United States
           Environmental Protection
           Agency
Office of Air Quality
Planning and Standards
Research Triangle Park, NC 27711
EPA-453R-94-019
March 1994
           Air
SL EPA  Regulatory Impact Analysis for the
           National Emissions Standards for
           Hazardous Air Pollutants for Source
           Categories:  Organic Hazardous Air
           Pollutants from the Synthetic Organic
           Chemical Manufacturing Industry and
           Other Processes Subject to the Negotiated
           Regulation for Equipment Leaks
           FINAL

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•-Q
                      REGULATORY IMPACT ANALYSIS
                                For The
      National Emissions  Standards for Hazardous Air Pollutants
  for Source Categories:   Organic Hazardous Air Pollutants  from  the
        Synthetic Organic Chemical Manufacturing Industry and
         Other Processes Subject  to the Negotiated Regulation
                          for Equipment Leaks
                      Emission Standards Division
                U.S. 3nvironmental Protection Agency
                     Office of Air and Radiation
             Office of Air Quality Planning  and Standards
         MD-13, Research  Triangle Park,  North Carolina 27711
                              March 1994

                                       U.S. Envtr:-   ' ' ' -^ct'on Agency
                                       Region 5, •_ .      " " 0
                                       77 West J^      •- *rd,  12th Floor
                                       Chicago, fL  C,

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     This report has been reviewed by the Emission Standards
Division of the Office of Air Quality Planning and Standards,
EPA, and approved for publication.  Mention of trade names or
commercial products is not intended to constitute endorsement or
recommendation for use.  Copies of this report are available
through the Library Services Office (MD-35),  U.S. Environmental
Protection Agency, Research Triangle Park, NC 27711, or from
National Technical Information Services,  5285 Port Royal Road,
Springfield,  VA  22161.

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                             FOREWORD
     This Regulatory Impact Analysis (RIA)  was initiated under
the authority of Executive Order 12291.  On October 1, 1993, the
Order was rescinded and replaced by Executive Order 12866.  The
Hazardous Organic NESHAP RIA at present does not explicitly
reflect this change.  This is necessary due to the tight court -
ordered schedule for_ this regulation.

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                        EXECUTIVE SUMMARY
     The Environmental Protection Agency  (EPA) plans to
promulgate regulations to reduce air pollutant emissions  from
synthetic organic chemical manufacturing industry  (SOCMI)
facilities in eight source categories, and facilities  in  seven
non-SOCMI equipment leak source categories.  Both new  and
existing facilities that meet the Clean Air Act definition of
major sources will be regulated under the authority of sections
112(c) and (d).   This decision is based on evidence that  SOCMI
facilities release air pollutants that have adverse effects on
both public health and welfare, and the need for additional
control of air pollutants already covered by the Act before the
1990 Amendments.

     Section 112(b) lists 189 hazardous air pollutants  (HAP's).
The proposed regulation will reduce the emissions of
approximately 150 of the organic chemicals on the list.   The
proposed regulation requires sources to achieve emissions limits
reflecting the application of the maximum achievable control
technology (MACT).

     The HON regulation covers five types of emission points:
process vents,  wastewater, transfer operations, storage vessels,
and equipment leaks.  The regulation is made up of two standards,
one covering the first four emission points, and the second
covering equipment leaks.  The standard for the first  four
emission points was arrived at by the usual regulatory process,
while the equipment leaks standard was developed by regulatory
negotiation.

     This regulation is unusual in that the regulation of the
emissions occurring from production of an extremely large number
of chemicals is being targeted at one time.  Facilities in
virtually every state shall be affected by the HON.  In
determining the regulatory options, the Agency evaluated methods
of determining what technologies should be applied for particular
types of emissions, what would be the minimum level of stringency
for pollutant control, and strategies for obtaining control at
the lowest cost (emission averaging).

     The standards will require reductions of emissions of HAP's,
which are a subset of VOC's (volatile organic compounds).  The
level of control provided by the regulatory options chosen ranges
from no control for existing small storage tanks ;l.a, storage
tanks with less than 10,000 gallon capacity) to 95 percent
control for new process vents.  The total amount of emission
reduction for HAP's will be 456,000 Mg (megagrams), and for all
VOC's (including HAP's)  approximately 949,000 Mg.
                               111

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     These standards, based on the regulatory options chosen,
will cost the nation $230 million annually by the fifth year
after all affected sources have complied with the regulation
(i.e., 1999), and will require $450 million in capital
investment.  The economic impacts for the regulatory options
chosen are expected to be small.  Price increases for a large
majority (83 percent) of affected chemicals are expected to be
under 2 percent, and decreases in production for a very large
majority (87 percent) of affected chemicals are expected to be
under 2 percent.  Due to the flexible nature of the SOCMI, and
the several process routes possible for production of most SOCMI
chemicals,  significant closures for SOCMI facilities are quite
unlikely.

     The regulatory alternatives under consideration will not
affect a substantial number of small entities, so a Regulatory
Flexibility Analysis is not required.

     The absence of valuation and sufficient exposure-response
information precludes a quantitative benefits analysis at this
time.
                                IV

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Table of Contents

Acronyms, Definitions, Units and Conversions

Chapter 1- Background

  1.1  Introduction

  1.2  Legal History

  1.3  Retrospective on Section 111 and 112 Standards affecting
       the SOCMI

  1.4  Executive Order 12291

  1.5  Guide to the References

Chapter 2- The Proposed HON Emission Standards in Brief

  2.1  Subpart F: Applicability of the HON

  2.2  Subpart G: Provisions for Process Vents, Wastewater
       Operations, Storage Vessels, and Transfer Operations

  2.3  Subpart H: Provisions for Equipment Leaks from SOCMI
     •  Processes

  2.4  Subpart I: Provisions for Equipment Leaks from non-SOCMI
       Processes

Chapter 3 - The Need for and Consequences of Regulatory Action

  3 .1  The Problems

  3.2  Need, for Regulation

     3.2.1  Market Failure
     3.2.1.1  Air Pollution as an Externality
     3.2.1.2  Natural Monopoly
     3.2.1.3  Inadequate Information

     3.2.2  Insufficient Political and Judicial Forces

     3.2.3  Harmful Effects of Hazardous Organic Air Pollutants

  3.3  Ccnsequencss of Regulation
     3.3.1  Consequences if EPA's Emission Reduction Objectives
            are Met
     3.3.1.1  Allocation of Resources
     3.3.1.2  Emissions Reductions and Air Quality
     3.3.1.3  Costs
                                v

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     3.3.1.4  Energy Impacts
     3.3.1.5  Solid Waste and Water Quality Impacts
     3.3.1.6  Technological Innovation
     3.3.1.7  State Regulation and New Source Review
     3.3.1.8  Other Federal Programs

     3.3.2  Consequences if EPA's Emission Reduction Objectives
            are not Met

Chapter 4- Control Techniques

 4.1  Combustion Technology

    4.1.1  Incinerators
     4.1.1.1  Thermal
       4.1.1.1.1  Applicability
       4.1.1.1.2  Types of Thermal Incinerators

     4.1.1.2  Catalytic
       4.1.1.2.1  Applicability
       4.1.1.2.2  Types of Catalytic Incinerators

    4.1.2  Flares
     4.1.2.1  Applicability
     4.1.2.2  Efficiency
     4.1.2.3  Types of Flares
      4.1.2.3.1  Steam-Assisted Flares
      4.1.2.3.2  Air-Assisted Flares
      4.1.2.3.3  Non-Assisted Flares
      4.1.2.3.4  Pressure-Assisted Flares
      4.1.2.3.5  Enclosed Ground Flares

    4.1.3  Boilers and Process Heaters
     4.1.3.1  Description of Boilers
     4.1.3.2  Description of Process Heaters
     4.1.2.3  Efficiency of Boilers and Process Heaters
     4.1.3.4  Appiicaoility of Boilers and Process Heaters

 4.2  Product Recovery Devices

    4.2.1  Absorbers
     4.2.1.1  Absorber Efficiency
     4.2.1.2  Applicability of Absorbers

    4.2.2  Steam Stripping
     4.2.2.1  Description
     4.2.2.2  Collecting, Conditioning, and Recovery
     4.2.2.3  Sfficiency of Control
                                VI

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   4.2.3  Carbon adsorbers
    4.2.3.1  Types of Adsorbers
    4.2.3.2  Control Efficiency
    4.2.3.3  Applicability

   4.2.4  Condensers
    4.2.4.1  Description
    4.2.4.2  Control Efficiency
    4.2.4.3  Applicability

   4.2.5  Vapor Collection Syscems for Loading Racks
    4.2.5.1  Description of Vapor Collection Systems
    4.2.5.2  Efficiency
    4.2.5.3  Applicability

4.3  LDAR

   4.3.1  Equipment Description and Controls
    4.3.1.1  Pumps
      4.3.1.1.1  Seals for Pumps
      4.3.1.1.2  Sealless Pumps

    4.3.1.2  Compressors

    4.3.1.3  Agitators

    4.3.1.4  Pressure Relief Devices

    4.3.1.5  Open-Ended Lines

    4.3.1.6  Sampling Connections

    4.3.1.7  Process Valves
      4.3.1.7.1  Seals for Valves
      4.3.1.7.2  Sealless Valves

    4.3.1.3  Connectors

    4.3.1.9  Instrumentation Systems

   4.3.2  Closed Vent Systems

   4.3.3  Work Practices
    4.3.3.1  Leak Detection Methods
      4.3.3.1.1  Individual Component Survey
      4.3.3.1.2  Area Survey
      4.3.3.1.3  Fixed Point Monitors

    4.3.3.2  Reoair Methods
                              VII

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 4.4 Internal Floating Roofs
    4.4.1  Types of Losses and How They are Controlled
     4.4.1.1  Control of Seal Losses
     4.4.1.2  Control of Fitting Losses
     4.4.1.3  Control of Deck Seam Losses

    4.4.2  Applicability

Chapter 5- Regulatory Options

 5.1  Introduction

 5.2  No Additional EPA Regulation
    5.2.1  Judicial System
    5.2.2  State and Local Action

 5.3  EPA Regulation
    5.3.1  Categories, Emission Points, and Floors
    5.3.2  Development of MACT and Regulatory Alternatives
    5.3.3  Description of MACT and the Regulatory Alternatives
    5.3.4  Role of Cost Effectiveness
    5.3.5  Economic Incentives:  Subsidies, Fees, and Marketable
           Permits

Chapter 6- Control Cost and Cost Effectiveness Analysis

 6.1  Cost Impacts of Control Technologies

 6.2  Cumulative Cost Control Analysis
    6.2.1  Building Chemical Trees
    6.2.2  Cumulative Control Cost Methodology
    6.2.3  Cumulative Control Cost Results

 6.3  Costs and Regulatory Options

 6 . i  National Coses
    0.4.1  Monitoring, Xecordkeeping, and Reporting  Costs
     6.4.1.1  Costs for Affected Sources
     6.4.1.1  Costs for the Federal Government:

    6.4.2  Summary

Chapter 7- Economic Impact Analysis

 7.1  Industry Profile
    7.1.1  Introduction
    7.1.2  Production, Shipments, and Capacity Utilisation
    7,1.3  Demand and End-Use Markets
    7,1.i  ?crsign Trade
    7.1.5  Pricing
    7.1.6  Financial Profile
 7.2  Studies of 20 Selected Chemicals
    7.2.1  Selection Rationale
                               viii

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     7.2.1.1  HON Compliance Costs
          7.2.1.2  Volume of Production
          7.2.1.3  Basic Feedstock Chemicals
          7.2.1.4  Selected Chemicals

    7.2.2  Methodology for Selected Studies
         7.2.2.1  Profiles
         7.2.2.2  Economic Impacts
           7.2.2.2.1  The Model
           7.2.2.2.2  Compliance

           7.2.2.2.3  Pricing
           7.2.2.2.4  Elasticities
           7.2.2.2.5  Estimating Market Adjustments
           7.2.2.2.6  Market Structure
    7.2.3  Results of Studies

 7.3  Distribution of Cumulative Costs

 7.4  Implications for the Rest of the Affected Chemical Industry
    7.4.1  Low Cost Impacts
    7.4.2  Immediate Cost Impacts
    7.4.3  High Cost Impacts
 7.6  Control Device Manufacturing Industry

 7.7  Conclusions

Chapter 8- Benefits

 8.1  Introduction

 3.2  Hazardous Air Pollutant Benefits
    3.2.1  Health Benefits of Reduction in Hazardous Air
           Pollutants
    3.2.2  Welfare Benefits of Reduction in Hazardous Air
           Pollutants

 8.3  Ozone Benefits
    3.3.1  Health Benefits of Reduction in Ambient Ozone
           Concentration
    8.3.2  Welfare Benefits of Reduction in Ambient Ozone
           Concentration

 3.4  Particulate Matter Benefits

 8.5  Additional Benefits

 8.6  Conclusion

                                ix

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Chapter 9- Weighing the Benefits and the Costs

 9.1  Introduction

 9.2  Economic Efficiency Considerations

 9.3  Cost-Effectiveness of HON Induced VOC Emission Reductions
      In Ozone Nonattainment Areas

 9.4  Conclusions

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List of Tables                                            Page  No.


3-1       HON Chemicals by Classification	3-7

5-1       Regulatory Options 	   5-8

5-2       Floor Elements	5-9

6-1       Annualized Control Cost Estimates  	    6-3

6-2       Cost Effectiveness for Model Units  (Quarterly
          Valve Monitoring)	    6-4

6-3       Cost Effectiveness for Model Units  (Monthly
          Valve Monitoring)	    6-5

6-4       Annualized Control Cost Estimates  for Example
          Model Tank	6-7

6-5       Cost Effectiveness for Wastewater Model Streams  .  6-9

6-6       Annual Control Cost Estimates	6-11

6-7       Cumulative Control Cost Analysis Results for
          Total Industry Control  (TIC) Options 	   6-14

6-8       Control Options for Process Vents  - Existing
          Sources	6-15

6-9       Control Options for Process Vents  - New Sources  .  6-16

5-10      Control Options for Wastewater - Existing Sources  6-17

6-11      Control- Oations for Wastewater - New Sources  ,  .  .6-13
6-12      Control Options for Transrer Operations  - Existing
          Sources	6-19

6-13      Control Options for Transfer Operations  - New
          Sources	5-20

5-14      Control Options for Storage Vessels:  Existing
          Sources 10,000 to 20,000 Gallon Capacity  ....  6-21

          Control Options for Storage Vessels:  Mew Sources
          10,000 to"20,000 Gallon Capacity  	  6-22
                                  XI

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6-16      Control Options for Storage Vessels:  Existing
          Sources 20,000 to 40,000 Gallon Capacity ....  6-23

6-17      Control Options for Storage Vessels:  New Sources
          20,000 to 40,000 Gallon Capacity 	  6-24

6-18      Control Options for Storage Vessels:  Existing
          Sources 40,000 Gallon Capacity and Greater .  .   .  6-25

6-19      Control Options for Storage Vessels:  New Sources
          40,000 Gallon Capacity and Greater 	  6-26

6-20      Existing Source Annual Respondent Burden and Cost of
          Reporting and Recordkeeping Requirements of the HON
          Provisions	6-29

6-21      New Source Annual Respondent Burden and Cost of
          Reporting and Recordkeeping Requirements of the HON
          Provisions	6-30

6-22      Annual Burden and Cost for the Federal Government 6-31

6-23      National Control Cost Impacts in the Fifth Year  . 6-32

7-1       SIC Codes for the SOCMI	7-4

7-2       Selection of Twenty SOCMI Chemicals	7-11

7-3       Summary of Market Adjustments	7-20

7-4       Likelihood of Closure and Process Change Under TIC
          Controls	,  .  .   .  7-22

7-5       Distribution of HON Chemicals by Percentage Cost
          Increase and Annual Production (106  kg) :  TIC
          Option 	  .....  7-25

7-6       Summary of Percentage Price Increases for Selected.
          Chemicals	,.	7-26

7-7       1990 Sales and Employment of Selected SOCMI
          Members	7-29
                               Xll

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Acronyms,  Definitions, and Conversions

                             Acronyms
     BID

     CAA

     CAAA

     CPP

     EPA

     HAP

     HON



     LDAR

     LEL

     MACT

     NAAQS

     NESHAP


     NPDES


     OAQPS

     OSHA

     POTW

     HACT

     RFA


     SIC

     SIP

     30CMI
Background Information Document

Clean Air Act

Clean Air Act Amendments of 1990

Chemical Production Processes

Environmental Protection Agency

Hazardous Air Pollutant

Hazardous Organic NESHAP (NESHAP is defined
below)

Leak Detection and Repair

Lower Explosive Limit

Maximum Achievable Control Technology

National Ambient Air Quality Standards

National Emission Standards for Hazardous Air
Pollutants

National Pollutant Discharge Elimination
System

Office of Air Quality Planning and Standards

Occupational Safety and Health Administration

Publicly Owned Treatment Works

Reasonably Available Control Technology

Regulatory Flexibility Act; also Regulatory
Flexibility Analysis

Standard Industrial Classification

3tata Implementation Plan

Synthetic Organic Chemical Manufacturing
Industry
                               Xlll

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TLV            Threshold Limit Value

TRE            Total Resource Effectiveness

VOC            Volatile Organic Compound

VHAP           Volatile Hazardous Air Pollutant

VOHAP          Volatile Organic Hazardous Air  Pollutant

WHAP          Very Volatile Hazardous Air Pollutant

              Chemical  Symbols


C02                  Carbon dioxide

CO                  Carbon monoxide

HC1                 Hydrochloric acid

NH3                  Ammonia

NOj                  Nitrogen oxide

03                   Ozone

S02                  Sulfur dioxide

       Economic,  Regulatory,  and Scientific Terms

Annual Cost         Annualized capital plus annual  operating
                    costs

Area Source         Any emission source emitting  lass  than
                    10 cons per year of a single  HAP or  25
                    tons or more per year of two  or more
                    HAPs, unless SPA establishes  a  lesser
                    quantity cutoff

bbl                 One barrel; equal to 42 gallons

Btu                 One British thermal unit

C/E                 Cost effectiveness, which  is  the net
                    present value of cost of emission
                    control divided by the presenc  value of
                    emission reductions in megagrams
                     (defined below)
                          xiv

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Gg
One gigagram, or 1,000,000 kilograms
Gm

kw

1pm

Major Source



Mg

MJ

MW

ppmv

ppmw

psia


112 (b)
scfm
Title III
                    One gram

                    One kilowatt, or 1,000 watts

                    One liter per minute

                    Any emission source emitting 10 tons
                    or more a year of a single HAP or 25
                    tons or more a year of two or more HAPs

                    One megagram, or 1,000 kilograms

                    One megajoule, or .949 Btu

                    One megawatt, or .949 Btu per second

                    parts per million by volume  (air)

                    parts per million in water

                    Pounds per square inch absolute
Section of Title III in the CAAA that
requires the EPA to promulgate
regulations establishing emission
standards for new and existing sources
of HAPs on the list of 189 HAPs in the
title

One standard cubic foot per minute

The first zitle of the CAAA;  -his cirle
classifies nonattainment areas, sets
attainment: schedules, and prescribes
control measures for 03,  CO,  PM-10,  and
for SOX,
                                 and Lead
The third title of the CAAA; chis title
lists the 189 HAPs to be controlled with
MACT, as well as the control of major
and area sources, incinerator air
emissions, accidental releases, and
scecial studies
                          XV

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     TIC                 Total Industry Control; the most
                         stringent regulatory option for each
                         source type
Units and Conversions


     This report uses metric units, some of which may not be
familiar to all readers.  The EPA is required by Congress to use
metric measurements.  The following is a short guide to  the units
and their conversions.
Conversions


To Approximate           As                  Multiply by


Mg  (megagram)            Ton  (2,000 Ib)      1.1

scm  (standard            scf(standard
cubic meter)             cubic foot)         35.3

MJ  (megajoule)           Btu  (British        949
                         thermal unit)

MW  (megawatt)            Btu/second          949

kg  fkilogram)            Ib  (pound)          2.2
                               xvi

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CHAPTER 1

BACKGROUND


1.1  Introduction

     The NESHAP being promulgated is commonly known as the
hazardous organic NESHAP, or HON.  The HON would regulate
emissions of certain organic hazardous air pollutants from SOCMI
process units.   A SOCMI process unit is defined as a unit
producing one or more of a list of SOCMI chemicals.  A SOCMI
process unit is only covered by the HON if it either 1) produces
a HAP as a product,  by-product, co-product, or intermediate; or
2) uses a HAP as a reactant or raw material to produce a SOCMI
chemical.  Seven non-SOCMI source categories would also be
regulated under the proposed equipment leaks standard  (see
Section 2.1):  styrene/butadiene rubber production; polybutadiene
production; chlorine production; pesticide production;
chlorinated hydrocarbon use; pharmaceutical production; and
miscellaneous butadiene use.

1.2  Legal History

     On November 15, 1990, the Clean Air Act was amended
significantly.   Section 112 was substantially revised at that
time altering the basic framework for regulating emissions of
toxic air pollutants from stationary sources.

     Prior to the amendments passed in 1990, Section 112 required
the Administrator to list air pollutants for which he intended to
establish NESHAPs.  Within 180 days after the'listing of such air
pollutants, regulations were to be proposed.  Final regulations
were to be issued in another 180 days.  Thus, once the
Administrator added a pollutant no the Section 112 list, a final
NESHAP for ~hat pollutant iiaa to be -.ssued within one year.  The
statute itself did not contain a list of hazardous air
pollutants.

     The amendments enacted in 1990 altered the preexisting
scheme of Section 112 fundamentally.  Instead of requiring the
Administrator to determine wnich air pollutants ought co be
listed and regulated as hazardous air pollutants, Congress
provided a list of 189 hazardous air pollutants in the statute
itself.  3PA may revise that list only in conformance with clear
statutory guidelines.  The Agency is now required to develop a
list of all categories and subcategories of sources emitting any
of the listed pollutants, and develop technology-cased standards
to control such emissions.  Thus, these standards are to be oased
on the sources of the emissions rather than being set pollutant
by pollutant as in the past and are no longer to be risk based.
Regulations for all source categories must be promulgated within

                               1-1

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10 years of enactment of the amendments.  Generally, assessment
and control of any remaining unacceptable health risk is to occur
8 years after the technology-based standards are promulgated.
However, for the HON the residual risk assessment is to be
conducted 9 years after promulgation.

1.3  Retrospective on Section 111 and 112 Standards Affecting the
     SOCMI

     The provisions of the promulgated standards incorporate
data, information, and experience gained by EPA through previous
rulemaking efforts involving similar sources.   Information on
control technology applicability, performance, and cost were
available from previous NSPS and NESHAP regulatory development
efforts.  This information was considered in selecting MACT and
in developing the proposed standards.

     Under the NSPS program, EPA has promulgated NSPS for SOCMI
air oxidation and distillation process vents; SOCMI emissions
from equipment leaks; petroleum refinery equipment leaks; and VOC
emissions from volatile organic liquid storage vessels.
Similarly, under the NESHAP program, regulations were promulgated
for benzene storage tanks, transfer racks and wastewater
emissions , and for vinyl chlorine and benzene equipment leaks.
In the development of the HON, this previously collected array of
information was carefully reconsidered in light of the provisions
of the CAA of 1990.  This technical information is presented in
detail in the HON BID.

     Each of these previous efforts regulates some sources or
chemicals that would be subject to the HON, but none of them
comprehensively regulate emissions of. all of the organic HAP's
emitted from new and existing SOCMI process units from all
emission points.  The HON would regulate all five of the emission
points at each affected SOCMI source (see Section 2.1), and-would
ragulate emissions of any of the listed organic HAP's.  The first:
of tzhe HON standards  (Subparc G) was developed, cnrough usual
regulatory procedures, and covers four of che five emission
points.  An analysis of various regulatory alternatives was
conducted for this standard.   The second, the equipment leaks
NESHAPs  (Subpart H), was developed through the regulatory
negotiation process, and, as a result,  a formal analysis of
regulatory alternatives was not conducted.

     •The negotiators in this process originally were to develop
standards for equipment leaks for 13 source categories that would
be affected by standards already under development.  The
standards under development would have applied to only eight
organic chemicals.   However, during negcciacicn of -he
amendments to the CAA, EPA expanded the scope of the standards to
include all SOCMI processes that produce or use as a reactant one
of the  149 organics listed in the CAA list of 189 HAP's  (55 FR

                               1-2

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3984, March 9, 1990; 55 FR 14349, April 17, 1990).  Petroleum
refinery processes were not to be covered, however.

1.4  Executive Order 12291

     The President issued Executive Order 12291 on February  17,
1981.  It requires EPA to prepare regulatory impact analyses
(RIAs) for all regulations having "major" impacts.  An  impact  is
considered "major" if the annual effect on the economy  is  $100
million or more, and/or may result in a "significant" increase  in
prices.  The EPA considers the HON regulations to be major and
thus is issuing this RIA.

     Along with requiring an analysis of benefits and costs, E.O.
12291 specifies that EPA, to the extent allowed by the  Clean Air
Act and court orders, demonstrate 1)  that the benefits  of  the HON
regulations will outweigh the costs and 2) that the maximum  level
of net benefits will be reached.  Chapter 3 describes the
benefits in detail.  As explained in that chapter, EPA  cannot
quantify some of the benefits.  Thus, EPA cannot show
quantitatively that the benefits of the regulations will outweigh
the costs.  Despite this problem of quantifying benefits,  EPA has
determined that CAA Sec. 112 requires issuance of the HON
regulations at the stringency level described in Chapter 2.  For
more information, refer to Chapter 9  and the Federal Register
preambles to the HON.

1.5  Guide to the References

     Most of this RIA is a summary of research reports, analyses,
correspondence, minutes of various meetings and hearings,  policy
directives, legal "notices, laws, regulations, and other documents
relating to the development of CAA Sec. 112 regulations for SOCMI
(and certain non-SOCMI) facilities.  The principal references are
listed in the back of the chapter on the subject of interest to
you.  Consult these references,  as well as the preambles than •
accompany proposal of the HON in che Federal Register,  for more
detailed information.  References are held in public dockets and
are available for inspection and copying-che latter may require a
fee-during normal business hours.  For more information on the
docket, contact:

               Air ana Radiation Docket
               and Information Center  (LE-131)
               Room M-1500 ,
               Waterside Mall
               401 M Street,  SW
               Washington, DC  20460

               Hours:  3:00 a.m. to 4:00 p.m.
               Phone No.:  (202) 382-7549
               FAX:        (202) 260-4000

                               1-3

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CHAPTER 2

TEE PROPOSED EON EMISSION STANDARDS IN BRIEF
     The HON is organized in four subparts.  Subpart F provides a
description of the applicability of the standards.  Subparts G,
H,  and I provide the control, monitoring, recprdkeeping and
reporting requirements for the standard.

2.1  Subpart F:  Applicability of the EON

     The HON will regulate certain components of new and existing
major sources,  as defined by Section 112(a), in the SOCMI and 7
non-SOCMI equipment leak source categories.

     To define the SOCMI source category, Subpart F includes a
list of organic HAP's and a list of approximately 400 synthetic
organic chemicals produced by the SOCMI as commercial products.
The "chemical manufacturing processes" used to produce these 400
chemicals can,  but do not always, result in organic HAP
emissions.  Only those processes resulting in HAP emissions are
subject to the standard.

     As proposed, Subpart F defines "source" for the SOCMI source
category as all process vents,  storage vessels, transfer racks,
wastewater streams, and equipment leaks in the organic HAP
emitting chemical manufacturing processes that are subject to the
HON.  To be subject to•the HON, a chemical manufacturing process
must be used to produce one or more of the approximately 400
SOCMI chemicals listed in Subpart F,  and have an organic HAP as
eicher  1) a product:, by-product, co-product, or intermediate; or
2)  a raw material in che production of another SOCMI cnemicai
product.

     To be part of the same source, chemical manufacturing
processes that are subject to the HON must also be located within
a contiguous plant site under common control.

     Subpart G will apply to the following kinds of emission
points in SOCMI chemical manufacturing processes:  process vents,
wastewater operations, storage vessels and transfer operations.

     Subpart H will apply to the equipment leakrs in SOCMI
chemical manufacturing processes, while Subpart I will apply zo
these non-SOCMI equipment leak source categories:
styrene/butadiene rubber production;  polybutadiene production;
chlorine production; pesticide production; chlorinated
hydrocarbon use; pharmaceutical production; and miscellaneous

                               2-1

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butadiene use.

2.2  Subpart G:  Provisions for Process Vents, Wastewater
     Operations,  Storage Vessels and Transfer Operations

     Subpart G of the proposed rule would require the owner or
operator of a source to limit source-wide emissions of HAP's.
Subpart G provides specific instructions for determining how much
emissions must be reduced at each source.  The required emissions
reduction is determined by how much emissions would be reduced if
a "reference control technology" were applied to all the
"Group 1" emission points in the source.

     The proposed standard specifies the reference control
technology for each kind of point.  Group 1 points are those
points that, meet the applicability criteria included in the
control requirements for the proposed standard.  The reference
control technologies and applicability criteria for Group l
points are specified in Subpart G of the standard as well as the
definition list in the HON preamble.

     The owner or operator of a source can use two methods to
comply with the emissions reduction requirement:.  Either method
can be used exclusively, or the two can be combined.

     The first method is to apply the reference control
technology, or an equivalent technology, to Group l emission
points; thereby achieving some part of the required emission
reduction at each Group 1 point that is controlled.

     The second method is to average emissions from two or more
emission points such that the overall required emission reduction
is achieved.  With the second method, emissions averaging, the
owner or operator does not have to apply the reference control
technology to aach Group l point, as long as an equivalent or
greacer emissions reduction is achieved elsewhere in che source.
The proposal provides specific procedures chac muse be followed.
to utilize emissions averaging as a means of compliance wich che
HON.  These procedures are summarized in Section III.3.6 of this
notice.

     Although equipment leaks are included in the definition, of
source for che SOCMI source category, equipment leaks can not be
included in the emissions averages because:  1) the equipment
leaks standard has no fixed performance level; and 2) no method
currently exists for determining the magnitude of allowable
emissions to assign equipment leaks for purposes of emissions
averaging.  When this methodology is developed, EPA will consider
allowing equipment: laak emissions zo be included in emissions
averages.
                               2-2

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2.3  Subpart H: Provisions for Equipment Leaks in SOCMI
     Processes

     The provisions in Subpart H of the proposed rule were
developed using regulatory negotiation and represent an extension
of existing equipment leak control techniques to the eight source
categories regulated by this final rule.

     Subpart H proposes work practice requirements to reduce
emissions from equipment leaks for equipment in volatile HAP
service for 300 or-more hours per year.  To be in volatile HAP
service is to be in contact with or containing fluid that is 5
percent or more HAP.

     The following types of equipment are subject to the proposed
standards in Subpart H:  valves, pumps, connectors, compressors,
pressure relief devices, open-ended lines,  sampling connection
systems, instrumentation systems, agitators, product accumulator
vessels, and closed-vent systems and control devices.

2.4  Subpart I: Provisions for Equipment Leaks in non-SOCMI
     Processes

     In contrast to the sources in the SOCMI source category,
sources in the non-SOCMI processes would be covered by this
subpart and subpart H.  For these processes, the source would
include every type of equipment subject to the proposed standards
in Subpart H except product accumulator vessels and closed-vent
systems and control devices.  The Agency is also considering
regulating the other kinds of emission points in these processes
in future section 112 standards.
                               2-3

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CHAPTER 3

THE NEED FOR AND CONSEQUENCES OF REGULATORY ACTION


3.1   The Problems

     One of the concerns about potential threats to human health
and the environment from chemical manufacturing plants  is air
emissions of hazardous organics.  Hazardous chemicals can also
find their way into underground water supplies, and in  the solid
waste stream.  Health risks from emissions of hazardous organics
into the air include increases in cancer incidences and other
toxic effects.  This chapter discusses the need for and
consequences of regulating of hazardous air emissions from
chemical plants.  Section 3.2.3 provides more detail on the
health risks of these pollutants.

3 .2  Need for Regulation

3.2.1   Market Failure

     The U.S. Office of Management and Budget  (OMB) directs
regulatory agencies to demonstrate the need for a major rule.1
The regulatory impact analysis must show that a market  failure
exists and that it cannot be resolved by measures other than
Federal regulation.  Market failures are categorized by OMB as
externalities, natural monopolies, or inadequate information.
The following paragraphs address the three categories of market
failure.  Chapter 5 discusses the regulatory options and makes a
case for the necessity of a Federal regulation.

3.2.1.1   Air Pollution as an 3xt3rnality

     Air pollution is an example of a negative externality.  This
means that, in the absence of government: regulation, trie
decisions of generators of air pollution do not fully reflect the
costs associated with that pollution.  For a chemical plant
operator, air pollution from che plant is a product or  by-product
that can be disposed of cheaply by venting it co the atmosphere.
Left to their own devices,  many plant operators treat air as a
frae good and do noc fully "internalize11 the damage caused by
emissions.  This damage is born by society, and the receptors	
the people who are the ones adversely affected by the pollution--
-are not able to collect compensation ~o offset: cheir costs.
They cannot collect compensation because che adverse effacts,
like increased risks of morbidity and mortality, are by and
large, non-market goods, that is, goods that are not explicitly


                               3-1

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and routinely traded in organized free markets.1

     Consider an example.  It may be somewhat unreal, but it
illustrates why air pollution is a market externality.  A young
man estimates that over his remaining lifetime he has a risk of
getting cancer of, let's say, 4 chances in 10.  A new chemical
plant is being constructed in his neighborhood, and he
pessimistically calculates that the added pollution to his own
environment will boost his odds of getting cancer to, say, 5
chances in 10.   He walks up to the people owning the chemical
plant and offers to "sell his exposure" to the plant's air
pollution for a bargain basement price of just $5 a day.  For his
efforts he gets no more than a laugh.  What's wrong?  Most young
men either would be unwilling to even consider such a
transaction, or, if they were willing, they would not know enough
about their futures and about the effects of the pollution to set
such a precise price.  Furthermore, even if they were willing and
did have a price, they would not have any good way of coming to
terms with the plant owners.1*   The plant  owners would ordinarily
not attempt such a transaction for many of the same reasons the
young man would not attempt it.  Given that the plant owners and
the young man could accept such a transaction, if transactions
costs were low enough and all others parties' concerns were
negligible, a transaction which would internalize the air
pollution externality could occur, as explained in Coase's
theorem.  However, it is unusual for this type of externality to
be eliminated by this route.5
     *  Litigation  also  is  a  possible  route  for  collecting
compensation.  EPA  recognizes  that improving the legal system to
facilitate environmental  protection lawsuits,  and the consequent
reduction of negative externalities, may be as cost effective and
equitable  as regulation  under the  CAA.    However,  EPA  has not
explored  this  avenue  for  controlling  hazardous  organic  air
ooilutant emissions.
     b Again,  litigation would be a possible route.

     cAn air  pollution  externality  caused  by a  chemical plant
outside  of  Port  Arthur,  Texas  was  dealt  with   by  a  market
transaction.  The company owning  the plant purchased  che homes of
local  residents who had  complained about the pollution.  However,
this  transaction  only occurred  after  intense political activity
instigated by the residents.  See "How  a Neighborhood Talked  Fina
Refinery Into Buying It Out, "  The  Wall Street Journal,  December 10,.
1991.  Other oil companies have also bought  land around facilities
 (called "greenbelts")  in order to  preempt che creation of pollution
externalities.  However,  this land buying preceded operations,


                               3-2

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     How would it help to force chemical plants either to
compensate the people suffering the consequences of the
pollution, or simply to reduce the pollution?  Where there are
negative externalities like air pollution, the market price of
goods and services does not reflect the costs, borne by receptors
of air pollution, generated in the course of producing the goods
and services.  Government regulation can be used to improve the
situation.  The NESHAP's will force chemical plant owners and
operators to reduce the quantity hazardous organic air pollutants
they emit.  With the NESHAP's in effect, what chemical plant
owners and operators must spend to produce chemicals will more
closely approximate the full social costs of production.  In the
long run, chemical plants will be forced to increase prices of
the products sold in order to cover total production costs.
Thus, prices will rise, consumers accordingly will reduce their
demand for chemical products, and hence less chemicals will be
provided.  The more the costs of pollution are internalized by
the chemical plants, the greater the improvement in the way the
market functions.  If we could internalize all negative
externalities	including, of course, those from chemical plants -
--society's allocation of resources would be improved.

3.2.1.2   Natural Monopoly

     In some respects,  chemical plants can tend toward "natural"
monopolies. There are large economies of scale in chemical
manufacturing; the heavy up-front capital needed to construct a
plant acts as a barrier to entry.  Due to the necessity for heavy
up-front capital, most chemical market are oligopolies (i.e.,
dominated by a few firms).  Thus, each firm in this type of.
market possesses more monopoly power than if each firm were
operating in a more competitive market.  The NESHAP's are not
designed to address this circumstance, and will not reduce the
tendency of chemical production markets toward monopoly or
oligopoly.

3.2.1.3   Inadequate Information

     The third category of potential market failure that
sometimes is used to justify government regulation is inadequate
information.

     Some chemical manufacturing facilities can reduce costs by
installing air pollution control devices, reducing leaks or
recycling hazardous organic chemicals.  Due co lack of
information, some of these facilities do not install such
systems.  The NESHAP's would require the collection of
information cnac may give a chemical plant 3wner enough iaua re
make an informed decision on whether or not control devices are
the best option.
                               3-3

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3.2.2   Insufficient Political and Judicial Forces

     There are a variety of reasons why many emission sources, in
EPA's judgment,  should be subject to reasonably uniform national
standards.  The principal reasons:

   *  Air pollution crosses jurisdictional lines.

   *  The people who breathe the air pollution travel freely,
     sometimes coming in contact with air pollution outside their
     home jurisdiction.

   *  Harmful effects of air pollution detract from the nation's
     health and welfare regardless of whether the air pollution
     and harmful effects are localized.

   *  Uniform national standards, unlike potentially piecemeal
     local standards, are not likely to create artificial
     incentives or artificial disincentives for economic
     development in any particular locality.

   *  One uniform set of requirements and procedures can reduce
     paperwork and frustration for firms that must comply with
     emission regulations across the country.

     None of these reasons, by itself, provides overriding justi-
fication for Federal action in the case at hand.  Collectively,
however, the reasons argue against reliance on state and local
action to control hazardous organic air emissions from chemical
plants.

     Citizens, as well as EPA, may sue state and local
governments to force them to control hazardous organic air
emissions from chemical plants.  Litigation under both the CAA
and RCRA is possible.  However, EPA has not explored ways of
improving the judicial route so chat it might: serve as a
substitute for action under Section 111 of the -IAA.

3.2.3

     Only health effects associated with hazardous organic air
emissions are addressed in these NESHAP's.  Direct exposure to
air emissions can occur through inhalation, soil ingestion, the
food chain, and dermal contact.

     Out of the 139 hazardous air pollutants identified in  the
Clean Air Act Amendments, 149 chemicals are being regulated by
the HON;  however, of  these 149, only  110 are regulated by
Subparz G of  the HON.  Of these 110 cnemicais, approximately  one-
third are carcinogens  and approximately two-thirds are
noncarcinogens.  The EPA has devised a system, which was adapced
from one developed by  the International Agency for Research on

                               3-4

-------
Cancer, for classifying chemicals based on the weight-of -
evidence.2  Three  of  the  carcinogens,  benzene,  vinyl chloride,
and-bis(chloromethyl)ether, are classified as group A or known
human carcinogens.  This means that there is sufficient evidence
to support that the chemical causes an increased risk of cancer
in humans.   One of these known human carcinogens, benzene,  is a
concern to the EPA because long term exposure to this chemical
has been known to cause leukemia in humans.  While this is  the
most well known effect, benzene exposure is also associated with
aplastic anemia, multiple myeloma, lymphomas, pancytopenia,
chromosomal breakages, and weakening of bone marrow  (53 PR  28504;
July 28,  1988).

     Vinyl chloride is another known human carcinogen.  Exposure
to* vinyl chloride has been known to cause angiosarcoma of the
liver.  It has also been associated with other forms of cancer as
well as noncancerous effects.  The noncancerous effects include
liver damage and,  potentially, chemical mutagenicity and
teratogenicity  (40 FR 59533; Dec. 24,  1975).

     Most of the carcinogenic chemicals on the list are
classified as group B or probable human carcinogens.  This  means
that there is limited data on human carcinogenicity, but
sufficient data on animal carcinogenicity to suggest possible
increased human risks as well.  Some examples of the twenty-five
probable human carcinogens on the list are l,3-butadiene, carbon
tetrachloride, acetaidehyde, benzyl chloride, and
tetrachloroethylene.  In several rat studies, 1,3-butadiene
caused several tumors on different organs (50 FR,
pp. 41466-41468, Oct. 10, 1985).  In addition, at high concen-
trations, it can 'cause coughing, fatigue, sleepiness, headache,
giddiness,  unconsciousness, respiratory paralysis, and death.3
Carbon tetrachloride is known to cause cancer in animals and is
thus suspected to cause cancer in humans.  It may also increase
stratospheric ozone depletion, which can cause a rise in the
incidence of skin cancer and cossibiv various other affects '50
?R 32621; Aug. 13, 1985).

     Twelve of the HON chemicals are considered to be group C or
possible human carcinogens.  A few of these are acrolein,
vinylidene chloride, allyl chloride, and 1,1,2,2-
tetrachloroethane.  For tnese chemicals,  there is either
inadequate data or no data on human carcinogenicity, and there is
limited data on animal carcinogenicity.  Therefore, while cancer
risk is possible,  there is not sufficient: evidence to support
that these chemicals will cause increased cancer risks in humans.

     The remaining "0 HON chemicals are noncarcinogens.  Though
they do not cause cancer, they are considered hazardous because
of the other significant adverse health effects with which  they
are associated.  Some examples of the noncarcinogens include


                               3-5

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chloroprene,  methyl chloroform, diethyl sulfate, methyl
hydrazine,  and triethylamine.  One of these chemicals,
chloroprene,  causes various effects at different lengths of
exposure.  Possible effects from acute exposure range from
vertigo and nausea at very short exposure periods to liver damage
and death after a few hours.   Subchronic toxicity effects
observed in human studies include fatigue, pressure and chest
pain, dermatitis and hair loss.  Subchronic animal studies at
higher concentrations and for longer periods of time revealed
effects ranging from small increases in underdevelopment and
behavioral effects to lung and liver tissue damage and death (50
FR 39632; Sept. 27, 1985).

     Methyl chloroform is another noncarcinogen that is a concern
to the EPA.  Acute exposure to this chemical may result in small
changes in perception, while subchronic effects of slight
histological and biochemical alterations have been observed in
mice livers.   At high concentrations, liver necrosis has been
reported.

     The following table lists the HON chemicals by CAS number
and their classification by their carcinogenic effect, if any.
                               3-6

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Table 3-1.  SON Chemicals by Classification
CAS
Number
71432
542811
75014
107131
75218
50000
75070
79107
62533
98077
100447
75252
106990
56235
67663
111444
542756
77781
123911
122667
106898
106934
107062
118741
75092
75569
127184
79016
107028
107051
75343
37683
67721
78591
79345
79005
75354
60355
"'5053
38862
79061
90040
92524
Chemical
Name
Benzene
Bis ( choromethyl ) ether
Vinyl chloride
Acrylonitrile
Ethylene oxide
Formaldehyde
Ac et aldehyde
Acrylic acid
Aniline
Benzotrichloride
Benzyl chloride
Bromoform
1,3- Butadiene
Carbon tetrachloride
Chloroform
Dichloroethyl ether
1 , 3 -Dichloropropene
Dimethyl sulfate
1,4-Dioxane
1 , 2 -Diphenylhydrazine
Epichlorohydrin
Ethylene dibromide
Ethylene dichloride
Hexachl orobenzene
Methylene chloride
Propylene oxide
Tecrachloroechylene
Trichioroethyiene
Acrolein
Allyl chloride
Ethylidene dichloride
Hexachlorobutadiene
Hexachloroethane
Isophorone
1,1,2,2- Tetrachloroethane
1,1,2- Trichloroethane
Vinyl idene chloride
Acetamide
Aceconitrnle
Acaccpnenone
Acrylamide
0-Anisidine
Biphenyl
Classification*
A
A
A
Bl
Bl
Bl
B2
B2
B2
B2
32
B2
B2
B2
B2
B2
32
32
B2
B2
B2
B2
B2
32
B2
32
32
3^
(2
,-1
c
c
c
ri
n
^_
c
•-1
NC
NC
.•1C
NC
NC
NC
                   3-7

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HON Chemicals by Classification (Continued)
CAS
Number
105602
75150
79118
532274
108907
126998
1319773

95487

108394

106445

98828
106467
111422
121697
64675
119937
68122
57147
131113
51285
121142
140885
100414
75003
107211
0
123319
108316
67561
74839
74873
71556
78933
60344
108101
^24839
80626
1634044
101688
Chemical Classification*
Name
Caprolactum
Carbon disulfide
Chloroacetic acid.
2 - Chloroacetophenone
Chlorobenzene
Chloroprene
Cresols/Cresylic acid (isomers and
mixture)
o-Cresols/Cresylic acid (isomers and
mixture )
m-Cresols/Cresylic acid {isomers and
mixture )
p- Cresols/Cresylic acid (isomers and
mixture)
Cumene
1, 4 -Di chlorobenzene
Diethanolamine
N, N-Dimethylaniiine
Diechyl suifate
3,3' -Dime thy Ibenzidine
N , N- Dimethyl formamide
1 , 1 -Dimethylhydrazine
Dimethyl phthalate
2 , 4 -Dinitrophenol
2,4- Dinitrot oluene
Ethyl acrylate
Ethylbenzene
2thyl chloride
Ethylene giycoi
Glycol ethers
Hydroquinone
Maleic anhydride
Methanol
Methyl bromide
Methyl chloride
Methyl chloroform
Methyl ethyl ketone
Methylhydrazine
Methyl isobutyl ketone
Methyl isocyanata
Methyl methacrylate
Methyl tert- butyl ether
Methylenediphenyl diisocyanate (MDI)
NC
NC
NC
NC
NC
NC

NC

NC

NC

NC
NC
NC
NC
NC
NC
NC
NC
NC
NC
NC
NC
NC
NC
NC
NC
NC
NC
NC
NC
NC
NC
NC
NC
NC
NC
NC
NC
NC
NC
                    3-8

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          EON Chemicals by Classification (Continued)
      CAS
     Number
Chemical
  Name
Classification*
    101779     4,4-Methylenedianiline
     91203     Naphthalene
     98953     Nitrobenzene
    100027     4-Nitrophenol
     79469     4-Nitropropane
    108952     Phenol
    106503     p-Phenylenediamine
     75445     Phosgene
     85449     Phthalic anhydride
         0     Polycyclic organic matter
     57578     beta-propiolactone
    123386     Propionaldehyde
     78875     Propylene dichloride
    106514     Quinone
    100425     Styrene
    127184     Tetrachloroethylene
    108883     Toluene
     95807     2,4-Toluenediamine
    584849     2,4-Toluene diisocyanate
     95534     o-Toluidine
    120821     1,2,4-Trichlorobenzene
     95954     2,4,5-Trichlorophenol
    121448     Triethylamine
    540841     2,2,4-Trimethylpentane
    108054     Vinyl acetate
   1330207     Xylenes
     95476     o-Xylene
    108383     m-Xylene
    106423     p-Xylene
                                        NC
                                        .NC
                                       . NC
                                        NC
                                        NC
                                        NC
                                        NC
                                        NC
                                        NC
                                        NC
                                        NC
                                        NC
                                        NC
                                        NC
                                        NC
                                        NC
                                        NC
                                        NC
                                        NC
                                        NC
                                        NC
                                        NC
                                        NC
                                        NC
                                        NC
                                        NC
                                        NC
                                        NC
                                        MC
*The carcinogens included in this list are chemicals which have
been designated as group A,  Bl,  32,  or C by IRIS,  CRAVE
verification,  or a Healch Assessment Document.  NC stands for
noncarcinogenic.
                               3-9

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3.3.1.1    Allocation of Resources

     There will be improved allocation of resources associated
with chemical manufacturing.  Specifically, more of the costs of
the harmful effects of chemical production will be internalized
by chemical plants.  This, in turn, will affect consumers'
decisions on whether, where, how, and how much chemicals to use.
To the extent these newly-internalized costs are then passed
along to the people who use the chemical products, and to the
extent these people are free to buy as much or as little products
as they wish, they will purchase less (relative -to -their
purchases of other competing services).   If this same process of
internalizing negative externalities occurs throughout the entire
chemical manufacturing industry, an economically optimal
situation is approached.  This is the situation when the marginal
cost of resources devoted to chemical production equals the
marginal value of the products to the people who are using the
chemical products.  There are many "ifs" in this chain of events.
It is easy to cite situations where the air pollution control
costs will not ripple through as suggested here and affect
decisions by the consumers of chemical products.  Nevertheless,
in the aggregate and in the long run, the NESHAP's will move
society toward this economically optimal situation.

3.3.1.2    Emissions Reductions and Air Quality

     Under the proposed standard, it is estimated that emissions
of HAP's will be reduced by 456,000 megagrams annually by 1997
and emissions of VOC's  (which includes HAP's) will be reduced by
949,000 megagrams annually by 1997.   (For more information refer
to Chapter 3 of this document.)  Air quality will .improve.   'This
analysis does not translate emission reductions into ambient air
quality improvements.;

     There will be a slight increase in emissions of carbon
monoxide and nitrogen oxides resulting from the on-site
combustion of fossil fuels as part of control device operations.
These estimates are 1,550 megagrams per year of carbon monoxide
and 16,600 megagrams per year of nitrogen oxides.

3.3.1.3    Costs and Benefits

     The national annual  cost of emission control, including
monitoring, recordkeeping, and reporting will increase by about
$226 million by 1997.  Expected benefits include reduced risks
for certain adverse health and welfare effects from lower levels

                               3-10

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of HAP's and VOC's emissions.   (See Chapters 8 and 9.)

3.3.1.4    Energy Impacts

     Increases in energy use were estimated for steam, natural
gas, and electricity.  These three types of energy were compared
and totaled on a barrels of energy (BOB) basis.  Under the
standard, estimates for increases in total energy use are 2.69
billion J/yr (470,000 BOE/yr)  of electricity, 6.56 billion J/yr
(1,150,000 BOE/yr) of natural gas, and 2.85 billion J/yr  (500,000
BOE/yr) of steam.  This equates to 2.12 million BOE/yr (15.5
billion J/yr).

3.3.1.5    Solid Waste and Water Quality

     Impacts for water pollution and solid waste were judged to
be negligible and were not quantified.  The required controls do
not generate any solid waste.   However, in time, as collection
and control equipment is replaced, the components themselves may
become part of the solid waste stream.

3.3.1.6    Technological Innovation

     Section 112 of the CAA regulations serve to disseminate both
pollution control and chemical manufacturing technology,  and to
stimulate further technological development.  Chemical facility
constructors have the freedom to seek the most economical way to
comply with standards.  The NESHAP's may promote the sharing of
technology with other countries,  and probably will open new
directions of research in chemical manufacturing technology.

3.3.1.7    State Regulation and New Source Review

     State regulatory programs will be strengthened.  The
NESHAP's will be delegated to "he states for enforcement as part
of -heir operating permitting programs if "hey are approved ~ne
EPA.  Assuming states do not pull resources from otner programs
to handle their enlarged responsibilities, there will be a
natural strengthening of state air pollution control staffs.
Recognition that the NESHAP's are effectively reducing emissions
will expedite the state process of reviewing applications for new
chemical plants and issuing permits for their construction and
operation.  There will be less controversy involved.  Finally,
state regulations will be uniform, and the disadvantages of the
piecemeal approach to emission regulation will be avoided.
                                                    •
3.3.1.3    Other Federal Programs

     The effects of the NESHAP's on other Federal regulatory
programs have not been thoroughly investigated.   Under Title I
there are CTGs  (control technology guidelines)  that specify
levels of control for VOC's in nonattainment areas.  Any NESHAP

                               3-11

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shall require control in attainment: and nonattainment areas.
While the baseline for the HON incorporates present CTGs, the
effect from new CTGs is not incorporated.  There is possible
overlap between these new CTGs and HON for facilities in
nonattainment areas.  The extent of this overlap has not been
defined.

3.3.2   Consequences if EPA's Emission Reduction Objectiv
        not Met

     The most obvious consequence of failure to meet EPA's
emission  reduction objectives would be emissions reductions and
benefits that are not as large as EPA is projecting.  However,
costs are not likely to be as large either.  Whether it is
noncompliance from ignorance or error, or from willful intent, or
simply slow compliance due to owners and/or operators exercising
legal delays, poor compliance can save some facilities money.
Unless states respond by pouring more resources into enforcement,
then poor compliance could bring with it smaller aggregate
nationwide control costs.   EPA has not included an allowance for
poor compliance in its estimates of emissions reductions.-  This
is because poor compliance is unlikely.

     If the emission control devices degraded rapidly over time
or in some other way did not function as expected, there could be
a misallocation of resources. This situation is very unlikely
because the NESHAP's are based on demonstrated technology.  Other
ways the regulations could fail are conceivable.
                               3-12

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References
l.   U.S.  Office of Management and Budget.  Regulatory Impact
     Guidance,  Appendix V of Regulatory Program of the United
     States Government, April 1,  1991 - - March 31, 1992.

2.   U.S.  Environmental Protection Agency.  The Risk Assessment
     Guidelines of 1986, Office of Health and Environmental
     Assessment, Washington, B.C.   August 1987.

3.   Sittig, Marshall.  Handbook of Toxic and Hazardous Chemicals
     and Carcinogens, Second Edition.  New Jersey:  Noyes
     Publication, 1985.  pp. 153-154.
                              3-13

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CHAPTER 4

CONTROL TECHNIQUES

     The scope of the HON is broad.  The control technology and
techniques involved are extensive.  Combustion technology,
product recovery devices, steam strippers, and vapor recovery
tanks are all part of the technology requirements for the HON,
and LDAR will be used to control fugitive emissions.  This
chapter does not attempt to be comprehensive in explaining the
technology and techniques used to control air toxics emissions
under the HON; it does attempt to survey what technologies and
techniques are being used and how effective they are.

4.1  Combustion Technology

     Combustion control devices, unlike noncombustion control
devices, alter the chemical structure of the VOC.  Destruction of
the VOC by combustion is complete if all VOC's are converted to
C02  and water.   Incomplete  combustion  results  in  some of the  VOC
remaining unaltered or being converted to other organic compounds
such as aldehydes or acids.  If chlorinated or sulfur-containing
compounds are present in the mixture,  the products of complete
combustion include the acid components HC1 or SO2,  respectively,
in addition to water and carbon dioxide.

4.1.1  Incinerators

     Incineration is one of the best known methods of industrial
gas waste disposal.  It is a method of ultimate disposal, that
is,  the constituents to be controlled in the waste gas stream are
converted rather than collected.  Provided proper engineering
design is used, incineration can eliminate the desired organic
cnemicais in a gas stream safely and cleanly.

     The heart of an incinerator is a combustion chamber in which
the VOC-containing waste stream is burned.  The temperature
required for combustion is much higher than the temperature of
the inlet gas. so energy is usually supplied to the incinerator
to raise the waste gas temperature.  This is accomplished by
adding auxiliary fuel (usually natural gas).

     The amount of auxiliary fuel required can be decreased and
energy efficiency increased by providing heat exchange between
the inlet stream and the effluent stream.  The effluent stream
containing zhe products cf combustion, along with any marts that
may have been present in or added to the inlet stream, can be
used to preheat the incoming waste stream, auxiliary air, or both
via a  "primary", or recuperative, heat exchanger.


                               4-1

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     Auxiliary air may be required for combustion if the
requisite oxygen is not available in the inlet gas stream.  Most
industrial gases that contain VOC's are dilute mixtures of
combustible gases in air.  With air oxidation reactor and
distillation processes, the waste gas stream is deficient in air.

     Important in the design and operation of incinerators is the
concentration of combustible gas in the waste gas stream.  Having
a large amount of excess air (i.e., in excess of the required
stoichiometric amounts) may be costly, but any mixture within the
flammability limits,  on either the fuel-rich or fuel-lean side of
the stoichiometric mixture is considered a fire hazard as a feed
stream to the incinerator.   Therefore, some waste gas streams
are diluted with air before incineration, even though this
requires more fuel in the incinerator.
                                          •
     There are two types of incinerators:  thermal and catalytic.
While much of what was discussed above applies to both, there are
important differences in their design and operation.

     4.1.1.1  Thermal Incinerators

     As is true of other combustion control devices, thermal
incinerators operate on the principle that any VOC heated to a
high enough temperature in the presence of sufficient oxygen will
be oxidized to CO^  and water.   The theoretical  temperature  for
thermal oxidation depends on the properties of the VOC to be
combusted.  There is great variation in theoretical combustion
temperatures between different VOC's.

     There are three requirements that must be met for a thermal
incinerator to be considered efficient:  1)  a high enough'
combustion chamber to enable oxidation of the organic compounds
to proceed rapidly to completion;  2) enough turbulence for good
mixing of the hot combustion products from the burner, the
combustion air,  and the organic compounds;  and 3) sufficient
residence cime for oxidation co reacn completion.-

     A typical thermal incinerator is a refractory-lined chamber
containing a burner or set of burners at one end.  Entering gases
are mixed with the process vent streams and the inlet air in a
premixing chamber.  Then the stream of gases passes into the main
combustion chamber.  This chamber is designed to allow the
mixture enough time at the required combustion temperature for
complete oxidation (usually from 0.3 to 1.0 second) .  A heat
recovery section is often added to increase energy efficiency,2
Oftentimes inlet combustion air is preheated; if this occurs,
insurance regulations require the VOC concentration must be
maintained below 25 percent of  che lower explosive limit  'L2L; ~o
minimize the possibility of explosions.  Concentrations from 25
to 50 percent are permitted given continuous monitoring by LEL


                                4-2

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monitors.

     The required level of VOC control of the waste gas that must
be achieved within the time it spends in the thermal combustion
chamber dictates the reactor temperature.  The shorter the
residence time,  the higher the reactor temperature must be.  Once
the unit is designed and built, the residence time is not easily
changed, so that the required reaction temperature becomes a
function of the particular gaseous species and the desired level
of control.  These required combustion reaction, temperatures
cannot be calculated a priori, although incinerator vendors can
provide guidelines based on their extensive experience.
Predictions of these temperatures are further complicated by the
fact that most process vent streams are mixtures of compounds.3

     Good mixing is also important, particularly in determining
destruction efficiency.  Even though it cannot be measured,
mixing is a factor of equal or even greater importance than other
parameters such as temperature.  The most feasible and efficient
way to improve the mixing in an incinerator is to adjust it after
start-up.

     Other parameters affecting thermal incinerator performance
are the heat content of the vent stream, the water content of the
stream, and the amount of excess combustion air (the amount of
air above the stoichiometric air needed for combustion) .
Combustion of a vent stream with a heat content less than 1.9
MJ/m3  (52  BTU/scf) usually  requires burning  supplemental  fuel  to
maintain the desired combustion temperature.

     The maximum achievable VOC destruction efficiency decreases
with decreasing inlet VOC concentration because combustion is
slower at lower inlet concentrations.  Therefore,  a VOC weight
percentage reduction based on the mass rate of VOC exiting the
control device versus the mass rate of VOC entering che device is
appropriate for vent screams with VOC concentrations above
approximately 2,000 ppmv \which corresponds co 1,000 ppmv VOC in
-he incinerator inlet stream since air dilution is tvpicaily
1:1) .3

     4.1.1.1.1  Applicability

     Thermal incinerators are technically feasible control
devices for most vent streams.  They are not recommended,
however, for vent streams with potentially excessive fluctuations
in flow rate (process upsets,  for example) ,  and for vent streams
containing halogens.  The former case would require a flare (see
Section 4.2)  and -he latter case would require additicnai
equipment such as acid gas scrubbers (see Section 4.1.3).
                               4-3

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      4.1.1.1.2  Types of Thermal Incinerators

     The very simplest type of thermal incinerator is the direct
flame incinerator, which is made up of only the combustion
chamber.  Energy recovery devices such as a waste gas preheater
and a heat exchanger are not included with this type of
incinerator.

     A second type of thermal incinerator is the recuperative
model.  Recuperative incinerators use the exit  (product) gas to
preheat the incoming feed stream, combustion air, or both via a
heat exchanger.  These heat exchangers can recover up to 70
percent of the energy (or enthalpy)  in the product gas.  The two
types of heat exchangers commonly used for this purpose and many
others are plate-to-plate and shell-and-tube.  Plate-to-plate
exchangers can be built to achieve a variety of efficiencies and
offer high efficiency energy recovery at lower cost than shell-
and-tube designs.  But when gas temperatures exceed 520 degrees
Celsius, shell-and-tube exchangers usually have lower purchase
costs than plate-to-plate designs.  Moreover, shell-and-tube
exchangers offer better long-term structural reliability than
plate-to-plate units.6

     Occasionally it is desired to recover some of the energy
added by auxiliary fuel in the traditional thermal units (but not
recovered in preheating the feed stream) .  Additional heat
exchangers can be added to provide process heat in the form of
low pressure steam or hot water for on-site application.  The
need for this higher level of energy recovery will be dependent
upon the plant site.  The additional heat exchanger is often
provided by the incineration unit vendor.

     A third type of thermal incinerator is the regenerative
incinerator.  This type of incinerator use direct contact heat
exchangers constructed of a ceramic material that can tolerate
the high temperatures needed to achieve ignition of the waste
straam.  Tha concept benind this incinerator type is that che
traditional approach to energy recovery in thermal units still
requires a significant amount of auxiliary fuel' to be burned in
the combustion chamber when waste gas heating values are too low
to sustain the desired reaction temperature at the moderate
preheat temperature employed.  Under these conditions, additional
fuel savings can be realized in units with more complete transfer
of exit stream energy.  Hence the regenerative incinerator.

     In this type of incinerator, the inlet gas first passes
through a hot ceramic bed thereby heating the steam to its
ignition temperature.  The hot gases then react and release
energy  in cne comcust^on cnamoer and while passing through
another ceramic bed, thereby heating it to the combustion chamber
outlet  temperature.  The process flows are then switched, now


                               4-4

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feeding the inlet stream to the hot bed.  This cyclic^process
affords very high energy recovery  (up to 95 percent).7

     4.1.1.2   Catalytic Incinerators

     A catalyst promotes oxidation of some VOC's at a lower
temperature than that required for thermal incineration.  The
catalyst increases the rate of the chemical reaction without
becoming permanently altered itself.  Catalysts typically used
for VOC incineration include platinum and palladium.  These
catalysts work well for most organic streams, but are not
tolerant of compounds containing halogens such as chlorine and
sulfur.  Among the catalysts that have been developed that are
effective in the presence of these halogens are chromia/alumina,
cobalt oxide, and copper oxide/manganese oxide.&   Inert
substrates are coated with thin layers of these materials to
provide maximum surface area for contact with the VOC in the vent
stream.  Compounds containing elements such as lead, arsenic, and
phosphorus should, in general, be considered poisons for most
oxidation catalysts.  In addition, particulate matter, including
dissolved minerals in aerosols,  can rapidly blind (deactivate)
the pores of catalysts and deactivate them over time.  Because
essentially all the active surface of the catalyst is contained
in relatively small pores, the .particulate matter need not be
large to blind the catalyst.

     For optimal operation, the volumetric gas flow rate and the
concentration of combustibles (in this case, VOC's)  should be
constant.  Large fluctuations in the flow rate will cause the
conversion of the VOC's to fluctuate also.  Changes in the
concentration or type of organic compounds in the gas stream can
also affect the overall conversion of the VOC contaminants.  Most
changes in flow rate, organic concentration, and chemical
composition are generally the result of upsets in the
manufacturing process generating the waste gas scream.

     4.1.1.2.1   Applicability

     Applicability of catalytic incinerators for control of VOC's
is limited by the catalyst deactivation sensitivity to the
characteristics of the inlet gas stream.  The vent stream to be
combusted should not contain materials that can poison the
catalyst or deposit on and block the reactive sites on the
catalyst surface.  In addition,  catalytic incinerators are unable
to handle high inlet concentrations of VOC or very high flow
rates.  Catalytic incineration is generally useful for
concentrations of 50 to 10,000 ppmv, if the total concentration
is lass ciian 25 percent 3f the 1SL and for flew rates of less
than 2,820 m3/min (100,000  scfm) .9  Catalytic units are also
typically used for vent streams with stable flow rates and
concentrations (refer to Section 4.1.1.2).
                               4-5

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     4.1.1.2.2  Types of Catalytic Incinerators

     One type of catalytic incinerator is fixed-bed.  Fixed-bed
incinerators themselves come in two varieties, depending on the
type of catalyst used:  the monolith and packed-bed.  The
monolith catalyst is the most widespread method of contacting the
VOC-containing stream with the catalyst.  In this scheme the
catalyst is a porous solid block containing parallel, non-
intersecting channels aligned in the direction of the gas flow.
Monolith catalysts offer the advantages of minimal attrition due
to thermal expansion/contraction during startup/shutdown and low
overall pressure drop.

     A second contacting scheme is a simple packed-bed in which
catalyst particles are supported either in a tube or in shallow
trays through which the gases pass.  The tray type arrangement is
the more common packed-bed scheme due to the use of pelletized
catalysts.  This tray arrangement is preferred because pelletized
catalysts can handle inlet streams containing contaminants such
as phosphorus or silicon.10   The tube arrangement is not used
widely due to its inherently high pressure drop compared to a
monolith, and the breaking of catalyst particles due to thermal
expansion when the confined catalyst bed is heated/cooled during
startup/shutdown.

     A third contacting pattern between the gas and catalyst is a
fluid-bed.  Fluid-beds have the advantage of very high mass
transfer rates, although the overall pressure drop is somewhat
higher than for a monolith.  Fluid-beds also possess the
advantage of high bed-side heat transfer compared to a normal gas
heat transfer coefficient.  This higher heat transfer rate to
heat transfer tubes immersed in the bed allows higher heat
release rates per unit volume of gas processed and therefore may
allow waste gases with higher heating values to be processed
without exceeding maximum permissible temperatures in the
catalyst bed.  The catalyst: temperatures depend on the race of
reaction occurring at the catalyse surface and. trie race of heat
exchange between the catalyse and imDedded heat transfer
surfaces.

     In general, fluid-bed systems are more tolerant of
particulates in the gas stream than fixed-bed or packed-bed
systems.  This results from the constant abrasion of the
fluidized catalyst pellets, which helps remove these particulates
from the exterior of the catalysts in a continuous manner.

4.1.2  Flares

     Flaring is an open combustion prccass in. which  the oxygen
necessary for combustion is provided by the air around the flame.
The organic compounds to be combusted are piped to a remote,


                               4-6

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usually elevated, location and burned in an open flame in the
open air using a specially designed burner tip, auxiliary fuel,
and sometimes steam or air to promote mixing for nearly complete
(98 percent minimum) destruction of combustibles.  Good
combustion in a flare is governed by flame temperature, residence
time of organic species in the combustion zone, turbulent mixing
of the organic species to complete the oxidation reaction, and
the amount of oxygen available for free radical formation.
Combustion is complete if all combustibles (i.e., VOC's) are
converted to CO2  and water, while  incomplete  combustion results
in some of the VOC's being unaltered or converted to other
organic compounds such as aldehydes or acids.

     Flares are generally categorized in two ways:  1) by the
height of the flare tip (i.e., ground-level or elevated), and 2}
by the method of enhancing mixing at the flare tip (i.e., steam-
assisted, air-assisted, pressure-assisted, or unassisted).
Elevating the flare can prevent potentially dangerous conditions
at ground level where the open flame is located near a process
unit.  Further, the products  of combustion can be dispersed above
working areas to reduce the effects of noise, heat radiation,
smoke, and objectionable odors.

     In most flares, combustion occurs by means of a diffusion
flame.'  A diffusion flame is  one in which air diffuses across the
boundary of the fuel/combustion product stream toward the center
of the fuel flow, forming the envelope of a combustible gas
mixture around a core of fuel gas.  This mixture, on ignition,
establishes a stable flame zone around the gas core above the
burner tip.  This inner gas core is heated by diffusion of hot
combustion products from the  flame zone.

     Cracking can occur with  the formation of small hot particles
of carbon that give the flame its characteristic luminosity.11  If
"here is an oxygen deficiency and if the carbon particles are
cooled co oeiow ~neir ignition temperature,  smoking occurs.   In
large diffusion flames, combustion product vortices can form
around burning portions of the gas and shut off the supply of
oxygen.  This localized instability causes flame flickering,
which can be accompanied by soot formation.

     4.1.2.1  Applicability

     Flares can be dedicated  to almost any VOC stream, and can
handle fluctuations in VOC concentration, flow rate,  heating
value, and inerts content.  Flaring is appropriate for
continuous, batch, and variable flow vent stream applications.

     Some streams, such as those containing halogenated or
sulfur-containing compounds,  are usually not flared because they
corrode the flare tip or cause formation of secondary pollutants


                               4-7

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(such as acid'gases or sulfur dioxide).  If these vent types are
to be controlled by comoustion, thermal incineration, followed by
scrubbing to remove the acid gases, is the preferred method.12

     The majority of chemical plants and refineries have existing
flare systems designed to relieve emergency process upsets that
require release of large volumes of gas.  Often, large diameter
flares designed to handle emergency releases are also used to
control continuous vent streams from various process operations.
Typically in refineries, many vent streams are combined in a
common gas header to fuel boilers and process heaters.  However,
excess gases, fluctuations in flow rate in the fuel gas line, and
emergency releases are sometimes sent to a flare.

     4.1.2.2  Efficiency

     Five factors affecting flare combustion efficiency are vent
gas flammability, auto-ignition temperature, heat content of the
vent stream, density, and flame zone mixing.

     The flammability limits of the vent stream, influence
ignition stability and flame extinction.  Flammability limits are
the stoichiometric composition limits (maximum and minimum) of an
oxygen-fuel mixture that will burn indefinitely at given
conditions of temperature and pressure without further ignition.
In other words,  gases must be within their flammability limits to
burn.  If these limits are narrow, the interior of the flame may
have insufficient air for the mixture to burn.  Fuels, such as
hydrogen, with wide limits of flammability are therefore easier
to combust.

     The auto-ignition temperature of a vent stream affects
combustion because gas mixtures must be at a sufficient
temperature and concentration to burn.  A gas with a low auto-
ignition temperature will ignita more easily than a gas with a
high auto-ignition temperature.

     The heat concent of the vent stream is a measure of the heac
available from the combustion of the VOC in the vent stream.  The
heat content of the vent stream affects the flame structure and
stability.  A gas with a lower heat content produces a cooler
flame that does not favor combustion kinetics and is more easily
extinguished.  The lower flame temperature will also reduce
buoyant forces,  which reduces mixing.

     The density of the vent stream also affects the structure
and stability of the flame through the effect on buoyancy and
mixing.  3y design, the velocity in many flares is very low;
therefore, most of the flame structure is developed through
buoyant forces as a result of combustion.  Lighter gases
therefore tend to burn better.  In addition to burner tip design,


                               4-8

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Che density also affects the minimum purge gas required to
prevent flashback, with lighter gases requiring more purge.13

     Poor mixing at the flare tip or poor flare maintenance can
cause smoking (particulate matter release).  Vent streams with
high carbon-to-hydrogen ratios (> 0.35) have a greater tendency
to smoke and require better mixing to burn smokelessly.14  For
this reason, one generic steam-to-vent-stream ratio is not
appropriate for all vent streams.  The steam required depends on
the vent stream carbon-to-hydrogen ratio.  A high ratio requires
more steam to prevent a smoking flare.

     The efficiency of a flare in reducing VOC emissions can be
variable.  For example, smoking flares are far less efficient
than properly operated and maintained flares.  Flares have been
shown to have high VOC destruction efficiencies, under proper
operating conditions.  Up to 99.7 percent combustion efficiency
can be achieved.

     4.1.2.3  Types of Flares

     4.1.2.3.1  Steam-Assisted Flares

     Steam-assisted flares are single burner tips, elevated above
ground level for safety reasons,  that burn the vented gas in
essentially a diffusion flame.  They reportedly account for the
majority of the flames installed and are the predominant flare
type found in refineries and chemical plants. 5  To ensure an
adequate air supply and good mixing, this type of flare system
injects steam into the combustion zone to promote turbulence for
mixing and to induce air into the flame.

     4.1.2.3.2  Air-Assisted Flares

     Air-assisted flares use forced air to provide the combustion
air ana the mixing raquirsd for smokeless operation.  These
flares are built with a spider-shaped burner  (with many small gas
orifices) located inside but: near tne cop of a steel cylinder two
feet or more in diameter.  Combustion air is provided by a fan in
the bottom of the cylinder, and the amount of combustion air can
be varied by varying the fan speed.  The primary advantage air-
assisted flares provide is that they can be used in the absence
of steam.

     4.1.2.3.3  Non-Assisted Plaras

     The non-assisted flare is just a flare tip without any
auxiliary provision for enhancing the mining of air into its
flame.  Its use is limited essentially to gas streams that have a
low heat content and a low carbon/hydrogen ratio that burn
readily without producing smoke.16  These streams require less air


                               4-9

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for complete combustion, have lower combustion temperatures that
minimize cracking rea-ctions, and are more resistant to cracking.

     4.1.2.3.4  Pressure-Assisted Flares

     This type of flare use vent stream pressure to promote
mixing at the burner tip.  If sufficient vent stream pressure is
available,  these flares can be applied to streams previously
requiring steam or air assist for smokeless operation.  Pressure-
assisted flares generally have the burner arrangement at ground
level, and consequently, must be located in a remote area of the
plant where there is plenty of space available.  They have
multiple burner heads that are staged to operate based on the
quantity of gas being released.  The size, design, number, and
group arrangement of the burner heads depend on the vent gas
characteristics.

     4.1.2.3.5  Enclosed Ground Flares

     The burner heads of an enclosed flare are inside a shell
that is insulated.  This shell reduces noise, luminosity, and
heat radiation and provides wind protection.  A high nozzle
pressure drop is usually adequate to provide the mixing necessary
for smokeless operation and air or steam assist is not required.
In this context, enclosed flares can be considered a special
class of pressure-assisted or non-assisted flares.  Enclosed
flares are always at ground level.

     Enclosed flares generally have less capacity than open
flares and are used to combust continuous, constant flow vent
streams, although reliable and efficient operation can be
attained over a wide range of design capacity.  Stable combustion
can be obtained with lower heat content vent gases than is
possible with open flare designs, probably due to their isolation
from wind effects.n

4.1.3  aoilara and Process Heaters

     4.1.3.1  Description of Boilers

     Industrial boilers are combustion units that boil water to
produce high and low pressure steam.  Industrial boilers can also
combust various vent streams containing VOC's, including vent
streams from distillation operations, reactor processes, and
other general operations.

     The majority of industrial boilers used in the chemical
industry are of watertube design, and over half of these boilers
use natural gas as a fuel.13  la a watartube cellar, hoc
combustion gases contact the outside of heat transfer tubes which
contain hot water and steam.  These tubes are interconnected by a


                               4-10

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set of drums that collect and store the heated water and steam.
Energy transfer from the hot flue gases to the water in the
furnace watertube and drum system can be better than 85 percent
efficient.19  Additional energy can be recovered from the flue gas
by preheating combustion air in an air preheater or by preheating
incoming boiler feed water in an economizer unit.

     When firing natural gas, forced- or natural -draft burners
throughly mix the incoming fuel and combustion air.  A VOC-
containing vent stream can be added to this mixture or it can be
fed into the boiler through a seperate burner.  In general,
burner design depends on the characteristics of the fuel-- either
the combined VOC- containing vent stream and fuel or the vent
stream alone (when a separate burner is used) .

     4.1.3.2  Description of Process Heaters

     A process heater is similar to an industrial boiler in that
heat liberated by the combustion of fuels is transferred by
radiation and convection to fluids contained in tubular coils.
It is different from an industrial boiler in that process heaters
raise the temperature of process streams instead of producing
high temperature steam.  Process heaters are used in many
chemical manufacturing operations to drive endothermic reactions .
They are also used as feed preheaters and as reboilers for some
distillation operations.  The fuels used in process heaters
include natural gas, refinery off gases, and various grades of
fuel oil.

     A typical process heater design consists of the burner (s) ,
the firebox, and a row of tubular coils containing the process
fluid.  Most heaters also contain a convective section in which
heat is recovered from hot combustion gases by convective heat
transfer to the process fluid.
      ...
              Zfficiency of Boilers and Process Heacars
     Average furnaca temperature and residence time determine the
combustion efficiency of boilers and process heaters, just as
they do for incinerators.  When a vent gas is injected as a fuel
into the flame zone of a boiler or process heater, the required
residence time is reduced because of the relatively high
temperature and turbulence of the flame zone.

     Residence cime and temperature profiles in boilers and
process heaters are determined by factors such as overall
configuration, fuel type, heat input, and excess air level. :o   A
•natnematicai model developed co astimata furnaca rssidenca rine
and temperature profiles for a variety of industrial boilers
predicts mean furnace residence times ranging 0.25 to 0.83 second
for natural gas -fired watertube boilers that range in size from


                               4-11

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4.4 to 44 MW (15 to 150 x 106 Btu/hr) .21   Boilers  with a 44-MW
capacity or greater generally have residence times and operating
temperatures that would ensure a 98 percent VOC destruction
efficiency.  The required temperatures for these size boilers are
at least 1,200 degrees Celsius.

     Firebox temperatures for process heaters can show wide
variations depending on the application.  Firebox temperatures
can range from 400 degrees Celsius for preheaters and reboilers
to 1,260 degrees Celsius for pyrolysis furnaces.   Tests conducted
by EPA on process heaters using a mixture of benzene offgas and
natural gas showed greater than 98 percent destruction efficiency
for C,  to  C6 hydrocarbons.22

     4.1.3.4  Applicability of Boilers and Process Heaters

     Both of these devices are used throughout the chemical
industry to provide steam and heat input essential to chemical
processing.  Most of these devices possess sufficient size to
provide the necesary temperature and residence time for VOC
destruction.  Furthermore, boilers and process heaters have
proved effective in destroying compounds that are difficult to
combust, such as PCBs (polychlorinated biphenyls).  Boilers and
process heaters are thus effective in reducing VOC emissions from
any vent streams that are certain not to reduce the performance
or reliability of the boiler or process heater.

     Ducting some vent streams to a boiler or process heater can
present potential safety and operating problems.   The varying
flow rate and organic content of some vent streams can lead to
explosive mixtures or flame instability within the furnace.  In
addition,  vent streams with halogenated or sulfur-containing
compounds are usually not combusted in boilers or process heaters
due to the possibility of corrosion.

     Boilers and process heaters are most applicable where the
potential exists for heat recovery from the combust-on of the
vent stream.  Vent streams with a high enough VOC concentration
and high flow rate can provide enough equivalent heat value to
act as a substitute for fuel that would otherwise be needed.
Because boilers and process heaters cannot tolerate wide
fluctuations or interruptions in the fuel supply, they are not
widely used to reduce VOC emissions from batch operations or
other noncontinuous vent streams.

4.2  Product Recovery Devices

4.2.1  Absorbers

     In absorption, a soluble vapor is absorbed from its mixture
with an inert gas by means of a liquid in which the solute gas is


                               4-12

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more or less soluble.  For any given solvent, solute, and
operating conditions, there exists an equilibrium ratio of solute
concentration in the gas mixture to solute concentration in the
solvent.  The driving force for mass transfer at a given point in
an operating absorber is the difference between the concentration
of solute in the gas and the equilibrium concentration of solute
in the liquid.

     Devices based on absorption principles include spray towers,
venturi and wet impingement scrubbers,  acid gas scrubbers, packed
columns, and plate columns.  Spray towers have the least
effective mass transfer capability due to their high atomization
pressure requirement, and are generally restricted to particulate
matter removal and control of high-solubility gases such as S02
and NH3  (ammonia) .a   Venturi  scrubbers  have  a high  degree  of
gas/liquid mixing and provide high particulate matter removal
efficiency.  They also require high pressure drops (i.e. high
energy requirements) and have relatively short contact times.
Their use is also restricted to high-solubility gases.  Acid gas
scrubbers are used with thermal incinerators to remove corrosive
combustion products.  Acid gas is formed upon the contact of
halogenated or sulfur-containing VOCs with intense heat during
incineration.  This gas is quenched to lower its temperature and
is then scrubbed in an absorber.  In most cases, the type of
absorber used is packed or plate columns,  the two most commonly
used absorbers for VOC control.

     Packed towers are vertical columns containing inert packing,
manufactured from materials such as porcelain, metal, or plastic,
that provides the surface area for contact between the liquid and
gas phases in the absorber.  Packed towers are used mainly for
corrosive materials and liquids with tendencies to foam or plug.
They are less expensive than plate columns for small-scale or
pilot plant operations where the column diameter is less than
O.o m.  They are also suitable where che use of place columns
would result in excessive pressurs drops.

     Plate columns contain a series of trays on which contact
between the gas and liquid phases in a stepwise fashion.  The
liquid phase flows down tray to tray as the gas phase moves up
through openings in the tray (usually perforations or bubble
caps) , passing through the liquid on the way.

     The major design parameters for absorbing any substance are
column diameter and height, system pressure drop,  and required
liquid flow rate.  Deriving these parameters is accomplished by
considering the solubility, viscosity,  density, and concentration
of the VCC in che inlet: vent stream  (ail of which depend en
column temperature); the total surface area provided by the
packing material; and the mass flow rate of the gases .to be
treated.
                              4-13

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     4.2.1.1  Absorber Efficiency

     Control efficiencies for absorbers can vary widely depending
on the solvent selected, design parameters, and operating
practices.  Solvents are chosen for high solubility for the
specific VOC and include liquids such as water, mineral oils,
kerosenes, nonvolatile hydrocarbon oils, and aqueous solutions of
oxidizing agents, sodium carbonate, and sodium carbonate.24  An
increase in absorber size (i.e., contact surface area) or a
decrease in the operating temperature can increase the VOC
removal efficiency of the system for a given solvent and solute.
It is sometimes possible to increase VOC removal efficiency by
changing the solvent.

     4.2.1.2  Applicability of Absorbers

     The primary determinant of absorption applicability for
controlling VOC emissions is the availability of a suitable
solvent.23  Water is a suitable solvent for absorption of organic
chemicals with relatively high water solubilities  (e.g., most
alcohols, organic acids, aldehydes, glycols).  For organic
compounds with low water solubilities, other solvents (usually
organic liquids with low vapor pressures) are used.

     Other important factors influencing absorption applicability
include absorptive capacity and strippability of VOC in the
solvent.  Absorptive capacity is a measure of the solubility of
VOC in the solvent.  The solubility limits the total quantity of
VOC that could be absorbed in the system, while strippability
describes the ease with which the VOC can be removed from the
solvent.  If strippability is low, then absorption is less viable
as a VOC control technique.26

     The concentration of VOC in the inlet vent stream also
determines the applicability of absorption.  Absorption is
usually considered only wnen the VOC concentration is above 200
co 300 ppm.:7  3eiow  cnese gas-phase concentrations, tne rata .;f
mass transfer of VOC to solvent is decreased enougn co make
reasonable designs infeasible.

4.2.2  steaTn Stripping

     Steam stripping can be used as initial treatment of a
process wastewater stream to reduce the VOC loading of that steam
before it is sent to the facility-wide wastewater treatment
system.   There are  several components in a steam stripping
system:  a feed tank, heat exchanger, steam stripping column,
condenser, overhead  receiver, and a destruction device  (if
necessary;.
                               4-14

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     4.2.2.1  Description

     Steam stripping involves the fractional distillation of
wastewater to remove VOC's.  The basic operating principle of
steam stripping is the direct transfer of heat through contact of
steam with wastewater.  This heat transfer vaporizes the more
volatile organic compounds.  The overhead vapor contains water
and organic compounds, and it is condensed and separated to
recover the organic fraction.  Recovered organic compounds are
either recycled for reuse in the process or incinerated in an on-
site combustion device for heat recovery.

     Steam stripper systems may be operated in batch or
continuous mode.  Batch steam strippers are more prevalent when
the wastewater feed is generated by batch processes, when feed
characteristics are highly variable, or when small volumes of
wastewater are generated.  They may also be used if wastewater
contains relatively high concentrations of solids, resins, or
tars.  In batch stripping, wastewater is charged to the receiver,
or pot, and brought to the boiling temperature of the mixture.
Solids and other residues remaining in the bottom of the pot
(hence the term "bottoms") at the completion of the batch are
nonvolatile, heavy compounds that are removed for disposal.  By
varying the heat input and fraction of the initial charge boiled
overhead, a batch stripper can be used to treat wastewater
mixtures with widely varying characteristics.28

     In contrast to batch strippers, continuous steam strippers
are designed to treat wastewater streams with relatively
consistent characteristics.  Continuous strippers can have
several stages and achieve greater efficiencies of VOC removal
than batch strippers.  Other advantages offered by continuous
strippers include more consistent effluent quality, more
automated operation, and lower annual operating costs.
                                 •
     Typically, wastewater steams continuously discnarged from
process equipment are usually consistent in composition.  A
continuous steam stripper system would thus be indicated for
treating the wastewater.  However,  batch wastewater streams can
also be controlled by continuous steam strippers by incorporating
a feed tank with adequate residence time to provide a consistent
outlet composition.

     4.2.2.2  Collecting, Conditioning, and Recovery

     The controlled sewer system or hard piping from the point of
wastewater generation to the feed tank controls emissions before
steam stripping.  The zeea cank collects and conditions "he
wastewater fed to the steam stripper.  If the feed tank is
adequately designed, a continuous steam stripper can treat
wastewater generated by some batch processes.  In these cases,


                               4-15

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the feed tank serves as"a buffer between the batch process and
the continuous steam stripper.  During periods of no wastewater
flow from the batch process, wastewater stored in the feed tank
is fed to the stripper at a relatively constant rate.

     Often present in the feed tank are aqueous and organic
phases.  The feed tank provides the retention time necessary for
these phases to separate.  The organic phase is recycled to the
process for recovery of organic compounds or disposed by
incineration.   The water phase is fed to the stripper to remove
the soluble organic compounds.  Solids are also separated in the
stripper feed tank; the separation efficiency depends on the
density of the solids dissolved in the process wastewater.  The
more dense solids, which settle to the bottom of the tank, are
removed periodically from the feed tank and are usually
landfilled or landfarmed.

     After this conditioning of the wastewater, it is pumped
through the feed/bottoms heat exchanger where it is preheated and
then pumped into the steam stripping column.  Steam is sparged
into the stripper at the bottom of the column, and the wastewater
feed enters at the top.  The wastewater flowing down the column
contacts the flowing countercurrently up the column.  Both latent
and sensible heat is transferred from the steam to the organic
compounds in the wastewater,  vaporizing them into the vapor
stream. ' These constituents flow out the top of the column with
any uncondensed steam.

     The wastewater effluent leaving the bottom of the stripper
is pumped through the feed/bottoms heat exchanger which heats the
feed stream and cools the bottoms before discharge.  After
leaving the exchanger, the bottoms stream is usually either
routed to an on-site wastewater treatment plant and discharged to
an NPDES-permitted outfall, or sent to a publicly owned treatment
works  (POTW).
                         *
     Recovery of both VOC's and. wacer vapors from cue gaseous
overheads stream from che steam stripper is usually accomplished.
with a condenser.  The condensed stream is fed to an overnead
receiver, and the recovered VOC's are usually either pumped to
storage and recycled to the process unit or combusted for their
fuel value in an incinerator, boiler, or process heater (all
discussed earlier in this chapter).  If an aqueous phase is
generated, it is returned to the feed tank and recycled through
the steam stripper system.

     4.2.2.3  Efficiency of Control

     The degrae of contact between ciie staam and zhe wastawater
is the primary variable affecting the ability of a steam stripper
to remove VOC's.  In turn, this variable is affected by five
factors:  1) column dimensions  (height and diameter);  2)  the

                               4-16

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contacting media (packing or trays);  and 3) operating parameters
such as the steam-to-feed ratio, column temperature, and
wastewater pH.

     Control efficiency increases as  column height increases
since there is greater opportunity for contact between the steam
and the wastewater.  The column height is determined by the
number of theoretical stages required to achieve the desired
removal efficiency.  The number of theoretical stages is a
function of the equilibrium coefficient of the pollutants and the
efficiency of mass  transfer in the column, and this number can be
computed by either the McCabe-Thiele  graphical method or the
Kremser analytical  method.

     The column diameter determines the required cross-sectional
area for liquid and vapor flow through the column.  The smaller
the cross-sectional area, the higher  the superficial gas
velocity, which increase turbulence and mixing resulting in high
column efficiencies.  However, the column cross-sectional area
must be sufficient  to prevent flooding from excessive liquid
loading or liquid entrainment.  This  area also affects the liquid
retention time, with higher retention times resulting in higher
efficiencies.  These factors have to  be weighed in selecting the
column diameter and the design velocities.

     The contacting media in the column also play an important
role in determining the mass transfer efficiency.  Packing or
trays are used to provide contact between liquid and vapor
phases.  Packing provides for continuous contact while trays
provide staged contact.  Trays are usually more effective for
wastewater containing dispersed solids because of the plugging
and cleaning problems encountered with packing.  Tray towers can
also operate over a wider range of liquid flow rates than packed
towers.  Packed towers, on the other  hand, are often more cost
effective to install and operate when creating highly corrosive
wastewater since corrosion resistant  ceramic packing can be used.
Also, the pressure  drop chrough packed towers may oe less than
through tray towers.29

     The steam-to-feed ratio required for high removal
efficiencies is affected by the wastewater temperature as it
enters the column.   If the feed temperature is lower than che
operating temperature at the top of the column, part of the steam
is required to heat the feed.  With good column design,
sufficient stsam flow is provided to  neat -he feed as well as
volatilize the organic constituents.   Any steam in excess of this
flow rate helps carry VOC's out of the top of the column with the
overheads stream.  Also, increasing tha steam-cc-feed ratio will
increase the ratio  of the vapor to liquid flow through the
column, which increases the stripping of VOC's into the vapor
phase.


                               4-17

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     Two other influences on VOC removal are Che column
temperature and wastewater pH.  Temperature influences the
solubility and equilibrium coefficients of the organic compounds.
pH has an effect on the vapor liquid equilibrium characteristics
of VOC's.  To ensure steam stripping is successful, columns are
operated at pressures slightly exceeding atmospheric,  and
operating temperatures are usually slightly higher than the
normal boiling point of water.  Wastewater pH is controlled by
adding caustic to the feed.30

     4.2.2.4  Applicability

     Steam stripping is most applicable to treating wastewaters
with organic compounds that are highly volatile and have a low
solubility in water.  The VOC's that have low volatility tend not
to volatilize and t'hus are not easily stripped out of the
wastewater by the steam.  Similarly, VOC's that are very soluble
in water tend to remain in the wastewater and are not easily
stripped by steam.   Oil, grease, solids content and pH of
wastewater also affect applicability.  High oil, grease, and
solids levels can cause operating problems for steam strippers,
and extremes in pH may prove to be corrosive to equipment.
Design or wastewater preconditioning techniques can be used to
mitigate these problems.

4.2.3  Carbon Adsorbers

     Adsorption is a mass-transfer operation involving
interaction between gas- or liquid-phase components and solid-
phase components.  In this operation, certain components of a
gas- or liquid-phase, (or adsorbate)  are transferred to the
surface of a solid adsorbent.  The transfer is accomplished by
physical or chemical adsorption mechanisms.  Physical adsorption
takes place when intermolecular (van der Waals) forces attract
and hold the gas molecules to the solid surface.  Chemisorption
occurs when a chemical bond forms between the gaseous- and solid-
phase molecules.  A physically adsorned molecule can be removed.
readily from che adsorbenc  (under suitable temperature and
pressure conditions) ; the removal of a chemisorbed component: is
much more difficult.

     Most industrial adsorption systems use activated carbon as
che adsorbent.  Activated carbon effectively captures certain
organic vapors by physical adsorption.  The vapors can then be
released for recovery by regenerating the adsorption bed with
steam or nitrogen.  Oxygenated adsorbents such as silica gels or
diatomaceous earth exhibit a greater selectivity for capturing
water vapor than organic gases compared to activated carbon.
They ;nus are of licrla use for high-moisture vent screams
characteristic of some VOC-containing vent streams.31
                               4-18

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     Among the factors influencing the design of a carbon
adsorption system are the chemical characteristics of  the VOC
being recovered,  the physical properties of the inlet  stream
(temperature,  pressure,  and volumetric flow rate), and the
physical properties of the adsorbent.  The mass of VOC that
adheres to the adsorbent surface is directly proportional to the
difference in VOC concentration between the gas phase  and the
solid surface.  In addition, the quantity of VOC adsorbed depends
on the adsorbent bed volume, the surface area of adsorbent
available to capture VOC, and the rate of diffusion of VOC
through the gas film at the gas- and solid-phase interface  (the
mass transfer coefficient).   It should be noted that physical
adsorption is an exothermic operation that is most efficient
within a narrow range of temperature and pressure.32

     4.2.3.1  Types of Adsorbers

     There are five types of adsorption equipment used in gas
collection:  1)  fixed regenerable beds;
2) disposable/rechargeable cannisters;  3)  traveling bed
adsorbers;  4) fluid bed adsorbers; and 5)  chromatographic
baghouses.  The fixed-bed type is the one most commonly used for
control of VOC's,33 so this section addresses this type only.

     Fixed-bed units can be sized for controlling continuous,
VOC-containing streams over a wide range of flow rates, ranging
up to several thousand cubic meters per minute (100,000 scfm) .
VOC concentrations in streams that can be treated by fixed-bed
units can range from several parts per billion by volume (ppbv)
to 10,000 ppmv.

     Fixed-bed adsorbers can be operated in two modes:
intermittent or continuous.   In intermittent mode,  the adsorber
removes VOC's for a specified time (called "the adsorption
time"), which corresponds to the time during which the controlled
source is emitting VOC's.  In continuous mode, a regenerated.
carbon bed is always available for adsorption, so chat ciie
controlled source can operate continuously without: shutting down.
While continuous operation allows for more adsorption  over ciie
same period of time because it does not need to be shut down,
more carbon must be provided.  This is necessary since a bed for
desorbing must be provided along with the adsorbing bed in order
to recover the captured VOC from the carbon.34

     4.2.3.2  Control Efficiency

     Well designed and operated carbon adsorption systems can
achieve control efficiencies of 95 ~o 99 percant for a variety of
solvents including ketones such as methyl ethyl ketone and
cyclohexanone.  The VOC control efficiency depends on  factors
such as inlet vent stream characteristics (temperature, pressure,


                               4-19

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and velocity),  the physical properties of the compounds present
in the vent stream, the physical properties of the adsorbent, and
the condition of the regenerated carbon bed.

     The adsorption capacity of the carbon and the resulting
outlet concentration are dependent upon the temperature of the
inlet vent stream.  High vent stream temperatures increase the
kinetic energy of the gas molecules,  causing them to overcome van
der Waals forces and release from the surface of the carbon.  At
vent stream temperatures above 38 degrees Celsius, both
adsorption capacity and outlet concentration may be adversely
affected.35

     Increasing vent stream pressure improves VOC removal
efficiency.  Increased stream pressure results in higher VOC
concentrations in the vapor phase and increased driving force for
mass transfer to the carbon surface.   Decreased stream pressure,
on the other hand, is often used to regenerate carbon beds.
Reduced pressure in the carbon bed effectively lowers the
concentration of VOCs in the vapor phase, desorbing the VOCs from
the carbon surface to the vapor phase.

     Vent stream velocity entering the carbon bed must be quite
low to allow time for diffusion and adsorption.  Typical inlet
vent stream velocities range from 15 to 30 meters per minute
(50 to 100 feet per minute). If inlet VOC concentrations are low,
as is expected in the SOCMI, the bed area required for the volume
needed usually permits a velocity at the high end of this range.35

     The required depth of the bed for a given compound is
directly proportional to the carbon granule size and porosity and
to the inlet vent stream velocity.  For a given carbon type, bed
depth must increase as the vent stream velocity increases.
Generally, carbon adsorber bed depths range from 0.40 to 0.95
meter  (1.5 to 3.0 feet).

     The condition of che regenerated carbon bed vill change wxcri
use.  After repeated regeneration, che carbon bed loses activity,
resulting in reduced VOC removal efficiency.

     4.2.3.3  Applicability

     Carbon adsorption cannot be used universally for
distillation or process vent streams.  It is not recommended
under the following conditions, common with many VOC-containing
vent streams:  1) high VOC concentrations, 2) very high or low
molecular weight compounds, 3) mixtures of high and low boiling
point VOC's, and 4) high moisture content.

     Absorbing vent streams with VOC concentrations above 10,000
ppmv may result in excessive temperature rise in the carbon bed


                               4-20

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due to the accumulated heat of adsorption resulting from the VOC
loading.  If flammable vapors are present, insurance company
requirements may limit inlet concentrations to less than 25
percent of the LEL.37

     The molecular weight of the compounds to be adsorbed should
be in the range of 45 to 130 gm/gm-mole for effective adsorption.
High molecular weight compounds that are characterized by low
volatility are strongly adsorbed on carbon.  The affinity of
carbon for these compounds makes it difficult to remove them
during regeneration of the carbon bed.  Conversely, highly
volative materials (i.e, molecular weight less than about 45 gm)
do not adsorb readily on carbon, thus adsorption is not typically
used for controlling streams containing such compounds.

     Adsorption systems can be very effective with homogeneous
vent streams but much less so with streams containing a mixture
of light and heavy hydrocarbons.  The lighter organic compounds
tend to be displaced by the heavier compounds, greatly reducing
system efficiency.

     Humidity is not a factor in adsorption at adsorbate
concentrations above 1,000 ppmv.  Below this level, however,
water vapor competes with VOC's in the vent stream for adsorption
sites on the carbon surface.  In these cases, vent stream
humidity levels exceeding 50 percent  (relative humidity) are not
desirable.38

4.2.4  Condensers

     Condensation is a separation technique in which one or more
volatile components of a vapor mixture are separated from the
remaining vapors through saturation followed by a phase change.
The phase change from gas to liquid can be achieved in two ways:
1) by increasing the system pressure ac a given temperature or 2)
by lowering the temperature at a constant pressure.  The latter
method is the more common to achieve the specified phase change,
and it alone is addressed here.

     4.2.4.1   Description

     The basic equipment includes a condenser, refrigeration
unit(s), and auxiliary equipment such as a precooier,
recovery/storage tank, pump/blower, and piping.

     The two most commonly used condenser types are surface
condensers and direct contact condensers.39   In surface
condensers, cne coolant fluid, ices not contact the vent stream:
heat transfer occurs through the tubes or plates in the
condenser.  As the vapor condenses, a film forms on the cooled
surface and drains away to a collection tank for storage,  reuse,


                               4-21

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or disposal.  Because the coolant from surface condensers does
not contact the vapor stream,  it is not contaminated and can be
recycled in a closed loop. Surface condensers also allow for
direct recovery of VOC's from the gas stream.

     Most refrigerated surface condensers are the shell-and-tube
type, which circulates the coolant fluid on the tube side.  The
VOC's condense on the outside of the tube (the shell side).
Plate-type heat exchangers are also used as surface condensers in
refrigerated systems.  Plate condensers operate under the same
principles as the shell-and-tube systems, for there is no contact
between the coolant and vent stream) ,  but the two streams are
separated by thin, flat plates instead of cylindrical tubes.

     In contrast to surface condensers, direct contact condensers
cool the vapor stream by spraying a liquid at ambient or lower
temperature directly into the vent stream.  Spent coolant
containing VOC's from direct contact condensers usually cannot be
reused directly.  Additionally,  VOC's in the spent coolant cannot
be recovered without further processing.  The combined stream
could present a potential waste disposal problem, depending upon
the coolant and the specific VOC's.

     A refrigeration unit generates the low-temperature medium
necessary for heat transfer for recovery of VOC's.  Typically in
refrigerated condenser systems two kinds of refrigerants are
used, primary and secondary.  Primary refrigerants such as
ammonia and chlorofluorocarbons (e.g.,  chlorodifluoromethane)  are
those that undergo a phase change from liquid to gas after
absorbing heat.  Secondary refrigerants, such as brine solutions,
have higher boiling points and thus act only as heat carriers and
remain in the liquid phase.

     There are some applications that require auxilary equipment.
If the vent stream contains water vapor or if the VOC has a high
freezing point  .e.g., benzene or toluene), ice or frozen
hydrocarbons may form on the condenser tubes or piatas.  This
will reduce the heat transfer efficiency of the condenser and
thereby reduce the removal efficiency.   Formation of ice will
also increase the pressure drop across the condenser.  In such
cases, a precooler may be used to remove the moisture before the
vent stream enters the condenser.   Alternatively, ice can be •
melted during an intermittent heating cycle by circulating
ambient temperature brine through the condenser or using radiant
heating coils.

     It is necessary in some cases to provide a recovery tank for
temporary storage of condensed VOC before its reuse,
reprocessing, or transfer to a large storage came.  Pumps and
blowers are typically used to transfer liquid (e.g., coolant and
recovered VOC) and gas streams,  respectively, within the system.


                              4-22

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     4.2.4.2  Control Efficiency

     The major parameters that affect the removal efficiency of
refrigerated surface condensers designed to control air/VOC
mixtures are: 1} Volumetric flow rate of the VOC-containing vent
stream;  2)  Inlet temperature of the vent stream;  3)
Concentrations of the VOC's in the vent stream;  4) Absolute
pressure of the vent stream; 5} Moisture content of the vent
stream;  and 6) properties of the VOC's in the vent stream, such
as dew points, heats of "condensation, heat capacities, and vapor
pressures.40

     Any operator of a condenser should remember that a condenser
cannot lower the VOC concentration to levels below the saturation
concentration at the coolant temperature.  Removal efficiencies
above 90 percent can be achieved with coolants such as chilled
water, brine solutions, ammonia, or chlorofluorocarbons.

     4.2.4.3  Applicability

     Condensers are widely used as product recovery devices.
They may be used to recover VOC's upstream of other control
devices or they may be used alone for controlling vent streams
containing relatively high VOC concentrations  (usually greater
than 5,000 ppmv).  In these cases, the removal efficiencies of
condensers can range widely, from 50 to 95 percent.

     Since the temperature necessary for condensation depends on
the properties and concentration of VOC's in the vent stream,
streams having either low VOC concentrations or more volatile
compounds require lower condensation temperatures.  Also,
depending on the type of condenser used, disposal of the spent
coolant can be a problem.  If cross-media impacts are a concern,
surface condensers would be preferable to direct contact
condensers.

     Condensers used as emission control devices can process flow
rates as high as about 57 mj/min (120,000  scfm) .   Condensers  for
vent streams with greater volumetric flow rates and having high
concentrations of noncondensibles will require significantly
larger heat transfer areas.

4.2.5  Vapor Collection Svst-pma f^r Loading Racfcs

     When liquids are transferred into a transport vessel, vapors
in the head space of that vessel can be lost to*the atmosphere.
The principal factors affecting emissions from transfer
operations are che vapor pressure of che chemical being
transferred.  Other factors that influence emissions from
transfer operations include the transfer rate and the purge rate
of nitrogen  (or other inert gas) through the vessel during


                               4-23

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transfer.

     The vapor pressure of the chemical being transferred has the
greatest influence on emissions from transfer operations.  For
pure materials, the vapor pressure gives a measure of the amount
of organic compound lost during transfer.  The total potential
emissions from any transfer is related to the void volume of the
transport vessel and the concentration of the VOC in the head
space.

     The mode of transfer is also an important factor in
determining emissions from transfer operations.  Top splash
loading creates the most emissions because it enhances the
agitation of the liquid being transferred, creating a higher
concentration of the compound in the vapor space.  With alternate
loading techniques, such as submerged fill or bottom loading, the
organic liquid is"loaded under the surface of the liquid, which
reduces the amount of agitation and suppresses the generation of
excess vapor in the head space of the transport vessel.

     The rate of transfer has a more subtle influence* on
emissions; its greatest effect is on air quality.  Transfer rate
will dictate the short-term emission rate of the compound being
transferred, thereby influencing exposure to the worker or
public.

     A nitrogen purge is used to reduce the potential for
explosion of some chemicals in air or to keep some chemicals
moisture-free.  Using an inert gas purge increases the emission
rate of VOC lost to the atmosphere because it creates a turnover
rate of gas through the transport vessel, increasing the total
volume of vapor discharged to the atmosphere.

     Most vapor collection systems collect the vapors generated
during transfer operations and transport them to either a
recovery device for return to the process or a combustion device
for destruction.  In vapor balancing systems, vapors generated
during transfer operacions are returned direcciy to che storage
facility for the material, and the system requires no additional
controls.

     4.2.5.1  Description of Vapor Collection Systems

     Vapor collection systems consist of piping that captures and
transports to a'control device VOC's in the vapor space of
transport vessels that are displaced when liquids are loaded.
These systems may use existing piping normally used to transport
licruids under pressure into the transport vessel or piping
separate from  cnat for transfer.  Collection systems comprise
very few pieces of equipment and minimal piping.  The principal
piece of equipment in a collection system is a vacuum pump or
blower, used to induce the flow of vapors from the transport

                               4-24

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vessel to the recovery or combustion system.

     Blowers can also be used to remove vapors from the head
space of the tank car as liquid is transferred into the tank car.
Standard recovery techniques such as condensation or
refrigeration/condensation systems, or combustion can be applied
to the captured vapors.

     Vapor balancing is another means of collecting vapors and
reducing emissions from transfer operations:  Vapor balancing is
most commonly used where storage facilities are adjacent to the
loading facility.  In this collection system, an additional line
is connected from the transport vessel to the storage tank to
return any vapor in the transport vessel displaced by the liquid
that is loaded to the vapor space of the storage vessel left by
the transferred liquid.   Since this is a direct volumetric
change, there are no losses to the atmosphere.

     4.2.5.2  Efficiency
                                   A
     The three factors affecting the efficiency of a vapor
collection system are:

          1)  Operating pressure of the collection system;

          2}  Volume of piping between the loading arm and the
                        transport vessel; and

          3)  The efficiency of the ultimate control device.

     The first factor influences the efficiency of collection
through the VOC concentration remaining in the line after
transfer.  The VOC concentration for systems operating at low
pressures or under vacuum is decreased, thus lowering the total
amount of VOC in the piping.  This effectively reduces the amount
of VOC lost to the atmosphere wnen disconnecting transfer lines.
The opposite occurs for systems operating at higher pressures.

     The second factor establishes the quantity of VOC not
delivered to the transport vessel and not collected for
treatment.  Systems that minimize the piping between the transfer
loading arm and the transport vessel are more efficient than
those with larger piping connections, because there is less open
piping to the atmosphere.

     The third factor* is the most important, for it affects the
the overall efficiency of the collection system and the control
system.  In the SOCMI, collection systems are generally hard-
piped between the transport vessel and the control system.  Thus,
there is no loss of efficiency, other than losses associated with
connections and disconnections.
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     4.2.5.3  Applicability

     Applicability of vapor collection systems depends on four
factors:

          1)  Vapor pressure of the material;

          2)  Value of the product;

          3)  Physical layout of the facility; and

          4)  OSHA considerations.

     Materials with vapor pressures greater than atmospheric are
stored and loaded under pressure.   Loading under pressure
eliminates the losses associated with atmospheric transfer
operations and limits losses to those associated with connections
and disconnections.

     For purely economic considerations,  expensive products are
candidates for more extensive collection and recovery systems.
Further, it is unlikely that combustion techniques will be used
to control emissions of products whose value is high enough to
warrant recovery efforts.

     The chird factor, physical layout of the facility, is the
most important.  The shorter the distance between the vapor
balancing system and the storage cank, the fewer meters of piping
required, and the more affordable a vapor balancing system is.
Because vapor balancing is a simple and cost effective control
technique for transfer operations, it is often used in RACT
(reasonably available control technology) requirements and has
been used in many instances as a control measure to meet the
emission requirements of many state air toxic regulations.

     OSHA limitations on work place exposure to chemicals being
transferred are additional considerations.  Some chemical
compounds being cransferred are mora toxic than others, and thus
must be more tightly controlled.  Highly toxic or carcinogenic
compunds require stringent control measures such as transferring
VOCs under vacuum, vapor compression, refrigeration, and
combustion.

4.3  LDAR

     Leak detection and repair programs have been required by the
EPA for a number of years.  They have been undertaken to reduce
emissions due to leaking equipment.  These emissions occur when
prccass fluid  (liquid or gaseous)  is released through the sealing
mechanisms of equipment in the chemical plant.  This section
discusses the sources of equipment leak emissions and control
techniques that can be applied to reduce emissions from equipment

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leaks, including the applicability of each control technique and
its associated effectiveness in reducing emissions.

     Many potential sources of equipment leak emissions exist in
an organic chemical plant.  The following sources are covered in
this section:  pumps, compressors, agitators, pressure relief
devices,  open-ended lines, sampling connections, process valves,
connectors,  instrumentation systems, and product accumulator
vessels.

     The  techniques for reducing emissions from equipment leaks
are as diverse as the types of sources.  The three major
categories for techniques are:  1) Equipment (modifications);  2)
Closed vent systems; and 3) Work practices.  The selection of a
control technique and its effectiveness in reducing emissions
depends on a number of factors including:  1) Type of equipment;
2) Equipment service (gas, light liquid, heavy liquid);
3) Process variables influencing equipment selection
(temperature, pressure);   4) Process stream composition;  and 5)
Costs.

4.3.1  Equipment Description and Controls

     4.3.1.1  Pumps

     Pumps are used widely in the SOCMI for the movement of
organic liquids.41   Chemicals transferred by pump can leak at the
point of  contact between the moving shaft and the stationary
casing.  Consequently,  all pumps require a seal at the point
where the shaft penetrates the housing in order to isolate the
pumped fluid from the environment.

     4.3.1.1.1  Seals for Pumps

     Two  generic types of seals, packed and mechanical,  are used
en pumps.  Packed seals can be used on both reciprocating and
rotary action (centrifugal) pumps.  A packed seal consists of a
cavity (or "stuffing box1') in che pump casing filled with packing
material  that is compressed with a packing gland to form a seal
around the shaft.  Coolant is required to remove the frictional
heat between the packing and shaft.  The necessary lubrication is
provided by a coolant chat flows between the packing and che
shaft.42  Deterioration of the packing can result in leakage of
the process liquid.

     Mechanical seals are limited in application to pumps with
rotating  shafts.  There are single and double mechanical seals,
wich ;nany variations co -heir basic design, but all have a lapped
seal face between a stationary element and a rotating seal ring.
In a single mechanical seal, the faces are held together by the
pressure  applied by a spring on the drive and by the pump


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pressure transmitted through the pumped fluid on the pump end.
An elastomer 0-ring seals the rotating face to the shaft.  The
stationary face is sealed to the stuffing box with another
elastomer 0-ring or gasket.

     For double mechanical seals, two seals are arranged back-to-
back, in tandem, or face to face.  In the back-to-back
arrangement, a closed cavity is created between the two seals.  A
seal liquid, such as water or seal oil, is circulated through the
cavity.  This seal liquid is used to control the temperature in
the stuffing box.  For the seal to function properly, the
pressure of the seal liquid must be greater than the operating
pressure of the pump.  In this manner, any leakage would occur-
across the seal faces into the process or the environment.

     Double mechanical seals are used* in many process
applications, but there are some conditions for which their use
is not indicated.  Such conditions include service temperatures
above 260 degrees Celsius, and pumps with reciprocating shaft
motion.  Further, double mechanical seals cannot be used where
the process fluid contains slurries, polymeric, or undissolved
solids.

     4.3.1.1.2  Sealless Pumps

     Another type of pump used in the SOCMI is the sealless pump.
Sealless pumps are used primarily in processes where the pumped
fluid is hazardous, highly toxic, or very expensive and where
every effort must be made to prevent all possible leakage of the
fluid.  Canned-motor, diaphragm, and magnetic drive pumps are
three common types of sealless pumps.

     Canned-motor pumps have interconnected cavity housings,
motor rotors, and pump casings.  Because the process liquid is
the bearing lubricant, abrasive solids in the process lines
cannot be tolerated.  Canned-motor pumps are widely used for
handling organic solvents, organic heat transfer liquids, ana
light oils.

     Diaphragm pumps contain a flexible diaphragm of metal,
rubber, and plastic as the driving member.  The primary advantage
of this arrangement is the elimination of all packing and seals
exposed to the process liquid provided the diaphragm's integrity
is maintained.  This is important when handling hazardous or
toxic liquids.  Emissions from diaphragm pumps can be large,
however, if the diaphragm fails.

     In magnetic-drive pumps, no seals contact the process fluid.
An externally-mounted magnet coupled to the pump motor drives ;he
impeller in the pump casing.
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     4.3.1.2  Compressors

     Compressors move gas through a process unit in much  the same
way that pumps transport liquid.  Compressors are typically
driven with rotating or reciprocating shafts.  Thus, the  sealing
mechanisms for compressors are similar to those for pumps, i.e.,
packed and mechanical seals.  Emissions from this source  type may
be reduced by improving the seals' performance or by collecting
and controlling the emissions from the seal.  Emissions from
mechanical contact seals depend on the type of seal or control
device used and the frequency of seal failure.

     Shaft seals for compressors are of several different types:
labyrinth, restrictive carbon rings, mechanical contact,  and
liquid film.  AIL of these seal types restrict leaks, although
none of them completely eliminates leakage.  Compressors  can be
equipped with ports in the seal area to evacuate collected gases,
which could- then be controlled.

     A buffer or barrier fluid may be used with these mechanical
seals to form a buffer between the compressed gas and the
environment, similar to barrier fluids in pumps.  This system
requires a clean, external gas supply that is compatible with the
gas being compressed.  Barrier gas can become contaminated and
must be disposed of properly, for example by venting to a control
device.  Compressors can also be equipped with liquid film seals.
This seal is formed by a film of oil between the rotating shaft
and stationary gland.

     4.3.1.3  Agitators

     Agitators are used in the SOCMI to stir or blend chemicals.
As with pumps and compressors, emissions from agitators can occur
at the interface of a moving shaft and a stationary casing.
Emissions from this sourca type may be reduced by improving the
seal or by collecting and controlling emissions.  There are four
seal arrangements conanoniy used with agitators:   packed seals,
mechanical seals, hydraulic seals, and lip seals.  Packed seals
for agitators are similar in design and application to the packed
seals for pumps  (refer to Section 4.3.1.1).

     While mechanical seals are more costly than other seal
arrangements, they provide better leakage rate reduction.  Also,
the maintenance frequency of properly installed and maintained
mechanical seals is one-half to one-fourth that of packed seals.13
Mechanical seals can be designed specifically for high pressure
applications (i.e., greater than 1,140 kPa or 165 psia) ,44  As
with packed seals, ~ns mechanical seals for agitators ara similar
to the design and application of mechanical seals for pumps.

     The hydraulic seal is the simplest and least-used agitator


                               4-29

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is limited to low temperatures and pressures and can only handle
very small fluctuations.  Process chemicals may contaminate the
seal liquid and then be released into the atmosphere as equipment
leak emissions.

     Lip seals,  which are relatively inexpensive and easy to
install, can be used on a top-entering agitator as a dust or
vapor seal..  Once the seal has been installed, the agitator shaft
rotates in'continuous contact with the lip seal.  Emissions can
be released through this seal when it wears excessively or when
the operating pressure surpasses the pressure limitation of the
seal.

     4.3.1.4  Pressure Relief Devices

     Insurance,  safety, and engineering codes require that
pressure relief devices or systems be used in applications where
the process pressure may exceed the maximum allowable working .
pressure of the process equipment.  Pressure relief devices
include rupture disks and safety/relief valves.  The most common
pressure relief device is a spring-loaded valve designed to open
when the operating pressure of a piece of process equipment
exceeds a set pressure.  Equipment leak emissions from spring-
loaded relief valves may be caused by failure of the valve seat
or valve stem, improper reseating after overpressure relief, or
process operation near the relief valve set pressure which may
cause the relief valve to frequently open and close or "simmer."

     Rupture disks are designed ~o burse at overpressure to allow
-he process gas zo vent directly zo che atmosphere.  Rupture
disks allow no emissions as long as the integrity of nhe disk is
rra.intained.  They must be replaced after each pressure relief
episode to restore the process to an operating pressure
condition.  Although rupture disks can be used alone, they are
sometimes installed upstream of a relief valve to prevent
emissions through the relief valve stem.

     Combinations of rupture disks and relief valves require
certain design constraints and criteria to avoid potential safety
hazards.  For example, appropriate piping changes must be made to
prevent disk fragments from lodging in damaging the relief valve
wnen relieving overpressure.  A block valve upstream of the
rupture disk can be used to isolate the rupture disk/relief valve
combination and permit in-service replacement of the disk after
it bursts.  Otherwise, emissions could result through the relief
valve.
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     4.3.1.5  Open-Ended Lines

     Emissions from open-ended lines are caused by leakage
through the seat of an upstream valve in the open-ended line.
Emissions that occur through the stem and gland of the valve are
not considered "open-ended" emissions and are addressed in-the
section on process valves.  Emissions from open-ended lines can
be controlled by installing a cap,  plug, flange, or second valve
to the open end.  Control efficiency of these control measures is
assumed to be 100 percent.

     4.3.1.6  Sampling Connections

     Emissions from sampling connections occur as a result of
purging the sampling line to obtain a representative sample of
the process fluid.  These emissions can be reduced by using a
closed loop sampling system or disposing of the purged process
fluid in a control device.  The closed loop sampling system is
designed to return the purged fluid to the process at a point of
lower pressure.  Closed loop sampling is assumed to be 100
percent effective for controlling emissions from a sample purge.
This purged fluid could also be directed to a control device such
as an incinerator, in which case the control efficiency would
depend on the efficiency of the incinerator in removing the VOC.

     4.3.1.7  Process Valves

     Valves are the most common and numerous process equipment
type found in the chemical industry.43  There are many designs for
valves, and most of the designs contain a valve stem which
operates to restrict or allow fluid flow.  Typically, the stem is
sealed by a packing gland or 0-ring to prevent leakage of process
fluid to the atmosphere.  Emissions from valves occur at the stem
or gland area of the valve body when the packing or 0-ring in the
valve fails.

     4.3.1.7.1  Seals for Valves

     Valves that require the stem to move in and out or turn, must:
utilize a packing gland.  A variety of packing materials are
suitable for conventional packing glands.  The most common
packing inaterials are the various types of braided asbestos that
contain lubricants; other packing materials include graphite,
graphite-impregnated fibers, and tetrafluorethylene.  The choice
of packing material depends on the valve application and
configuration.46  Conventional packing glands can be used over a
wide range of operating temperatures.

     4.3.1.7.2  Sealless Valves

     Emissions from process valves can be eliminated if the valve


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stem can be isolated from the process fluid.  There are two types
of sealless valves available:  diaphragm valves and sealed
bellows valves.

     Diaphragm valves isolate the valve stem from the process
fluid using a flexible elastomer or metal diaphragm.  The
position of the diaphragm is regulated by a plunger, which is
controlled by the stem.  Depending on the diaphragm material,
this type of valve can be used at temperatures as high as 205
degrees Celsius and in strong acid service.  If the diaphragm
fails, the valve can become a relatively larger source of
emissions.47  In addition, use at temperatures beyond the
operating limits of the material tends to damage or destroy the
diaphragm.

     Sealed bellows valves are another alternative leakless
design.  In this valve type, metal bellows are welded to the
bonnet and disk of the valve, thereby isolating the stem from the
process.  These valves can be designed to withstand high
temperatures and pressures and can provide leak-free service at
operating conditions beyond the limits of diaphragm valves.
However, they are usually dedicated to highly toxic services and
the nuclear industry.

     The control effectiveness of both diaphragm and sealed
bellows valves is essentially 100 percent, although a failure of
the diaphragm or bellows could cause temporary emissions much
larger than those from other types of valves.

     4.3.1.8  Connectors

     Connectors are flanges, threaded fittings, and other
fittings used to join sections of piping and equipment.  They are
used wherever pipe or other equipment (such as vessels, pumps,
valves, and heat exchangers) require isolation or removal.

     Flanges are bolted, gasket-sealed connectors.  Normally,
flanges are used for pipes with diameters of 50 mm or greater and
are classified by pressure rating and face type.  The primary
cause of flange leakage are poor installation and thermal stress,
which results in the deformation of the seal between the flange
faces.48

     Threaded fittings are made by cutting threads into the
outside end of one piece  (male) and the inside end of another
piece  (female).  These male and female parts are then screwed
together like a nut and bolt.  Threaded fittings are normally
used to connect piping and equipment having diameters of 50 mm or
lass.  Seals for zhese fittings are made by coating tne male
threads with a sealant before joining it to the female piece.
Emissions from threaded fittings can occur as the sealant ages


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and eventually cracks.  Leakage can also occur as the result of
poor assembly or application of the sealant, and thermal stress
of the piping and fittings.

     Emissions from connectors can be controlled by regularly
scheduled maintenance.  Potential emissions can be reduced by
replacing the gasket or sealant materials.  If connectors are not
required for process modification or periodic equipment removal,
emissions from connectors can be eliminated by welding the
connectors together.

     4.3.1.9  Instrumentation Systems

     An instrumentation system is a group of equipment components
used to condition and convey a sample of process fluid to
analyzers and instruments for the purpose of determining process
operating conditions  (e.g., composition, pressure,  and flow
rate) .  Valves and connectors are the predominant types of
equipment used in instrumentation systems, although other
equipment may be included.  Emissions resulting from the
components in the instrumentation system are controlled as they
are for the same component in the process system.49

4.3.2  Closed Vent Systems

     Emissions from equipment leaks may be controlled by
installed a closed vent system around the leaking equipment and
venting the emissions to a control device.  This method of
control is only applicable to certain equipment types, i.e.,
pumps, compressors, agitators, pressure relief valves, and
product accumulator vessels.  Because of the many valves,
connectors, and open-ended lines typically found in chemical
facilities it is not practical to use this technique for reducing
emissions from all of these potential sources for an entire
process unit.  However, a closed, vent system can be used to
control emissions from a limited number of components, which
could be enclosed and maintained under negative pressure and
vented ~o a control device.
4.3.3  Work Practices

     LDAR methods are used to identify equipment components chat
are emitting significant amounts of VOC and to reduce these
emissions.  The emission reduction potential for LDAR as a
control technique is highly variable and depends on several
factors, the most important of which are the frequency of
monitoring and the techniques used to identify leaks.  .Repair of
leaking components is required only when the equipment leak
emissions reach a set level--the leak detection level.  A low
leak definition will initiate repair at lower levels, resulting


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in a lower overall emission rate.

     4.3.3.1  Leak Detection Methods

     Leak detection methods include individual component surveys,
area (walk-through)  surveys, and fixed point monitors.
Individual component surveys form a part of the other methods.

     4.3.3.1.1  Individual Component Survey

     Each source of equipment leak emissions  (pump, valve,
compressor,  etc.)  can be checked for VOC leakage by visual,
audible, olfactory,  soap bubble, or instrument techniques.
Visual methods are good for locating liquid leaks.  A visible
leak does not necessarily indicate VOC emissions, however,
because the leaking material may be non-VOC.  High-pressure leaks
may be detected by the sound of escaping vapors, and leaks of
odorous materials may be detected by smell.

     Soap spraying on equipment components can be used to survey
individual components in certain applications.  If the soap
solution forms bubbles or blows away,  a leak is indicated, and
vice versa.   Disadvantages of this method are that 1) it does not
distinguish leaks of hazardous VOC's from nonhazardous VOC's; 2)
it is only semiquantitative, since it requires the observer to
determine subjectively the rate of leakage based on the behavior
of the soap bubbles; and 3) it is limited to sources with
temperatures below 100 degrees Celsius, because the water in the
soap solution will evaporate at temperatures above this figure.
This method is also not suited for moving shafts on pumps or
compressors, because the motion of the shaft may interfere with
the motion of the bubbles caused by a leak.

     The best method for identifying leaks of VOC from components
is using a portable hydrocarbon detection instrument.  Air close
to the potential leak site  is sampled and analyzed by a sampling
traverse  ("inoni coring"5  over the entire ara wnere leaks may
occur.  The concentration of hydrocarbons in the sampled air is
displayed on the instrument meter and is a rough indicator of the
VOC emission rate from the component.  If the concentration is
higher than a specified figure  ("action level"), then the leaking
component is marked for repair.

     4.3.3.1.2  Area Survey

     An area or walk-through survey requires  the use of a
portable hydrocarbon detector and a strip chart recorder.  The
procedure involves carrying the instrument within one meter of
the upwind ana downwind sides of process equipment.  The
instrument is then used for an individual component survey in a
suspected leak area.  The efficiency of this method for locating
leaks is not well established.  Problems with this method include

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the fact that leaks from.overhead valves or relief valves will
not be detected,  and the possibility of leaks from adjacent units
and adverse meteorological conditions affecting the results of
the walk-through survey.  Thus, the area survey is best for
locating only large leaks at small expense.

     4.3.3.1.3  Fixed point monitors

     This method consists of placing several automatic
hydrocarbon sampling and analysis instruments at various
locations in the process unit.  If elevated hydrocarbon
concentrations are detected, a leaking component is indicated.
Identifying the specific leaking component requires an individual
component survey.  The efficiency of fixed point monitoring is
not well established, but fixed point monitoring of VOC's is not
as effective as a complete individual component survey.50  Fixed-
point monitors are expensive, multiple units may be required, and
the portable instrument is also needed to locate the particular
leaking component.  Calibration and maintenance costs may be
high.  Fixed-point monitors are used successfully to detect
emissions of hazardous or toxic substances, and can provide an
increased detection efficiency by selecting a particular compound
as the sampling criterion.

     4.3.3.2  Repair Methods

     This section describes repair methods for possible equipment
emission sources in a chemical plant.  These are not intended to
be complete repair procedures.

     Many pumps have in-line or parallel spares that can be used
while the leaking pump is being repaired.  Leaks from packed
seals may be reduced by tightening the packing gland.  With
mechanical seals, the pump must be dismantled to repair or
replace the leaking seal.  Dismantling pumps can result in
spillage of some process fluid..  If "he seal Leak is small.
evaporative emissions of VOC from such spillage may be greater
chan the continued leak from the seal.  Precautions must be taken
to prevent or reduce these emissions.

     Leakage from compressors with packed seals may be reduced by
tightening the packing gland, as described for pumps.  Repair cf
compressors with mechanical seals requires the compressor be
removed from service.  Since compressors usually do not have
spares, immediate repair may not be practical or possible without
a process unit shutdown.

     Agitators,  like pumps and compressors, can leak VOC's at the
point where the shaft penetrates the casing, and seals are
required to minimize fugitive emissions.  Leaks from packed seals
may be reduced by the repair procedure described for pumps,  while


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repair of other types of seals require the agitator to be out of
service.  In this- latter case, process shutdown or isolation of
the particular agitator being repaired is required.

     Leaking repair valves usually must be removed for repair.
To remove the relief valve without shutting down the process, a
block valve may be required upstream of the relief valve.  A
spare relief valve should be attached while the faultly valve is
repaired and tested.

     A rupture disk can be installed upstream from a pressure
relief valve to eliminate leaks until an overpressure release
occurs.  Once a release occurs, the rupture disk must be replaced
to prevent further leaks.  A block valve is required to isolate
the rupture disk for replacement.

     Most valves have a packing gland that can be tightened while
in service.  Although this procedure should decrease the
emissions from the valve, it can actually increase the emission
rate if the packing is old and brittle or has been over-
tightened.  Some types of valves have no means of in-service
repair and must be isolated from the process and removed for
repair and replacement.  Most control valves have a manual bypass
loop that allows them to be isolated and removed.  Most block
valves cannot be isolated easily, although temporary changes in
process operation may allow isolation in some cases.

     In some cases, leaks from connectors can be reduced by
replacing the connector gaskets, but most connectors cannot be
isolated to permit gasket replacement.  Tightening of connector
bolts also may reduce emissions from connectors.  Where
connectors are not required for process modification or periodic
equipment removal, emissions from connectors can be eliminated by
welding them.

4.4  Internal Floating Roofs

     Internal floating roofs are commonly used in the chemical
manufacturing industry to control emissions of chemicals from
storage tanks.  As the name implies, it is a roof inside a tank
that floats on the surface of the stored liquid.

     The presence of a floating roof  (or deck) inside a fixed
roof tank significantly reduces the surface area of exposed
liquid.  It serves as a physical barrier between the volatile
organic liquid and the air that enters the tank through vents.

     Because evaporation is the primary emission mechanism
associated witn storage caiucs, emissions from floating roof  ~anks
as well as fixed roof tanks vary with the vapor pressure of  the
stores liquid.  Thus, the control efficiency of retrofitting a
fixed  roof tank with an internal floating deck depends on the

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material being stored.

     Other factors affecting emissions, and therefore control
efficiency, are tank size, number of turnovers, and the type of
deck and seal system selected.  Installing an internal floating
roof can reduce emissions by 61 to 98 percent.31  The relative
effectiveness of one internal floating roof design over another
is a function of how well the deck can be sealed.  Probably the
most typical internal floating roof design is the noncontact,
bolted, aluminum internal floating roof with a single vapor-
mounted wiper seal and uncontrolled fittings.

     4.4.1  Types of Losses and How They are Controlled

     Loss of VOC's from internal floating roof tanks occurs in
one of four ways:

               1)  Through the annular rim space around the
                  perimeter of the floating roof (seal
                  losses),

               2)  Through the openings in the deck required
                  for various types of fittings (fitting
                  losses),

               3)  Through the nonwelded seams formed when joining
                  sections of the deck material (deck seam
                  losses), and

               4)  Through evaporation of liquid left on the tank
                  wall following withdrawal of liquid from the
                  tank (withdrawal loss) .52
     4.4.1.1  Control of Seal Losses

     Internal floating roof seal losses can be minimized by
employing liquid-mounted primary seals instead, of vapor-mounted
seals and/or by employing secondary wiper seals in addition to
primary seals.

     Available emissions test data suggest that the location of
the seal (i.e.,  vapor- or liquid-mounted)  and the presence of a
secondary seal are the major factors affecting seal losses.  A
liquid-mounted primary seal has a lower emissions rate, and thus
a higher control efficiency, than a vapor-mounted seal.  A
secondary seal,  with either a liquid- or a vapor-mounted primary
seal, provides an additional level of control.

     The type of seal used plays a less significant role in
determining the emissions rate.53  The type of seal is important


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only to the extent that the seal must be suitable for the
particular application.  For instance,  an elastomeric wiper seal
is commonly employed as a vapor-mounted primary seal or as a
secondary seal for an internal floating roof.  Because of its
shape,  this seal is not suitable for use as a liquid-mounted
primary seal.   Resilient foam seals, on the other hand, can be
used as both liquid- and vapor-mounted seals.

     4.4.1.2  Control of Fitting Losses

     There are numerous fittings that penetrate or are attached
to an internal floating roof.   Among them are access hatches,
column wells, roof legs, sample pipes,  ladder wells, vacuum
breakers,  and automatic gauge  float wells.  Fitting losses occur
when VOCs leak around these fittings.  Fitting losses can be
controlled with gasketing and  sealing techniques or by the
substitution of fittings that  are designed to leak less.

     The effectiveness of fitting controls at reducing the
overall emission rate is a function of the number of fittings of
each type employed on a given  tank.  For example, if using
controlled fittings reduces total fitting loss by 36 percent, and
if fitting losses are about 35 percent of the total emissions
from a typical internal floating roof tank, then the controlled
fittings reduce the overall emissions by  (.36*.35)= .126, or 12.6
percent over a similar tank without fitting controls.  The usual
increase in control efficiency achieved by installing controlled
fittings ranges from 0.5 to 1.0 percent.54

     4.4.1.3  Control of Deck  Seam Losses

     Deck seam losses are inherent in a number of floating roof
types including internal floating roofs.  Any roof constructed of
sheets or panels fastened by mechanical fasteners (e.g., bolts)
is expected to have deck seam losses.  Deck seam losses are
considered ~o be a function of che length of the seams and not
the ~ype of mecnanicai fastener or the position of the deck
relative to the liquid surface.  This is a conclusion drawn from
a 1986 study on two roof types with significantly different
mechanical fasteners and differences in the amount of contact
with the liquid surface.55

     Deck seam losses are controlled by selecting a. roof type
with vapor-tight deck seams.  The welded deck seams on steel pan
roofs are vapor tight.  Fiberglass lapped seams of a glass fiber
reinforced polyester roof may be vapor tight as long as there is
negligible permeability of the liquid through the seam lapping
materials.  Some manufacturers provide gaskets for bolted metal
deck seams.

     Selecting a welded roof  (rather than a bolted roof) will


                               4-38

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eliminate deck seam losses.   For a typical internal roof that has
primary seals, secondary seals,  and controlled fittings already,
eliminating deck seam losses will raise the control efficiency as
much as 1.5 percent.56

     4.4.2
     The applicability of any storage tank improvement in order
to reduce VOC emissions is dependent upon the characteristics of
the particular VOC.  Since floating decks are often constructed
primarily of aluminum, they may not be applicable to tanks
storing halogenated compounds,  pesticides, or other compounds
that are incompatible with aluminum.  Contact between these
compounds and an aluminum deck could corrode the deck and cause
product contamination.

     In addition, vapor pressures may affect the selection of
tank improvements as an applicable control technology.  For
chemicals with very low vapor pressure,  fixed roof tank emissions
will already be so low that installing an internal floating roof
may not significantly reduce emissions further.  For chemicals
with vapor pressures up to 65 kPa (9.4 psia) ,  emission reductions
of 95 percent and above are achievable with this technology.
Above this vapor pressure,  achievable emission reduction starts
to decrease with increasing vapor pressure.  Thus, an internal
floating roof may not be indicated for chemicals with relatively
high vapor pressures.
                              4-39

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References

l.   U.S.  Environmental Protection Agency.  Office of Air Quality
     Planning and Standards, Research Triangle Park, North
     Carolina.   Hazardous Air Pollutant Emissions from Process
     Units in the Synthetic Organic Chemical Manufacturing
     Industry -- Background Information for Proposed Standards,
     Volume IB.   September 1991.   p. 2-8.

2.   Reed, R.J.   North American Combustion Handbook.  Cleveland,
     Ohio.  North American Manufacturing Company.  1979, p. 269.

3.   U.S.  Enviromental Protection Agency.  Office of Air Quality
     Planning and Standards.  Research Triangle Park, North
     Carolina.  OAQPS Control Cost Manual, Fourth Edition.
     January 1990.  p. 3-8.

4.   Reference 3.  p. 3-9.

5.   Reference l.  p. 2-13.

6.   Letter from Thomas Schmidt (ARI International, Palatine, IL)
     to William M. Vatavuk  (U.S. EPA, Office of Air Quality
     Planning and Standards, Research Triangle Park, North
     Carolina).   August 16, 1989.

7.   Reference 3.  p. 3-11.

8.   Manning, P.  Hazardous Waste.  Volume 1 (1).  1984.

9.   Kosusko, M. and Ramsey, G.  Destruction of Air Emissions
     Using Catalytic Oxidation.  U.S. Environmental Protection
     Agency.  Air and Energy Engineering Research Laboratory,
     Research Triangle Park, North Carolina.  EPA Publication
     No.  600-0-38/107,  May 1988.  p. 3.

10.  Letter from Robert M. Yarringcon  (Englehard Comora'tion,
     Edison, NJ) to William M. Vatavuk (uts. EPA, OAQPS, RTP,
     NC).   August 14, 1989.

11.  Reference 3.  p. 7-5.

12.  Reactor Processes in SOCMI -- Background Information for
     Proposed Standards.  U.S. Environmental Protection Agency.
     Office of Air Quality  Planning and Standards, Research
     Triangle Park, North Carolina.  Preliminary Draft.  EPA
     Publication No. 450/3-90-016a.  June 1990.

13.  Letter from David Shore  (Flaregas Corp., Spring Valley, NY)
     to William M. Vatavuk  (U.S. EPA, OAQPS, RTP, NC).
     October 3,  1990.

                               4-40

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14.   Reference 12.

15.   Guide for Pressure-Relieving and Depressuring Systems.
     Refining Department, API Recommmended Practice 521, Second
     Edition.  September 1982.

16.   Reference 13.

17.   Kalcevic, V. (IT Enviroscience).   "Control Device Evaluation
     Flares and the Use of Emissions as Fuels," Organic Chemical
     Manufacturing Volume 4.  U.S. Environmental Protection
     Agency.  Research Triangle Park,  North Carolina.  EPA
     Publication No. 450/3-80-026.  December 1980.  Report 4.

18.   Devitt, T.,  Spaite,  P. and Gibbs, L.  (PEDCo Environmental,
     Inc.)   Population and Characteristics of
     Industrial/Commercial Boilers in the U.S.   Prepared for the
     U.S. Environmental Protection Agency.  Washington, D.C.  EPA
     Publication No. 600/7-79-178a.

19.   Reference 1.  p. 2-17.

20.   Castaldini,  C., Willard, H.K., Wolbach,  D., and Waterland,
     L.  (Acurex Corporation).  A Technical Overview of the
     Concept of Disposing of Hazardous Waste in Industrial
     Boilers. Prepared for the U.S. Environmental Procection
     Agency.  Cincinnati, OH.  EPA Contract No. 68-03-2567.
     January, 1981.   p. 44.

21.   Reference 20.   p. 73.

22.   U.S. Environmental Protection Agency.  Benzene -- Organic
     Chemical Manufacturing, Ethylbenzene Styrene.  Emission Test
     Report, El Paso Products Company (Odessa,  TX).  Research
     Triangle Park,  North Carolina.   EMB Report No. 79-OCM-15.
     April"1981.

23.   U.S. Environmental Protection Agency.  Office of Air and
     Waste Management.  Control Techniques for Volatile Organic
     Emissions from Stationary Sources.   Research Triangle Park,
     North Carolina.  EPA Publication No.  450/2-78-002.  May
     1978.  p. 72.

24.   Reference 23.   p. 76.

25.   U.S. Environmental Protection Agency.  Air and Energy
     'Engineering Research Laboratory.   Handbook -- Control
     Technologies for Hazardous Air Pollutants. Research Triangle
     Park, North Carolina.  EPA Publication No.  625/0-86-014.
     September 1986.  .pp. 26-27.

26.   Standifer, R.L.   (IT Enviroscience).  Control Device

                               4-41

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     Evaluation:  Gas Absorption.  In: Organic Chemical
     Manufacturing Volume 5:  Adsorption, Condensation, and
     Absorption Devices.  U.S. Environmental Protection
     Agency,  Research Triangle Park, North Carolina.  EPA
     Publication No. 450/3-80-027.  December 1980.  Report 3.
     p.  1-7.

27.   Reference 26.  p. I-l.

28.   Reference 1.  p. 2-34.

29.   Reference 1.  p. 2-41.

30.   Trip Report.  R.H. Howls and M.A. Vancil, Radian Corp., to
     file.  7 pgs.  Report of May 12, 1987 visit to Allied
     Fibers.

31.   Stern, A.C.   Air__ Pollution. Third Edition.  Volume IV.  New
     York, Academic Press, 1977.  p. 336.

32.   Reference l.  p. 2-43.

33.   Calvert, Seymour and Englund, Harold M., eds.  Handbook of
     Air Pollution Control Technology.  John Wiley and Sons.
     New York, 1984.  pp. 135-172.

34.   Reference 3.  p. 4-5.

35.   Basdekis, H.S. and Parmele, C.S. (IT Enviroscience).
     Control Device Evaluation:  Carbon Adsorption.  In Organic
     Chemical Manufacturing Volume 5.:  Adsorption, Condensation,
     and Absorption Devices.  U.S. Environmental Protection
     Agency.   Research Triangle Park, North Carolina.  EPA
     Publication No.  450/3/80/027.  December 1980.  Report 1.
     p.  ll-l.

26.   Reference 25.  p. II-'7. .

37.   Reference 25.  p. 23.

38.   Baraett, K.W., May, P.A., and Elliott, J.A.  (Radian
     Corporation).  Carbon Adsorption for Control of VOC
     Emissions:  Theory and Full Scale System Performance.
     Prepared for  the U.S. Environmental Protection Agency.
     Research Triangle Park, North Carolina.  EPA Contract No.
     53-02-4378.   June 5, 1988.  p. 2-2.

39,   Vatavuk. W.M. and Neveril, R.3.  Cost File Part XVI.  Costs
     of .xefrigeracion Systems.  Chemical Engineering.  .-lay -'6,
     1983.  pp. 95-98.

40.   Reference 1.  pp.  2-31,  32.

                               4-42

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41.   Erikson,  D.G. and Kalcevic, V.   (Hydroscience,  Inc.)
     Emissions Control Options for the Synthetic Organic
     Chemicals Manufacturing Industry. (Prepared for U.S.
     Environmental Protection Agency.)  Research Triangle
     Park,  North Carolina.  EPA Contract No. 68-02-2577.
     February 1979.  p. II-2.

42.   Reference 41.  p. II-2. .

43.   Ramsey,  W.D. and Zoller, G.C.  How the Design of Shafts,
     Seals, and  Impellers Affects Agitator Performance.
     Chemical Engineering.  83  (18):  pp. 101-108.   August 30,
     1976.

44.   Reference 43.  p. 105.

45.   Reference 1.  p. 2-73.

46.   Lyons, J.L. and Askland, C.L.  Lyons' Encyclopedia of
     Valves.   New York, Van Nostrand Reinhold Company, 1975.
     p. 290.

47.   Pikulik,  A.  Manually Operated Valves.  Chemical
     Engineering.   8J5_(7)  : p. 121.  April 3, 1978.

48.   McFarland, I.  Preventing Flange Fires.  Chemical
     Engineering Progress.  65_(8) : 59-61.  August 1969.

49.   Reference 1.  p. 2-76.

50.   Hustvedt, K.C. and Weber,  R.C.   (U.S. Environmental
     Protection Agency.')  Detection of Volatile Organic Compound
     Emissions from Equipment Leaks.  (Presented at  the 7lst
     Annual Meeting of the Air Pollution Control Association.
     Houston,  Texas.  June 25-30, 1978.)

51.   Memorandum from Probert, J.A., Radian Corporation, ~o
     Project File.  August 7, 1991.  Achievable emission
     reduction for internal floating roofs.

52.   Reference 1.  p. 2-52.

53.   U.S. Environmental Protection Agency.  Office of Air Quality
     Planning and Standards.  VOC Emissions from Volatile Organic
     Liquid Storage Tanks  - - Background Information  for
     Promulgated Standards.  Research Triangle Park,   North
     Carolina.  EPA Publication No.  450/3-81-003b.
     January 1D37.

54.   Reference 1.  p. 2-61.

55.   Reference 53.  Appendix C.

                               4-43

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56.  Reference l.   p.  2-62.
                               4-44

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CHAPTER 5

REGULATORY OPTIONS


5.1  Introduction

     This chapter is devoted to briefly explain the decision
process for choosing a regulatory option.  The rationale for
regulation versus no regulation will be discussed as well as a
MACT floor analysis, cost effectiveness, and economic incentives.

5.2  No Additional EPA Regulation

     5.2.1     Judicial System

     In the absence of governmental regulation, market systems
fail to make the generators of pollution pay for the costs
associated with that pollution.  For an individual firm,
pollution is an apparently unusable by-product that can be
disposed of cheaply by venting it to the atmosphere.  However, in
the atmosphere pollution causes real costs to others.  The fact
that producers, consumers, and others whose activities result in
air pollution do not bear the full costs of their actions leads
to a divergence between private costs and social costs.  This
divergence is considered a market failure since it results in a
misallocation of society's resources.  Too many resources are
devoted to the polluting activity when polluters do not bear the
full cost of their actions.

     Also, if there was no regulation, the previous regulations
would be relied upon as the basis for making judicial decisions
regarding axcess emissions.
                                         •

     5.2.2     otate and Local Action

     The Clean Air Act requires each state to develop and
implement measures to attain and maintain EPA's standards.  Each
state assembles these measures in a document called the State
Implementation Plan (SIP).  SIP'3 must be approved by the 3PA,
and the EPA is empowered to compel revision of plans it. believes
are inadequate.  The EPA may assume enforcement authority over
air pollution control programs any state fails to implement.  The
standards will become parts of each state's SIP, and"enforcement
authority will be delegated to the states.  If the EPA were not
co promuigata "ha standards, states -/culd oa responsible for
making case-by case MACT decisions under Section" 112 (gj and  (j)
whenever there is a major modification or when the date for MACT
promulgation has passed without action on EPA's part.


                               5-1

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     The EPA believes that reliance on state and local action is
not a viable substitute for the standards. This belief holds even
if the EPA were to step up research and technology transfer
programs to assist state and local governments.

5.3  EPA Regulation

     5.3.1     Categories

     The EPA source category list identifies source categories
for which NESHAP's are to be established.  This list implements
Section 112 (c) of the Act and reflects the EPA's determination
that listed source categories include major sources of hazardous
air pollutants.  The source category list includes SOCMI chemical
production as well as the seven non-SOCMI equipment leak source
categories.

     The SOCMI is a segment of the chemical manufacturing
industry that includes the production of many high-volume organic
chemicals.  The products of SOCMI production processes are
derived from approximately 10 petrochemical feedstocks.  Of the
hundreds of organic chemicals that are produced by the SOCMi,
some are final products and some are the feedstocks for
production of other chemicals or synthetic products.  For
example, large quantities of SOCMI products are used in the
production of plastics, fibers, surfactants, Pharmaceuticals,
synthetic rubber, dyes, and pesticides.  Production of these end
products is not considered to be part of SOCMI production.

     In the source category list, EPA identified the SOCMI with a
list of chemical products whose production is believed to involve
emissions of organic HAP's.  This list of chemicals was
identified from the literature describing SOCMr production
processes, reactants, and products.  A chemical was listed if
organic HAP's could be used as reactants or produced in the
production of the SOCMI chemical.  "de EPA recognises t-iat these
chemical products can be proaucsd using ocner reaction sequences
and than not all plants producing Che listed chemicals use a
process that involves organic HAP emissions.  Thus, the standard
will only apply to those chemical production processes from which
organic HAP's can be emitted.

     The equipment leak standard would apply to the SOCMI and to
processes within seven other non-SOCMI source categories:
styrene/butadiene rubber production; polybutadiene production;
chlorine production; pesticide production; chlorinated
hydrocarbon use; pharmaceutical production; and miscellaneous
butadiene use.

     For this SOCMI component of the regulation, the EPA is
proposing to define source as all the process vents, storage
vessels, transfer operations, wastewater collection and treatment

                               5-2

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operations,  and equipment leaks in the subject industrial
processes used to manufacture synthetic organic chemicals that
are located in a single facility covering a contiguous area under
common control.

     As the entire production process is contained within a
single source that is part of one source category, a single
floor, as defined in Section 112 (d) (3), is applicable to the
entire operation.1  The five  kinds of  emission points as  stated
above are process vents,  storage vessels, transfer operations,
wastewater collection and treatment operations, and equipment
leaks.

     Though equipment leaks are included in the definition of
source, they cannot be included in emissions averaging because
there is no method that currently exists for determining the
magnitude of allowable emissions to assign equipment leaks for
purposes of emissions averaging.  When methods are developed to
assign allowable emission levels to particular leak points, the
EPA will consider revising the HON to allow the inclusion of
equipment leaks in emissions averages.

     In order to develop the MACT standards, the floor must be
established for the source category.   This is due to the fact
that the Act specifies that the standard be at least as stringent
as the floor.  Since there were no readily available data to
determine the floor for the source as a whole, each kind of
emission point was examined to determine the floor.   Controls
that comprise the best 12 percent of performance for existing
sources determine the existing source floor.  For new sources,
the best controlled similar source is used to determine the
floor.  For SOCMI,  what distinguishes a well-controlled facility
is not only the type of control equipment used, but also the
number of emission points that are controlled.  The EPA used
existing Federal and State regulations to determine current
control levels on che emission points. Using ±his process r.o
establish a floor for the part of the source regulated by Sucpart
G ensures chat the control level of the standard will be
equivalent to the emission control level on the best controlled
12 percent of SOCMI facilities.

     For Subparts H & I,  the negotiating committee agreed that
the requirements of the negotiated standards constitute MACT for
equipment leaks.  The standards for equipment leaks were
determined under the regulatory negotiation process. The
committee that negotiated the equipment leak rule considered the
many factors and uncertainties associated with regulating
equipment leaks at a -^ide variety of chemical plants and
developed an acceptably balanced approach.  The negotiators
weighted the need to be flexible, the technical uncertainties,
the requirement for MACT standards,  and the data limitations.  At


                               5-3

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the final negotiating session,  the committee members conceptually
resolved all outstanding major issues and over the following
several months reached final agreement on the draft regulation
and preamble.

     All committee members agreed to support the standard
providing that EPA proposes and promulgates a regulation and
preamble with the same substance and effect as what was contained
in the final agreement.  Consequently, there were no other
regulatory alternatives for equipment leaks evaluated under the
HON rule.


               Alternatives

     The SOCMI standards potentially represents the greatest
emissions reduction likely to be achieved by any air toxics
source category being regulated under Title III.  As such,
regulating this industry represents a significant first step
toward fulfilling the mandate of Title III to reduce emissions of
toxic air pollution to the greatest feasible extent.  In
addition, SOCMI facilities tend to be large individual emitters
of toxic air pollutants, which are generally suspected to pose
potential, health hazards at the local level (i.e. close to
individual sources).

     The EPA recognizes that the 110 HAP's regulated by Subpart G
of the HON represent a wide range of toxicities associated with a
variety of potential toxic effects at a variety of exposure
levels.  However, Title III does not contemplate quantifying the
specific health and environmental risks associated with different
chemicals in MACT standard setting.  While MACT decisions are
thus not risk-based,  and risk information specific to the SOCMI
industry has not been developed, the EPA nevertheless recognizes
clear public interest in reducing toxic emissions from the SOCMI
industry as much as is feasible, based upon the potential for
health ana environmental benefits from coxic emissions reduction
of this magnitude.

     Aside from the general goal of maximum feasible emissions
reduction, the EPA has endeavored to structure this first major
MACT rule to incorporate several other goals:  overall
administrative simplicity, allowing flexibility in implementation
(in order to reduce costs), encouraging pollution prevention and
source reduction, and enforceability.  Some goals reinforce each
other  (e.g. ensuring flexibility and encouraging pollution
prevention).  Where different goals may tend toward opposing
outcomes  (e.g. flexibility vs.  enforceability) , the EPA has
striven  ~o find -.forkable resolution of issues, and will be
requesting comment on our proposed solutions.

     The EPA has devised a standard for sources in this category

                               5-4

-------
that permits  compliance either by applying  reference  technology
 (MACT or an approved alternative) to all  points  specified by the
standard, or  alternatively by using emissions  averaging,
including Pollution Prevention/  Early  Reduction  credits.

     Once the floor level of control was  established,  as  required
by the Act, the EPA considered the floor  level of  control for
every kind of emission point and the options for control
requirements  beyond the floor.   Bearing in  mind  all relevant
statutory criteria, the EPA considered the  magnitude  of the
emissions reduction to be obtained at  a plant, the relative costs
of different  levels of controls  and the general  characteristics
of this source category compared to other sources  of  hazardous
air pollution when considering control requirements.

     The alternative options were structured for each emission
point.  The same  technology was  used for  each  alternative but
different parameters of emission points were generated which
would result  in a broader coverage as  alternatives became more
stringent.

     5.3.3     Description of MACT and the  Regulatory
               Alternatives

     The options  and floors chosen for each source are as
follows:  (See Tables 1 and 2 for details)

     Process  Vents
     Using the TRE calculations, the EPA  determined that  the
existing source floor level of control for  process vents  is
equivalent to a cost effectiveness value  of $1,500.   The  new
source floor  level of control is a TRE based cost  effectiveness
value of $11,000.  The proposed  standard  would require combustion
with 98 percent control efficiency for existing  and new source
process vents with TRE cost effectiveness values of less  than
 52,000 and $11,000, respectively.

     .Storage  Vessels
     For purposes of selecting control requirements,  storage
vessels were  divided by capacity as follows:   10,000  to 20,000
gallons  (small);  20,000 to 40,000 gallons (medium); and greater
'than 40,000 gallons  (large).  These size  divisions are commonly
used in regulations for storage  vessels.  The  existing source
floor level of control is a vapor pressure  of  13.1 kPa (1.9 psia)
for both large and medium storage vessels.  The  floor analysis
for small storage vessels indicates that  less  than 12  percent of
all small vessels are controlled to the efficiency of  the
reference control, and zlius chere is ao .floor  control  for
existing source small storage vessels.  The new  source floor
level of control  is a vapor pressure of 13.1 kPa (1.9  psia)  for
small and medium  storage vessels.


                               5-5

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     The control requirements for storage vessels apply to
existing source medium and large storage vessels storing liquids
of vapor pressures more than 13.1 kPa (1.9 psia) and 5.2 kPa
(0.7 psia), respectively.  The proposed applicability criterion
for new source small and medium storage vessels is storage of
liquids with vapor pressures greater than 13.1 kPa (1.9 psia).
There is no proposed control requirement for existing source
small storage vessels.  The proposed applicability criterion for
new source large vessels is vapor pressures above 0.7 kPa
(0.1 psia).  The control requirements are the same for new and
existing source vessels in the medium and large size divisions.

     Transfer Operations
     The existing and new source floor levels of control for
transfer operations are a vapor pressure and throughput
combination of 10.3 kPa (1.5 psia)  and 0.65 million liters/yr
(0.17 million gal/yr), respectively.

     Wastewater Streams
     The floor level of control for new source wastewater streams
is 10 ppmw for very volatile HAP's  (WHAP).  The control
requirements for new source wastewater streams are to be applied
to those streams with 0.02 1pm flow and 10 ppmw volatile HAP.
The applicability criteria for control of existing source
wastewater streams are 10 1pm flow and 1000 ppmw volatile HAP.
There is no floor for existing wastewater streams.

     Equipment Leaks
     The regulation would apply to both existing and new process
units.  It categorizes the regulated processes into five groups
and uses a staggered implementation scheme, requiring some
process units to comply 6 months after promulgation,  while others
would have to comply as late as 18 months after promulgation.

     The regulation applies to those pieces of equipment
currently regulated in the existing equipment-leak rules,
including ail valves, pumps, compressors, pressure raiief
devices, open-ended valves or lines, connectors, closed-vent
systems and control devices, sampling connection systems,  and
product accumulator vessels.

     These standards are estimated to reduce emissions by about
60-70 percent and aftar control, leak frequencies (i.e. the
percentage of equipment components within a process unit that
leak) would be approximately 5 percent.

     The standard only applies to equipment containing or
contacting process materials that are five percent VHAP or
greater.  In certain chemical plants, particularly chose witn
batch processes that produce a number of different products, some
equipment is used in VHAP service only occasionally.   In such
cases, implementation of the standard could be difficult and

                               5-6

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would achieve very little emission reduction.  For these
situations, equipment that is operated in VHAP service for 300
h/yr is exempt.

     The HON will establish a control requirement for each kind
of emission point regulated by Subparts G, H and I.  To
facilitate emissions averaging, the standard will also establish
an allowable emissions level for the emission points regulated by
Subpart G at each source.  The allowable emissions level will be
equal to the sum of the emissions from each point in the source
excluding equipment leaks, after the required controls have been
applied.  As such, the allowable emissions level is set for a
given mix of emission points, and the emissions limit will change
as the number of each kind of emission point in the source
changes.

     Both Group  1 and 2 emission points as defined in Subpart G
must be included in the calculation of the source's allowable
emissions level.  However, emission points associated with
equipment that is no longer operational are not to be included in
the calculation  of the emissions limit because these points are
not subject to the standard.  Though the form of the standard
established in Subpart G of the HON is an allowable emissions
level, the EPA does not anticipate that any owner or operator
will actually calculate emissions estimates for every point in
order to comply  with the standard.  Actual emissions estimates
will only be required for those emission points that are included
in emissions averages.  For emission points that are not included
in emissions averages, compliance will be determined on a point
by point basis.  For these points, the use of an appropriate and  .
well maintained  control serves as a surrogate for an emissions
estimate in determining compliance with the allowable emissions
level.2
                               5-7

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                            Table 5-1

                        Regulatory Options


Process Vents

     0    Existing - C/E <. $3,000/Mg

     0    New - C/E < $ll,000/Mg

Transfer Operations

     0    Existing and New - Control for racks with vapor
          pressure > 1.0.3 kPa (1.5 psia) and throughput > 0.65
          million liters/yr (0.17 million gallons/yr)

Wastewater Operations

     0    Existing - control for flow > 10 liter/min and > 10
          ppmw total VOHAP
          New
               Control for flow > 0.02 liter/min and > 10 ppmw
               total VOHAP
Storage Vessels

     0    Small Tanks

               Existing - no control
               New - control for vapor pressure > 13.1 kPa  (1.9
               psia}

          Medium Tanks

               Existing - control for vapor pressure > 13.1 kPa
               (1.9 psia)

               New - same as existing

          Large Tanks

               Existing - control for vapor pressure > 5.2 kPa
               ,0.75 psia)

               New - control for vapor pressure > 0.7 kPa
               (0.1 psia)

                               5-8

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                            Table 5-2

                          Floor Elements

Process Vents

     0    Existing - control vents with cost effectiveness  of
          < $l,500/Mg

     0    New - control vents with cost effectiveness of
          < $ll,000/Mg


Wastewater Operations

     0    Existing - No control required

     0    New - control for streams > 10 ppmw WHAP

Transfer Operations

     0    Existing - control for racks loading liquid HAP's with
          vapor pressure > 10.3 kPa (1.5 psia) and throughput >
          0.65 million liters/yr (0.17 million gallons per year)

     0    New - same as existing

Storage Vessels

     0    Small Tanks

               Existing - no control required

               New - control z'or tanks storing HAP's with vapor
               pressure > 13.1 /;Pa  '!.? psia)

     0    Medium Tames

               Existing - control for tanks storing HAP's with
               vapor pressure > 13.1 kPa (1.9 psia)

               New - same as existing

     0    Large Tanks

               Existing - control for tanks storing HAP's with
               vapor pressure > 5.- /J?a •. 0."5 paia;

               New - control for tanks storing HAP's with vapor
               pressure > 0.7 kPa (0.1 psia)
                               5-9

-------
5.3.4  Role of Cost Effectiveness

     EPA has often used cost effectiveness (C/E) analysis as a
guide for selecting among regulatory alternatives.  Regulatory
alternatives can sometimes be ranked based on stringency of
control.  All else equal, alternatives yielding the same level of
control but higher average C/E (usually control cost per ton of
pollutant reduced) could be eliminated from consideration.
Incremental C/E can then be calculated for each step up the
stringency ranking.  The selection of a regulatory alternative
could then be made by selecting the most stringent alternative
below some agreed upon C/E cutoff.  The level of such a C/E
cutoff would generally depend on the pollutant being controlled
and other factors.

     However, since the HON regulation is to be a MACT standard,
the role of C/E analysis for selecting a regulatory alternative
for this regulation is somewhat limited.  A MACT floor level of
control stringency is required regardless the C/E at this control
level.  At stringency levels beyond the MACT floor, cost
effectiveness can be legally considered, and EPA believes  cost-
effectiveness of controls is a primary consideration for
stringency levels beyond the MACT floor.

5.3.5  Economic Incentives;  Subsidies. Fees, and Marketable
       Permits

     Economic incentive strategies, when designed properly, act
to harness the marketplace to-work for the environment.  Such
strategies influence, rather than dictate producer and consumer.
behavior, in order to achieve environmental goals.  They make
environmental protection of economic interest to producers and
consumers.  When feasible, properly designed systems can be
employed to achieve any environmental goal at -he lease cose "c
society.

     Several types or canegorz.es of economic incentive strategies
exist.  One broad category of incentive programs is based of the
use of fees or subsidies.  Fee programs establish and collect a
fee on emissions, providing a direct economic incentive for
emitters to decrease emissions Co the point where the cost of
abating emissions equals the fee.3   Similarly,  subsidy programs
provide a direct incentive for emitters to decrease emissions by
providing subsidy payments for emission reductions beyond some
baseline.

     A 5eccna oread category of economic incentive strategies is
based on the concept of emissions trading.  A wide range of
variations in emissions trading programs exist.  The common idea


                               5-10

-------
in such programs is to allow sources with low abatement  cost
alternatives to trade or sell emission allowances to higher
abatement cost alternatives so that the cost of meeting  a given
total level of abatement is minimized.

     There are two important constraints regarding the
workability of economic incentive programs.  The first constraint
concerns the problem of emissions monitoring.  Without an
effective emissions monitoring system it is not possible to
charge fees or use other economic incentive strategies.  Only the
traditional "command and control" approach of requiring
employment of specific control technologies is feasible  in this
circumstance.

     The second problem constraining the potential value of
economic incentive strategies is legal.  Various legal
restrictions imposed by the CAAA limit the applicability of
economic incentive strategies to reduce air pollution.

     Legal constraints imposed by Title III of the Act severely
limit the usefulness of economic incentive strategies for
reducing HAP emissions.  Title III requires the implementation of
MACT.  Thus sources have little or no choice as to the type or
level of control they implement except perhaps if going  beyond
the MACT floor control level.  As a limited economic incentive,
it may the be possible to impose, for example, and emissions fee
on residual emissions after the MACT technology is employed to
encourage additional control.

     Hence the applicability of economic incentive programs for
the HON regulation is very limited.  However, limited emissions
at the facility level may be feasible and legal given that each
facility is considered an emissions source.  This emissions
averaging scrategy allows facilities to trade emission reductions
across emission points so as to minimize control costs for any
given facility level emission reduction requirement.  Thus, ~o
cms extent, an economic incentive strategy .tiay be implemented
nor the HON regulation.

     The analysis of control costs (Chapter 6} does not
incorporate emission averaging.  It is recognized that if
facilities were to use this strategy their costs of control
should fall.  Thus, the costs calculated are an overestimate.  It
also should be noted that the economic impacts and benefits
analyses (Chapters 7 and 9)  are only for the TIC option  due to
data paucities.  These analyses are therefore overestimates of
the impacts and benefits of the regulation.  The control costs
:alculated in Chapter 6 do,  however,  include data .for the MACT
floor and more stringent options up to TIC for aacri emission
point.
                               5-11

-------
References

1.   U.S. Environmental Protection Agency, Office of Air
Quality Planning and Standards.  Draft Preamble for the HON.
December 1993.

2.   Reference 1.

3.   U.S. Environmental Protection Agency, Office of Air
Quality Planning and Standards.  Municipal Waste Landfills  -
Regulatory Impact Analysis.  March 1991.
                          5-12

-------
CHAPTER 6

CONTROL COST AND COST EFFECTIVENESS

     Due to the unavailability of complete information upon which
to base emission and control impacts to the desired degree of
accuracy for all chemicals,  estimates were developed in the
following manner.  As much information gathering and analysis as
possible was completed for those chemical production processes
(GPP) used in the manufacture of SOCMI chemicals.1   Emissions and
control impacts were then estimated for each CPP involved in the
manufacture of those chemicals for which complete information was
available.2  For those chemicals  with  incomplete information,
generic estimates of emissions and control impacts were
developed.

     Section 6.1 of this chapter presents and discusses the cost
and cost effectiveness for controlling each of the five HON
emissions source types.   Section 6.2 presents the method for and
results of estimating the cumulative control cost of producing
SOCMI chemicals.  Section 6.3 addresses control costs in light of
the regulatory alternatives, and Section 6.4 presents the
estimated national costs of the HON.

6.1   Cost Impacts of Control Technologies

     In developing facility level and national costs for the HON,
source emission models and appropriate control technologies were
paired with the CPP units in the HON database.  Control impacts
were determined for each modeled emission source at a process
unit that was required to implement additional control.

     The costs, emission reductions. and COST: effectiveness on a
model plant oasis, are -.shown in Tables ,5-1 znrough i-5.  Tab la -5-
1 snows the annuaiised coses, emission reductions,  ana cost
effectiveness for controlling 12 model process vent screams.
These model vent streams were selected co illustrate a range of
impacts as well as a range of production processes and control
          For a detailed explanation of the methodology used to
          assess emission and control impacts,  refer to Volume 1A,
          Chapter 4 of -.he HON 3ID.

          The chemicals for which sufficient information was found
          account  for  more  than  90  percent  of  total  SOCMI
          production capacity.

                               6-1

-------
technologies.3  For  this analysis  it was assumed that each
production process would be equipped with a dedicated combustion
device.  Some cost savings would be achieved at larger facilities
if a common combustion device was used to control multiple
production process vent streams.  As shown, the annualized costs
range from $8 to $2,630,000.

     Tables 6-2 and 6-3 show annualized costs, emission
reductions, and cost effectiveness for controlling equipment
leaks for 6 model units.  The model units represent combinations
of numbers of equipment components and existing control levels.4
The recovery credit values are determined by multiplying VOC
emission reductions by the average chemical price of $l,590/Mg.
Table 6-2 presents annualized costs,  emission reduction, and cost
effectiveness when quarterly valve monitoring is required.
Quarterly monitoring is required if less than 2 percent of all
valves are leaking at or above a leak definition of 500 ppmv.
Table 6-3 presents annualized costs,  emission reduction, and cost
effectiveness when monthly valve monitoring is required.  Monthly
monitoring is required if more than 2 percent of all valves are
leaking at or above a leak definition of 500 ppmv.  The costs
range from a savings of $246,539 to a net cost of $390.
          For a detailed explanation of  the  development and use of
          model process vent  streams  see Volume 1C, Chapter 2 of
          the HON BID.  The model streams are subsets of all the
          process vent streams in the database.

          For a detailed explanation of  the  development and use of
          equipment  leak  model units  see Volume 1C, Chapter 6 of
          the HON BID.

                               5-2

-------







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      Table 6-4 summarizes the annualized  costs,  emission
 reductions, and cost effectiveness  for  controlling each of 17
 model storage tank farms.5  The costs depend on the emission rate
 of  the storage vessel and the specific  control  device used.  For
 this  analysis it was assumed that each  individual  tank would be
 equipped with a dedicated control device.   However,  some cost
 savings could be achieved at larger facilities  if,  for instance,
 a single condenser serves all the tanks in  one  farm.   The product
 recovery credit shown is the value  in dollars per  year of the
 recovered product.  It is calculated by multiplying the emission
.reduction by the unit price of  the  individual chemical.  The
 total annualized costs for the  model tank farms range from a
 savings of $280,000 to a net cost of $556,000.

    .  Table 6-5 summarizes the annualized  cost,  emission
 reductions and cost effectiveness for controlling  18  model waste
 water streams with steam strippers.  A  total of 84 model
 wastewater streams were created from various combinations of flow
 rate,  VOHAP concentration, and  strippability.6  Although  impact
 estimates were made based on specific stream characteristics of
 all 84 streams, a subset of 18  examples were selected from the 84
 model streams to illustrate the potential cost  and environmental
 impacts.  These 18 were selected to provide a manageable number
 of  examples while still illustrating the  full range of impacts.
 For calculating treatment costs, it was assumed that  facilities
 would combine wastewater streams for treatment  whenever
 technically feasible.  Accordingly,  steam strippers were sized
 and costed for combined wastewater  feed rates of 50 and 500
 liters per minute  (1pm).  As shown  in table 6-5, the  annualized
 costs per facility range from $121,000  to $418,000.
           For a detailed explanation of the development and use of
           model storag§ cank farm farms see Volume  1C, Chapter 4 of
           the HON  BID.

           For a detailed explanation of the development and use of
           model wastewater streams see Volume 1C, Chapter 5 of the
           HON BID.

                                6-6

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-------
     Table 6-6 shows the annualized cost,  emission reduction and
cost effectiveness for controlling 20 model transfer operacions.7
The costs depend on the transfer rate for a given loading rack
and the combustion device selected for control.  For this
analysis a single control device was assumed to service the
entire facility.  The annualized costs of the control systems for
model transfer racks range from $9,630 to $84,400.

6.2  Cumulative Control Cost Analysis

     In addition to addressing the cost of the HON on a facility
level, the HON economic impact analysis requires an estimate of
the potential impact of the HON on SOCMI chemical prices.  To
better facilitate this assessment,  an analysis of the potential
cumulative control cost associated with each chemical's
production was performed.  The basis for this analysis was
chemical use trees developed specifically for the HON.

     A chemical tree conveys the production relationship between
chemicals, indicating the possible precursor evolution of a SOCMI
chemical.  For instance, the tree in Figure 6-1 depicts the
relationship between chemical A and its precursors.  Chemical A
can be produced by either combining chemicals B and C, or
combining chemicals E and F.  Chemical B can be produced from
chemical D, and D by combining chemicals G and H.
             Figure  6-1  Hypothetical Chemical  Tree
              Chemical A	(B + G)
                        i      i
                        j      '	D	(G + H)
          For a detailed explanation of  the development and use of
          model transfer loading operations see Volume 1C, Chapter
          3 of the HON BID.

                               6-10

-------
          Table 6-6.  Annual Control Cost Estimates3-
Model Total
Rack Annual! zed
Number Cost ($/yr)
1 9,
2 63
3 9,
4 66
5 10
6 34
7 22
8 25
9 39
10 28
11 6,
12 63
13 10
14 15
15 63
16 16
17 14
18 74
19 67
20 38
630
,800
650
,000
,600
,400
,600
,900
,000
,100
870
,800
,100
,600
,800
, 300
,300
,300
,200
,400
Total HAP/VOC
Emission
Reduction
(Mg/yr)
3
6
1
3
9

9



2
6
2
9
2
2
3


.56
.32
.42
.08
.19
3
.63
1
6
5
.34
.32
.96
.72
.08
.11
. 5o
4
4
* 10
* 10
* 10
* 10
* 10
.39
* 10
.67
.39
.65
* 10
* 10
* 10
* 10
* 10
* 10
* 10
.46
.22
-6
-4
-4
-2
-2

-1



-6
-4
-4
-4
-1
-1
- 1


19.3
Cost
Effectiveness
($/Mg)b
2
1
6
2
1
2
2
1
6
4
2
1
3
1
3
7
_
T_
1
1
.70
.01
.81
.14
.16
.49
.35
.55
.11
.98
.93
.01
.42
.61
.06
.97
.53
.57
.59
.99
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
T
•*
*
*
109
1Q8
107
106
105
104
104
104
103
103
109
108
107
107
105
104
10-i
104
10*
103
aEach transfer rack has a dedicated control device.

bCost Effectiveness ($/Mg) = Total Annual Cost  ($/yr)  -=-
 Total HAP/VOC Emission Reduction (Mg/yr).

-------
6.2.1  Building Ch.°'n|ical Trses

     Chemical trees are formed by linking together individual
CPPs.  A CPP is identified by its chemical inputs and outputs.
The chemical output of one process is matched to the chemical
input of another to form a chain.  Additional processes that
match are linked to the chain to form the tree.  The HON trees
begin with a "root" chemical and identify all the chemicals that
can be used to produce the root chemical.  Each root chemical can
be associated with a producer, and the cost of controlling the
process that makes each precursor chemical can be introduced into
the tree framework.

6.2.2
     Cumulative control cost refers to the price increase for the
root chemical that is necessary to recover HON compliance cost,
given that the root chemical and its precursor chemicals incur
additional production costs as a result of regulation.  In simple
form, the cumulative cost of controlling a root chemical is the
sum of all control costs for each link in the root chemical's
production chain.  Because the market relationships between
production process links are not fully characterized by a
chemical tree, each link is assumed to denote an imaginary common
marketplace where output chemicals of one process are sold as
inputs to another process.  One limitation of the cumulative
control cost methodology is that market quantity adjustments are
not considered.  There are hundreds, possibly thousands, of
market interactions that would have to be characterized in order
to incorporate the chemical production quantity changes that
result from the HON into the analysis, and this was not deemed
feasible.  Therefore, the chemical trees cumulative control cost
analysis only addresses for each chemical the probable price
increase necessary to recover the HON compliance cost when all
other variables are held constant.3

     Another limitation already alluded to is that che chemical
craes represent possible markec interactions, not accual
interactions.  Not all process links in the chemical trees are
technically or economically viable.  Without an indepth
investigation of individual circumstances, an interaction
determination cannot be made with certainty,

6.2.3

     The cumulative control cost analysis was performed for the
HON options representing total industry control  (TIC).  This
analysis, charefora, represents an upper-bound, or worst-case
cost impact scenario.  Table 6-7 shows the results of the
          For a summary of the indepth economic impact analysis of
          the  representative  HON chemicals,  refer  to  Volume 1A,
          Chapter 6 of the HON BID,  or Chapter 7 in  this document.

                               6-12

-------
cumulative control cost analysis for the TIC options.  The
average percentage cost increase for all HON chemical products
appears prohibitively high due to the extremely low cost
effectiveness of controlling some small  (less than 1.00 Gg/yr)
production process units.  Of course, many of these units would
be unaffected by options less stringent than TIC.  The chemical
percent price increase necessary to recover HON compliance costs
is relatively insignificant for chemicals whose annual production
exceeds 1 Gg.

6.3  Costs and Regulatory Options

     Tables 6-8 through 6-19 present the total annual cost,
emission reductions, and cost effectiveness for the control
options considered for each source type  (with the exception of
equipment leaks which is governed by a negotiated regulation).
It is important to note that the information in these tables
pertains only to those CPPs for which sufficient information was
available.  Recall from this chapter's introduction that these
CPPs account for over 90 percent of total SOCMI production.
Tables 6-8 and 6-9 present the control options for existing and
new process vents.  Tables 6-10 and 6-11 present the control
options for existing and new wastewater sources.  Tables 6-12 and
6-13 present the control options for existing and new transfer
operations.  Tables 6-14 and 6-15 present the control options for
existing and new 10,000 to 20,000 gallon storage vessels.  Tables
6-16 and 6-17 present the control options for existing and new
20,000 to 40,000 gallon storage vessels.  Tables 6-18 to 6-19
present the control options for existing and new storage vessels
with greater than 40,000 gallon capacity.

6.4  National Costs

6.4.1  Monitoring. Recordkeepina. and Reporting Costs

       The annual!zed. costs of :nonicoring, recordkeeping, a.nd
reporting for compliance with this standard were calculated.  All
estimac.es were prepared in consultation with people wno routinely
work with or consult for major chemical firms, air pollutant
regulators in several states, and environmental groups. They are
also based on experience with similar estimates based on the
information collection requirements in the SOCMI NSPS.
     'For more  information,  refer to U.S. Environmental Protection
Agency, ''Reporting and Recordkeeping Requirments  for nhe Hazardous
Organic NESHAP  for the Synthetic Organic  Chemical Manufacturing
Industry and Other Processes Subject to the Negotiated Regulation
for  Equipment  Leaks."  Part A  of  the  Hazardous  Organic  NESHAP
Supporting Statement,  December 1993.

                              6-13

-------
     To compute the costs associated with the burden estimates,
the Agency used labor rates developed for the 1989 Comprehensive
Assessment and Information Rule (CAIR)  economic analysis.  The
estimated rates are: technical at $33,  management at $49, and
clerical at $15.  These rates are in 1989 dollars to remain
consistent with the base year for the control costs.

6.4.1.1  Costs to Regulated Sources

     The annual burden estimates and associated costs for
existing sources from reporting and recordkeeping are presented
in Table 6-20, and the same estimates for new sources are shown
in Table 6-21.  These estimates are shown separately because the
calculation of technical hours required at new sources must
include compliance at startup and periodic records burdens in
addition to pre- compliance requirements.  Generally, with the
exceptions of new sources and some equipment leaks provisions,
periodic reports and recordkeeping requirements begin after the
date of compliance, which is three years after promulgation
(Feburary 1997) .

     The requirements include both periodic reports and reports
required only once.  Burden estimates for the latter are treated
as average annual burdens by dividing the cumulative three year
total technical hour estimate by three before inclusion in the
column entitled, "technical- hours per year per source."

     Estimates of total technical -hours per year per source and
the number of activities per respondent per year listed in each
table are based upon experience with similar estimates computed
for the SOCMI NSPS in particular and the number of emission
points in each source.   It is important to note that an average
was taken of costs covering a period of three years for the
burden to a typical source.
  ...
         Casts ~o the Federal Government
     Because the monitoring, recordkeeping, and reporting
requirements were developed as a normal part of standards
development, no costs are attributed to the development of the
requirments.  Also, because these requirements are required under
Section 112 of the Glean Air Act, no operational coses will be
incurred by the Federal Government.

     Examination of records to be maintained by the respondents
will occur incidentally as part of the periodic inspection of
sources that is part of the Agency's overall compliance and
enforcement program and, therefore, is not an additional cose to
the Government.  The only costs cne Federal Government will occur
are user costs associated with the analysis of the reported
information, as presented in Table 6-22.  The labor rates used to

                               6-14

-------
compute these costs are the same as- in the CAIR economic
analysis.

The total of all monitoring, recordkeeping, and reporting costs
comes to $69.1 million per year for the first three years after
promulgation.  The estimated burden is approximately 2,150,000
hours (1,870,000 technical, 93,500 managerial, and 186,500
clerical hours)  per year.   Virtually all the costs  (99 percent),
not surprisingly, will be borne by the affected sources.


6.4.2  fllMHMT-y

     Table 6-23 shows the national total annual control cost and
average cost effectiveness for the options currently proposed for
the HON.  These costs include all the costs associated with the
monitoring,  recordkeeping, and reporting requirements.  The
national annual control cost and cost effectiveness are estimated
for the fifth year following proposal, or the third year
following promulgation.  This date is used to approximate the
date by which all affected sources will have complied with the
regulation.   The estimated total annual cost of the standard is
$227 million.
                              6-15

-------
Table 6-7.   Cumulative Control Cost Analysis Results
          For Total Industry Control (TIC)  Options
Chem.
Pro-
duction
(Gg/yr)
> 0
> 1
> 5
> 10
% of
HON
Chem.
100
87
79
66
Percent
of Total
HON Pro-
duction
100.00
99.99
99.89
' 99.41
Average
Cumul.
Cost
Increase
($/kg)
19.85
0.069
0.066
0.020
Median
Cumul.
Cost
Increase
($/kg)
0.016
0.014
0.012
0.009
Average
Percent
Cost
Increase
1,158
3.74
3.55
1.35
Median %
Cost
Increase
1.12
0.94
0.85
0.71
                     6-16

-------
          Table 6-8.  Control Options For Process Vents
                         Existing Sources
Option"
1
2
3
4
5
Emission
Reduct .
(Mg HAP
per yr)
235,000
236,000
238,000
239,000
241,000
Percent
HAP
Reduct. b
93
93
94
94
95
Annual
Cost
($1000)
55,000
58,000
62,000
66,000
97,000
Avg. Cost
Effective-
ness
($/Mg)
234
245
260
276
404
Incremental
Cost
Effective-
ness ($/Mg)

1,808
2,500
3,900
23,000
'Option  1  -


 Option 2-

 Option 3-


 Option 4--

 Option 5-
(MACT floor) control vents with cost effectiveness
< $l,500/Mg.

control vents with cost effectiveness < $2,000/Mg.

control vents with cost effectiveness < $3,000/Mg.
This was the regulatory option chosen.

control vents with cost effectiveness < $5,000/Mg.

control of all process vents  (i.e., TIC).
bBaseline emissions are 261,600 Mg/yr of HAP.
                              6-17

-------
               Table 6-9.  Control Options For Process Vents
                              New Sources
Option*
1
2
Emission
Reduct .
(Mg HAP
per yr)
46,000
46,000
Percent
HAP
Reduct. b
95
95
Annual
Cost
($1000)
14,000
18,000
Avg. Cost
Effective-
ness
($/Mg)
300
400
Incremental
Cost
Effective-
ness ($/Mg)

47,000
"Option  1-
(MACT floor) control vents with cost effectiveness
<$ll,000/Mg.  This was the regulatory option
chosen.
 Option 2-     control of all process vents.

bBaseline  emissions  are  48,400 Mg/yr  of  HAP.
                               6-18

-------
          Table 6-10.  Control Options For Wastewater
                         Existing Sources
Option*
1
2
3
4
Emission
Reduct .
(Mg HAP
per yr)
68,400
69,100
69,600
71,200
Percent
HAP
Reduct. b
79
80
81
82
Annual
Cost
($1000)
29,200
32,100
39,100
51,600
Avg. Cost
Effective-
ness
($/Mg)
430
470
560
720
Incremental
Cost
Effective-
ness ($/Mg)
430
4,300
13,400
7,600
"MACT  floor  is  no  control.  All  options  listed  are  for  control
levels above the MACT floor.
 Option 1 -


 Option 2-


 Ootion 3-
control streams > 10 1pm and > 1000 ppmw volatile
HAP's.  This was the regulatory option chosen.

control streams > 5 1pm and > 800 ppmw volatile
HAP's.

control streams > 1 1pm and > 500 ppmw volative
HAP's.
 Option 4-     control of all wastewater streams (i.e., TIC).

bBaseline  emissions  are  86,500 Mg/yr  of  HAP.
                              6-19

-------
          Table 6-11.  Control Options For Wastewater
                         New Sources
Option4
1
2
3
Emission
Reduct .
(Mg HAP
per yr)
10,300
13,500
13,900
Percent
HAP
Reduct . b
63
82
85
Annual
Cost
($1000)
10,000
12,800
23,500
Avg. Cost
Effective-
ness
($/Mg)
975
948
1,690
Incremental
Cost
Effective-
ness ($/Mg)

860
27,700
'Option  1  -


 Option 2-
(MACT floor)  control streams > 10 ppmv volatile
HAP's.  This was the regulatory option chosen.

control streams > 0.02 1pm and > 10 ppmw highly
volatile HAP's.
 Option 3-     control all wastewater streams  (i.e., TIC).

bBaseline  emissions  are  16,300 Mg/yr of  HAP.
                               6-20

-------
               Table 6-12.
             Control Options For Transfer
               Existing Sources
Option8
1
2
Emission
Reduct .
(Mg HAP
per yr)
360
424
Percent
HAP
Reduct . b
65
77
Annual
Cost
($1000)
3,100
6,500
Avg . Cos t
Effective-
ness
($/Mg)
8,700
15, 000
Incremental
Cost
Effective-
ness ($/Mg)

54, 000
"Option 1  -
(MACT floor) control racks loading liquid HAP's
with vapor pressure > 10.3 kPa  (1.5 psia) and
throughput > 0.65 million liters/yr  (0.17 million
gallons per year).   This was the regulatory option
chosen.
 Option 2-     control of all transfer racks (i.e., TIC).

bBaseline  emissions are  550 Mg HAP/yr.
                              6-21

-------
          Table 6-13.  Control Options For Transfer Operations
                         New Sources
Option*
1
2
Emission
Reduct .
(Mg HAP
per yr)
68
80
Percent
HAP
Reduct . b
65
77
Annual
Cost
($1000)
590
1,200
Avg. Cost
Effective-
ness
($/Mg)
8,700
15,000
Incremental
Cost
Effective-
ness ($/Mg)

54,000
"Option 1  -
               (MACT floor) control racks loading liquid HAP's
               with vapor pressure > 10.3 kPa  (1.5 psia) and
               throughput > 0.65 million liters/yr  (0.17 million
               gallons per year).   This was the regulatory option
               chosen.
               control all racks loading liquid HAP's  (i.e.,
               TIC) .
 Option 2-


bBaseline  emissions are  105 Mg  HAP/yr.
                               6-22

-------
               Table 6-14.  Control Options For Storage Vessels:
               Existing Sources 10,000 to 20,000 Gallon Capacity
Option"
1
2
Emission
Reduct .
(Mg HAP
per yr)
0
360
Percent
HAP
Reduct. b
0
95
Annual
Cost
($1000)
0
21,000
Avg. Cost
Effective-
ness
($/Mg)
0
58,000
Incremental
Cost
Effective-
ness ($/Mg)

58,000
"MACT  floor  is no  control.  The MACT floor was  the regulatory
option chosen.

 Option 1-     MACT floor

 Option 2-     control of all storage vessels  (i.e., TIC).

bBaseline  emissions  are  360 Mg/yr  of HAP.
                              6-23

-------
               Table 6-15.  Control Options For Storage Vessels:
               New Sources 10,000 to 20,000 Gallon Capacity
Option*
1
2
Emission
Reduct .
(Mg HAP
per yr)
61
68
Percent
HAP
Reduct. b
85
95
Annual
Cost
($1000)
1,600
4,000
Avg. Cost
Effective-
ness
($/Mg)
26,800
58,000
Incremental
Cost
Effective-
ness ($/Mg)

336,000
"Option  1-
 Option 2-
(MACT floor)  control tanks storing HAP's with
vapor pressure > 13.1 kPa  (1.9 psia).  This was
the regulatory option chosen.

control of all small storage vessels  (i.e., TIC)
"Baseline  emissions  are  72 Mg/yr of  HAP.
                               6-24

-------
          Table 6-16.  Control Options For Storage Vessels:
          Existing Sources 20,000 to 40,000 Gallon Capacity
Option"
I
3
Emission
Reduct .
(Mg HAP
per yr)
330
410
Percent
HAP
Reduct . b
70
88
Annual
Cost
($1000)
2,400
6,400
Avg. Cost
Effective-
ness
($/Mg)
7,400
16,000
Incremental
Cost
Effective-
ness ($/Mg)

48,000
"Option 1  -
(MACT floor) control tanks storing HAP's with
vapor pressure > 13.1 kPa  (1.9 psia).  This was
the regulatory option chosen.
 Option 2-     control of all medium storage vessels  (i.e., TIC)

bBaseline  emissions are  464 Mg/yr of HAP.
                              6-25

-------
          Table 6-17.  Control Options For Storage Vessels:
          New Sources 20,000 to 40,000 Gallon Capacity
Option1
1
2
Emission
Reduct .
(Mg HAP
per yr)
62
78
Percent
HAP
Reduct. b
70
88
Annual
Cost
($1000)
395
766
Avg. Cost
Effective-
ness
($/Mg)
6,370
9,870
Incremental
Cost
Effective-
ness ($/Mg)

23,780
'Option 1  -
(MACT floor) control tanks storing HAP's with
vapor pressure >1.9 psia.   This was the
regulatory option chosen.
 Option 2-     control of all medium storage vessels  (i.e., TIC)

bBaseline  emissions  are  88 Mg/yr of HAP.
                               5-26

-------
          Table 6-18.  Control Options For Storage Vessels:
          Existing Sources 40,000 Gallon Capacity And Greater
Option*
1
2
3
4
Emission
Reduct .
(Mg HAP
per yr)
1,700
4,800
8,629
8,644
Percent
HAP
Reduct . b
16
46
83
83
Annual
Cost
($1000)
5,000
10/000
25,000
27,000
Avg. Cost
Effective-
ness
($/Mg)
2,900
2,100°
2,900
3,100
Incremental
Cost
Effective-
ness ($/Mg)

1,600
3,900
122,000
"Option 1  -


 Option 2-
(MACT floor)  control tanks storing HAP's with
vapor pressure > 13.1 kPa  (1.9 psia).

control tanks storing HAP's with vapor pressure
> 5.2 kPa (0.75 psia).   This was the regulatory
option chosen.
 Option 3-     control of all large storage vessels  (i.e., TIC)

bBaseline  emissions  are  10,000 Mg/yr of HAP.

"Average cost  effectiveness decreases  due  to  credits  from
 controlling several large tanks.
                               6-27

-------
          Table 6-19.  Control Options For Storage Vessels:
          New Sources 40,000 Gallon Capacity And Greater
Option"
1
2
3
Emission
Reduct .
(Mg HAP
per yr)
558
1,640
1,642
Percent
HAP
Reduct . b
46
87
87
Annual
Cost
($1000)
1,500
2,900
3,100
Avg. Cost
Effective-
ness
($/Mg)
1,700
1,800C
1,900
Incremental
Cost
Effective-
ness ($/Mg)

1,900
88,900
"Option  1  -


 Option 2-
(MACT floor)  control tanks storing HAP's with
vapor pressure > 5.2 kPa  (0.75 psia).

control tanks storing HAP's with vapor pressure >
0.7 kPa (0.1 psia).  This was the regulatory
option chosen.
 Option 3-     control of all large storage vessels   (i.e., TIC)

bBaseline  emissions  are  1,900 Mg/yr of  HAP.

'Average cost  effectiveness decreases due  to  credits  from
 controlling several large tanks.
                               6-28

-------
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-------
      Table 6-22.  Annual Burden and Cost for the Federal Government
Burden Item
Average
Hours
per
Activity
(a)
Number of
Activities per
year
(b)
Estimated
Technical
Hours per
year
(c)
Estimated
Managerial
Hours per
year
(d)
Estimated
Clerical
Hours per
year
(e)
Annual Cost
in
$Thousandsp
er year
(f)
PERFORMANCE TESTS:
1) Initial
2) Repeat
LITIGATION:
40
40
2,080
14
3
3
560
120
6,240
28
6
312
56
12
624
20.69
4.43
230.57
REPORTS REVIEW:
1 ) Initial
2) Implementation
Plan or Permit
3) Compl. status
4) Review equip.
leak monitoring
5) Notification of
const./recon.
6) Notification of
anticipated startup
7) Notification of
actual startup
3) Notif. of
2
20
40
7
6
6
6
6
124
124
124
742
8
6
6
3
248
2,480
4,960
5,194
36
36
36
36
12
124
248
260
2
2
2
o
25
248
496
519
4
4
4
j.
9.15
91.64
183.27
191.93
1.35
1.35
1.35
1.35 !
 performance test
9) Review of test
•esults
10) Review
periodic reports
24
4
5
18
'44
72
TOTAL BURDEN AND COST (Saiarv) I 20,162
7
4
1.009
;4
7
5.31 j
2.68
2,017 1 745.07 '
TRAVEL
EXPENSES
15
30 I
FOTAL ANNUAL COST
760.37
                                   6-31

-------
     Table 6-23.  National Control Cost Impacts In The Fifth Year
                after Proposal"
Emission
Source Type
and Other
Cost
Categories
Equipment
Leaks
Process Vents
Storage
Vessels
Wastewater
Collection
and Treatment
Transfer
Operations
Monitoring,
Recordkeeping
and Reporting
Total
Total
Capital
Cost
(106 $)
120
100
74

140

12

N/A
450
Total
Annual
Cost
(106 $)
(0.26)
86
20

50

5

69
230
Average
HAP Cost
Effective-
ness ($/Mg
HAP)b
(5)
290
2,900

490

10,000

N/C
350
Average
VOC Cost
Effective
-ness
($/Mg
VOC)
(4)
170
2,900

130

10,000

N/C
170
"Existing emission  points  account  for  84  percent of the total.
Emission points constructed or modified in the  first  five years
account for the additional 16 percent.

''Average cost  effectiveness values are determined by dividing
total annual costs by total annual emission reduction.

N/A = Not Available

N/C = Not Calculated
                               6-32

-------
CHAPTER 7

ECONOMIC IMPACT ANALYSIS

7.1. Introduction.

     The purpose of this chapter is to summarize the economic
impacts of the Hazardous Organics NESHAP  (HON).  HON chemical
compounds are produced by the synthetic organic chemicals
manufacturing industry (SOCMI) ,  a complex and diverse  industry
that produces thousands of chemical compounds, with ultimate uses
in nearly every consumer and industrial market.  For purposes of
analyzing the SOCMI,  chemical trees have been constructed  for 490
synthetic organic chemical compounds, which identify the various
routes by which a particular compound is produced.  Many
different production processes can be used to produce  the  same
compound.  Since in-depth analysis of all 490 compounds is not
possible, 21 compounds have been chosen for detailed analysis.
Furthermore, five additional compounds, all of which incur
control costs significantly higher than average, were  chosen for
a high-cost analysis.  These compounds will be referred to as
high-cost compounds.

     Control costs have been analyzed for controls option  one.
Option one controls are estimates of the actual control costs
that: facilities and industries are likely to incur.

     This chapter proceeds in four sections.  Section  7.2
examines the extent to which the 21 selected compounds are
representative of the population of regulated chemicals.
Subsequently, section 7.3 reviews the economic impact  analysis
and examines the implications of the study for the SOCMI as a
whole.  Section 7.4 examines the economic impacts on high-cost
compounds only.  Finally, section 7.5 analyses the small business
impacts.

"7.2  Representativeness -31 Selected. Chemical Coa-pouncis

     The representativeness of the 21 selected, chemical compounds
and the five high-cost compounds is assessed based on  three
criteria; annual production levels, HON control costs, and the
extent to which the selection is drawn from the range  of basic
feedstock chemicals.

     At the outset of the analysis, it was immediately clear that
an examination of zhe initial 21 compounds was not sufficient to
depict the range of impacts in the SOCMI.  Specifically, in order
co perform detailed analysis on particular chemicals,  an adequate
amount of information is needed.  Littla or .10 in.forrra.ticn -?as
available for compounds with annual production levels  of less
than 10 million kilograms, whicn account for 32.7 percent  of the
regulated compounds.   In addition, it was found that these same
low-volume production compounds also tanded to incur high

                               7-1

-------
compliance costs, primarily due Co economies of scale in
compliance.  Thus, it was necessary to select a group of low
volume, high-cost compounds for which there existed sufficient
information for profiles and analysis. While this analysis is not
nearly as detailed as for the initial 21 selected compounds, it
nevertheless provides a broad overview of low-volume, high-cost
impacts.

     7.2.1 Annual Production and Control Costs

     Percentage cost increases have been computed for each
facility producing the 21 compounds analyzed, as well as the five
high-cost compounds.

     The percentage cost increase is calculated by dividing the
cumulative compliance cost per kilogram by the per-unit revenue,
or price, for each compound, as shown in equation one:
                                )xlOO                         (1)
     where  CCj = cumulative compliance cost  for  compound  i

             Pj = price of chemical i


     7.2.1.1  Option One Control Costs

     Table 7-1 compares the distribution of  the 490 chemical
compounds with those 21 selected for analyses, for option one
control costs, in terms of both annual production and control
costs.  The percentage cost increases presented represent the
50th percentile of costs for each compound.  The comparison by
annual production demonstrates ~ne aforementioned, drawback of ~ne
initial selectmen.  Specifically, only one compound -.;ith annual
production less than 10 million kilograms has been selected for
detailed analysis, and zero less than, five million kilograms.  In
the population, 32.7 percent of the compounds have annual
production of less than 10 million kilograms, and 20.8 percent
less than 5 million kilograms.  Clearly, the selection is biased
cowards large volume compounds.

     The population of compounds is under-represented in several
ranges of option-one cost increases.  Compounds are absent in the
four highest cost ranges of control costs.   Compounds in these
cost ranges account for 9.9 percent of the regulated compounds.

     The selection encompasses the other four cost ranges, which
account for 90 percent of the regulated compounds.  For the range
of cost increases less than 2 percent, coverage is the best.


                                7-2

-------
Table 7-1. Distribution Of HON Compounds By Percentage Cost
           Increase And Annual Production  (106 kg) :  Option One
•
	
(106 kcr)
% Change In Cost* Number
Less than 1.00 351
284
1.00 - 2.00 65
28
2.00-3.00 17
4
3.00-4.00 8
2
4.00-5.00 6
2
5.00-7.00 10
4
7.00-10.00 2
0
Greater than 10.00 31
l
Total 490
325.
% Of Total 100%
67.3%
All
% Of

Total
71.6%

13.3%

3.5%

1.6%

1.2%

2.0%

0.4%

6.3%

99.9%b



Reoulated Compounds
Distribution
By Annual Production

<:L
43

0

0

0

0

1

0

20

64

13.


1-5
26

2

3

2

0

3

1

1

18

1% 6.7%


5-10
35

18

4

0

2

2

1

1

63.

12.9%

Select sd Cciroounds
Distribution

(106 kcr)
% Change In Cost4 Number

Less than 1.00 14
13
1.00-2.00 ;
3
2.00-3.00 1
1
% Of

Total
66.7%

14.3%

4.8%

By

<1
0

0

0

Annual Production

-*- - ^
0

•J

0


5-10
1

j

0

                              7-3

-------
3.00-4.00
3
4.00-5.00
0
5.00-7.00
0
7.00-10.00
0
Greater than 10.00
0
Total
2jO
% Of Total
95%
3

0

0

0

0

21

100%

14.3%

0%

0%

0%

0%

100. lb



0

0

0

0

0

Q

0%

0

0

0

0

0

o

0%

0

0

0

0

0

1

5%

"Cost  increase based  on  control  costs at  the  50th percentile of
 industry output.
"Does  not  sum to  100  due to  rounding.
                               7-4

-------
Eighty-five percent of the population is included in this range,
as compared with 81 percent of the selection.  Cost increases
ranging from two to three percent include 3.5 percent of the
population and 4.8 percent of the selection.  Coat increases
ranging from three to four percent include 1.6 percent of the
population and 14.3 percent of the selection.

      7.2.3  Basic Feedstock Chemicals

      Synthetic organic chemical compounds are ultimately derived
from eight basic feedstock chemicals, which serve as the building
blocks for the SOCMI.  These eight feedstock chemicals are
derived from petroleum refineries, natural gas plants, and coal
tar distillers.  Table 7-2 presents the selected compounds,
grouped by the basic feedstocks from which they are derived.  As
illustrated, each basic feedstock chemical is represented.  Thus,
the selected compounds are a satisfactory representation the
scope of the SOCMI as measured by basic feedstock chemicals.

      7.2.4 Summary

      In general, the selection under-represents compounds with
costs greater than four percent, as well as compounds with annual
production less than ten million kilograms.  However,  the
large-volume chemicals, which make up 67.3 percent of the
population, are represented in terms of annual production,
control costs in the lower ranges, and basic feedstock chemicals.
Since these compounds represent the lion's share of SOCMI
production, an examination of the impact of HON control costs on
the industry as a whole is not unreasonable.

7 . 3  Overview of Economic Impacts

      7.3.1 Nature of Impacts

      The economic impacts of HON controls on the SOCMI derive
zrom several possible outcomes.  Primary attention is paid co
price and output adjustments, since chase estimates are likely ~o
be the most accurate.  Impacts stemming from these adjustments
are the closure of a facility and the substitution of one
production process for another.

      7.3.2 Price Adjustments and Reductions In Output

      Installation of control equipment will lead to increases in
production costs which will in turn spur price increases in the
industry.  Price increases have been estimated by calculating a
product ion-weighted cost increase for each compound,  and dividing
it by industry revenue.*  These production-weighted cost
increases are employed for estimating economic impacts.

* For a detailed discussion of methodology, see Chapter two of
the HON Economic Analysis, section 2.3.2.3.
                               7-5

-------
The distribution of HON compounds by percentage cost increases,
shown previously in Table 7-1,  are used only for comparison's
sake, and differ from the one's used for the economic impact
analysis.

     Market structure has important implications for the size of
the price increase that will occur as a result of HON controls.
In general, it can be said that if a market structure is not
perfectly competitive, firms in the industry will raise prices
less than they would in the perfectly competitive case.  The
market structure in the SOCMI is characterized by the following
attributes:

          • -a limited number of firms producing each chemical

          • - a large degree of market concentration

          • - a large degree of vertical integration

          •  a large degree of horizontal integration

          • - barriers to entry and exit in the form of high
             capital and raw materials costs
                               7-6

-------
       Table 7-2.  Selected Chemicals Compounds Grouped By
                    The Eight Basic Feedstock
                Chemicals From Which They Are Derived
         Benzene

Styrene-Butadiene Rubber
Cyclohexylamine
Hydroquinone
Styrene
Acetone
Bisphenol-A
Propylene Glycol

         Toluene

Benzoic Acid

         Xylenes

Terephthalic Acid
Phthalic Anhydride
Ether
       Naphthalene
Acetone
Phthalic Anhydride
Ether
         Methane
Formaldehyde
Chloroform
Methyl Ternary Bucyl Ether
Methvl Chloride
          Ethylene

Butadiene
Polybutadiene
Styrene-Butadiene Rubber
Ethylene Bichloride
Ethylene Oxide
Ethylene Glycol
Styrene
Triethylene Glycol
Propyiene Glycol

         Propylene

Cyc1ohexy1amine
Acetone
Bisphenol-A
Propylene Glycol
Methyl Tertiary Butyl

Acrylonitrile

         Butylenes
Butadiene
Methyl Tertiary Butyl
                               7-7

-------
Thus, Che SOCMI can be characterized as oligopolistic, and firms
will absorb a portion of HON control costs.  Thus, the price
increases are likely to be lower than estimated.  Moreover, price
increases are apt to be felt in end-use markets, due to the
considerable amount of captive consumption in the industry.

     Since the industry demand curve is downward sloping, each
price increase will be accompanied by a reduction in output.
While these quantity adjustments derive directly from the control
costs and the price elasticity of demand for each chemical, it is
not readily apparent how these changes will be experienced at the
facility level.  As data on average cost of production and plant
vintage are not available, identifying the marginal facility is
difficult.  If there are notable differences in production cost
and plant vintage,  the quantity adjustment could be absorbed by
those firms which are marginal.  If the facilities have similar
cost structures,  the output reduction could be distributed across
the industry.

     Given the way in which the SOCMI is organized, it seems
likely that quantity adjustments will be distributed across the
industry, rather than falling on any one facility.  Most
facilities are owned by large parent corporations, which could
subsidize plants which might be less efficient.  In addition, the
industry is dynamic, and cost increases will stimulate
alternative production processes to offset competitive
disadvantages.  Also, chemical production will be driven by the
economics of coproducts and byproducts.  Facilities will often
have the flexibility to step up production of more profitable
compounds to offset the burden of compliance.

     7.3.3  Closure

      In general, closure of a facility might be predicted if a
significant percentage of output were to be wrested from the
marginal plant, i.e. the plant with the highest average cost of
production.  In the SOCMI, however, there is reason co believe
that, aven wiuh significant price increases, closure is highly
unlikely.

     The primary explanation for this is the flexibility of
chemical producers.  In most cases, several chemicals other than
the sample chemicals are produced at facilities producing sample
chemicals.  Table 7-3 presents this information, and indicates
the lowest numtier of chemicals produced at a given facility, the
highest number of chemicals, and the average number of chemicals.
In only one case is the average number of chemicals produced at a
site equal to one.                                       •

      In two cases, as ;nany as 20 chemicals are produced at the
same facility. Therefore, revenue at a given facility is shared
among a number of chemicals, and the reduction in output of one
of them is unlikely to lead to closure.  It is also possible that
a decline in output of one chemical could be cross-subsidized by

                               7-8

-------
another chemical.  There is flexibility in other areas as well.
Some facilities have the ability to use different production
processes for the same chemical if economic conditions dictate.
Constructing new plants with the ability to use different
feedstocks is becoming more common in the industry.  Also, plants
can vary capacity utilization,  idle parts of the plant, and run
inventories up and down to cope with changes in demand.  In some
cases,  it is difficult to close facilities, as different
production processes are dependent on the same feedstock. In
addition, the SOCMI is a dynamic industry in which new processes
and chemical formulations are constantly being explored.  The
prospect of control costs could stimulate a changes of these
types rather than closure of a facility.

      If the impacts are large,  it is important to note that
ceasing production of one chemical does not always necessitate
closing the entire facility.  Employment might be kept at the
same level, or production might be stepped up for another
chemical at the same facility.
                               7-9

-------
          Table  7-3. Number Of HON Chemical Compounds
                   Produced On The  Same Site As
                Facilities Producing Selected  Compounds*
Sample (Number of
Chemical Facilities)

Butadiene (9)
Styrene- Butadiene Rubber (5)
Polybutadiene ( 4 )
Ethyl ene Dichloride (15)
Ethylene Oxide (13)
Cyclohexylamine (2)
Hydroquinone (2)
Ethylene Glycol (11)
Styrene (9)
Formaldehyde (46)
Acetone (13)
Chloroform (6)
Triethylene Glycol (11)
Bisphenol-A (4)
Terephthalic Acid (7)b
Propylene Glycol (5)
Methyl -Tertiary Butyl Ether (18)
Phthalic Anhydride (6)
Benzoic Acid (3)
Acrylonitrile (6)
Methyl Chloride
Number
Low
1
N.A.
N.A.
2
1
1
2
1
1
1
2
2
1
2
1
3
1
1
2
1
1
Of Chemicals
On Same SiŁe
High
10
N.A.
N.A.
17
15
1
9
15
17
5
9
20
15
18
2
20
7
7
3
6
11
Produced
Average
5
N.A.
N.A.
5
6
1
6
6
4
1
5
9
6
8
2
10
2
2
3
3
7
"May  aoc  include  coproducr.3 and  byproducts.

^Includes dimethyl terephthalate.

N.A.  - not available.
                               7-10

-------
     Finally,  the SOCMI is an oligopolistic industry dominated by
large parent corporations.  While this assures that a portion of
compliance costs will be absorbed by producers, it also assures
the ability to finance purchase of control equipment.  Also, high
capital and raw materials costs provide barriers to exit.  As
long as firms are covering these large fixed costs, closure will
not ensue, even if the facility is unprofitable in the short run.

     For all of these reasons,  closure due to HON controls is in
general,  unlikely.

      7.3.4 Process Changes

      It is quite possible that HON controls will stimulate a
shift to an already existing chemical production process, usher
in a process which was previously uncompetitive, or stimulate
research and development into new production processes.  Given
the dynamic and flexible nature of the SOCMI,  it is likely that
each of these will take place in response to HON controls.

       7.3.5  Economic Impacts

      Table 7-4 illustrates the summary of market adjustments for
the selected compounds.  The output changes are based on the
upper bound of the estimated price elasticity of demand, which
forecasts the maximum reduction in output.  It should be noted
that the change in price is an increase,  and the change in output
is a decrease.  These market adjustments  are derived from a
production-weighted average price increase.  Each compound is
accompanied by one price adjustment and quantity adjustment,
except for benzoic acid.  Since the facilities in this industry
cater to three separate markets,  it was necessary to calculate
three impacts.  Thus, 23 price and quantity adjustments are
presented.

      Table 7-5 categorizes the selected  compounds in three
ranges of percentage price increases for  the option one costs.
The categories: low; leas cnan two percent, intermediate; two co
five percent,  and high; greater than five percent,  respectively.
Since chese percentages are derived from  -he production-weighted
average price increase, they differ from  those presented in Table
7-1, which are based on costs at the 50th percentile of control.
Production-weighted averages have not been calculated for all 490
regulated compounds, so direct comparison is not possible.
However,  general conclusions can be drawn from chose chemicals
analyzed.

     Table 7-6 extends these market adjustments to the
possibility for closure and process substitution.   The
possibility for ciosurs :_s oaaea ooieiy on the percentage output
reduction as compared with the smallest size facility in the
industry.  It was stated in section 7.3.3 tnat closure in any
case is unlikely.  Thus, Table 7-6 displays only the most
conservative,  i.e. severe,  case.

                               7-11

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Table 7-4. Summary Of Market Adjustments
Chemical Name
(CAS Number)

Butadiene
(106990)
Styrene- butadiene rubber
(00043)
Polybutadiene
(00045)
Ethylene Dichloride
(107062)
Ethylene Oxide
(75218)
Cycl ohexalyamine
(108918)
Hydroquinone
(123319)
Ethylene Glycol
(107211)
Styrene
(100425)
Formaldehyde
(50000)
Acetone
(67641)
Chloroform
(67663)
Triethylene Glycol
(112276)
Bisphenol-A
f80057)
Tereohthaiic Acid
(2.00210)
Propylene Glvcol
"(57556)
Methyl - Tertiary
Butyl Ether
(1634044)
Phthaiic Anhydride
(85449)
Benzoic Acid
Facility 1A
Facility 2A
Facilitv 3A
(65850)
Acrylonitrile
(107131)
Methyl Chloride

Got ion One
% A Price1
0.74

0.28

0.30

1.03

0.31

0.64

0.51

0.40

0.34

2.51

0.72

1.09

0.11

0.56

2 Q

0.25

0.24


3.36


0.75
0.88
3 .78

0.57

3.17
7-12
Control
% A Quantity"
(0.73)

(0.28)

(0.30)

(0.69)

(0.10)

(0.43)

(0.61)

(0.27)

(0.34)

(1.65)

(0.48)

(0.37)

(0.07)

(0.38)

: o . 3 6 )

(0.25)

(0.08)


(2.50)


(0.74)
(0.87)
•3 .54)

(0.38)

(2.07)


-------
   .74873)
"The percentage price  increase  is based on the
production-weighted
 average compliance cost.  (See Chapter 2 A for methodology) .
bThe percentage change in quantity  is  based on the most elastic
 estimate of demand elasticity, which forecasts the higher
percentage
 change in quantity.
A = Change in
                              7-13

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       Table 7-5. Summary Of Percentage Price Increases  For  The
                        Selected Compounds
                          Percentage Price Increase
                                  Option
Price Range/                       One
Chemical Name                    Controls
High Increase: Over 5

None

Intermediate Increase: 2 to 5 Percent

Phthalic Anhydride                 3.86%
Benzoic Acid 3A                    3.78%
Methyl Chloride                    3.17%
Formaldehyde                       2.51%

Low Increase; Below 2 Percent

Terephthalic Acid              •    1.29%
Chloroform                         1.09%
Ethylene Bichloride                1.03%
Benzoic Acid 2A                    0.88%
Benzoic Acid 1A                    0.75%
Butadiene                          0.74%
Acetone                            0.72%
Cyclohexalyamine                   0.64%
Hydroquinone                       0.61%
Acrylonitrile                      0.57%
aisphenol-A                        0.56%
Hthylene Glycoi                    0.40%
Styrene                            0.24%
Sthylene Oxide                     0.31%
Poiybutadiene                      0.30%
S tyrene-butadiene rubber           0.28%
Propylene Glycoi                   0.25%
Methyl-Tertiary Butyl Ether        0.24%
Triethylene Glycoi                 0.11%
                               7-14

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     7.3.6 Low Ranae Impacts
     7.3.6.1  Option One Control Costs
     For option one control costs, the low cost range  includes
82.6 percent,  or 19 of the 23 price increases shown.   Since this
range represents the majority of the SOCMI, it is useful to
extend the results of these impacts to the population  of
regulated compounds.  In this category,  maximum quantity
adjustments range from .07 percent to .87 percent of industry
output.  For 14 of these compounds, closure is unlikely even in
the most extreme scenario.  Closure is possible for the remaining
five compounds.

     Nine compounds in this range are produced by more than one
production process.  For two of these, the cost differential is
large enough to predict possible process changes.  However, it is
quite possible that HON controls will stimulate research and
development into new production processes.

     7.3.7 Intermediate Range Impacts

     7.3.7.1  Option One Control Costs

     The intermediate range includes 17.4 percent, or four of the
23 price increases displayed.  Maximum quantity adjustments range
from 1.65 percent to 3.64 percent of industry output.  Closure is
possible for three of the four.  Again,  closure is possible only
in the most extreme case, and is in general unlikely.

     Three of  the four intermediate-cost compounds are produced
by more than one process.  In each case, the cost differential is
large enough to predict process changes.

     7.3.8 High Range Impacts

     No compounds in the selection are high-cost and so no
conclusions can be drawn for ~his range  for either control
option.
                              7-15

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       Table 7-6.  Likelihood Of Closure And Process Change
                   Under Option One  Controls"
Chemical
Name
Butadiene
Styrene- butadiene rubber
Polybu t adi ene
Ethylene Bichloride
Ethylene Oxide
Unlikely
Cy c 1 ohexalyamine
Hydroquinone
Ethylene Glycol
Styrene
Formaldehyde
Acetone
Chloroform
Triethylene Glycol
Bisphenol-A
Terephthalic Acid
Propylene Glycol
Methyl -Tertiary Butyl Ether
Phthalic Anhydride
Benzoic Acid
Aery lonit rile
Methyl Chloride
Likelihood Of
Closure
Possible
Unlikely
Unlikely
Possible

N.A.
Unlikely
Unlikely
Unlikely
Possible
Possible
Unlikely
Possible
Unlikely
Unlikely
Possible
Unlikely
Unlikely
Possible
Unlikely
Unlikely
Possible
Likelihood Of
Process Chancre
Unlikely
N.A.
N.A.
N.A.


Possible
Unlikely
N.A.
Possible
Probable
Unlikely
Unlikely
Unlikely
N.A.
Unlikely
N.A.
Unlikely
Possible
N.A.
N.A.
. Possible
N.A. - not applicable,  since only one process is used.
1  Closure  is in general unlikely.  'This table presents  only  the
most extreme case.
                               7-16

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7.4 High Cost Compounds

      Five high-cost compounds were selected for purposes of
analyzing high-cost impacts.   Option one controls are analyzed
for this group of compounds.   These compounds,  along with their
respective price and output adjustments, are presented in Table
7-7.

      The economic impact of  HON controls on high-cost compounds
appears to be only a little more exacting than the impact for the
SOCMI on average.  Of the five compounds examined, only one is
likely to experience closure,  and one process could be phased
out.  Given the magnitude of  the percentage price increases, this
outcome might be expected.

      Nevertheless, several qualifications are warranted that
would mitigate against such severe impacts.  First, as noted
above, the control cost estimates are probably too large.1
Second, these impacts assume  no cost absorption at previous links
in the chemical tree.  Third,  impacts are based on the lowest
available price estimate.  To this it is added that these
producer's seem to have quite a degree of pricing discretion that
would allow them to alleviate the impact of compliance.  Fourth,
as with the SOCMI as a whole,  it is assumed here that many
products are produced at sites along with the high-cost
compounds, and that the dynamic nature of the SOCMI makes it
difficult to predict closure  with any certainty.
                              7-17

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Table 7-7.   Summary Of Price And Output Adjustments For
                    High-Cost Compounds
= - .34
Chemical Name
A Q
          Elasticity = -.0


         ? A P       % A Q
                    Elasticity

                    % A P      %
 Benzil Benzoate


 Phthalimide

 Diphenyl Methane


 Gluteraldehyde
 Diisooctyl
 Phthalate
   90.42


  530.9

1,878.93


2,378.67


    9.46
           90.42
(0.64)

   (1.8)   530.9

        1,878.93
(2.58)


(2.75)


(.090)
2,378.67


    9.46
(19.7)


(46.5)

(63.8)


(66.4)


(3.03)
                               7-18

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7.5  Small Business Impacts

      The RFA (Public Law 96-354, September 19, 1980) requires
Federal agencies to give special consideration to the impact of
regulation on small businesses.

      The RFA specifies that a regulatory flexibility analysis
must be prepared if a proposed regulation will have  (l) a
significant economic impact on (2) a substantial number of small
entities.  Regulatory impacts are considered significant if:

      • Annual compliance costs increase total costs of
        production by more than 5 percent,

      • -Annual compliance costs exceed 10 percent of profits for
        small entities,

      • Capital cost of compliance represent a significant
        portion of capital available to small entities,

      • The requirements of the regulation are likely to result
        in closures of small entities.

A "substantial number" of small entities is generally considered
to be more than 20 percent of the small entities in the affected
industry.

     A first step in determining small business impacts is
assigning an appropriate definition for what constitutes a small
entity in the SOCMI.  The Small Business Administration (SBA)
defines small businesses in the chemical industry as having
employment from under 500 to under 1,000, depending on the SIC.2
For this analysis, the upper bound of 1,000 employees will be
used as the cutoff for assessing small business impacts.

     Table 7-3 lists 1990 sales and employment figures for -hose
companies in the 3GCMI that produce the 20 chemicals selected for
the HON analysis.  This is a comprehensive list of sample
chemical producers, totaling 66 companies.  Data was compiled
from a collection of 1991 annual reports, the 1991 Million Dollar
Directory, and Standard and Poor's Register of Corporations.
Directors. and Executives.

     As shown, only 10 of the 66 companies fails below the 1000
employee cut-off.  Thus, given this sample, only 15 percent of
the SOCMI can oe classified as small.

     The 1988 Handbook of Small Business Data,  which provides
information on tns nature of businesses -/nich typify iiffarent
SIC categories,  supports tnis assertion.  Each of the SIC
categories affected by the HON are listed as "Large-Business-
Dominated."  This classification is based on the more
conservative definition of small entities that the SBA uses.

                               7-19

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     Therefore,  the standard is not expected to have a
significant economic impact on a substantial number of small
firms,  and a RFA is not required.
            Table 7-8.  1990 Sales And Employment  Of
                          Selected SOCMI Members
Company
Air Products
Allied Signal
American Cyanamid
American Petrofina
American Synthetic
Rubber Corp.
American Synpol
AMOCO
ARCO
Ashland Oil, Inc.
Atlantic Richfield
BASF
B.F. Goodrich
Borden
British Petroleum
BTL Specialty Resins
Corp.
Champ! in defining
Chevron
Citgo
Conoco
Copolymer Rubber and
Chemical
Deltech
Diamond- Shamrock
3ow
DuPont
Eastman- Kodak
Sales ($106)
2,895
12,343
4,574
3,978
93
N.A.
31,581
18,808
8,994
1,590
4,023
2,470
7,633
33,039
(Ł mil.)
64
374
41,540
4,940
12,330
250
20
2,708
13,. 773
40,028
18,908
Number of Employees
14,000
105,800
32,012
3,997
311
2,600
54,524
27,300
33,400
26,600
133,759
11,892
46,300
118,050
200
300
54,208
3,300
19,000
710
200
6,000
" " * ° n
2^. , _uU

134,450
                               7-20

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TABLE 1 - 8 .   (CONTINUED)
Company
Exxon
Firestone
Formosa Plastics
GE
General Tire
Georgia Gulf
Georgia Pacific
Goodyear
Hani in Group
Hercules
Hill Petroleum
Hoechst Celanese
Kalama
Koppers
Marathon (USX)
Mobil
Monsanto
Mt. Vernon Phenol"
Occidental Petroleum
Olin
•
3xy Pecrocnemicals
? . D . Glycol
Pfizer
Phillips Petroleum
?olysar
PPG
Quantum
Quest ra ( Rhone -
Pouienc Dana,1
Rexene
Shell Oil
Sales ($106)
115,794
3,867
625
55,300
1,300
1,110
12,665
11,273
1,110
3,200
4
1,500
N.A.
426
20,659
64,472
8,995
56,279
1,500
25 , 300
^ *j ^.
26
6,406
12,500
643
5, 320
2,656
2,278
553
24,460
Number of Employees
104,000
53,500
1,700
292,000
9,600
1,350
63,000
107,671
1,350
19,867
1,070
2,400
N.A.
1,900
51,523
67,300
41,081
292,043
12,500
15,400
1,220
185
42,500
21,300
1,200
35,500
N.A.
91,571
1,300

         7-21

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                     TABLE 1 - 8.   (CONTINUED)
	Company	Sales  ($106)	Number oŁ Employees
 Spurlock                         11                    41
 Stepan Co.                       346                 1,150
 Sterling Chemical                581                   926
 Sun Co.                       13,270                20,926
 Texaco                       41,822                39,000
 Texas  Olefins                    300                   300
 Union  Carbide                  8,740                45,000
 Velsicol                        100                   500
 Vista  Chemicals                  779                 1,750
 Vulcan Materials               1,080                 6,250
                               7-22

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7.6  Conclusions

     For the 21 compounds selected for detailed analysis, the
majority of estimated price increases --83 percent -- are below
two percent.  Eighty-seven percent have estimated ranges of
reductions in output of below two percent.  In general, impacts
on the selected compounds are small.   Since the selection does
not adequately represent the population of controlled compounds,
the same cannot be said for all controlled compounds.
Nevertheless,  given the cost increases from Table 7.1, it is safe
to say that impacts for the SOCMI are, in general, small.

     Given the dynamic and flexible nature of the SOCMI, as well
as the oligopolistic market structure, closure in the majority of
cases is unlikely.

     The notable  impact of the HON will the stimulation of a
shift to already  existing chemical production processes, the
ushering in of processes that were previously uncompetitive, or
stimulation of research and development into new production
processes.  It is likely that each of these will take place in
response to HON controls.

     In conclusion,  the SOCMI is a dynamic industry which
responds quickly  to changes in the economic environment.
Increasing costs  driven by the HON will serve to reinforce moves
to lower-cost production processes, plants engineered for
flexibility in feedstock choice, and facilities capable of
producing a variety of chemical substitutes depending on costs
and market demand.
                              7-23

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7.7
1.   U.S.  Environmental Protection Agency.   Economic Impact
     Analysis of the Hazardous Organic NESHAP.  December 1993.
     p. 26-4.

2.   "Small Business Administration: Small Business Size
     Standards;   Final and Interim Final Rules"; 13 CFR Part 121,
     Federal Register. December 21, 1989.
                               7-24

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CHAPTER 8

BENEFITS

8.1   Introduction

     This chapter discusses the potential benefits associated
with air toxics regulation under the HON regulation. Various
limitations prevent a formal, quantitative benefits analysis.  A
formal benefits assessment requires analysis of the full
pollutant path, tracing from the change in emissions to
atmospheric dispersion through population exposure, effective
dose, physical effect manifestation considering mitigating and
averting behavior, and ultimately to economic valuation.
Ideally, this analysis should be conducted for each of the air
toxic chemicals regulated under the HON.  Lack of information on
an individual chemical basis, such as the quantity and location
of emissions and chemical-specific physical effect and exposure
data, as well as a significant time requirement preclude such a
detailed benefit analysis.

     Because of the above limitations, a qualitative analysis of
the potential benefit categories is given that identifies the
direct use and non-use benefits of the regulation.  The physical
effect categories that are associated with HON emission
reductions include health and welfare responses that have been
documented for HAPs, ozone, and particulate matter.
Furthermore, option value, existence value, and bequest value are
potential benefits creditable to this rule making.

     The HON rule regulates 149 of the 189 hazardous air
pollutants listed in Section 112(b).   A general understanding of
the physical and chemical nature of these compounds, including
their potential toxicity and environmental fate, makes possible
che categorization of physical effects from HAP emissions.
Hazardous air pollutant: emissions may occur in both gaseous and
particuiate form.  Of che gaseous HAPs, che majority are volatile
organic compounds (VOCs), which are precursors in the formation
of ozone.  The VOC HAPs may also condense or react co form
particulate matter.   HAPs may enter terrestrial and aquatic
ecosystems through atmospheric deposition.  HAPs can be deposited
on vegetation and soil tnrough wet or dry deposition.  HAPs may
also enter the aquatic environment from the atmosphere via I)  gas
exchange between surface water and the ambient air, 2)  wet or dry
deposition of particulate HAPs and particles to which HAPs
adsorb, and 3)  wet or dry deposition co watersheds with
subsequent leaching or runoff to waterbodies.l

     Human exposure to HAPs may occur directly through inhalation
or indirectly through iiigestion of food or water contaminated by
HAPs or through dermal exposure.  In general,  the reduction of


                                8-1

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HAP emissions resulting from promulgation and implementation of
the HON will reduce human and environmental exposure to these
pollutants and thus, reduce potential health and welfare effects.
This chapter provides a general discussion of the various
components of total benefits that may be gained from a reduction
in HAPs through the HON rule.  Figure 8-1 lists the range of
potential physical health and welfare effects categories that may
be associated with HAP emissions and also with ambient
concentrations of ozone and particulate matter secondarily formed
by VOC HAPs.
                                8-2

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    Figure 8-1. POTENTIAL PHYSICAL EFFECTS CATEGORIES  FOR HON

  Categories may be applicable for hazardous air pollutants  and
           ozone  and PM secondarily formed by VOC HAPs.
Human Health Effects

Mortality Due to Chronic Exposure
Mortality Due to Acute Exposure
Morbidity Due to Chronic Exposure
Morbidity Due to Acute Exposure

Human Welfare Effects

Worker Productivity Losses
Odors

Non-Human Biological Effects

Agriculture
Forestry
Recreational/Commercial Fishing
Ecosystem

Soiling and Materials Damacre

Residential/Commercial/Industrial Facilities
Miscellaneous Materials

Climate and Visibility Effects

Local Visibility
Non-local Visibility
-limate
Visibility at Parks
Transportation Safety
                               8-3

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8.2   Hazardous Air Pollutant Benefits

     8.2.1  Health Benefits of Reduction in Hazardous Air
            Pollutants

     The RON will regulate 149 of the 189 air toxics listed under
Title III.  Exposure to ambient concentrations of these
pollutants may result in a variety of adverse health effects
considering both cancer and noncancer endpoints.  In an effort to
better understand the "big picture" of hazardous air pollutant
exposures, EPA undertook broad studies in the 1980s to evaluate
the releases of these pollutants and the relative implication of
the resulting exposures to human health.

     The first study assessed the magnitude and nature of
potential cancer risks associated with exposure to hazardous air
pollutants.  Originally conducted in 1985*  and updated  in 199O3,
the work broadly assessed long-term exposures to HAPs and
estimated potential cancer risks associated with these
pollutants.  Without chemical and site specific exposure and risk
assessment, it is not possible to estimate the excess expected
cancer cases attributable to HON emission sources.

     A second EPA study4  assessed ambient concentrations  of HAPs
in relation to their potential to elicit adverse noncancer
affects.  This project utilized several approaches to
characterizing potential noncancer risks including review of case
reports, evaluation of State, local and Federal agencies'
experiences, and review of available health and exposure data.
Although the magnitude of noncancer risks could not be estimated,
the broad implications of this study indicated that areas of
concern may be the following:  short-term as well as long-term
exposures, multiple chemical exposures,  and the combined impact
of an individual chemical emitted from multiple sources in the
same geographic area.  The major health endpoints of concern in
this study were respiratory affects, developmental and.
reproductive coxic^ty, and neurotoxicnty.

     In general, noncancer health effects can be grouped into the
following broad categories'*:

     o    Genotoxicity - a broad term that usually refers to a
          chemical that has the ability co damage DNA or the
          chromosomes.
     o    Developmental toxicity - adverse effects on a
          developing organism that may result from exposure prior
          to conception  (either parent), during prenatal
          development, or postnatally to the  time of sexual
          maturation.  Adverse developmental  affects iray oe
          detected at any point in the life span of the organism.
          Major manifestations of developmental toxicity include:


                                8-4

-------
          death of the developing organism; induction of
          structural abnormalities; altered growth; and
          func t i onal de f i c i ency.
     o    Reproductive toxicity - harmful effects on fertility,
          gestation, or offspring, caused by exposure of either
          parent to a substance.
     o    Systemic toxicity - affects a portion of the body other
          than the site of entry.
     o    Irritant - causes irritation of eyes, skin, and
          respiratory tract.

     Exposure to HAPs may occur directly through inhalation as
well as indirectly through oral or dermal exposure to food or
water contaminated through deposition of HAPs.  The Lake Michigan
Fish-Eating Study provides evidence of adverse health effects due
to indirect exposure to HAPs.  Atmospheric deposition of HAPs
into the Great Lakes is a major cause of the deteriorated water
quality of this aquatic system.  High concentrations of toxics
have been observed in a number of commercial and recreational
fish species.  The Lake Michigan Fish-Eating Study revealed that
the total amount of fish consumed by mothers in all years prior
to conception and the amount of PCBs measured in umbilical cord
serum is associated with decreased visual recognition memory--a
measure of neurological development--in. offspring.  There is also
evidence of developmental effects such as reduced birth weight
and smaller head and skull circumference when compared to
controls.6

     Exposures related to routine emissions of HAPs may be acute
(isolated or repeated events) or continuous in nature.  Most
commonly, populations are exposed to more than one pollutant at a
given time.  Consideration must be given to potential additive,
synergistic, or antagonistic effects resulting from exposures to
chemical mixtures.  Adverse effects resulting from these
exposures may be reversible or irreversible depending upon the
magnitude of che exposurs and che mecnanism c-f action eliciting
-he effect.  A wide range of responses may be seen from mild
irritation to mortalicy.

     For the 149 HAPs covered under the HON, evidence on the
potential toxicity of the pollutants varies tremendously. Given
sufficient exposure conditions, ail of these pollutants have che
potential to elicit adverse health or environmental effects in
the exposed .populations.  It can be expected that emission
reductions achieved through the HON regulation will decrease the
incidence of adverse health effects.

     3.2.2     Welfare Benefits of deduction in Hazardous \ir
               Pollutants

Environmental Impacts


                               8-5

-------
     Emissions of hazardous air pollutants may also bring about
adverse, non-human biological effects such as ecosystem and
recreational and commercial fishery impacts.  Atmospheric
deposition of toxics is believed to significantly contribute to
the presence of hazardous compounds in the environment.  The
presence of toxic compounds in relatively pristine areas and
around large point sources such as smelters provides a strong
linkage between long and short-range transport of HAPs and the
bioaccumulation of these compounds in terrestrial and aquatic
systems.  For example, atmospheric loading is estimated to
account for approximately 80 - 90% of all pollutant inputs to the
upper Great Lakes, an area considered relatively pristine and
with few major sources of toxics.  Similarly, short-range
atmospheric deposition is thought to be responsible for 90 - 99%
of lead inputs to the mid-lower Chesapeake Bay.7

     Hazardous air pollutants may be directly harmful to
organisms due to their presence in the ambient air.  For example,
experts believe that major declines in the lichen flora of urban
and industrial areas worldwide are caused by atmospherically-
derived metals and gaseous phytotoxicants.s

     Atmospheric deposition of HAPs directly to land may affect
terrestrial ecosytems.  For example, there is documented evidence
of terrestrial ecosystem impacts such as plant toxicity, changes
in species composition, bioaccumulation, and inhibition of enzyme
activity due primarily to atmospherically-derived metals .  These
effects may result in the loss of sensitive species and declines
in ecosystem productivity.9   Specifically, there  is  evidence  of
impacts on mammal populations near to and downstream of a mining-
smelting complex in northern Idaho.  Population declines in mink,
muskrat, and other small mammals are believed to be due to the
direct toxicity of atmospherically-derived metals as well as
secondary effects on cover and food supply.10

     Atmospheric deposition of HAPs also contributes to adverse
aquaeic ecosystem effects.  Much, of che documentation on che
aquatic impacts of HAPs has focused on tne Great: Lakes.  Many of
the HAPs deposited to the Great Lakes are persistent toxics chat,
through the process of biomagnification, tend to accumulate in
toxic concentrations in the tissues of species high on the food
chain.  This not only has adverse implications for individual
wildlife species and ecosystems as a whole,  but also the humans
who may ingest contaminated fish and waterfowl.  The Great Lakes
is the largest freshwater fishery in the world.  In 1985, more
than 4 million people fished in the Great Lakes basin.11
Recreational and commercial fishing is estimated to be worth $4.2
billion annually.12  High tissue contaminant levels, however, have
forced tne closure of some commercial fisheries and the issuance
of fish advisories for some recreational fish species.
Therefore, atmospheric deposition of HAPs to the Great Lakes may


                                8-6

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impose significant costs to the area's recreational  and
commercial fishing industries.

     Toxic pollutants in the Great Lakes ecosystem are  believed
to be responsible for a number of specific problems  in  organisms
at the top of the Great Lakes food web such as the following13:

     o    reproductive problems and population decline
     o    metabolic changes
     o    birth deformities
     o    hormonal changes
     o    tumors
     o    generational effects
     o    behavioral changes.

Additionally, large increases (outside normal variation for
vertebrate species) in the populations of cormorants and ring-
billed gull indicate the occurrence of fundamental changes in the
balance of the Great Lakes ecosystem.14  Experts believe that
these ecosystem changes are indirectly due to the  presence of
toxic compounds in the Great Lakes ecosystem.

     The extent to which other ecosystems outside  of the Great
Lakes are adversely impacted by hazardous air pollutants is not
yet known, although toxics loading appears significant.   For
example, loadings to the Chesapeake Bay are at least as high or
higher than loadings to the Great Lakes on a per unit area basis.
Because there is a proportionally larger watershed around the
Chesapeake Bay than the Great Lakes,  there is greater potential
for indirect loading of HAP's into the Chesapeake  Bay.    In
general, HAP emission reductions achieved through  the HON should
reduce the associated adverse environmental impacts.

Additional Welfare Effects

     There is evidence of ;nater:.ais damage chat may occur as a
result of emissions of hazardous air pollutants.   Acidic
compounds may corrode or decay metals, stone, and  automotive
finishes.13  Additionally, odor chreshold concentrations have been
reported for a number of hazardous air pollutants.16  However,
without site specific air quality modeling, it is  not known the
extent zo which ambient concentrations of these air coxic
compounds exceed che odor threshold level.

3.3 Ozone Benefits

     8.3.1     Health Benefits oŁ Reduction in J^Tnh>i6nt  Ozone
               Concentration

     Ozone benefits may be attributable to this regulation as
ozone is a product of VOC and nitrogen oxide emissions  reacting


                               8-7

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in the presence of sunlight.  VOCs are a major pollutant for
those sources/processes that will be regulated under HON.
Consequently,  reductions in the emissions of VOCs will also lead
to reductions  in the types of health and welfare impacts that are
associated with elevated concentrations of ozone.

     Approximately 47.7 million people live in nonattainment
areas (classified as marginal, moderate, serious, severe and
extreme)  that  contain a HON process unit and are potentially
exposed to ozone levels above the standard.  VOC emissions from
HON process units therefore may contribute to some degree to the
adverse health effects experienced by exposed individuals in
those nonattainment areas.  Furthermore, it is estimated that'
approximately  57% of the VOC reductions achieved by the HON may
occur in ozone nonattainment areas.

     There are sensitive subpopulations that are more at risk of
adverse health effects from elevated ozone concentrations.  These
groups include people with the following conditions17:

     o    chronic bronchitis  (3.5 percent of US population);
     o    asthma (3.5 - 5 percent of US population);
     o    allergies (7 percent of US population);
     o    emphysema (1 percent of US population);
     o    any  individual exercising heavily during ozone
          exposure. Heavy exercise increases breathing frequency
          and  depth of breathing resulting in a larger ozone dose
          to lungs and deeper penetration of ozone to the most
          sensitive lung tissue.

The health effects associated with increased ambient ozone
concentrations have been well documented in EPA's recent review
of the ozone standard and presented in.the Office of Air Quality
Planning and Standards Staff Paper on ozone.  The major ozone
health effects of concern to health scientists are the
following13:

     o    Alterations in Pulmonary Function - modifications in
          such pulmonary measurements as forced expiratory
          volume, total lung capacity, and breathing frequency;
     o    Symptomatic Effects - eye, nose and throat irritation,
          chest discomfort, cough, headache, chest pain on deep
          inspiration, chest tightness, wheezing, lassitude,
          malaise and nausea;
     o    Exercise Performance -  reduced workload and
          performance;
     o    Bronchial Reactivity - increased sensitivity of airway
          to agents such as histamines with subsequent initiation
          of-an inflammatorv  response:
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          Aggravation of Existing Respiratory Disease  -
          aggravation of existing asthma, chronic bronchitis  or
          emphysema conditions;
          Morphological Effects - occurrence of lesions  in  lung
          tissue of exposed animals;
          Altered Host Defense System - alteration of  host
          defense system rendering sensitivity to respiratory
          infection;
          Extrapulmonary Effects - blood enzyme, central nervous
          system, liver, endocrine, cardiovascular,  reproductive
          and teratological effects.
     8.3.2     Welfare Benefits from Reduction in A"»fr^ t»nt Ozone
               Concentration

     Elevated concentrations of ambient ozone are also associated
with adverse welfare (non-health)  impacts.  The welfare effects
of concern are the following19:

     o    decreased worker productivity;
     o    crop damage resulting in yield losses and undesirable
          quality effects20;
     o    forest damage manifested as growth retardation or
          foliar injury;
     o    materials damage of elastomers, textile fibers, dyes,
          and paints .

     Reduction of VOCs through the HON regulation is another
mechanism - in addition to Title I and II control measures - by
which the ambient ozone concentration may be reduced and in turn
reduce the incidence of the adverse health and welfare effects
discussed above.

8.4  Farticulate Matter Benefits

     In addition co acting as precursors zo ozone formation. 70C
emissions may also condense or react: co generaca secondarily-
formed aerosols, elevating ambient concentrations of particuiate
matter (PM) .   Based on available conversion factors,
approximately 1 to 2 percent of VOC emissions condense or react
to form secondary particulate matter.  The 949,000 Mg of VOC
emissions reduction under trie HON will therefore cause a
reduction of 9,490 Mg to 18,380 Mg of secondary ?M formation.
These particles are respirable and contribute to impairment of
visibility.

     PM- related health effects include chronic and acute
morbidity and mortality.  ?M- related welfare impacts encompass
soiling and materials damage and climate and visibility effect.::
Therefore by reducing VOC emissions, decreases in the adverse
                               8-9

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health and welfare effects associated with elevated PM
concentrations may be achieved.

8.5  Additional Benefits

     There are additional benefits that may be attributable to
the HON regulation above and beyond the direct use value as
represented by the health and welfare benefits associated with
HAP reductions as discussed above.  Theoretical analysis of the
value of non-market environmental amenities (i.e. air quality,
visibility) or disamenities (i.e. Superfund sites, nuclear power
plants) has led to the decomposition of willingness to pay into
several components.  One important distinction relevant to the
HON that is made in the literature is that some portion of the
value one places on air toxics reductions is related to one's own
exposure to air toxics while some portion of the value may not be
related to one's own exposure to air toxics.  Use values are the
values associated with an individual's desire to avoid his or her
own exposure to an environmental risk, or in the case of the HON,
toxic air pollutants.  Non-use values are values an individual
may have for lowering the concentration of toxic air pollution or
level of risk unrelated to his or her own exposure.  Non-use
values may be related to the desire that a clean environment be
available for the use of others now and in the future, or may be
related to the desire to know that the resource is being
preserved for its own sake, regardless of human use.

       Several different categories of use and non-use values
have been developed and rigorously defined in the literature.22
These include:

     o    Option price.  Option price is a measure of total value
          that reflects uncertainty regarding future use of a
          resource.  It equals the expected value of current and
          future use plus a risk premium, which may be positive,
          negative, or zero.  The risk premium is related to
          uncertainty regarding desired future ase and .its sign
           (positive or negative) depends on whether che
          individual prefers to err toward preserving che
          resource  (reduced-toxic atmosphere)  that may not be
          wanted for use in the future, or toward losing the
          resource that may be wanted for use in the future.  The
          risk premium associated with option prica is referred
          to as option value.

     o    Bequest value.  This is the component of non-use value
          that is related to the use of the resource by others
          now and in the future.  This value is typically thought
          of as altruistic in nature.  Bequest value may be more
          significant to the HON regulacion wnen considering che
          value an individual may have to reduce the risk of air


                               8-10

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          pollutant exposure to others  (outside of one's  family
          and friends) now living rather than future generations.

     o    Existence value.  This is the component of non-use
          value that is related to preservation of the resource
          for its own sake, even if there is no human use of the
          resource.  In practice, bequest and existence values
          are difficult to distinguish and are often together
          referred to as existence value.  In the case of the HON
          regulation, existence value would incorporate an
          individual's willingness to pay for the preservation of
          a reduced-toxic atmosphere.

     These value categories may apply to changes in the quality
of a resource.  Freeman explicitly included this in his
analysis.23.  With air emissions under the HON regulation,  the
issue is typically the concentration of air emissions to  which
people are exposed, not whether or not any emissions exist at
all.  These value categories may also be components of the total
use and non-use values of a reduction in ambient ozone and PM
concentrations that may also be achieved through the HON.

     Option price differs from use value because it is an ex ante
measure rather than an ex post measure of value related to
exposure.  As the ex ante measure, option price is the
appropriate measure for analysis of proposed regulatory decisions'
that may affect the availability or quality of a resource.
Option price may differ from use value due to differences between
expected and actual use of the resource as well as due to any
risk premium.

8.6 Conclusion

     Because of various limitations, the benefits associated with
che HON regulation have not been monetized.  However, there are
health and welfare improvements that: could be gained through a
reduction in air pollutants regulated unaer HON ~hat nave been
qualitatively discussed.  In summary, air toxic reductions may
reduce mortality and morbidity from exposure directly co  HAP's
and secondary PM.  Similarly, VOC reductions in ozone
nonattainment areas will decrease ambient concentrations  of ozone
and therefore reduce morbidity effacts.  Because approximately
47.7 million people reside in ozone nonattainment areas with at
least one HON process unit, any decrease in ambient ozone
concentrations as a result of HON control will directly benefit
these individuals.  In fact, ±z is escimatad that approximacaly
57% of the VOC reductions achieved by the HON will occur  in ozone
nonattainment areas.  Human welfare benefits from HON control may
include improvements in worker productivity and a -decrease -n
odors.
                               8-11

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     The HON regulation may also result in beneficial biological
effects such as agricultural crop yield increases, and beneficial
forestry,  fishing, and ecosystem impacts.  A decrease in soiling
and materials damage is another potential benefit of this
rulemaking.   Climate and visibility may also be improved through
decreases in secondary PM associated with HAP reductions.

     Finally, potential benefits from the HON regulation may also
include existence value, bequest value, and components of option
nrice.
price.
                               8-12

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References

1.   ICF, Inc. "Focus Chemicals for the Clean Air Act Amendments
     Great Waters Study."  Draft Report.  Prepare for Office of
     Air Quality Planning and Standards, U.S. Environmental
     Protection Agency, Research Triangle Park, NC.  August 1991.

2.   U.S. EPA, Offices of Air and Radiation and Policy Planning
     and Evaluation.  The Air Toxics Problem in the United
     States:  An Analysis of Cancer Risks for Selected
     Pollutants.  EPA 450/1-85-001.  May 1985.

3.   Office of Air Quality Planning and Standards, Cancer Risk
     From Outdoor Exposure to Air Toxics.  EPA-450/l-90-004a.
     U.S. Environmental Protection Agency, Research Triangle
     Park, NC.  September 1990.

4.   Office of Air Quality Planning and Standards. Toxic Air
     Pollutant and Noncancer Health Risksr  Screening Studies.
     External Review Draft. U.S. Environmental Protection Agency,
     Research Triangle Park, NC.  September 1990.

5.   U.S. EPA.  Air Risk Information Support Center.  Glossary of
     Terms Related to Health, Exposure, and Risk Assessment.
     EPA/450/3-88/016.  March 1989.

6.   Colborn, Theordora E. Great Lakes Great Legacy?  The
     Conservation Foundation and The Institute for Research on
     Public Policy, Washington, DC. 1990. pp. 172-173.

7.   ICF, Inc.  Atmospheric Deposition of Toxic Chemicals to
     Surface Waters:  Identification and Summary of Recent
     Literature.  Draft Report.  Prepared for Office of Air
     Quality Planning and Standards, U.S. Environmental
     Protection Agency, Research Triangle ParK, NC.  August 1391.
     p. 3S-7.

8.   Ref. 13, p. ES-10.

9.   Ref. 13, p. ES-10.

10.  Ref. 13, p. ES-12.

11*  2nvironment Canada.  Toxic Chemicals in the Great: Lakes and
     Associated Effects.  Toronto, Ontario.  March 1991.

12.  Personal Communication wicii .-Jayne "Gilford, Jreac Lajces
     National Program Office, U.S. EPA.  January 1992.
                               8-13

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13.  Ref. 17.

14.  Ref. 12,  pp.  132-140.

15.  U.S. National Acid Precipitation Assessment Program.  Acidic
     Deposition:   State of Science and Technology, Volume III,
     Terrestrial,  Materials, Health and Visibility Effects. 1991.

16.  Office of Research and Development. Reference Guide to Odor
     Thresholds for Hazardous Air Pollutants Listed in the Clean
     Air Act Amendments of 1990. EPA/600/R-92/047. March 1992.

17.  Environmental Criteria and Assessment Office.  Air Quality
     Criteria for Ozone and Other Photochemical Oxidants.  U.S.
     Environmental Protection Agency, Research Triangle Park, NC.
     1986.

     Office of Air Quality Planning and Standards, "Summary of
     Selected New Information on Effects of Ozone on Health and
     Vegetation:   Draft Supplement to Air Quality Criteria for
     Ozone and Other Photochemical Oxidants," U.S. Environmental
     Protection Agency, Research Triangle Park, NC. November
     1988.

18.  Ref. 4.

19.  Adams, R.M.,  et. al.  The Economic Effects of Ozone on
     Agriculture.   Office of Research and Development, U.S.
     Environmental Protection Agency, Corvallis, OR.  EPA-600/3-
     84-090.  1984.

20.  Shortle,  James S., et. al, "Economic Assessment of Crop
     Damages Due to Air Pollution:  The Role of Quality Effects."
     Environmental Pollution 53:377-385.  1988.

21.  Office of Air Quality Planning and Standards, "Regulatory
     Impact: Analysis of the National Ambient: Air Quality Standard.
     for Particulate Matter,1' U.S. Environmental Protection
     Agency, Research Triangle Park, NC. December 1983.

22.  Office of Air Quality Planning and Standards, Regulatory
     Impact Analysis of a Revision of the Federal Implementation
     Plan for the State of Arizona to Include SO2 Controls for
     the Navajo Generating Station, U.S. Environmental Protection
     Agency, Research Triangle Park, NC. January 1991.

23.  Freeman,  A.M., III.  "Non-use Values in Natural Resource
     Damage Assessment."  Paper prepared for the Resources for
     "he Future Conference on Assessing Natural Resource Damages -
     Washington,  B.C., June IS-17, 1988.
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CHAPTER 9

BENEFIT-COST ANALYSIS

9.1  Introduction

     This chapter provides an illustration of  the  economic
efficiency framework for evaluating regulatory options  under the
promulgated HON rulemaking.  Unfortunately data paucities and
time constraints preclude a formal quantification  of  the
allocative efficiency aspects of this rule.

     This chapter also identifies the overlap  of the  HON
rulemaking with VOC emission reduction requirements for ozone
nonattainment areas.  The complementarity of these regulatory
requirements may result in control cost savings in these areas.

9.2   Economic Efficiency Considerations

     The adoption and implementation of air toxics regulations is
not free.  There is a reallocation of society's resources to
address the negative spillover of air pollution.   In  the course
of internalizing the air pollution externality,  the cost of
•reducing emissions through the HON rulemaking  is reflected in the
production, distribution, and consumption of synthetic  organic
chemicals.  This additional cost is in contrast to the
improvement in society's well being from a cleaner environment
and. concomitant reductions in adverse health effects  and other
risks.

     As displayed in Figure 9.1, the existence of  a regulation to
internalize the air pollution externality does not guarantee an
allocatively efficient outcome.  An allocatively efficient
regulation maximizes the net benefits to society.  In a
mathematical sense, allocative efficiency requires chat the
marginal benefits of the rule be equal to the  marginal  cose  and
than marginal coses are rising at a rate greater trian marginal
benefits.

     Because of the inability to compare in a  quantitative sense
both the benefits and the costs of the regulatory  alternatives,
the economic efficiency aspects of this rule cannot be  assessed.

9.3   Cost-Effectiveness of HON VOC Emission Reductions in
      Ozone Honactairunent Areas

     Environmental quality enhancement programs are not always
independent of one another.  In the course of  accomplishing  the
objectives of Title III unrough tne HON requirements, tne
regulation also reduces emissions of ozone precursors (VOC's) in
ozone nonattainment areas.  In the year 1996,  HON  VOC emission
reductions for the most stringent regulatory option  (TIC) are

                               9-1

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Figure 9.1  Optimal Regulation
      and Net Benefit Levels
 $
    Positive Net
    Benefits
                               Total Cost
                                        Negative Net
                                        Benefits
                           Optimal Regulation Level
                       Q*   HON VOC Emission Reductions
                             Marginal Costs

      Marginal Bsnafrts
                           Optimal Regulation Lavei
                        Q*    HON VOC Emission Reductions

-------
estimated to be 56 percent of the total VOC emission reductions
required in nonattainment areas (classified as marginal,
moderate, serious, severe, and extreme) for the ozone NAAQS.

     Some of the VOC emission reductions for ozone nonattainment
areas are achieved through nondiscretionary control measures.
Some of these control measures include VOC emission reduction
requirements based on new control techniques guidelines
documents.  One of the source categories for these new documents
is the SOCMI.  Consequently, there is some overlap between  the
HON VOC emission reductions and those reductions from
nondiscretionary control requirements for ozone nonattainment
areas.

     There are additional VOC emission reductions from the  HON
rulemalcing that will occur in moderate, serious, severe and
extreme ozone nonattainment areas.  Further emission reductions
are required in these areas; however, the means of achieving
these additional VOC emission reductions is discretionary.
Consequently, the prudent regulatory authority may use the
additional VOC emission reductions from the HON rules to replace
the emission reductions from high cost discretionary controls.
This replacement may result in a "savings" or avoided cost  of the
discretionary controls that are replaced by HON controls.

     For example, the average cost of the HON VOC emission
reductions for total industry control in nonattainment areas is
estimated at $1,061 per Mg.  The average cost of discretionary
controls in the moderate, serious, severe, and extreme
nonattainment areas is estimated to be $4,540 per Mg.1  If  a
megagram of HON-VOC emission reductions replaced a $4,540
discretionary control measure megagram, the savings would be
$3,479.  This is a potential control cost savings of nearly 77
percent.

     The exact amount of savings resulting from the HON rule
cannot be calculated, aue co uncertainties regaraing crie potential
overlap of emission reductions resulting from rules derived from
the control techniques guidelines documents for SOCMI sources and.
the HON rulemaking.

9.4 Conclusion

     The economic efficiency aspects of HON regulatory options
cannot be assessed because of the inability to quantify the
benefits associated witn the rule.

     There is overlap between the emission reductions and
environmental 'quality ennancement objectives of the noiaactaimnent
and air toxics titles of the Clean Air Act.  This overlap may
                               9-2

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result in a potential cost savings in selected ozone
nonattainment areas.
                               9-3

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References

1.  E.H. Pechan and Associates, Inc., "Ozone Nonattainment
Analysis Clean Air Amendments of 1990,"- report for Office of Air
Quality Planning and Standards, U.S. Environmental Protection
Agency, Research Triangle Park, NC. September 1991.
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