Economic Impact Analysis
for the Proposed
Polyether Polyols NESHAP
U.S. Environmental Protection Agency
Office of Air Quality Planning and Standards
Research Triangle Park, NC 27711
Document No. EPA-453/R-97-013
May 1997
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Disclaimer
This report is issued by the Innovative Strategies and Economics
Group of the Office of Air Quality Planning and Standards of the
Environmental Protection Agency. It presents a technical
analysis of the economic impacts associated with the proposed
National Emission Standard for Hazardous Air Pollutants (NESHAP)
for Polyether Polyols. Mention of trade names and commercial
products is not intended to constitute endorsement or
recommendation for use. Copies of this report and other materials
supporting the proposal are in Docket 453/R97-013 at EPA's Air
and Radiation Docket and Information Center, Waterside Mall, Room
M1500, Central Mall, 401 M. Street SW, Washington, D.C. 20460.
The EPA may charge a reasonable fee for copying. Copies are also
available through the National Technical Information Services,
5285 Port Royal Road, Springfield, Virginia 22161. Federal
employees, current contractors and grantees, and other non-profit
organizations may obtain copies from the Library Services Office
(MD-35), U.S. Environmental Protection Agency; Research Triangle
Park, NC 27711; telephone number (919) 541-2777.
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TABLE OF CONTENTS
Section Page
List of Figures v
List of Tables vi
1 Introduction 1-1
2 Production and Supply of Polyether Polyols 2-1
2.1 Overview of the Plastics Industry 2-1
2.2 Material Inputs 2-2
2.3 Production Processes 2-3
2.4 National Output of Polyether Polyols 2-5
2.5 Polyether Polyol Production Facilities 2-6
2.6 Estimated Domestic Production of Polyether
Polyols in 1996 2-7
3 Demand and Consumption of Polyether Polyols 3-1
3.1 Product Characteristics 3-2
3.2 Uses and Consumers 3-2
3.3 Substitutability 3-4
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TABLE OF CONTENTS (CONTINUED)
Section Page
4 Industry Organization 4-1
4.1 Market Structure 4-1
4.2 Manufacturing Facilities 4-1
4.2.1 Locations 4-1
4.2.2 Employment 4-3
4.2.3 Sales of Affected Products 4-3
4.3 Companies Owning Polyether Polyol Facilities 4-5
5 The Polyether Polyols NESHAP 5-1
5.1 Emission Controls 5-1
5.2 Costs of Complying with Proposed Emissions
Controls 5-5
6 Economic Impacts of the Polyether Polyol NESHAP 6-1
6.1 Facility Impacts 6-1
6.2 Company Impacts 6-5
6.3 Conclusions 6-7
References R-l
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LIST OF FIGURES
Number Page
1-1 Ether Linkages and Hydroxyl Groups 1-2
2-1 The Plastics Manufacturing Industry 2-3
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LIST OF TABLES
Number Page
2-1 Employment and Production in the Plastics
Materials and Resins Industry (SIC 2821) 2-4
2-2 Production of Polyether Polyols, 1983-1993 2-6
2-3 Facilities Producing Polyether Polyols 2-8
2-4 Capacity and Production Statistics by Model
Plant Category 2-12
3-1 Sales and Captive Use of Polyether Polyols 3-1
4-1 Polyether Polyol Production Facilities by State. . . . 4-2
4-2 Facility Employment by Model Plant Category 4-3
4-3 Prices for Polyether Polyols 4-5
4-4 Estimated Sales Revenues of Polyether Polyols
by Model Plant Category 4-6
4-5 Distribution of Company Employment 4-8
4-6 Distribution of Sales Revenues 4-8
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5-1 Summary of Level of Proposed Standards for
Existing Sources 5-3
5-2 Summary of Level of Proposed Standards for
New Sources 5-4
5-3 Estimated Control Costs by Model Plant Category. . . . 5-6
5-4 Total Nationwide Cost of Control for the Polyether
Polyols NESHAP 5-8
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LIST OF TABLES (CONTINUED)
Number Page
6-1 Descriptive Statistics of Facility Impacts of
Proposed Polyether Polyol NESHAP 6-3
6-2 Frequency Distribution: Total Annual Compliance
Cost/Facility Sales by Model Plant Category 6-4
6-3 Frequency Distribution: Company TAC as a Share
of Company Sales: All Companies 6-6
6-4 Frequency Distribution: Company TAC as a Share
of Company Sales: Small Companies 6-6
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SECTION 1
INTRODUCTION
Production of polyether polyols can result in the emission of
hazardous air pollutants (HAP), including ethylene oxide,
propylene oxide, and other oxides, as well as hydrogen fluoride,
hexane, and toluene.1 Currently, the Environmental Protection
Agency (EPA or the Agency) is developing a National Emissions
Standard for Hazardous Air Pollutants (NESHAP) under Section 112
of the Clean Air Act Amendments of 1990 to limit HAP emissions
from the production of polyether polyols. The Agency is excluding
from this rulemaking materials regulated as glycols or glycol
ethers under the Hazardous Organic NESHAP (HON).2
Polyether polyols are a class of organic chemicals that
contain multiple ether linkages (polyether) and have multiple
hydroxyl groups as terminal functional groups (polyol). Figure 1
illustrates the chemical structure. Within the plastics
industry, polyether polyols are classified as thermoset resins.
Thermoset resins are capable of becoming permanently rigid when
heated or cured. Polyether polyols are generally produced as
intermediate goods; that is, they are products that are inputs
into the production of other products.
1-1
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Ether linkage:
C - 0 - C
Hydroxyl group:
0 - H
where C is carbon, 0 is oxygen, H is hydrogen, and
the dashes represent molecular bonds between the
atoms of these elements in a chemical compound.
Figure 1-1. Ether Linkages and Hydroxyl Groups
The majority of polyether polyols are used for manufacturing
urethanes; other end uses include surface-active agents,
functional fluids, and synthetic lubricants. This industry
profile focuses on polyether polyols for urethane production.
This group of polyols includes four main chemical
types: polypropylene glycol, glycerin adducts of propylene
oxide, other propylene oxide-based adducts, and
polytetramethylene ether glycol (PTMEG).3
World capacity for polyether polyols for urethanes was
approximately 8.5 billion pounds at the beginning of 1994. The
U.S. accounted for 34 percent of 1994 world capacity. Polyether
polyols are also produced in Western Europe, Japan, Canada,
Mexico, the Republic of Korea, Taiwan, South America, and the
People's Republic of China.4 In 1992, polyether polyols
production represented 69 percent of worldwide capacity.5 Over
1-2
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the period 1992 to 1997, consumption of polyether polyols is
projected by SRI International to increase by 3.2 percent in
Japan, by 2.7 percent in the U.S., and by 2.5 percent in Europe.6
In this report, the Agency profiles the industry, including
conditions of production and supply, conditions of demand and
consumption, and the organization of the industry. The Agency
then analyzes the potential economic impacts of the regulation on
affected facilities.
1-3
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SECTION 2
PRODUCTION AND SUPPLY OF POLYETHER POLYOLS
Polyether polyols are a class of polymers characterized by
multiple ethers and multiple terminal hydroxyl groups. They fall
into the class of thermosetting resins, or plastics. Manufacture
of polyether polyols is a precursor to the production of various
plastics, most notably polyurethanes. Plastics can be defined as
materials comprising synthetic polymers of high molecular weight
that, when shaped by flow (pressure and heat), become solid in
their finished state.7
2.1 OVERVIEW OF THE PLASTICS INDUSTRY
The manufacture of plastics materials and resins is classified
under SIC code 2821 as part of the Chemicals Industry, SIC code
28. In 1987, the value of shipments of plastics materials and
resins constituted 13.2 percent of the value of shipments for the
chemical industry and 34 percent of the value of shipments for
the plastics industry.8 The plastics industry also includes the
next manufacturing step, compounding or formulating, followed by
processing, which converts plastics materials into usable
products or forms. Processed plastics products are classified as
Miscellaneous Plastics Products (SIC 3080), within the Rubber and
Miscellaneous Plastics Products industry, SIC 30.
Manufacture of plastic products is basically a three-step
process. First, the basic resin or polymer is produced from
2-1
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various chemical compounds; this process is called synthesis.
Then, the resin is mixed with other materials to produce an
intermediate compound with particular characteristics; this is
called formulation. Third, in the processing step, the plastics
compounds are processed into products or forms by using heat
and/or pressure. Plastics materials are obtained from about 300
basic material suppliers operating nearly 500 plants and 175
independent compounders/concentrators. Processing is done by
• facilities of manufacturers of other end products (59
percent of total volume),
• independent processors of proprietary and custom products
(36 percent), and
• basic materials suppliers and suppliers of plastics
processing equipment (5 percent).9
Figure 2-1 shows the relationship between plastic polymer
producers, compounders, and processors.10
Polyether polyols are produced in the first, basic production
step of the production process. As noted above, the production
of polyether polyols is part of SIC 2821, Plastics Materials and
Resins. Table 2-1 shows historical data on the production of
this SIC code.11
2.2 MATERIAL INPUTS
Polyether polyols are manufactured by reacting a cyclic ether
with an initiator. The cyclic ether is generally
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PostScript Printers Only
Figure 2-1. The Plastics Manufacturing Industry.
ethylene oxide, propylene oxide, or tetrahydrofuran. The
initiator may be water, propylene glycol, ethylene glycol,
glycerin, trimethylolethane, trimethylolpropane, or other
materials.
PRODUCTION PROCESSES
Polyether polyols are manufactured through chemical reactions
in which cyclic ethers (oxides), such as ethylene oxide,
propylene oxide (PO), or tetrahydrofuran (THE), react with active
hydrogen-containing compounds (initiators), such as glycerine,
water, or ethylene or propylene glycol, in the presence of a base
catalyst such as potassium hydroxide. A
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TABLE 2-1. EMPLOYMENT AND PRODUCTION IN THE PLASTICS MATERIALS
AND RESINS INDUSTRY (SIC 2821)
Year
1
977
1978
1979
1
1
1
1
1
1
1
1
1
1
1
1
1
980
981
982
983
984
985
986
987
988
989
990
991
992
Employment
(103)
57
57
60
58
57
54
53
54
55
54
56
58
62
62
60
60
.2
.6
.3
.8
.7
.7
.2
.2
.4
.7
.3
.3
.4
.5
.4
Value of Shipments
($106)
10,
11,
14,
14,
16,
15,
18,
20,
20,
21,
26,
32,
33,
31,
29,
31,
818.2
997.5
282.4
908.2
675.5
769.2
935.8
776.3
261.8
483.7
245.5
109.8
256.7
325.8
565.8
303.9
Source: U.S. Department of Commerce. 1992 Census of Manufactures. Industry
Series. Industry 2821, p. 28.
wide variety of compositions of varying structures, chain
lengths, and molecular weights is theoretically possible.12
Polyether polyols can be subdivided, based on the cyclic ether
from which they are made, into two groups: polyols based on PO
and polyols based on THF. Polyether polyols based on PO are
produced by chemical reactions of PO with an initiator compound
2-4
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having active hydrogen groups (e.g., -OH or -NH where 0 is
oxygen, H is hydrogen, and N is nitrogen), in the presence of a
base catalyst. The initiator used depends on the type of
polyurethane that the polyol will be used to produce. Typically,
the reaction is carried out by discontinuous batch processes, at
elevated pressures and temperatures, and under an inert
atmosphere. When the desired degree of polymerization has
occurred, the catalyst is neutralized and filtered out. Then the
polyol is purified and desired additives are incorporated. Types
of polyether polyols based on PO include polypropylene glycol,
polyol adducts, block copolymers, polyurea polyols, and polymer
polyols.
Polytetramethylene ether glycol (PTMEG) of different molecular
weights is manufactured by the polymerization of THF using a
Lewis acid catalyst. PTMEG may be a liquid or a waxy solid,
depending on its molecular weight. PTMEG is used to manufacture
polyurethane elastomers and spandex fibers.
2.4 NATIONAL OUTPUT OF POLYETHER POLYOLS
Seventy-nine facilities in the United States produce polyether
polyols. Of the 79 facilities, 72 are anticipated to be impacted
by the regulation. Data from the Society of the Plastics
Industry (SPI), shown in Table 2-2, indicate that more than 2.1
billion pounds of polyether polyols were produced in the U.S. in
1993.13
Over the 10-year period shown in the table, domestic U.S.
production of polyether polyols increased from approximately
2-5
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TABLE 2-2. PRODUCTION OF POLYETHER POLYOLS, 1983-1993
Production of Polyether Polyols
Year (106 Ibs . )
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1,
1,
1,
1,
1,
1,
1,
1,
1,
1,
2,
296
347
391
452
626
872
808
788
769
838
144
Source: Society of the Plastics Industry. Facts & Figures of the U.S.
Plastics Industry. Washington, DC, Society of the Plastics
Industry. 1994. p. 52.
1.3 billion pounds per year to approximately 2.1 billion pounds,
an increase of approximately 65 percent.
2.5 POLYETHER POLYOL PRODUCTION FACILITIES
The EPA has identified 79 facilities in the U.S. that produce
polyether polyols and will be affected by the regulation. Of the
79 facilities producing polyether polyols, 7 have been determined
by the Agency to be area sources and these facilities will not be
affected by the rule. For this reason, these facilities are
omitted from the industry profile and impacts analysis contained
in the remainder of this report. Table 2-3 lists these
2-6
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facilities by model plant category. The category or categories
of polyether polyols produced at each plant, defined in terms of
demanding sector are also shown in Table 2-3.
2.6 ESTIMATED DOMESTIC PRODUCTION OF POLYETHER POLYOLS IN
1996
Data for facility-specific production of polyether polyols are
generally not available. The Agency, with SPI, issued an
Information Collection Request (ICR), that collected capacity and
production data from 12 facilities. Actual production data for
the 12 facilities were used to estimate annual revenues for these
facilities and to estimate capacity utilization for the remaining
facilities that produce polyether polyols domestically.
Production capacity data were available for 17 additional
facilities from the Chemical Economics Handbook (CEH) .14<15<16
Based on the capacity and production data for the 12 facilities
and the production capacity data from the CEH, production was
estimated for the 72 facilities producing polyether polyols in
the U.S. that will be affected by the regulation. For 42 of the
72 facilities, capacity data were unavailable. The EPA assumed
the median capacity for each model plant category based on the
CIR and CEH capacity data available. Production estimates were
derived for each model plant category using three alternative
assumptions regarding capacity utilization rates: (1) randomly
assigned capacity utilization, (2) mean capacity utilization, and
(3) median capacity utilization. The data imputation necessary
to estimate production for the randomly assigned capacity
utilization approach involved the following steps:
2-7
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TABLE 2-3. FACILITIES PRODUCING POLYETHER POLYOLS
Plant
ABITEC
Akcros
Chemicals
Amerchol
Arco
ARCO
ARCO
Baker
Baker
Baker
BASF
BASF
BASF
BASF
Brin-mont
Calgene
Carpenter
CasChem
Croda
Dexter
Chemical
Dow
Dow
DUPONT
Eastern
Color
Eastman
Eastman
Emkay
Chemical
Exxon
Gresco Mfg.
Harcros
Organics
City
Janesville
New Brunswick
Edison
Channelview
Charleston
Institute
Sand Springs
Santa Fe
Springs
Dayton
Washington
Wyandotte
Spartansburg
Geismar
Greensboro
Skokie
Pasadena
Bayonne
Mill Hall
Bronx
Freeport
Midland
Niagara Falls
Providence
Greensboro
Conroe
Elizabeth
Houston
Thomasville
Kansas City
State
WI
NJ
NJ
TX
WV
WV
OK
CA
TX
NJ
MI
SC
LA
NC
IL
TX
NJ
PA
NY
TX
MI
NY
RI
NC
TX
NJ
TX
NC
KS
Model Plant
Category
Large
Large
Large
Large
Large
Catalyst
Large
Small
Catalyst
Catalyst
Small
Small
Catalyst
Area
Small
Large
Large
Catalyst
Area
Large
Small
Small
Large
Catalyst
Catalyst
Area
Large
Area
Small
Non- Surfac-
Urethane urethane tants
X
X
X
X
X
X
X
X
X
X X
X
X
X
X X
X
X
X
X
X X
X
X
X
X
X
X
X
X
X
(continued)
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TABLE 2-3. FACILITIES PRODUCING POLYETHER POLYOLS (CONTINUED)
Plant
Henkel
Henkel
Henkel
Heterene
Chemical
High Point
Chemical
Hoechst
Celanese
Huntsman
Huntsman
ICI
Index
Lonza
Lonza
Miles
Miles
Mllliken
Nalco
Nalco
Nalco/Exxon
Nalco/Exxon
Olin
Ortec
Petrolite
Petrolite
Chemicals
Group
PPG
QO
Chemicals
Rhone-
Poulenc
Rhone-
Poulenc
Rhone-
Poulenc
City
Hoboken
Charlotte
Mauldin
Paterson
High Point
Mount Holly
Port Neches
Conroe
Geismar
Philadelphia
Williamsport
Long Beach
Baytown
New
Martinsville
Inman
Freeport
Carson
Freeport
Sugarland
Brandenburg
Easley
Pasadena
St . Louis
Gurnee
Memphis
Winder
Baltimore
Spartanburg
State
NJ
NC
SC
NJ
NC
NC
TX
TX
LA
PA
PA
CA
TX
WV
SC
TX
CA
TX
TX
KY
SC
TX
MO
IL
TN
FL
MD
SC
Model Plant
Category
Large
Small
Small
Small
Large
Large
Small
Small
Catalyst
Large
Large
Small
Large
Catalyst
Large
Large
Small
Large
Catalyst
Large
Area
Large
Large
Small
Catalyst
Large
Catalyst
Catalyst
Non- Surfac-
Urethane urethane tants
X
X X
X X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X X
X
X
X X
X
X X
X
X X
( continued)
2-9
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TABLE 2-3. FACILITIES PRODUCING POLYETHER POLYOLS (CONTINUED)
Plant
Sandoz
Chemicals
Corp
Shell
Shell
Stepan
Stepan
Stepan
Stepan
Stepan
Stepan
Texaco
(Huntsman)
Texaco
(Huntsman)
Union
Carbide
Union
Carbide
Union
Carbide
Union
Carbide
Vista
Chemical
Witco
Witco
Witco
Witco
Witco
City
Martin
Geismar
Reserve
Anaheim
Winder
Fieldsboro
Maywood
Mlllsdale
Elwood
Conroe
Port Neches
Texas City
Seadrif t
Institute
South
Charleston
Lake Charles
Santa Fe
Springs
Houston
Harahan
Janesville
Chicago
State
SC
LA
LA
CA
GA
NJ
NJ
IL
IL
TX
TX
TX
TX
WV
WV
LA
CA
TX
LA
WI
IL
Model Plant
Category
Catalyst
Large
Large
Large
Large
Large
Large
Small
Catalyst
Large
Small
Large
Small
Small
Small
Large
Area
Area
Large
Large
Small
Non- Surfac-
Urethane urethane tants
X
X
X
X
X
X
X
X
X
X
X
X
X X
X
X
X
X
X X
X
X
X X
1. Sort data for 12 facilities responding to EPA/SPI ICR
according to model plant category.
2. Compute minimum and maximum capacity utilization rates in
each model plant category based on the ICR data.
2-10
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3. Compute randomly assigned capacity utilization rate for
each facility, using the following formula:
[ (fviax - fvln) * (random number between zero and one)]+ fvln,
where
Kmax = maximum capacity utilization rate for facilities
providing data within the relevant model plant
category, and
Kmln = minimum capacity utilization rate for facilities
providing data within the relevant model plant
category.
4. Estimate production by multiplying randomly assigned
capacity utilization rate by the productive capacity of
each facility reported in the CEH.
Table 2-4 shows descriptive capacity and production statistics
for facilities in the polyether polyols industry by model plant
category. Production data are shown for each of the capacity
utilization alternatives.
In addition to the polyether polyol production facilities
identified by EPA with model plants, 7 facilities producing
polyether polyols are classified as area sources. The production
of polyether polyols for these facilities is estimated to range
from 10 million to 30 million pounds per year. These facilities
are excluded from the capacity and production statistics shown in
Table 2-4.
2-11
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TABLE 2-4. CAPACITY AND PRODUCTION STATISTICS BY MODEL PLANT
CATEGORY
Production
(106 Ibs. per year)
Estimated ICR Randomly
Capacity Capacity Assigned Mean Median
(106 Ibs . Utilization Capacity Capacity Capacity
per year) Rate Utilization Utilization Utilization
Small Model Plant
Number of
Minimum
Maximum
Mean
Median
Catalyst
Number of
Minimum
Maximum
Mean
Median
affected
8.
339.
60.
50 .
Production Estimates:
f acilil
0
0
6
2
Extraction Model
affected
20.
210 .
96.
95 .
Large Model Plant
Number of
Minimum
Maximum
Mean
Median
affected
95.
975 .
284.
275 .
0
0
2
0
;i
0
0
0
0
es :
. 6799
.9039
. 8795
.8870
Plant
0
0
0
0
. 7661
.8869
. 8259
.8187
22
5
305
54
44
.4 5.8
. 6 301.0
. 0 53.7
.8 44.5
5 . 9
301.0
53 . 7
44.5
Production Estimates
15
18
160
79
80
.8 17.5
.9 170.9
.2 73.4
.7 72.5
17 . 6
167.1
73 . 8
72.8
Production Estimates
0
0
4
0
0
0
0
0
. 6533
.7954
.7286
.7374
35
75
758
207
198
. 0 69.2
.0 710.4
. 0 207.2
.2 200.4
70 . 0
718.9
209.7
202.8
2-12
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SECTION 3
DEMAND AND CONSUMPTION OF POLYETHER POLYOLS
The major use of polyether polyols is in the production of
urethanes or polyurethanes. Although this profile focuses on the
uses of polyether polyols in polyurethane production, many of the
facilities affected by the proposed rule also produce polyether
polyols for nonurethane uses. Other uses of polyether polyols
include surfactants, synthetic lubricants, and functional fluids.
Table 3-1 lists the sales and captive use of polyether polyols
between 1983 and 1993.17
TABLE 3-1.
SALES AND CAPTIVE USE OF POLYETHER POLYOLS
(106 Ibs.)
Year
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
Flexible
Foam
1,
1,
1,
1,
1,
1,
1,
1,
1,
874
915
014
000
045
134
048
048
016
045
069
Rigid
Foam
137
144
133
127
144
138
132
134
136
152
163
Nonfoam
129
148
141
158
188
232
256
269
253
269
303
Export
146
98
119
168
276
414
350
380
392
422
565
Total
1,
1,
1,
1,
1,
1,
1,
1,
1,
1,
2,
286
305
407
453
653
918
786
831
797
888
100
Source: The Society of the Plastics Industry. Facts & Figures of the U.S.
Plastics Industry. Washington, DC, Society of the Plastics
Industry. 1994. p. 52.
3-1
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3.1 PRODUCT CHARACTERISTICS
As noted above, polyether polyols are an entire class of
thermosetting resins used in the manufacture of polyurethane,
surfactants, lubricants, and other products. A variety of
polyether polyols are used in manufacturing polyurethanes. The
type of polyols chosen depends on the end use.
Polyols have different numbers of reactive hydroxyl groups,
and this is referred to as "functionality." Polyols may be
difunctional, trifunctional, tetrafunctional, pentafunctional,
hexafunctional, or octafunctional. The end use of a polyether
polyol is determined by the properties of the polyol. Polyether
polyols fall into two main classifications: high-molecular-
weight, linear or slightly branched polyether polyols, and low-
molecular-weight, highly branched polyether polyols. The linear
or slightly branched polyether polyols are used in flexible
applications, such as in flexible slab and molded foam or
reaction injection molding. The branched polyether polyols are
used in applications requiring rigidity, such as rigid foams.
Polyols may be combined to achieve certain desired
characteristics. For example, including polymer and/or polyurea
polyols in addition to polyether polyols increases a foam's
resiliency and load-bearing potential.
USES AND CONSUMERS
As noted above, polyether polyols are consumed mainly in the
production of polyurethanes, including flexible and rigid foams
In addition, polyether polyols can be used in producing
elastomers, surface coatings, adhesives, fabrics, and sealants.
-------
The manufacture of flexible polyurethane foams is by far the
largest market for polyether polyols. Within that category, the
largest market is for furniture cushioning. Increasing the
density of the foam to provide superior wear requires increasing
the polyether polyol volume needed to produce a given amount of
polyurethane foam. After furniture cushioning, passenger car
seating and other transportation uses are the second largest use.
Other uses include carpet padding, bedding, and packaging.
Growth in the use of flexible foam is anticipated for the future,
but at a relatively slow rate.
In 1993, nonfoam uses were the second largest category of
consumption for polyether polyols. Nonfoam polyurethane
applications include reaction-injection molded materials, widely
used in the automobile industry to produce bumper covers; front-
and rear-end panels; steering wheels; and other parts. Other
uses include shoe soles and recreational equipment.
Thermoplastic polyurethane elastomers (TPUs) are an important
application of polyether polyols. These TPUs "occupy the upper
end of the thermoplastic elastomer spectrum in terms of price and
performance."18 They are noted for general overall toughness and
flexibility, even at low temperatures. They are resistant to
abrasion, possess superior adhesive properties, are readily
processable, and are very versatile. Applications of TPUs
include drive couplings, the Food and Drug Administration-
approved wraps for meat and poultry, and solvent-free film
adhesives.19
The manufacture of rigid polyurethane foams is another leading
use of polyether polyols. Rigid polyurethane foams are used in
construction, appliances, industrial insulation, and packaging.
The manufacture of rigid foams typically uses polyols with
3-3
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relatively high functionality (four to eight). Rigid foams are
used for insulation in commercial and household refrigerators,
freezers, and water heaters.
3.3 SUBSTITUTABILITY
The ability of manufacturers to substitute other products for
polyether polyols varies from one application to another. For
example, in the manufacture of rigid polyurethane foams, less
expensive polyester polyols have recently been substituted for
some or all of the polyether polyols in some applications.
Similarly, substitutes exist for polyurethanes in some of their
applications (e.g., furniture cushions, TPUs).
3-4
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SECTION 4
INDUSTRY ORGANIZATION
4.1 MARKET STRUCTURE
The market for polyether polyols for urethanes is
international. World capacity for polyether polyols for
urethanes was approximately 8.5 billion pounds at the beginning
of 1994. The U.S. accounted for 34 percent of that production;
Western Europe accounted for about 36 percent; Japan for 10
percent; Canada, Mexico, the Republic of Korea and Taiwan
combined for 8 percent; and the rest of the world (producers
located mainly in South America and the People's Republic of
China) accounted for the remaining 12 percent.
4.2 MANUFACTURING FACILITIES
In the U.S., 79 facilities produced polyether polyols in 1996,
They are listed in Table 2-3 in Section 2. The facilities are
distributed widely about the country and vary considerably in
terms of size and the types of polyether polyols produced.
4.2.1 Locations
Table 4-1 shows the geographical distribution of polyether
polyol production facilities. Polyether polyol
4-1
-------
TABLE 4-1. POLYETHER POLYOL PRODUCTION FACILITIES BY STATE3
State
Number of Facilities
California
Delaware
Florida
Georgia
Illinois
Kansas
Kentucky
Louisiana
Maryland
Michigan
Missouri
New Jersey
New York
North Carolina
Oklahoma
Pennsylvania
Rhode Island
South Carolina
Tennessee
Texas
West Virginia
Wisconsin
5
1
1
1
5
1
1
6
1
2
1
9
2
6
1
3
I
6
I
18
5
2
Total
79
Includes area sources.
production facilities are located in states with high
4-2
-------
concentrations of chemical manufacturers, including California,
Texas, Illinois, Louisiana, New Jersey, and North and South
Carolina. Texas, which has 18 polyether polyol production
facilities, has approximately 25 percent of industry facilities.
The next greatest concentration is New Jersey, with nine
facilities, followed by Louisiana, North Carolina, and South
Carolina, with six facilities each.
4.2.2 Employment
Employment at facilities producing polyether polyols ranges
from 10 employees to 2,000 employees. Table 4-2 shows facility
employment statistics by model plant category.20
TABLE 4-2. FACILITY EMPLOYMENT BY MODEL PLANT CATEGORY
Employment —
Statistic
Minimum
Maximum
Mean
Median
Small
10
1,300
507
347
Model Plant Category
Catalyst Extraction
30
1,200
248
74
Large
16
2, 000
207
100
Source: Dun and Bradstreet. Dun's Market Identifiers. Online Database.
Accessed through EPA NCC computer, FINDS System. March 1997.
4.2.3 Sales of Affected Products
As noted in Section 2, actual production data are available
for very few of the facilities potentially affected by this
regulation. The EPA therefore estimated production based on
capacity data and estimated capacity utilization rate as
4-3
-------
discussed in Section 2.6 of this report. Table 2-4 shows
facility polyether polyols production statistics that were
estimated using three different capacity utilization rates:
the average reported by plants in each model plant
category,
the median reported by plants in each model plant
category, and
a randomly assigned capacity utilization rate that falls
between the minimum and the maximum capacity utilization
rate reported by facilities in each model plant category.
Similarly, data for facility sales of polyether polyols are
not available. The Agency estimated the sales (or the value of
production, for facilities producing polyether polyols for
captive use) by multiplying estimated production by the estimated
price for polyether polyols in 1996. Polyether polyols are a
class of commodities with a range of market prices. Table 4-3
shows price ranges for polyether polyols over the period 1985
through 1994.21
EPA estimated the August 1996 price of polyether polyols by
using the midpoint of the 1994 price range ($0.96 per pound) and
adjusting it to August 1996 dollars using the producer price
index (PPI) for thermosetting resins.22 The formula used to
estimate the 1996 price is:
$1994 price of polyether polyols * (PPI, Aug. 1996/PPI 1994)=
$0.96 * (157.1/143.6)= $1.05.
4-4
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TABLE 4-3. PRICES FOR POLYETHER POLYOLS
Year
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
Price Range
(cents per pound)
0
0
0
0
0
0
0
0
0
0
.72 -
.74 -
.77 -
.76 -
.78 -
.80 -
.92 -
.89 -
.94 -
.95 -
0.77
0.81
0.86
0.84
0.83
0.85
0.95
0.94
0.96
0.97
Source: Chemical Marketing Reporter, various issues.
The resulting price, $1.05 per pound, was multiplied by the three
estimates of facility production to yield estimated facility
sales. Table 4-4 shows statistics for estimated facility sales
by model plant category.
4.3 COMPANIES OWNING POLYETHER POLYOL FACILITIES
The 72 facilities producing polyether polyols affected by the
regulation are owned by 36 companies. The companies owning these
polyether polyol production facilities are of interest, because
these companies will incur the costs of complying with the
proposed regulation. Of particular interest is the impact of the
regulation on small entities, including small companies. Small
companies may have fewer internal and external sources of funds
to enable them to purchase and
4-5
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TABLE 4-4. ESTIMATED SALES REVENUES OF POLYETHER POLYOLS BY
MODEL PLANT CATEGORY ($1996 103)
Random3 Mean13 Median0
Small Model Plant
Minimum $5,712 $6,121 $6,195
Maximum $320,972 $316,099 $316,099
Mean $56,727 $56,445 $56,448
Median $47,102 $46,622 $46,622
Catalyst Extraction Model Plant
Minimum $19,776 $18,424 $18,522
Maximum $168,955 $168,216 $169,111
Mean $83,147 $77,059 $77,469
Median $84,761 $76,098 $76,502
Large Model Plant
Minimum $78,723 $72,692 $72,569
Maximum $796,094 $746,054 $755,051
Mean $217,409 $217,618 $220,243
Median $208,201 $210,426 $212,963
a Random sales were estimated by multiplying 1996 price by estimated
production, based on randomly assigned capacity utilization rate for each
model plant category.
b Mean sales were estimated by multiplying 1996 price by estimated
production, based on mean capacity utilization rate for each model plant
category.
c Median sales were estimated by multiplying 1996 price by estimated
production, based on median capacity utilization rate for each model plant
category.
install capital equipment, modify operations, or undertake the
other tasks that may be required to comply with the regulation.
The Agency is required to analyze impacts on small businesses
under the Regulatory Flexibility Act of 1982 and the Small
4-6
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Business Regulatory Enforcement Fairness Act of 1996.
The general size standard definition criteria is used by the
Small Business Administration (SBA) to identify the small
businesses affected by this regulation. These criteria are
defined by Standard Industrial Classification (SIC) code. The SBA
general size standard definition for each SIC code is defined in
terms of number of employees or annual sales receipts. The
production of polyether polyols falls under SIC code 2821,
Plastic Materials and Resins. For SIC 2821, small businesses are
defined as those with fewer than 750 employees.
Data on company employment and sales were collected from Dun
and Bradstreet's Dun's Market Identifiers, an on-line database
maintained on the EPA National Computation Center computer.23 A
size distribution of affected companies is shown in Table 4-5,
where size is defined in terms of employment.24'25'26'27 A total of
seven companies have fewer than 750 employees and are thus
classified as small businesses according to the SBA general size
standard definitions.
Table 4-6 presents a size distribution in terms of total
company sales.28'29'30'31 While the SBA defines company size for
this industry is in terms of employment, company sales are of
interest as a gauge of company resources for complying with the
regulation. Table 4-6 demonstrates that most of the companies
owning polyether polyols have substantial annual sales.
4-7
-------
TABLE 4-5. DISTRIBUTION OF COMPANY EMPLOYMENT
Company Employment Total
Fewer than 750 7
750 to 5,000 11
5,001 to 20,000 8
20,001 to 50,000 6
Over 50,000 4
36
Sources: Dun and Bradstreet. Dun's Market Identifiers Online Database.
Accessed through EPA NCC computer, FINDS System. March 1997.
Worldscope Online database. (1995 and 1996 data) May 1997.
Disclosure Online database. (1996 data) May 1997.
Business & Co. ASAP Online database. (1995 data) May 1997.
TABLE 4-6. DISTRIBUTION OF SALES REVENUES
Company Sales Total
Less than 10 million 0
10 million to 100 million 5
100 million to 1 billion 9
1 billion to 5 billion 10
5 billion to 20 billion 7
Over 20 billion 5
36
Sources: Dun and Bradstreet. Dun's Market Identifiers Online Database.
Accessed through EPA NCC computer, FINDS System. March 1997.
Worldscope Online database. (1995 and 1996 data) May 1997.
Disclosure Online database. (1996 data) May 1997.
Business & Co. ASAP Online database. (1995 data) May 1997.
4-f
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SECTION 5
THE POLYETHER POLYOLS NESHAP
The proposed standards regulate Hazardous Air Pollutants (HAP)
emissions from polyether polyols manufacturing units (PMPU).
Polyether polyols as previously defined are the products formed
by the reaction of ethylene oxide (EO), propylene oxide (PO), or
other cyclic ethers with compounds having one or more reactive
hydrogens (i.e., a compound having a hydrogen terminally bounded
with a nitrogen, sulfur, oxygen, phosphorous atom, etc.). This
definition excludes materials regulated as glycols or glycol
ethers under the Hazardous Organic National Emission Standard for
Hazardous Air Pollutants (HON). For the proposed rule, an
affected source is defined as each group of one or more PMPU and
located at a plant site that is a major source.
Facilities in the source category covered by the proposed rule
emit a variety of HAP. The most significant emissions are of the
following HAP: EO, PO, hexane, and toluene. The proposed
standards would regulate emissions of these compounds, as well as
all other organic HAP that are emitted during the production of
polyether polyols.
5.1 EMISSION CONTROLS
Emissions from the following types of emission points (i.e.,
emission source types) are being covered by the proposed rule:
storage vessels, process vents, equipment leaks, and wastewater
5-1
-------
operations. The standards being proposed for these emission
source types at new and existing facilities have the same group
determination criteria and control requirements as those
promulgated for the corresponding emission source types at
existing sources subject to the HON. A specified emission
reduction for the combination of all process vent streams within
a PMPU is being proposed for process vent epoxide emissions and
for nonepoxide HAP emitted from catalyst extraction. For process
vents from batch unit operations that emit nonepoxide HAP from
the making or modification of the product, the proposed standard
requires the Group I/Group 2 determination to be based on the
criteria in the Polymer and Resins I NESHAP. In the event that
there may be process vents from continuous unit operations that
emit nonepoxide HAP from the making or modification of the
product, the proposed standard requires the Group I/Group 2
determination based on the criteria from the HON.
Tables 5-1 and 5-2 summarize the level of control being
proposed for new and existing sources, respectively. Where the
applicability criteria and required level of control is the same
as the HON, this is indicated in the table as "HON." When the
table lists "epoxides," it is referring to EO and PO, the HAP
monomers used in the polyether polyols process. "Nonepoxide HAP"
refers to organic HAP other than EO and PO that are used in the
polyether polyols manufacturing process. The following sections
describe these proposed standards in more detail, by emission
source.
5-2
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5.2 COSTS OF COMPLYING WITH PROPOSED EMISSIONS CONTROLS
The Agency has estimated the costs of complying with the
proposed emission controls. Table 5-3 shows costs for each model
plant category, and Table 5-4 shows national total costs to
control the emissions.32'33 Costs are shown for the Small Model
Plant, the Large Model Plant, and the Catalyst Extraction Model
Plant.
The capital and annualized costs of emission controls shown on
Table 5-3 reflect control costs by emission point. The total
costs for each model plant category are not shown. The reason
for this is that the number of facilities requiring emission
control for each emission source within a model plant category
varies. For example, 20 of the Small Model Plant facilities
require controls for equipment leaks, while only six require
controls for process vents. Thus, the annual control costs for a
facility classified as belonging to the Small Model Plant
category could range from $26,100 to $89,800, depending on
whether the facility requires controls on equipment leaks only or
on all emission sources. Similarly, annualized costs for the
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$284,100. For the Large Model Plant facilities, costs range from
$50,400 to $292,500 annually, depending on whether the facility
requires controls on equipment leaks only, or for all possible
emission points.
In general, the economic impacts of the proposed rule are
estimated assuming that each facility incurs the maximum
per-plant cost for each model plant category. This is an
5-5
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accurate estimate of costs for a subset of polyether polyol
facilities only but it overstates the costs and impacts for many
facilities. Given the limited amount of information available,
the assumption was necessary to assure that costs were not
underestimated for any facility.
5-9
-------
SECTION 6
ECONOMIC IMPACTS OF THE POLYETHER POLYOL NESHAP
The Agency has estimated the impacts of the proposed polyether
polyol NESHAP on both facilities producing polyether polyols and
on the companies that own them. Facility impacts are being
examined to assess the likelihood of facility closures and
employment impacts. Company-level impacts are being examined to
assess the magnitude of impacts on small businesses under the
Regulatory Flexibility Act (RFA) and Small Business Regulatory
Enforcement Fairness Act (SBREFA).
6.1 FACILITY IMPACTS
The goal of the economic impact analysis is to estimate the
market response of the polyether polyols industry to the emission
standards and determine any adverse effects that may result from
the regulation. Since the nationwide annualized cost of this
regulation of $7.7 million represents approximately 0.06 percent
of the estimated 1996 sales revenues for domestically produced
polyether polyols, the EPA determined that the regulation is not
likely to have a significant impact on this industry as a whole.
For this reason, a streamlined economic analysis was performed.
The goal of this streamlined analysis was to determine whether
individual facilities producing polyether polyols and companies
owning those facilities are likely to be adversely impacted by
the regulation. Facility-specific impacts were examined to
assess the likelihood of facility closures and employment
6-1
-------
impacts. The facility level impacts were estimated by comparing
the total annual cost of control in each model plant category to
estimated sales per facility resulting in a cost-to-sales ratio.
A cost-to-sales ratio exceeding one percent is determined to be
an initial screening criteria for a significant facility-specific
impact.
Table 6-1 shows descriptive statistics for the selected impact
measure, the ratio of Total Annual Cost (TAG) to Facility Sales
Revenues for the 72 facilities potentially impacted by the
regulation. While the median TAC/facility sales ratio in each
category is well below 1 percent, the catalyst extraction model
plant category indicates a maximum ratio exceeding 1 percent. To
examine the impacts more closely, a frequency distribution of
cost-to-sales ratio was developed and is shown in Table 6-2. The
three columns are the numbers of facilities incurring
TAC/facility sales in each range of values, where sales are
estimated based on randomly assigned capacity utilization, mean
capacity utilization, and median capacity utilization,
respectively.
Table 6-2 clearly shows that very few plants are significantly
affected by the proposed regulation. In addition to the 7 plants
determined to be exempt from the regulation because they are area
sources, 46 additional plants are estimated to incur costs less
than 0.2 percent of their annual sales. Only one facility in the
industry is estimated to incur TAC/sales exceeding 1 percent.
The impacts of the regulation to this facility were evaluated
in greater detail. The facility for which costs
6-2
-------
TABLE 6-1. DESCRIPTIVE STATISTICS OF FACILITY IMPACTS OF
PROPOSED POLYETHER POLYOL NESHAP
TAC/Randomly TAC/Mean TAC/Median
Statistic Estimated Sales3 Sales13 Sales0
Small Model Plant Category (22 facilities)
Minimum 0.028% 0.028% 0.028%
Maximum 0.881% 0.881% 0.881%
Mean 0.282% 0.280% 0.280%
Median 0.191% 0.192% 0.192%
Catalyst Extraction Model Plant Category (15 facilities)
Minimum 0.168% 0.169% 0.168%
Maximum 1.437% 1.542% 1.534%
Mean 0.415% 0.448% 0.446%
Median 0.335% 0.373% 0.371%
Large Model Plant Category (35 facilities)
Minimum 0.128% 0.139% 0.138%
Maximum 0.214% 0.232% 0.229%
Mean 0.144% 0.145% 0.143%
Median 0.140% 0.139% 0.138%
1 Random sales were estimated by multiplying 1996 price by estimated
production, based on randomly assigned capacity utilization rate for each
model plant category.
' Mean sales were estimated by multiplying 1996 price by estimated
production, based on mean capacity utilization rate for each model plant
category.
; Median sales were estimated by multiplying 1996 price by estimated
production, based on median capacity utilization rate for each model plant
category.
exceed 1 percent of sales is estimated to produce about 23
million pounds of polyether polyols per year. Total annualized
compliance costs are estimated to be $284,100 for this facility.
Total annualized costs are estimated to be about 1.5 percent of
annual facility sales of polyether
6-3
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TABLE 6-2. FREQUENCY DISTRIBUTION: TOTAL ANNUAL COMPLIANCE
COST/FACILITY SALES BY MODEL PLANT CATEGORY
Random3
Small Model Plant
Cost to Sales Ratios:
0 to 0.2 percent
0.2 to 0.5 percent
0.5 to 1 percent
1 to 5 percent
Over 5 percent
Total
Catalyst Extraction Model Plant
Cost to Sales Ratios:
0 to 0.2 percent
0.2 to 0.5 percent
0.5 to 1 percent
1 to 5 percent
Over 5 percent
Total
Larqe Model Plant Cateqory
Cost to Sales Ratios:
0 to 0.2 percent
0.2 to 0.5 percent
0.5 to 1 percent
1 to 5 percent
Over 5 percent
Total
16
3
3
0
0
22
1
12
1
1
0
15
29
4
2
0
0
35
Meanb
16
3
3
0
0
22
1
12
1
1
0
15
29
4
2
0
0
35
Median0
16
3
3
0
0
22
1
12
1
1
0
15
29
4
2
0
0
35
Random sales were estimated by multiplying 1996 price by estimated
production, based on randomly assigned capacity utilization rate for each
model plant category.
Mean sales were estimated by multiplying 1996 price by estimated
production, based on mean capacity utilization rate for each model plant
category.
Median sales were estimated by multiplying 1996 price by estimated
production, based on median capacity utilization rate for each model plant
category.
6-4
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polyols. This facility is owned by a large, financially strong
company. Company sales were more than $2.2 billion in 1996, with
net income more than $220 million. The compliance costs are an
insignificant share of those resources, so it is probable that
the company will choose to comply with the regulation, rather
than shutting down its polyether polyol production.
6.2 COMPANY IMPACTS
The Agency also examines impacts of the regulation on
companies owning polyether polyol facilities to determine the
economic impacts of the regulation on affected companies. Of
particular concern is whether small companies previously defined
in Section 4.3 are adversely affected by the regulation. The
measure of company impact the Agency has chosen to use is the
ratio of company total annual compliance costs to company sales.
For companies owning more than one affected facility, this
statistic is computed by summing the annualized compliance costs
across all facilities owned by the company and comparing it to
total company sales. Tables 6-3 and 6-4 show frequency
distributions of companywide total annual compliance costs as a
share of company sales for all companies affected by the
regulation and small companies, respectively.
As presented on Table 6-3, no companies affected by the
regulation are expected to incur costs exceeding 1 percent of
company sales. The maximum share is 0.88 percent for any of the
affected companies. All but eight companies have costs less than
0.1 percent of sales.
6-5
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TABLE 6-3. FREQUENCY DISTRIBUTION: COMPANY TAC AS A SHARE OF
COMPANY SALES: ALL COMPANIES
TAC/Company Sales Frequency
0 to 0.01 percent 9
0.01 to 0.05 percent 15
0.05 to 0.1 percent 3
0.1 to 1.0 percent 9
Over 1 percent 0
Total 36
To ensure that no small companies incur significant adverse
impacts due to the regulation, the Agency also constructed a
frequency distribution of company compliance costs to company
sales for companies with fewer than 750 employees. Table 6-4
shows this distribution.
TABLE 6-4. FREQUENCY DISTRIBUTION: COMPANY TAC AS A SHARE OF
COMPANY SALES: SMALL COMPANIES
TAC/Company Sales Frequency
0 to 0.05 percent 0
0.05 to 0.1 percent 1
0.1 to 1.0 percent 6
Over 1 percent 0
Total 7
No small company incurs costs exceeding 1 percent of sales.
Six of the seven affected small companies incur costs between 0.1
and 1.0 percent of sales as shown in Table 6-4.
6-6
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6.3 CONCLUSIONS
The proposed NESHAP will impose costs on producers of
polyether polyols. For most facilities, the costs imposed will
be negligible. Costs exceed 1 percent of sales for only one
facility out of 72 affected facilities. Based on an analysis of
the costs of compliance compared to facility and company
financial data, the Agency finds it unlikely that the company
owning this facility will choose to close it, because the company
is financially robust and the costs are a small share of the
company sales and net income. The generally small scale of the
impacts also suggests that there will be no significant impacts
on markets for the products made using polyether polyols, such as
polyurethanes.
Costs do not exceed 1 percent of company sales for any of
the companies owning facilities producing polyether polyols.
Thus, the Agency concludes that no company is likely to go
bankrupt as a result of this regulation, and no small businesses
will incur significantly adverse impacts.
6-7
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REFERENCES
1. Memorandum, from Seaman, Joanne C., EC/R Incorporated, to
Svensdsgaard, David, EPA/OAQPS/ESD/OCG. June 19, 1996.
pp. 4, 6, 12, 14. Summary of Nationwide Baseline Emissions
for Polyether Polyols Production Facilities.
2. Ref. 1, p. 1.
3. SRI, International. Chemical Economics Handbook, CEH
Abstract for Polyether Polyols for Urethanes.
4. Ref. 3.
5. Ref. 3.
6. Ref. 3.
7. Rauch Associates, Inc. The Rauch Guide to the U.S. Plastics
Industry. Bridgewater, NJ, Rauch Associates, Inc. 1991.
p. 2.
8 Ref. 3, p. 1.
9. Ref. 3, p. 3.
10. Ref. 7, p. 2.
11. U.S. Department of Commerce. 1992 Census of Manufactures.
Industry Series. Industry 2821, p. 28.
12. Ref. 3.
13. Society of the Plastics Industry. Facts & Figures of the
U.S. Plastics Industry. Washington, DC, Society of the
Plastics Industry. 1994. p. 52.
14. SRI, International. Chemical Economics Handbook. CEH
Marketing Research Reports. Polyether Polyols for
Urethanes. January 1995.
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15. SRI, International. Chemical Economics Handbook. CEH
Marketing Research Reports. Polyalkylene Glycols. August
1995.
16. SRI, International. Chemical Economics Handbook. CEH
Marketing Research Reports. Polytetramethylene Ether
Glycol. August 1994.
17. Ref. 13.
18. Modern Plastics, eds. Plastics Handbook. New York, McGraw-
Hill, Inc. 1994. p. 67.
19. Ref. 18, p. 68.
20. Dun and Bradstreet. Dun's Market Identifiers Online
Database. Accessed through EPA NCC computer, FINDS System.
March 1997.
21. Chemical Marketing Reporter, various issues.
22. Bureau of Labor Statistics. Producer Price Index Revision-
Current Series. Series ID: PCU2821#4 (Thermosetting
Resins). Extracted from BLS online database) on April 25,
1997.
23. Ref. 20.
24. Ref. 20.
25. Worldscope Online database. (1995 and 1996 data) May 1997.
26. Disclosure Online database. (1996 data) May 1997.
27. Business & Co. ASAP Online database. (1995 data) May
1997.
28. Ref. 20.
29. Ref. 25.
30. Ref. 26.
31. Ref. 27.
32. Chappell, L. U.S. Environmental Protection Agency.
Memorandum to K. Heller, RTI. April 14, 1997. Revised
Control Costs for the Polyether Polyols Project. Tables 14,
15, and 16.
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33. Ref. 32, Table 17
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TABLE OF CONTENTS
Section Page
List of Figures v
List of Tables vi
1 Introduction 1-1
2 Production and Supply of Polyether Polyols 2-1
2.1 Overview of the Plastics Industry 2-1
2.2 Material Inputs 2-2
2.3 Production Processes 2-3
2.4 National Output of Polyether Polyols 2-5
2.5 Polyether Polyol Production Facilities 2-6
2.6 Estimated Domestic Production of Polyether
Polyols in 1996 2-7
3 Demand and Consumption of Polyether Polyols 3-1
3.1 Product Characteristics 3-2
3.2 Uses and Consumers 3-2
3.3 Substitutability 3-4
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TABLE OF CONTENTS (CONTINUED)
Section Page
4 Industry Organization 4-1
4.1 Market Structure 4-1
4.2 Manufacturing Facilities 4-1
4.2.1 Locations 4-1
4.2.2 Employment 4-3
4.2.3 Sales of Affected Products 4-3
4.3 Companies Owning Polyether Polyol Facilities. . . . 4-5
5 The Polyether Polyols NESHAP 5-1
5.1 Emission Controls 5-1
5.2 Costs of Complying with Proposed Emissions
Controls 5-5
6 Economic Impacts of the Polyether Polyol NESHAP 6-1
6.1 Facility Impacts 6-1
6.2 Company Impacts 6-5
6.3 Conclusions 6-7
References R-l
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LIST OF FIGURES
Number Page
1-1 Ether Linkages and Hydroxyl Groups 1-2
2-1 The Plastics Manufacturing Industry 2-3
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LIST OF TABLES
Number Page
2-1 Employment and Production in the Plastics
Materials and Resins Industry (SIC 2821) 2-4
2-2 Production of Polyether Polyols, 1983-1993 2-6
2-3 Facilities Producing Polyether Polyols 2-8
2-4 Capacity and Production Statistics by Model
Plant Category 2-12
3-1 Sales and Captive Use of Polyether Polyols 3-1
4-1 Polyether Polyol Production Facilities by State 4-2
4-2 Facility Employment by Model Plant Category 4-3
4-3 Prices for Polyether Polyols 4-5
4-4 Estimated Sales Revenues of Polyether Polyols
by Model Plant Category 4-6
4-5 Distribution of Company Employment 4-8
4-6 Distribution of Sales Revenues 4-8
5-1 Summary of Level of Proposed Standards for
Existing Sources 5-3
5-2 Summary of Level of Proposed Standards for
New Sources 5-4
5-3 Estimated Control Costs by Model Plant Category 5-6
5-4 Total Nationwide Cost of Control for the Polyether
Polyols NESHAP 5-8
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LIST OF TABLES (CONTINUED)
Number Page
6-1 Descriptive Statistics of Facility Impacts of
Proposed Polyether Polyol NESHAP 6-3
6-2 Frequency Distribution: Total Annual Compliance
Cost/Facility Sales by Model Plant Category 6-4
6-3 Frequency Distribution: Company TAC as a Share
of Company Sales: All Companies 6-6
6-4 Frequency Distribution: Company TAC as a Share
of Company Sales: Small Companies 6-6
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