spent carbon from hydrogen chloride purification) from the production or manufactur-
ing use (as a reactant. chemical intermediate, or component in a formulating process) of pentachlorophenol, or of in-
termediates used to produce derivatives
P022 Wastes (except wastewater and spent carbon from hydrogen chloride purification) from the manufacturing use (as a
reactant, chemical intermediate, or component in a formulating process) of tetra-, penta- or hexachtorobenzenes un-
der alkaline conditions
F023 Wastes (except wastewater and spent carbon from hydrogen chloride purification) from the production of materials on
equipment previously used for the production or manufacturing use (as a reactant, chemical intermediate, or compo-
nem in a formulating process) of tri- and tetrachtorophenols. (This listing does not indude wastes from equipment
used only for the production or use of hexachlorophene from highly purified 2,4,5-trichtorophenol.)
(continued)
B-ll
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INSTRUCTIONS
APPENDIX RCRA AND OTHER WASTE CODES
Code Wast* description
F024 Wastes, including but not limited to, distillation residues, heavy ends, tars, and reactor clean-out wastes from the
production of chlorinated aliphatic hydrocarbons, having a carbon content from one to five, utilizing free radical
catalyzed processes. (This listing does not include light ends, spent filters and fitter aids, spent dessicants.
wastewater, wastewater treatment sludges, spent catalysts, and wastes listed in § 261.32.)
F026 Wastes (except wastewater and spent carbon from hydrogen chloride purification) from the production of materials on
equipment previously used for the manufacturing use (as a reactant. chemical intermediate, or component in a
formulating process) of tetra-, penta-, or hexachtorobenzene under alkaline conditions.
F027 Discarded unused formulations containing trt-, tetra-, or pentachjorpphenol or discarded unused formulations
containing compounds derived from these chlorophenols. (This listing does not include formulations containing
rMxachlorophene synthesized from prepurified 2,4.5-trichlorophenol as the sole component.)
F027 2,4,6-Trichtorophenol
F027 2.3,4,6-Tetrachlorophenol
F027 Pentachtorophenol
F027 Phenol,2,4,5-trichloro
F027 2.4,5-T
P027 Phenol.pentachloro
F027 Silvex
F027 Phenol,2,3,4,5-tetrachloro
P027 Phenol,2,4,6-trichloro
P027 Propionic acid, 2-(2,415-trichlorophenoxy)
F027 2,4,5-Trichlorophenol
F027 2,4,5-Trichlorophenoxyacetic acid
F028 Residues resulting from the incineration or thermal treatment of soil contaminated with EPA hazardous waste nos.
F020, F021, F022, F023, F026, and F027
Hazardous Waste from Specific Sources
K001 Bottom sediment sludge from the treatment of wastewater from wood preserving processes that use creosote and/or
pentachlorophenol
K002 Wastewater treatment sludge from the production of chrome yellow and orange pigments
K003 Wastewater treatment sludge from the production of morybdate orange pigments
K004 Wastewater treatment sludge from the production of zinc yellow pigments
K005 Wastewater treatment sludge from the production of chrome green pigments
K006 Wastewater treatment sludge from the production of chrome oxide green pigments (anhydrous and hydrated)
K007 Wastewater treatment sludge from the production of iron blue pigments
K008 Oven residue from the production of chrome oxide green pigments
K009 Distillation bottoms from the production of acetakJehyde from ethylene
K010 Distillation side cuts from the production of acetakleriyde from ethylene
K011 Bottom stream from the wastewater stripper in the production of acrytonitrile
K013 Bottom stream from the acetonrtrile column in the production of acrytonitrile
KOI 4 Bottoms from the acetonrtrile purification column in the production of acrytonitrile
K015 Still bottoms from the distillation of benzyl chloride
K016 Heavy ends or distillation residues from the producttonrf carbon tetraohtoride
K017 Heavy ends (still bottoms) from the purification column in the production of epichtorohydrin
K018 Heavy ends from the fractionation column in ethyl chloride production
(continued)
B-12
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INSTRUCTIONS I APPENDIX RCRA AND OTHER WASTE CODES
Code Waste description
Hazardous Waste from Specific Sources
K019 Heavy ends from the distillation of ethylene dichloride in ethylene dichloride production
K020 Heavy ends from the distillation of vinyl chloride in vinyl chloride monomer production
K021 Aqueous spent antimony catalyst waste from fluoromethanes production
K022 Distillation bottom tars from the production of phenol/acetone from cumene
K023 Distillation light ends from the production of phthalic anhydride from naphthalene
K024 Distillation bottoms from the production of phthalic anhydride from naphthalene
K025 Distillation bottoms from the production of nitrobenzene by the nitration of benzene
K026 Stnpptng still tails from the production of methyl ethyl pyridines
K027 Centrifuge and distillation residues from toluene diisocyanate production
K028 Spent catalyst from the hydrochlorinator reactor in the production of 1.1,1-trichloroethane
K029 Waste from the product steam stripper in the production of 1,1,1-trichloroethane
K03' Column bottoms or heavy ends from the combined production of trichtoroethylene end perchloroethylene
K031 By-product salts generated in the production of MSMA and cacodytic acid
K032 Wastewater treatment sludge from the production of chlordane
K033 Wastewater and scrub water from the chlorination of cyclopentadiene in the production of chlordane
K034 Filter solids from the filtration of hexachlorocyclopentadiene in the production of chlordane
K035 Wastewater treatment sludges generated in the production of creosote
K036 Still bottoms from toluene reclamation distillation in the production of dlsulfoton
K037 Wastewater treatment sludges from the production of disulfoton
K038 Wastewater from the washing and stripping of phorate production
K039 Filter cake from the filtration of diethytphosphorodithioic acid in the production of phorate.
K040 Wastewater treatment sludge from the production of phorate
K041 Wastewater treatment sludge from the production of toxaphene
K042 Heavy encs or distillation residues from the ~ filiation of tetrachlorobenzene in the production of 2.4,5-T
K043 2,6-Oichlorophenol waste from the production of 2,4-0
K044 Wastewater treatment sludges from the manufacturing and processing of explosives
K045 Spent carbon from the treatment of wastewater containing explosives
K046 Wastewater treatment sludges from the manufacturing, formulation, and loading of lead-based initiating compounds
K047 Pink/red water from TNT operations
K048 Dissolved air flotation (DAF) float from the petroleum refining industry
K049 Slop oil emulsion solids from the petroleum refining industry
K050 Heat exchanger bundle cleaning sludge from the petroleum refining industry
K051 API separator sludge from the petroleum refining industry
K052 Tank bottoms (leaded) from the petroleum refining industry
K060 Ammonia still lime sludge from coking operations
K061 Emission control dust/sludge from the primary production of steel in electric furnaces.
K062 Spent pickle liquor from steel finishing operations of plants that produce iron or steel
K069 Emission control dust/sludge from secondary lead smelting
K071 Brine purification muds from the mercury cell process in chlorine production, where separately prepurified brine is
not used
K073 Chlorinated hydrocarbon waste from the purification step of the diaphragm cell process using graphite anodes in
chlorine production
X083 Distillation bottoms from aniline production
K084 Wastewater treatment sludges generated during the production of veterinary Pharmaceuticals from arsenic or
organo-amenic compounds •
(continued)
B-13
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INSTRUCTIONS
APPENDIX
RCRA AND OTHER WASTE CODES
Code Waste description
K085 Distillation or fracttonation column bottoms from the production of chtorobenzenes
K086 Solvent washes and sludges, caustic washes and sludges, or water washes and sludges from cleaning tubs and
equipment used in the formulation of ink from pigments, driers, soaps, and stabilizers containing chromium and lead
K087 Decanter tank tar sludge from coking operations
K093 Distillation light ends from the production of phthalic anhydride from ortho-xylene
K094 Distillation bottoms from the production of phthalic anhydride from ortho-xylene
K095 Distillation bottoms from the production of 1,1,1-trichloroethane
K086 Heavy ends from the heavy ends column from the production of 1.1.1-trichloroethane
K097 Vacuum stripper discharge from the chlordane chtorinator in the production of chlordane
K098 Untreated process wastewater from the production of toxaphene
K099 Untreated wastewater from the production of 2,4-0
K100 Waste leaching solution from add leaching of emission control dust/sludge from secondary lead smelting
K101 Distillation tar residues from the distillation of aniline-based compounds in the production of veterinary
Pharmaceuticals from arsenic or organo-arsenic compounds
K102 Residue from the use of activated carbon for decolonization in the production of veterinary Pharmaceuticals from
arsenic or organo-arsenic compounds
K103 Process residues from aniline extraction from the production of aniline
K104 Combined wastewater streams generated from nitrobenzene/aniline production
K105 Separated aqueous stream from the reactor product washing step in the production of chlorobenzenes
K106 Wastewater treatment sludge from the mercury cell process in chlorine production
K111 Product washwaters from the production of dinitrotoluene via nitration of toluene
K112 Reaction byproduct water from the drying column in the production of toluenediamine via hydrogenation of
dinitrotoluene
K113 Condensed liquid light ends from purification of toluenediamine in production of toluenediamine via hydrogenation of
dinitrotoluene.
K114 Vicinals from the purification of toluenediamine in production of toluenediamine via hydrogenation of dinitrotoluene
K115 Heavy ends from purification of toluenediamine in the production of toluenediamine via hydrogenation of
dinitrotoluene
K116 Organic condensate from the solvent recovery column in the production of toluene diisocyanate via phosgenation of
toluenediamine
K117 Wastewater from the reactor vent gas scrubber in the production of ethylene dibromide via bromination of ethene
K118 Spent adsorbent solids from purification of ethylene dibromide in the production of ethylene dibromide via
bromination of ethene.
K136 Still bottoms from the purification of ethylene dibromide in the production of ethylene dibromide via bromination of
ethene 1
Discarded Commercial Chemical Products, Off-Specification Species, Container Residuals, and Spill
Residues Thereof—Acute Hazardous Waste (An alphabetized listing can be /bund at 40 CFR 261.33. Juty 1.1986.)
P001 Warfarin, when present at concentrations greater than or equal to 03%
P001 S^ohAcetonyl-benzylH-hydroxycoumann and salts, when present at concentrations greater than 0.3%
P002 Acetamide, N-(aminothioxomethyl)
P002 1-Aceryt-2-thiourea
P003 2-Propenal
POOS Acrolein
P004 1.2A4,iai041exae*lor>1,4.4aAB£a-f«xarryd
P004 AWrin
(continued)
B-14
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INSTRUCTIONS APPENDIX RCRA AND OTHER WASTE CODES
Code Waste description
POOS 2-Propen-1-ol
POOS Ally! alcohol
P006 Aluminum phosphide (r,t)
P007 3(2H)-lsoxazolone,5-(aminomethyl)-
P007 5-(Aminomethyl)-3-isoxazolol
POOS 4-or-Ammopyridine
POOS 4-Pyridinamine
POOS 4-Ammopyridine
POOS Phenol,2,4,6-tnnrtro-,ammonium salt (r)
P009 Ammonium picrate (r)
P010 Arsenic acid (t)
P011 Arsenic pentoxide (t)
P011 Arsenic (V) oxide (t)
P012 Arsenic (HI) oxide (t)
P012 Arsenic trioxide (t)
P013 Banum cyanide
P014 Thiophenol
P014 Benzenethio!
P015 Beryllium dust (t)
P016 Methane,oxybis(chloro-
P016 Bis(chloromethyl) ether
P017 2-Propanone, 1 -bromo- (t)
P017 Bromoacetone (t)
P018 Strychnidin-10-one,2,3-dimethoxy-
P018 Brucme
P020 DinoseD
P020 Pheno!,2,4-dimtro-6-(1-methyfpropyl)-
P021 Calcium cyanide
P022 Carbon bisulfide (t)
P022 Carbon disulfide (t)
P021 Acetaldehyde, chloro-
P023 Chloroacetaldenyde
P024 Benzenamine, 4-chloro-
P024 p-Chloroaniline
P026 Thburea, (2-chlorophenyl)-
P026 1-
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INSTRUCTIONS
APPENDIX
RCRA AND OTHER WASTE CODES
Cod* Wast* description
P034 4,6-Dinrtn>c-cyclohexy1phenol (t)
P034 Phenol.2-cyclohexyW.6-dinitro- (t)
P036 Dichlorophenylarsine
P036 Phenyi dichloroarsine
P037 Oieldrin
P037 1 £,3,4.10.10-Hexachlorc-€,7.expoxy-1,4,4a,5,6,7,8,8a-octahydrc-endo,exo-1,4:5,8-dimethanonaphthalene
P038 Dlethylarsine (t)
P038 Arsine.diethyHt)
P039 0.0-Diethyf S-{2-(«thytthio)ethyl) phosphorodithioate (t)
P039 DisuHoton (t)
P040 0,0-Oiethyl 0-pyrazinyl phosphorothioate
P040 Phosphorothloic acid, 0,0-diethyl 0-pyrazinyl ester
P041 Diethy»-p-nitrophenyt phosphate
P041 Phosphoric acid, diethyl p-nrtrophenyl ester
P042 Epinephrine
P042 1,2-Benzenediol, 4-{1-hydroxy-2-{methylamino)ethyl)-
P043 Diisopropyt fluorophosphate
P043 Fluoridic acid, bis(1 -methylethyt) ester
P043 Phosphorofluondic acid. bis(l-methylethyf) ester
P044 Oimethoate (t)
P044 Phosphorodrthioic acid, 0,0-dimethyl S^2-(methy)amino)-2-oxoethy11ester (t)
P045 3,3-OimethyH-(methylthio)-2-butanone, (H(methylamino)carDonytJoxime
P045 Thiofanox
P046 a,cr-Oimethylphenethy)amine (t)
P046 Ethanamine ,1,1 ^limethy^2•pheny^- (t)
P047 4,6-Oirtitrc-c-cresol and salts
P047 Phenol, 2-methyW,6-dinrtro and salts
P047 Phenor,2'4-dinitro-6-fnethyt-, and salts
P048 2,4-Oinrtrophenol
P04« Phenol,2,4-dinitro-
P049 2.4-Oithiobiuret
P049 Thioirnidodicarbonic diamide
P050 Endosulfan
P050 5^ort>omene-2,3-dimethanol,1,4,5,6,7.7-hexachloro.cyclic sulfrte
P051 1 ^,3,4,10,10-Hexachlorc-6,7-expoxy-l .4,4a,5.6,7,8.8a-oxtahydn>endo,endo-1,4:5,8-dimethanonaphthaJene
P051 Endrin
P054 Ethylenimine
P054 Aziridine
POS6 Ruorine
POST FluofoacetamWe
POS7 Aettamide^-fluor-
P05S FkKXOtcetic add, sodium salt
POM Aostic acid, fluoro-, sodium satt
P059 H^Jtmchlor
P089 4.744«thano-1 mndene.1,4.5.6.7.8.8-rieplachten>
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INSTRUCTIONS
APPENDIX
RCRA AND OTHER WASTE CODES
Code Wtste description
P060 Hexachloronexanydro-endo.endo-dimethanonapthalene
P060 1,2,3,4,10,10-Hexachloro-l ,4,4a,5,8,8a-hexahydro-1,4:5,8-endo, endo-dimethanonaphthalene
P062 Hexaethyl tetraphosphate
P062 Tetraphosphoric acid, hexaethyl ester
P083 Hydrocyanic acid
P063 Hydrogen cyanide
POM Methyl isocyanate
POM Isocyanic acid, methyl ester
P065 Fuiminic acid, mercury(II) salt (r,t)
P065 Mercury fulminate (r,t)
P066 Methomy!
P066 Acetimidic acid, N-{(methylcart>amoyl)oxy]thio-, methyl ester
P067 2-Methyfaziridine
P067 1,2-Propylenimine
P068 Hydrazine.methyl-
P068 Methyl hydrazine
P069 2-Methyllactonitrile
P069 Propanenitrile,2-hydroxy-2-methyl-
P070 Propanal, 2-methyl-2-{methy1thio)-, 0[(methylamino)cartx>nyl]oxime
P070 Aldicarb
P071 0,0-Dimethyf 0-p-nitrophertyf phosphorothioate
P071 Methyl parathion
P072 o-Naphthytthiourea
P072 Thtourea, 1-naphthalenyl-
POTS Nickel tatracarbonyt
P073 Nickel cartx>nyl
P074 Ntekel(n)cyanide
P074 Nickel cyanide
P075 Nicotine and safts (t)
P075 Pyridine, (SJ-S-fl-methyl^-pyrrolidinyl)-, and salts
P076 Nitrogen (n) oxide (t)
P076 Nrtric oxide (t)
POTT p-Nttroanilina (t)
POTT Benzenamine, 4-nrtro-
P078 Nitrogen (IV) oxide
POTS Nitrogen dioxide
P081 Nttroglycwine(r,t)
P081 1^,3-Prop*netriol,trinitrate-(r)
P082 Dimethylnrtrosamine
P082 N-NttrosodiriMthylamine
P084 Etfwnamine.N-methyW^flftroso-
POS4 N^ttrosomethytvinytamine
POftS Diphosphofimide.octtmethyi-
P08S Octamethyipyropnotphoramide
(continued)
B-17
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INSTRUCTIONS
APPENDIX RCRA AND OTHER WASTE CODES
Code Waste description
P087 Osmium tetroxide
P087 Osmium oxide
P088 Endothall
P088 7<5xabicyclo(2.2.1)heptane-2,3-dicarboxylic acid
P089 Parathion (t)
P089 Phosphorothioic acid.O.O-diethyl 0-(p-nitropheny1) ester (t)
P092 Mercury,(acetatc-0)phenyl-
P092 Phenylmercuric acetate
P093 N-Phenytthiourea
P093 Thiourea, phenyl-
P094 Phosphorothioic acid, 0,0-diethyl S-{ethyltnio)methy1 ester (t)
P094 Phorate(t)
P09S Phosgene (t)
P095 Carfoonyi chloride
P096 Hydrogen phosphide
P096 Phosphine
P097 Famphur
P097 Phosphorothioic acid, 0,0-dimethyl 0-[p-<(dimethylamino)-sulfonyl)phenyl)ester
P098 Potassium cyanide
P099 Potassium silver cyanide
Pi 01 Ethyl cyanide
P101 Propanemtrile
P102 Propargy) alcohol
P102 2-Propyn-1-ol
P103 Selenourea
Pi 03 Carbamimidoselenoic acid
P104 Silver cyanide
P105 Sodium azide
PI 06 Sodium cyanide
P107 Strontium sulfide (t)
P108 Strychnidin-10-one, and salts (t)
P108 Strychnine and salts (t)
P109 Oithiopyrophosphoric acid, tetraethyl ester
P109 TetraethyWtthiopyrophosphate
P110 Plumbane.tetraethyl-
P110 Tetraethyl lead
P111 Tetraethylpyrophosphate
P111 Pyrophosphoric acid, tetraethyl ester
P112 Methane.tetranttrc-(r)
P112 Tetranrtromethane (r)
P113 ThalliurrXm) oxide
P113 Thallic oxide
P114 ThaJlium(I) seJenide
P115 Sulturic acid, thallium(I) satt
P115 Thallium(I)sutfate
(continued
B-18
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INSTRUCTIONS
APPENDIX
RCRA AND OTHER WASTE CODES
Cod* Waste description
P116 Hydrazinecarbothioamide
P116 Thiosemicarbazide
P118 Methanethiol.tnchlorc-
P118 Trichtoromethanethiol
P119 Vanadic acid, ammonium salt
P119 Ammonium vanadate
P120 Vanadium pentoxide
P120 Vanadium(V) oxide
P121 Zinc cyanide
P122 Zinc phosphide (r,t)
P122 Zinc phosphide, when present at concentrations greater than 10%
P123 Toxaphene
P123 Camphene, octachlorc-
Oiscarded Commercial Chemical Products, Off-Specification Species, Container Residues, and Spill
Residues Thereof—Toxic Waste (An alphabetized listing can be found at 40 CFR 2G1.33, July 1.1986.)
U001 BhanaJ (i)
U001 AcetaJdehyde (i)
U002 2-Propanone (i)
U002 Acetone (i)
U003 Ethanenitnle (i,t)
U003 Acetonitnle (i,t)
U004 Etfianone,1-phenyl-
U004 Acetophenone
U005 2-Acetylaminofluorene
U005 Acetamide. N-9H-(luoren-2-yl-
U006 Ethanoyi chloride (c,r,t)
U006 Acetyl chloride (c.r.t)
U007 2-Propenamide
U007 Acrylamide
U008 2-Propenoic acid (i)
U008 Acrylic acid (i)
U009 2-Propenenitnle
U009 Acryionithle
U010 Mitomycin C
U010 Azirino(2'3':3,4)pyTrolo<1,2-a)indole-4,7-dione! 6-amino-8-(((aminocart>ony)) oxy)methy1]-l,l»,2ABa3b-nexahydro-8a-
methoxy-5-methy<-,
U011 1H-1,2.4Triazol-3-amine
U011 Amrtrole
U012 Benzanamine (i,t)
U012 Aniline (i.t)
U014 Aura/nine
U014 Benzenamine, 4.4'-carbonimidoyibis(N,N-dimethyl-
(continued)
B-19
-------
INSTRUCTIONS
APPENDIX
RCRA AND OTHER WASTE CODES
Cod* Wast* description
U015 L-Serine, diazoacetate (ester)
U015 Azaserine
U016 Benzjcjacridine
0016 3,4-Benzacridine
U017 Benzal chloride
U017 Benezene, (dtchloromethyl)-
U018 Benz(a]anthracene
U018 1 ,2-Benzanthracene
U019 Benzene (i,t)
U020 Benzenesulfonyl chloride (c,r)
U020 Benzenesulfonic acid chloride (c,r)
U021 Benzidine
U021 (1,V-8iphenylH.4'-diamine
U022 Benzo[a]pyrene
U022 3,4-Benzopyrene
U023 Benzotrichloride (c,r,t)
U023 Benzene, (trichtorometnyl>-{c,r,t)
U024 Bis(2-chlofoethoxy) methane
U024 Ethane,1.1 '-{methylenebts(oxy}]bis[2-chloro-
U025 Dichloroethyl ether
U025 Ethane,1.1'-oxybis(2-chloro-
U026 2-Naphthy1amine,N,N-bis(2
-------
INSTRUCTIONS
APPENDIX
RCRA AND OTHER WASTE CODES
Cod* Wwte description
U038 Ethyl 4,4'-dichlorobenzilaie
0038 Benzeneacetic acid, 4-chloro-a-(4-chloro-pheny)>^r-hydroxy, ethyl ester
U039 Phenol,4-chtoro-3-methyl-
U039 4-Chloro-m-cresol
U041 Oxirane,2-(chloromethyl>-
U041 1-Chloro-2,3-expoxypropane
0042 Ethene,2-chtoroethoxy-
U042 2-Chloroethyt vinyl ether
0043 Ethene^hloro
U043 Vinyl chloride
U044 Methane, trichlorc-
U044 Chloroform
U045 Methane, chloro-{i,t)
U045 Methyl chloride (i,t)
0046 Methane, chloromethoxy-
U046 Chloromethyl methyl ether
U047 Naphthalene, 2
-------
INSTRUCTIONS
APPENDIX
RCRA AND OTHER WASTE CODES
Cod* Waste description
• U063 Dit>enz(a,h]anthracene
U063 1,2:5,6-Dibenzanthracene
0064 Dibenz(a,i]pyrene
U064 1.2:7,8-0ibenzopyrene
UOM Propane, 1-2-dibromo-3-chloro-
U066 1,2-Dibromo-3-chloropropane
U067 Ethytene dibromide
U067 Ethane, 1 ,2-dibromo-
U068 Methane, dibromo-
U068 Methylene bromide
U069 Dibutyl phthalate
U069 1 ,2-Benzenedicarboxylic acid, dibutyl ester
U070 o-Oichlorobenzene
U070 Benzene, 1 ,2-dichloro-
U071 m-Oichlorobenzene
U071 Benzene, 1 ,3-dichloro-
U072 p-Oichlorobenzene
U072 Benzene, 1 ,4-dichloro
U073 (1,1'-BiphenylH.4'-dlamine^3'-dichloro
U073 3£'-Dichlorobenzidine
U074 2-Butene,1,4-dichlorcHi,t)
U074 1,4-Oichloro-2-butene(i,t)
U075 Methane, dichlorodifluoro-
U075 Dichlorodifluoromethane
U076 Ethylidene dichlonde
U076 Ethane.1,1-dichloro
U077 Ethylene dichlonde
U077 Ethane, 1,2-dichloro-
U078 Ethene.M-dichlorc-
U078 1,1-Oichloroethylene
U079 Ethene. trans-1,2-dichloro-
U079 1,2-Oichloroethylene
0080 Methane, dichloro-
O080 Methylene chloride
0081 Phenol,2,4-dichloro-
OOtl 2.4-Oichlorophenol
0082 Phenol.2^dichloro-
0082 2£-Oichlorophenol
0083 Propytene dichtoride
0083 1.2-Oichlorepropane
Propene,15-dlchtoro-
0085 W-Btarirane 0,0
0085 1^3,4-Dlepoxybutane (i,t)
(continued)
B-22
-------
INSTRUCTIONS APPENDIX RCRA AND OTHER WASTE CODES
Cod* Waste description
U086 Hydrazine, 1,2-diethyl-
U086 N.N-Oiethylhydrazine
U087 Phosphorodtthioic acid.O.O-diethyl-, S-methyt-ester
U087 0,0-Oiethyl-S-fnethyf-drthiophosphate
U088 Oiethyl phthalate
U088 1,2-Benzenedicarboxytic acid, diethyl ester
U089 4.4'-Stilbenediol,a.a'-diethyt-
U089 Diethytstilbestrol
U090 Dihydrosafrole
U090 Benzene,l,2-methytenedioxy-4-propyl-
U091 (1,r-Biphenyi)-4,4'-diamineA3'-difflethoxy-
U091 W-OimethoxybenzJdine
U092 Methanamine, N-methyHO
U092 Oimethylamine (!)
U093 Dimethytaminoazobenzene
U093 Beruenamine, N,N-dimethyM-phenytazo-
U094 7,12-DimethylbenzjaJamhracene
U094 1,2-Benzanthracene,7,12-dimethyl-
U095 (1,1 '-8ipheny)>-»,4'-diamineA3'-dimethy)-
U095 W-Oimethytbenzjdine
U096 Hydroperoxide, Unethyl-phenylethyl-C")
U096 ao-Oimelhyibenzylhydroperaxide (r)
U097 Carbamoyt chlonde,dimethyl-
U097 Dimetnylcarbamoyl chloride
U098 Hydrazin«,1,1-dimethy1-
U098 1,1-Oimethythydrazine
U099 Hydrazine, 1,2-dimethyl-
U099 1.2-Oimethylhydrazine
U101 Phenol, 2,4-dimethyl-
VJ101 2,4-Oimetriylphenol
U102 Dimethyl phthalate
U102 V2>Benzenedicarfooxy1ic acid, dimethyl ester
U103 Sultunc aad, dimethyl ester
U103 Dimethyl sulfate
U105 2.4-Oinrtfotoluene
U105 Benzene, 1-metnyl-2,4-dinrtro-
U106 2>Oinrtroto(uene
U106 Benzene, 1-methy1-2,6-dinttro
U107 DkMsctyl phthalate
U107 1-2-Benzenedicart>oxy1ic acid, dwvoctyl ester
U108 1,4-Oiettiytene dioxide
0108 1,4-Oioxane
(1109 Hydrazine, Uxliphenyt-
U1M 1,2-0ipn«ny1hydrmzine
B-23
-------
-------
INSTRUCTIONS
APPENDIX RCRA AND OTHER WASTE CODES
Cod* Waate description
U110 1-Propanamine,N-propyl-(i)
U110 Dipropytamine (i)
U111 N-Nitroso-N-propyiamine
U111 DS-N-propylnitrosamine
U112 Ethyl acetate (i)
U112 Acetic acid, ethyl ester (i)
U113 2-Propenoic acid, ethyl ester (i)
U113 Ethyl acrylate (i)
U114 Ethylendbis(dithtocarbamic acid), salts and esters
U114 1,2-EthanediylbiscartiamodithJoicacid
U115 Oxirane(i,t)
U115 Ethytene oxide (i,t)
U116 Ethylenethiourea
U116 2-lmidazolidinethione
U1t7 Ethyl ether (1)
U117 Ethane,l.1'-oxybis-(i)
U118 2-Propenoic acid, 2-methyl-, ethyl ester
U11B Ethyl methacrylate
U119 Ethyl methanesulfonate
U119 Methanesulfonic acid, ethyl ester
U120 Ruoranthene
U120 Benzolj.kJfluorene
U121 IHchloromonofluoromethane
U121 Methane, trichlorofluoro- '
U122 Formaldehyde
U122 Methylene oxide
U123 Formic acid (c,t)
U123 Methanoic acid (c,t)
U124 Furan(i)
U124 Furfuran(i)
0125 Furfural (0
U125 2-Furancarboxatdehyde (i)
U126 l-Propanol,23^poxy-
U126 Qlycidylaldehyde
U127 Hexacftlorobenzene
U127 Benzene, hexachloro-
U12S Hexachlorobutadine
U128 1>8utadiene,1,UA4,4-flexachlorc-
U129 Heachlorocyctoheane (T isomer)
U129 Undane
U130 HracMorocydopentadine
U130 1^Cyctop«Tt»dien
U131 HexachkyiMtnane
U131
(continued)
B-24
-------
I INSTRUCTIONS APPENDIX RCRA AND OTHER WASTE CODES
Cod* Weste description
U132 Hexachlorophene
U132 2.2-Methylenebis(3,4,6-trichlorophenol)
U133 Hydrazine (r,t)
U133 Diamine(r,t)
U134 Hydrogen fluoride (c,t)
U134 Hydrofluoric acid (c,t)
U13S Sulfur hydride
U135 Hydrogen sulfide
U136 Hydroxydimethylarsine oxide
U136 Cacodylic acid
U137 1,KH1.2-Phenytene)pyrene
U137 »deno[1.2,3-cdlpyTene
U138 Methane, iodo-
U138 Methyl Iodide
U139 Ferric dextran
U139 Iron dextran
U140 1-Propanol,2-methyf-(i,t)
U140 Isobutyl aJcohol (i,t)
U141 Isosafrole
U141 Benzene, 1,2-methytenedioxy-4-propenyi-
U142 Kepone
U142 Decachlorooctahydro-1,3,4-metheno-2H-cyclobuta[c,d]-pentalen-2-one
U143 Lasiocarpine
U144 Lead acetate
U144 Acetic acid, lead salt
Ut 45 Phosphoric actd, lead salt
U14S Lead phosphate
U146 Lead subacetate
U147 2,5-Furandione
U147 MaJeic anhydride
U144 Maleic hydrazide
U148 1,2-Oihydro-3,6-pyradizinedione
U149 Propanedinitrile
U149 Malononttrile
U150 Melphaian
U150 Alanine, 3-{p-bis(2-chloroethyl)amino] phenyl-.L-
U1S1 Mercury
U1S2 Propenenrtrile.2-methy(-(i,t)
U152 Methacrylonrtrile(i,t)
U1S3 Thkxnethanol (i.t)
U153 Methanethtol 0,1)
U184 Methane! (?)
U1S4 Methyl alcohol (I)
U155 Pyridine,24(2xtimethyl«fflirK>)etriyl>2-pherryiamino-
0155 Methapyrilene
(continued)
B-25
-------
INSTRUCTIONS
APPENDIX
RCRA AND OTHER WASTE CODES
Code Waste description
U156 Methyl chlorocarbonate (i,t)
U156 Carbonochloridic acid, methyl ester (i,t)
U1S7 3-Methytcholanthrene
0157 BenzOlaceanthrytene, 1,2-dihydro3-methyt-
U158 4,4'-Methylenebis(2-chloroaniline)
U158 Benzenamine,4,4'-methylenebis(2-chloro-
U159 Methyl ethyl ketone(i.t)
U159 2-Butanone (i.t)
U160 Methyl ethyl ketone peroxide (r,t)
U160 2-Butanone peroxide (r,t)
U161 4-Methyt-2-pemanone (i)
U161 Methyl isobutyl ketone (Q
U162 2-Propenoic acid, 2-methyi-, methyl ester (i,t)
U162 Methyl methacryJate (i.t)
U163 Guanidine, N-nrtroso-N-metriyl-N'-nitro-
U163 N-methyt-N'-nrtro-N-nitrosoguanidine
U164 4{1H)-Pyrimidinone, 2.3-dihydro-6-methy1-2-thioxo-
U164 Methytthiouracil
U165 Naphthalene
U166 1,4,Naphthoquinone
U166 1,4-Naphthalenedione
U167 1-Naphthylamine
U167 o-Naphtrtytamtne
U168 2-Naphthylamine
U168 |S-Naphthylamine
U169 Nitrobenzene (i.t)
U169 Benzene, nitro- (i,t)
U170 Phenol,4-nitro-
U17D p-Nitrophenol
0171 Propane,2-nrtro-fM)
U171 2-Nitropropane (i.t)
U172 N-Nitrosodi-N-butytamtne
U172 1-Butanamine, N-butyt-N-nrtroso-
UT73 Ethanol.2,2-(nitresoimino)bis-
U173 N-Nitrosodiethanolamine
. U174 N^litrosodiethylamine
U174 Ethanamine, N-etnyt-N-nitroso-
U178 N^Jitfoso-N-ethylurea
U178 Carbamid«,N-«nyl-N-nrtroso-
U177 N-Nitroso<^-fn«hylurea
U177 Caroamid«,N4iMthyl44-nitreso-
U178 N-Nitroso-N^nethy1ur»thane
U17B Cartaamic acid, methylnitroso-, ethyl ester
U179 N-Nitrosopiperidine
U178 PyrWine,h«jcahydn>N-nitro»o-
(continued)
B-26
-------
INSTRUCTIONS
APPENDIX
RCRA AND OTHER WASTE CODES
Code Waste description
U180 Nitrosopyrrolidine
U180 Pyrrole, tetrahydro-N-nitroso-
U181 5-Nitro-o-toluidine
U181 Beruenamine,2-methy)-5-nitro
U182 Pa/aldehyde
U182 1,3l5-Trioxane,2,4,S.trimethyl-
U183 Pentachlorobenzene
U183 Benzene, pentachloro-
U184 Pentachtoroethane
U184 Ethane, pentachloro-
U185 Pentachloronitrobenzene
U185 Benzene, pentachloronitro-
U186 1,3-Pentadiene(0
U186 1-Methylbutadiene (i)
U187 Phenacetin
U187 Acetamide, N-<4-ethoxyphenyl)-
U188 Phenol
U188 Benzene, hydroxy-
U189 Phosphorus sulfide (r)
U189 Sulfur phosphide (r)
U190 Phthalic anhydride
U190 1,2-Benzenedicarboxylic acid anhydride
U191 2-Picoline
U191 Pyndine, 2-methyl-
U192 Pronamide
U192 3,5-Dichloro-N-(1,1-dimethyl-2-propynyl) benzamide
U193 1,2-Oxathiolane, 2,2-dioxide
U193 1,3-Propane sultone
U194 1-Propanamine (i,t)
U194 N-Propylamine (i,t)
U196 Pyndine
U197 p-Benzoquinone
U197 1,4-Cyclohexadienedione
U200 Reserpine
U200 Yohimban-16-carboxylic acid, 11,17-dimethoxy-l84(3,4,5-tnmethoxy-6enzoyl)oxy]-. methyl ester
U201 Resorcinol
U201 1,3-Benzenediol
U202 Saccharin and salts
U202 1,2-Benzisothiazolin-3-one,1,1-dioxide, and salts
U203 Safrole
U203 Benzene, 1,2-methy)enedioxy-4-allyl-
U204 Setenious acid
U204 Selenium dioxide
U205 Selenium disulfide (r,t)
U205 Sulfur selentde (r,t)
(continued)
B-27
-------
INSTRUCTIONS
APPENDIX
RCRA AND OTHER WASTE CODES
Code Waste description
U206 Streptozotocin
U206 D-Glucopyranose, 2-deoxy-2(3-methyl-3-nitrosoureido)-
U207 1,2,4,5-Tetrachlorobenzene
U207 Benzene, 1,2,4,5-tetrachloro-
U208 1,1,1,2-Tetrachloroethane
U208 Ethane, 1,1,1,2-tetrachloro-
U209 1,1,2,2-Tetrachloroethane
U209 Ethane,M-2-2-tetrachloro-
U210 Tetrachloroethylene
U210 Ethene,1,1,2.2-tetrachloro
U211 Methane, tetrachloro-
U211 Carbon tetrachloride
U213 Tetrahydrofuran (i)
U213 Furan, tetrahydro- (!)
U214 Thallium(I) acetate
U214 Acetic acid, thallium(I) salt
U215 Thallium(I) carbonate
U215 Carbonic acid, dithallium(I) salt
U216 Thallium(I) chloride
U217 Thallium(I) nitrate
U218 Thioacetamide
U218 Ethanethioamide
U219 Thiourea
U219 Carbamide, thio-
U220 Toluene
U220 Benzene, methyl-
U221 Toluenediamine
U221 Oiaminotoluene
(1222 o-Toluidine hydrochlonde
U222 Benzenamtne, 2-methyl-, hydrochlonde
U223 Toluene diisocyanate (r,t)
U223 Benzene, 1,3-diisocyanatomethyl-(r,t)
U225 Methane, tribromo-
U225 Bromoform
U226 1,1,1-Trichloroethane
U226 Methylchloroform
U227 1,1,2-Trichloroethane
U227 Ethane, 1,1,2-trichlorc-
U228 Trichloroethylene
U228 Trichloroethene
U232 2,4,5-Trichtoracetic acid, salts, and esters
U233 2,4,5-Trichtofophenojcypropionic acid, salts, and esters
U234 iym-Trinitrobenzene (r.t)
U234 Benzene. 1,33-trinrtn>(r,t)
(continued)
B-28
-------
INSTRUCTIONS
APPENDIX RCRA AND OTHER WASTE CODES
Code Waste description
U235 1-Propanol,2,3-dibromo-,phosphate(3:1)
U235 Tris(2,3-dibromopropyl) phosphate
U236 Trypan blue
U236 2,7-Naphthalenedisulfonic acid, 3,3'-l(W-dimethyH1,1 '-bipheny!H.4'-diyO}-bis(azo)bis(5-amino-4-riydroxy)l
tetrasodium salt
U237 Uracil mustard
U237 Uracil, 54bis(2-chloroethyl)-amino]-
U238 Ethyl carbarmate (urethan)
U238 Carbamic acid, ethyl ester
U239 Xylene(i)
U239 Benzene, dimethyl- (i.t)
U240 2,4-0, salts and esters
U240 2.4-Dichlorophenoxyacetic acid, salts, and esters
U243 1-Propene,1,1,2,3A3-hexachloro-
U243 Hexachloropropene
U244 Thiram
U244 Bis(dimethylthiocarbamoyl) disulfide
U246 Bromine cyanide
U246 Cyanogen bromide
U247 Ethane, 1,1,1,-trichloro-2-2-bis(p-methoxyphenyl)
U247 Methoxychlor
U248 Wartann, when present at concentrations of 0.3% or less
U248 3-(
-------
-------
APPENDIX C
ELASTICITY OF DEMAND FOR OFF-SITE
WASTE AND RECOVERY OPERATIONS
-------
-------
APPENDIX C
ELASTICITY OF DEMAND FOR OFF-SITE
WASTE AND RECOVERY OPERATIONS
The price-elasticity of demand (which will be referred to
as the elasticity of demand from here on) measures the
responsiveness of demand for a service to changes in its
price. It is defined as the percentage change in the quantity
demanded of a service divided by the percentage change in its
price.
Economic theory states that the elasticity of the derived
demand for an input is a function of the following:
• demand elasticity for the final good it will be used
to produce,
• the cost share of the input in total production cost,
• the elasticity of substitution between this input and
other inputs in production, and
• the elasticity of supply of other inputs.1'2'3
Using Hicks' formula,
v _ s(n + e) + Ke(n-s) (C-l)
n + e - K(n-s)
where
E = elasticity of demand for the OWR service,
s = elasticity of substitution between OWR services and
all other inputs,
n = elasticity of demand for final product,
e = elasticity of supply of other inputs, and
K = cost share of this input in total production cost.
C-l
-------
Hicks, in the Appendix to The Theory of Wages, shows
that, if n > s, the demand for the input is less elastic the
smaller its cost share.4 If the data were available, this
formula could be used to actually compute the elasticity of
demand for each OWE service. As noted above, however, nearly
every production activity generates some waste that is managed
off site. The number of final products whose elasticity of
demand (n) would need to be included is very large, and the
elasticities of demand for those products vary widely. Thus,
resources do not permit determination of a value for n. This
makes direct computation of the elasticity of demand, E,
impossible. In spite of this, the formula is useful because
it identifies factors that influence the magnitude of the
elasticity of derived demand. Knowledge of the general
magnitude of those factors makes it possible to make an
educated assumption about the magnitude of E.
The elasticity of substitution, s, between waste
management services and other inputs is low but not zero.
This means that waste generators do have some limited options
in the way they produce their final goods or services. Some
limited substitution is possible between management
technologies for a given waste form. Further, facilities may
substitute on site capital, labor, and/or materials for off
site waste management either by choosing to manage the waste
on site or by undertaking on site pollution prevention
activities. These options are very limited, however, so s is
expected to be small, and n is almost certain to be larger
than s.
Thus, the magnitude of E depends on the magnitude of K,
the cost share of OWR in final goods production.
REFERENCES
1. Allen, R.G.D. Mathematical Analysis for Economists. New
York, St. Martin's Press. 1938. 509 pp.
C-2
-------
2. Hicks, J.R. Marshall's Third Rule: A Further Comment
Oxford Economic Papers. .13.:262-65. 1961.
3. Hicks, J.R. The Theory of Wages (2nd ed. ) . New York,
St. Martin's Press. 1966. 247 pp.
4. Ref. 3.
C-3
-------
-------
APPENDIX D
FINANCIAL ANALYSIS METHOD
-------
-------
APPENDIX D
FINANCIAL ANALYSIS METHOD
This analysis uses data from Dun & Bradstreet's (D&B's)
Industry Norms and Key Business Ratios (1992) to construct
typical financial statements for the firms for which actual
financial statements are not available. Industry Norms and
Key Business Ratios reports data by Standard Industrial
Classification (SIC) code and aggregates financial data for
all firms within a SIC code rather than reporting data for any
individual firm. Two types of financial data are contained in
the D&B database: common-size financial statements and
financial ratios. Common-size financial statements include a
representative (or average) income statement where all values
are expressed as a percentage of total revenues and a
representative balance sheet where all values are expressed as
a percentage of total assets. Key financial ratios reported
as quartile values representing above-average (upper
quartile), average (median), and below-average (lower
quartile) performance are also reported for each SIC code.
Two options are available for constructing financial
statements using D&B profiles. Under the first approach,
financial statements are constructed using the common-size
financial data and company data on total sales and/or total
assets to generate financial statements. Financial statements
constructed in this manner represent firms in average
financial condition only. The second approach uses the upper
quartile, median, and lower quartile financial ratios to
derive financial profiles. Under this approach, the
constructed financial statements represent firms in above-
average, average, and below-average financial condition.
D-l
-------
The regulation will potentially have a more adverse
impact on firms that are in average or below-average financial
condition than on firms in above-average financial condition.
Consequently, the second approach (based on financial ratios)
was used to construct financial profiles for the potentially
affected firms for which actual financial statements are not
available from published sources. To construct financial
statements for these firms, each firm was assigned to a
financial health category based on the following protocol:
• Assign a random number to each firm.
• Sort the firms by SIC code then sort the firms within
each SIC code by random number.
• Assign financial health within each SIC code based on
the following pattern: average, below average,
average, above average. Repeat this pattern until all
firms are assigned to a financial health category.
Using this method to assign financial health ensures that
each SIC category with four or more firms has a representative
firm in average, below-average, and above-average financial
condition. Furthermore, firms are distributed roughly in the
proportion 25 percent below-average, 50 percent average, and
25 percent above average for most of the SIC categories. This
distribution is consistent with the quartile financial ratios
used to construct financial statements. Note, however, that a
perfectly systematic distribution of 25 percent below average,
50 percent average, and 25 percent above average does not
result from this method because the number of firms in each
SIC code is not a multiple of four. Consequently, the
distribution is slightly skewed toward the average and below-
average financial health categories.
Data on total revenues or total assets are required (at a
minimum) to construct financial statements using financial
ratios reported in D&B. All other lines in the financial
statements are derived, directly or indirectly, from the
quartile financial ratios and the common size financial
D-2
-------
statements reported in D&B (see Table H-5 in Appendix H) .
Several examples will clarify how the statements are derived.
D&B reports that the median waste treatment firm (SIC 4953) in
the D&B database has a net profit of 6.7 percent of total
revenues. This ratio multiplied by the total revenue value
yields the estimated net profit in the income statement. The
three other lines in the income statement are analogously
derived by applying D&B ratios multiplied by sales.
Balance sheet items are derived in a similar manner. D&B
reports that the median waste treatment firm had about $528 of
total assets for every $1,000 of revenues. This ratio
multiplied by the total revenue value yields an estimate of
total assets. D&B reports that the average waste treatment
firm has about $421 of current assets, $347 of fixed assets,
and $232 of other noncurrent assets per $1,000 of total
assets. These ratios multiplied by the total assets estimates
yield the estimates for those variables. In the liabilities
section of the balance sheet, "total liabilities and net
worth" must equal "total assets," and the component parts are
computed using D&B ratios multiplied by the total.
D-3
-------
-------
APPENDIX E
ESTIMATING COMPANIES' WEIGHTED AVERAGE
COST OF CAPITAL
-------
-------
APPENDIX E
ESTIMATING COMPANIES' WEIGHTED AVERAGE
COST OF CAPITAL
To estimate the WACC, first values for Kd and Ke were
estimated. Marginal costs of capital, not historical average
costs, are appropriate hurdle rates for new investments.1
However, data are available only for the historical values.
All else being equal, the cost of both debt and equity capital
is generally higher for firms in below-average financial
condition than for firms in above-average financial condition.
This higher cost of capital reflects a higher level of risk
associated with the returns for firms in below-average
financial condition. Consequently, EPA estimated the cost of
capital for firms in below-average, average, and above-average
financial condition.
This analysis estimated the cost of debt for firms in
above-average and average financial condition based on the
average bond yields reported by Standard and Poors (S&P).2
Bond ratings indicate potential default risk. Bonds rated AAA
are considered low risk and are generally associated with
firms in above-average financial condition. Yields for
corporate industrial bonds rated AAA averaged 7.89 to 8.69
percent in 1992.3 Bonds rated BBB are considered average risk
and are associated with firms in average financial condition.
Yields for corporate industrial bonds rated BBB averaged 8.82
to 9.5 percent in 1992.4 For this analysis, EPA uses the
midpoint of the range, or 8.29 percent, for AAA bonds and 9.16
percent for BBB bonds. Bonds rated CCC are considered to be
riskier than average. Standard and Poors does not report
yields for lower grade bonds (rated BB-C) because of the high
E-l
-------
variability in returns for these bonds. However, Anderson et
al. project a 14.5 percent yield for bonds rated CCC.5 The
1992 CCC bond yield was estimated using the 1987 S&P average
yield for grade BBB bonds (10.36 percent),6 the 1992 S&P yield
for grade BBB bonds (9.16 percent), Anderson's estimates of
the 1987 CCC bond yield (14.5 percent), and the following
formula:
CCC92 = (CCC87 / BBB87) • BBB92 (E-l)
or
12.91 = (14.5 / 10.36) • 9.16
Based on these assumptions and data, the cost of debt for
firms was projected in three financial conditions:
• above-average financial condition: 8.29 percent
• average financial condition: 9.16 percent
• below-average financial condition: 12.91 percent
Because debt interest is deductible for state and federal
income tax purposes, the cost of debt has to be adjusted
downward. The Tax Foundation estimates that the effective
marginal state and federal tax rate averaged 30.3 percent in
1992.7 Applying this rate to the real costs of debt computed
above derived an after-tax debt costs for firms in three
different financial conditions:
• above-average financial condition: 5.78 percent
• average financial condition: 6.38 percent
• below-average financial condition: 9.00 percent
Financial analysts use several methods to estimate the
cost of equity capital including the Capital Asset Pricing
Model (CAPM) , the Dividend Growth Model, and a risk premium
model. These methods are discussed in Appendix A of the
Economic Impact of Air Pollutant Emission Guidelines for
E-2
-------
Existing Municipal Waste Combustors.8 This analysis used the
CAPM to estimate the cost of equity capital. The CAPM is
expressed in the following equation:
Ke = Rf + Pd^ - Rf) (E-2)
where
Ke = the cost of equity capital
Rf = the risk-free rate of return (long-term
treasury bonds)
P = beta, a measure of the relative risk of the
equity asset
(Rjj, - Rf) = the market risk premium
Estimates of the risk-free rate, the market risk premium,
and firm-specific beta values are required to estimate the
cost of equity capital. This analysis used the 1992 average
rate of return on long-term treasury bonds to estimate the
risk-free rate. The Survey of Current Business reports that
long-term treasury bonds averaged 7.52 percent during 1992.9
Ibbotson Associates estimate that the market risk premium
(R,,, - Rf) has averaged approximately 6 percent over the last 66
years.10 The risk-free rate and the market risk premium are
for the market as a whole and, thus, are the same for all
firms regardless of the firm's financial condition. Beta
values, however, are a measure of the relative riskiness of
the firm and vary from firm to firm. Table E-l reports beta
values for a small sample of firms that perform hazardous
waste management services.
To estimate Ke values for firms in each of three
financial conditions, average beta values were computed for
firms in different bond rating groups. Beta values for firms
with a bond rating of AAA to A averaged 1.18. Similarly, beta
values for firms with bonds rated BBB to B averaged 1.41.
Only one firm in the small sample was rated below B. This
firm was rated CCC+ and had a beta value of 2.06. These beta
values by bond rating group were used as representative betas
E-3
-------
TABLE E-l. BETA VALUES BY BOND RATING GROUP FOR A SAMPLE
OF POTENTIALLY AFFECTED FIRMS11
Bond rating
AA
A
BBB+
BB
BB
BB
BB-
B+
B+
B+
CCC+
Beta Bond group average beta
1.15
1.2 1.18
1.2
1.1
1.7
2.3
1.2
1.15
1.25
1.35 1.41
2.06 2.06
to estimate the cost of equity for firms in each of three
financial conditions:
• above-average financial condition:
P = 1.18, Ke = 14.57;
• average financial condition:
(3 = 1.41, Ke = 15.96; and
• below-average financial condition:
(3 = 2.06, Ke = 19.88.
Next, the weighting factors were estimated and used to
estimate the WACC equation. The theoretically correct weights
are the target weights rather than historical weights.
Financial theory holds that each firm has an optimal capital
structure that maximizes the value of the firm by minimizing
its cost of capital. When the firm raises new capital, it
generally tries to maintain an actual capital structure that
is reasonably close to the target or optimal structure. As
seen in the WACC equation above, returns (interest payments)
to debtholders are a tax-deductible expense for the firm.
This tax benefit associated with debt effectively reduces the
cost of debt financing for the firm. However, increasing the
use of debt in a firm's capital structure increases the fixed
interest payments incurred by the firm. The greater the use
E-4
-------
of debt financing, the larger the fixed interest charges, and
the greater the probability that a decline in earnings will
lead to financial distress. This tradeoff between the tax
advantages of using debt and the financial distress costs
associated with debt is shown in Figure E-l.
The firm's optimal capital structure is the point where
the tax advantages of using debt are just offset by the
financial distress costs. Estimating the target capital
structure for each potentially affected firm is beyond the
scope of this analysis. It was assumed that the actual
capital structure employed by firms approximates their target
or optimal capital structure and that firms are minimizing
their cost of capital in the baseline. Furthermore, it was
assumed that book-value weights approximate market-value
weights where market-value weights are not available.12
Value of
Firm, V
($)
Present Value of
Interest Tax Shelter: TD
Value of Firm with No
Financial Distress Costs
Rnancial Distress Costs
Actual Value of Firm
Value of Firm with
No Financial Leverage
Optimal Amount of Debt
0 Debt($)
Figure E-l. Optimal capital structure: tradeoff model.
E-5
-------
REFERENCES
1. Bowlin, 0. D., J. D. Martin, and D. F. Scott. Guide to
Financial Analysis. 2nd Ed. New York, McGraw-Hill.
1990.
2. Standard & Poor's. Security Owner's Stock Guide. Vol.
47, No. 1. January 1993.
3. Ref. 2.
4. Ref. 2.
5. Anderson, D. W., H. H. Mims, and A. S. Ross. Industry
Supply, Cost, and Availability of Capital, and Closure .
Analysis. Draft report prepared for the Environmental
Protection Agency. Research Triangle Park, NC, Research
Triangle Institute. September 1987.
6. Ref. 5.
7. The Tax Foundation. Special Report. No. 18. March
1993 .
8. U. S. Environmental Protection Agency. Economic Impact
of Air Pollutant Emission Guidelines for Existing
Municipal Waste Combustors. Research Triangle Park, NC.
EPA-450/3-89-005. August 1989.
9. Survey of Current Business. 1993.
10. Ibbotson and Associates. SBBI 1993 Yearbook. Chapter 6
11. Value Line Investment Survey. June 11, 1993.
12. Ref. 1.
E-6
-------
APPENDIX F
ESTIMATING FACILITIES' BASELINE WASTE
MANAGEMENT QUANTITIES
-------
-------
APPENDIX F
ESTIMATING FACILITIES' BASELINE WASTE
MANAGEMENT QUANTITIES
F.I ESTIMATING BASELINE QUANTITIES
The baseline quantity of individual waste types managed
at each of the affected off-site waste and recovery (OWR)
facilities was estimated by synthesizing data from the
National Survey of Hazardous Waste Treatment, Storage,
Disposal, and Recycling Facilities (TSDR Survey) and the
National Survey of Hazardous Waste Generators (GENSUR). As
described in Section 2 of this report, the TSDR Survey
provides the total quantity of waste managed commercially and
noncommercially in each treatment process at each facility,
but does not provide any information as to the characteristics
of specific waste streams handled in each process. The
GENSUR, on the other hand, offers a detailed characterization
of each waste generated in 1986 and identifies the quantity of
each waste sent off site for management. The GENSUR also asks
generators to identify the OWR facilities to which each waste
stream was sent as well as for the generators' best guess of
which treatment and disposal processes await each waste stream
at the destination OWR facility. When facilities associated
more than one destination OWR facility with a given waste
stream, the reported quantity was divided equally among all
OWR facilities mentioned.
The Agency is able to group the approximately 27,000
individual waste streams from the GENSUR database into six
broad waste "forms" by using the GENSUR's detailed constituent
information. Then, by identifying which one of 10 broad
F-l
-------
categories of treatment generators believed would first be
used at the OWR facilities to which wastes were sent, the
Agency can differentiate these six "waste forms" into 60
distinct types of waste for which off-site waste management is
demanded. Throughout this section, "waste type" means one of
the 60 unique waste form/waste management process
combinations. The analysis of impacts on the markets for
commercial OWR services treats management of each of the 60
waste types as a unique OWR service with its own market supply
and demand and its own price.
F.I.I Resolving Data Limitations
The estimated quantities of individual waste types (waste
form and treatment category combinations) managed at each OWR
facility at baseline that are discussed in this section are
the Agency's best estimate of baseline conditions given the
data available. The Agency attempted to account for trends in
the waste management industry that have evolved in the seven
years since the GENSUR and TSDR Survey were conducted. For
example, 19 off-site waste management categories of the GENSUR
have been streamlined to 10, primarily to reflect revised
practices in land-based waste treatment and disposal resulting
from the Land Disposal Restrictions described in Section 2.
Also, the Agency assumes that most wastes formerly managed
with land application, or treatment, storage, and disposal in
wastepiles and surface impoundments, are currently being
landfilled and that wastewater treatment in tanks has now
replaced wastewater treatment in surface impoundments.
Table F-l shows how the 19 1986 off-site management codes
from the GENSUR were used to map 1986 flows of wastes managed
off site into the 1991 baseline industry profile presented
here. Column 1 shows OWR codes associated with wastes in the
GENSUR. Column 2 shows the waste management operation in the
analysis to which each OWR code was assigned.
F-2
-------
TABLE F-l.
DEFINITIONS OF MANAGEMENT CODES USED IN THIS
ANALYSIS
GENSUR off-site management codes Management codes used in analysis
M01
M02
MO 3
M04
MOB
M06
M07
MO 8
M09
Mil
M12
Ml 3
M14
Ml 5
M10
Ml 8
Ml 6
M17
M19
Incineration
Reuse as fuel
Fuel blending
Solidification/stabilization-
Solvent recovery
Metals recovery
Wastewater treatment in tank-
Wastewater treatment in
surface impoundment
Wastewater treatment in
unknown treatment type
Storage/treatment in waste
pile
Storage/disposal in
surface impoundment
Landfill
Land treatment
Underground injection
Other treatment/recovery
Other
Discharge to POTW
Discharge under NPDES permit-
Unknown
Ql Incineration
Q2 Reuse as fuel
Q3 Fuel blending
Q4 Solidification/stabilization
Q5 Solvent recovery
Q6 Metals recovery
Q7 Wastewater treatment
Q7 Wastewater treatment
Q7 Wastewater treatment
Q8 Landfill
Q8 Landfill
Q8 Landfill
Q8 Landfill
Q9 Underground injection
Q10 Other
Q10 Other
Not included
Not included
Q20 Unknown (distributed across
other on site treatment
categories)
F.I.2 Combining Process Quantities from the TSDR Survey with
Waste Form Data from the GENSUR
There are discrepancies between the amount of waste from
off site that OWR facilities reported accepting for each
category of treatment (in the TSDR Survey) and the quantity
that generators claimed (in the GENSUR) to have shipped to
each treatment category at each OWR facility. To resolve this
discrepancy, the Agency has chosen to control to the total
quantities reported in the TSDR Survey but use the
distribution of waste forms described by the GENSUR. This
decision is appropriate because the approximately 6,000 waste-
generating facilities included in the GENSUR comprise only a
F-3
-------
sample, albeit a large one, of the total population of
hazardous waste generating facilities, while the TSDR Survey
was a census of all RCRA-regulated treatment and disposal
facilities operating in 1986. It is also the Agency's belief
that the most reliable information regarding how much waste
was treated in each category of treatment at each OWR facility
is the information each OWR facility provided in its responses
to the TSDR Survey. Unlike the GENSUR, the TSDR Survey
specifically requests that respondents omit "brokered wastes,"
from their tallies of waste quantities managed in each
treatment category. Brokered wastes are those accepted from
off-site generators and then shipped to other waste treaters
for management. Omitting these wastes means that quantities
of waste reported as being treated in a treatment category at
an OWR facility are actually treated at that site. These are
the waste quantities needed for this analysis.
At the same time, the most accurate information about
waste forms being sent to OWR facilities comes from the
generators' GENSUR responses. To fully characterize the
wastes being managed at OWR facilities, the analysis combines
the distribution of waste forms from the GENSUR with the
quantities of waste managed in each process from the TSDR
Survey. Figure F-l illustrates the general approach taken for
a hypothetical facility. Panel A shows the quantities of
waste managed in each of the ten waste management processes,
based on data from the TSDR Survey. In panel B, the shaded
distribution of waste forms sent by generators to the facility
for management in the various processes, according to data
from the GENSUR. The waste form distribution from the GENSUR
is applied to the quantities reported in the TSDR, giving the
quantities managed of 60 specific waste types shown in
panel C.
F.I.3 Waste Brokerage and Unnamed OWR Facilities
Ideally, the level of detail requested of respondents to
the GENSUR about the source, character, quantity, destination,
F-4
-------
A) TheTSDR
Survey provided
the quantity of
waste a facility
handled in each
of the 10
process
categories.
01
02 Q3 Q4 Q5 Q6 Q7
Q8
Q9 Q10
B) Data from the
GENSUR
Survey gave a
breakdown into
the six waste
forms for a
portion of the
waste the facility
managed in
each process.
1
01
02 Q3
04
05 Q6 Q7 Q8 Q9 Q10
C) The proportion
of each form
within each
process (from
step B) is used
to assign the
TSDR Survey
quantity
managed in
each process to
individual waste
forms.
01
Q2 Q3 Q4 Q5 Q6 Q7 08 Q9 Q10
Figure F-l. Preferred methodology for combining TSDR-survey
quantities with GENSUR waste form distribution for each process
F-5
-------
and subsequent treatment of each waste shipped off site would
allow for simple and accurate portrayal of baseline conditions
at OWR facilities. Unfortunately, only 464 facilities of the
universe of 725 affected OWR facilities were mentioned by name
(EPA ID#) in the GENSUR as the OWR facilities to which wastes
were sent for treatment. Moreover, not all facilities that
responded to the GENSUR associated a destination OWR facility
with each waste stream that they indicated that they
generated. Another problem is that some facilities did not
respond to the question of where wastes were sent for any of
the waste streams that they generated, and others only named a
destination for some of their waste streams. In some cases,
the type of treatment that the generator claimed would be
provided at the receiving OWR facility was not even offered by
that OWR facility according to the TSDR Survey. These
facilities are referred to from now on as "misnamed" OWR
facilities and the wastes are referred to as "brokered
wastes." For this analysis, the Agency assumed that the named
receiving facility brokers these wastes to OWR facilities that
dp offer that type of treatment.
To remedy this situation, all unassigned waste streams
identified in the GENSUR, and the brokered wastes described
above, were combined as if they were all being sent to a
single OWR facility. These wastes were then disaggregated
into the 60 waste types based on waste characteristics and
management process reportedly awaiting each waste stream at
the 246 unnamed OWR facilities.
The quantities of each waste type (waste form and
treatment category combination) treated at each of the 246 OWR
facilities that were not named as destination OWR facilities
by waste generators responding to the GENSUR were estimated
using the following approach. The quantity of waste treated
in each process at each of the 246 OWR facilities is set at
the quantity the facility reported in the TSDR Survey. The
distribution of waste forms for the wastes reported in GENSUR
F-6
-------
to be sent to a given treatment category at unnamed and
misnamed OWR facilities was assumed to hold for all of the 246
facilities having that treatment category. For example, if
the overall distribution of waste forms sent to incineration
at unnamed and misnamed OWR facilities were 20 percent Form 1,
30 percent Form 2, and 50 percent Form 4, each of the 246
facilities that does incineration is assumed to incinerate 20
percent Form 1, 30 percent Form 2, and 50 percent Form 4.
The advantage of this depiction of the OWR industry at
baseline is that the total quantity of management services
supplied for each waste type accepted from off site is
consistent with what the sample of generators indicated was
demanded in 1986 and the quantities are consistent with the
quantities reported by the 246 facilities in the TDSR Survey.
It has the disadvantage, however, of assuming that each of the
246 unnamed facilities that offered a given category of
treatment treated the same proportions of the same specific
waste types. In other words, whereas in reality some of these
facilities may treat only one or two of the six waste forms in
a given category of treatment, with other facilities treating
other waste forms, this approach assumes a much more
homogeneous supply of treatment services for all waste types
for which no destination OWR facility was indicated in the
GENSUR. The approach results in a wider and more homogeneous
distribution of waste forms being managed in each treatment
process at the 246 OWR facilities than is probably true in
reality.
Figure F-2 illustrates the assumptions made in profiling
the types and quantities of wastes treated in the OWR industry
at baseline. Constituent data about wastes treated in each
treatment category at each of the 464 named facilities were
available only for roughly two-thirds of the approximately
14,600,000 Mg of wastes accepted from off site. The remaining
third of the off-site wastes are assumed to be similar to
those for which data are available. Because the OWR
F-7
-------
I
CD
Distribution of Wsst* Form*
f rom the QENSUR Survey
(aggregated for all processes)
12 3 466
for 464 "named" facilities
0,784.605 Mg
24,432 waste streams
2 TSOR Survey auanlllles
by Process with Selected
Waste Forms from GENSUR
CM 8.9 (7965%)
Q7 (4394%)
Q8 |22 35%|
Q10 (4 06%)
01 6. 9 |S 44%]
Q7 (5080X|
QIO (IS 28X|
O Baseline Quantities
of Each Waste Form
(aggregated for all processes)
12
5 , 8 .
12 _3L 45 «
I Off site quantity for
> 464 "named" facilities
j 24.133,927 Mg
Onslte quantity for
464 "named" facilities
197,948,269 Mg
61
fl
71J
for 246 "unnamed" facilities
6.M8.714 Mg
2,167 waste stream*
or
Q1-6. B |4 59%|
QIO |1 65%)
Ot-8. 8 (15.38%)
Q7 (28 58%)
Q8 (806%)
Q10 (4887%)
i<
/-*
Off site quantity for
• 246 "unnamed" facilities
6.160,993 Mg
Onsite quantity for
246 "unnamed" facilities
39.581,524 Mg
Figure F-2. Overview of aggregate waste form distribution at named and unnamed facilities.
-------
regulation would only apply to wastes transported off site for
treatment, the Agency performed no detailed analysis of the
physical composition of the roughly 106,000,000 Mg of on site-
generated wastes processed at affected OWR facilities. The
Agency has assumed that the distribution of waste forms of on-
site generated wastes managed in each category of treatment at
these facilities is the same as the distribution of waste
forms for the corresponding treatment categories of the
approximately 10,000,000 Mg of wastes sent to these facilities
from off-site GENSUR respondents. This assumption is based on
the Agency's belief that OWR facilities are most likely to
accept wastes from off site that are chemically similar to
wastes generated on site for which they are already equipped
to treat and dispose.
Figure F-2 also shows that the total quantity of waste
generators sent off site for treatment at unnamed and misnamed
facilities (5,888,714 Mg) is greater than the total quantity
of waste from off site reportedly accepted by the 246 unnamed
facilities (5,118,691 Mg). Thus, at least 770,023 Mg,
assigned to the imaginary catch-all facility and then used to
allocate the 246 unnamed facilities' TSDR Survey quantities
for each treatment category to specific waste forms, were
actually treated by other facilities, such as the named
facilities or the 15 non-RCRA wastewater treatment facilities
discussed below.
For each facility, the off-site waste form distribution
is applied to on-site wastes also. This suggests that the
industry-wide pattern of on-site waste forms managed should
match the industry-wide pattern of off-site waste forms
managed. Studying the third panel of Figure F-2 shows that
this is not the case. Industry-wide, Form 3 has a greater
share of the waste from off site than from on site, while Form
6 has a greater share of on-site waste than off-site waste.
This occurs because the quantity of wastes managed on site is
much larger than the off-site quantity at some facilities
F-9
-------
managing'a lot of Form 6 waste. Their waste fprm
distributions have a greater influence on the on-site
distribution of waste forms than they had on the off-site
distribution. Conversely, facilities managing a relatively
large share of Form 3 waste dominate the industry-wide off-
site waste form distribution. Aggregating across facilities,
the overall pattern of on-site waste forms managed thus
differs from the pattern of off-site waste forms managed.
Table F-2 presents the estimated baseline quantities of
each waste form managed in each process for off-site generated
wastes and on-site generated wastes aggregated separately for
the group of 464 named facilities and the 246 unnamed
facilities. Figure F-3 and Table F-3 combine the 464 and the
246, and show the distribution of waste forms across all
processes for all wastes managed at all 710 OWE facilities
that completed the TSDR Survey.
F.I.4 Non-RCRA Wastewater Treatment Facilities
In addition to the 464 named facilities and the 246
unnamed facilities discussed above, 15 OWR facilities were
never mentioned in the GENSUR as destination OWR facilities
and also did not complete the TSDR Survey. All waste quantity
information about these facilities was obtained from the 1989
CWT Survey conducted by EPA's Office of Water. These
facilities manage an estimated 22,067,009 Mg of waste from
off-site annually. The Agency assumes that all of this waste
is Form 3 and managed in wastewater treatment.
F.I.5 Unrecognizable OWR Codes
Some of the waste management codes used to identify the
type of treatment awaiting the waste stream at the receiving
OWR facility were not taken from the list of off-site
management codes provided in the GENSUR instruction package.
For these wastes it was not possible to determine what waste
management process was used. These waste quantities were
distributed equally across all waste types treated at each of
the OWR facilities to which they were reportedly sent for
F-10
-------
TABLE F-2. ESTIMATED AGGREGATE QUANTITIES OF EACH WASTE FORM
FROM OFF SITE AND ON SITE PROCESSED IN EACH TREATMENT CATEGORY AT
NAMED AND UNNAMED FACILITIES (Mg)
Process
Off-site
Ql
Q2
Q3
Q4
Q5
Q6
Q7
Q8
Q9
Q10
Total
On-site
Ql
Q2
Q3
Q4
Q5
Q6
Q7
Q8
Q9
Q10
Total
Form 1
quantities for
20,196
1
367
39,299
3,718
247,984
13,797
1,043,190
75
3,936
1,372,563
quantities for
833,148
0
16
62,963
1
104.810
144,863
8,144,558
11
7,312
9,297.682
Form 2
464 named
972
8,236
16,797
88,958
4,853
4,446
103,463
728,810
2,382
84,971
1,043,888
Form 3
facilities
21,683
9,552
15,205
78,275
37,003
53,503
5,731,355
523,232
353,034
174,483
6,997,325
Form 4
161,947
201,784
1,427,805
20,775
1,455,269
3,654
145,908
128,639
14,090
40,941
3,600,812
Form 5
46,717
98,151
1,200,301
139,912
1, 140,051
8
64,939
636,525
8,105
20,061
3,354,770
Form 6
19,023
8,538
3,307
69,746
8,178
109,780
4,544,871
2,334,566
11,702
654,858
7,764,569
Total
270,538
326,262
2,663,782
436,965
2,649,072
419,375
10,604,333
5,394,962
389,388
979,250
24,133,927
464 named facilities
58,730
0
607
147,409
93
97,613
2,090,729
8,276,654
1,852
124,897
10,798,584
568,694
18,045
7,912
68,593
1,985
114.600
35,300,602
261,195
1,296,720
115,075
37,753,421
1,526,041
301,180
37,422
146,940
176,838
0
5,374,772
201,268
4,158
53,288
7,821,907
768,575
1,383,532
7,073
162,745
2,470
0
2,380,381
3,232,770
3,841
6,681,568
14,622,955
2,106,240
55,353
8,036
69,125
140,122
67,303
55,274,686
36,293,280
408,129
23,231,446
117,653,720
5,861,428
1,758,110
61,066
657,775
321,509
384,326
100,566,033
56,409,725
1.714,711
30,213,586
197,948.269
(continued)
-------
TABLE F-2. ESTIMATED AGGREGATE QUANTITIES OF EACH WASTE FORM FROM
OFF SITE AND ON SITE PROCESSED IN EACH TREATMENT CATEGORY AT
NAMED AND UNNAMED FACILITIES (Mg) (continued)
Process
Form 1
Off-site quantities for
Ql
Q2
03
Q4
Q5
06
Q7
08
09
Q10
Total
On-site
01
02
03
04
05
06
Q7
Q8
09
Q10
Total
49
494
26
30
132
26,278
2,011
37,999
0
3,263
70,282
quantities for
848,808
12,053
27
7
653
34,584
36,641
528,293
0
343,512
1,804,578
Form 2
246 unnamed
19
576
0
28
0
5,712
21,466
5,112
0
14
32,927
Form 3
facilities
359
120,885
188
28
2,506
712
4,422,228
849
13,288
44,187
4,605,230
Form 4
360
1,144
2,624
28
2,934
1,042
2,948
5,793
0
722
17,595
Form 5
204
658
1,498
28
780
7,033
2,010
11,849
25,939
50
50,049
Form 6
24
514
990
28
44
17,655
14,727
307,392
1,818
31,718
374,910
Total
1,015
124,271
5,326
170
6,396
58,432
4,465,390
368,994
41,045
79,954
5,150,993
246 unnamed facilities
847,904
12,075
0
0
0
22,857
85, 106
430,760
0
1,460
1,400,162
858,437
44, 541
421
1
886
20.006
11,047,877
418,118
231,596
4,651,631
17,273,514
858,455
12,228
6,309
0
928
20,194
38,977
432,780
0
76,056
1,445,927
853,641
12,097
3,587
0
716
23,610
36,639
450,739
279,809
5,231
1,666,069
848,040
12,058
2,359
0
2.035
29,667
68,319
1,327,235
187,886
13,513,675
15,991,274
5,115,285
105,052
12,703
8
5,218
150,918
11,313,559
3,587,925
699,291
18,591,565
39,581,524
-------
140
120
100
80
O5
60
40
20
Q10
Q7
Q7
Q10
Q8
Q10
Q8
Q7
Form 1 Form 2 Form 3 Form 4 Form 5 Form 6
Figure F-3. Treatment categories most commonly used to
manage each waste form.
F-13
-------
TABLE F-3. ESTIMATED AGGREGATE QUANTITIES OF EACH WASTE FORM
PROCESSED IN EACH TREATMENT CATEGORY BY THE 710 OWRS THAT
RESPONDED TO THE TSDR SURVEY (Mg)
^d
i
i-1
.£>
Process
Ql
Q2
Q3
Q4
Q5
Q6
Q7
Q8
Q9
Q10
Total
Form 1
1,702,
12,
102,
4,
413,
197,
9,754,
358,
12,545,
201
548
436
299
504
656
312
040
86
023
105
Form 2
907,625
20,887
17,404
236,395
4,946
130,628
2,300,764
9,441,337
4,234
211,342
13,275,561
Form 3
1,449, 173
193,023
23,726
146,897
42,380
188,821
56,502,062
1,203,394
1,894,638
4,985,376
66,629,490
Porn: 4
2,546,
516,
1,474,
167,
1,635,
24,
5, 562,
768,
18,
171,
12,886,
803
336
160
743
969
890
605
480
248
007
241
Form 5
1,669,137
1,494,438
1,212,459
302,685
1,144,017
30,651
2,483,969
4,331,883
317,694
6,706,910
19,693,843
Form
2,973,
76,
14,
138,
150,
224,
59,902,
40,262,
609,
37,431,
141,784,
6
327
463
692
899
379
405
603
473
535
697
473
Total
11,248,266
2,313,695
2,742,877
1,094,918
2,982,195
1,013,051
126,949,315
65,761,606
2,844,435
49,864,355
266,814,713
-------
management. If no destination OWR facility was associated
with a waste stream for which the off-site management code was
ambiguous, the waste quantity was similarly distributed across
the waste types managed at the imaginary catch-all facility
before those wastes were allocated to the 246 unnamed
facilities that responded to the TSDR Survey.
F-15
-------
-------
APPENDIX 6
TECHNIQUE FOR ESTIMATING FACILITIES'
AVERAGE VARIABLE COSTS
-------
-------
TABLE H-5. CALCULATIONS REQUIRED TO SET UP BASELINE FINANCIAL STATEMENTS
Financial statement
category
Calculations
Income statement
Annual revenues
Cost of sales
Gross profit
Other expenses and taxes
Net income
Balance sheet
Cash
Accounts receivable
Cash + accounts receivable
Other current assets
Total current assets
Fixed assets
Other noncurrent assets
Debt to total assets
Accounts payable
Other current liabilities
Total current liabilities
Noncurrent liabilities
Total liabilities
Net worth
Total liablities and
owner's equity
Collected from data sources identified in Table
_-_ or {total assets) / (assets to sales
benchmark)
Sales • (1-ROS benchmark) * [(cost of sales share
from common size income statment) / (cost of sales
share plus general and administrative expenses
share from common size income statment)]
Annual revenues - cost of sales
Gross profit - net income
ROS benchmark • annual revenues
(Cash + accounts receivable) - accounts receivable
(Collection period benchmark / 365) • annual
revenues
Total assets • [(cash share from the common size
balance sheet plus accounts receivable share from
the common size balance sheet) / (total current
assets share from the common size balance sheet)]
Total current assets - (cash + accounts
receivable)
Total current liabilities • current ratio
benchmark
Fixed assets to net worth benchmark ratio • net
worth
Total assets - fixed assets - current assets
Collected from data sources identified in Table
_-_ or (annual sales) • (assets to sales D&B
benchmark ratio)
Annual revenues • accounts payable to sales
benchmark
Total current liabilities - accounts payable
Current liabilities to net worth benchmark • net
worth
Total liabilities - total current liabilities
Debt to total assets - net worth
Debt to total assets / (1+total liabilities to net
worth benchmark)
Total assets
Note: These calculations were used to set up financial statements for
potentially affected firms for which actual financial statements were not
available from published sources. Benchmark ratios are based on the Dun &
Bradstreet Key Financial Ratios contained in Table C-l.
H-13
-------
TABLE H-6. CALCULATIONS REQUIRED TO SET UP WITH-REGULATION
FINANCIAL STATEMENTS
Financial statement
category
Calculations
Income statement
Annual revenues
Cost of sales
Gross profit
Expenses due to
regulation
Other expenses and taxes
Net income
Balance sheet
Cash
Accounts receivable
Cash + accounts
receivable
Other current assets
Total current assets
Fixed assets
Other noncurrent assets
Debt to total assets
Accounts payable
Other current
liabilities
Total current
liabilities
Noncurrent liabilities
Total liabilities
Net worth
Total liablities and
owner's equity
Baseline annual revenues + the estimated change
in annual revenues
No change from baseline
Annual revenues - cost of sales
Interest: Projected share of capital costs;
financied through debt • debt interest rate;
Depreciation: 10% • compliance capital costs;
Operating: operating compliance costs
(Gross profit - estimated expense due to
regulation) • baseline ratio of other expenses
and taxes to gross profit
Gross profit - estimated expense due to
regulation - other expenses and taxes
No change from baseline
No change from baseline
No change from baseline
No change from baseline
No change from baseline
Baseline fixed assets + compliance capital cost
No change from baseline
Total current assets + fixed assets + other
noncurrent assets
No change from baseline
Baseline other current liabilities + amortized
compliance cost financied through debt -
estimated interest expense
Accounts payable + other current liabilities
Baseline noncurrent liabilities ••• (capital
compliance cost financed through debt - current
portion of debt)
Total current liabilities + noncurrent
liabilities
Total assets - total liabilities
Total assets
Note: Depreciation expense is based on the first year's allowable
deduction for industrial equipment under the modified accelerated cost
recovery system.
H-14
-------
APPENDIX G
TECHNIQUE FOR ESTIMATING FACILITIES'
AVERAGE VARIABLE COSTS
G.I ESTIMATING BASELINE COSTS
This appendix offers a detailed description of how the
Agency estimated facility-specific variable costs (AVCs) of
waste treatment for each of the 60 OWR treatment services
affected by the proposed regulatory alternatives.
Neither the National Survey of Hazardous Waste Treatment,
Storage, Disposal, and Recycling Facilities (TSDR Survey) nor
the National Survey of Hazardous Waste Generators (GENSUR)
provides any information about facilities' costs of providing
waste management services. Process-specific waste management
costs are estimated using production and cost functions
developed by Research Triangle Institute (RTI) and published
in A Profile of the Market for Hazardous Waste Management
Services for EPA's Office of Air Quality Planning and
Standards.1 The waste treatment categories for which
production and cost functions were developed include rotary
kiln/hearth incineration, chemical precipitation, chemical
stabilization/fixation, steam stripping, and landfills. Table
G-l shows the production and cost functions used to estimate
costs for each of the 10 OWR treatment categories. These
production functions were developed by comparing the quantity
of inputs required per megagram of waste over a range of
throughput volumes for 8 of the 10 categories of treatment.
The estimated costs of providing waste treatment services for
each waste type managed at each OWR facility are the product
of a methodical estimation process. First, the required
quantity of each input to each OWR service offered by an
G-l
-------
TABLE G-l. MODEL PROCESSES USED TO ESTIMATE COSTS
OWR treatment
category treatment
Process used for input factor quantity
and cost estimation
Ql Incineration
Q2 Reuse as fuel
Q3 Fuel blending
Q4 Solidification
Q5 Solvent recovery
Q6 Metals recovery
Q7 Wastewater treatment
Q8 Landfills
Q9 Underground injection
Q10 Other
Rotary kiln/hearth incineration
Rotary kiln/hearth incineration
without fuel as a Required Input*
Chemical precipitation without
chemicals as required inputsb
Chemical stabilization/fixation
Steam stripping
Chemical precipitation with doubled
lime and polymer requirements0
Chemical precipitation
Landfills
Underground injection
Average unit costs of all other
processes
a Fuel is omitted from the list of input factors because the wastes
managed in this process have a high enough Btu content to fuel the
kiln or furnace.
b A production function specifically for fuel blending was not
available. Fuel blending generally involves storage tanks with
mixing and transfer capabilities. If chemicals are not included,
the remaining input requirements of labor, electricity, water, and
indirect O&M are roughly comparable to a chemical precipitation
process.
c The greater the concentration of the waste stream processed, the
greater the chemical requirements for chemical precipitation.
G-2
-------
affected facility was estimated using the'RTI production
functions for the appropriate category of treatment to the
estimated waste quantities processed at the facility. Then,
by applying current factor prices to the estimated quantities
of each required input factor and summing costs across all
required input factors the Agency obtained the total cost of
managing the given waste quantity (see Equations G-l, G-2, and
G-3 for a detailed example of this cost estimation process
applied to landfill services) . A more condensed overview of
the production and cost functions used for each of the eight
treatment categories for which AVCs are a function of
throughput is found in Tables G-2 through G-9.
Input costs were also estimated for a typical underground
injection facility, but data limitations prohibited
development of production and cost functions to reflect how
the average costs may change with varying levels of throughput
for an underground injection well. The AVCs of underground
injection are based on data from a single underground
injection facility. For this reason the underground injection
presented in Table G-10 is assumed to be the same at all
facilities offering this waste management service. Facility-
specific estimates of the AVCs of managing Q10 wastes, that
is: waste managed in other processes, were calculated by
averaging the estimated AVCs of all other treatment categories
offered at each facility.
G.I.I Estimating Facility-specific Input Requirements for
Each Waste Type Managed
Although the Agency acknowledges that different processes
may be used to manage different waste forms within a broad
management process category, data limitations regarding the
costs of managing different waste forms in each treatment
category require using a single production function to
represent the management of all six waste forms in each of the
10 treatment categories. The quantity of inputs required for
management of each waste type and their corresponding costs,
G-3
-------
o
I
TABLE G-2. INPUT REQUIREMENTS AND ESTIMATION PROCESS USED TO CALCULATE AVERAGE VARIABLE
COSTS OF MANAGING 1 Mg OF WASTE WITH INCINERATION
Factor Inputs
Labor
Electricity
Fuel
Chemicals
Water/Utll
Lab Work
Maintenance
Indirect O&M
Units
hr
kwh
gallon
Small Plants
Small Plants
Small Plants
Small Plants
Small Plants
i
1
2
3
4
5
6
7
8
Ai
intercept
10275.867
18147.139
128535.649
0.053
0.659
0.974
•0.418
0.3
Bi
slope
0.508653
44.577657
16.294278
0.000243
0.000088
0.000007
0.000364
0.000179
R
1991 Factor Prices
$21.928421
$0.062150
$0.786000
$66,392.791431
$34,290.241147
$44.165.614495
$51,619.717855
$166,657.946218
The average variable cost per Mg of waste incinerated at each facility was
estimated using the following equation:
f of Inputs
AVC.Q1 * [ £ ((AI +
• PI)] / Tot_Q1
Where:
Ai = the Intercept of the input requirement function for input (i),
Bi = the slope of the input requirement function for input (i),
Pi = the $1991 price per unit of input (i), and
Tot_Q1 = all wastes (including wastes generated onsite) managed with incineration at the facility.
-------
TABLE G-3.
INPUT REQUIREMENTS AND ESTIMATION PROCESS USED TO CALCULATE AVERAGE VARIABLE
COSTS OF MANAGING 1 Mg OF WASTE IN REUSE AS FUEL
0
1
U1
Factor Inputs
Labor
Electricity
Chemicals
Water/Util
Lab Work
Maintenance
Indirect O&M
The average variable
estimated using the
Units
hr
kwh
Small Plants
Small Plants
Small Plants
Small Plants
Small Plants
i
1
2
3
4
5
6
7
cost per Mg of waste reused
following equation:
Ai
intercept
10275.867
18147.139
0.053
0.659
0.974
-0.418
0.3
as fuel at each facility
Bi
slope
0.508653
44.577657
0.000243
0.000088
0.000007
0.000364
0.000179
was
R
1991 Factor Prices
$21.928421
$0.062150
$66,392.791431
$34,290.241147
$44,165.614495
$51,619.717855
$166.657.946218
• of Inputs
AVC_Q2 = [ £
i= 1
+ 01 (Bl)) * PI)] / Tot_Q2
Where:
AI = the intercept of the input requirement function for input (i).
Bi = the slope of the input requirement function for input (i),
Pi = the $1991 price per unit of input (i), and
Tot_Q2 = all wastes (including wastes generated onsite) managed in reuse as fuel operations at the facility.
-------
TABLE G-4. INPUT REQUIREMENTS AND ESTIMATION PROCESS USED TO CALCULATE AVERAGE VARIABLE
COSTS OF MANAGING 1 Mg OF WASTE WITH FUEL BLENDING
Factor Inputs
labor
electricity
water
ind. o&m
Units
hr
kwh
gallon
small plants
1
1
2
3
4
Ai
intercept
779.2664521
1631.626897
30905.26178
0.992466055
Bi
slope
0.002707826
0.537583345
3.67658784
2.71085E-05
R
1991 Factor Prices
$21.928421
$0.062150
$0.000369
$2,149.592536
The average variable cost per Mg of waste blended for fuel at each facility was
estimated using the following equation:
o
i • of Inputs
o
AVC_Q3 = [ £ ((AI + Q1(BI)) * PI)] / Tot_Q3
i = 1
Where:
AI = the intercept of the input requirement function for input (i).
Bi = the slope of the input requirement function for input (i),
Pi = the $1991 price per unit of input (i), and
Tot_Q3 = all wastes (including wastes generated onsite) managed in fuel blending operations at the facility.
-------
Q
TABLE G-5. INPUT REQUIREMENTS AND ESTIMATION PROCESS USED TO CALCULATE AVERAGE VARIABLE
COSTS OF MANAGING 1 Mg OF WASTE WITH SOLIDIFICATION/STABILIZATION
Factor Inputs
Labor
Electricity
Cement
Water
Indirect O&M
Units
hr
kwh
Ib
gallon
Small Plants
1
1
2
3
4
5
Ai
intercept
2081.008
2143.422
130.695
2320.856
0.946
Bi
slope
-0.00404
45.026738
2203.208556
96.256684
0.000917
R
1991 Factor Prices
$21.928421
$0.062150
$0.030427
$0.000369
$11.084.719889
The average variable cost per Mg of waste solidified or stabilized at each facility was
estimated using the following equation:
f of inputs
AVC_Q4 s I I ((AI
1= 1
01 (Bl)) • PI)] / Tot_Q4
Where:
AI = the intercept of the input requirement function for input (i),
Bi a the slope of the input requirement function for input (i),
Pi = the $1991 price per unit of Input (i), and
Tot_Q4 = all wastes (including wastes generated onsite) managed with solidification/stabilization at the facility.
-------
o
i
CD
TABLE G-6. INPUT REQUIREMENTS AND ESTIMATION PROCESS USED TO CALCULATE AVERAGE VARIABLE
COSTS OF MANAGING 1 Mg OF WASTE IN SOLVENT RECOVERY
Factor Inputs
Labor
Electricity
Steam
Water
Indirect O&M
Heat Recovery
(Assuming $0.075 f
Units
hr
kwh
Small Plants
gallon
Small Plants
Mg
>er kg)
1
1
2
3
4
5
6
7
Ai
intercept
3461.538
-0.534
-0.005
-64.137
1
0.01
Bi
slope
0
2.645644
0.026456
317.477285
0
-0.047622
R
1991 Factor Prices
$21.928421
$0.062150
$73.025248
$0.000369
$6.882.629047
$93.533644
The average variable cost per Mg of waste managed in solvent recovery operations at each
facility was estimated using the following equation:
I of Inputs
AVC_Q5 - [ I ((AI
1 = 1
Q1(BI)) • PI)] / Tot.QS
Where:
Ai = the Intercept of the input requirement function for input (i),
Bi = the slope of the input requirement function for input (i),
Pi = the $1991 price per unit of input (i), and
Tot_Q5 = all wastes (including wastes generated onsite) managed In solvent recovery operations at the facility.
-------
TABLE G-7.
INPUT REQUIREMENTS AND ESTIMATION PROCESS USED TO CALCULATE AVERAGE VARIABLE
COSTS OF MANAGING 1 Mg OF WASTE IN METALS RECOVERY
O
I
Factor Inputs
labor
electricity
lime
polymer
water
ind. o&m
Units
hr
kwh
Ib
Ib
gallon
small plants
1
1
2
3
4
5
6
Ai
intercept
779.2664521
1631.626897
30969.36255
0.044163241
30905.26178
0.992466055
Bi
slope
0.002707826
0.537583345
3.378542673
0.004269916
3.67658784
2.71085E-05
Pi
1991 Factor Prices
$21.928421
$0.062150
$0.024727
$4.327277
$0.000369
$2,149.592536
The average variable cost per Mg of waste managed in metals recovery operations at each
facility was estimated using the following equation:
• of inputs
AVC.Q6 » [ L ((Al + Q1(BI)) * PI)] / Tot_Q6
1= 1
Where:
Ai • the Intercept of the input requirement function for input (i).
Bi = the slope of the input requirement function for Input (i).
Pi = the $1991 price per unit of input (i), and
Tot_Q6 = all wastes (including wastes generated onsite) managed in metals recovery operations at the facility.
-------
Q
I
TABLE G-8. INPUT REQUIREMENTS AND ESTIMATION PROCESS USED TO CALCULATE AVERAGE VARIABLE
COSTS OF MANAGING 1 Mg OF WASTE WITH WASTEWATER TREATMENT
Factor Inputs
labor
electricity
lime
polymer
water
ind. o&m
Units
hr
kwh
Ib
Ib
gallon
small plants
i
1
2
3
4
5
6
Ai
intercept
779.2664521
1631.626697
15484.68128
0.022091621
30905.26178
0.992466055
Bi
slope
0.002707826
0.537583345
1.689271337
0.002134958
3.67658784
2.71085E-05
R
1991 Factor Prices
$21.928421
$0.062150
$0.024727
$4.327277
$0.000369
$2,149.592536
The average variable cost per Mg of waste managed in wastewater treatment operations at each
facility was estimated using the following equation:
i ol Inputs
AVC_Q7 • [ X ((At + Q1(BI)) • PI)] / Tot_Q7
I- 1
Where:
AI = the Intercept of the input requirement function for Input (i),
Bi = the slope of the input requirement function for input (i),
Pi s the $1991 price per unit of input (i), and
Tot_Q7 = all wastes (including wastes generated onsite) managed with wastewater treatment at the facility.
-------
o
i
TABLE G-9. INPUT REQUIREMENTS AND ESTIMATION PROCESS USED TO CALCULATE AVERAGE VARIABLE
COSTS OF MANAGING 1 Mg OF WASTE IN LANDFILLS
Factor Inputs
Labor
electricity
Leachate Tx.
Fuel
Heating
Ind. O4M
Units
hr
kwh
gallon
gallon
Small plants
Small plants
1
t
2
3
4
5
6
*
Ai
intercept
799.935
29663.866
33613.445
10154.062
0.996
0.941
Bi
slope
0.227052
0.672269
32.773109
0.52521
0.000008
0.000118
R
1991 Factor Prices
21.92842105
0.06215
0.12290409
0.786
2458.081803
73373.74181
The average variable cost per Mg of waste landfilled at each facility was
estimated using the following equation:
i of Inputs
AVC.Q8 = [ £ ((AI
1=1
Q1(BI)) • PI)] / Tot.QB
Where:
Ai = the intercept of the input requirement function for input (i),
Bi = the slope of the input requirement function for input (i).
Pi = the $1991 price per unit of input (i), and
Tot_Q8 = all wastes (including wastes generated onsite) managed in landfill operations at the facility.
-------
o
i
TABLE G-10. INPUT REQUIREMENTS AND ESTIMATION PROCESS USED TO CALCULATE AVERAGE VARIABLE
COSTS OF MANAGING I Mg OF WASTE WITH UNDERGROUND INJECTION
Factor Inputs
Labor
electricity
Heating
ind. O&M
Units
hr
kwh
Typical plant
Typical plant
1
1
2
3
4
$1991
Facility Costs
$293,684.21
$33,312.40
$3,687.12
$403,371.22
Throughput
(Mg)
138,000
138,000
138,000
138,000
$1991 Cost per Mg
Throughput
$2.13
$0.24
$0.03
$2.92
$5.32
The average variable cost per Mg of waste injected underground at each facility was
estimated using the following equation:
AVC.Q9 = Q9 * $5.32 / Tot_Q9
Where:
Q9 = the total quantity of waste injected underground, and
Tot_Q9 = all wastes (including wastes generated onsite) managed in underground injection operations at the facility.
-------
however, are estimated based on. the volume of each specific
waste type (waste form and treatment category combination)
processed at each OWR facility.
The production functions used to estimate the quantity of
each input factor required for management of Form 1 wastes
(organic solids, incinerator ash and solidified treatment
residuals) in landfills are as follows:
QUANTITY OF INPUTS USED TO LANDFILL FORM 1 WASTES (G-l)
QLabor (hours) = (0.227052 • volume landfilled (Mg) + 7999.935)
QElectricity (kWh) = (0.672269 • volume landfilled + 29663.866)
QLeachate Treatment (gallons) = (32.773109 • volume landfilled
4 33613.445)
QFuel (gallons) = (0.52521 • volume landfilled 4 10154.062)
QHeating (small plants) = (0.000008 • volume landfilled 4 0.996)
Qlndirect 0 & M (small plants) = (0.000118 • volume landfilled 4 0.941)
These input quantities, as mentioned above, are estimated
separately for each waste form landfilled, based on the
quantity of each waste form thought to be landfilled at each
OWR facility. These same production function equations were
used to estimate the input requirements for each waste form
accepted at facilities offering landfill services, with the
variable for "volume landfilled" in each case reflecting the
estimated quantity of the given waste form landfilled.
To estimate the total variable cost (TVC) of providing
landfill services of Form 1 wastes in 1991 at each OWR
facility that offered such services, these estimated
quantities of each input factor must be multiplied by 1991
factor prices. The 1982 factor prices originally used in
these cost functions were updated to mid-year 1991 prices
using a variety of price indexes. Table G-ll presents each of
the indexes used to adjust factor prices from 1982 dollars to.
'1991 dollars, the adjustment factor corresponding to each
index, and the resulting 1991 factor prices of all input
G-13
-------
TABLE G-ll. COST INDEXES USED TO ADJUST COSTS TO 1991 DOLLARS
Factor inputs
Index used to adjust
prices
Source of index
Cement
Chemicals
Electricity
Fuel
M&S Process Ind.-Cement
M&S Process Ind.-
Chemicals
BLS-PPI Elec. Power
BLS-PPI #2 Diesel Fuel
Heat recovery M&S Process Ind.-Steam
Heating
M&S Process Ind.-Avg
Indirect O&M M&S Process Ind.-Avg.
Lab work
Labor
Leachate Tx.
Lime
Maintenance
Polymer
Steam
Water
Water/Util
CE Plant-Engineering
BLS-Empl. Cost Index
M&S Process Ind.-Avg.
M&S Process Ind.-
Chemicals
M&S Process Ind.-Avg.
M&S Process Ind.-
Chemicals
M&S Process Ind.-Cement
M&S Process Ind.-Avg,
M&S Process Ind.-Avg.
Chemical Engineering
(1982-1992)
Chemical Engineering
(1982-1992)
Statistical Abstract
of the United States
1992
Statistical Abstract
of the United States
1992
Chemical Engineering
(1982-1992)
Chemical Engineering
(1982-1992)
Chemical Engineering
(1982-1992)
Chemical Engineering
(1982-1992)
Economic Report of
the President,
January 1993
Chemical Engineering
(1982-1992)
Chemical Engineering
(1982-1992)
Chemical Engineering
(1982-1992)
Chemical Engineering
(1982-1992)
Chemical Engineering
(1982-1992)
Chemical Engineering
(1982-1992)
Chemical Engineering
(1982-1992)
G-14
-------
factors used in the production and cost functions employed in
this analysis. Costs were estimated as follows:
COSTS OF INPUTS USED TO LANDFILL FORM 1 WASTES (G-2)
TVC(Labor) = (QLabor • 21.928421)
TVC(Electricity) = (QElectricity • 0.672269)
TVCtLeachate Treatment) = (QLeachate Treatment • 0.122904)
TVC(Fuel) = (QFuel • 0.786)
TVC(Heating) = (QHeating • 2,458.081803)
TVC (Indirect 0 & M = (Qlndirect 0 &. M • 73,373.741808)
The total variable cost of providing waste management for
all Form 1 wastes landfilled at a given OWR facility is then
computed by summing the total variable costs of the M inputs.
The total cost for facility k, therefore, is as follows:
M
TVC(Landfills)k = ]T (TVCmik) (G-3)
m=l
Reference
1. Reslay, W.A., T.H. Bingham, R.V. Chandran, L.S.
Maclntyre, and J.H. Wood. A Profile of the Market for
Hazardous Waste Management Services. Research Triangle
Institute. Research Triangle Park, NC. May 1986. pp.
138.
G-15
-------
APPENDIX H
DOCUMENTATION AND SUMMARY OF METHODS USED TO
IMPUTE MISSING FINANCIAL STATEMENT VALUES
-------
TABLE H-l. LOWER QUARTILE INDUSTRY BENCHMARK FINANCIAL RATIOS
SIC
Code
181
1311
1382
1611
1629
1799
2082
2211
2295
2491
2511
2522
2599
2621
2812
2819
2821
2834
2842
2844
2851
2869
2874
2875
2879
2892
2899
2911
2951
2992
3069
3241
3272
Current
ratio
1.3
1.0
0.8
1.3
1.2
1.3
1.1
1.4
1.6
1.2
1.3
1.3
1.4
1.3
1.2
1.2
1.2
1.5
1.6
1.4
1.7
1.2
1.3
1.3
1.4
1.8
1.3
1.1
1.1
1.5
1.2
1.7
1.3
Assets
to
sales
108.7
354.5
324.7
65.4
78.0
47.5
64.4
68.1
62.4
63.6
56.2
61.9
51.7
118.1
92.3
86.6
73.7
124.9
61.4
106.3
56.3
77.1
81.6
49.6
102.3
71.8
59.5
97.7
66.5
47.4
71.0
173.0
65.6
Debt
to
total
assets
63%
56%
64%
64%
64%
65%
54%
63%
63%
65%
69%
67%
72%
65%
81%
71%
70%
60%
60%
69%
61%
66%
50%
65%
63%
60%
67%
74%
65%
61%
64%
68%
64%
Return
on
sales
0.80%
-3.90%
-1.30%
0.60%
1.10%
1.40%
3.60%
0.60%
1.20%
0.50%
1.10%
1.10%
1.10%
1.00%
-1.00%
1.60%
0.60%
-2.20%
0.80%
0.80%
0.70%
2.00%
1.30%
1.20%
-1.00%
5.90%
1.70%
1.40%
0.50%
1.70%
0.80%
-2.00%
1.30%
Return
on
assets
0.70%
-1.90%
-0.90%
0.70%
1.60%
2.70%
5.00%
1.30%
1.50%
0.80%
2.70%
2.30%
1.40%
1.00%
-1.00%
2.00%
1.20%
-2.10%
1.50%
0.90%
1.60%
3.60%
2.60%
2.50%
-0.80%
2.70%
2.70%
2.00%
0.80%
2.40%
0.80%
-2.30%
2.40%
Return
on net
equity
1.70%
-2.90%
-2.20%
1.70%
4.40%
6.60%
8.50%
4.70%
3.20%
2.40%
6.30%
4.20%
6.20%
2.80%
-2.20%
5.80%
1.80%
-6.20%
3.20%
2.60%
2.10%
9.80%
4.80%
3.60%
-3.00%
19.30%
5.90%
6.70%
1.80%
6.40%
4.40%
-3.00%
4.10%
Fixed
assets to
net worth
121.3
117.0
142.1
116.5
117.6
94.6
122.1
77.2
90.6
105.2
113.2
89.7
103.7
154.4
812.3
133.9
121.2
76.0
64.0
56.0
56,0
112.4
86.6
114.9
123.8
110.0
77.9
212.1
138.9
79.5
88.0
127.8
99.0
Collec-
tion
period
49.5
111.7
111.0
71.2
74.8
66.1
30.3
53.3
56.1
40.5
49.3
65.7
52.9
46.9
60.3
63.2
54.1
69.6
56.6
73.4
58.1
58.8
43.4
55.5
61.5
69.9
60.3
53.9
67.1
55.5
59.1
64.8
64.3
Total
liabilities
to net
worth
166.9
125.8
176.1
175.1
175.0
185.8
116.3
166.8
168.1
189.6
221.8
203.3
262.0
185.9
422.0
250.7
236.7
152.4
153.1
219.6
155.0
193.6
102.0
185.7
172.9
151.6
203.6
288.2
188.7
155.8
174.6
210.1
175.1
(continued)
H-l
-------
TABLE H-l. LOWER QUARTILE INDUSTRY BENCHMARK FINANCIAL
(Continued)
RATIOS
SIC Current
Code ratio
3273
3312
3321
3356
3523
3724
4226
5171
3339
3341
3351
3357
3369
3412
3425
3429
3452
3471
3479
3499
3531
3533
3579
3585
3612
3643
36-61
3674
3678
3679
3691
3714
3721
1.1
1.2
1.7
1.5
1.6
1.3
0.7
1.3
1.4
1.2
1.3
1.5
1.6
1.0
2.3
1.4
1.5
1.2
1.2
1.4
1.4
1.4
1.5
1.3
1.6
1.5
1.5
1.5
1.7
1.4
1.4
1.3
1.4
Assets
to
sales
69.8
71.9
54.7
94.2
71.8
96.1
159.6
32.9
85.3
48.9
98.9
74.3
48.1
48.2
48.8
69.8
68.3
59.9
71.7
68.8
77 .5
90.8
84.2
75.7
62.2
79.2
81.4
92.0
79.1
70.7
83.3
69.2
92.8
Debt
to
total
assets
61%
70%
59%
71%
63%
70%
72%
65%
52%
63%
73%
65%
57%
74%
40%
62%
61%
61%
65%
64%
66%
63%
68%
69%
65%
64%
62%
61%
62%
67%
71%
70%
62%
Return
on
sales
0.50%
1.90%
1.60%
1.50%
1.60%
1.60%
3.20%
0.40%
-0.10%
-0.10%
-10.00%
0.80%
-0.50%
-2.50%
1.20%
1.60%
0.50%
1.40%
1.90%
1.70%
-1.90%
1.20%
0.50%
1.40%
1.50%
-0.10%
-0.50%
-0.10%
1.20%
0.30%
0.50%
0.60%
1.60%
Return
on
assets
0.80%
2.10%
2.60%
2.20%
2.90%
2.40%
3.00%
1.80%
-3.50%
-0.30%
-10.40%
0.90%
-1.80%
-5.70%
1.70%
1.70%
1.30%
2.20%
2.80%
2.70%
-3 .50%
1.60%
0.80%
0.70%
3.10%
-0.20%
-2.20%
-0.70%
1.20%
0.50%
-0.40%
0.60%
4.10%
Return
on net
equity
1.50%
7.10%
4.70%
8.80%
5.90%
4.90%
7.70%
3.90%
-7.90%
-0.60%
-27.00%
3.70%
-1.80%
-23.10%
3.80%
3.30%
3.10%
4.70%
6.70%
5.60%
-5.80%
3.60%
2.90%
2.40%
6.70%
-0.20%
-4.60%
-0.30%
2.10%
2.00%
2.10%
2.00%
10.30%
Fixed
assets to
net worth
140.5
147.6
74.8
119.2
80.8
110.8
174.8
103.3
70.4
92.5
165.2
67.5
85.1
179.4
41.8
75.5
95.1
103.8
125.4
75.3
97.0
71.7
52.5
77.5
77.1
61.9
49.2
74.4
76.4
69.7
121.5
101.2
60.1
Collec-
tion
period
49.7
60.6
56.8
64.6
55.9
68.0
61.3
30.7
63.4
56.7
51.5
59.9
63.5
42.1
53.8
53.4
55.9
56.6
60.4
59.0
60.1
73.7
73.3
66.1
66.0
59.4
73.1
68.4
58.8
62.8
62.1
53.1
71.9
Total
liabilities
to net
worth
155.4
231.4
142.1
239.5
172.4
235.3
258.7
183.8
110.4
171.2
267.3
187.6
133.5
283.3
65.4
160.5
154.4
156.9
187.0
175.0
197.1
168.4
211.8
221.7
185.0
181.0
163.1
154.6
161.6
200.8
249.8
230.8
166.6
(continued)
H-2
-------
TABLE H-l. LOWER QUARTILE INDUSTRY BENCHMARK FINANCIAL
(Continued)
RATIOS
SIC Current
Code ratio
3728
3731
3751
3842
3861
3951
3999
4011
4212
4214
4789
4911
4922
4923
4931
4953
4959
5093
5169
5172
7389
7699
8071
8731
8999
1.4
1.3
1.2
1.6
1.0
2.2
1.4
0.8
0.9
1.0
1.2
1.1
0.8
0.9
1.2
0.8
0.9
1.3
1.3
1.2
1.2
1.4
1.0
1.3
1.2
Assets
to
sales
74.0
76.8
50.5
80.8
78.0
89.3
63.7
291.9
58.3
55.7
98.2
263.3
246.7
168.2
284.9
86.2
90.4
46.1
45.7
35.7
53.4
58.6
76.5
93.2
73.0
Debt
to
total
assets
68%
75%
64%
61%
60%
52%
62%
65%
68%
65%
66%
69%
71%
72%
63%
68%
70%
62%
70%
68%
66%
62%
70%
61%
59%
Return
on
sales
1
1
2
0
-0
1
0
2
0
0
0
3
1
2
5
2
1
0
0
0
1
1
1
-1
0
.60%
.50%
.80%
.50%
.80%
.30%
.90%
.50%
.10%
.20%
.70%
.20%
.10%
.60%
.00%
.10%
.20%
.90%
.70%
.40%
.30%
.40%
.70%
.00%
.90%
Return
on
assets
2.
3.
5.
0.
-0.
2.
0.
1.
0.
•
0.
1.
1.
2.
2.
2.
1.
3.
1.
1.
1.
2.
1.
-1.
0.
00%
20%
60%
80%
50%
20%
90%
40%
10%
•
60%
60%
80%
50%
00%
80%
60%
20%
80%
70%
40%
30%
60%
30%
10%
Return
on net
equity
5
7
15
3
-0
3
4
2
0
1
2
5
4
8
3
7
3
6
5
4
4
6
2
-3
.50%
.20%
.50%
.20%
.90%
.50%
.70%
.90%
.90%
.20%
.60%
.00%
.50%
.30%
.20%
.30%
.60%
.80%
.20%
.20%
.80%
.30%
.50%
.40%
Fixed Collec-
assets to tion
net worth period
103.7
118.9
69.6
59.9
76.0
61.2
86.1
185.0
167.2
137.0
142.9
241.6
213.9
206.4
187.6
163.0
116.2
96.5
62.4
98.0
95.1
88.7
143.7
82.8
94.0
63
79
53
77
58
53
55
106
47
58
72
44
80
84
42
69
63
36
59
36
54
54
88
86
85
.6
.1
.1
.6
.0
.7
.1
.6
.8
.8
.3
.5
.0
.2
.2
.5
.6
.9
.1
.1
.8
.4
.8
.5
.2
Total
liabilities
to net
worth
216
294
177
155
152
107
159
184
212
188
198
224
241
257
172
211
233
165
230
214
191
163
230
154
146
.4
.4
.3
.9
.0
.0
.8
.5
.5
.5
.2
.4
.9
.5
.0
.7
.3
.9
.7
.9
.8
.2
.7
.0
.1
Source: Dun & Bradstreet Key Financial Ratios.
H-3
-------
TABLE H-2. MEDIAN INDUSTRY BENCHMARK FINANCIAL RATIOS
SIC Current
Code ratio
181
1311
1382
1611
1629
1799
2082
2211
2295
2491
2511
2522
2599
2621
2812
2819
2821
2834
2842
2844
2851
2869
2874
2875
2879
2892
2899
2911
2951
2992
3069
3241
3272
3273
3312
2.3
1.6
1.3
1.8
1.7
1.9
1.5
2.2
2.3
1.7
2.0
2.0
2.1
1.7
1.5
1.7
1.9
2.4
2.4
2.2
2.5
1.9
2.3
2.0
1.9
2.1
2.3
1.4
2.0
2.3
2.1
2.1
2.1
1.9
1.8
Assets
to
sales
57.4
201.5
159.0
46.0
49.2
31.9
49.0
47.1
39.0
40.2
37.5
48.4
34.3
69.2
72.0
53.5
43.4
90.2
44.1
57.4
42.4
49.9
48.5
40.4
55.6
49.8
41.4
53.6
51.6
35.3
48.5
146.1
49.9
48.0
43.9
Debt to
total
assets
42%
31%
40%
47%
47%
46%
44%
41%
41%
48%
49%
45%
51%
54%
64%
52%
50%
43%
39%
52%
44%
48%
39%
42%
50%
49%
45%
59%
41%
47%
45%
47%
42%
42%
55%
Return
on
sales
4.70%
7.90%
6.90%
2.90%
3.80%
4.30%
6.60%
3.20%
2.80%
2.10%
3.80%
2.90%
4.10%
3.70%
3.20%
4.40%
4.60%
5.00%
3.30%
3.70%
2.40%
5.30%
3.00%
3.10%
3.50%
6.90%
4.10%
3.40%
3.10%
3.00%
3.40%
4.80%
4.20%
2.60%
4.40%
Return
on
assets
5.00%
3.00%
3.50%
5.40%
6.60%
10.00%
25.50%
5.60%
6.70%
4.30%
7.10%
5.50%
7.40%
3.40%
3.20%
8.20%
9.00%
6.10%
6.40%
5.80%
4.80%
7.80%
7.10%
7.00%
4.40%
15.00%
7.90%
4.90%
4.70%
6.00%
5.40%
3.30%
7.30%
4.50%
7.20%
Return
on net
worth
10.90%
5.20%
6.00%
11.20%
15.00%
22.40%
38.40%
12.20%
13.80%
11.90%
16.50%
12.10%
23.30%
6.80%
8.60%
15.60%
20.40%
12.60%
10.60%
14.60%
11.00%
16.80%
12.30%
16.10%
9.00%
35.20%
14.30%
10.90%
10.20%
13.50%
12.10%
8.10%
14.60%
9.50%
17.40%
Fixed
assets to
net worth
76.3
55.1
61.1
71.0
67.1
49.8
79.7
52.8
36.0
68.4
51.4
47.8
48.6
85.5
126.0
49.3
53.9
46.7
24.5
31.0
31.4
58.0
25.0
52.1
36.1
53.3
38.7
132.5
79.0
28.1
47.8
77.8
58.9
77.5
68.1
Collec-
tion
period
27
60
59
47
47
42
19
41
41
26
33
46
39
36
58
46
43
49
41
50
44
42
19
34
47
45
44
39
32
42
48
55
45
35
42
.4
.6
.9
.5
.8
.0
.4
.3
.3
.7
.6
.4
.1
.5
.4
.0
.2
.9
.3
.4
.9
.7
.4
.7
.3
.6
.9
.8
.0
.3
.2
.5
.5
.8
.7
Total
liabilities
to net worth
73
44
67
88
88
85
77
68
68
93
95
81
103
115
178
109
99
74
63
107
78
92
63
73
98
97
82
146
70
88
83
89
73
72
122
.6
.8
.6
.2
.5
.1
.6
.1
.3
.8
.7
.2
1
. -i
.3
.1
.0
.9
.4
.8
.4
.1
.4
.2
.4
.1
.2
.1
.9
.0
.2
.3
.3
.1
.9
.0
(continued)
H-4
-------
TABLE H-2. MEDIAN INDUSTRY BENCHMARK FINANCIAL RATIOS (Continued)
SIC Current
Code ratio
3321
3356
3523
3724
4226
5171
3339
3341
3351
3357
3369
3412
3425
3429
3452
3471
3479
3499
3531
3533
3579
3585
3612
3643
3661
3674
3678
3679
3691
3714
3721
3728
3731
3751
2.7
1.8
2.5
2.1
1.8
1.8
1.7
1.8
1.8
1.9
2.9
1.6
3.2
2.5
2.5
2.0
2.1
2.6
2.0
2.2
2.3
1.9
2.3
2.5
2.3
2.4
2.4
2.2
2.0
1.9
1.5
2.0
1.8
2.0
Assets
to
sales
45.1
43.8
50.2
66.2
73.3
21.6
43.3
34.0
60.0
40.3
38.2
40.5
42.2
46.6
46.2
42.1
45.5
47.6
54.4
58.4
68.0
53.6
46. 4
52.5
63.5
66.6
55.3
46.9
57.9
46.4
59.0
54.3
55.0
36.5
Debt to
total
assets
38%
52%
44%
49%
47%
46%
42%
44%
71%
46%
34%
65%
36%
42%
39%
42%
44%
40%
51%
46%
51%
54%
53%
40%
46%
41%
40%
46%
44%
51%
55%
44%
54%
50%
Return
on
sales
3
2
4
3
7
1
4
1
1
2
2
-0
3
3
3
4
5
3
2
4
3
4
3
1
2
3
3
3
2
3
3
5
3
5
.70%
.80%
.30%
.80%
.10%
.20%
.90%
.80%
.10%
.50%
.90%
.10%
.80%
.50%
.20%
.50%
.70%
.80%
.10%
.80%
.10%
.30%
.20%
.60%
.10%
.70%
.10%
.00%
.60%
.50%
.50%
.10%
.50%
.20%
Return
on
assets
7.70%
5.50%
7.20%
5.60%
9.00%
5.20%
10.80%
5.30%
-0.20%
5.20%
7.90%
-2.90%
8.10%
5.50%
5.70%
8.50%
9.80%
7.20%
3.60%
6.00%
5.30%
7.00%
6.40%
3.90%
3.40%
5.50%
4.50%
5.20%
1.00%
5.80%
6.00%
8.20%
6.00%
7.80%
Return
on net
worth
14.70%
9.70%
14.80%
12.60%
16.90%
10.00%
16.40%
13.80%
-3.90%
13.10%
8.20%
-10.70%
14.40%
12.70%
10.90%
17.50%
22.00%
15.20%
10.10%
11.30%
10.10%
16.00%
16.50%
9.10%
6.60%
10.80%
7.70%
13.10%
10.00%
13.00%
13.60%
17.30%
14.80%
28.30%
Fixed
assets to
net worth
48.6
65.7
34.8
60.8
78.7
59.0
43.2
55.4
156.0
28.2
45.2
132.1
25.4
37.0
41.3
57.8
60.5
37.9
44.3
40.9
27.8
34.8
36.7
39.0
24.8
41.2
52.2
30.8
68.9
51.4
48.1
50.7
64.5
53.2
Collec-
tion
period
47
48
31
50
41
20
38
39
48
53
43
34
49
42
43
44
45
40
46
54
57
49
47
47
52
56
45
47
51
38
49
47
56
35
.8
.9
.4
.0
.6
.1
.7
.5
.2
.1
.8
.4
.9
.0
.8
.9
.6
.7
.0
.8
.1
.3
.7
.3
.0
.2
.6
.8
.9
.0
.6
.5
.1
.8
Total
liabilities
to net worth
62.4
109.1
77.0
95.1
87.6
86.1
72.8
78.4
245
86
51
182
55
72
64
72
80
65
105
83
106
117
113
67
83
70
66
85
79
102
124
79
116
99
.5
.9
.1
.0
.4
.4
.1
.4
.0
.7
.6
.7
.1
.0
.2
.8
.8
.1
.4
.2
.2
.4
.4
.5
.4
.3
(continued)
H-5
-------
TABLE H-2. MEDIAN INDUSTRY BENCHMARK FINANCIAL RATIOS (Continued)
SIC Current
Code ratio
3842
3861
3951
3999
4011
4212
4214
4789
4911
4922
4923
4931
4953
4959
5093
5169
5172
7389
7699
8071
8731
8999
2.8
2.3
3.1
2.4
1.2
1.5
1.7
1.8
1.7
1.2
1.1
1.8
1.4
1.7
2.2
1.8
1.8
2.0
2.4
1.7
2.4
2.3
Assets
to
sales
48.9
48.9
70.2
39.6
199.5
36.9
35.1
57.2
209.3
139.2
91.3
227.6
52.8
47.1
30.6
32.0
23.1
32.2
37.6
44.4
50.2
39.8
Debt to
total
assets
39%
44%
27%
42%
48%
46%
48%
50%
61%
60%
62%
57%
50%
49%
40%
50%
48%
42%
42%
48%
33%
34%
Return
on
sales
3.50%
3.50%
6.20%
4.10%
7.00%
2.70%
2.50%
4.40%
6.50%
3.80%
4.50%
8.00%
6.70%
8.30%
3.10%
2.30%
1.40%
5.70%
5.60%
6.00%
3.20%
6.80%
Return
on
assets
6.50%
5.70%
4.90%
8.00%
4.30%
6.30%
5.70%
4.50%
3.20%
3.80%
4.40%
3.90%
8.90%
10.70%
8.40%
6.40%
5.40%
11.00%
10.50%
10.20%
5.50%
7.70%
Return
on net
worth
13.60%
9.20%
8.10%
16.40%
11.70%
13.40%
12.90%
9.20%
8.70%
10.70%
12.20%
8.90%
20.50%
22.80%
18.00%
15.30%
11.00%
24.10%
21.50%
22.50%
10.20%
18.50%
Fixed
assets to
net worth
31.0
36.1
21.6
37.8
116.6
87.4
73.3
57.8
174.6
128.8
132.1
120.4
93.4
74.4
44.7
29.1
48.5
45.2
42.5
71.4
37.6
44.7
Collec-
tion
period
53.
45.
47.
39.
62.
31.
37.
45.
34.
51.
58.
33.
42,
47.
22
43
23
32
35
61
56
50
9
6
1
1
8
0
6
3
7
7
8
,6
.4
.7
.6
.1
.6
.1
.0
.3
.5
.1
Total
liabilities
to net worth
64.
77.
37.
72.
91.
84.
93.
100.
158.
148.
165.
133.
101.
95.
66
100
91
71
72
92
48
51
51
7
6
3
1
6
6
3
6
1
7
.2
.1
.3
.6
.5
.3
.2
.2
.7
.2
.1
Source: Dun & Bradstreet Key Financial Ratios.
H-6
-------
TABLE H-3. UPPER QUARTILE INDUSTRY BENCHMARK FINANCIAL RATIOS
SIC
Code
181
1311
1382
1611
1629
1799
2082
2211
2295
2491
2511
2522
2599
2621
2812
2819
2821
2834
2842
2844
2851
2869
2874
2875
2879
2892
2899
29li
2951
2992
Current
ratio
6.4
4.0
3.7
3.1
3.1
3.7
2.6
3.2
4.5
3.7
3.8
3.9
3.1
3.1
1.9
3.3
3.5
5.4
4.7
3.7
4.1
3.5
3.2
4.0
3.0
2.4
3.9
2.1
3.6
3.8
Assets
to
sales
35.4
108.3
68.5
32.9
33.4
21.6
40.9
30.1
30.3
29.3
24.5
32.7
23.1
38.9
59.1
33.9
30.7
51.7
31.1
37.6
33.0
32.3
35.7
32.0
37.7
42.0
30.1
40.9
42.1
28.5
Debt to
total
assets
19%
13%
14%
28%
25%
25%
32%
22%
30%
27%
27%
18%
29%
32%
38%
26%
25%
16%
21%
27%
25%
23%
19%
22%
32%
25%
23%
39%
21%
24%
Return
on
sales
10
22
19
7
9
12
14
7
7
5
7
6
9
8
4
12
13
14
8
10
5
10
6
6
11
8
8
5
8
6
.90%
.40%
.90%
.50%
.40%
.50%
.20%
.00%
.40%
.50%
.90%
.30%
.20%
.70%
.20%
.00%
.40%
.80%
.30%
.60%
.90%
.00%
.80%
.40%
.30%
.70%
.40%
.80%
.00%
.30%
Return
on
assets
12.10%
9.30%
11.20%
12.40%
15.50%
25.00%
41.60%
15.50%
11.40%
16.40%
15.70%
12.40%
15.90%
9.60%
5.40%
15.80%
21.30%
15.40%
12.70%
14.20%
11.40%
15.10%
9.40%
15.00%
16.60%
17.70%
15.20%
9.90%
12.10%
10.60%
Return Fixed
on net assets to
worth net worth
23.00%
17.60%
23.90%
24.90%
34.50%
57.70%
60.80%
26.70%
29.70%
24.30%
37.30%
29.60%
41.60%
19.10%
18.90%
34.00%
46.50%
25.30%
25.90%
27.70%
23.00%
36.40%
19.80%
21.00%
31.30%
39.60%
36.70%
19.70%
23.60%
23.80%
39.6
18.8
18.4
38.0
29.6
22.5
38.3
20.5
16.2
34.1
21.4
22.0
18.0
39.9
74.4
21.6
21.0
16.9
12.9
15.1
12.4
28.3
11.1
26.2
16.9
28.9
18.3
64.8
29.7
15.5
Collec-
tion
period
14
31
27
26
27
19
12
24
35
14
15
38
20
28
48
37
27
30
29
38
31
31
10
21
29
12
32
26
15
32
.2
.4
.4
.7
.7
.7
.8
.1
.6
.1
.3
.9
.4
.5
.6
.1
.6
.8
.9
.5
.4
.8
.8
.5
.8
.1
.9
.2
.1
.3
Total
liabilities
to net
worth
23.1
14. B
15.9
39.1
33.0
33.9
47.5
28.8
43.6
37.1
36.4
22.2
41.8
46.3
62.4
35.4
33.7
19.4
27.3
36.9
32.6
30.5
24.2
27.7
47.4
32.6
30.4
65.2
26.9
31.3
(continued)
H-7
-------
TABLE H-3. UPPER QUARTILE INDUSTRY BENCHMARK FINANCIAL
(Continued)
RATIOS
SIC
Code
3069
3241
3272
3273
3312
3321
3356
3523
3724
4226
5171
3339
3341
3351
3357
3369
3412
3425
3429
3452
3471
3479
3499
3531
3533
3579
3585
3612
3643
3661
3674
3678
3679
Current
ratio
4.1
2.7
4.3
3.7
2.8
3.7
2.7
5.1
3.9
3.7
2.8
4.4
3.3
2.3
2.9
5.0
3.3
5.2
4.2
4.1
3.9
4.1
5.0
3.1
4.6
3.7
3.2
4.0
5.3
4.5
4.5
2.7
3.8
Assets
to
sales
34.3
103.1
37.2
35.8
31.4
35.6
38.7
38.2
44.2
33.9
15.5
19.3
21.4
47.4
31.2
30.6
33.4
30.8
32.3
35.1
30.8
31.5
33.2
35.4
37.5
50.6
32.6
32.6
35.3
38.0
43.6
41.7
32.8
Debt to
total
assets
24%
25%
20%
20%
37%
21%
38%
21%
24%
18%
26%
24%
27%
54%
33%
15%
50%
27%
22%
20%
22%
20%
22%
27%
25%
28%
33%
30%
22%
19%
23%
31%
24%
Return
on
sales
7.50%
7.20%
9.20%
6.10%
8.70%
6.80%
4.70%
9.70%
7.20%
16.40%
2.70%
11.80%
7.00%
3.10%
5.40%
7.90%
1.80%
12.00%
9.80%
8.30%
10.30%
12.50%
10.70%
6.40%
13.20%
8.00%
8.90%
6.00%
6.60%
7.70%
11.50%
8.30%
8.00%
Return
on
assets
12.50%
6.50%
14.40%
11.10%
15.40%
14.40%
7.30%
14.90%
8.60%
16.70%
9.40%
26.90%
17.50%
5.30%
11.10%
19.10%
7.20%
16.00%
13.80%
12.00%
16.10%
20.60%
17.30%
9.40%
11.90%
10.90%
13.40%
12.80%
9.70%
11.00%
13.20%
9.00%
14.80%
Return
on net
worth
24.80%
13.50%
31.10%
22.80%
44.20%
30.60%
26.30%
31.50%
23.80%
38.30%
20.20%
34.30%
45.90%
23.90%
28.40%
30.90%
32.40%
23.50%
24.90%
31.00%
34.10%
50.00%
34.30%
26.00%
29.40%
19.40%
38.40%
31.80%
25.90%
26.40%
29.40%
16.10%
31.80%
Fixed
assets to
net worth
19.0
60.8
29.3
43.4
28.9
24.3
45.3
16.1
41.1
30.4
28.7
19.3
27.2
103.5
15.5
21.2
48.8
13.0
14.5
16.6
27.7
30.1
16.9
18.9
16.0
11.5
14.9
12.8
15.4
12.2
17.0
37.4
15.0
Collec-
tion
period
37
39
26
25
31
36
32
19
41
27
13
29
20
39
37
33
24
39
29
38
34
31
23
29
34
42
33
40
40
38
43
39
31
.2
.1
.7
.3
.4
.5
.9
.1
.4
.0
.1
.8
.6
.4
.6
.2
.6
.3
.6
.7
.0
.6
.4
.6
.3
.0
.2
.6
.0
.4
.8
.4
.4
Total
liabilities
to net
worth
31.
33.
24.
24.
58.
26.
61.
27.
31.
21.
34.
32.
37.
119.
48.
17.
101.
37.
27.
24.
27.
25.
27.
37.
33.
38.
48.
43.
28.
24.
30.
44.
32.
8
3
9
4
4
4
3
0
3
6
9
1
6
4
4
8
6
5
8
9
4
7
8
6
8
0
2
5
6
2
0
8
0
(continued)
H-8
-------
TABLE H-3.
UPPER QUARTILE INDUSTRY BENCHMARK FINANCIAL
(Continued)
RATIOS
SIC
Code
3691
3714
3721
3728
3731
3751
3842
3861
3951
3999
4011
4212
4214
4789
4911
4922
4923
4931
4953
4959
5093
5169
5172
7389
7699
8071
8731
8999
Current
ratio
2.9
3.7
3.6
3.6
2.6
2.8
6.5
5.1
4.2
5.0
2.2
3.6
3.6
4.2
2.9
1.7
1.3
2.9
3.1
3.7
5.3
3.3
3.1
4.8
5.1
3.6
5.7
7.0
Assets
to
sales
35.5
33.9
45.8
38.2
37.2
29.9
33.5
34.1
51.0
26.9
135.2
23.5
24.5
25.4
167.4
56.0
47.5
178.8
33.5
32.9
19.7
22.7
16.2
19.2
24.4
30.2
34.1
19.1
Debt to
total
assets
26%
27%
49%
24%
33%
36%
17%
21%
20%
21%
30%
23%
26%
17%
51%
44%
53%
33%
28%
25%
19%
29%
26%
18%
21%
28%
16%
10%
Return
on
sales
5.70%
8.70%
7.40%
11.00%
6.80%
8.30%
11.30%
8.40%
11.20%
10.00%
18.00%
7.10%
6.30%
7.90%
10.00%
10.00%
8.60%
13.80%
14.20%
16.00%
7.10%
8.30%
3.20%
13.80%
12.80%
13.40%
11.40%
18.60%
Return
on
assets
7.90%
14.40%
7.70%
16.60%
11.40%
25.30%
19.10%
15.60%
19.50%
19.40%
8.40%
15.50%
14.00%
12.20%
4.50%
6.90%
6.60%
6.00%
20.30%
28.60%
17.40%
16.80%
10.50%
30.30%
25.00%
22.70%
18.80%
20.80%
Return
on net
worth
18.70%
29.70%
24.30%
41.60%
38.60%
53.50%
31.80%
31.60%
25.20%
41.30%
18.30%
33.70%
31.90%
23.20%
12.20%
17.30%
18.10%
15.30%
50.50%
73.30%
36.80%
36.80%
23.40%
68.20%
57.20%
50.80%
30.40%
37.20%
Fixed
assets to
net worth
21.0
20.0
19.9
20.0
42.8
22.6
11.0
15.9
16.4
14.2
81.4
42.5
37.3
29.1
112.3
91.9
77.8
89.2
41.2
49.7
18.8
9.3
20.5
17.2
18.0
37.4
14.6
18.3
Collec-
tion
period
40
23
20
25
42
19
34
32
37
22
31
16
23
23
26
36
34
27
24
25
11
30
13
16
16
43
36
28
.9
.4
.1
.4
.5
.8
.9
.3
.2
.3
.0
.8
.1
.4
.7
.0
.7
.1
.9
.7
.3
.7
.9
1
.4
.0
.9
.1
Total
liabilities
to net
worth
34
36
95
32
49
55
20
26
24
26
42
29
34
21
105
77
111
48
39
33
23
40
35
22
26
39
19
11
.5
.5
.0
.1
.6
.9
.6
.3
.6
.9
.2
.6
.8
.0
.5
.7
.9
.7
.7
.6
.0
.3
.5
.5
.9
.8
.2
.5
Source: Dun & Bradstreet Key Financial Ratios.
H-9
-------
TABLE H-4.
DATA FROM THE COMMON SIZE
SET UP BASELINE FINANCIAL
FINANCIALS REQUIRED TO
STATEMENTS
Income statment items
SIC
Code
181
1311
1382
1611
1629
1799
2082
2211
2295
2491
2511
2522
2599
2621
2812
2819
2821
2834
2842
2844
2851
2869
2874
2875
2879
2892
2899
2911
2951
2992
3069
3241
3272
3273
3312
3321
3356
3523
3724
4226
Cost of
sales
0.563
0.516
0.536
0.747
0.685
0.628
0.641
0.691
0.702
0.760
0.670
0.670
0.670
0.770
0.745
0.629
0.631
0.525
0.601
0.508
0.659
0.633
0.707
0.728
0.603
0.737
0.599
0.725
0.750
0.669
0.682
0.754
0.616
0.625
0.689
0.767
0.740
0.679
0.705
0.563
General and
Gross administrative Net
profit expenses income
0.437
0.484
0.464
0.253
0.315
0.372
0.359
0.309
0.298
0.240
0.330
0.330
0.330
0.230
0.255
0.371
0.369
0.475
0.399
0.492
0.341
0.367
0.293
0.272
0.397
0.263
0.401
0.275
0.250
0.331
0.318
0.246
0.384
0.375
0.311
0.233
0.260
0.321
0.295
0.437
0.385
0.413
0.391
0.216
0.260
0.310
0.338
0.263
0.251
0.215
0.284
0.277
0.279
0.187
0.228
0.312
0.297
0.442
0.349
0.436
0.306
0.314
0.264
0.233
0.362
0.220
0.351
0.241
0.215
0.302
0.278
0.211
0.331
0.342
0.255
0.192
0.223
0.268
0.247
0.357
0.052
0.071
0.073
0.037
0.055
0.062
0.021
0.046
0.047
0.025
0.046
0.053
0.051
0.043
0.027
0.059
0.072
0.033
0.050
0.056
0.035
0.053
0.029
0.039
0.035
0.043
0.050
0.034
0.035
0.029
0.040
0.035
0.053
0.033
0.056
0.041
0.037
0.053
0.048
0.080
Balance sheet
Accounts
Cash receivable
0.112
0.162
0.161
0.162
0.151
0.150
0.100
0.106
0.118
0.046
0.111
0.081
0.122
0.100
0.059
0.108
0.103
0.124
0.100
0.078
0.094
0.113
0.066
0.120
0.094
0.031
0.126
0.080
0.143
0.086
0.110
0.041
0.117
0.124
0.107
0.116
0.090
0.104
0.080
0.133
0.129
0.143
0.147
0.277
0.270
0.322
0.124
0.243
0.273
0.187
0.219
0.280
0.287
0.221
0.222
0.285
0.282
0.189
0.295
0.257
0.290
0.248
0.227
0.257
0.220
0.307
0.297
0.186
0.247
0.317
0.290
0.109
0.249
0.226
0.287
0.277
0.308
0.196
0.227
0.194
items
Total
current
assets
0.499
0.418
0.434
0.560
0.556
0.654
0.411
0.641
0.725
0.561
0.650
0.679
0.693
0.538
0.463
0.626
0.621
0.608
0.705
0.731
0.740
0.587
0.580
0.655
0.636
0.636
0.678
0.514
0.555
0.674
0.646
0.339
0.580
0.477
0.609
0.583
0.681
0.715
0.634
0.428
(continued)
H-10
-------
TABLE H-4. DATA FROM THE COMMON SIZE FINANCIALS REQUIRED TO
SET UP BASELINE FINANCIAL STATEMENTS (Continued)
Income statment items
SIC
Code
5171
3339
3341
3351
3357
3369
3412
3425
3429
3452
3471
3479
3499
3531
3533
3579
3585
3612
3643
3661
3674
3678
3679
3691
3714
3721
3728
3731
3751
3842
3861
3951
3999
4011
4212
4214
4789
4911
4922
4923
Cost of
sales
0.855
0.792
0.779
0.834
0.667
0.669
0.603
0.602
0.660
0.696
0.574
0.591
0.611
0.695
0.641
0.615
C.683
0.661
0.686
0.616
0.629
0.668
0.650
0.684
0.679
0.670
0.671
0.731
0.626
0.553
0.610
0.642
0.595
0.554
0.608
0.581
0.631
0.670
0.702
0.764
General and
Gross administrative Net
profit expenses income
0.145
0.208
0.221
0.166
0.333
0.331
0.397
0.398
0.340
0.304
0.426
0.409
0.389
0.305
0.359
0.385
0.317
0.339
0.314
0.384
0.371
0.332
0.350
0.316
0.321
0.330
0.329
0.269
0.374
0.447
0.390
0.358
0.405
0.446
0.392
0.419
0.369
0.330
0.298
0.236
0.127
0.153
0.185
0.181
0.293
0.302
0.389
0.348
0.284
0.250
0.367
0.337
-0.151
0.282
0.315
0.355
0.273
0.296
0.280
0.369
0.329
0.323
0.315
0.265
0.276
0.283
0.271
0.226
0.291
0.394
0.360
0.311
0.352
0.342
0.357
0.388
0.344
0.269
0.239
0.177
0.018
0.055
0.036
-0.015
0.040
0.029
0.008
0.050
0.056
0.054
0.059
0.072
0.540
0.023
0.044
0.030
0.044
0.043
0.034
0.015
0.042
0.009
0.035
0.051
0.045
0.047
0.058
0.043
0.083
0.053
0.030
0.047
0.053
0.104
0.035
0.031
0.025
0.061
0.059
0.059
Balance sheet
Accounts
Cash receivable
0.118
0.098
0.111
0.026
0.114
0.112
0.053
0.066
0.096
0.087
0.131
0.126
0.124
0.090
0.110
0.160
0.106
0.102
0.121
0.146
0.152
0.088
0.125
0.075
0.098
0.066
0.102
0.148
0.076
0.145
0.130
0.163
0.134
0.120
0.143
0.139
0.180
0.039
0.089
0.053
0.284
0.121
0.254
0.212
0.320
0.314
0.294
0.279
0.255
0.286
0.287
0.284
0.260
0.255
0.280
0.229
0.290
0.323
0.270
0.285
0.246
0.238
0.289
0.285
0.240
0.171
0.250
0.312
0.180
0.278
0.240
0.198
0.252
0.135
0.237
0.297
0.263
0.060
0.197
0.247
items
Total
current
assets
0.616
0.590
0.635
0.495
0.741
0.672
0.540
0.692
0.679
0.694
0.545
0.560
0.686
0.694
0.648
0.749
0.720
0.759
0.715
0.755
0.671
0.592
0.721
0.649
0.658
0.702
0.654
0.619
0.673
0.710
0.730
0.718
0.704
0.354
0.458
0.524
0.558
0.186
0.392
0.389
(continued!
H-ll
-------
TABLE H-4. DATA FROM THE COMMON- SIZE FINANCIALS REQUIRED TO
SET UP BASELINE FINANCIAL STATEMENTS (Continued)
Income statment items
SIC
Code
4931
4953
4959
5093
5169
5172
7389
7699
8071
8731
8999
Cost of
sales
0.697
0.614
0.495
0.705
0.697
0.837
0.612
0.553
0.503
0.599
0.538
General and
Gross administrative Net
profit expenses income
0.303
0.386
0.505
0.295
0.303
0.163
0.388
0.447
0.497
0.401
0.462
0.215
0.319
0.430
0.252
0.264
0.142
0.319
0.376
0.435
0.359
0.402
0.088
0.067
0.075
0.043
0.039
0.021
0.069
0.071
0.062
0.042
0.060
Balance sheet
Accounts
Cash receivable
0.062
0.113
0.149
0.152
0.139
0.126
0.200
0.139
0.145
0.215
0.187
0.057
0.221
0.233
0.237
0.368
0.312
0.249
0.239
0.277
0.262
0.268
items
Total
current
assets
0.219
0.421
0.481
0.628
0.763
0.645
0.647
0.660
0.501
0.628
0.617
Source: Dun & Bradstreet Key Financial Ratios.
H-12
------- |